Day trading tips – Ever wondered how some traders make huge money in just a very short span of time? Or ever though how a stock market trader having living in an apartment shifting into a new bungalow? These queries often strike to each one of some or the other time and we end up concluding that he had something which we don’t have thus we cant do what that person has done. Read on to know more what I am talking about. Generally who see such exponential growth are in stock markets are the day traders (although they do say that they are insiders trading on the operator based news blah.. blah..)
Day traders are the stock market traders who like to trade on the movements in the stock prices for the same day and don’t wait for the next day gap up or gap down do make money. They take a position and square it off the very same day without carrying any position home for the next market trading session. Intraday traders (as day traders are known in India) may trade for a profit of as low as a fraction of percent to a few percentage points. They enter a trade in the morning (or any point of the session) and close the trade the same day before the closing bell at 3:30 PM.
Now you may argue that you also do intraday trades but you always end up making losses, then how come I can say that it’s the best way to make money from the Indian Stock Markets. As I interact with a lot of people clients, relatives, friends most of them believe intraday trading is very risk and some even regard it as slow poison. Then how and why, some day traders are so successful and wealthy. Let’s discuss what all it need to be a rich day-trader. There are many factors which contribute to success of these traders some are:-
Strategy: – The first and the most important trait of a good day trader is a very clear and tested strategy. The trading strategies are a set rules but everyone has to develop a clear and accurate strategy for himself depending upon his needs and style of trading. The strategy should clearly define each and every aspect of your trading and must be strictly followed. It needs to be tested over a period of time in different phases of markets which can be done using a stock market simulator or paper trading. The strategies should be dynamic and adoptable with the market conditions, thus should be corrected and modified to suit the current needs. This can be taken care by regular appraisal and review of the same. Once you have a clear strategy its like half the battle won. But do remember to stick to it irrespective of the results which it yields and your emotions.
Speed: – Day traders need to be as speedy as tiger. They should have a complete control over the terminal and should press the right key at the right time without delay of even seconds. I feel for being a successful day trader in the Indian stock markets you need to have a speed faster than the speed of the terminals. So you can act before even anyone else can think of it.
Margin / Exposure Utilisation: – Most of the brokers in the Share markets do provide exposure or margin funding for the day trading. Almost all clients receive this facility but only a few are able to use it the right way while doing day trading. Its not important to get maximum exposure but its more important to use the one which you get wisely. Always plan you intraday trading strategy to use the day trading exposure limit efficiently as it’s the major factor which adds to your successful day trading strategy.
Stoploss: – Although it’s a part of strategy to decide the stoploss before entering a day trade (intraday trade) but it’s very important to discuss it separately. Most of the day traders, almost 97% of them don’t use a stoploss for their day trading positions (don’t get exited they are the one who are the losers). These traders believe that their analysis are 100% right and there are no chances of getting a failure (which I don’t believe is anyway possible). Even if it is so then what’s wrong in using a stoploss if you know that your stock or index wont go down (when you are long). Most of the day traders whom I have met say that if they put a stoploss they end up making a loss, but they don’t understand it’s a limited loss else they would have lost all their day trading capital along with owing some huge debt.So its MUST TO ALWAYS PUT THE STOPLOSS IN ADVANCE FOR ALL INTRA – DAY TRADES. Keep the stoploss entered in the system and not in mind because :-
the markets & prices are supreme not yours (or mine) perditions and emotions
Day trading must become a bit easier and profitable for you by not just reading it but also following it.
Related Pages :
{ 2 trackbacks }
{ 1 comment… read it below or add one }
Unitech Bey/Sell