Golden Rules for Intraday
Introduction
SGX Nifty is an indicator being used by Indian Markets to predict Nifty Opening at 9:15 AM as Singapore markets open around 2.5 hours before Indian markets? SGX Nifty is available for trade from 6:30 AM to 11:30 PM as per Indian time. The First thing is that a trader should analyze SGX Nifty, its trend in International Market before our NSE opens for trade at 09:15 am. A Trader should find the market trend in the first few minutes of opening of NSE market for trade. Always buy strong stocks in an uptrend and Short Sell weak stock in downtrend first and square off your positions later. There are some Rules for Intraday we provide in this blog.
Intraday Rules for Traders
We are giving several Intraday rules for traders to help them increase their accuracy
Rule#1
Always do trading in a disciplined manner
A trader who wants to do trading in the market has to put some discipline while doing intraday trading and keep their emotions away from their trade. If a trader follows this rule, he maintains very good accuracy in their trade. A trader has to become a robot while doing trading, always wait for a confirmation before entry in trade, always put a stop loss.
Wait for confirmation
Always wait for confirmation before entry in trade. A trader can use any candlestick pattern like a morning star, an evening star, bullish engulfing, bearish engulfing and a trader can use any candlestick pattern like RSI, MACD, Bollinger band, Ichimoku, moving average and a trader can work on price action but before entry in a trade they have to wait for confirmation after confirmation makes a solid entry and make a handsome profit.
Exit on stop loss
A stop-loss is a very good weapon in our hand but the problem is that we don’t use this weapon in our trade. If a trader wants to put a stop loss he put in his mind except not put an automatic order of stop-loss. If a trader put stop loss in his mind, he is not able to exit their position from trade after hitting the stop loss he waits for a reversal only but it will not happen and he books a huge loss so it’s better to put an automatic order instead of put order in mind.
Book your profit
A trader has to set their targets while doing trading, he can apply for support and resistance or he can use Fibonacci retracement for setting his target and according to this he has to book profit
Don’t do overtrading
Never do overtrade in both cases (profit & loss). A trader who wants to do day trading has to finalize his daily profit and loss target. Once He gets the decided profits, he should square off his all positions and stop trading for the day. Even if he makes losses on his trades, i.e. he is losing the money that he had fixed for the day. He should exit his positions, book loss, and close the trading application for the day.
RULE#2
Always use 1:3 risk-reward ratio
A trader has to use 1:3 risk-reward ratio while doing trading if he follows this rule he never faces a minus figure in his account. To clear more about these rule I take one probability rule. “Toss one coin and probability of head and tails of this coin is 50-50 if we toss the same coin four times the probability of head and tails is 0.25-0.25-0.25-0.25.” If a trader applies the same rule in his trade and uses a 1:3 risk-reward ratio his account never shows minus figures but excludes brokerage from this rule.
Always do trade with a small amount of capital
A trader should use small capital of amount while doing trading. If he put all his money in a single trade and face loss then very soon he will exit from the market and lose several opportunities for trading. The most important rule of this market is “how long you survive in this market”. So always do trade with a small amount of capital.
Do not put all money in intraday trading
A trader should not put all his money in intraday trading, out of his 100% of the capital he should use 20% in trading and while remaining 80% capital in investment because “The big money is not in buying or selling, but is waiting for it will be”.
Rule#3
Avoid biased trading
A trader should avoid biased trading. If a trader makes a buying or selling position then he has to become confident in his trade don’t do trade on news, on any recommendation, on advice.
On News basis
A trader should not depend only on the news because sometimes we saw that a company has a bad quarter result but its share price will increase, this will happen only because of Demand & Supply. It is the most important factor in price action.
Don’t trade on advice or tips
A trader should not do trade on advice or take any tips because if a person who provides tips and give 100% surety in trade then why he shouldn’t make his own trade and make a handsome profit, why he providing tips only just for small amounts. Think about it before trade on such advice.
Analyzing your Trades
Some time your some trades may go wrong and sometimes you could make a lot of money. Once the Market is close, we request you open your trading book and write your own report of the trades done by you and what went wrong and which decision was right. This will help you to avoid loss-making trades in the future.
Traders should avoid trading for a few minutes when the market opens for trade and also when the market is closing for the day. If you are a newbie to trade, trade-in small quantities first, later on when you get experienced, you can trade as per your requirement. We say that market is a sea of money, if you follow the rules above, you will surely earn a lot of money doing day trading.