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1. Not Setting Stop-Loss:
Stop-Loss helps in saving the traders from incurring a huge loss.
A Stop-loss order is a type of order through which traders can instruct the broker to sell the stocks below their purchasing price to reduce losses.
As this order gets immediately executed, intraday traders can reduce the loss if the price movements go against their expectations.
But some novice traders do not set stop losses in their trades which results in huge losses.
As a trader, one should look for maximizing their profits but they should also look to protect their losses.
2. Not Conducting Technical Analysis:
Some traders just follow the recommendations of others and do not conduct technical analyses of their own.
Traders should review the prices, analyze the volume, check the prior trends and analyze other technical indicators before placing their intraday orders.
Rushing just to place buy or sell orders is one of the biggest mistakes intraday traders make.
One should conduct proper technical analysis and then start trading.
3. Going against the Trends:
The phrase- “Trend is your best friend” always works in the stock market. Not following the trend is another biggest mistake that day traders make.
Unless a trader has many years of experience and understanding of the stock market, traders should try to avoid going against the trend.
If the market is in a strong uptrend, then one should try to trade in the up direction only unless there is any strong resistance or chart pattern breakout.
If the trader wants to trade against the trend, then they should set a stop loss to avoid the losses.
4. Following the Herd:
Some traders follow rumors and recommendations which are spread by the media houses and brokers.
This is another big mistake that intraday traders make. One should not blindly follow the intraday trading tips and rumours without their own analysis.
Going by these recommendations without conducting your own analysis can cause huge losses.
These days there are many websites like StockEdge which helps the traders to conduct their own analysis.
5. Being Impatient:
Many day traders rush to book their profits or make trading decisions in a hurry which is one of the reasons why they make losses in intraday trading.
Many traders book profits before deciding their price targets or stop loss.
Traders should execute their trades in a planned way like deciding their stop loss and profit target level and then only execute their trades.
Also being impatient and changing trading strategies frequently is one of the biggest mistakes that intraday traders make.
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