8 Golden Intraday Trading Rules For Day Traders

Golden Rules for Intraday Trading-minGolden Intraday Trading Rules For Day Traders


Intraday trading is not everyone’s cup of tea. It requires the right set of skills and knowledge to become successful. Intraday trading is all about taking a position and squaring it off before the market closes. However, intraday trading is not as simple as it sounds. One needs to be disciplined when it comes to intraday trading. A trader cannot be successful if the intraday trades are taken on hope rather than on technical analysis or other factors. The day traders not only need to monitor the prices on a constant basis but also manage themselves well because the fast-paced volatility can make them take poor trades or decisions. Therefore, intraday traders always need to be on their toes and make sure they follow the rules of intraday trading. This article will assist all intraday traders as we list down some of the important day trading rules.

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Golden Intraday Trading Rules For Day Traders


1) Follow A Consistent Trading Plan


Becoming an intraday trader is not easy. The stock market will always test you. As a day trader, you should always follow a consistent trading plan rather than falling to the market volatility and trying different things. A consistent plan will help you in making good returns over a period.

2) Put A Stop Loss


As an intraday trader, you must know when to enter and exit the stock. This approach will protect you from heavy losses in the market. Putting a stop loss is one way to protect yourself from excessive losses in intraday trading. When the price of a stock moves beyond a specific limit, stop loss gets triggered and your position is squared off immediately. Therefore, with this strategy, you can timely exit your position with minimal losses and protect your capital for future trading.

3) Trade In Liquid Stocks


As an intraday trader, you must ensure that you trade in liquid stocks only. Liquid stock means those stocks that have higher trading volumes. Since intraday trading is all about squaring off the transaction at the end of the trading session, you must have sufficient buyers and sellers to close your position. This is possible only when a stock is highly liquid.

4) Trade With Money You Are Ready To Lose

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One of the most critical rules for intraday trading is to use only that part of money for trading which you are ready to lose. This is because intraday trading is risky and in volatile markets you can make heavy losses. Therefore, as a trader you must be aware of the losses and put only that part of money which you can afford to lose.

5) Avoid Overtrading


One of the common mistakes that the day traders do is to over trade. This is a very wrong approach. A disciplined trader always goes slowly when the market is volatile and even avoid trading until the market is stable again. By overtrading, the day traders not only end up making huge losses, but also erode their capital completely.

6) Keep Emotions Away


There is no place for emotions in the stock market. You must try to keep your emotional side away from intraday trading and not get affected by profits or losses. In fact, losses must be taken as an experience and you must learn from the mistakes. When the market gets volatile, a day trader must try to be patient and should wait for the pullbacks rather than taking hasty decisions and making huge losses.

7) Book Timely Profits


Booking timely profits is very important to survive in day trading. During intraday trading, the movements in price happen very quickly. This volatility can even turn your profitable trades into losses. Therefore, the time available to capture and convert profit is very less. Instead of falling for greed, you must timely book profits and exit the position.

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8) Trade with Limit orders Instead of the Market Orders


Intraday traders must use limit orders for trading rather than market orders. In a market order, you buy or sell a stock immediately at current market price. While in the limit order, you set the maximum purchase price to buy a stock and minimum selling price to sell a stock. So if the desired price set in the limit order is not reached, your trade will not be executed. Limit order keeps you disciplined and helps to contain losses.

Conclusion: The above mentioned are few of the golden rules for day trading. These rules will not only help you in making profitable trades but also managing your risks well. The beginners in the market must remember that intraday trading is an art and you can better it only with experience. So, one must exercise right amount of caution and discipline while trading in the stock market.

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Suresh KP

Golden Intraday Trading Rules For Day Traders

Suresh KP

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