The Basic Rules Of Day Trading You Should Know
Day trading is a way to trade stocks that is both risky and profitable. Day trading, which is also called intraday trading, is when you buy and sell stocks during the same trading session. Here are some basic intraday trading tips you can use if you want to use this strategy to make money on the stock market. Before we get into the rules, the basic rule of trading is to use the right tools — as a share trading company we understand this better than anyone and are here to offer our customers the best Indian trading platform along with the lowest brokerage options. 1. Choose the best stocks When you start day trading, the first and most important thing you should do is choose the right stock to buy. Not all stocks are good choices for trading during the day. Since you would be buying and selling them during the same trading session, you would need to choose stocks with a lot of liquidity, which will make buying and selling them easier. Large-cap stocks and mid-cap stocks are usually the best choices for day trading because they have a lot of buyers and sellers. 2. Set prices to enter and exit the market Once you've decided on the stock you want to trade, the next step is to set entry and exit prices. Going into a trade without any goals is a sure way to lose money. Set a price at which you want to buy the stock and stick to it, even if it means you might not be able to buy it. Set a goal for when you want to sell the stock, even if it means you might miss out on any gains the stock might make in the future. 3. Don't forget to set stop loss After buying the stock, the first thing you should do is set a stop loss. This will keep you from losing a lot of money if the stock moves in a way you didn't expect. Let's say you buy a stock for Rs. 100 with the hope that it will go up. But as a safety net, you set a stop loss at Rs. 97. Now, if the stock goes against your expectations and drops to Rs. 97, the stop loss will be triggered, and your stock will be sold at a loss of Rs. 3. You will also be protected if the price goes down even more. 4. Always follow the trend This is one of the best tips you can use when trading during the day. If the market is going up, it's a good idea to buy stocks. And if it is bad, it is best to sell stocks. Contrarian views on the market are never a good idea because they can backfire. For example, many people short-sell stocks when the market is bullish because they expect the price to go down. These kinds of changes don't happen very often. Conclusion Even though intraday trading is riskier than regular trading, when done right, it can be one of the most profitable ways to make money consistently. So, if you want to do day trading, you must have both a trading account and a Demat account. Get in touch with us right away to start trading stocks. As a share trading company, we understand this better than anyone and are here to offer our customers the best Indian trading platform along with the lowest brokerage options. Want to try out our tools? Get in touch with us.