Intraday trading is the process of buying and selling stocks, bonds, securities, and other financial instruments in a single day. To gain high profits, you need to be smart and take advantage of small price moves correctly. But if you are a beginner, then it can prove to be dangerous, as you must not be aware of certain rules of intraday trading.
Intraday trading should only be practiced by the people who are ready to bear the risk and have enough time to invest in the study of the market trends. If you are planning to do intraday trading, you must first get a good understanding of the trends through the technical and fundamental analysis of the market. Moreover, you should avoid certain mistakes, and earn huge profits while trading.
Choose The Liquid Stocks
If you don’t have time to take lengthy courses on how to make profit in intraday trading, you can follow this tip. Before the session of intraday trading ends, it involves squaring off open positions, and therefore you should choose some highly liquid large capital shares.
If you invest in mid or small cap, you may tend to hold these shares due to their low trading values and volumes. Trading with liquid stocks improves the odds of quick trade execution. You should look for the stocks, which are under the market trend and classify them as weak and strong based on their value movements and percentage.
Remember To Place the Stop-Loss
Stop loss helps you to automatically sell your share at a fixed price if the rate falls below the given limit. The golden rule to earn huge profits in Intraday trading is by placing a stop-loss order. The ideal stop loss should be in a 1:1 ratio with your expected return. There are several instances when you place your order to earn a specific amount of profit and forget to put a stop loss on your order. Stop loss is the most important tool that can help you earn huge profits in the stock market.
Plan An Investment Strategy
It is important to do proper research on the market and its trends, once you know all related things about investment, it’s time for you to plan an investment strategy. It may happen that your strategy may not be perfect, you should learn from your mistakes and losses. Everyone makes the strategy and only a few of them work on it, and that is where they make a difference. So, if you too want to make huge profits and become a successful intraday trader, follow the planned investment strategy, and make useful changes in it by learning from mistakes.
Target Certain Profit and Book It
There will be a situation when you will find that the price of stock or share will increase more and more. In such a case, avoid greedy thoughts and do not fall into any mind traps. But if you have a strong intuition that the price of a certain stock is going to increase, then set a stop loss, and book the profit so that you can minimize the losses and maximize the profits. This type of strategy helps traders in day trading online in india successfully execute trades.
Fix Your Budget Margin
While day trading, you must not invest your whole sum of money in one day. We all know that the market is uncertain, and anything could happen, so the best way to deal with a volatile market is to divide your money into small bits, which will increase your chances of gaining huge profits and reducing losses in a single day.
Sometimes, a trader makes a small profit, and out of enthusiasm, invests some more money into the market thinking to earn more and more profit, but unfortunately, ends up losing them instead of gaining. This is precisely the way that you should never do it when you are trading in the stock market, especially on intraday trade.
These were the tips that you can follow to earn huge profits. Remember that the main objective of doing intraday trading is to earn profit and get heavy returns, not to own the stock. Day trading is full of risks, and there is no certainty that you will only get profits, so before making any decision, think and research well.