Intraday trading
Intraday trading is a perfect and lucrative opportunity to capitalize on the price fluctuations for the day. Day traders perform intraday trades by buying and selling the stocks every day. You too can book good profits if you have the basic technical knowledge to perform the intraday trades. If you implement the right strategies at the right time in the right trades you can earn well too. However, some traders make some of the biggest mistakes that you must avoid. Let’s take a quick look:
- Be Practical
Keep your intuition and emotions away while trading and believe the numbers and the price charts, so research well on these aspects. Know if the shares are oversold or over purchased and accordingly make the trade. Secondly, do not follow the crowd. By this, we mean just don’t trade in the stocks because your friends or a family member invested or recommended you to invest in. Before following in their footsteps please carry on your own research.
- Stop-loss
Every experienced intraday trader will give this valuable tip – Set a stop loss. Not setting up a stop loss can cause you severe damage. Hence, if you notice that the stock is falling way below your predetermined stop-loss level, sell the stock. Although intraday traders have a high-risk appetite, you must put a cap on the losses. The most common mistake that most traders make is they expect the stock to go up even after it has crossed the stop-loss flag.
- Technical analysis
It is necessary to have your own strategy. To formulate your strategy you must know all the technical aspects well. The market is highly volatile and especially if you trade daily. So observe the technical indicators before making a move. These are some of the things that you must keep a close watch on to understand the market and trades for the day:
- Price charts
- Market trends
- Target prices
- Hasty decisions
Avoid exiting before the target price is achieved. It is only natural, due to the nature of the risky market that once in a while you make hasty decisions. But if the market is performing well or if technical indicators suggest that you can wait till the target price, don’t exit hastily. Because times like these will earn you profit. These are times when you have a chance to get the maximum profit so avoid making hasty decisions.
- Opting for Illiquid stocks
The main intention to do intraday trading is to book profits regularly. If you trade in illiquid stocks it will get difficult for you to perform trading every day. For instance, you brought a stock so that you can sell it in the evening and book a profit, but no one wants to buy it. To avoid this situation, know the liquidity of the stocks you aim to sell at the end of the day.
So, these are some of the mistakes that you must avoid if you want to book profits. If you have any queries feel free to contact us.
