If you are keen to supplement your current income, online share trading as a day trader could be an excellent option. Of course, you may be concerned whether you have the aptitude for trading on the markets. And yes, intraday trading for beginners can be a little complicated. Need help figuring it all out?Here are some intraday trading rules that you could follow.
Online share trading rules for day traders
- Create a plan of action:Rather than chase every promising opportunity, limit your choices to eight or 10 quality stocks. Regular monitoring of these stocks will help you assess the best entry and exit points. Indicators, charts, market data, and the news can support you todraw up an effective intraday trading
- Follow the trend:Are the markets bullish? Choose securities that are likely to move up aggressively.But if bearish conditions prevail, pick stocks that are dropping faster than the market. Experts advise not to go against the market trend. Be on the lookout for sudden reversals as well.
- Keep emotion away: Fear and greed can hurt the day trader.You are sure to face some losses as you start trading, but don’t fret over them. Instead, create objective trading goals and follow them consistently.
- Collect profits quickly:Day traders have a small window to gather profits.So, don’t keep sitting on profitable trades asprice reversals can happen suddenly. When trading a short position, experts suggest placing your target slightly below the earlier low. When going long, the target price should be slightly above the earlier high.
- Don’t overtrade:Rather than trade all day long, be selective. Ensure that the stock price movements ensure more rewards than risk; otherwise, it would be a poor trade. Seasoned traders often go slow when markets are volatile or there are no clear trends.
- Use limit orders:Limit orders enable you to sell or buy securities at the prices you specify. The trade goes through only when the asset hits your specified price triggers. In contrast, market orders get executed right away at the current market price.Market orders can thus result in losses if the price moves against you.
- Be open to learning:Maintain records of all your trades, and evaluate these regularly to assess which strategies worked for you. It is also important to keep up with the news, as it could affect how stocks trend on the exchanges. Before placing an order, carry out price analysis, use charting tools, and study different indicators. It will help you to make the right trading calls.
- Be diligent, not reckless:Rather than gamble away all your money, be patient and cautious. Aim for profits but keep losses in check as well. To ensure this, devote time to research and analysis on a daily basis.
- Ration your capital:Intraday trading can help multiply your wealth but you must also be prepared to lose money on trades. That’s why it is advisable to invest amounts that you can afford to lose. And rather than use the profit earned to make more trades, hold on to it as back-up for a rainy day.
- Use stop loss:A stop loss should be an integral part of your exit strategy. It safeguards your capital in case a security moves against you. The trade is executed as soon as the price hits your stop loss trigger, thus keeping your losses within a manageable range.
These day trading rules can help you to find your way in the markets. Keep experimenting with different approaches to figure out what works for you. It may also help to open an account with a dependable broker like Kotak Securities. You can then access a range of resources that make online share trading easier than ever.