Intraday trading also known as day trading, is the process of selling and buying stocks and other instruments of the financial domain within the same day. It simply means that all notions of buying and selling need to be executed before the market closes, which doesn’t change the ownership stake of shares. Intraday trading requires close monitoring of market scenarios and can be a cakewalk for people who closely follow Zerodha intraday tips. Due to the time constraint involve with intraday trading tips Zerodha, a trader must either have a certain level of mastery or should closely follow the paradigms of the best stock broker in India. You require a well-planned day trading plan for gaining optimum benefits from it. Below are some features of an ideal day trading plan that’ll help traders cleverly fulfill trades.
- Frame according to an Analytical Approach- An analytical approach is an answer to the question, “how to you acknowledge trade set-ups?”. It could be a well-planned combination of trend lines, Fibonacci levels, chart patterns, the returning Elliott Wave Theory, moving averages, price support and resistance. This initial measure towards an efficient trading plan helps traders to concentrate on a handful of pathways that might suit the trader.
- Include your most suited individual trade setups- The trade set up forms the core of the trading process. But firstly, you must focus on the analytical approach that guides the trade setup. A good example of this would be to focus on Zerodha intraday tips and note the consolidation pattern that’ll eventually decide the subsequent action from the trader. Setups are often based on numerous factors that together lead to trades belonging to higher probability scopes. One must first figure out what trade bracket best suites them.
- Have a clear idea of your holding period- You must have a well-planned holding period because it is the deciding factor between a winning and losing trade. The best stock broker in India acknowledges short-term trades at the same time informing them about the associated risk and the need for time-based decision-making abilities. Medium range traders generally hold trades for a certain period of time ranging from a few hours to a few days, for the same they’re referred to as swing traders. On the contrary, long-term trading consists of time frames involving days, weeks, months, and sometimes years, depending on the volume and capital of trade.
- Know your risk tolerance limits- Every single pedestal while visualizing your trading plan holds utmost importance, but if you forget to include risk management your whole plan will fall apart. In this phase, traders need to explore their personal risk tolerance that aligns with their financial targets and abides by their stock trading aspirations. Risk tolerance roughly translates to the trader’s proximity to risk their capital while transacting with the stock market.
Trading plans should be rigid in the beginning but should become more malleable over a period of time when a trader wishes to limit downside risk. The purpose of a trading plan is to impart a strong visionary foundation to traders where they know their limits to operate within.
