Intra Day
Trading is not for everyone mainly because of the reason that requires very
quick and rational thinking and we can’t just think emotionally during trading.
The process of getting in and out
of a trade is very short and because we are trading just for a few points, we
need to trade with a sizeable position so as to make a difference to our
trading account. There are a lot of mistakes that intraday traders make but I
will list some of the biggest mistakes which I feel that most of us make or
have made in some point of our trading career.
1. Trading throughout the day :- We all must have made this mistake or are still making
it in which we think that we need to trade all day long and we need to capture
each and every move that we see in front of us. This is a really big problem
because we are generally watching smaller time frames when we trade intraday,
so we may find some buy or short signals on almost all of the watchlist stocks.
Solution
- We should keep a filter of how many trades we have to take in a day, If we
don’t keep a filter or rule which limits our trades in a day, we might end up
sitting all day long and just randomly keep trading only to make the broker
rich. In these cases, we will notice that the profit that we might have made in
the first trade is given back to the markets along with some of our capital.
2. Jumping on the Trade at the market open :- This is one of the most common mistake which I always
used to do. I usually used to sit in front of the system at 7 AM and used to
watch all the world markets, Sgx Nifty , Currencies, and what not. What
happened was that when the market finally opened, I was so charged up by all
the over analysis that I usually couldn’t resist myself to take a trade at the
very first minute. Sometimes I didn’t even waited for a 5 min candle to close.
Solution
– It is always better to wait for at least first 15-30 minutes to let markets
“settle” and trade only when the morning fizz is settled down. I have noticed
that most of the trades which have good risk reward, generally come up after 1st
hour and then around 2 hours before the market closes.
3. Chatting with other Traders During market hours :- This might look like normal to most of us, but this is
seriously a big problem. When we are confident on our studies and we have
analysed everything that we can, we should just sit back and execute our trade.
If we start chatting with our trader friends and start taking their opinion
about our trade, we will be bound to be influenced by their view of our trade.
Trading should be noise- free and for a technical analyst , only chart is
his/her best friend.the trade every single day, we might lose some great opportunity. Trading without a plan is just like gambling in which we are just lured by all the money making possibilities in front of us and we
just get into the “hope” category with every trade that we make. This is a very risky way of trading and we might end up blowing our trading accounts like this.
Solution
– Always have a checklist and follow it religiously. A checklist could simply
be in a
simple
hand written format which lays out the criteria which is to be met before
taking any trade. It could be made
up with your best strategy combined with risk to reward and position sizing
factors.These were some of the mistakes that we all have done at some point of our trading career. There
Read : Do You Have a Pro Trader's Mindset ?
All should strictly follow what you have written.
ReplyDeleteI try to, thanks
DeleteIndeed true. Blessed are those who endure temptations. Regards :)
DeleteVery well explained Harneet Sir :)
ReplyDeleteNice article.
ReplyDeleteNice sirji
ReplyDeleteVery nicely explained paji... keep posting.
ReplyDeleteThanks for the DO's n Dont's specially in market hours.
ReplyDeleteThank u pajji. It is common mistake which everyone does...thank u for the solution given🙏🙏
ReplyDeleteNice suggestions 👍
ReplyDeleteInsightful, thank you :)
ReplyDelete