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Day Trading Shares
Welcome to the Indian Share Market
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Trading Strategies in Current Market Scenario
Current market overview
High volatility, sharp rallies, unexpected market direction, extremely fickle sentiments and high influence of the international markets - these are but the few of the stock markets tantrums in the past few months. Some analysts expect this bear run to continue for some more time.
It is not easy task to make money in bear or volatile markets. Excellent market strategies have to apply to reduce losses and to increase profits. There is no single strategy which works in uncertain markets so try using following ways to make money.
Investor’s - Regular buying of undervalued stocks
In current bearish markets some of the stocks are available at very affordable rates which are having tremendous growing potential in future. Investor can plan to buy such
stocks in steps rather then buying in bulk in single trade because as markets are still
bearish, so some downtrend in markets may put some more pressure on stock price.
If you are interested to see how to find undervalued stocks then please visit here
Active trader, short term trader
If you are an active trader or short term trader then appropriate tracking
of price and volume data of specific stock or index will provide good
returns in short term.
Like positive price movement with large support of volumes (buyers) indicate bullish sign and negative price movement with large support of volumes (sellers) indicate bearish sign. Specially breakout (bullish) above moving averages and breakdown (bearish) below moving averages.
We daily update stocks breaking the moving averages in either direction. To see the list, please Go here
We also update on daily basis the stocks whose volumes have increased tremendously. Please visit here to see the list
Buying puts of stock that you hold
Suppose if you have stocks in your delivery and you are expecting the stock price to come down in next couple of days then you can buy put of your stock and make money in short term.
You will get profit, if you buy put, when stock price falls.
Please note - Stocks have future contracts will be having calls and puts.
Minimizing Losses
Suppose if you have bought any future contract of either stock or nifty or of any index then at the same time you can buy puts. So that if in case the price falls then your buying order will go into losses but your put price will appreciate, will increase, so that you can compensate the losses in futures derivatives.
Something you can do if your planning for short selling future derivative, to compensate/minimize losses you can buy calls.
Avoid 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.
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Disclaimer: Information presented on this site is a guide only. It may not necessarily be correct and is not intended to be taken as financial advice nor has it been prepared with regard to the individual investment needs and objectives or financial situation of any particular person. Stock quotes are believed to be accurate and correctly dated, but www.daytradingshares.com does not warrant or guarantee their accuracy or date.
www.daytradingshares.com takes no responsibility for any investment decisions based on recommendations provided on website.
Financial contents like Technical charts, historical charts and quotes are taken from NSE and Yahoo sites.
Note - All quotes are delayed by 15 minutes and unless specified.
Please read at www.daytradingshares.com/disclaimer.php before using any material or advice given at www.daytradingshares.com
Copyright © 2009 DayTradingShares.com. All Rights Reserved.
Buying both at the money call and put
A simple strategy to make good returns with limited profit and with less risk is to buying both at the money call and put.
Suppose if you expect the market or stock is going to be down in next couple of minutes, hours or days then you can buy two or three at the money puts and one call. This one call will reduce your losses if market turns against your expectation. On the other side if you expect the market or specific stock is going to rebound or more up then you can buy two or three at the money calls and one put. This one put will reduce your losses if market turns against your expectation.
Selling deep out of money calls and puts near the expiry date
Selling calls and puts which are deep out of money can provide you with a limited profit when sold near the expiry date. Only time value exists in these options but to earn limited profit you have to block money in the form of margins and though a rare chance but you could end with an unlimited loss.
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.
For paper trading please Go here
