Intraday Trading is completely different from long-term equity investment. It is riskier as compared to stock investment. Off late, the stock market is absolutely volatile. If you have to make your living from the arena of stock market, then this type of trading is the only solution.
The most critical point here is to keep long-term equity investment separate from this type of Trading. Following are a few things that you should keep in mind for the best results.
Never trade in middle of a volatile market
you should never trade in the middle of a volatile market. it is the basic rule. This type of trading is best done when the direction and impetus of the market is predictable. Otherwise you might end up spending more time activating stop losses.
Protect your capital
This trading is all about guarding your capital. First you should concentrate on how much loss you are willing to take in general and on a per trade basis. Once you can guard your capital from reducing beyond a point, intraday profits are automatically going to follow.
Don’t trade intraday without stop loss
You should not trade intraday in the absence of a stop loss. Remember, stop losses are needed in most trades but in intraday type of trading it is an absolute must. In the absence of stop losses you could end up holding positions with incontrollable MTM losses.
Profit target based on Your risk
You should always take decision regarding your profit target based on your risk-return trade off. Stop loss is one side of the tale; the other side is you even require to take profits. Allow your profit targets be a manifold of your stop loss. A trade-off of 3:1 or that of 2:1 is comprehensible, not 1:1.
Never stretch yourself on margin of trading. Once you leverage yourself on margins keep an eye on the worst-case loss. Don ‘t stretch yourself to a point that your losses turn out to be unaffordable in the event of any black drift occurrences.
Be careful of tips
Evade the lure of tips and just trade when you are convinced. There is no shortage of research analysts and market professionals. Most of them are simply pretenders to the throne. Treat these thoughts with a pinch of salt. There is no alternative to doing your own research before you do trading intraday. It is something that works best at all times!
To stay away from markets is even an important decision for intraday traders. As an intraday trader there are a few key decisions you make; when to purchase, when to vend and when to sit tight. In an interesting manner, most of the money in intraday type of trading is made when you simply sit out doing nothing while the rest of market is scorching profits in the chaos.
So, since you have a few of the Tips for Intraday type of Trading, make sure that you keep these in mind for the best trading results.