Best tips for safe Intraday trading
Intraday trading can be safe, money making too as well as it can be risky too. If you follow the following things, and master them, we are sure day trading will be very safe and could become a money making machine.
Knowledge First : Before you start day trading, as a novice investor, first try to gain maximum knowledge of the working of the share market. We have developed a knowledge centre (link- http://www.a1intradaytips.in/Learn-about-stock-market.html), which will really help to gain a very good knowledge for free. A wise words, If you learn more you can earn more in nse market.
Prepare a Trading Plan : Plan you trade, Define the strategies that you use to trade, plan your risk per trade or for the day. If market is positive and is trending up, he can use buy first and sell later strategy. If market opens with the gap up and is trending down, he can short and buy later to make money. if the market open lower in red but if its trending up, he can employ a cautions buy approach with selling for short profits. Every trader has his own plan, a trader who think that the stock will go down can sell the stock thinking to make a money, while the other trader may buy that stock, thinking that it will go up do to some other reasons that he thinks are correct. Fundamentally a Stock can look very strong but technically on daily charts in may look weak. Since you are doing day trading, you should trade using Charts, you should see daily / hourly or 30/15/5 mins charts and plan your trade accordingly.
Set your Daily Income and Loss Targets: A trader can set a risk of Rs 1000 per trade and 2500 as his risk for the day. A trader should also set his profit target like for example he can set a profit of Rs 1500 for a trade and say 3000 for the day. Once he get the profits, he should exit the trade and books his profits. If still he wants to keep his positions open, he should put stop loss on his profits.
Example: A Trader buys 500 Shares of Canbank @ 376, in short span of time say in 15 mins, stock moves up to 380 levels. Now here the trader is earning a profit of Rs 4 per share i.e 2000. say after few mins stock moves up by 2 Rs more and trades @ 382. Here trader can change set the stop loss to 380 and can hold the stock for some more time. Here he has lock his profit of Rs 2000/-. He will gain more if stock moves ahead and he square off his trade at higher rates.
Plan your Trading Hours for the day: As per our experience in day trading, Don’t start trading as soon as market opens, you should first wait for markets to settle i.e you should see, which sector is moving up, and which stocks of those sector are also going up or vice versa if market is moving down. In India market opens @ 09:15 so you can place your first trade after 09:30. As per our experience 09:30 to 12 is best time to trade and in Second session you can place you trade between 1:30 to 3:00 pm. Normally during 12 to 1:30 many traders take lunch breaks so volume slows down during this time. Also after 3.00 there can be lot of unwinding of positions happen during that time, so it can be risky to trade after 3.00 pm till market close.
To summaries, if you trade with a sound knowledge and using the above techniques, you are sure to avoid losses and make money in NSE market.
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