As a Day Trader if you want to earn daily profits regularly you should follow certain stock selection Techniques determine the entry (Buy) price level and Exit (sell) price level of your recommended stocks in real time.

At the time of opening bell, if your recommended stocks opens above previous day’s close price, but below previous day’s intra day high price and today’s target price, It is a positive indication that the price has got potential to achieve today’s target price. So immediately, you should buy that stock, hold it until it achieves target, and exit from that stock after booking your profit. If your recommended stock opens above previous day’s close price, it clearly confirms the uptrend momentum. This confirmed momentum attracts buying interest and this buying interest increases the demand and pushes the price of this stock to further higher levels up to its target price or above target price. The investors who are holding this stock will not sell this stock due to confirmed growth momentum and wait till it reaches to further higher levels to book more profit. This decreases the supply of this stock and increases the imbalance between demand and supply. Due to this imbalance in demand and supply (with more demand and less supply) the price will definitely move in upward direction till it reaches target price or above target price. If the price of your recommended stock, after opening favorably starts falling from that level, you should wait till it took support and you should enter into that stock at lower levels to book profit later.

In this way in Profit Targets Technique, you should take decision depending upon the opening price of your recommended stocks. You can use this technique as your regular day trading technique on every day. In this technique depending upon the price action of your recommended stocks, you can earn 2 to 4 % of profits on every trade. In this technique, you will enter into stocks only on confirmation of growth momentum. Therefore, the success rate of this technique will be more when compared to other normal day trading techniques.

In Profit Targets Technique, the profits will come within short period. If your recommended stocks opens with favorable price for you to purchase, in most cases you can book your profit before 11.00 a.m., Generally in stock market, intra day high price or intra day low price will be registered before 11.00 a.m., So in the case if you buy stocks at opening bell you can exit near target price after booking your profit before 11.00 a.m., if the price of your recommended stock, after opening favorably starts falling from that level, you should wait till it took support and you should enter into that stock at lower levels to book profit later. If the price starts falling from opening price, you should catch up intra day low price before 11.00 a.m., and enter into that stock at lower levels to book profits later. If your profit targets recommended stocks starts moving in downwards direction after opening favorably, you should enter into that stock at lower limit of the day’s trading range by analyzing that stock using pivot points technique which I discussed in this site to catch up intra day low price before 11.00 a.m., either at pivot support level 1 or at pivot support level 2 on evidence of support.

Always be flexible to book profits and don’t be greedy, Booking profits at every point is very important in order to earning money consistently, also it is advisable to sit out when you are in doubt and not trading for a day rather than doing it and incurring loss.

Source:Srinu

A large number of day traders incurs heavy losses in the first few weeks of their trading career and quit day trading after losing all their money. Why they lose all their money and quit trading? It is not because they are in efficient. In fact, most traders have an above average intelligence and they are above than average in most categories such as education and income, So Why do they fail? The reason is lack of trading education!

A large number of new day traders think that there is easy and quick money in day trading. They think that they can buy at bottoms and sell at tops very easily. They think that since they are successful in their earlier activities they can trade consistently with 90% accuracy. They think that they can invest small amount and trade for large amounts to earn big profits by utilizing multiple exposure on their margin amount and fail to understand the effect of draw down on their trading capital because of too much exposure. They fail to understand that Day trading is a highly challenging business, which rewards only disciplined traders. Most importantly, they fail to understand that they should learn day trading before starting day trading!

If you want to earn consistent profits in day trading, you should thoroughly educate yourself in all aspects of day trading. You should educate yourself on the correct psychological approach to the market. You should educate yourself in the correct money management and risk management techniques relative to your trading capital or account size. You should educate yourself in the correct entry and exit methods in your stock selection techniques.

It is impossible for any Trader to buy at the low and to sell at the Top. You have to make profits in between the low and top points by using some techniques. People come to market thinking that it is an place to make quick money, that’s true to a extent but market rewards to those only who have discipline and who have patience.

Trading is not gambling as many assume it is a business which done properly can result into huge profits. Education of self is very important in whichever field you go. So one should be  always ready to learn the tricks of the trade before getting into it.

What is Intraday?

Intraday trading is nothing but buying and selling of stocks on the same day. People do intraday to take advantage of price moments and fluctuations that exist in market. This moment of price provides a great advantage to a person who has the knowledge along with understanding to earn money.

For Intraday, trading it is important that a person has time to spend, as he would need to sit in front of system and take decisions based on his judgment. In order to take correct judgment it is important that a person understands the market and the implications of his decisions otherwise it can prove fatal and a person can incur huge losses.

Some important things to note while doing Intraday Trading rules that will be helpful in order to earn profits consistently.

1 Trade like a guerilla warrior
you must learn to adapt quickly to changes. If the winning side is changing, do not hesitate to join the new party and to commit all your forces to this side (capital, mental, emotional)…until the market conditions change. Don’t be possessive for any stock.

2 Be disciplined
Create a game plan then stick to it. A trade does not simply consist of a position. It consists of a position plus reasons for having the position plus a stop loss level plus profit taking levels. In the end, your discipline will save you when markets get rough.

3 Buy high…Sell higher – Sell Low…Buy Lower
Do not try to bottom fish or pick tops. When you think you, know the trend, and then follow it.

4 Think big picture but trade like a technical analyst
You must understand the fundamentals behind your investment ideas but you need to understand the Technical Analysis too. When your fundamental and technical signals point to the same direction…you have a good chance to have a winning trade.

5 Do not use excessively tight stop losses
Spend more time identifying a good entry point. Be patient. Give some freedom to the market. Place your stop losses carefully.

6 Hit your stops
The first stop is the cheapest stop on a losing position. Do not follow the temptation to “hang onto” a losing position that has gone through your stop loss level. It might work a few times but one day you will get bankrupt  if you trade without discipline.

7 In a Bull market…Be long or Neutral – in a Bear market …Be short or Neutral
many people forget this rule and trade against the trend by calling for short-term changes in market conditions. This usually causes psychological imbalance and frequently leads to losses.

8 Go for the most powerful market trend
Do not focus too much on markets where the trend is not strong enough or the market is range bound or choppy. Commit your forces to the stronger trend.

9 Accept losses they are part of the game
Prepare yourself mentally and emotionally for this eventuality. If you make a loss then don’t trade again, Instead take a off for a day and relax and try to analyze as to what went wrong. Was it your mistake or were you trading on the wrong side.

10 Resist the urge to trade against the trend too early
the trend is usually right (fundamentally). Be patient. Wait for the trend to turn. When the fundamentals and technical are turning to the other direction, wait a bit longer then enter. Always make trend your friend in order to be successful.

11 Never add to a losing position
this is a recipe for disaster. Just add to winning positions especially when the market is retracing.

12 Do not make a winning position lose
Use trailing stop losses. You must learn to take profits.

13 Bear markets are more violent than bull markets
you can trade bear markets with smaller positions. Expect violent retracements so get in the habit of taking profits. Book profits wherever you get, and get into the habit of revising your stop losses so that you can safeguard profits.

14 Keep all your technical analysis simple
Use simple support and resistance, Fibonacci retracement and reversal days. A good tip: When yesterday’s daily trading range is the smallest of the previous last 11 days trading range…be ready for a big move and some volatility.

15 Be aware of market liquidity at all times
Assets do not just have prices. They have liquidity levels too, and just as prices change so too does liquidity. Illiquid assets do not trade in the same way as liquid assets. Only trade lower-liquidity assets if there is sufficient compensation for the lack of liquidity and you are a true expert in the asset class.

16 Be intellectually honest
when you are wrong admit it, learn from it and go on to the next trade. The market rewards intellectual arrogance with losses and pain. If you want to stick to your point of view no matter what the evidence may be to the contrary… become a politician.

17 Wall Street climbs on a wall of worry
Be aware that the most likely time for a bull market to end is when everyone is bullish and the bottom of a bear market occurs when everybody is bearish. When everyone is on the same bandwagon, be careful and get ready to get out.

18 Be aware of Psychological biases in the markets
Bond traders tend to make most money as economies slow and dip into recession. Stock traders tend to make most money when the economy booms. So many bond market participants are always pessimistic and many stock analysts are perpetual optimists. Try to remain objective and observe which market commentators appears objective too.

19 Be patient
the more profound your ideas the longer it will take for others to see them as well and thus the longer it will take markets to move your way. Be patient and give yourself and your trade’s time.

The 20th rule
If you have to…break the rules