Trading rules

Every trader wants to earn money in stock markets. Your dream to gain profits can come true by following basic day trading rules for intraday traders.These rules are not mandatory in nature but they are highly valuable for intraday or margin trading. They can help you to gain maximum profits with minimum risk.

These rules are not mandatory in nature but they are highly valuable for intraday or margin trading. They can help you to gain maximum profits with minimum risk.

Day trading is a fast-paced buying & selling of securities in the same day during market hours. This share trading strategy can generate money within a short period of time. However, your losses can also be steep if you avoid these simple & basic rules of trading.

Generally, day traders are full-time traders. They utilize every possible opportunity to enter & exit trades. Intraday traders can either buy first & sell later or sell first & buy later.

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Here are some trading rules for first time traders or beginners:

  1. Use the money you can afford to lose.
  2. Start small.
  3. Be patient and disciplined with the trade setup and its logic.
  4. Trade what you see, not what you want to see.
  5. Choose highly liquid shares.
  6. Try to avoid market orders.
  7. Trade in two or three scripts at a time.
  8. Research watchlist carefully.
  9. Fix entry price and target levels.
  10. Use stop losses to contain impact.
  11. Book profits when targets are met.
  12. Don’t fight the market trend.
  13. Never add to a losing position.
  14. Each trade is an individual trade.
  15. Build a trading pyramid.
  16. Trade divergence within related underlying (stocks/commodities).
  17. In trading, one should kiss and flirt but not marry.
  18. If you have missed an opportunity, don’t run behind it.
  19. When you are not sure, stand aside.
  20. No hard and fast rule to trade daily.
  21. Don’t trade too many indices/stocks/commodities at a time.
  22. Always document the trade.
  23. Treat trading as a BUSINESS – Earnings (profits) & Expenditure (losses).
  24. Trading is neither a science nor an art.

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If all the above rules are followed strictly and religiously, in the end, more often than not, you will end up on the winning side. Even if there are more numbers of losing trades than the winning ones, don’t worry because the sheer size of all the winning trades will overshadow the losing ones and will only increase the overall portfolio size.

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