10 Golden Intraday Trading Rules:
Intraday Traders should follow these 10 golden intraday trading rules to make profits and to be sustained in the market as well in Intraday Trading.
What is Intraday Trading ?
Intraday Trading is also popularly known as Day Trading. By name itself indicates the Day Trading is the trading which completes in a day unlike Long term investment and Swing Trading. Intraday Trading Rules involves the high risk and there is high chances to lose your money untill you analyse a stock perfectly in technical part like chart analysis and intraday strategies most importantly the discipline.
Discipline is the key factor in the day trading, whether you are in profit or loss you should go through the rules and highly needs to be discipline. Intraday Traders may face higher volatility than long term investors, however with the right knowledge, you can make the most of your intraday trades profitable.
In day trading so many will lose their money due to the lack of knowledge and instead of learning so many people runs behind the intraday tips and paid calls. we strongly recommend you to learn first then practice, then only you can trade instead of trading tips. that’s because, what you need is strong knowledge, Powerful trading strategy and Strict discipline.
Now in this article we’ll learn the golden rules to be followed by an intraday trader to become profitable or to control the losses. these rules will protect you from becoming zero in short period.
Intraday Trading Rules are:
1. Always choose a liquid full stocks
As you already knows intraday trading involves buying and selling a set of shares in the same day before market closes. As you need to square off the open positions in a same day there should be enough liquidity in stocks else the exchanges like NSE, won’t execute your orders in the certain point where you want to exit whether it’s a target or it’s stoploss.
So always choose the high liquidity stocks for day trading to make money. You must avoid small cap and mid cap stocks in day trading as they don’t have enough liquidity, In this case your orders may not execute also they will suggest you to convert them into delivery.
2. Fix the Entry and Exit before Entry
As a day trader you should always needs to be fix the entry and exit before entering into any stock as per your risk capacity, trading strategy, price action and candle stick analysis or it might be support and resistance.
There should be atleast one reason to enter into the trade else you are doing nacked trading which may leads you to become zero soon. It might be hard to listen but its truth, not only knowing the intraday trading rules but also following is most important.
3. Keep the strict Stop loss
Stop loss protects you from losing huge money in volatility. The traders who are trading in Nifty and Bank Nifty may experienced the high volatility which takes out the huge money from our account by trading without stoploss.
This acts as protection and helps minimize the risk. Most of the experts will give this as a primary and most important rule for intraday traders. if you are a beginner and if you are facing difficulty in fixing stoploss then at least you should follow the 1:1 or 1:2 ratios as basic.
What it means if you are able to face 1000 rupees loss then you can expect 1000 rupees or 2000 rupees as targets. in this case your stoploss is 1000 and your target is 2000 rupees. this is the basic thumb rule to keep the stoploss otherwise you may lose your money in short period if heavy move comes. heavy moves usually comes in the important days where there is important events that might impact the market, so you should also observe this on priority.
4. Book Profits when the target is reached
You should always book the profit when your target price reached, never ever don’t wait for more profit. if your target is 1000 rupees there you should exit or if your target is a resistance point, there you need to exit else again it may touches your buying point and stoploss too.
So you never wait after your target comes, and you don’t need where market goes after your target. as a beginner one must follow this rule as it is very important to taste the profits.
5. Trade small Quantity
If you are a beginner of day trading you should always trade in small quantity. it minimizes your risk or losses. by trading small quantity you also may experience the market, that can helps you to learn the market. so never overtrade than your capability else your account will be vanished soon. if it exceeds your risk taking capability you may also exit from the stock market.
6. Spend some quality Time
If you wants to become a professional trader or wants to become permanent trader then you should always spend some quality time on learning and analysing the stocks. you can also observe the candlestics to learn price action strategies. If you analyse more then you can learn enough. if you are knowledge enough trader then you can earn money on stock market very easily.
7. Always close your Opened positions
If you wants to minimize the risk then you should aflways close the open positions before market closes, otherwise some times the broker aquare off your open positions else they may convert into delivery mode which needs more money than intraday. It’s not suggestible to keep the open positions as stock markets opening may depends on global markets. There will be high gap ups and gap downs, which impacts the profitability.
8. Don’t chase the market
Never ever dont chase the market as it is high volatile in nature. you need to exit from the trade as per your target and stoploss. Once you get exited from the trade as it’s hit the stoploss then don’t trade too much to recover the money, just leave the market for that day. One or two stoploss hits is enough for the day else you trade over you may loose your capital soon. Must follow intraday trading rules to become Pro Traders.
9. Keep positive attitude
For day trader, positive attitude is very important in profits or losses. the positive attitude makes us stable in decision making. it can also helps us to prevent from over trading in a single day. positive attitude will help us to start next day without any carry forward emotions from last day’s profit or loss. To build positive attitude better try meditation and doing some basic exercises like walking and running.
10. Learn from your losses and profits too
Your regular trades should be the lessons for your next days trade whether it’s profit or loss. always try to keep note all your trades in excel or write down in a book. that can helps you to learn more from your experience. As experience is the best teacher in the world if you utilise it in proper manner.
11. Trade with Market Trend
In the stock market trend is the master. if you goes opposite to the market’s trend you may loose your money. So as a day trader you must follow the trend of the market whether it’s positive or negative. you should take the trades as per the market trend, if market goes positive you should be at buying side else selling side.
12. Never use your Emergency fund
Never use emergency fund which will be needed in near term for the family expenses, for day trading. just keep that money safe because if yur loose that money, your family’s financial stability will be on toss. so never ever do that as your family’s financial condition depends on it.
Conclusion:
Above golden rules are very important in Intraday trading to minimize losses or to become profitable. you should follow these rules at any cost. as a beginner never trade directly on the trading platform. first learn the charts,
Try to analyse the stocks and their past history, get a knowledge on stock selection and keep practicing for atleast 60 – 90 days in virtual trading platform. then start trading with low quantity. Once you get mastered in day trading then you can go for high. in day trading you should control your emotions as they leads you to trade over. Make a note all of these points and keep practicing you may see the good results and you may experience the stability, confidence and change in your trading style, that will help you to become Pro Trader.
You can follow our Intraday Trading Course & Option buying, selling of Nifty & BankNifty here.
Disclaimer : Stock selection and suggestions purely based on my personal view and risk appetite. Before investing into any stock please do your own research else take a suggestion from your financial Advisor.