1️. Invest in what you can afford to lose
Day Trading carry more risk investing in stocks. Always invest the amount that you can afford to lose. Eg: In the year 2009 satyam computer scrip fell more than 80% from Rs 188 to Rs 31 in one day. A unexpected movement in the market could lose more than you invested in Stock Market. Its very Important intraday trading rules.
2️. Select highly liquid Shares
Day traders must square off their positions at the end of the session. This is easy when you are trade in large cap, index- based stocks which are highly liquid and get traded in large volumes every day.
3️. Trade in only 3-4 scrips at time
It is advisable to diversify the portfolio while investing in stocks when it comes to trade. Limit yourself to just 1-2 stocks. Also track the stock movements closely.
4️. Do extensive Research
There should be 10-15 stocks on your trade watch list. You should be aware of all the forthcoming news like stock splits, bonuses, dividends, result dates, mergers as well as technical levels of the stock.
5️. Know the entry price and target levels
Before you enter the market always set your entry price and level. The psychology changes after he bought a stock where you could interfere with judgment and sell quickly even if the price moves marginally.
6️. Use stop loss to minimize loss
A stop loss is triggered for selling shares if the price moves beyond specified limit. It helps the buyer to limit the losses.
7️. Don’t be an Investor
Both of them buy shares considering the Profit.
8️. Book Profits when target are achieved
Greed and Fear creates hurdles for the traders. Trader should book profit when the shares reach his target. If trader feels that there is more upside to the stock he should reset the stop loss.
9️. Don’t Fight with Market Trend
Even the expert analysis cannot predict the way in which market will move. By using the technical factors trader will point out the likely movement of the market they don’t guarantee it.