madhansurya
12-10-2007, 10:58 PM
Dear Members
Iam surprised to see and understand that there are lot Members involved in day trading, and the fact which worries me is that majority of day traders does not even know about the basics of Day trading.
From the point that the previous topic has got so many views, you can say that people are ready to learn thngs atleast.
I would like to give my views and suggestions on day trading, as, i, myself can boast about being a successful day trader for quite few years.
First and foremost, DAY TRADING IS NOT LIKE GAMBLING , as most often you hear on the street and from so called "market experts". KEEPING THE FACT IN MIND THAT YOU HAVE A DEFINITIVE STRATEGY, RESOURCEFULL, DARING AND DETERMINATIVE AND SMART.
DAY TRADING IS NOTHING BUT TIMING THE MARKET.
MUST DO FACTS FOR DAY TRADERS!
1. Be Resourcefull.
A.You should know about the global markets performance before our market time starts.This is is one of the many indicators to predict the 'may be direction' of the market.
B.Any news from the Finance ministry, Government, RBI, Important announcements from leading financial institutions which may have a great impact on the performance of particular stocks should be known before the market starts.
C.Learn about everything u see on newspapers, television channels and websites relating to a particular company listed in the BSE or NSE.This is not only for Investors but also for day traders.
2.Working on Tips
A. 8 out of 10 people just trade by the tips they get from some source.But never considers the point that if the tips are accurate 80% of traders must me billioners.The reality is vice versa.
Reasons why Tips dont work for you:
TIPS are given based on market news, fundamental analysis and technical analysis.Tips work for us when the news about that particular stock is true.(news can be rumours also.)
When there is a strong negative news coming into the market, any good news relatively having less strength than the negative news will go in vein.
Tips always carry a STOP LOSS with it which most of us dont use.Stop loss is the resistance for that stock, where buyers will be less and supply will be more.So never trade without stop loss.STRICT STOP LOSS.
3.Open/High/Low:
It should be noted seriously that if there is a gap-up opening of the particular stock from its previous day closing, chances are high that there is no room for the uptrend.
Gap- up opening happens because of the orders placed by the buyers at market opening after calculating the freeze percentage or by the blind hope that the stock will go up and they can get at some rate greater than the previous day close.
As Anupam says, if the open rate and day's low is the same the oppurtunity for long postion on that day exists.
HIGH is because of the overwhelmed demand for that stock either by the traders or by investors.If maximum traders gain profit, the demand does not exists and the price goes down.LOW is because of the overwhelmed supply from the traders when there is no demand.(for more details on this, see Support and resistance level with good example in the articles section of this forum).
TITBITS:
Most news about good stocks to go long for that day, can be understood from NDTV and CNBC TV 18 from 9:35A.M.But before 9:50 A.M
(SURE SHOT AND RELIABLE).
Work with strict stop loss.
Sit before the screen.Never place orders through telephone without having access to the stock's prices second to second.
Target 1 is always enough.
Trade only 2 or 3 stocks per day.
Past performance is not a guarantee for future performance.
If you cant get a scrip at the price u wanted and if it goes up, then dont go behind it.
Never go by others comments, after when you bought the share.
Strict homework and analysis about the sudden increase in stock price or sudden fall is very very important for a trader.(It is the best tutor which can help you in the next day trade.) This can be done by Chart reading and other analysis tools.
If the price of the scrip you bought increases, use trailing stoploss.
E.G. If bought at 90 rs and cmp is 96, SL is 94.If it goes to 100, SL is 98.
This method helps you gain profits in a very volatile market.
If you follow the above strictly, I challenge you that you can never suffer from severe losses and take back handful of profits.
Further useful techniques will be posted in the next topic "BASIC TECHNICAL ANALYSIS".
please give your valuable feedback.
Regards with cheers
Madhansurya.
Iam surprised to see and understand that there are lot Members involved in day trading, and the fact which worries me is that majority of day traders does not even know about the basics of Day trading.
From the point that the previous topic has got so many views, you can say that people are ready to learn thngs atleast.
I would like to give my views and suggestions on day trading, as, i, myself can boast about being a successful day trader for quite few years.
First and foremost, DAY TRADING IS NOT LIKE GAMBLING , as most often you hear on the street and from so called "market experts". KEEPING THE FACT IN MIND THAT YOU HAVE A DEFINITIVE STRATEGY, RESOURCEFULL, DARING AND DETERMINATIVE AND SMART.
DAY TRADING IS NOTHING BUT TIMING THE MARKET.
MUST DO FACTS FOR DAY TRADERS!
1. Be Resourcefull.
A.You should know about the global markets performance before our market time starts.This is is one of the many indicators to predict the 'may be direction' of the market.
B.Any news from the Finance ministry, Government, RBI, Important announcements from leading financial institutions which may have a great impact on the performance of particular stocks should be known before the market starts.
C.Learn about everything u see on newspapers, television channels and websites relating to a particular company listed in the BSE or NSE.This is not only for Investors but also for day traders.
2.Working on Tips
A. 8 out of 10 people just trade by the tips they get from some source.But never considers the point that if the tips are accurate 80% of traders must me billioners.The reality is vice versa.
Reasons why Tips dont work for you:
TIPS are given based on market news, fundamental analysis and technical analysis.Tips work for us when the news about that particular stock is true.(news can be rumours also.)
When there is a strong negative news coming into the market, any good news relatively having less strength than the negative news will go in vein.
Tips always carry a STOP LOSS with it which most of us dont use.Stop loss is the resistance for that stock, where buyers will be less and supply will be more.So never trade without stop loss.STRICT STOP LOSS.
3.Open/High/Low:
It should be noted seriously that if there is a gap-up opening of the particular stock from its previous day closing, chances are high that there is no room for the uptrend.
Gap- up opening happens because of the orders placed by the buyers at market opening after calculating the freeze percentage or by the blind hope that the stock will go up and they can get at some rate greater than the previous day close.
As Anupam says, if the open rate and day's low is the same the oppurtunity for long postion on that day exists.
HIGH is because of the overwhelmed demand for that stock either by the traders or by investors.If maximum traders gain profit, the demand does not exists and the price goes down.LOW is because of the overwhelmed supply from the traders when there is no demand.(for more details on this, see Support and resistance level with good example in the articles section of this forum).
TITBITS:
Most news about good stocks to go long for that day, can be understood from NDTV and CNBC TV 18 from 9:35A.M.But before 9:50 A.M
(SURE SHOT AND RELIABLE).
Work with strict stop loss.
Sit before the screen.Never place orders through telephone without having access to the stock's prices second to second.
Target 1 is always enough.
Trade only 2 or 3 stocks per day.
Past performance is not a guarantee for future performance.
If you cant get a scrip at the price u wanted and if it goes up, then dont go behind it.
Never go by others comments, after when you bought the share.
Strict homework and analysis about the sudden increase in stock price or sudden fall is very very important for a trader.(It is the best tutor which can help you in the next day trade.) This can be done by Chart reading and other analysis tools.
If the price of the scrip you bought increases, use trailing stoploss.
E.G. If bought at 90 rs and cmp is 96, SL is 94.If it goes to 100, SL is 98.
This method helps you gain profits in a very volatile market.
If you follow the above strictly, I challenge you that you can never suffer from severe losses and take back handful of profits.
Further useful techniques will be posted in the next topic "BASIC TECHNICAL ANALYSIS".
please give your valuable feedback.
Regards with cheers
Madhansurya.