Making money is not an easy task and trading profits can be even more difficult if someone is randomly buying or short selling (i.e. selling 1st) based on pure gut instinct or based on some broker’s recommendations.
If one notices, the majority of the analysts & TV views on individual stocks which are followed by thousands of people do not work as during the day the markets also fluctuate quite a bit. Brokers are unfortunately more interested in generating brokerage rather than guiding the client to take an informed trading decision thereby making the client handicapped. The trader is on his/her own! This compounds to traders making more losses as suggested by general statistics that 90% of intraday traders actually fail.
After years of trading, I can share with you certain points which have helped me make sustained profits in intraday over a long period of time.
1) Select maximum 2-3 stocks/indices for trading: Stay focused on very few stocks or probably just Nifty or Bank Nifty in the initial 6 months. This will help you understand the movement of that particular stock/index much better and help you make profits even in extremely volatile market conditions
2) Use multi-frame charts wisely: As a thumb rule, always understand the long-term trend through Monthly, Weekly & Daily charts. Traders who understand the long-term trend always find it easier to gauge the short-term trend through 15 minutes or 5 minutes chart.
3) Control your urge to overtrade: As a rule, once you have 1-2 profitable trades, learn to shut shop and enjoy the booked profits. Many-a-times, traders from winning positions during the day end up making heavy losses by the end of the session due to greed and stupidity thereby losing control over their positions.
4) ‘No trade is also a good trade’: There will be times when the stock/index won’t be in a clear trend. This would mean a rest day for you or just observe the market as sometimes not trading also could be a good strategy as you can protect your capital
5) Keep it simple: Last but definitely not the least, keep your strategies simple. Do not clutter your charts with numerous momentum indicators or other tools as this could lead to severe confusion. Focus only on candles, volume & at best 1-2 indicators.
Ultimately, one should always remember that trading or investing is about taking the right decision at the right time. There will be some rough days for sure as market volatility is only going to increase but experience, patience, knowledge & discipline will help you stay in profits and even maximize them at the right time. Follow these simple rules and you will be amazed to find out that making money is indeed easy! Happy trading!