Algo Trading in India |
  • September 10, 2019
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There are three simple and easy way to make profits in Intraday Trading. Just keep these three things in mind.

  • Rule number one: Stay away from Trading Terminal

Yes, that’s the most important thing to follow for a Intraday Trader, most of us believe that we need to sit in front of the Computer between 9 to 3:30 PM to make money from Intraday Trading. No, its not. I have been trading for years now. But I do not spend more 15 mins a day in front of Trading terminal.

What happens is, you see some news channel or get to see some important news with related to a stock, and you decide to make intraday trading with that stock. Looking at the charts, movement you decide that you will go in and come out quickly to make some quick profits. But the moment you place the trades, you are no longer in control. The markets or rather the Trading terminal is in control of you.

You keep staring the screen, you mind keeps telling you to exit or book profits or buy more based on the every movement you see in the MTM, and all of a sudden you would see there is some other stock showing strong moment in the screen and you would decide to jump into that stock. In the end you end up trading more and more, eventually you lose money and gain stress.

The best time to decide about stop loss is before entering into the trade, not after placing the trade. Always have clear cut rules, for entry, exit, stop loss, number of shares you need to buy etc, once you have all these, just place the order and shutdown the trading terminal. This will make you a disciplined trader.

  • Rule number Two: Blow out your Trading account at least once.

Every successful trader has blown out their trading account at least once, only then they will understand the real importance of the risk management. I have read a lot about risk management, position sizing etc but it was always boring topic to me, so i tend to give least importance and always focused on finding the right entry technique.

Finally one day it happened, I lost 95% of my trading capital in one day. That was the day I realized how important it is to protect your capital. If I haven’t blown out, I would have kept on increasing my leverage and one day would have lost huge money. So its better to blow out the account at the early stage and learn the lesson which will last life long.

Kirubakaran Rajendran’s answer to How big was your incurred loss in the Indian stock market? What is the main reason for that loss?

  • Rule number Three: Follow a Trading system not Trading calls or Stock tips

There are many trading strategies that available over the internet, choose the right trading system. Do not evaluate a trading system based on its total profits or accuracy. You should know how to find the best trading system. Check if the trading strategy requires more time, does it involves monitoring charts and needs you to sit in front of the system all the time? if so, skip such trading strategies. Do not fall far complicated strategies, remember LTCM? Long-Term Capital Management (LTCM) was a large hedge fund led by Nobel Prize-winning economists was blown eventually.

I have already shared multiple trading strategies in my other answers, you find the right which is suitable for you.

Kirubakaran Rajendran’s answer to What are some good intraday trading strategies?

Keep it simple and try to be a disciplined trader, that’s the only way to become a successful trader.

Happy Trading!

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