Dear Trader
To become successful in day trading it is important to apply practical as well as mental rules which you will come to once you proceed ahead.
The following are few very important techniques to be used to get success in day trading.
1. Understand the truth of day trading
2. How to generate profits in day trading
3. How to Avoid or at least reduce the losses.
. How to safeguard/protect your capital
1. Understand the truth of day trading
a) According to our experience day trading is not possible for everyone because not only practical approach but also some emotional factor plays very vital role in providing profits in day trading.
So we generally we advice to do paper trading practise and if you get success then traders can proceed to do day trading with actual money.
b) Day trading is not overnight quick rich scheme and most of the people come to stock market and especially to day trading to become rich in one night or to generate big profits in single trade based on some tips. But this is not true and also not possible.
Day trading requires study, dedication and experience and then it will give profits.
It is not one day course but in fact trader has to put efforts for months to understand markets and then it is possible to get profits.
If you are thinking to earn profits without any efforts and also based on some tips then day trading is not for you but if you continue doing same then it will take you to heavy losses.
2. How to generate profits in day trading
To be honest generating profits in day trading is not easy at all. Generating profits requires experience, dedication and study.
Experience about markets reading and analysis
Dedication to keep self updated on daily basis about domestic and international news, company updates, government news etc
Daily study of new things about and interpret them.
a) Intraday stocks movements are purely based on market (traders) sentiments, so if you want to make profits then move in accordance with the flow and not against the flow.
For example - IF the stock price is going up then buy and sell multiple times with small profits instead of waiting for big profits in single trade.
On the other side if the stock price is going down then you can short sell and by at lower levels.
If you do 2 to 3 trades with small profits then it is enough to start with day trading and once you gain experience then you can increase the capital as well as trades.
b) Find stock direction, so it will be easy to make trades. The following are few links where we post stocks for day trading purpose.
3. How to Avoid or at least reduce the losses
In day trading it is important thing is to sustain. For example if you do some losses today then you should have capital to do trading tomorrow and generate profits so reducing or avoid losses is very important. If you loose all your capital then you can't do trading tomorrow.
4. How to safeguard/protect your capital in day trading
Protecting your capital (your trading amount) is very important to get success in stock market.
The following are few techniques to protect your capital -
a) It is advisable to use only 50% of your trading amount for day trading and rest of the money is kept as backup.
b) Till you become experienced you can trade only with your amount without using margin amount this will help to reduce losses and safeguard your capital. But in fact do paper trading practices till you get success and then you can start trading with actual money.
c) Don't panic and act on any tips.
d) Don't buy expensive trading software without testing them or without seeing the live demonstration.
e) Trading in future derivatives and options requires extra expertise so new comers are not advised to start with these instruments.
FROM SAFALTA KI RAAH
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