You might have heard one famous saying, ‘Nothing is Impossible’. Now this is applicable in trading as well, especially when questions like ‘Can Intraday Trading Make You Rich’ strike in your mind.
But there is another famous quote that states, ‘There is no magic to achievement, it’s really about hard work, choices, and persistence.’
So, if you are looking forward to becoming an intraday trader and accomplishing your dream of becoming rich from trading, then there are few things that need to be considered.
How to Make Money from Intraday Trading?
Nothing can stop you from making money and becoming rich in intraday trading. It is your hard work, the right practices, and trading psychology that help you achieve your goals.
So, if you are a serious trader, or want to be the one then here are a few things to be considered before setting high expectations from the market.
1. Learn the Basics of Trading
You do business to earn money but to be a successful businessman you put a lot of time and energy into learning business skills. Doing intraday trading is similar to that where you have to invest your time in learning stock market basics.
In today’s world, grabbing any knowledge on any subject through online platforms is easier.
So, if you are serious about trading and want to become rich then there are intraday trading classes and courses where you can enroll and learn directly from market experts.
2. Start With Small Capital
Once you gain knowledge about the stock market and most preferably intraday trading, then it is always recommended to start with a small amount of capital.
Yes, to become rich, it is important to invest large capital as well, but trading is a zero-sum game where you can lose your entire capital in a matter of seconds if not executed correctly.
Whatever facts and figures you learn from the trading course, it is important to execute it practically using a small amount of capital. You can also start intraday trading from 1000 rupees or less.
Only after learning your mistakes, it is recommended to put more money into trading.
But also it is important to use it wisely. For this, you can diversify your capital by trading in different stocks where you can make decent money.
3. Do Proper Analysis
Another important step to becoming rich in intraday trading is proper and in-depth analysis. Not all stocks are meant for intraday trading and hence you must invest your time in picking the right stock.
So, how to select stocks for intraday trading?
Well, it depends upon the segment.
For equity intraday, choose the trending stock with moderate volatility and high liquidity.
In case you are doing intraday in options, then it is recommended to wait for the right trading setup to take a position in the market.
4. Manage Risk-Reward Ratio
To make intraday trading profitable, it is more important to limit losses than to book profit. Sometimes, the monthly profit is wiped off with a single trade mistake.
Hence it is important to consider using the right intraday trading strategy that gives you potentially high profit and less loss, in case the market goes south.
For example, in equity intraday trading, the trader keeps the risk-reward ratio of 2:1. However, it also depends upon your trading setup and various other factors like how much profit is good for intraday trading as per your expectations, etc.
This means for every ₹2 profit there is a risk of losing ₹1 rupee.
Now let’s say you make 20 trades in a month, out of which 15 trades were profitable. Hence you booked a profit of ₹30 (15*2) and lost ₹5 (5*1). Thus, the net gain or loss would be ₹25.
The proper risk-reward ratio, thus, helps a trader in limiting their losses and in generating high profits in trading.
5. Stay Away from Penny Stocks
Generally, to increase the position sizing, the beginner trader often makes a mistake of choosing penny stocks, (stocks which are trading below ₹10).
But they forget that these stocks have very low liquidity and circuit limits which make it difficult for them to square off their position at the market value.
So, if you dream big of earning money or getting rich from trading, then it is important to stay focused on your choice of stocks.
Conclusion
Consistency, discipline, and proper knowledge can never stop anyone from making money and getting rich in the market.
One must work on one’s psychology and emotions while trading and choose the trade based on facts, figures, and technical analysis of stocks. If you are a beginner with the dream of making trading a full-time career then it is the time to enroll yourself in the stock market classes now.
Before investing capital, invest your time in learning Stock Market.
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