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Rules and discipline for Intraday traders

Pulak Priyesh
06/09/2016 0 0

Secrets of successful Intraday Trading
Intraday trading means buying and selling in the same day. It may be either buying first or short selling. Normally intraday traders book profit in small margins. People are making profit by repeated trades or by trading large quantities. One thing to be mentioned here is intraday trading is high risk involved.

How to make profit from Intraday trade.

The Golden rule of intraday trade is ride with the trend. Hence the first step to make profit in intraday trade is to identify the stock. Intraday charts are the best way to identify stocks for trading intraday. Also one should make a good home work before entering in intraday trade. Home work means, study the historical charts and find out the upward or downward moving stocks. Then see the previous days intraday chart. Find out the support and resistance levels. The better strategy will be buy at previous days support level and short at previous days resistance levels. Also shorting below support level and buying above resistance level are good ideas.

Keeping Stop loss

Keeping stop loss is very important for intraday trade. Otherwise one will loose heavily. Where to keep stop loss is a very important question. Again previous days intraday charts will help. If one shorted in a stock, keep stop loss at previous days high or days high. Also if bought, keep stop loss at previous days lows, or days lows. Another thing to remember is keep trailing stop loss and revise stop loss when one is in profit. Instead of booking profit, one can keep stop loss for profit and can revise according to upward movement. Normally this will help a lot in intraday trade.

Panic and Greedy

The two things to avoid in stock market and particularly in intraday trade is panic and greedy. When one enters in a trade and goes in opposite direction, don’t be panic. Wait some time, keep strict stop loss. If stop loss triggers, don’t enter again. Wait some time and relax, watch the market trend and enter in some other stocks. Another thing to avoid is greediness. Some people will not book profit and wait for more and more profit. But such people will end up in loss only. In intraday trade book profit in every highs. Wait for a dip and enter again if trend sustains.

Timing is important for successful Intraday trade

The best time to enter for intraday trade is after 20 to 30 minutes when the market opens. Some people will jump in the market at the opening bell itself. It is risky always. Watch the market in the early trades and find out the trend. First enter in some small quantity, say 25% of the quantity one is intended to buy. Then buy more in the next 10 to 15 minutes. The trend observed is intraday trading is stocks will shoot up till after 45 to 1 hour when the market opens. This is the best time to book profit. Once booked profit in a particular stock, better wait some time and watch the next movement and enter accordingly.

The Rules of Trading

1. Never, under any circumstance add to a losing position.... ever! Nothing more need be said; to do otherwise will eventually and absolutely lead to ruin!

2. Trade like a mercenary guerrilla. We must fight on the winning side and be willing to change sides readily when one side has gained the upper hand.

3. Capital comes in two varieties: Mental and that which is in your pocket or account. Of the two types of capital, the mental is the more important and expensive of the two. Holding to losing positions costs measurable sums of actual capital, but it costs immeasurable sums of mental capital.

4. The objective is not to buy low and sell high, but to buy high and to sell higher. We can never know what price is "low." Nor can we know what price is "high."

5. In bull markets we can only be long or neutral, and in bear markets we can only be short or neutral. That may seem self-evident.

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