Concept Of Day Trading And Day Trading Techniques For Individuals
Concept Of Day Trading
The term day trading refers to the practice of buying and selling financial instruments. However it should be noted that it should be done within the same trading day such that all the positions are usually closed before closing of the market in the trading day. People who practice or participate in this type of trading are called day traders. A day trader actively searches for potential trading setups in the stock market.
What Is Margin Trading?
There are day traders that sometimes borrow money to practice their trade which is known as margin trading. There is no cost to day trader for the margin benefit since margin interests are typically only charged on overnight balances. It can be either extremely profitable or extremely unprofitable because of the nature of financial leverage and the rapid returns that are possible. High risk profile traders can generate either huge percentage of returns or huge percentage of losses in their cash. Thus day traders are sometimes portrayed as ‘gamblers’ by other investors because of the high profits or losses born by them.
Is It risky?
There are many people who considers this type of trading as risky and thus regulations requires brokerage firms to ask whether they have prior trading experience before entering into the market and also to whether the clients understands the risks of this type of trading. There are some strategies that relatively require sophisticated trading systems and software. Many day traders use multiple monitors or even multiple computers in order to execute their orders. Some of the traders also use real time filtering software which is programmed to send stock symbols to a screen which meet specific criteria during the day.
There are some concepts in the markets like BSE, NSE, and NASDAQ…etc that plays an active role in the market. Day traders may buy or sell many times during a particular trading day and so they receive trading fee discounts in return from the broker. So if you are willing to go for day trading, then you should make it a point to take some guidance from your broker so that you need not waste a lot of money in the market.
Day Trading Strategies
To some, stock market day trading is a good way to earn money with a bit of gambling. But you need to have some idea about day trading strategies so that you get good profits out of it. However once you get into day trading, then you have to devote your whole life into the stock market.
Prepare for ups and downs of the market
When you invest money in the Indian stock market, you need to be fully prepared for ups and downs in the market. The value of the stock may rise or fall down in a single day. So each trader makes his or her own strategy in order to earn maximum results. There are traders who do their trading from their computers but this does not mean that trading can be done only through the computers. There are some traders who make the use of their phones. Whichever method you utilize, but the main important thing which you have to do is to make a good research. You should be able to study the whole market very carefully so that you do not lose any cashinvesting in the stock market.
Avoid worthless rumors
Apart from studying the market about NSE, BSE, NASDAQ…etc, you should also take some precautionary measures. You should always avoid worthless rumors about the companies by people who do not know much about them. This people just make you confused. So, you need to avoid this type of people. It is always better to buy stocks when they are available in low price and then sell them at a higher price in the market. There is a limit on the gains from a single share in the stock market day trading. So, you should always try to buy and change stocks in regular intervals.
Knowing the day trading strategies helps you in investing the right stock and selling the same in the right time. If you do not have any idea about the market scenario, then it is best to go for a good stockbroker who would guide you for your investment and profit.
Day Trading Techniques For Individuals
- I will Trade small.
- I will not Trade without stoploss.
- I will win and walk out.
- I will loose less and walk out. Some days are bad.
- I will not get unduly swapped by the market noise.