WHAT IS DAY TRADING ?

Q.What is Day Trading?

A.The term “day trading” is a widely misused and misunderstood term. Real day trading means not holding on to your stock positions beyond the current trading day; in other words, not holding any position overnight. This is really the safest way to do day trading because you are not exposed to the potential losses that can occur when the stock market is closed due to news that can affect the prices of your stocks.

Unfortunately, many people who claim to be “day trading,” hold stocks overnight because of fear or greed, thus setting themselves up for the catastrophic elimination of their capital. When day trading currencies, the term “day trading” changes slightly. Since currencies can be traded 24-hours-a-day, there is no such thing as “overnight” trading. Thus, you can have open positions for longer than a day with active stop losses that can be activated at any time.

Day trading can be further subdivided into 2 styles, including:

1.Scalpers: This style of day trading involves the rapid and repeated buying and selling of a large volume of stocks within seconds or minutes. The objective is to earn a small per share profit on each transaction while minimizing the risk.

2.Momentum Traders: This style of day trading involves identifying and trading stocks that are in a moving pattern during the day, in an attempt to buy such stocks at bottoms and sell at tops.

WHAT IS SWING TRADING ?

Q.What is Swing Trading?

A.Swing Trading takes advantage of brief price swings in strongly trending stocks to ride the momentum in the direction of the trend.

Swing trading combines the best of two worlds — the slower pace of investing and the increased potential gains of day trading.

Swing traders hold stocks for days or weeks playing the general upward or downward trends.

Swing Trading is not high-speed day trading. Some people call it momentum investing, because you only hold positions that are making major moves.

By rolling your money over rapidly through short term gains you can quickly build up your equity.

Q.How does Swing Trading work?

A.The basic strategy of Swing Trading is to jump into a strongly trending stock after its period of consolidation or correction is complete.

Strongly trending stocks often make a quick move after completing its correction which one can profit from.

One then sells the stock after 2 to 7 days for a 5-25% move. This process can be repeated over and over again. One can also play the short side by shorting stocks that fall through support levels.

In brief a Swing Trader’s goal is to make money by capturing the quick moves that stocks make in their life span, and at the same time controlling their risk by proper money management techniques.

WHAT IS TREND TRADING ?

Q.What is Trend Trading?

A.Trend trading is one of the most effective and easy to use methods for making money in the market. Trend trading success depends on identifying and catching the trend after it has started and getting out of the trend as soon as possible after the trend reverses.

Trend Trading involves taking a position in the markets with a view of holding that position for weeks to months for larger than normal gains. Trend traders or investors generally trade the long term or secular trends and are not concerned with the day to day market volatility.

WE CARE FOR YOU - Please check before you invest

It is imperative for the investors to follow the Dos and Don’t in general while dealing in the stock market. As there are attendant risks associated with it.

Given below are the Dos and Don’ts in general for investors who are dealing in Stock markets.

Do's

Always deal with the market intermediaries registered with SEBI / Exchanges.

Give clear and unambiguous instructions to your broker / agent / depository participant.

Always insist on contract notes from your Broker. In case of doubt of the transactions, verify the genuineness of the same on the Exchange website.

Always settle the dues through the normal banking channels with the market intermediaries.

Before placing an order with the market intermediaries please check about the credentials of the companies, its management, its fundamentals and recent announcements made by them and various other disclosures made under various Regulations. The sources of information are the websites of Exchanges and companies, databases of data vendor, business magazines etc.

Adopt trading / investment strategies commensurate with your Risk bearing capacity as all investments carry risk, the degree of which varies according to the investment strategy adopted.

Please carry out due-diligence before registering as client with any Intermediary. Further, the investors are requested to carefully read and understand the contents stated in the Risk Disclosure Document, which forms part of investor registration requirement for dealing through brokers in Stock Market.

Be cautious about stocks, which show a sudden spurt in price or trading activity, especially low price stocks.

Please be informed that there are no guaranteed returns on investment in stock markets.

Don’ts

Don’t deal with unregistered brokers / sub-brokers, intermediaries.

Don’t deal based on rumours .

Don’t fall prey to promises of guaranteed returns.

Don’t get misled by companies showing approvals / registrations from Government agencies as the approvals could be for certain other purposes and not for the securities you are buying.

Don’t leave the custody of your Demat Transaction slip book in the hands of any Intermediary.

Don’t get carried away with onslaught of advertisements about the financial performance of Companies in print and electronic media.

Don’t blindly follow media reports on corporate developments, as they could be misleading.

Don’t blindly imitate investment decisions of others who may have profited from their investment decisions.

MARKET OUTLOOK FOR 8th FEB 2013

Daily trend of the market is down

Market has becomes somewhat oversold and may take a small counter rally from here. But as overall trend of the market is down, so the readers may stay out of the market and wait for it to come in uptrend.

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Percentage above support

Percentage of stocks above support is still below 50%, so the readers may not create long positions in cash market till the percentage above support remains below 50%.
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Strong Futures

This is list of 10 Strong Futures: Suzlon, Adani Ports, PFC, DLF, Zeel, IOC, NHPC, Sun TV, TCS & MC Dowell.

Weak Futures

This is list of 10 Weak Futures: Opto Circuits, HDIL, IVRCL Infra, JP Associat, ALBK, UCO Bank, JP Power, Jain Irrigation, Raymond & Andhra Bank.

MARKET OUTLOOK FOR 6TH FEB 2013

Daily trend of the market is down

As the market is now in downtrend, so the readers must have quit the longs in Nifty. Now is it advisable not to create any long positions and stay away from the market.
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 Percentage above support

Percentage of stocks above support is still below 50%, so the readers may not create long positions in cash market till the percentage above support remains below 50%.
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Strong Futures

This is list of 10 Strong Futures: Suzlon, Adani Ports, DLF, IOC, Sun TV, NHPC, Asian Paint, Zeel, Sun Pharma & Kotak Bank.

Weak Futures

This is list of 10 Weak Futures: Opto Circuits, HDIL, Jub Food, JP Associat, IVRCL Infra, UCO Bank, Raymond, Jain Irrigation, Hexaware & Andhra Bank.

Market Outlook for 5th Feb 2013

Daily trend of the market is down

Market has broken its support and has come in downtrend. So the readers who were holding longs in nifty since 29th November may now quit them and stay out of the market till the trend remains down.

Strong Futures.

This is list of 10 Strong Futures: Suzlon, Sun TV, DLF, Adani Ports, IOC, NHPC, Asian Paint, BPCL, Axis Bank & PFC.


Weak Futures

This is list of 10 Weak Futures: HDIL, Opto Circuits, IVRCL Infra, JP Associate, Hexaware, Adani Power, Andhra Bank, Dena Bank, ALBK & Ranbaxy.