‘Day Trading’ refers buying and selling of shares within a single day. The idea is to make a quick profit in a very short time which is also called the ‘Get Rich Quick’ scheme (it’s also called Intraday).
Reasonable thinking, good sense of judgment followed by a well-organized and meticulous pattern is vital for day trading.
Specific tips for day trading
- High Profit – You may buy 1000 shares for Rs.100 each. Total expense will be Rs.100000. Before day end, if you can sell it for Rs.110 per share, the total income will be Rs.110000. You make a clean profit of Rs.10000 in a day.
- High Risk – Day Trading is highly risky because if the price falls, the loss will be equally bad.
- Expertise and time – Knowledge, experience, shrewdness, capital and an excitement to take risk are the key factors necessary for ‘Day Trading’. This cannot be taken as a part time activity as it requires continuous monitoring.
- Profits from Bear Markets – It can take advantage of falling prices. You can borrow stocks and sell them when prices start falling. When it has fallen enough, you can buy at lower rates pocketing a profit (Short Selling).
Vital rules for ‘Day Trading’
- Do not over do ‘Day Trading’. The amount invested should match the amount you could afford to lose. Confine yourself to only 2 or 3 stocks at a time.
- Choose shares of high liquidity
- Day trading is all about short term gains so do not bother for major scrutiny.
- Fix a target price for shares and stick to it.
- Manage your patience for day trading highs and lows.
- Research thoroughly and keep a close watch.
- Keep a keen watch on every minute detail.
- UAE Exchange with its vibrant, trained staffs are always ready to trade for their valuable customers.