Life of an Income Trader

Published by Sharekhan Education | November 3, 2022

Life of an Income Trader

Behzad Elavia: Sharekhan Education

A trader’s objective is to prepare himself for any opportunity available in day-trading mechanism. However, this simply cannot be attained at the last minute or without a thorough process or scanning technique. He must jot down all the possible results with respect to intra-day or momentum trading so that he can manage the positions accordingly. In today’s article we shall discuss the mentality required to prepare ourselves as far as Income trading (intra-day) is concerned.

Rely more on HTF

Since, income traders have more liberty to take more trades on daily basis, they often end up making higher errands due to impulsive nature and greed. Thus, in my opinion, to eliminate the factor of impulsive trading, a trader must wait for the location candle to get complete. For day trading, it’s best to wait for the first hourly candle to close after the market opens before making any High Impact Trades (HITs). The he can certainly rely on the LTF as a good location reflect in high probability set-up. Similarly, a DIT should wait for the day candle to get complete (location). The he can certainly move later to LTF for zone selection and odd enhancer procedure.

Scanning

There are various methods to rely on, but the smarter the procedure, the better the outcome. Day traders should rely more on imbalances and pending order with bigger moves on the charts. Hence, preparing a pre-defined of 35-40 scrips is decent enough for a trader to manage recent moves on the charts. Furthermore, if he wants to scan more imbalances that he may miss out from the pre-defined market watch list, then he can sort the watch list as per the highest imbalance so that it is easier for us to find better HTF and LTF’s.

Check Reports

Even before we opt to place an order, it is much advisable to see the major events to be declared for the day such as Fed meet, RBI policy meet, results/ news/ events for the scrip. On the day of declaration, a trader can choose not to trade until the volatility calms down or can exit the scrip with minimum profits or tighten the SL as per the risk management procedure.

Position Sizing

Impulsive nature often reflects into taking erratic decisions. Thus, to have a proper control over it, a trader should fix up his risk management and position size even before he places the order in the system. Even in case of a stopped-out trade, one can rely on fixed scanning model (as discussed in my earlier article) and RR to continue working on his 6-step process.

Conclusion

Punching the order and placing the trade at the last minute, never results in a consistent approach. On following the above points, I have realised that I am a better and calm trader using my scanning and 6-step process trades.

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