In Intraday Trading, The Trader Buys And Sells The Shares Within In The Same Day This Is Also Known As Day Trading.
Intraday Trading Is Very Risky, You Need To Follow Technical Levels And Be Good At Reading Charts. For Beginners, It’s Very Hard Because They Can’t Control Their Emotions And Fear So They Do Some Mistakes While Trading.
In This Article, You Are Going To Learn About the Top 5 Mistakes To Avoid In Intraday Trading.
Avoid Overtrading, The Most Common Thing That Beginners Do Is Overtrading.
For Example What Most Of The Beginners Do Is, While Trading If They Lose Some Amount In Their First Trade Of The Day. Then They Do Another Trade To Compensate The Looses In Their First Trade.
Likewise Lot Of Beginners Do Overtrading. Finally, At The End Of The Day, Your Profit Will Be Less, And The Charges Will Be More.
So While Trading Set A Limit For Your Loss As Well As Your Profit.
For Example, If Your Capital Is 50k Then Be Clear About How Much Loss Can You Bear And How Much Profit You Want. If Your Loss Limit Is 2k and Profit Limit Is 4k, Then Stick To The Limits.
If You Loss 2k Then Stop Trading For That Day And If Your Profit Is 4K. Then Stop Trading For That Day, Don’t Go For Overtrading.
If You do Heavy Overtrading Then Your Charges Will Be More Then Your Actual Profit.
Most Of The Beginners Will Trade every day, Mainly The One Who Are New To Stock Market They Trade every day.
It Is Not Compulsory To Trade Everyday, So Trade Only When You See The Opportunities. Most Of Beginners In Their Initial Days Are Addicted To Trading. If They Don’t Trade For One Day They Feel Bored And Emptiness.
Addiction To Trading Is A Serious Problem, So Trade Only When You See The Opportunities.
Avoid Averaging In Intraday Trading
When A Trade Is Not Working Out Or Not Moving In The Direction They Think, The Traders Put More And More Money Into That Trade-In Order To Average The Prices Down.
But What They Don’t Realize Is That. They Are Digging A Deeper Hole By Throwing Their Money Into A Bad Trade. If Your Trade Is Giving Losses Just Except It Was Not A Good Trade, Take The Minimal Lose And Get Out Of That trade.
For Example, After All Technical And Chart Analysis You Bought A share At 100Rs By Thinking That The Share Price Will Increase From There. But Instead, The Share Price Started Falling And It Fell To 97Rs.
So Now Most Of the Traders Think That They Bought At 100Rs And Now The stock Is At 97Rs And They Buy Again At 97Rs To Average Down The Share Price And In The Hope That It Will Increase. If They Stock Again Falls To 93Rs, They Buy Again At 93Rs And Likewise The Quantity Of The Stocks Will Increase As Well As The Losses.
So If The Stock Moves In the Opposite Direction Of What you Thought, Then Accept That It Was A Bad Trade, Book The Minimal Losses, And Do Analysis On Any Other Stock To Trade.
Stop Loss In Intraday Trading
Stop Loss Is The Most Important In Intraday Trading. Most Of the Beginner Traders Don’t Even Use Stop Loss.
By Using Stop Loss You Can Exit The Trade With Minimal Losses. The Value Of Stop Loss Is Known To Only The Well Disciplined Traders. Stop Loss Is Mandatory For Intraday Traders.
Don’t Put Stop Loss Blindly, Analyze The Charts And Put Stop Loss According To The Charts, According To The Support and Resistance.
Sometimes Operators Or For Any Other Reasons Like Good Or Bad News There Will Be A Sudden Spike In Stock Price. If It Is A Bad News And Suddenly The stock Fell So Much, At That Time If You Put A Stop Loss Then You Can Exit With Minimal Losses.
Or If You Went Away From The Screen For Five Minutes And By The Time You Return Sometimes The Stock May Fall 5 Or Even 10%. So If You Put Stop Loss You Need Not To Worry About These Things.
If You Want To Sustain In Stock Market You Need To Well Disciplined.
Trade With The Money You Can Afford To Lose
Trade With The Money That You Can Afford To Lose. Don’t Trade With The Money That You Borrowed From Your Friends, Family, Or Others.
Intraday Trading Is Very Risky And While Trading Emotions And Fear Are Common For Beginners. So If you Are Trading With Money That You Cannot Afford To Lose Then The Fear Is Even More And It’s Very Hard To Control The Emotions.
By That Fear, You Do More And More Mistakes. So Only Trade With The Money You Can Afford To Lose.
If You Are Trading With The Money That Was Borrowed From others Or The Money You Can’t Afford To Lose. Then If You Lose Some Amount Then You Will Be Feared That You Lost The Money And Think about How To Recover The Loss And You Will Go For Revenge Trade To Recover The Losses You Made And Will Trade Aggressively To Recover The Losses.
Finally, You End Up Losing The Remaining The Capital Too. So Don’t Trade With The Money you Cannot Afford To Lose.