Indian share Market has attracted various investors towards itself by its good performance and has become an attractive source of investment now. Returns earned on investment in shares by long term traders is higher than investment in other markets and assets. However high capital is required to trade on a long-term basis. Another way by which traders can trade with less capital and earn good returns is intraday trading. Day trading means not holding your position in stocks beyond the current trading day. To trade on intraday basis traders need to have Demat account and trading account.
The risk associated with this type of trading is high. Some useful tips to become a successful day trader are discussed below:
- Trade by using a practical approach
Movements in intraday stocks are based on the market fluctuations.To earn good profit here traders have to trade on the basis on present market movements.When the market is bullish instead of waiting for large movements buy and sell few times to earn small profits.By understanding the market trend intraday traders can earn in both bearish and bullish market conditions.
- Trade in constant volume
Try and maintain a constant value of trade as it is riskier to trade in different volumes.Along with this keep your investment portfolio well diversified. This will ensure steady returns even when market conditions are not good.
- Take decisions on the basis of facts
It is not always necessary that crowd is taking the right decision. Sometimes under the influence of some unwarranted news of a company or laws traders start buying and selling stocks without even considering its actual financial reports. Without analyzing actual facts trader should not buy or sell any stock.
- Plan multiple trades
Intraday trading is all about earning small profits by doing multiple trades.This helps to reduce loss and earn good profit daily.Traders should not wait for large movements to earn more profit in single trade.Instead, they should plan multiple trades and earn a small profit with each trade.
- Have a good understanding of market
Traders who study about the market are more likely to earn profitable returns by day trading. Market movements are results of both global and domestic market updates. Traders should learn about all updates timely, read companies financial reports and their regular updates.This will help them in understanding market movements and decide what should be the right strategy to earn maximum under such conditions.
These are some tips which can help traders to perform better in intraday trading. High brokerage charges are of one the disadvantage here, as with every trade brokerage has to be paid. Services of discount brokers help to save a lot of money as they charge flat fees with every trade which does not vary with trade volumes.It is advisable to learn about trading before beginning with it and follow a disciplined trading practice always.
