Intraday Trading, Day Trading Intraday Trading, also known as Day Trading, is the system where you purchase stock and sell that before the end of that day's trading session. Thereby making a profit in that buy-sell or sell-buy exercise. All in one day. Here the stock Market movement is not the main factor. All we need to predict is that the stock price will either rise or fall very sharply in the course of the day. When you take up day trading, the rules that may have helped you pick good stocks or find great money makers over the years, trading 'normally', will no longer apply.
This is a different game with different rules. No fundamental analysis of normal trading for delivery is necessary for intraday trading. The day trader's choice of scrips and positions has to work out in a day. If the day trader sees an opportunity, he has to go for it. Do it now or or it is gone. Things can change drastically in minutes. When it's time to buy or sell, it's time to buy or sell, and that's all there is to it. Day trading can be a great way to make money and it is also a great way to lose a ton of money. If the idea of being in charge of your own business and your own trading account is exciting, then day trading might be a good career option for you.
The objectives of the intraday trader is to make profits as much as possible. Whether the market is going up or down, we are not concerned. But to realise this objective we have to undertake very difficult step. That is: Pick out a few stocks that can possibly give good profits through Intraday Trading. It is not physically possible to track in real-time all of the scripts listed at Stock Exchanges every day to see which is going up or down sharply. So we need to make a few educated guesses and narrow down our watch-list to 4-to-6 stocks that show promise for the day. The process of finding these stocks is not easy. Because none of the normal methods used in locating stocks for investment work here. You can make profits only if the stock was spotted in advance and entry/exit points were proper. How to do it? Like any stock trader, to make money through intraday trading at the stock market you must have a trading plan, set limits and stick to them. You must trade based on the data on the screen, not based on emotions like hope, fear, doubt and greed. To put that plan in action you need do some preparation and define an objective. Day traders have to move quickly, so they also have to take decisions quickly. You must also have patience. Some days there is nothing good to buy. Other days it seems like every trade can bring you money. But everything just turns around as soon as you really put in some money. Be patient, and take a calculated decision. Yes, most day traders fail — about 80 percent in the first year. But so do a large percentage of people who start new businesses or enter other occupations. But two good day trading practices help limit the effects of making a bad decision: The first is the use of stop and limit orders, which automatically close out losing positions. The second is closing out all positions at the end of every day, which lets traders start fresh the next day. Part time Day Trading You can make money in doing part time day trading. A part-time trader may commit to trading three days a week, or to closing out at noon instead of at the close of the market.
A successful part-time trader still has a business plan, still sets limits, and still acts like any professional trader would, just for a smaller part of the day or week. Day Trading business can be started by single person with the following facilities: 1. Online Trading and Demat Account connected to your Bank Account 2. Internet connection with Normal Speed 3. Knowledge of Computer Operation 4. Margin Money e.g. if you keep Rs. 10000/- as margin money, you can purchase and sell shares worth 4 to 8 times of the margin money in a day. The process can be repeated number of times. i.e. with Rs. 10000/- margin money you can purchase and sell shares worth lacs of Rupees in a day through different transactions. Documents for Opening Bank Account In India, Bank Account of a person can be opened by giving the following documents: ID Proof Address Proof Photograph Copy of PAN Card Any other document the bank may ask for. The documentation will be different in other countries according to the law of land. Documents for opening Trading and Demat Account ID Proof Address Proof Photograph Copy of PAN Card Any other document the broker may ask for. Now a days for investing in Mutual Funds KYC (Know Your Customer) documentation is compulsory. It is a one time exercise and the broking agent will help you to complete KYC documentation also.