Intraday Trading is a difficult and risky game. It involves more than just making the appropriate investments and cashing in gains. More emphasis should be placed on risk management and maintaining attention on current market developments.

Despite maintaining attention and minimising risks, some traders make critical errors that ultimately result in substantial losses.

A single error causes nearly 90% of intraday traders to lose all of their money. The top seven Biggest mistakes that intraday traders should avoid are listed below.

Biggest Mistakes to Avoid while doing Intraday trading

Here the 7 biggest mistakes to avoid while doing Intraday Trading:

Not performing Technical Analysis

During stock market trading, the phrase “surety” does not exist. However, one of the best things a trader can do is research, evaluate, and make conclusions based on historical stock or company success.

Both novice and seasoned traders start their trading process with this phase. Trading requires a critical analysis of the stocks and their past.

In order to make wise selections, a trader must look at the price, volume charts, and various other technical indicators.

These indicators aid traders in determining how long and whether the stock will continue its recent trend.

Going By Tips Rather Than Learning To Self-Trade

Getting profitable trading advice from traders is quite easy, but it’s difficult to profit from these ideas. Learning to self-trade is the greatest approach to make money in intraday trading.

Getting trading advice from seasoned professionals may result in some profit, but not always. A trader must become familiar with charts, comprehend their structure, and develop their own trading style.

Many intraday traders choose not to take this risk, which causes them to lose patience and stop trading.

Not setting up a Stop Loss

Stop-loss is a tool that is mostly used by traders to protect themselves from big losses. Stop-loss is frequently used by intraday traders since it helps them determine how much loss they can afford to take.

When a trader places a stop-loss order, they are telling their broker to sell their stock as soon as the market drops below a specific price throughout the trading day.

This order is instantly executed when the market declines, protecting a trader from losses. Due to their desire for high risk, day traders want to increase their profits.

As a result, while putting a purchase order, they fail to set a stop-loss order. They must consider how to increase their profits while protecting themselves from big losses as day traders.

Keep in mind that setting a stop-loss order only takes a short amount of time, and if the market declines, it can save them from losing all of their prospective profits.

Trading Illiquid stocks

Due to a lack of research, trading in illiquid equities is one of the most frequent and costly mistakes made by day traders. They must comprehend how important stock liquidity is to intraday trading.

Let’s clarify with the following example:

Imagine a scenario where a trader buys a particular stock in the early morning with the intention of selling it before the market closes at a profit but finds that there are no purchasers waiting to acquire the stock.

Because of this, a trader’s sell order might not be carried out, and the stock might instead be sent to you in their Demat account.

As a result, it’s crucial to position trade-in companies that have a lot of liquidity in their market shares.

Not Taking a 360 Degree View of the Market

It’s common for intraday traders to seize the trend and ride it into the closing day, but it’s not that easy. As fundamental investors, they must probe deeply and examine the stock performance to understand the subtleties of the trade structure.

As intraday traders, they must comprehend the market trend and adopt a 360-degree perspective of the market in order to better comprehend the market.

Developing a Negative Attitude or Being too emotional

The main rule of intraday trading is to avoid being overly dependent on gains and losses and experiencing depressive thoughts when engaging in intraday trading.

A trader’s odds of suffering losses are reduced if they cease trading altogether, keep their emotions in check, and do not allow losses to get in the way of their goals. It will nonetheless grow a bad attitude about the stock markets.

They must always consider profit and loss in the same way and keep their attention on improvement by adhering to the guidelines while engaging in intraday trading.

Ignoring the Trading Plan and the Trading Diary

The two most important items that intraday traders overlook are the trading plan and the trading journal. First, let’s examine the trading strategy.

The trading plan outlines how intraday deals should be planned and carried out. This includes setting profit goals, placing stop losses, taking into account various aspects, and choosing the ideal trading times.

A trader must precisely follow the guidelines in a trading plan, which is a whole book for trading activities.

The trading journal, on the other hand, keeps track of all trades made during a single trading day as well as their justifications and EOD performance analyses.

The trader’s trading diary aids in identifying problem areas and closing trading plan gaps. Success as an intraday trader will be challenging if the trader does not prioritise the trading plan and the trading diary.

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