You might have observed that some intraday traders like to trade the same stock over and over throughout the trading day. They would have become familiar with its support and resistance areas from trading the same stock repeatedly. Its mainly because they would have come to know, how one particular stock moves. This serves as a big advantage for an intraday trader, as they would be knowing which stocks are real buyers or sellers.
It is always advisable for a new trader to master trading in one single stock, instead of following stocks with which he is unfamiliar. Once you have mastered trading in one stock, you can move on to the next level. Now create a watch list of approximately 10 stocks. If you feel that its too many stocks to be watched, then add only two stocks to your list. The stock list created should be in your comfort zone (you must be able to follow them). So, don’t junk your stock list.
Now its time to sort the stock list. You must place the strongest stocks at the top and the weakest stocks at the bottom. The stocks in the watch list must belong to different sectors. Its very important to have diversified stocks in your watch list. By sorting out the stocks from the strongest to weakest, you can immediately look at your watch list and decide which sectors are the stronger or weakest and which stocks in that sector have relative strength or weakness.
Lets assume that banking sector is showing some strength, whereas the auto sector is showing some weakness in the few Intraday trading sessions. So, if you have two bank stocks and two auto stocks in your watch list, you can easily go long on bank stocks and short on auto stocks, when stock market starts to rally. You can do the opposite if the Stock market is selling off.
Next step is to identify the sector which is best for you. Now the question is how to identify. Its very simple. You just have to review all the trades you have made in the last two to three months and identify the sector that had the greatest number of winning trades. Then identify the single stock in that sector which has given you the most profits. Then you have to analyze the average price and volume of your best winning stock you traded during the post two months. Therefore, now you know the sector which you like the most and where you are more likely to make most money.
Now next step is to rectify your mistakes. Analyze your past two months of trading history and recognize your losing sector and from that sector you select the stock that causes you the financial loss. Its better to drop those stocks. You should not try to repeat the painful mistakes. You can trade this stock again, but firstly you have to understand the movements of that stock. If you cant, then you shouldn’t trade that stock and lose your capital.
If you think that its not possible for you to create the watch list of stocks, then you can get the help of the stock advisory company which provides intraday tips as well as reviews the stock portfolio. This will help you to succeed in Intraday trading . Stock market will reward you, if you strike the balance between the risk and rewards.