Day trading -what are Good practices?

How to become a good day trader? what are all the things we should know for day trading? Please suggest one good book to learn it.

2 Likes

Check this section, where we have put up interviews with some real good traders. 

2 Likes

There are many books out there, use this link  to find out. To be a day trader, if i am not wrong it takes years of practice , discipline , sticking to your method without breaking the rules which you have made.

I have seen so many matches of Tendulkar playing, but tomorrow i can't enter the field and excel in that by just watching him play. He did his homework, practice, dedication.  

So define your own strategy , stick to your rules......

4 Likes

support-resistance level,break in,break out

I had made money and lost too. Net result is that I had stopped trading for a considerable time.

But the losses taught me a lot :

  1. Never try to average a loss

  2. Never enter a trade without a stoploss.

  3. Never hesitate to get out of a trade if it going the other way, which is why stoploss is a better.

  4. Never enter a trade without checking the technicals as on date. Indicators like MACD, RSI, WILLIAM %R and borllinger give you fairly good indication on the movement. But be prepared (with a stoploss) for a shock.

  5. Never put all your money in trading stocks. ideally, it should be a sum which you can afford to loose.

  6. Never use leverage, however attractive it might be. Always trade WITH YOUR money and WITHIN your means.

  7. Never borrow money to trade in stocks and invest in land.

5 Likes
  • Ride with the wind, if the market falls, then short-sell, Even if the market whipsaw, means suddenly turning in the other direction, do not buy-sell the shares, after some time again it might start drooping down, Always short-sell if overall market is down and vice versa.
  • Watch out for news before you start the day. Spend some 1 hour in the morning reading various news, which came out yesterday or today morning. Look out for recommendations from websites like ecomomic times, profit.ndtv and see the reasons why they are saying it, without any concrete reason do not blindly trust them.
  • If your day starts with a profit before 12 noon, pack things¬†and close the trading windows. Same if you face loss twice, then give some break and check out after 2 pm, what happens in the market or take the day off.
  • Look for sudden spikes (market ramp or plummet)¬†using Stop Loss entry and exit when the spike settles.
  • Do not put all your money in one trade, always split them between different stocks. choose certain stock and follow it, use only a portion of your money for it, if you face loss, quit that stock and watch some other stock, not the same one.

These are my personal observations and learnings. I am still learning, will add points if any, later.

Good Luck!

2 Likes

day trading is truly a challenge, extremely challenging, good question, learning a lot from it :slight_smile:

11 Practical Tips for Intraday Trading:

  1. Picking up the right stock is extremely important. You can go for the stock which has high trading volume. Stock with higher volume suggests that there is a lot of activity going on within it. Higher volume provides better liquidity. Keep in mind to tame your emotions. Just because you a negative feeling about some stock does not mean that it does not have good trading opportunities.
  2. Choose a combination of candle stick chart patterns and indicators that is easier for you to read, depict and analyze. Not all chart patterns and indicators are 100% accurate but they provide valuable insights into the price movement. A simplest, neat and clean combination is of 15 and 50 days simple moving averages combined with Volume and Relative Strength Index.
  3. Check the High and Low of last 25 days of the stock. This will give you an idea about the height and depth of trading opportunities. The higher the difference between the movements of High and Low, the better opportunities are there to trade.
  4. Avoid trading between the consolidation periods. It is the time when there is indecision about the direction of the price. Learn to read the chart patterns to identify the ongoing consolidation. Consolidation period can be identified as Horizontal Flat movement of the price.
  5. Learn to identify entry and exit points. Camarilla pivot points are the most useful in identifying the entry and exit points. It will also help you find the Support and Resistance Level.
  6. Find the appropriate Lot Size to trade. Calculate the average trading lot size of the stock for the last 15 days to identify the perfect lot size for you to trade.
  7. Learn to identify the entry of Bulls and Bears. This is extremely helpful to make a profitable trade as you can know the direction of the price by identifying the entry of Bulls and Bears. The movement in the High, Close, Open and low combined with Volume can help you find the entry of Bulls or Bears.
  8. Instead of going through the chart pattern of every stock, make a list of chart patterns you are comfortable with and choose the stock based on the pattern it has at the end of the day. Here you will find the Chart Patterns created at the end of the day and can pick the stock with strong indicators :http://www.topstockresearch.com/CandleStickPatterns/OneDayCandleStickPatternsForIndianStocks.html
  9. Make a checklist. Go through your checklist before you make a decision to trade the stock. Your checklist should be compatible with your trading plan. Read How to pick Stocks for Intraday Trading.
  10. Remember the fact that leverage is two sided sword. Use it wisely. It can destroy wealth as much as it can create. Read Margin Trading: A Boon for Retail Traders.
  11. Do Paper Trading before you start live trading. Do it at least for a month. Check your progress. Move to live trading once you get comfortable with trading on paper. Online brokers provide virtual money and a simulator to their clients to get used to the market. You can also take advantage of the same.
3 Likes

No interview after 21 December 2013…

Yeah, have a bunch of them recorded, held up with many things so have not been able to post.

There are lots & lots of difference between Tendulkar playing cricket and a traders. He never had anything to loose when he entered the stadium to play but only to gain. But a trader has his money if he loose the trade. Tendulkar has reached a point where he makes money even if he looses the match. But a trader even if he is the richest, wisest and the most experienced shall never make money if he looses a trade. Money lost is lost, no matter how you define it.

A million { what ? } thanks my bro { not Rupees … lol } … for your valuable tips , much appreciated.
I 'll chech out the sites you mentioned , I follow Karvy site for learning ,

It is one of the popular strategies used by most of the traders in the market. In this strategy, traders buy and sell a stock on the same day, they do not stay in a position overnight. The main reason behind this is to take advantage of daily ups and downs in share prices.
It is a good option, but short-term trading is high risk and high return strategy. And if the trader is not so much able to tackle the risk then he might be facing huge loss in the market. A trader can refer trading tips like stock tips, commodity or forex tips to from financial experts. It will help them to take the right decision at right time.

Never fixed rule. It depends upon your capital and how much your addition capacity. How much risks you can bear. Your gred.