When the stock market fluctuates intraday trading could be a better proposition for increasing your profitability. However, it is a tricky thing also because there is not a sufficient time window to average out the loss. Hence, it is very much important that you follow the fundamental rules of intraday trading to become a successful intraday trader.
Do you want to know the rules of intraday trading? This blog lists them for you.
Pick the right stock
Every stock is not the best stock for intraday trading. A few properties that make it suitable are:
- The stock is easy to buy and sell and can be converted into cash easily.
- It has controlled volatility, which means the rate of price change over time is low.
- The stock belongs to a sector that has been making profits.
- The stock follows trends in coordination with the stock market trend.
Fix the entry and exit prices
When you choose a stock for intraday trading, it is essential to pick it when the price is low. When you buy, you should set the targets for selling as well. Also, there should be a target for stop loss. It means you will sell it at a loss if it goes below a pre-decided price to stop further loss.
Choose the right strategy
The intraday trading strategy is different from long-term investment. Before you move further, stop, and think whether the format suits your temperament?
A day trader has to set targets for the day. Make a journal of all profits and losses. At the end of the day, you should calculate the net profit or loss.
Tweak your strategy if required.
Take calculated risks
It means you should play with the money that you can afford to lose. Remember, it is a high-risk, high-gain game. One trade could wash out the whole month’s profits.
Trade with the money you are not afraid to lose.
Keep your emotions aside
Remember, intraday trading is a mind game. The magnitude of profit or loss is high in a short span. Therefore, you should keep a balanced state of mind. Do not get overwhelmed by profits and do not get depressed by losses.
Finally, do not trade in so many stocks. It will lose your focus on trading and you will end up losing money. Therefore, pick stocks with care.
These tips will help in earning sizeable money by intraday trading.
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