Day Stock Trading
Basic Rule
Day Trading in stock market is all about managing risk, nothing works 100% accurate. Even if you have a trading system which generates 99% of success, there is always a certain chance and probability to lose in day stock trading.
Day Stock trading requirement
Day stock trading requires whole market awareness and try to get latest updates on stocks, companies and its related news, very important is to get market direction (either positive or negative),
Day Stock trading monitoring
Financial Television channels provide all latest buzz on stocks, news, markets and companies. This will really helps for day trader to enter and exit on news based stocks.
Day trading Caution
Day stock trading can’t be done based on single technical charting or based on only technical software. Market awareness is must to exceed in day trading.
There is no any technique or calculation to earn in day stock trading.
Very importantly – Market experience is required to get success in day trading.
New comers to stock markets should be very careful, but in fact they must avoid it unless and until they gain proper knowledge.
Important strategy to follow by day trader
As you are doing day trading you have to book profits on low margins and do multiple trades because you never know when markets turns back, so book profit and get ready for another trade unless you are 100% sure of the trade and market direction.
Remember before you start your day trading
1. Buying and selling or selling and then buying (which are called as short selling) are two basic trades done in day trading.
2. Before you decide to do any one of the trade you have to find out the direction of the market. – It’s not possible to find this 100% accurate.
For example – Indian stock markets will open mostly based on the situation on Asian markets and Asian markets in turn will open based on USA markets.
This is not any hard and fast rule but it is observed most of the time.
Truth of day stock trading
Most of the day stock traders get success by avoiding over trading.
For example – If you have RS 5000 then brokerage firms provide margin on your amount, means you can trade 4 times (margin percentage varies from broker to broker) more on your amount. But if you make use of margin amount then you have to square off your trade before market closes or some brokers provide two days time. This means even if your trade goes against you, you have to square off in loss.
Now lets see other side – If you day stock trade only on your amount then there is no restriction for you to square off because you are not using any margin amount provided by your broker. Now suppose if market turns back and you are in loss then you can take them in delivery and hold them as long as you wish or till that scrip goes up.