9 GOLDEN RULES FOR INTRADAY TRADING

 


  1. Liquid Stocks: Select stocks with high trading volume to ensure easy entry and exit.

  2. Trade with Small Quantities: Begin trading with smaller positions (e.g., 10, 20, 40, 50 shares).

  3. Always Use Stop-Loss Orders: Implement stop-loss orders to manage risk. The stop-loss should be set within the trading system, not just mentally. Follow a double trade rule strategy.

  4. Set Daily Profit Targets: Establish a daily profit limit (e.g., 5000/-) and cease trading once achieved. For instance, aiming for 5000/- daily over 20 trading days per month equates to a target of 100,000/- per month. After reaching the daily target, refrain from further trading for the day.

  5. Minimize Losses and Exit Trades: Limit losses and avoid prolonged trading after incurring losses. Avoid making financial decisions under emotional distress. It is preferable to wait until a calm and rational state of mind is achieved before making decisions. Emotional decisions made during periods of stress or excessive joy can often lead to negative outcomes, particularly in stock trading. Review past trading experiences to observe this. This market requires decisions based on information and facts. Avoid trading solely on emotion, especially without a strong fundamental analysis or positive technical indicators.

  6. Avoid Averaging Down During Losses: Do not purchase more shares of a stock that is declining in price. This practice, known as averaging down, involves buying more shares at lower prices after an initial purchase has decreased in value.

  7. Filter Market Noise: Make decisions based on facts rather than rumors or speculation. Conduct thorough research on the stocks before trading. Gather all necessary information a day prior or before the market opens. This includes studying market data, conducting analysis, and understanding information that may influence buyer-seller sentiment or company announcements. Avoid trading based on tips or information gathered during trading hours.

  8. Consider Market Interdependencies: Recognize that each trading day is not isolated. It is influenced by past and future market activity.

  9. Value and Manage Time Wisely: Focus on time management, exploring side hustles, and investing intelligently for financial security and retirement.

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