Hi everyone, i am new to intraday trading so i want your help, and suggestions in understanding my today’s mistake while doing intraday trade. Today at 9:33 am i bought 100 shares of MAZAGON DOCK SHIP at 1051 each because the price had risen a lot, a high of 1062 was made few minutes ago, i thought the price would rise more after this, at around 9:32-9:33 am ADX was 54, +DMI at 37, after some time the price rose but not that much & a high of 1055.85 was made at 9:45 am. After this, the price fell instantly & never reached 1051,1052. I thought i should average down, & then i will have an opportunity for breakeven or for a small profit. At 10:47 am i bought 100 more shares at 1028.5 each, the average price became 1039.36 for 200 shares. The price fell even more aggressively after. At 11:18 am i exited the trade by selling all my 200 shares for 1014.38. Did i make a mistake by buying at a high of 1051, what should i focus on while doing intraday next time?
- Don’t trade with meaningful capital. Most people lose in trading, and almost all lose at start. You will lose money, so trade small and lose less while you learn.
- You do not understand how trading works. Even if you do everything right with a system that works, you will have plenty of losing trades. Losing is integral to trading, we take small bets that play out over time, while never risking too much that we can lose it all.
- So with that said, fact you lost has no meaning. What you should check is whether what you are doing is profitable over long term. Take hundreds and thousands of trades - you will lose some, and win some. Do you make money overall ? If yes, the trade that plan. Else dont. Each step can be checked. So if you think averaging will make money ( probably wont), then test it over large sample.
- Trading is hard work too. You have to do 3, or be ready to lose to the market over long term. Trading is competitive and it takes many years or work to have a chance.
@SpacemanSpiff thank you for taking the time to respond to my question, can you also share a technical analysis of where & how i went wrong in my trade?
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There is no one way of looking at things. People can be long and short at the same time with different systems and both may have an edge. For ex, We can have both momentum and mean reversion / growth and value. etc
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Read point 2 from above post again. Once you do your work and test out a system and see that it works over a large sample, then there is no right and wrong in a single trade. To repeat - You can do everything right and still lose, its normal. Trading does not work with 100% perfection, not even close.
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So from above, it follows that you cannot look at a single trade or even few trades and make any kind of analysis on it on why you were right or wrong. You could have almost the same looking chart and one might work and another may not.
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While i have not read it, i think Trading in the Zone explains these concepts. Its a mindset one needs to have, and not many talk about it. It took me many years to get it, only after 1) seeing an established trader navigate a tough market 2) After running my own tests on market data.
take some spare money that you can make 0, like say 10K.
With Qty of 1 share in equities, trade for as long as you can and dont look at loss or profit but rather your trading methodology.
How you select stocks, how you judge trend, your entries, exits, pyramiding etc.
You will learn far more on your own than what a ton of material would do.
In this business, there are no shortcuts.
As @SpacemanSpiff & @Chirag1 already provided important points to consider while taking intraday trades for both new & experienced traders let me answer your questions about your particular trade. Before I put my points forward, I would like to say that this is my point of view about your trade, others might look at it in a different way.
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MAZAGON was on lifetime high, you have to understand the risk while taking trades on stocks which are already on lifetime highs as big players are looking to book profits by selling to small traders.
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You took your positions while the stock was pulling back, it can be taken in a different scenario, but here you should have waited for the breakout of price above first three candles on a 5min chart.
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I am not sure if you are using moving averages, but I would average a position only when it shows strength on the moving average or on the vwap. You can verify strenght by different price action factors depending on your knowledge & experience.
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Last but not the least, try & learn placing a stoploss as soon as you take your trades. After that, work on your physcology to keep them intact, don’t move them if the stock is about to hit the SL. With tight SL’s you will stay in the game for long long time. Remember, you have to be in the game to win or lose, if you are not even in the game then what’s the point? Always try & save your capital wisely.
I hope this helps. Good luck out there… 
Hey @Chirag1, thank you for taking the time to answer my question. I appreciate your insight, but I have a question. While I understand that trading with just one share minimizes risk and would help me gain a better understanding of the process, I’m still curious about the purpose of trading if I’m not actively considering profit or loss. Typically, traders engage in trading with the goal of making a profit. Could you please explain this more?
Let me add something here. What @Chirag1 told you to do is very important as it will help you in different ways.
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You will not drain your capital by taking small positions. Once again, be in the game to play it.
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It will engage your emotions as well because real money is real money. Give it a try and once you lose or gain you will feel like you are sitting on a roller coaster of emotions. But, you won’t feel anything if you are trying to make money real quick. Making good money can take minimum 1 to 2 years.
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With small trades you will be able to analyse what works and what not, then only you will be able to set the goal of making profit. Imagine putting money on something you don’t know about. Hence, test the setups & strategies by putting in small money. Once you are sure and tested something for good amount of time, go ahead and put more money.
Trust me, I recently increased size of my trades after years of tiny trades. I am speaking by experience, it works but requires hell lot of patience and perseverance. I am still learning and still a tiny trader, but aiming for big only.
Cheers…!!
Trading is not one trade or few trades.
Profitable trading is being in profit over a large sample.
So if you make it alive from a large sample, you will know what to do and what not.
You have taken 2 trades and are dissecting them as if whole life depended on it.
If you knew this, then you would not ask but after everything 100% correct, trades WILL FAIL without any reason.
Spacemanspiff put alot of time answering, read everything.
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As others mentioned - This is only for the start. Do you consider yourself to be a profitable trader ? Why ?
Why would you expect trading to not have a large learning curve, otherwise everyone would be making money from it, -
So you should expect to lose in first few years. Getting knowledge takes time ( a lot of it is useless gyan … ), applying knowledge and gaining skill takes even more time. Until then you will lose. So lose less by trading small
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Eventually you might reach a stage where you know what you are doing, and have the numbers to back it up and have the patience for things to work out. Then you can start taking real but responsible risk and scale up + diversify. So not saying you should not make money, but first get ready to make money or you will instead lose more.
An article you might want to read, just something that google showed up first for the author. Thats a very good blog btw.
Start by reading this course:
I think as long as the trade went as planned it’s a success.
Look at things based on process and system. Plan your trade and trade your plan.
The outcome is irrelevant. Try practicing trade in your mind before placing, intraday is hard though.
“I thought i should average down, & then i will have an opportunity for breakeven or for a small profit.”
Never average down (or chase for a small profit) to break even unless it’s in your system.
The other important thing is to log your trades and study them every month or so. There is so much more data, see if averaging really is bringing in as much as non-average trade.
Losses are part of the system anyway like any business. Take it on your chin and move on mate.