Every day trader seeks the secret to earning large profits for intraday trading. The stock market can indeed generate wealth, and given this luring factor, most trading enthusiasts look for secrets from successful intraday traders. You can make excellent profits in intraday trading, with a reputed broker such as Kotak Securities, if the market goes in favour of your trading positions. But, if it does not go according to plan, you may have to incur significant losses. This is why it is crucial to make the right position at critical junctures during the day to ride the wave of volatility. Let’s look at the leading secrets of successful intraday traders and how you can profit from them.
- Staying neutral during price movements: Regarded as the best secret of successful intraday traders, observing share price movements based on the prevailing trend is what you must follow. Successful intraday traders do not consider price fluctuations. And like them, with a clearly defined entry and exit strategy, you too will be able to ride the market volatility. Ensure that you do not switch strategies during trade as it could be a dangerous move that could result in huge losses. At the end of the day, the golden rule to remember is to ride with the market trend.
- Identifying the right stock: To search for the right stocks for intraday trading, you may want to study chart patterns and intraday charts. Before entering into the day’s trading, you may want to read up and research on historical charts and understand upward and downward moving stocks. Studying the previous day’s intraday chart can help you to understand the support and resistance levels. An excellent idea is to purchase at the previous day’s support level and short at the former day’s resistance levels. It can also help if you short below the support level and purchase above the resistance level.
- Keep an eye out for lucrative opportunities: Share trading opportunities may appear many times during the day and is not as rare as traders make it out to be. It requires time, patience and study to identify the right opportunity and make a position for a successful trading decision.
- Exercising patience during day trades: One of the most significant and overlooked factors in intraday trading is to be patient. Most day and margin traders jump all in, when the markets open, without prior knowledge or understanding. This eagerness and impatience result in substantial losses being incurred rather than profits. However, successful intraday traders take their time to chart out new strategies before the trading hours begin. It is critical to know that no single approach can be used every day. Hence, on some days, successful intraday traders may sit on the side-lines and observe the market to cut down their losses.
- Avoiding greed and panic: If you have begun trading and you observe the market going in a different direction, you may want to take some time and relax, rather than panicking. This is where maintaining a fixed and strict stop loss comes into the picture. If your stop loss triggers, you may not want to enter the market again. At this time, you may want to observe market trends and join in with other stocks. Continue to watch the market and look out for a dip to re-enter trading.
In addition to the points mentioned above, it can also help if you manage your funds like an experienced money manager. By trading with confidence, adopting key strategies and reading chart patterns — such as candlestick charts and technical analysis — you will be able to keep emotions at bay, and adopt a neutral trading approach to make the right decision. Ensure that you make your positions and execute your orders as per prevailing trend, rather then on rumours and hearsay.