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How to become a successful intraday trader? – Part 1

As a trader, it is not about understanding the markets, it’s all about understanding who you are, your freedom and limitations. As a successful trader you need to place yourself at the right entry and exit points especially at the right time.

A right entry point or entering at right time is one of the greatest things that almost all intra day traders fail at. In order to learn, practice and become a successful trader is not a course or a program that you can learn from any university. It is all about practice and patience. First let us go through a few basics about the markets first and then we learn in-depth about calculating supports resistances, identifying entry and exit points, when to enter and exit, how to select stocks for the next day, how to define a stop loss, and how to exit making a decent profit for the day.

Finally we will learn what strategies are and how to make winning strategies. And do you know that, following a strategy with discipline, earning money out of it is much harder than creating one such winning formula???

Understanding the market players – WHO ARE THE THEY?

We can classify the market players into 3 main categories. One, the floor trader and the second one, the bigger time frame player and third is what we are, the common man referred to as retail investors and traders. The floor trader is a person who is present in the market throughout the day and the nature of trade they perform is confined to a very minimum profit/loss. They buy and sell or they short sell and buy back, irrespective of the market conditions and trend. Next comes the bigger guy whose volume and the time frame both are higher than others. The long term player enters the market either to buy or to sell, but the volumes are going to be huge which will be a key factor in deciding the current day’s trend of a particular stock or index. Third comes the retailer, who is concerned only about making a few thousands in a day. The most challenging job is to be as the third one, the retail intraday trader.

As an intraday trader, you should be aware who is present in the market? Only the floor traders… Or the bigger guys too? Unless the long term players’ presence is found, you cannot expect a intraday trend developing in the market for any particular stock/index. With only the floor traders actively performing in the market, you either see a flat day or a choppy day where your stop loss hits on both directions.

Now the major concern of the intraday trader is to make sure that he/she enters a particular stock or index in the same direction of the higher  player. Unless you are not sure about this, all your calculations might end up in hitting your stop loss. Another factor is, even though you enter in the same direction but at the wrong time.. What is going to happen? Just imagine a stock or index starting to move and making higher highs every 15 minutes and the moment you enter, the movement stops and it starts to fall or it stays inside a range with no exit and not hitting your stop loss too, testing your patience, forcing you to change your calculations and plans that you had before entry? This is what happens when you enter at the wrong time, for example the bigger player has completed his role for the day and has moved out, a moment before you entered???
Interesting right?

So how do we know that? How to calculate? How to work on these things? Is it possible to make a profit intraday taking all these factors into consideration?

The answer is – OF COURSE YES, YOU CAN.

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