Intraday trading simply refers to positions in the stock market that are held in only a short space of time, which means buying and selling in the same day. As simple as that sounds, this form of trading is not so easy. Intraday trading is filled with high risk but at the same time can be very satisfying. A lot of people make money by trading repeatedly throughout a day or trade in large quantities.
In as much as the trading is filled with high levels of risk and can be very complicated, it can quickly become less complicated when you learn simple secrets of the trade.
- The golden rule: Intraday trading rule is riding with the trend. The secret to being a success in intraday trading is to identify the stock, and the best way to go about this is through chart. Study the historical chart and look out for stock moving upwards or downwards. You can also look at the previous day intraday trading chart. The secret is to buy at previous day support level and sell at previous day resistance levels.
- Supply and demand:This is a secret that professionals swear by. Identify scenarios whereby supply and demand are imbalance and use as your entry points. Because if supply is almost exhausted and there are still willing buyers, the price is bound to go higher, likewise if there is surplus supply and no buyers, prices will drop. That is why it is advised to look for these turning points on a price chart. This can also be done by studying historical charts.
- Set targets: Always decide in advance how much profit is good enough as well as a stop loss level that is if the trade doesn’t go in your favor. After you must have set your targets, you must be able to stand by your decisions. This limits losses and keeps you from being greedy if the price spikes.
- 3:1 risk-reward ratio: Another secret to be a successful intraday trader is to set a proper risk-reward ratio. This allows you to “lose small and win big” making you emerge a winner even if you have losses in several of your trades. And as you gain experience you can go higher.
- Only trade what you can afford to lose: Intraday trading like I said earlier is filled with high level risk that means your money can disappear before you realize what is happening. It is advisable to invest only what you can afford to lose.
- Don’t limit yourself: Intraday trading should not be limited to only stocks. Future, options and forex are also asset classes that displays liquidity and volatility just like stocks, making them suitable for intraday trading.
- Learn from experience: There’s no day trader without losses, so don’t beat up yourself when those trades don’t go your way. Learn from your failures and move on.
- Discipline yourself: This is an ultimate secret to successful day trading. Do not expect to make that million too soon. It takes time, effort and discipline. Dispel fear and greed, because greed can make you stay in a position for too long and fear on the other hand can make you exit too soon. Make a plan and stick to it.
Author Bio: The stock market experts stockradar.in are professional traders and research house which endeavor to provide best winning trading strategies to the traders so that they stop losing money and start making consistent gains from the stock markets .