Top Tips for Intraday Trading Online

When you read about people making a killing online, it is natural to be tempted to start trading in stocks. The process nowadays is much easier, with almost all established brokerage houses providing terminals you can set up at home and commence intraday trades. Some handy tips that can set you up for trading success and caveats to follow:

Choose Liquid Stocks

In intraday trading, you sell the stocks on the same day as you buy. These transactions are only possible when people are ready to buy and sell the stock. Unless the stock is liquid, you can have a situation that forces you to offload the stock for a deep discount. It is always wiser to stick to large-cap stocks instead of trading in small or mid-cap stocks where the liquidity is suspect. You will always have more trades in large-cap companies. 

Deciding the Entry and Exit Prices in Advance 

You can lose out on good opportunities if you cannot decide the best price to buy or sell. You can also be worried that you have not made the right decision because the price continues to fall after you buy or rise after you sell. The best strategy for online share trading India is to determine the prices you will buy and exit, even before you trade. You can focus better on earning profits without tying yourself up in knots. 

Set a Stop-Loss Level

Everyone wants to profit from the day’s trade, but inevitably there will be occasions when the stock price falls instead of rising. You can keep holding on to the stock, hoping it will rise. However, if the price continues to plunge, you could make a huge loss that you cannot afford. 

To prevent it, you should set a stop-loss level, i.e. the price of the stock at which you will sell it and bear the loss. Experts suggest setting it at three times lower than the price, at which you would have booked the profit. 

Conclusion

You mustn’t keep chasing more profits when the price of the stock continues to rise. If you are greedy, you should know that the market can turn against you suddenly and wipe out your profits. 

It is a sound policy to get out once you have met your target. Also, ideally, you should close all your open position at the end of the day, instead of taking delivery and hoping the prices will rise the next day.