Intraday trading is an addiction. Both the success (profit) and failure (loss) in it results in more and more trading until it reaches to trader’s bankruptcy or to trader’s psychological imbalance. This could be saved if an trader follows Intraday trading rules. By following these trading rules you can make much money from Intraday trading than you previously made following a hit-or-miss path.
Rule 1: Stick to your plan, no matter what
Earning a lot of money every day before the closing bell rings could be the central idea, but it cannot be a plan, from any stretch of imagination. It can never pass for a plan. If this is all one got, the situation is not very bright. The sun will soon set in the horizon leaving a bitch-black darkeness behind.
It is, therefore, advised to have a proper plan for your Intraday trading activities. And once a plan and the strategy to meet the goal set in the plan is created and tested, stick to it. Follow it to the dressing room, for even the best of the strategies, if not backed, will not succeed.
The worst thing a day trader could do to himself and his plan is to switch strategy at the drop of a hat.
Rule 2: Don’t Be Greedy
If you scan through the history of people losing money in Intraday trading then you will see pages and pages of history littered with the stories of excessive greed. Greed, if controlled, could be a proponent of growth, but when left untamed, it brings disaster for its master.
Do not wait till the last minute for the bell to toll before you can surrender the winning hand. Sell it much earlier and remain satisfied with the profit you make, or even the loss you incurred.
Rule 3: Never be afraid of loss, it doesn’t matter
If Intraday trading is a gamble, letting go of the bad cards dealt to you is the key to the pot. Many Intraday traders are afraid of loss because of which they do not keep their minds and eyes open to see the bad trade they have done. At the end, they stick to a bad trade for long, which results in more loss.
The winner in the game of Intraday trading is the one who knows when to hold it and when to fold it (surrender), so that the gain could be maximized and loss could be minimized. Keeping the losses small, in a sense, is saving money which didn’t flow through like sand from the clenched fist.
Rule 4: Information About Securities Markets
Successful day trading strategies require the knowledge of securities markets. Security marketplace is substantially the actual catching point to any far off achievement within the market. To be successful with Intraday trading, you must have an in-depth knowledge of the securities market, and the trading techniques.
Importantly, you should have an appropriate experience when attempting to design your Intraday trading strategies. Work carefully along with experts as well as certified investors that will help you have the correct details about particular security market. The actual security market is really a complicated and it is controlled by numerous elements that you need to know.
Rule 5: Severe Risk Exposure
Intraday trading is very risky, consequently you’ll want the best ways of limit these types of dangers. When developing your day trading strategies, put in thing to consider your own risk threshold, degree of assets, as well as trading experience.
Rule 6: Focus First On Preserving Capital
The final essential Intraday trading rule is to pay attention to protect your own funds prior to substantial capital gain. Though the aim of intraday trading is to break ground very fast, capital growth should come second.
It would be worthless if you loss all your capital because of the lucrative promises to gain marginally within a short trading hours. Though the concept is very simple and looks obvious, most forex traders don’t make the paradigm of preserving capital their first choice.
Although the probabilities of producing huge earnings with intraday trading are very higher, the opportunity associated with losing all of your preliminary funds can also be higher. What’s going to make you really successful is actually the way you balance in between income as well as risk dangers.
If you want to make real money in Intraday trading then you should follow the Intraday trading rules laid above. Breaking any of the Intraday trading rules may push you away from your goal. Keep your goal in mind and follow the trading rules set above.
Intraday trading has the greatest risks and trader ought to be completely conscious of this. Good planning and understanding the trade-off is vital. A cardinal rule for profitability is to plan your trade and trade your plan. To end the weeks, months, and years on the positive, you must fully understand how and what you will trade next.