How to become a Successful Day Trader?

August 30, 2009

Intraday Trading/ Day Trading are one of the most attractive ways of making money. It is a money game; experts can make huge money, at the same time one who doesn’t know anything about the market may lose huge money. Understanding the below given points will help you in creating a fair idea about intraday trading.

Start saving
If you want to participate in intraday trading you should have enough savings with you. You can use 10 – 15% of your savings every day for intraday trading. If you don’t have good money backup with you a considerable loss in the market can place you in financial problem. So before entering in intraday trading make sure that you have enough savings.

Plan before Trading
There are different kinds of traders in the market such as day trader, swing trader, short term trader, long term trader, etc. before trading you need to decide what kind of trader do you want to be? A Day Trader works in the market every day and requires more research, monitoring of the market, supervision, guidance, etc. before trading you should have a clear plan about your trading pattern other strategies.

Open a Demat Account
To start trading, you need to open a demat account with a broker. He can help you in placing the orders and all other issues related to trading. While choosing the broker you should be very careful, you need to know about all the charges and commissions imposed by the broker. Their past performance in the industry plays an important role in selecting the broker.

Learn the Language of Stock Market
The language used in stock market is entirely deferent; a common man may not be able to understand the technical terms used in the field. If you want to be a successful intraday trader you should be able to understand the industry’s language. You must know what you are asking for and when you listen to the talking heads sharing their opinions on news channels, you need to know what they are talking about.

Be ready to face Uncertainty
There is a learning curve in trading, until you learn to read the chart, read the mood of the market and recognize how to play. Till you learn that invest small amount in different stocks, you might make loss but experience will make you an expert and will help to generate huge profits in future.

Pick the Stock
Your first trade is the most important, but if you lose money, don't get panic. In the initial stage it is better to take the help of stock experts.

Set Targets
While trading set a profit goal (Target) and a loss goal (Stop Loss) and place orders for both. If the stock price drops below a particular limit, your stop loss (loss goal) will save your capital. If you put your money in a gaining market, greed won't take over your profit because it will be triggered in your profit goal. Think if you don’t have a profit goal (target) you will keep your money in the market till the market ends in this case, if the market is coming down again you will lose all your profits.

Get Advice from Experts
Like any other job, stock trading also requires training and experience, you must practice it. It helps if you have a good guide or mentor who can give you great advice to trade. Day trading can be one of the most financially rewarding careers but you can't do it in half measures. It is always better to take the advice of experts.

Understand the Pulse of Market
Stock trading can be a great way to make money but you should learn to read human behavior. You can never control the market. But you have control over how you read the market, how much homework you do to reach your goals, etc. Always try to understand the market pulse.
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