4 Biggest Intra Day Trading Mistakes and How to Avoid Them

Intra Day Trading is not for everyone mainly because of the reason that requires very quick and rational thinking and we can’t just think emotionally during trading. The process of getting in and out of a trade is very short and because we are trading just for a few points, we need to trade with a sizeable position so as to make a difference to our trading account. There are a lot of mistakes that intraday traders make but I will list some of the biggest mistakes which I feel that most of us make or have made in some point of our trading career.

      1.      Trading throughout the day :- We all must have made this mistake or are still making it in which we think that we need to trade all day long and we need to capture each and every move that we see in front of us. This is a really big problem because we are generally watching smaller time frames when we trade intraday, so we may find some buy or short signals on almost all of the watchlist stocks.

Solution - We should keep a filter of how many trades we have to take in a day, If we don’t keep a filter or rule which limits our trades in a day, we might end up sitting all day long and just randomly keep trading only to make the broker rich. In these cases, we will notice that the profit that we might have made in the first trade is given back to the markets along with some of our capital.

      2.      Jumping on the Trade at the market open :- This is one of the most common mistake which I always used to do. I usually used to sit in front of the system at 7 AM and used to watch all the world markets, Sgx Nifty , Currencies, and what not. What happened was that when the market finally opened, I was so charged up by all the over analysis that I usually couldn’t resist myself to take a trade at the very first minute. Sometimes I didn’t even waited for a 5 min candle to close.

Solution – It is always better to wait for at least first 15-30 minutes to let markets “settle” and trade only when the morning fizz is settled down. I have noticed that most of the trades which have good risk reward, generally come up after 1st hour and then around 2 hours before the market closes.

      3.      Chatting with other Traders During market hours :- This might look like normal to most of us, but this is seriously a big problem. When we are confident on our studies and we have analysed everything that we can, we should just sit back and execute our trade. If we start chatting with our trader friends and start taking their opinion about our trade, we will be bound to be influenced by their view of our trade. Trading should be noise- free and for a technical analyst , only chart is 
his/her best friend.

Solution – It’s ok to chat with your trader friends and discuss trades AFTER the market closes and not during the market hours. You will feel trading to be very peaceful when you will trade alone without any external distraction and would be able to execute your trades better.

4.      Trade According to the plan :- Most of us end up taking random trades because we get over whelmed by all the flickering red and green ticks in front of us and we feel that if we don’t take 
the trade every single day, we might lose some great opportunity. Trading without a plan is just like gambling in which we are just lured by all the money making possibilities in front of us and we 
just get into the “hope” category with every trade that we make. This is a very risky way of trading and we might end up blowing our trading accounts like this.

Solution – Always have a checklist and follow it religiously. A checklist could simply be in a 
simple hand written format which lays out the criteria which is to be met before taking any trade. It could be made up with your best strategy combined with risk to reward and position sizing factors.

These were some of the mistakes that we all have done at some point of our trading career. There 
are many more mistakes that we do which i will cover in some other article in the future. Thanks for reading and Happy Trading !

Read : Do You Have a Pro Trader's Mindset ?