Intraday Trading Rules to be followed to Make Money in Stock Market
It is a fact that every trader wants to make a decent sum from the stock market and your dreams and aspirations of making that big buck can come true if only you follow some simple basic trading rules for intraday trading.
Intraday traders are seen as full time traders because intraday trading is a fast paced trade conducted in just a day. They effectively utilize every possible opportunity presented them to enter and exit trades.
Depending on your strategy for a day you can either reap the benefits of the trade or get beaten by the market. However this simple trading rules if followed religiously can help you make good money from the stock market.
· Trade in good daytrading stocks: it is a basic rule for professional intraday traders. Not every stock is a sure fit candidate for intraday trading. Making profit from intraday trading means investing in only good day trading stocks. And how do you identify these stocks you might ask?
ü Stock with a reasonable volatility
ü Stocks that match your strategy
ü Stocks with sector specifics
ü Stocks having good correlation to general market.
Once you can successfully identify these stocks, you can take your position as these stocks can make available to you several opportunities to trade during market hours.
· Intraday trading is a business: Thinking of your trade as something you’re doing for fun or a hobby is one of the most dangerous things you could do to yourself. Your approach to trading should be as professional as can possibly be. You should always keep in mind that you’re risking your hard-earned money and that risk starts the single moment you place the trade. So treat every trade as a business investment, that way you’re off to a good start.
· Keep your emotions under control: Emotions such as fear and greed are big enemies to a successful trade. The stock market don’t wait for anybody, so you shouldn’t hesitate either. Do not let your fear get the better part of you if the market doesn’t move in your favor. Likewise if the trade goes in your favor, exit the trade at your set profit level. No matter what, stick to your own stop loss and targets.
· Have a plan: Having a proper plan simply means setting your entry, target level, and stoploss of the particular trade you’re entering. This can be done effectively through the help of technical analysis. And this is available through online trading platforms and online trading software. Writing down your plan on a paper is also a good way to go about it, so that you don’t get distracted by the market moves. Sticking to your plans is a key to becoming a successful intraday trader.
· Do not over trade: This rule is here to guide you because entering multiple trades at a time is suicide as more trades are pretty difficult to manage. Trade only what you think you can effectively manage, keeping the number to 2 or 3 at a given time. If a trade gives you sufficient amount of profit, it is ideal to close for the day rather than overworking yourself, which can drastically increase your odds of losing.
However these rules aren’t mandatory in essence, but they’re highly recommended for intraday trading as they can help you gain great profits with minimal risk involvement.