Day Trading is basically an act of buying & selling
shares of a Firm, Institution or a Group within the same day OR in a multiple
no. of times that supposed to be squared off during the course of day (squared off:
if a share is bought will have to short it by the end of days closure i.e. 3:15
PM IST & vice versa is the case with selling).
Basic Things to keep in my Mind (Tips):-
Risk Management
The very first case that arrives is newbie’s or anyone who
doesn’t have a well designed strategy will come to lose his/her hard earned
money in no time.
Avoid! Avoid! Such mistakes Plan properly & then
execute.
Stop Loss / Limit
Order
People often forget to add stop loss while doing day trades,
as you’re risking your money on a single trade which in my opinion should never
exceed 2% of your trading balance in any case. So, make it a habit to add stop
loss each time you’re doing Intraday.
Limit orders help you trade with more precision & cut
losses, wherein you set your price (not unrealistic but executable) for buying
as well as selling.
No. of Trades
In a single day mark only 2-3 trades as your favorites, play
safely don’t overtrade. You may lose more than you’ve earned.
Example:-
Case 1 – Suppose I took 100 shares which costs 100/- each,
so in this scenario I have invested 10,000/- + broker charges which add up to
500 making it 10,500 for single trade.
In case I go for 3 trades in that day would have played for
31500.
Assuming I Lose on all three @ 2% as denoted earlier will
have lost 630 + brokerage = 650/- (approx.) which I think one can easily bear
& will cover with proper strategies.
Case 2 – In case I have gone for 6 trades in that day would
have played for 63000/- & my losses would have been 1260 + brokerage = 1300/-
(approx.).
As clearly mentioned one can see the difference.
So start small, convert them slowly in a well designed way
to bigger outputs.
Penny Stock
All of us even me being one of them who’s every single time
looking for deals with low prices. I strictly suggest avoiding them. These
stocks often become delisted from the exchange or may lead to loss, until &
unless you see a real opportunity as per your researches.
Recently on 20.06.2019 shares of Jet Airways have risen drastically from a face value of 17.5 to 73 INR only at the time of closing of the market that may have yielded good
results.
*Ending Herewith an
Important note: Don’t let your emotions abandon your strategies.
