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Day Trading

Day Trading. Day Trading involves taking a position in the markets with a view of squaring that position before the end of that day.

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Day Trading

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  1. Day Trading

  2. Day Trading involves taking a position in the markets with a view of squaring that position before the end of that day. • A day trader typically trades several times a day looking for fractions of a point to a few points per trade, but who close out all their positions by day's end. • The goal of a day trader is to capitalize on price movement within one trading day. • Unlike investors, a day trader may hold positions for only a few seconds or minutes, and never overnight.

  3. Types • Scalpers: This style of day trading involves the rapid and repeated buying and selling of a large volume of stocks within seconds or minutes. The objective is to earn a small per share profit on each transaction while minimizing the risk. • Momentum Traders: This style of day trading involves identifying and trading stocks that are in a moving pattern during the day, in an attempt to buy such stocks at bottoms and sell at tops.

  4. Advantages of Day Trading • Zero Overnight Risk • Increased Leverage • Profit in any market direction • You will be your own Boss • You can trade from Home • You can trade from anywhere in the World • No need to Employ anyone • No need to Make anything • No need to Sell anything • No need to Find customers • Overheads are extremely Small (pc, Internet and software) • Flexible hours - Trade when you want to • Free time - take a day off, the market will always be there again tomorrow. • No limit to your Income

  5. Day Trading Tips • Do not expect to become an Expert Day trader right away. It takes considerable time, practice and effort to learn the ropes. • Paper trade or use a simulated trading Web site to practice your trading techniques before you use your own "real" money. • Eliminate the fear of losing because "scared" money rarely profits. • Always limit your losses - use stop orders.

  6. Learn from your Losses - take Advantage of each loss to improve your knowledge of the market. • Never allow large profits to turn into losses. • Consider selling if the market moves against you by about 25% or so from your peak profit point

  7. Essential Psychological Barriers to Successful Day trading • Not defining loss • Not taking a loss or profit • Getting locked into a belief • Trading on ‘inside information’ or taking a tip • Kamikaze trading • Euphoric trading • Hesitating at your numbers • Not catching a breakout • Not focusing on opportunities • Being more invested in being right than in making money • Trying to be perfect • Not consistently applying your trading system • Not having a well-defined money management system • Not being in the right state of Mind

  8. Key personality traits that successful day traders tend to have in common • Confidence • Discipline • Take Profits • Decisiveness • Passion • Ability to Accept Failure • Ability to Accept Risk • Patience • Concentration

  9. Day Trading Secret • Never confuse the Price of the Scrip with the Company. • The Price is the result of the Real time Demand & Supply of the stock. • Virendra Sehawag :” I am hitting the ball… not the bowler.”

  10. Trading Rules

  11. Dos and Don’ts • Never, ever under any condition, add to a losing trade, or "average" into a position. If you are buying, then each new buy price must be higher than the previous buy price. If you are selling, then each new selling price must be lower. This rule is to be adhered to without question. • Do more of what is working for you, and less of what's not. • When sharp losses in equity are experienced, take time off. • The mind can play games with itself following sharp, quick losses. The urge "to get the money back" is extreme, and should not be given in to. • When trading well, trade somewhat larger. • Markets form their tops in violence; markets form their lows in quiet conditions. • The final 10% of the time of a bull run will usually encompass 50% or more of the price movement. Thus, the first 50% of the price movement will take 90% of the time and will require the most backing and filling and will be far more difficult to trade than the last 50%.

  12. Dos and Don’ts • The first and most important rule is - in bull markets, one is supposed to be long. • Buy strength - sell weakness. • When putting on a trade, enter it as if it has the potential to be the biggest trade of the year. • Be patient. If a trade is missed, wait for a correction to occur before putting the trade on. • Be patient. Once a trade is put on, allow it time to develop and give it time to create the profits you expected and insulate itself from random noise • Be impatient on losses.

  13. Trade with the Winner Thank You

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