Intraday Trading Tips
You need to have a well thought out plan if you want to day trade like a pro. It is not easy to decide when to buy or sell financial instruments, while taking advantage of the small price moves. Following intraday trading tips blindly may or may not work in your favor at all times. You need to adopt invest some of your time to understand a few things and learn a few strategies that you can adopt. Here are a couple of things from Share Advisorto keep in mind when it comes to day trading.
Try and gain as much knowledge as possible
Gaining knowledge about share market recommendations and following day trading tips is not good enough if you want to day trade like a pro. You have to keep yourself abreast about the latest in stock market news and the various events that can affect the prices of the stocks. You need to do your homework thoroughly. You should create a wish list of the stocks that you would like to trade and get as much information as possible about those companies.
Share advisor always counsels its clients to do a thorough research of the general market, scan business newspapers and go through reputed financial websites regularly. All this can help you in taking informed decisions about the stocks that you need to pick for day trading.
Set your trading amount aside
Putting all your money on day trading is not a wise move to make. You have to make sure you have adequate money for your basic living and expenses and then keep aside a certain amount of funds for day trading. You should be prepared to lose this money if things don’t turn out as expected. Also, Share Advisor always advises the clients that they decide the amount of capital that they can risk on every transaction you make. Ideally this should not be more than 1 to 2% of your account.
Invest some amount of your time
The stock market opens at 9:15 every morning and remains open till 3:30 (Mon-Fri). Although you may not trade throughout this period, you will have to invest your time in tracking the market and spotting the opportunities that can come up any time during the trading hours. You will have to put in most of your day if you wish to day trade like a pro. If you are not ready to put in that kind of time, it is better not to consider day trading.
Always start small
You don’t become a pro in day trading overnight even if you follow the best share market tips at all times. It takes time to understand the market, recognize the trends and find appropriate opportunities. Therefore, it is better to stick to just about one or two stocks in one day trading session. This is exactly what most stock market tips will tell you. You can slowly start increasing once you get the hang of it.
Never go for the Penny Stocks
Low stock prices and deals can be very tempting in day trading. But it is advisable to stay away from penny stocks. Companies that offer them often have minimal operations and make little or no profit. Penny stocks fluctuate tremendously in price; but they are highly illiquid. The risks are too many when compared to any benefits if at all. There are very little chances of one hitting the jackpot if he deals with penny stocks.
Always time your trades
The moment the stock market opens, you may want to buy or sell your shares based on stock market recommendations. But it is always best to resist this temptation. The stock market is at a highly volatile state when it opens. Unless you are a seasoned player, you may not be able to recognize the patterns and pick the right stocks to trade with. If you are a beginner to day trading, it is better to spend the first half an hour reading the market even if you do find some amazing opportunities. Try trading during the middle hours when the market is less volatile.
Limit your orders to cut your losses
Always set your entry and exit price before you trade. This way even if you don’t get to maximize your returns, you will at least make sure your losses are minimized.
Whether you follow these day trading tips or not, one thing you need to ensure if you want to day trade like a pro, is to remain cool. This is the advice that the expert team at Share Advisor gives its clients. Remember, it is not possible to win every trade. If you want to win some, you will have to be prepared to lose some. Keep your fear, hopes and greed at bay and use logic while making decisions. This is the only way to become a pro at day trading.
(For any query on trading, please contact Share Advisor)