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Overview of the Rules of Intraday Trading for the New Traders

The intraday trading is the type of trading where the entire share transaction is done within the same day. This means that you have to buy shares and then sell those shares on the same day before the market closes. This type of trading is also called day trading by a number of traders. The intraday trading is quite risky and so it is recommended that you should only invest that amount which you can afford to lose. 

If you are interested to go for the intraday trading and want to know about its rules then you can go through the list below:

  • If you want to do intraday trading then trading with liquid shares is the best option for you. The index based large cap shares are extremely liquid and you can trade large number of these shares every day. The mid-cap and the small-cap shares are not at all suitable for intraday trading as it is not possible to trade large volumes of these shares and intraday trading with these shares could leave you without any buyers at the end of the day.
  • When you do share trading, it is always recommended to invest in the stocks of a number of companies; however, this is not the case with intraday trading. For this type of trading it is better to deal with just one or two shares. You can have about 8-10 shares in your watch list however you should never trade in more than 2-3 shares at a time.

  • Before doing an intraday trading, it is extremely important to do a proper research work with your watch list. It is also important for you to know about all the future transactions related to trading. This will include knowledge of aspects like the bonuses, the dividends, the result dates as well as the mergers. In order to know about the support level and the resistance, you can feed in the price on the relevant websites and you will be able to get all the necessary information.

  • Before you invest in any share it is very important that you fix both your entry price as well as the target price. Most of the buyers tend to change their mind after buying the stocks and this can often be a hindrance to proper judgment. This often makes these buyers sell their stock quite fast and so they are not able to make a good profit from share trading. So, they might lose an opportunity to earn a good profit. If you already have a set target in mind then there are fewer chances of you selling the shares before you actually should.

  • It is always better to use stop losses because this is prompt for you to sell your shares if its price goes down below a particular limit. This will prevent you from incurring too much loss.

  • Intraday trading and investing are completely different from each other and the factors that are considered for both these cases are completely different. One takes the fundamental data and the other takes the technical data into account. It is not at all good to mix the two. It often happens that if the share price goes down then the intraday trader in place of booking his loses tries to keep the shares with him or her and wait for the prices to recover. This can prove to be a major mistake because these shares were bought for a very short span of time.

If you are an intraday share trader then you should do the trading keeping all its rules in mind. This will surely help you to earn a good profit from it. If you want you can look into the website of some of the best share trading companies in India and take your decisions based on their suggestions.

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