10 Basic Day Trading Rules For Intraday Traders

Basic Day Trading Rules For Intraday Traders Day trader cautiously monitoring stock movement.

(4) Make Positions With Limit Orders Instead Of Market Orders

It is one of the most desirable & basic day trading rules for first time traders or beginners. A market order is a default trading option that involves buying & selling of equity immediately at current market price.

However, the current market price or best available price doesn’t necessarily mean profitable. The drawback of market order is basically revealed during highly volatile conditions such as stock market crashes or flash crash.

A high volatility can trigger intraday orders at much far away prices than anticipated. On the other hand, a limit order is an order to execute a stock at a specific price or better.

It helps you to control maximum price of a buy order & a minimum price of a sell order. Limit order are considered best option for making positions during intraday or margin trading.

[Read Also: 11 Great Tips To Trade Stocks During Earnings Season]

(5) Perform Appropriate Research & Analysis

It is one of the most popular & basic day trading rules for intraday traders. Research & analysis is the key to get success in stock markets. You can beat other traders only if you are well-informed about a given script.

Some of the valuable research & analysis needed to trade intraday include support & resistance of a stock, trading range, date of quarterly results, analysts result estimates, events related to concerned company, national & international events & many more.

Day trading can become extremely difficult in absence of research & analysis. However, first-time traders should not forget to learn basic trading procedures needed to place orders online.

You should have sufficient experience of working on trading platform to get familiarize with it.

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2 Comments on 10 Basic Day Trading Rules For Intraday Traders

  1. dilip kumar malakar // April 4, 2018 at 5:57 PM // Reply

    suppose i buy 10 shares of ABC ltd @ $100 and sold them @ $200 in intraday trade and earned $1000. Now after and hour i have done short sell of ABC ltd @ $300 and at the end of trading session i have buy the same @ $400 and my loss in short selling is $500. so my question is do i will able to do such trade and what will be my net profit/loss earning.

    • Editing Staff // April 6, 2018 at 7:44 PM // Reply

      Practically, this much of stock volatility is almost impossible during normal trading sessions. However, if you can perform such a trade anyhow then your profit in first case is $1000 (as mentioned by you). But, your loss in second case will be $500 (as mentioned by you). So, your total profit will be $1000 – $500 = $500. Here, we are ignoring any brokerage that will be charged by your stock broker as well as security transaction charges of stock exchange else you have to deduct it from both cases to calculate the total profit.
      Best Wishes,
      GetUpWise Staff

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