Intraday trading is one of the safest and simplest investment choices. However many people commit very obvious and foolish choices with their investments. To carry out successful intraday trading you must stay patient and refrain from giving into anxiety.
To help your journey as a day trader we have gathered intraday trading tips from experts in the domain.
Here are the top 7 common mistakes and how to avoid them.
Mistake – Wait too long
As anintraday trader if you waste time in only strategizing, then chances are you will fall behind and miss on golden opportunities. The more you trade, the more options you will open up. It will also garner your style enough attention to make a positive difference.
Mistake – Investing in too many stocks
Investing in multiple stocks can be detrimental as it is difficult to keep track of so many stocks. Consider two to three options at most. As fractional shares are allowed, you can easily invest an amount you are most comfortable with.
Mistake – Not spending enough time monitoring
Day trading requires intensive monitoring. If you have set your heart at day trading options, then invest quality time in the trading process. Be smart and manage your time between tracking the prices and spotting the right scope.
Mistake – No budget
If you think day trading is a casual affair, you need to think again. As the chances of you making it big are good, there are equal chances are of you losing it all. A smart day trader should always fix a budget for trade. If you are starting out, you can risk 1-2% of your trading account per trade. A pro intraday trader can take higher risks.
Mistake – Having no plan
Do not go into intraday trading without a plan. It is important that you fix your entry level and set a target price. Try not to change minds if you see a slight increase in the stocks. Trust the trend and your instincts. Try to sell at a price as close as possible to the target price.
Mistake – Not having a stop loss strategy
Most intraday traders fall prey to the inability to react with spontaneity. A factor like the implementation of stop-loss will eliminate chances of drastic loss. You will be able to stay in a safe margin zone. The stop loss gets triggered when the prices head the wrong direction and reach the stop loss limit.
Mistake – Ignoring the trends
You might have done your homework well but the market may not perform the way you had predicted. Take into account the real-time data and act fast with your stocks. Ignoring the flow of the market without a full-proof strategy might be disadvantageous for your investment.
Most intraday traders are charged around Rs. 220 on a daily basis for the brokerage services. But there are reliable and trusted brokerages such as Kotak securities who do not charge you for your intraday transactions for a meagre annual subscription of Rs.999. So, you get to save not only on the brokerage fees but also keep your profit intact.