A large majority of intraday traders face loss in day trading. According to the mini invest survey, 90% of people lose their money due to lack of knowledge and do common mistakes in intraday trading.
Some people makes profits in the day trading, Those who follows the rules. You can also make profit, Avoid these 15 common mistakes in intraday trading which given below.
Common mistakes in intraday trading you should avoid
- Lack of knowledge of chargers and brokerages.
- Trading on low probability.
- Not doing planning of trade before entering it.
- Trading in illiquid stocks.
- Trading on rumors and news without planning.
- Trading on other tips.
- Failing to put a stop loss.
- Failing to plan the target for the position.
- Not being patients enough for the target to reach – exiting before a target.
- Not waiting for the proper result.
- Not set on a proper or one trading strategy.
- Changing the strategy too much.
- Not exiting losing position or trade on time.
- Overconfident on trade.
- Greedy and trading beyond your limits.
1) Lack of knowledge of chargers and brokerages.
Many people don’t know, trade contents chargers and brokerage. Without knowledge of it no one can gain profit in the day trading. This is one of the important factor, But people are not aware.
Lack of knowledge can be risky for you. Many people doing intraday trading and exiting their trade-in low profit it can be turned into no profit. Because of every trade content chargers and brokerage. To avoid loss in the day trading then you should know the chargers and brokerage.
The chargers is depend on your country and the Brokerage is depend on the Broker that you haven chosen. You should be aware of it, Get knowledge on google.
2) Trading on low Probability
Trading on low probability means “winning chance is low“. It is very bad if you are also doing same type of trading.
Build your own trading strategy and check that the winning ratio should be high from the loss ratio. Also, maintain the risk-reward ratio. Experts say that the risk-reward ratio should be 1:2 and 1:3. But according to me, Please maintain a 1:2 ratio or 1:1.5 ratio.
Following the above ratio will turn your losses into profit at the end of the week or month. This makes common mistakes in intraday trading. So, If you are also doing the same mistake then avoid it and turn your losses into profit.
3) Not doing planning of trade before entering in it.
Many people i saw that they not plans the trade and enter in it. Choose a random stock and trade in it with close eye and the result of that is making losses.
Not doing planning of trade then it can be very risky. Be safe from it and do planning before entering in it. This comes in common mistakes in intraday trading. So, If you want to do day trading then avoid this mistake.
Planning can save you by doing big losses in day trading. I hope you will not do this mistake.
4) Trading in illiquidity stocks.
Trading in illiquidity stocks is a mistake which beginner traders do. illiquidity stocks means, “the volume participation of people is low“.
It is an outcome of lack of research in trade. It is important to understand, volume of a stock or its liquidity plays a very important role in day trading.
If you trading in illiquidity stocks means you cannot enter to exit your position on time and at the planned place. So, It is important to choose the liquidity stocks for intraday trading. This comes in common mistakes in intraday trading which mainly done by beginner traders.
So, If you are also doing this mistake or beginner in day trading then avoid this mistakes. It will help you to gain profit.
5) Trading on rumors and news without planning.
Many people I personally saw, Who trade on the news basics thing this is positive or negative news and the market can go according to it. Please avoid this type of trading, This can be very risky.
First, do the planning of trade and then check, What is the market view or stand. According to it, You can trade. But, If you trade according to your mind then it can be risky trade for you.
I think it will help you to take a profitable trade and it can be very rewardable also.
6) Trading on other tips.
Are you doing day trading on other’s tips then you are losing money in trading? Because They give you tips but you have not the knowledge of entering or exiting place of trade that’s the reason for losing money. If it is right then comment below.
Many people I have saw which are taking tips from others and losing money in intraday trading and telling them due to your tip I have entered in this trade and lost my money. But, in reality, that was your mistake and it happens due to the lack of knowledge.
So, If you are also doing same mistake or beginner in day trading then avoid this common mistakes in intraday trading to gain profit.
7) Failing to put stop loss
Not putting stop loss means you are taking big risk and you cannot control your risk. This comes in common mistakes in intraday trading.
One of the most common mistakes in intraday trading due to which you can lose money in stock markets is not placing a stop loss on their trades. A stop-loss order is an order where you instruct your broker to sell purchased security when the prices start going down instead of up.
This helps you in limiting the loss. Most traders commit the mistake of not placing a stop-loss order hoping that the price would reverse and move in the desired direction. Not just beginners, but even seasoned traders make this mistake of not closing their position in time with limited loss and instead end up incurring a huge loss.
8) Failing to plan the target for the position.
Experts says plan your enter and exit place before entering in the trade it will help you to exit your trade at right place.
The person who plans their target and enter point they have their control over their trade. Because If you plan before entering then you should not ware about your trade. This will give you positive energy.
So, If you are not planning the target for your trade then don’t do this mistake again. These are common mistakes in intraday trading and many people are confused while exiting the trade.
9) Not being patients enough for the target to reach – exiting before a target.
It might have happened to you that you have been given a target of a higher level, which can help you earn a profit in the trade. However, in a hurry to book profit, you closed your position even before the target price was achieved, thus, closing your position at partial target.
This happened due to a lack of patience. Despite getting all the signals that the full target will be achieved, traders close their position in advance, thus leading to a smaller profit.
This cuts down on your ability to earn full profit from the markets. To gain profit then follow the rules and avoid these common mistakes in intraday trading.
10) Not waiting for the proper result.
Not have the patience for the result means you cannot gain profit in the stock market. these are common mistakes in intraday trading made by almost 90% of traders. But those who have control over it gain good returns on their trade.
If you cannot wait for the proper result then you should not do intraday trading. Avoid these mistake.
11) Not set on a proper or one trading strategy.
Many traders of intraday trading lose their money due to not having a proper strategy and not setting on one strategy. They trade on the basis of their gut feeling or rumors.
It can be very risky and it means you are just doing gambling and at last you will lose your money in it. You should always have a strategy to do intraday trading and stick to that strategy at the end of the trade.
These are the most common mistakes in intraday trading, not setting on proper strategy. Always see the market things and direction it will help you gain profit. Hence, Avoid this mistake if you are doing intraday trading.
12) Changing the strategy too much.
Are you change your change your strategy too much if one strategy on that trade and losing money in day trading.
You should avoid these common mistakes in intraday trading. Once you select a strategy, It is important to stick to that strategy for the end of that trade because that trade was taken with that strategy.
It would not be wise to keep changing the goal post every time during the game. No trading strategy can guarantee 100% success because markets are unpredictable. Hence, it is important to have faith in your trading plan.
Last word from mini invest
I hope this article has helped you to avoid the common mistakes in intraday trading. So, If you are also doing these common mistakes or beginner in day trading then avoid these 15 common mistakes in intraday trading.
If you have any question, recommendation or feedback then you can leave it in the comment box below.