Know what should be the essentials of your intra day trading strategy before getting started with it.
Intraday trading basically involves taking positions in securities that might be long or short in duration and squaring off the positions prior to the culmination of the trading day. The methodologies and rules involved in intraday trading are different from those involved in long duration investment.
Two parties are imperative for intraday trading to take place, one party would be involved in the selling of stocks and the other in the buying of stocks. The market is an unpredictable place which means that the profit making does not only rely on the market going up but you can also earn a profit when the market is down.
However the success of your intraday trading stint would depend on your strategy. Here are some of the things you should invariably keep note of to be successful in intraday trading.
Intraday traders should have consistent and well thought of day trading plan. A good plan will not let you make impulsive decisions in the spur of the moment which can hamper your profit earning strategy.
Get into intraday trading with the money you can afford to incur a loss over. The market is unpredictable so it is important for a trader to understand how much he can afford to lose.
Practicing the trick of stop loss as a discipline will contribute to your success. Discipline is an important aspect of intra day trading.
Apart from this having properly devised entry and exit strategies and religiously sticking to them can go a long way. Liquid stocks which have high volumes are always a good option for new intraday traders as they allow the buying and selling of larger amounts without affecting the price a lot.