How To Set The Intraday Stop Limit
When you trade or buy an Insurance plan you could get carried away. This happens especially if you trade intraday. So take care that you have a set of rules on when to stop trading when you are trading intraday. It is also important that you put this into your rule book.
Intraday trading is only for the professionals who can control their emotions and take quick trading decisions. The market can give many opportunities within the trading day and thus as an intraday trader you should take care that you have a lot of patience and take trades cautiously.
Many times intraday traders get carried away when they trade and this causes them to make huge losses. They take trades out of emotions and this especially happens on days when they are either very profitable or make a number of losses.
If you are an intraday trader then take care to follow these rules to be able to profit in the market.
Set a stop limit
One method to stop trading intraday is to set up a stop limit. Thus if you reach a particular amount of loss then you stop to trade that day. This is the same if you make a particular amount of win. If you are continuously winning on a particular day then set a profit amount and then stop trading once you reach that amount.
Stop with some number of trades
Another approach is to stop trading when you have taken some number of trades. So if suppose you have taken 10 trades for the day when you stop trading. This is irrelevant of whether you are in the red or in the green. This approach stops you from overtrading in the market and you stop to take trades when your daily number of trades is met.
The biggest mistake that people do is to overtrade in the market. If you have just started to trade and are yet not capable of controlling your emotions then you could fall into this trap. There are two reasons why one could over trade.
For those who are in a profit they overtrade because they think that it is their lucky day and thus trading more is going to get them wealthy. But on the contrary, they get overconfident and then to end up losing all their money in the market.
The other trader who is making losses on his trade makes so much loss that he starts to get revengeful. He then takes more trades to get back what he has lost this, in turn, causes him to make more loses.