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.