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Practical Ways of Doing Day Trading
Analyze, Wait, Watch and then Trade
This sentence looks time consuming like analyze, wait, watch and then trade when
to do all this and they to get profit?
Answer is - For newcomers it may take an hour and for experienced trades it may
takes seconds or minutes.
- First analyze the market and then
particular share - It is very important to know how the entire market is going
to be today before start trading.
- Check out whether the market is
going to be Bullish, Bearish or going to trade in very narrow range.
- Check out how American markets have
closed at yesterday night, how Asian markets are trading in the morning (they
open before Indian markets)
Once you get the knowledge how the market is going to move (it is totally
acceptable that it is not possible to judge it 100% accurate but you should have at least 50 to 70% knowledge) then act accordingly.
Always trade in the market direction.
In bullish trend - buy and then sell bullish shares
In bearish trend - Short sell and then buy bearish shares
In very narrow range trading - Wait for right opportunity and then enter into
trade. “Every day is not trading day”.
It is important to know the status of American markets because mostly it has
been observed that based on American markets Asian markets open in the morning
at 8.30 am and finally Indian markets open at 9:00 am.
Mostly (80 to 90%) it has been observed that Indian markets follow global
markets.
American indices are NASDAQ and DOW.
Important Asian markets are Nikkei, HangSeng, Taiwan etc
At afternoon 1.30 pm European markets open and mostly it has been observed that
our Indian markets reacts to European markets.
For example - If European markets open in negative then there are chances that
our Indian market may also move some downside (if already Red then further
downtrend will continue and if in Green then may some pressure on upper side)
If European markets open in Green then it is expected that Indian markets will
recover (if in Red) and if already in green then continue their upward journey.
Act accordingly
- It is always profitable to act in
accordance with the market direction and not against market direction.
- If market is in green and continue
its upward journey then you should plan to buy and then sell.
- If market is in Red continue its
downward then you should plan to short sell and then buy.
- This will increase the chances of
more success and more profitable because most of the time it has been observed
that shares also move in accordance with the market so it becomes easy to go with
the flow and not against the flow (market).
- Because everybody is buying and if
you do short sell then definitely your trade will end up in loss and if market
is falling and if you buy then also your trade will end up in loss.
- Never trade against market
direction.
- Once you analyze the market now its
turn to analyze the specific share.
Analyze specific
share
- Once
you get the at least some knowledge of market direction/status then you can act
on choosing the shares which are moving in accordance with the market especially nifty, Jr nifty, sensex other
indices related shares.
Note - You can choose any share but it’s our experience to choose indices
related shares to have more liquidity and easy to enter and exit from the trade.
For example - if you come to know that market is going to be bullish and
going to remain in green at least for some more time then you can choose bullish shares for trading and if you come to know
that market is going to be bearish and going to remain in red then you can choose bearish shares.
- Once you get the shares according
to market direction than you can start analyzing whether they are moving
according to market or not.
- It is possible that some shares may
not move or may not react immediately and some may move or react quickly so you should analyze all these parameters and select shares for your trading.
- Once you analyze the shares and
decide your shares for trading then Wait and Watch.
- Initially this all process seems to
be time consuming but as you proceed ahead and start gaining experience this
process becomes very easy and fast.
Wait and Watch
- Wait
and watch are two very important parameters which will decide to give you a big
profit or small profit or big loss or small loss, so follow it very seriously.
- Once you analyze the specific share
and market movements keep continuous watch on direction on both of them.
- You should always keep continuous
watch on market because if market changes the direction then your shares are
also going to change the direction.
- Here your paper trading experience
will comes into picture, so still if you not feeling confident you can stop
actual trading
- “We always recommend entering late
in trade and taking small profit instead entering early and making losses”.
- Wait and keep watching until you
get any signal either buy or short sell.
- Don’t hurry to enter into trade
because market is open for 6 hours and your first trade is important to make up
your mood so if you do profit in first trade then definitely this will boost your
confidence going forward.
- Write down your experience.
- Only trade when you are sure about
the market and share direction or else leave the trading for that day.
- “Please remember money saved is
money earned.”
Now the final step
is to act and trade
Till now you would
have followed the rule Analyze, Wait and Watch. If you are still not confident
or feeling nervous and fearful then stop trading immediately and go again for
paper trading practice and keep doing practice until you feel confident and earn
profits and then come for actual trading.
We are always keep reminding you to do paper trading practice because your money
is hard earned and we don’t want you to loose it unnecessary. You came to our
website to earn money and believe us that we are the happiest people to see your
success.
Important point to
note
Trading of shares
is not important as it is only the buying and selling of shares and this can be
done by anybody if you tell him the share name, buying price and selling price
even a small boy who can read the English words can do trading.
The important steps towards successful trading are analyzing the market and
share, doing proper interpretation, taking appropriate decision and then finally
trade.
Final step is
trading
- Act
in accordance with market; never ever go against market direction.
- Buy call - If you analyzed that
Market is bullish or is expected to trade in green then you can trade on bullish
shares by buying the shares and then selling them.
- Don’t short sell and keep waiting
when the market or the share price will come down and you will square off your
trade.
- Short Sell call - If you analyzed
that market is expected to be bearish and will remain same for some more time
then you can plan on short sell call (first sell and then buy the share when its price
comes down) and then buy the share. Don’t do reverse
(like first buy and wait for market or stock to come up) in bearish market.
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