Intraday Trading Mistakes: 7 Mistakes That Can Ruin Your Profits

Looking to Succeed in Intraday Trading? Avoid These Mistakes!

Intraday trading is not just booking profit and creating a bundle of wealth. It is beyond mere execution of profitable trade that includes effective risk management and focus on prevailing market trends. No matter how focused the trader is on his risk management activities, several commit big mistakes and eventually book significant losses. Almost 90% of intraday traders lose their money just by attributing to a single mistake. Identifying the biggest mistake is very important while executing intraday trade. If you are one of them losing money, here are some mistakes to avoid in intraday trading.

Key Highlights

  • Intraday trading means navigating the complexities of the financial market, making informed decisions and managing risk.

  • It is essential for intraday traders to stick to their plan and maintain discipline to avoid significant losses in their trade.

  • By avoiding a few mistakes, intraday traders can limit the losses and increase the gain on their trade.

1- Do Not Come Unprepared.

If you want to achieve success in intraday trading, you need to be excellent in all the tests- it means thoroughly preparing in advance. Intraday trading demands a level of commitment, and if you enter the market without prior knowledge of stocks, you will have losses on each of your trades.

You must analyse the historical performance of the stocks through technical analysis. This analysis helps traders make an informed decision, establish a profitable position, and pass panic-inducing scenarios. Traders who don't use technical analysis in intraday trading often grapple with anxiety and panic as their investment takes a downturn.

2- Not Using Stop Losses.

In intraday trading, stop loss is a crucial tool for traders. It helps them assess their risk tolerance and determine when it is essential to exit the market. A stop loss is an order a trader sets for their brokers to sell stock when the market price is below a pre-established threshold during the trading day. Intraday traders often focus more on earning their profits and neglect to set a stop loss when initiating a buy order. 

An intraday trader needs to prioritise not only profits but also a strategy that may help mitigate the impact of significant losses. This will allow the day traders to strike a balance between maximising profits and minimising risk in intraday trading.

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3- Don't Use Emotions While Trading.

Traders often get emotional with specific stocks, making them hope they will appreciate over time. Well, sometimes it might happen, but many times it may not. Therefore, traders must make decisions based on technical analysis rather than emotional attachment to the investment

It is crucial to develop an intuitive sense with experience. Accurate intuition in trading happens after accumulating knowledge and a deep understanding of market dynamics. Adhering to established rules in intraday trading is vital. Relying on your emotions will significantly affect your future trades. Therefore, you must avoid emotional decisions and depend on technical indicators during intraday trades.

4- Don't Make a Trade Without Analysing the Market.

Many traders do not analyse the market while trading and follow the same trend. Successful intraday trading demands a flexible approach and continuous market analysis all day. Some traders even make mistakes when using illiquid stocks for intraday trading. Intraday trading requires liquidity and smooth price movement. Choosing illiquid stocks can impede trade execution and potentially result in unfavourable outcomes. 

Therefore, a comprehensive understanding of market dynamics and consideration of liquidity in stocks is vital for traders who want to navigate the complexities of intraday trading and make each of their trades successful.

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5- Do Not Trade Out of Capacity.

In the current era, brokers are extending leverage at unpredictable levels, like ten times, twenty times, and even forty Times. Sometimes, traders exceed their risk capacity to make quick profits. The primary motivation behind such behaviour is often greed and eagerness to accumulate wealth rapidly. However, it is essential to recognise that leverage is a double-edged sword. At the same time, it has the potential to amplify gain; it can also easily magnify your losses. 

Therefore, it is vital to limit your trades to at most five times your capital, and before entering a trade, ask yourself if you are comfortable with the possibility of loss. This will help you strike a balance between ambition and risk management, which will safeguard your capital in the volatile market.

6- Do Not Add More Money to a Losing Position.

Many traders tend to inject more capital into a trade that is not yielding positive results. This strategy often hits back, resulting in a deeper financial hole. As the trader puts more money into losing trades, it can exaggerate losses rather than mitigate them.

 You must understand that it was never a successful move if the trade consistently goes in the red. Traders must accept the loss and exit the trade as soon as possible. 

7- Do Not Trade Based on Tips.

It is the most common mistake beginners fall into. After opening a trading account, many seek help from stock tips services that promise guaranteed profits or money-back assurance. Unfortunately, many such services turn fraudulent, and traders lose their capital after following such tips.

Similarly, many television shows also recommend buying and selling stocks. Individuals need to take trading seriously, develop independent thinking and not rely on external tips or recommendations. Develop your analytical skills and understanding of the market and make trading based on your decisions and research.

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8- Do Not Carry Forward Your Trades.

It is the most common mistake among beginners who deviate from their initial day trading plan and carry forward their position while encountering losses or failing to meet the desired goal. Such changes in the initial day trading plan can cause traders to fall into additional risk due to market volatility.

Traders should stick to their intraday trading approach and square of position at the end of the trading day, even if their target is not met. A trader can limit the potential losses by maintaining discipline and avoiding unnecessary exposure to market movements.


Intraday trading requires a disciplined and well-informed approach for long-term profitability. It also requires avoiding inevitable common mistakes to limit the losses. An intraday trader must prioritise the preparation work; instead of relying on emotions, they must plan while considering technical analysis and market research.

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25 Jan, 2024


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