Intraday traders are at more
risk than long-term investors due to the higher volatility rate. Although, with
the right knowledge, you can make best out of your intraday trading efforts.
Many traders, especially beginners, seek intraday trading tips to enhance their chance of success. Though it is suggested to opt for intraday recommendations instead of intraday trading tips. That’s because what you require is a strong intraday trading plan, not merely intraday trading tips.
SELECT LIQUID STOCKS
Intraday trading is a practice of buying and selling a set of shares on the same day before the market gets closed, that is, squaring off open position. Though for the exchange to implement these orders, one needs enough liquidity in the market. As such, the first tip among the best intraday trading tips is to avert stocks of small-cap and mid-cap that might not be liquid anymore. If not, your squaring off order may not get implemented, forcing you to take a quick delivery.
Moreover, avert investing your entire money in a single trade or stock. Stock experts suggest variegating your intraday positions across diverse stocks. This will help you balance your intraday trading plan and reduce the risk of money loss.
FREEZE THE ENTRY AND EXIT PRICE
Many stock traders and investors suffer from buyer’s delusion. This happens when the trader instantly has a change of mind since the stock purchase. The trader suddenly feels that the stock selection was not apt as s/he believed at the time of purchase. As such, they may make a wrong decision after they purchased the stock/s. The second best intraday tip recommends to decide the entry and exit price of the stock/s before you take a position and avoid your previous trading mistakes.
This ascertains that you have
followed a strong objective view.
MUST SET A STOP-LOSS LEVEL
It is highly possible that the stock you selected would fall on the day you trade instead of going up. As a result, it is vital that you decide how low the share can be allowed to fall before squaring off the position. This works as a safety step and helps reduce your losses. Most stock experts would recommend this is the most imperative intraday trading tip you may ever get. Thus, the third best intraday trading tip says you dig intraday calls, which are purchased and sell recommendations and set a stop-loss level.
If you are a newbie, it is important to follow the basic 3:1 reward to risk ratio strategy. It means that the stop-loss price should be three times lower than the exit price.
BOOK PROFIT WHEN YOUR TARGET IS REACHED
The hack of successful intraday trading resorts in the high leverage and margins that traders or investors enjoy. Leverage and margins are the resources to amplify profits and losses, both. But the trick lies in not being lured once the target is reached. Avert fantasizing for the hope that the price will keep going up. But, if you believe that the price is likely to move up, then adjust the stop-loss as per your strategy.
Conclusion-
Intraday trading is a decent trading practice, but to make it successful, you should follow the best intraday trading tips. Above is listed 5 tips which when followed can reduce your risk and increase the chances of profit.
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