How do I earn profits in intraday trading?

If you are asking this question, then you need to know a lot about the Stock market and how the stock market works. Intraday is not as simple as it is sold by most of the intraday trainers. The answer to this question is that it requires a lot of factors to become a successful trader.

Earlier people use to earn from the price difference in exchanges but at that time calling charges were expensive and still, people use to make money. One must understand that intraday is risky and people wipe out their whole account in intraday. There is no day trader on the Forbes List.

Intraday trading is done when you make and close your position on the same day. Brokers give 10x to 50x margin on your intraday trades. If you are not going to close your position by end of the market session for the day, then your broker will itself square off your position. Intraday is the platform where you can sell the share without getting them delivered to your Demat account.

Simple Steps to be followed for Intraday Trading:

Learn

First Learn about the Stock Market as it is important to know before you start intraday trading. You must have a deep understanding of fundamentals and technical analysis so that you can make informed decisions about your trade. It is important to understand why you are taking a particular trade then how you will take the trade. Each trading platform has a unique interface and it is important to know everything about your trading platform.

Follow Market

“Trend is your Friend” is the most common saying in the stock market. The safest way to earn money by trading is by following the trend and making your trades in the direction of the trend. If you go against the market trend, then you can easily blow your trading account.

Prepare Today for Tomorrow

On must be prepared before making any intraday trade in the stock market. First, prepare a list of stocks that you want to trade tomorrow and make sure that stocks are high volume liquid shares. Go through the charts and patterns that you can be profitable for you. Set up your trading strategy and you must enter the market only when all the conditions related to your setup are met.

Risk Management

Risk Management is the core of Intraday trading. If you are not managing your risk, then you might lose your hard-earned money. Risk capacity and risk appetite vary from individual to individual. One must understand that not all trades are profitable and the only way to survive in trading is to have a proper risk management system that is followed by you dedicatedly in every trade.

Avoid Greed and Fear

Greed and Fear are the two most important factors that affect most of the intraday traders. These two psychological factors divert the choice of traders which leads to huge losses. It is always advised to avoid these emotions while trading the market as under the influence of these psychological factors traders over trade which is disastrous for day traders.

Stop Loss is Mandatory

Most of the intraday traders trade on the margin given by their brokers which increases the risk of their capital. Stop Loss is mandatory in case your trade goes against you. Stop Loss will help you survive the uncertainty of the stock market. All the brokers now give the facility of Bracket Order (BO) and Cover Order (CO) so that you must put a stop loss before taking a trade.

Entry and Exit Point

It is necessary to know when you are going to enter the market and when you will be exiting the market. You cannot be random in your decision related to the stock market, especially Intraday trading. You must know the reason why are you entering at a particular price point and what will be your profit target and placing a defined stop loss as per your risk is mandatory.

Conclusion

Intraday Trading needs discipline, patience, and a deep understanding of the Stock Market. Traders need a lot of practice and control over their emotions to be successful in the market. Proper risk management is mandatory as poor risk management can kill your entire capital. Stay focus on your goal and always make informed decisions.