Large number of people wish to become successful in day trading.Unfortunately,most of them taste failures and losing their hard earned money.Few years ago,a friend of mine created 10 times profit in single day.Amazing!All other traders in his circle get motivated and concentrated in day trading.But,their trading story ended as tragedy.Why some one succeed and others fail?let us examine the hidden rules of day trading.
Here,my friend's gain was accidental.He has bought few option contracts on the basis of some news and it was speculative in nature.Other friends have blindly expected this fortune in life and it was their biggest mistake.Day trading will not provide huge profits continuously.But,you can earn a decent return if following the below rules.
1.Try to make small profits.It is not a difficult task.but,you should have enough capital and time.
2.Watch stock market indices and understand the trend.Trade with the trend.Not following the trend is like swimming against the tsunami waves.You cannot conquer the market.
3.Market represents mass psychology.so,don't be greedy or panic in sudden market situations.
4.Fix small profit targets.
5.Use stoploss orders to prevent market crash.Stoploss point should be lower than the profit target.
6.When you trade intraday,do not engage in other activity.Mental control is crucial for day trading success.
7.You need tools such as online trading platform and a charting software.Candlestick charts with Moving averages,RSI or MACD are sufficient.
8.Understand the trendlines.Get an idea about support and resistance levels.Fix your profit targets at resistance levels.
9.Trade in futures and options.Shares are less volatile and its' profit potential is low in a day.You can opt shares for investing.But,futures and options provide comparatively better movement and trading opportunity.
10.Don't trade in sideways markets.It is useless and time consuming.You can make profit if positive or negative trend is clear in the market.