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Day Trading Strategies
Be
Professional
If you want to achieve success then you should
seriously act towards your activities.
Basically there are two types of traders
1. First type of traders do trading for just sake of trading or they do trading
because others are trading and earn
some money for today’s expense or trading only on tips, rumors etc. in short no
seriousness towards the activity.
2. Second type of traders are serious traders who take interest in daily trading
activities right from learning strategies
and become the professional traders.
So in following sections we will talk how to become professional traders and
keep earning money as the continuous process from share market.
Following are few points which are recommended to follow to become the
professional traders.
a) Dedication and sincerity towards daily activities.
b) Doing daily home work before start doing trading.
c) Watching financial news channel especially related to Indian share market.
d) Keep yourself always updated with all latest happenings in the share market.
e) Follow share market related websites where you can get lots of information to
read.
f) Patience and confidence are two important factors required for successful day
trading.
g) While trading, do only trading and no any other activity.
h) Keep noting all your experiences whether you make profit or loss so that you
can learn from them and take proper
precaution in future.
Do specific
and selected trades
Basically it has been observed that day traders loose most of their money by
continuously doing day trading irrespective of any signals.
At the same it is also noticed that day trader won’t place any achievable
targets and keep doing trading and expecting the price should go up and up and
finally at the end of the day he do losses.
This is not recommended.
Trader should analyze the market and then specific stock and then wait and watch
and finally place your order.
The process of market and stock examination may take some time, especially if
you are new comer, but once you get experience then you can do it very easily
and at faster rate.
Wait and watch how the market and stock are moving, whether they are moving in
accordance with your examination or not, if not then do your examination once
again and wait and see how it moves.
And finally once you understand how the market and your chosen stock are moving
and then you can decide your trade.
So by doing specific and selected trades you will get appropriate profits and
not by doing continues trading.
Trading is an opportunity and not a routine daily activity.
You have look for an opportunity and once you get it then you have to trade but
if you are not getting any opportunity then don’t trade, don’t make it routine
activity.
If you want to earn money and want to be successful in day trading then wait and
watch and do specific and selected trades.
Look for opportunity and then trade and don’t make it as compulsory trading
habit.
But once you spend hours and hours in front of the trading terminal in share
market then automatically you will be able to find daily trading opportunities
in share market.
Don’t be greedy and
fearful in day trading
Greed
and fear are the two critical factors in day trading.
It is observed that most of the day traders or even investor loose money in
share market due to these two factors.
Most of the time it has been observed that people (Trader or investor) becomes
greedy once the share price starts going in upward direction and instead of
booking profit they keep expecting more and more.
So expecting so much rise and profit in single trade is not practical all the
time in the share market.
Set your Targets
Whether you are the trader or investor be realistic and set your targets.
If you are day trader then you should not expect even 0.5% net profit in single
trade (we have explained in next session how to take very small profits and do
multiple trades and earn thousands at the end of the day including calculation
of brokerages rates and all taxes).
So bottom line is avoid greed factor and be profitable trader all the time.
Our personal view just to share with you - Even in our general lives if we keep
the greed factor away then we will get peace and our life becomes happy.
It’s our own personal view and everyone have their own personal views.
Fearful
Getting unnecessary fear or getting fear without any reason is harmful for your
health as well as in share market.
First up all don’t act on rumors. Most of the new comers falls prey to rumors.
In day trading mostly trader gets fear if they buy shares and share prices
starts falling. This even happens with investor even if they are holding it for
long term.
No need to fear provided you have studied the company fundamentals and then
invested and traders too provided they have done proper study before entry in
the trade.
Markets are always rights so some exceptional are expected in the market like
sudden jump in downward or in upward direction and shares are bound to move up
and down.
If you have done the paper trading dedicatedly then the fear factor will not
come to you because in paper trading you would have come to know which share
moves how much rupees in single session and also you get the idea how market and
share prices moves. Paper trading is base for your successful trading.
Investors
Even it has been observed that some investors fear if the share prices come down
from their buying price even they are holding for long term.
The other side of the falling share prices is if your buying price is at higher
valuation then the correction is quite obvious.
If investor buys shares at low valuation then they need not have to worry for
share price fluctuations.
The conclusion is buying shares at lower valuations and holding them for mid
term to long term will definitely provide the good returns to all investors.
Avoid panic by not doing over trading
We believe “over trading” is most common factor among the day traders and over
trading will lead you to losses if you don’t follow appropriate strategies or if
don’t have experience.
Generally traders do over trading and get panic if the price moves against their
trade and this panic generates fear in their mind and finally they square off
the trades by accepting losses.
Over trading should be avoided to get rid of panic, especially if you are new
comer.
What is Over Trading?
Buying and selling of shares at big quantities is called over trading.
Basically brokers provide margin amount for day trading like if you have 25,000
amount in your trading account then you can trade till Rs 1 lakh (this is 4
times margin amount)
If you are new and not fully aware of market principles and strategies and start
trading by using full 1 lakh rupees then it is very risky.
If you are very experienced then you can use margin amount with appropriate
precautions. We have noticed that some traders put all their savings money in
trading which is also very risky and this is not at all recommended.
Please stop all such activities and don’t put lakhs of rupees in trading and
take margin amount and dream to earn huge amount in single day is a very risky
activity.
It’s your hard earned money and don’t take such big risk.
Above note is for new comers to share market and who are not fully aware of day
trading. If you want to test whether you are fully prepared for day trading or
not then first work do paper trading
practice. |
