Having Practical Approach is Key to Success in Day Trading
One who studies markets can generate good profits in intraday trading. You can start with reading markets and keep themselves updated with both domestic and international markets. You can also read about company updates, government updates and so on. Such factors will affect the direction of stock markets and this is what the trader needs to concentrate on.
Day trading stocks always move based on the market sentiment and hence if you have to make profits in intraday; trade has to be based on the movement of the stock market. Consider an example, if the market is bullish, then buy and sell a few times to earn small profits rather than waiting for that big move. Likewise, if the market is bearish, you can short sell and buy at the lower levels to gain some small profits with 2-3 trades.
Day trading is all about generating small profits with multiple trades. It helps reduce the losses and generate daily profits. Another way the traders can reduce the losses is to wait for the right time to trade rather than trading at every move in the stock’s price.
You must never wait to generate huge profits in just trade; instead, plan multiple trades and earn small profits. Generally, traders tend to overtrade and they end up in losses. In case of intraday trading, no one has the control over the movements of stocks and hence if the trader waits too long and the direction of the stock reverses, the trade then enters into a loss.
One more important aspect to remember during intraday trading is to use stop losses. It helps in minimizing your loss in case of sudden reversal in the direction of the stock. You also have to be careful not to use the margin amount that is provided by the broker. When you do so, the trade has to be squared off before the closure of the market irrespective of loss or profit. When the trader just uses the money, he/she can opt for the delivery of shares bought if the trade gets to loss.