What Is Intraday Trading? How to do Intraday Trading Like a Professional?
Day trading is a form of speculation in securities in which a trader buys and sells a financial instrument within the same trading day, so that all positions are closed before the market closes for the trading day to avoid unmanageable risks and negative price gaps between one day’s close and the next day’s price at the open.
How to do Intraday Trading like a professional?
Professional means for me who earn some money or achieve his/her target based on risk tolerance. Professional traders have 3 main things in them if you look carefully.
Most common things in professional traders are:
1) TRADING SYSTEM:
All of the good traders out there have a system that is backtested by them in the real market and has met their expectations in the real market. Those traders always work on their own system which they’ve learned from the books, courses, or with their own experience.
The system includes the “ENTRY POINTS, EXIT POINTS, STOP-LOSS LEVEL, TAKE-PROFIT LEVEL, SUPPORT, RESISTANCE, TREND, TREND-LINE, INDICATORS, DIVERGENCE OR WHATEVER THEY USE”.
Trading without a system is like driving a car but don’t know where to go, just keep driving and after that regret it in the end to waste time, money, knowledge, and hard work for nothing.
So it’s always better to have a great system for trading in the stock market or in any market. Also, always backtest that strategy first in the real market.
2) RISK MANAGEMENT:
The second rule of professional trading is, “taking calculated risks is always better, otherwise, you might lose all your money”. and if you don’t have the capital with you, then you automatically will be out of the market or the trading business.
The only thing we can do in the market is “LIMIT OUR LOSSES”.
We don’t know the reward that we can get from the market, the time it’ll take to hit TP, but we know that we can take a calculated risk on our whole capital.
Most of the professional traders take 1% risk in their intraday trades and at most 3% risk on the total capital in the swing trade.
They don’t take this whole 1% or 3% in a single trade, they diversify their trades like 1% loss in every trade and will take 3 swing trades, that’s how they lose less and win big.
Risk Management is considered as the 30% part of the whole trading.
3) PSYCHOLOGY:
This is the last and most important part of trading. 90% of the traders with a good system and risk management lose in the psychology part and become a part of the whole 95% losing traders in the market.
Do you know why this happened so?
To become a good trader you have to surpass overall 95% of the traders who are trading in the market. 50% of them are almost unaware of what they are doing in the market.
They are trading on the opinions of their friends, barbers, and other people out there, so don’t be one of them. If you’re reading this post then you’re over that 50% of the people because they don’t even want to study about anything.
If we look very closely then your competition is only with 25% of the top traders and the psychology made that part very easy. If you have control over human emotions then you can easily take over them.
If you can control your greed, hope, anger, and all the emotions in trading (which is a very tough job to do), then you can really be a professional trader in the stock market.
Now a few more things that you should learn to do professional trading in the stock market.
4) DO YOUR HOMEWORK:
Always have 2–3 tickers in which you’re going to trade the next day with pre-defined entries, exits, stop-loss levels, take-profit levels, support, resistance and make sure there is no news in those stocks.
5) DONT FORCE TRADES:
If you think there’s nothing going according to you then don’t trade on that day. Just stay away from the charts otherwise you’ll end up getting into wrong trades. And if the market opens with a gap up or gap-down, then avoid trades that day.
6) NO OVERTRADING:
If you already made a profit on the day then control your greed and stay away from the charts. If you hit your loss limit for the day then don’t try to do revenge trading, if you fail then it means you were wrong either technically or psychologically, so don’t try revenge trading. “MARKET IS SUPERIOR”.
7) STOCK PICKING:
Always pick a stock that is rich in volume and the price should not be less than INR 100 and more than INR 5000.
I think we’ve shared a lot here. If you want to know more then you can follow our website because we write a lot here about trading and investing. If you follow all these steps then you’ll become a good trader for sure.
The most important thing is psychology and “we personally think that no one can be perfect in trading neither in 100 years nor in 1 year because it completely depends on the psychology of the traders that they are greedy or fearful”.
So we hope that your question “how to do intraday trading “? has been answered well. So trade well and safe. Also, let us know about your first trading experience in comment box.