InvestorQ : What are the most important things to remember in intraday trading?
Bhavika Nehru made post

What are the most important things to remember in intraday trading?

Bhavika Nehru answered.
3 years ago

As a trader there is 3 very important facets to intraday trading which you need to remember and are enumerated as under:

· Identifying good stocks is the first step. Your intraday trading performance will be as good or as bad as the stocks you select. You need to select stocks that are predictable yet show traction in response to news and cues. Volumes are a major criterion as are the spreads and the tick sizes of the order.

· Managing the risk is the second key item on your agenda. Your risk has to be managed in a variety of ways. There are stop losses, there are profit targets and there is market intelligence. Use all these to limit your risk. At the end of the day, intraday trading is all about managing your risk and now about chasing returns. Returns will follow as a logical corollary if you risks are properly managed.

· Bring down your costs to the bare minimum. Your intraday trading charges contain a host of costs apart from the brokerage and hence you need to take a holistic view to understand the break even of your trade. The key feature of intraday trading is that it is a risky game with prospects of returns if risk and costs are managed properly. Hence your costs have to be managed in such a way that you always leave a small cushion to err. Your starting point in intraday trading must be to fully understand the cost structure and minimize the impact of trading costs.