Anyone can become a day trader but not everyone can make money out of it. Day trading is suitable for only those who wish to speculate on the stock market. Generally day traders say that day trading not only gives you the opportunity to make money, but also to lose. No matter whether you are a full time employee or part time employee, you can trade in stocks and enjoy the benefit. Stock market provides you an opportunity to use your knowledge of every-day events and convert them into profits.
Following techniques will help you to become a successful intraday trader. Following the techniques are more important than understanding it.
Always fix a target price while trading. If you don’t have a target price, the greediness will make you to lose the entire capital in the stock market. Stock market is such a place it can fluctuate to any level. A fair increase in the price of a particular stock may give you a feel that the price will increase further but in the very next moment it may fall down drastically.
See also: How To Open Demat Account?
For example: Buy Siemens at Rs.500, target Rs. 530 and stop loss is Rs. 495.
In this case you have to buy Siemens stock at Rs. 500 and sell it when it touches Rs.530 so that you can make a profit of Rs. 30. If you hold the share after it achieve the target, there is a possibility that the stock price may come dawn drastically after touching a certain limit. In this case you will lose all your profit and capital because of greediness. So fixing a target price is very important for traders.
Before trading in stock market you should fix the buy price and sell price. You should execute the trade only if the stock touches that particular level. For example, if the call is like, buy Unitech at Rs.80 target Rs. 85 and stop loss at Rs. 78. You should not buy below this price; only buy at Rs.80 or slightly higher. Because the given buy price may be the resistance price, if it breaks then share price goes up or else it may not go up. So always buy at given target price.
It is very important to maintain a stop loss while trading. This will help you in minimizing the loss in case the stock price is moving is the unfavourable direction. Assume that the share you bought falls down drastically, in this case you may end up with huge loss. But stop loss will help you to restrict your loss to a certain limit.
Stock market is a very risky place for a fresher lack of knowledge is very dangerous and it will make you to lose huge money. It is always better to do trading or investing by taking the advice and suggestions of an expert who has proper knowledge about the market. IndianMoney.com is providing accurate trading calls for its subscribers.
No one is perfect in stock trading; no one can be a master in stock market. So do not blindly trade on the tips given by any one. Before trading observe that stock, check the volume, whether they are increasing or decreasing and then take a decision on your trade.
Do not rush into the market without a proper analysis. Wait, watch and trade. Verify the market direction and place the order because most of the stock-tips do not work if market direction changes. Make sure and confirm all your strategies like resistance and support levels and then plan to trade.
One of the most important things that all traders should keep in mind is that do not over trade. Never put all your money in stock, most of the brokers provide margin amount but it is up to you how to make use of this margin amount. It means if you have Rs.100000 in your demat account, you can trade for more than Rs.100000. But before trading you should have a fair idea about how much you can trade, how much you can afford to lose etc.
Always trade with market trend and don’t move against market direction. Don’t short sell, if the market is going up and don’t buy if the market is falling down. Give more importance to market trends than individual perceptions.
If you are not sure about market movement then wait for an opportunity and don’t trade vigorously. It is always better to wait instead of losing money.
Greediness will end up in losing all the money. So don’t expect too much from stock market, try to be happy in whatever profit you make. If you try to grab too much from market, the market will grab all your money. Remember that you are doing day trading so square off your positions with appropriate profit instead of waiting for big profit.
Before buying a stock check out the buying and selling volumes. If buying volume is increasing then the stock may go up and if the selling volume is increasing the stock price may come down.
Don’t allow sentiments to rule you. If that is the case you are going to lose all your money in the market. During the day market might go up and dawn but don’t change your decisions continuously. Have a clear plan about the day and start trading.
The research team at IndianMoney.com comprises of certified and experienced professionals who share the company's vision to make every Indian financially literate by equipping every Indian with right and unbiased advice. IndianMoney.com research team provides newsletters, articles, videos and FAQs on various financial products and concepts only to help you make wise financial decisions.
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