Wednesday, July 7, 2010
HOW TO EARN GOOD PROFIT IN SHARE TRADINGIN INDIAN STOCK MARKET
If index is in positive from yesterday and the share you are holding is in minus then it should be cut and if intraday trend of index is in buy then one should buy a stock in which is in plus.
If index is in minus then one should look to short stocks which are minus and not stocks which are in plus.
It is not necessary that a stock which is weak today during intraday trading might be weak tomorrow also, simultaneously if a stock is strong today might not be strong tomorrow
If US Markets have gone up overnight, the markets here in all probability will open strong, so one should be quite careful when buying stocks as the general psychology of public is to buy when good news is there. Being a contrarians is very important while trading intraday.
Stop loss is a must while trading intraday.
Always trade in very liquid stocks i.e. which have very high volume because as entry and exit can be very fast in such stocks.
Do paper trading before you actually start trading so that when you start making paper profits, then shift to actual trading.
Keep your volume constant e.g.: if you trade in five lots of nifty future then trade in five lots only. This position can be increased only when you are satisfied with your trading for a month. It should not be that one day you buy five lots and next day you trade in ten lots and third day you get a loss and stop trading for two days.
Fear and Greed are at maximum levels while trading intraday so always have less position when you are new to intraday trading as otherwise you will be mostly under tension.
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