Day Trading - Is it the best way book huge Profits??

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What is Day trading?

Day Trading means where trading of financial instrument (either cash or equivalent to cash) takes place on the same day before the market close for trade, it is also know as intraday trade. Trader who does day trading is known as Day trader.

Typical Intraday Chart

 
How to do Day Trading?

To do Day Trading, One need to know liquidity and volatility. Liquidity allows you to enter and exit a stock at a good price. Volatility is simply a measure of the expected daily price range - the range in which a day trader operates. More volatility means greater profit or loss, professional software platform ensure that real-time news and data feeds are included, good understanding of the charts used.

Benefits and Risks of day trading?

Benefits of Day Trading:

• Less risk (as you have control on money involve / invested,), 
• Home based trading, 
• Avoids over night risk,
• Learning,
• Increases leverage

Day Trading Risks:

• Trader most of the time keep observing the stock & not invest ,
•  Suffers loss for initial phases, 
• Time consuming activity, 
• Depends on borrowed stock

How to make most out of day trading?

Define your financial goals, amount of risk you are willing and financially able to take, need to know liquidity and volatility, should have good understanding about the stock in which you are trading, should be strategic, active & keen observer.

Things to know before doing a day trade?

 Trading vs investment, should understand it a gambling, Use of limit order, Selling span, 

10 Must have Qualities to become a successful Day Trader 

To be a successful Day Trader one must have the following qualities:

1. Flexibility
2. Self Control
3. Responsible
4. Discipline
5. Accept Losses
6. Observer
7. Confidence
8. Concentration
9. Patience
10. Good Learner

5 Mistake Most of the Day Traders Make

1. Entering day trading without any guidance, Holding stocks without selling.
2. Starting day trading without proper knowledge about the market.
3. Not keeping enough funds for Risk Capital.
4. Trading without Plans
5. Trading without market analysis and without Self Assessment.

Through Day Trading / Intraday Trading one can book huge profits but one must keep in mind that share trading / share marketing involves risk. Thorough understanding of the market is required in order to get profit.

Happy Trading....