Day trading, as the name suggests, means trading-buying and selling-the stocks on the same trading day. The trading positions, usually though not always, are closed before the market closes for the trading day.
Day trading is different from after- hours trading where the trading activity continues even after the regular marketing hours when the stock exchange closes.
Sellers and buyers who participate in day trading are called day traders. Although day trading evokes the image of a hectic trading activity in course of the trading day, it may not be so in actual practice. You may make several trades, say a dozen, in course of a trading day, or, you may limit yourself to just one trade.
You may, in some cases, just buy a stock on one day and sell it on the next day, if you think that selling it on the same day would not prove profitable. There is no legal restriction such as that you must finish off your trading activity the same day. You may, at the most, have to pay some differential on brokerage if you carry your trade to the next day.
In standard practice, traders usually tend to close their trading positions by the end of the same trading day. In any case your trading frequency depends entirely on your trading strategy for that particular day, or, your general trading style and outlook.
There are traders who focus on very short or short term trading. They finish off their trades in a matter of few minutes or even seconds. Such traders buy and sell several times a day and usually their trades consist of high volumes. They are the favorites of the brokers who reward them with big discounts on commissions.
Some traders, however, do not hanker after reduced brokerages. They focus on momentum or trends of the stock movement. They are very patient during their wait for a strong move, which may occur during the trading day. Obviously such day traders make only a few trades.
There are traders who prefer to sell off their stocks before the close of the market day to avoid the risks arising out of the price gaps between the closing price on the day they bought a stock and its opening price on the next day. They consider this practice as a golden rule and follow it almost religiously.
Other traders believe in allowing the profits to run so they stay with the position even after the market closes.
As said earlier, the number of trades you make on a trading day depends upon your trading style or trading strategies.
Profits and risks in day trading
Day traders make quick bucks and also quick losses in a matter of minutes or at the end of the trading day. Day trading may evoke the visions of gamblers gaming in casinos. There is, however, a marked difference between day trading and gambling.
While, you cannot make any calculated moves or devise any intelligent strategies in gambling, except when you are out to cheat others, day trading involves very serious understanding of the process of trading.
You study the general market trends and the movement of the stocks. You make fundamental and technical analysis and keep yourself abreast of the latest news flashes about the stocks of the companies that you trade in and much more.
Day trading is not playing a blind man's buff or just throwing away a dice. You have to be very alert and cautious before every move. It would, therefore, be unfair to call day traders gamblers or bandits as some frustrated losers in day trading are apt to do.
Experienced and intuitive traders generate huge percentage of returns from day trading. Some stock traders manage to mint millions per year solely on the day trading. A large number of persons have successfully made day trading a sole avenue of making their livelihood.
This, however, is not to deny the risks of huge losses in day trading. Those who trade without a calculated and intelligent strategy and discipline are more likely to incur huge losses in day trading. This happens more with those who use borrowed funds, a practice known as buying on margins. They have to pay back the borrowed amounts with huge interests and other penalties if fail to make profits. This is what makes day trading really risky.
Friday, May 2, 2008
Make Money Online
You've heard all the stories about regular people like you and me pulling down six-figure incomes from the Internet. These people have no special business or marketing training, didn't start off with a large amount of capital, and don't spend 20 hours per day working on their enterprises. In fact, it seems that they're able to make money online without expending very much effort at all. Understandably, you want in on the action. What's their secret?
Well, there are actually lots of different ways to consistently -- and legally -- make money online. For example, if you have a product to sell, it would be very easy to get set up at a few different auction sites. Thousands of people make a full-time living just from running auctions. Even if you don't have a product to sell, you can still make money online. Many people get their start from putting up a simple website and filling it with affiliate links that generate a commission every time a visitor clicks on the links. Of course, you would have to have some kind of content on the website or it's not likely that visitors will keep coming back to it.
If you're a bit more adventurous, you can try to make money online from various investment programs. You can either hook up with a program that is already in place, or strike out on your own. Some of the existing programs out there consist of private investor's clubs and HYIPs. A private investor's club is a group of people who pool their capital together in order to invest it in various financial markets. Usually, one or more of the members is a licensed broker or seasoned analysts, so the investments are both savvy and mid- to low-risk. The major drawbacks to a private investor's club is that you have to be invited by a current member in order to join and you usually have to provide a significant investment up front.
HYIPs are another vehicle that regular people have used in order to make money online. A HYIP is a high-yield investment program, and is based on some of the same principles as private investor's clubs. With HYIPs, however, membership funds are used to invest in very risky prospects that can either go bust or pay off handsomely. Most HYIPs are open to any and all comers, so you don't need to know anyone in order to join.
In order to make money online from your own investment know-how, you can sign up with an e-trading firm and trade stocks, bonds, and futures all day long with just a few clicks of your mouse.
These are just a few of the innumerable ways to make money online. You can decide to pursue one of the avenues mentioned above, or turn your own original idea into a gold mine. Either way, you're sure to be able to find a niche that will allow you to generate a steady primary or secondary income stream.
Well, there are actually lots of different ways to consistently -- and legally -- make money online. For example, if you have a product to sell, it would be very easy to get set up at a few different auction sites. Thousands of people make a full-time living just from running auctions. Even if you don't have a product to sell, you can still make money online. Many people get their start from putting up a simple website and filling it with affiliate links that generate a commission every time a visitor clicks on the links. Of course, you would have to have some kind of content on the website or it's not likely that visitors will keep coming back to it.
If you're a bit more adventurous, you can try to make money online from various investment programs. You can either hook up with a program that is already in place, or strike out on your own. Some of the existing programs out there consist of private investor's clubs and HYIPs. A private investor's club is a group of people who pool their capital together in order to invest it in various financial markets. Usually, one or more of the members is a licensed broker or seasoned analysts, so the investments are both savvy and mid- to low-risk. The major drawbacks to a private investor's club is that you have to be invited by a current member in order to join and you usually have to provide a significant investment up front.
HYIPs are another vehicle that regular people have used in order to make money online. A HYIP is a high-yield investment program, and is based on some of the same principles as private investor's clubs. With HYIPs, however, membership funds are used to invest in very risky prospects that can either go bust or pay off handsomely. Most HYIPs are open to any and all comers, so you don't need to know anyone in order to join.
In order to make money online from your own investment know-how, you can sign up with an e-trading firm and trade stocks, bonds, and futures all day long with just a few clicks of your mouse.
These are just a few of the innumerable ways to make money online. You can decide to pursue one of the avenues mentioned above, or turn your own original idea into a gold mine. Either way, you're sure to be able to find a niche that will allow you to generate a steady primary or secondary income stream.
Wednesday, March 26, 2008
Types of Shares for trading
You should first find out the share type and then invest in the share. This avoids disappointment later. The different types of shares are:
Blue chip stocks: These are companies with solid foundations and which have decades and centuries of history. These are low growth companies. But these will give you a stabilized return. These have consistent dividend paying history. These companies are diversified into various sectors and hence are good bets to invest for the long term. The Dow 30 consists of most of these stocks. These companies have lower and stabilized growth but they are safer bets over the long term to park your money and can give surprising compound annual returns over the long term.
Growth stocks: These are in great flavour. These are companies which show high growth in their turn over as well as share price. These companies are in the buzzing sectors of the economy. Generally these are not as old as the blue chip ones. These are very expensive in terms of the price to earning multiple as compared to the other stabilized companies. They can have huge ups and down in their stock price in a few trading sessions due to the large trader interests. All the blue chip stocks go through this phase before stabilizing. Negative news related to these companies can set back the price of these stocks by a vast amount.
Speculative stocks:
These are companies with no real fundamental logic. Their stock prices defy the conventional logic. The stock price of these types of companies rises and fall a lot during single trading sessions. The stock prices of these companies are controlled by the huge manipulation in buying and selling of shares rather than by the fundamentals. These types of stocks are very risky and are great money losers. You need to avoid such stocks. This category of stocks consists of stocks priced below 5$.
Range bound shares: The price of these shares doesn't fall or rise too much. These basically remain range bound within 10% range. These types of companies have stagnant growth in profits. These are fundamentally stable companies with no real thrust in profits. These stocks are used in trading on technical basis. These stocks are used by traders to buy at the lower support of the range and are sold off by the traders at the higher end of the range. Thus making a decent profit of 5% to 10% every 5 to 10 days.
Different types of people invest in different types of stocks. You can earn by investing in any of these types of stocks, you just need to find out which type suits your needs.
Blue chip stocks: These are companies with solid foundations and which have decades and centuries of history. These are low growth companies. But these will give you a stabilized return. These have consistent dividend paying history. These companies are diversified into various sectors and hence are good bets to invest for the long term. The Dow 30 consists of most of these stocks. These companies have lower and stabilized growth but they are safer bets over the long term to park your money and can give surprising compound annual returns over the long term.
Growth stocks: These are in great flavour. These are companies which show high growth in their turn over as well as share price. These companies are in the buzzing sectors of the economy. Generally these are not as old as the blue chip ones. These are very expensive in terms of the price to earning multiple as compared to the other stabilized companies. They can have huge ups and down in their stock price in a few trading sessions due to the large trader interests. All the blue chip stocks go through this phase before stabilizing. Negative news related to these companies can set back the price of these stocks by a vast amount.
Speculative stocks:
These are companies with no real fundamental logic. Their stock prices defy the conventional logic. The stock price of these types of companies rises and fall a lot during single trading sessions. The stock prices of these companies are controlled by the huge manipulation in buying and selling of shares rather than by the fundamentals. These types of stocks are very risky and are great money losers. You need to avoid such stocks. This category of stocks consists of stocks priced below 5$.
Range bound shares: The price of these shares doesn't fall or rise too much. These basically remain range bound within 10% range. These types of companies have stagnant growth in profits. These are fundamentally stable companies with no real thrust in profits. These stocks are used in trading on technical basis. These stocks are used by traders to buy at the lower support of the range and are sold off by the traders at the higher end of the range. Thus making a decent profit of 5% to 10% every 5 to 10 days.
Different types of people invest in different types of stocks. You can earn by investing in any of these types of stocks, you just need to find out which type suits your needs.
Suitable Forex Trading System
Understanding oneself and your current situation will determine your trading style and setup, which is crucial for success.
I have been experimenting with different systems from intraday to swing trading, and I found that unless you are a professional day trader, you are not going to be successful with some profitable trading systems if they don't suit you. Probably automatic trading can helps you in another way, but the every day market condition is unique so if we want to make more pips, auto trading would not be able to do what manual trading could.
As a new trader who just started out with Forex earlier this year, I have always been fascinated with fancy setups and beautiful customized indicators. Although many systems are profitable if strictly adhere with its rules, however, if a system does not fit into individual style of trading, we won't be able to make pips nor stick to it 'religiously'.
Everyone of us has different style, and it is particularly important to find out what suits our personality if we want to be successful in trading.
Same like most -if not all- of the new traders who just started out, I am also no stranger to losing trades and seeing my position being liquidated due to over-leveraging the account result of trying to exploit the 24-hour Forex market has to offer. That is, always want to be in the thick of action but I have realized that I don't have the time and energy to do that consistent unless trading is what I do for a living.
So what setups and systems are we going to use if we are doing part-time trading? It depends on what suits you and your current time available for trading. My advice is, if you are not an intraday trader, don't pick up systems that are customized for day-trading no matter how profitable it is because if your conditions don't allow, you won't be able to follow through it consistently throughout the day. You might just miss a winning trade after a string of losses due to your time schedule and other priorities. That would be detrimental.
Right now, I sense that I am going through to the second stage of my trading and I am constantly picking up knowledge from traders around the world in the forums, webinars and books etc. I am looking less at other trading systems now but rather focus on my own EMA trading setup since it suits me the most as I am not a day trader with a large capital nor the time to do scalping during the day.
I have been experimenting with different systems from intraday to swing trading, and I found that unless you are a professional day trader, you are not going to be successful with some profitable trading systems if they don't suit you. Probably automatic trading can helps you in another way, but the every day market condition is unique so if we want to make more pips, auto trading would not be able to do what manual trading could.
As a new trader who just started out with Forex earlier this year, I have always been fascinated with fancy setups and beautiful customized indicators. Although many systems are profitable if strictly adhere with its rules, however, if a system does not fit into individual style of trading, we won't be able to make pips nor stick to it 'religiously'.
Everyone of us has different style, and it is particularly important to find out what suits our personality if we want to be successful in trading.
Same like most -if not all- of the new traders who just started out, I am also no stranger to losing trades and seeing my position being liquidated due to over-leveraging the account result of trying to exploit the 24-hour Forex market has to offer. That is, always want to be in the thick of action but I have realized that I don't have the time and energy to do that consistent unless trading is what I do for a living.
So what setups and systems are we going to use if we are doing part-time trading? It depends on what suits you and your current time available for trading. My advice is, if you are not an intraday trader, don't pick up systems that are customized for day-trading no matter how profitable it is because if your conditions don't allow, you won't be able to follow through it consistently throughout the day. You might just miss a winning trade after a string of losses due to your time schedule and other priorities. That would be detrimental.
Right now, I sense that I am going through to the second stage of my trading and I am constantly picking up knowledge from traders around the world in the forums, webinars and books etc. I am looking less at other trading systems now but rather focus on my own EMA trading setup since it suits me the most as I am not a day trader with a large capital nor the time to do scalping during the day.
Tuesday, March 11, 2008
Learning Effective Day Trading Activities
Trading can be a risky activity. There is no doubt about that! However, so is driving a car to work, but the risks of getting from A to B on four wheels are well understood and are managed accordingly, to the point where we do not think twice about getting behind the wheel.
And in the same way, provided a trader is disciplined in his approach to the job at hand, and understands the associated risks of the work, those risks can be managed and a trader could well be on his way to good profits.
On the subject of risk in day trading, it is almost unique, in that it can be learned and practiced with absolutely no financial risk at all. One way is by means of paper-trading - that is - trading using freely available simulation software. Thus in the same way a trainee airline pilot won't be let loose into the skies without having learned and rehearsed their skills in a simulator, so a new trader can employ the same technique before they start trading real money. "Sim-trade" before you give up the day-job.
Most of us may rely on experience as a teacher, reading the charts and relying on gut feel. Your experience may be a master teacher but it can be very costly and if we go through too many failing experiences, we will be out of the game altogether. We need to understand the risks involved in every trade to succeed.
Knowing your risks and knowing the right information in the right time is the key to success or failure. Note that in trading, sometimes that knowledge can be hard to find or intentionally kept secret.
It takes a lot more than getting lucky and common sense to break even in day trading. But who wants to just break even? If you are hitting a bad trade day, why not take a break and look into day trading tutorials. These tutorials are one way traders can shorten the learning curve and have greater odds of hitting more than losing.
And in the same way, provided a trader is disciplined in his approach to the job at hand, and understands the associated risks of the work, those risks can be managed and a trader could well be on his way to good profits.
On the subject of risk in day trading, it is almost unique, in that it can be learned and practiced with absolutely no financial risk at all. One way is by means of paper-trading - that is - trading using freely available simulation software. Thus in the same way a trainee airline pilot won't be let loose into the skies without having learned and rehearsed their skills in a simulator, so a new trader can employ the same technique before they start trading real money. "Sim-trade" before you give up the day-job.
Most of us may rely on experience as a teacher, reading the charts and relying on gut feel. Your experience may be a master teacher but it can be very costly and if we go through too many failing experiences, we will be out of the game altogether. We need to understand the risks involved in every trade to succeed.
Knowing your risks and knowing the right information in the right time is the key to success or failure. Note that in trading, sometimes that knowledge can be hard to find or intentionally kept secret.
It takes a lot more than getting lucky and common sense to break even in day trading. But who wants to just break even? If you are hitting a bad trade day, why not take a break and look into day trading tutorials. These tutorials are one way traders can shorten the learning curve and have greater odds of hitting more than losing.
Buying And Selling Stocks In Day Training College
Day trading is buying and selling stocks in the course of a single day. This typically is done in large volume orders to make more money from smaller moves. This can definitely be a very profitable hobby if you do your homework.
The most common question that is asked about day trading is: Do I have to sit in front of the computer all day to make money?
In short, no. You do not have to slave over your keyboard for hours upon hours. You mainly just need to trade when the biggest volume is happening. Which is in the morning hours. So most day traders spend just about 4 hours really watching the computer. Plus, they do not trade on the weekend. Which makes day trading so appealing.
If something is an investment, then it has risk. If there was anything that was 100% everyone would be doing that. So consider day trading the same way. You can make plenty of money, but you are guaranteed to lose some as well. Accepting losses when they come is something you better get used to because nobody bats 1000 at this game.
However, day trading does have a slight advantage in some ways. The fact is that it is very rare that stocks lose a lot of value in just one day. If a stock is going at $74.50 at 9:30 am, then it is doubtful it will tumble all the way down to $50 in just a couple of hours.
If you only have a little bit of money to work with then it will be slow going at first. Simply put it is hard to make $2000 in one day when you are only working with $5000. However, if you have $30000 to work with then you have the potential to make that kind of money.
One more important thing to remember is stock trading is to pay attention for the amount of shares, this is the biggest factor when it comes to day trading. If you are not paying attention to both, you will not make the money that you are shooting for.
Finally, with all investments. Take your time and learn. There are demo accounts out there where you can practice with real stock info, but not lose your kids college fund in the process. So make sure to take full advantage of the chance to "learn before you buy".
The most common question that is asked about day trading is: Do I have to sit in front of the computer all day to make money?
In short, no. You do not have to slave over your keyboard for hours upon hours. You mainly just need to trade when the biggest volume is happening. Which is in the morning hours. So most day traders spend just about 4 hours really watching the computer. Plus, they do not trade on the weekend. Which makes day trading so appealing.
If something is an investment, then it has risk. If there was anything that was 100% everyone would be doing that. So consider day trading the same way. You can make plenty of money, but you are guaranteed to lose some as well. Accepting losses when they come is something you better get used to because nobody bats 1000 at this game.
However, day trading does have a slight advantage in some ways. The fact is that it is very rare that stocks lose a lot of value in just one day. If a stock is going at $74.50 at 9:30 am, then it is doubtful it will tumble all the way down to $50 in just a couple of hours.
If you only have a little bit of money to work with then it will be slow going at first. Simply put it is hard to make $2000 in one day when you are only working with $5000. However, if you have $30000 to work with then you have the potential to make that kind of money.
One more important thing to remember is stock trading is to pay attention for the amount of shares, this is the biggest factor when it comes to day trading. If you are not paying attention to both, you will not make the money that you are shooting for.
Finally, with all investments. Take your time and learn. There are demo accounts out there where you can practice with real stock info, but not lose your kids college fund in the process. So make sure to take full advantage of the chance to "learn before you buy".
Thursday, February 21, 2008
Day Training - Buying And Selling Of Shares
Day trading-Buying and selling of shares on daily basis is called day trading this is also called as Intra day trading. Whatever you buy today you have to sell it today OR whatever you sell today you have to buy it today and very importantly during market hours that is 9.55 am to 3.30 pm (Indian time).
Advantages of Day Trading -
a) Margin trading - In Day trading you get margin on your balance amount means you get more leverages (amount) on your available balance amount to do day trading this concept is called margin trading. Margin trading is only possible in day trading and not in delivery trading. How much extra amount (margin) you are going to get that totally depends on your broker, or your online system brokers. Some broker provides 3, 4, 5, and 6 times extra margin. If you do margin then you have to square off your open trades on the same day (means if you bought shares then you have to sell and if you sold shares then you have to buy)before market time (that is 3:30 PM) finishes.b) Second important advantage is that you have to pay is less brokerage (commissions) on day trading (Intraday) as compared to delivery trading. This brokerage again depends from broker to broker (or on your online trading system). c) In day trading you can sell and then buy this is called short sell which you cant do in delivery trading. You can sell shares when prices are falling and then buy when price falls further.
Disadvantage of Day Trading
a) As you are benefited to get more extra amount to trade (that is margin trading) and get more extra profit it is also equally true that you are also taking more risk of loss.b) At any cost you have to square off the open transaction before 3:30 PM (especially if you are doing margin trading) at that time the price may not be in your favor.
Basic Requirements for Day trading
A successful day trader or share market trading requires couple of disciplines and following requirements -
1) PC with internet - If you need to do it yourself then you need to have a PC or else you can do it in internet café also. A PC with good internet connection speed. The internet connection should not be slow or should not face any other problem especially in Day Trading.
2) Online Account (Demat Account) - You need to open online share trading account with any of the available banks or online brokers.Points to remember while opening online accounta) Make multiple enquiries and try get low brokerage trading and demat account.b) Also discuss about the margin they provide for day trading. c) Discuss about fund transfer. The fund transfer should be reliable and easy. Fund transfer from your bank account to account and visa versa. Some online share accounts have integrated savings account which makes easy for you to transfer funds from your saving account to trading account.d) Very important is about service they provide, the research calls, intraday or daily tips. e) Also enquire about their services charges and any other hidden charges if any. f) And also see how reliable and easy is to contact them in case if any emergency. Emergency closing or squaring off trades in case of any technical or other problems
How to choose shares (stocks) for day trading
In day trading, traders mostly wish to do buying and selling on small profits or else they look for overbought or oversold shares. Taking into consideration these important points following basic things you should look in for shares while choosing them for day trading.- Price Volatility- Volume (quantity)What exactly these terms mean and how to use them while Day Trading.
Price Volatility - The Price volatility means the movement (up and down) of share price should be more (or high) through out the day. In other words the fluctuation in share prices should be on high rate so that it will be easy for you to buy and sell on different prices. Suppose if share is moving up and down in very narrow range then on what price you will buy and sell? So it is always better if you choose shares which have high volatility in price movement.Do you want to know how to find out the high volatility shares then please click here?
Volume (quantity) - Volume means trading quantities. The shares which you choose for day trading should have high volumes (or high traded quantity).Why this is required?The high volume indicates that there is more liquidity. Liquidity means lots of transactions had took place on this share and more people are interested to trade in this share. This will ease your trading job because you will get more exposure to the price to buy and sell at anytime. Due to high volumes there will be also high price fluctuations.
Points to remember for day tradingFollowing are very important points to be always remember by day traders.Entry & exit points, stop loss limits, profit targets, your desired risk/reward profile,amount of capital to be committed to trades, how long you need to hold the share if incase it is against your favor.
Why it is required to practice day trading before starting actual day trading?
It's important to do practice or paper trading before you starts actual trading. Following are the few reasons, 1) Very importantly you will come to know how to place buy/sell orders, and will become familiar and perfect about using your trading system. 2) You will gain confidence in yourself. 3) The fear of trading will vanish. It is very important to keep fear away while doing day trading. 4) You will become active to enter and exit the trade. It's vital important that you must be pretty fast to enter and exit the trade (i.e. open positions).
What are the common day trading mistakes and how to avoid them to make generous profit
1) Don't jump in trend early - Wait and get paper confirmation of trend change, and then plan and do your trades (buy/sell). Don't jump in or do early trades before any trade change confirmation this may damage your capital (bank balance).
2) Don't wait in trade for long time - Suppose that you had done one trade (either buy or sell) but the scrip is not moving either up or down, it is just stable or moving with very low price difference, then you should get out of that trade and look for other scrip's. You may encounter these type of situations when indices (NSE or BSE) and not moving (or moving with narrow range). At such time either you wait or come out of trade, don't loose patience and fall under loss.
3) Don't change your trend on volume volatility - Some time you enter in trade by seeing the buy and sell quantities. For example, suppose you brought shares by seeing more buy quantity then sell quantity, expecting more buy quantity may push the share/stock up but after few minutes you see exactly reverse that you see more sell quantity and less buy quantity or both buy and sell high quantity or the difference of buying and selling quantity is decreased as compared to what you had seen before. So this point is very important, don't panic here and sell off your stock, wait and realize the situation properly and then take action. This situation comes many times but if you are sure that your share is going to move up then stick to it.
4) Beware of companies' acquisition or any announcement by Government - Suppose in the morning, before market begins, you should read or viewed the news of any Indian Company has acquired any foreign company (or part of foreign company) if you see this is actually best news/things that Indian company. But if acquisition amount is far more than expectation then this good news will turn into worst news. The shares of that company will start falling. So you should not get in trade and buy shares you have to wait and watch how market or other people are responding to these shares and once you understand then you can trade. So always watch where the market heading towards and then react. Announcement of Government - You should also be very careful to decide your tarde based on any government announcement.For example, if government has declared any hike in interest rate then its good news for bank stocks and hence the shares will rise but if government has declared 2nd rate hike in very less span of time as company to first one ( stay within duration of one, two month or three month) then this news will be worse for bank stocks, the share may keeping fall during the trading period. So realize and analyze the news and finally watch market behavior and this fall or do trade you will get success.
Things to study in the morning before starting your day trading or share market trading or Intraday trading?
1) Read financial newspaper like Business Standard, Economics Times, etc. If possible note done the high lights/breaking news with respective company names and keep close watch on them for that day.
2) If possible watch share (stock) market related TV channels like Zee Business, CNBC, etc. In these TV channels you get over all idea/movements of all share prices and markets (BSE, NSE). And also it becomes easy to catch and keep close watch on related companies if any breaking news comes out during that day.
3) Especially some share market related websites like capitalmarket.com, businessstandard.com always displays current news, market affairs, share market trends, breaking news and various announcement done by company or government which may effect the share market and related companies. So try to access and have all ok on such types of websites before starting trading and also through out the day, if possible.
4) So in short before starting you stock market trading you should be well aware of all the current news of financial market and if possible note down the breaking news or effective news and its related company and keep watch on that share and trade accordingly on that day.
Important principles to be follow by day tradersNever invest all your money in same sector this method is called as diversification of shares. This will protect your money from downtrends of any particular sector as you can make money from other sector.There are various sectors like IT, Pharmacy, Banking, Steel, Petrol and Oil, construction and infrastructure, auto etc.
Avoid common day trading mistakes Lack of a Trading Plan, Failure to Control Emotions, Failure to Accept and Limit Losses, Lack of Commitment, Over-Trading
Thanks and warm regards
Competitive Day Trading
Day trading is a highly competitive, stressful, fast-paced activity. Only a relatively small number of traders are at the top of the pyramid and consistently succeed. What are the characteristics of these people?
The truth is that the top day traders have a lot of traits in common with top artists, or elite athletes. That should not be too surprising. Many people tinkle the ivories, but not many can make a living as a professional pianist. Lots of us enjoy a game of tennis, but not many can earn a living on the pro circuit.
Obviously people who succeed in the arts and sport have a certain amount of talent for their chosen profession, they have the passion to work long and hard to perfect their technique, they have the determination to succeed, the courage to keep going after setbacks, and the self discipline to maintain their technique under intense stress.
All these things are important, but there is another aspect I would like you to consider. Ask yourself how many concert pianists would say they stay at their peak without any practice between recitals? How many tennis pros would retain their top ranking if the only time they held a racquet was in tournament matches?
So, how many top class traders consistently succeed if the only trading they do is during live trading sessions?
The professional artists or athlete practices or trains for hours each day. This is not something that stops once they reach the top. It is an ongoing part of their lifestyle for as long they remain professional participants.
So what is the equivalent of practising your volley, getting in some putting practice, singing the scales, or any other form of honing your skills, for the professional day trader?
Well, what I find works well for me is this. At the end of each trading session I make screen shots of the daily chart in whatever time frame(s) I use to make my trading decisions. I save these in a folder for the particular contract. So, for example, I can now go back to the November 2007 Soybeans futures contract and look at the 1 minute, 2 minute and 5 minute charts for each trading day during the period when this was the "front contract". That is usually two to three months worth of charts for each contract.
I have been doing this for a long time, so I have literally thousands of charts to look at.
Most days I like to get in some "training" by pulling up charts for forty or fifty old trading days and going through each one applying my trading rules. After a while you can do this very quickly, as you spot your trading setups instantly.
This is important because when you are trading in a live session you do not have complete patterns to look at. Setups which are glaringly obvious when you are looking at a complete chart can be very difficult to spot when you are watching the charts forming on your screen in real time.
The benefit of the kind of training I am talking about is that the setup patterns become so deeply internalised in your mind that you can watch the bars being painted on your screen in a live session, and instinctively "see" what the next bar(s) need to do to complete a setup.
When you reach this state, it is like being "in the zone" in any activity. Suddenly you seem to have more time. You are anticipating, not reacting. (Note that anticipating is not the same as predicting. All the training in the world will not enable you to predict the future, but you can learn to anticipate what movement is required to complete a setup pattern.)
Often a pattern is not completed. You get your orders in, having anticipated what is needed to complete the pattern, but then price moves in another direction. Now you can instantly see what is needed to complete a different setup. The initial orders are smoothly cancelled, and new ones entered. This might happen a few times before one of the setups completes and you find yourself in a trade.
At that point, there is no hesitation. You swing automatically, instinctively, into your trade management routine. Your stop is entered, your target also if you use one. Stops are adjusted, profits are taken, all according to your trade management plan which you have practised countless times during your out-of-market training sessions.
I know that one of the much vaunted benefits of day trading is that there is no need to work long hours. Most of the trades I take are over in less than fifteen minutes, so I could say I work for fifteen minutes a day. But ask yourself, does the elite 100 metres sprinter who averages one race each week of the year just work for ten seconds a week?
Of course not! And neither does a top class professional day trader just work for a few minutes a day. If you want to be successful, be prepared to put in the hard yards learning the ropes, then be prepared to build a rigorous training schedule into your routine.
It is still the best job in the world, but be realistic about the commitment you need to put in to get to, and stay, at the top.
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