It
will be difficult for me to advice you on how to master intraday
trading since everybody is different with unique learning curves.
Successful traders execute trades with a proper strategy and respect
their stop losses.
And like any other profession, disciple and
experience are essential to reach that level.
Here are some of my
observations of the qualities that a master trader possesses.
Stock selection
Selection of stock plays a major role in intraday
trading and if you don’t improve that, your chances of earning a profit
will diminish.
Never select volatile stocks. Try to stick to Group A
stocks while day trading.
Select less volatile and stable stocks for
intraday which move with the market.
Have a strategy
Always have an investment strategy and follow the
rules for buying and selling.
Discipline is of the utmost importance
when it comes to the stock market.
Set Stop-Losses
Always set a stop-loss on your shares so that you can
sell them and limit your losses. The stop loss will prevent you from
incurring further loss.
Volumes matter
Trade in the stock which is fairly liquid, which means
that it has a good number of buyers and sellers, so that there should
not be any problem during transaction.
Over-trading
Never try to fit in too many trades in one trading
session. Rather than initiating 5–10 trades in a day, try to complete
1–2 trades successfully.
Set a daily goal and stop trading for the day
once you have achieved the target of profit or loss.
Never average a losing trade
People average their losing position,
which makes matters worse as the risk is doubled.
It will be difficult
to book loss, thus destroying your capital. Never average a losing
trade. Just cut your loss and move to the next trade.
You can also employ the services of top brokers who’s got top knowledge about intraday trading.
Huge Risk per Trade
A good trading system will have only 40–60% accuracy without compromising on any other factors.
So
even if you have a 60% accurate intraday trading system, there is a
possibility of getting 9–10 consecutive losing trades (statistically).
So what will happen if you risk 10% of your capital on every trade?
You will lose your entire capital when you face 10 consecutive losing trades. Isn’t it?
It means you have to keep a check on your greed (sorry, there is no other way).
A
simple solution is to risk only 2–3% of your capital per trade. So when
you face 10 consecutive losing trades, you lose only 20–30% of your
capital.
Revenge Trading
We are all bought up in such a way that failure is bad and it is unacceptable.
Failing in 10th std, 12th std, and graduation is terrible, right?
The same thought process troubles us in trading.
Because nobody can get 100% success in their trading (except ‘god’ and ‘liar’).
So, when we face a failure, our mind pushes us to correct these mistakes immediately.
Hence, we take many unnecessary trades and lose money.
The simple way to avoid this problem is to set a rule for the total number of trades in a day.
For example, I have two rules on any trading day
I will shut down my system when I get 2 failed trades
I will take only 3 trades per day. Once the 3rd trade gets completed, I will close the system
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What are some great share trading hacks
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What time frame should I use for day trading
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Which indicator is more effective for intraday?
