Transcript Document

Day Trading
• 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.
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.
Advantages of Day Trading
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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
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.
• 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
Essential Psychological
Barriers to Successful Day trading
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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
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
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.”
Trading Rules
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%.
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.
Trade with the Winner
Thank You