Starting out is never easy. And intraday trading for beginners can seem pretty complex. After all, there is plenty you need to figure out. A thorough knowledge of market movements, trends, and entry and exit times is absolutely necessary. There is no short-cut to success for day traders, but some intraday trading tips can set you on the right path.
Tips to simplify intraday trading for beginners
Here are some are intraday trading tips to find your way in the world of online share trading:
Prepare a trading plan
Start by shortlisting eight to 12 stocks that you can monitor regularly. Intraday traders should focus on liquid stocks with medium-to-high volatility. Look at stocks that move in the same way as other stocks from their sector or index group. This is an important step because good stock selection will eventually lead to favourable trades.
Your online share trading plan should also cover exactly when to enter and exit stock market positions. Experts generally suggest that you stay put in volatile markets. The best thing to do is to wait out the volatility. Make your move only when a stock shows momentum and a more predictable trend.Â
Use objective targets
To profit from trades may be your top priority, but you must also protect your capital. Stop loss and profit targets could be useful in this regard. What happens when you set a stop loss? The open position will close automatically when the stock price dips to hit the stop loss limit. This will keep your losses within a certain limit and never go beyond it. Similarly, a profit target set in advance takes greed out of the picture. When the price hits your pre-decided profit trigger, the position closes. It prevents you from waiting for the price to go up further—which may never happen. Â
Watch your leverage
Brokers may offer high leverage against your margin account. But steer clear of opting for any leverage that is too high. You could end up losing heavily if the market moves against your expectations. Focus instead on what you can afford.Â
Put in the time
Intraday traders should keep up with the latest news because this may affect market movements. Reports on company earnings and actions also have impacts on intraday trades. The fundamentals of a company may not be as important to an intraday trader as to a long-term investor. Nevertheless, the information may offer valuable insights and lead to a better trade. Day traders also need to read technical charts and indicators to stay in tune with the latest trends in the market.
Be realistic
Not all trades will help you win big. Losses are part of the story. Don’t panic or regret your trading strategy when a trade misses the mark. It is wiser to ride out the losses and analyse why they occurred. You should also be wary of your winning trades. If you see big profits coming your way, consider whether to exit the trade sooner rather than later. Profit targets can help you avoid waiting too long, which may lead to the risk of loss. A good practice might be to evaluate your gains and losses on the stock market on a daily or weekly basis. Once you gain some experience, you will know how to play in a given situation.
Conclusion
As you venture into the world of intraday trading, keep these intraday trading tips in mind. It may a good idea to open an account with a dependable broker like Kotak Securities. You will then gain access to a range of trading platforms and services that simplify the way you trade.
