Stock Trading Strategies
The community of the daytraders has been growing bigger day by day, with many of them wondering whether making money in stockmarket for livelyhood is a mirage. The daytraders need to understand some important points to protect their capital and make profits consistently.
All stocks are equally good or bad for daytrading. Only the volume factor is important. Therefore, please don't waste your time on hundreds of stocks.
Don't be under the impression that you have understood the market well. Beware, nobody can understand it. It's rationally irrational. Every information related to a stock reflects in it's price movement during the day. Experts can say why something has gone up or down only after the market hours. Ofcourse, you'll forget about their predictions within few minutes after commencement of trading the next day. At the end of the day, who cares or remembers!
Your target price should be very realistic considering the range of intraday movements of the stock in general. If the price comes close to your target price, be watchful and close the position immediately before it gets immersed in the next wave. Do not regret, if your decision proved to be incorrect once in a while!
Risks need to be avoided with 100% Stop Loss as an insurance. One slip may cost your ability to trade... Stock flirting SL and escaped? Wait for the next opportunity to close the position at a smaller profit than estimated.
A stock stuck in a narrow range? Wait for a clear direction before taking position, because the subsequent movement could be violent!
Stock moves against index? Wait for the next favorable movement of the index to close it. Any stock is more or less affected by the index ultimately, may be the changes relative to the stocks are not uniform.
Be careful in the first entry of the day. Further trading depends on its outcome. Watch for broader support & resistance levels.
A particular counter can offer opportunities throughout the day several times. Be watchful of the stock's movement through the day. In fact you can have very few scrips for trading on a regular basis! Yeah, known devils are better if you agree that the stocks do have some charecteristics like you and me in their behavior.
If you are uncertain or unconvinced of the movement of the market in a day, better keep quiet. Just watch, if necessary throughout the day without taking any position.
Finally, do not fall a prey to Experts, Advisors or Analysts who claim that they can predict the market movement accurately for you to make huge profits, ofcourse, at a very nominal or reasonable cost! Nevertheless, there are some good professionals providing online service and doing justice!