Do Detailed Research
The key to become successful intraday trader is do your home work and be prepared. Make a wish list with plan A and plan B before starting your trading day. Thus, doing a detailed research is key to trading success.
Define your Supply & Demand zones
To be objective trader before placing the buy/sell order, you must determine your entry point and target or exit price objective. It is common traders tendency to change mindset after entering the trade setup. This will lead to exit trades early and thus due to this loss of opportunity to gain higher profits will occur. So being objective is key to become a successful intraday trader.
Apply your Stops and stick to it
As a intraday trader particularly you must manage stop loss in an efficient way. This is beneficial in limiting the potential loss for traders. For traders who have used short-selling, stop loss reduces loss in case the price rises beyond their expectations. This helps traders manage risk and money in a prudent manner and thus makes traders emotionally competent.
Once you know what you are losing before taking the trade and you are comfortable with it, you are not prone to emotions and the probability of success as a day trader specifically increases dramatically.
Book profits and Trail stops
Traders usually get obsessed with greed and few and are prone to do mistakes. So its is advised to book profits near price projection or target objectives or trail your stop loss levels higher to protect from reversal and being objective.
Trade with the trend not against it
Trend is your friend as a trader or an investor thus one needs to follow trend to make big money. The above statement is quoted and practiced by legendary traders and investors. Because being a contrarian and to succeed as a trader is very tough. Therefore, never act against the trend if you want to become a successful trader.
Choose liquid stocks and indices
The difference between Bid and Offer price determines the liquidity in the shares or Indices. To get the smoother entry and exit trade should always trade liquid stocks, futures or options. The momentum also favors liquidity.
Usually in intraday trading one needs to square off the positions before the close of the markets. Some mid and small cap stocks may not be highly liquid which will force you to carry positions. This particularly day traders are advised to trade larger cap stocks and indices which are highly liquid and easy to enter and exit.
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