Like everything else, Intraday Trading also has its own rules. If you follow them properly there are high chances of maximizing your profits, even if the market is heading towards a downtrend.
Here are a few things you need to consider if you are trying your luck at Intraday trading for the first time:
Stick to a trading strategy
As a day trader you will have higher chances of making profits. Nevertheless, the risks of losses are also very high if you don’t have a trading strategy. Here are a few things you need to consider while formulating your own trading strategy:
You need to set up a few entries as well as exit rules
You need to be clear on the type of shares that you want to trade on
You have to determine how many trades you want to do in a day
You should also keep track of the profits and losses that you make in each trade
Visit AvaTrade YouTube for more information on how to create a trading strategy.
Choose stocks that are best suited for day trading
The options are many when it comes to choosing stocks. However, not all stocks may be recommended for day trading.
Select stocks that are easy to trade on
Look for stocks that are less volatile and more stable
Choose stocks of a particular business sector that you might be familiar with
Choose stocks that follow market trends
Set the right prices for entry, exit, and stop loss
Selecting the right value is very important while entering and exiting from a trade. Putting a stop loss will help you escape from a crisis situation, minimizing your losses, even if you can’t make maximum profits.
Use the money that you can afford to lose
Intraday trading is a high-risk venture. You can lose the entire amount you have invested with one small mistake. You need to have an eye for trouble and be extremely cautious with each step you take. Of course, this will take a lot of time and experience. But if you invest only that much that you are ready to lose you will be able to trade better, while keeping your stress levels at bay.
Focus on limit orders rather than market orders
Limit orders can help you take buying and selling decisions before you enter into a trade. The transaction will automatically be completed once the limit price is triggered. This way you won’t be tempted by the market orders.
Keep your emotions out of your trading
Day trading is something that can help you experience great profits within the shortest span of time. However, because of the high market volatility, you can also experience heavy losses. If you want to be a good trader you will have to control your emotions and stay calm, irrespective of the profit or losses you make.
An alert mind is very essential if you want to take good decisions every time you trade. You should know when to get in and when to get out from any trading activity. You will only end up losing all your money if you ignore these market responses.