What things should be considered while doing Intraday trading?
Things should consider in Intraday trading
Intraday trading also referred as day trading is the practice mostly used by traders that focus on very short term and high volumes to make a substantial profit. Multiple buy and sell trades happen within the day and sometimes the traders exit in minutes.
Many people look at this as a quick means of earning daily profits however this is not very simple and requires a lot of research and discipline.
Stocks are sensitive to news and if there are negative messages then the stock prices can go down and not give a chance to traders to book their profit in the trade. There are traders who do not consider the financial stability of a company and they just react to the prices based on the stocks’ day-performance.
Stock price downfall triggered by negative news from multiple sources would normally lead to ‘panic selling’ and this leads to huge losses for traders.
Global markets play an important role and the industry developments should be watched closely since the news from these can make a quick impact on the stock prices during the day.
Steps to be considered for Intraday Trading
While it may sound too risky to do intraday trading, there are substantial gains if one gets it right and is able to leverage the stock prices trend indicators carefully and quickly.
- One needs to find out the suitable sector(s) in which he or she possesses or gathers appropriate knowledge on the industry and the recent developments that help understand the news in an effective manner.
- A detailed trend analysis of the selected stocks within the sector helps understand the day-trend and how the stocks flow with the tide.
- An understanding of the broader picture of the Word Business news and their impact on the Indian stocks provides another important dimension of the market trend.
- It is important to know that 10% of traders who constantly profit from the market share always cap their losses.
- Adopt trading strategies: Momentum day trading strategies and Reversal day trading strategies, alongside also you need to master your emotions.
- It is extremely difficult to achieve the level of composure to sell when you hit your maximum loss but focus on accepting small losses and move on to the next trade.
Finally, try and achieve your daily goal. So that you can end the day in profit and start trading again on the next day.
Also Read – Choosing the Best Time Frame Chart for Intraday Trading