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To become successful in day trading also called as Intraday it is important to apply practical as well as psychological rules and these are acquired through experience and not over night. Following four techniques and strategies are used by day traders in indian share market. The following are 4 very important techniques to get success in day trading also called as intraday trading. 1. Understand the truth of day trading - day trading is not for everyone. 2. How to generate profits in day trading - Profits and losses are part of day trading? 3. How to reduce the losses - Reduce losses and automatically profits will increase 4. How to safeguard/protect your capital- So that you can trade tomorrow to recover losses.
1. Understand the truth of day trading - day trading is not for everyone.
a) According to our experience day trading is not possible for everyone because it requires practical approach in addition to some emotional factor also plays very vital role in providing profits in day trading. To know whether you are able to do successful trading we generally advice to do paper trading practice and if you get success in this then you can surely proceed to day trading with actual money. The process of paper trading practice need to be followed to know how real time stock market operates. b) Day trading is not overnight quick rich scheme and most of the people come to stock market especially to day trading to become rich in one night or to generate big profits in single trade based on some tips. But this is not true and also not possible. Day trading requires study, dedication and experience and then it will give profits. It is not one day course but in fact trader has to put efforts for months to understand markets and then it is possible to get profits. If you are thinking to earn profits without any efforts and also based on some tips then day trading is not for you and if you continue doing same then it will take you to heavy losses.
2. How to generate profits in day trading - Profits and losses are part of day trading ? Generating profits in day trading is easy for people who study markets. Generating profits requires experience, dedication and study. To start with one need to spend time in reading markets, dedication to keep self updated about domestic and international markets and news on daily basis, company updates and news, government updates and news etc. Because all these factors and events affects market direction and that is what day trader need to concentrate to make profits. Day trading is not part time business. If trader need success then he or she need to stay in markets from the time market opens till its close.
Some practical approach to generate profits in day trading (Intraday trading) a) Intraday stocks movements are purely based on market (traders) sentiments, so if you want to make profits then move in accordance with the flow and not against the flow. For example - IF the stock price is going up then buy and sell multiple times with small profits instead of waiting for big profits in single trade. On the other side if the stock price is going down then you can short sell and by at lower levels. If you do 2 to 3 trades with small profits then it is enough to start with day trading and once you gain experience then you can increase the capital as well as trades.
b) The following are few links where we post stocks for day trading on daily basis
3. How to reduce the losses - Reduce losses and automatically profits will increase?
In day trading the important thing is to generate small profits with very minimal losses. It is not possible to generate daily profits without losses throughout the month. So here the bottom line is to reduce the losses. For example if you do some losses today then you should have capital to do trading tomorrow and generate profits. If you lose all your capital then you can’t do trading tomorrow and recover the losses. The following are few important techniques to reduce losses a) One way to reduce or avoid losses is to wait for right opportunity for trading rather doing trading for every rise and fall in the stock price. b) Don’t wait for huge profits in single trade, take small profits and do multiple trades.
c) Don’t Overtrade Generally people do overtrading and end up into losses. In Day trading no one has control over market and on stock movements so if the stock direction reverses then the trade will enter into losses. So it is always advisable not to do overtrading. d) Using stop losses Stop losses will reduce your losses to large extent if the stock direction reverses. To know how to make use of stop loss, please visit at Stop loss page e) Don't use Margin AmountIf you use margin amount, provided by broker, then you have to square off your trade before market closes irrespective of whether you are in profit or loss. If you use only your money then you can take delivery of your shares if your shares go into losses. Read more about margin trading and its disadvantages
4. How to safeguard/protect your capital in day trading - So that you can trade tomorrow to recover losses.
Protecting your capital (your trading amount) is very important to get success in share market.
The following are few techniques to protect your capital -
a) It is advisable to use only 50% of your trading amount for day trading and rest of the money is kept as backup.
b) Till you become experienced trader, trade only with your amount without using margin amount this will help to reduce losses
and safeguard your capital.
c) Do paper trading practice - If you get success in paper trading practice then only you can start trading with actual money.
d) Don’t panic and act on any tips.
e) Don’t buy expensive trading software without testing them or without seeing the live demonstration.
f) Trading in future derivatives and options requires extra expertise so new comers are not advised to start with these
Four Techniques and Strategies for successful day trading in share market
Four Strategies and techniques for successful trading
If you are looking for success into trading then can you make use of strategies and techniques?
We have mentioned few of them as follows:-
Four Strategies for day trading in share market
1. Wait and watch and do one or two trades in a day.
2. Stay away from Greed and fear in trading. Greed comes to make more money and do more trades and fear comes by doing
big trades and fear also generates by trading without having knowledge
3. Understand US market closing, Asian markets status and then trade into Indian markets because most of the times Indian
markets follows global markets.
4. For successful trades and profits try to trade on stocks in news. Look for small profits and book profits.
If possible keep a watch on business news channel on television and try to track stocks in news and make trades.