Strategies for day trading

Basic Rules:

·         Select liquid stocks only.

·         Select a few stocks only.

·         If you are already holding the stock wait for the peak or the bottom

·         Watch the general sentiment (Index Support/Resistance)

·         Don't be over enthusiastic.

·         Never challenge the market.

·         Place stop loss orders in a highly volatile market after long or short trades

 
Strategies:

Trade on unknown trends: When the market opens trade on a stock based on the previous day’s movements. Partially or fully cover the trade within half an hour

Trade on known trends: When the market is about to close (half an hour before) trade on a stock based on the day's movements

Trade on resting stocks: Stocks which have risen/fallen substantially will take rest for some time. Watch it and trade

Trade when trends are known: In a bull market raising stocks will raise further. Wait for correction and buy. In a bear market falling stocks will fall further. Wait for up move and sell.

Trade on news: The general philosophy is to buy on rumors and sell on news. When the news is favorable and the stock has risen considerably go short. When the news is unfavorable and the stock has fallen considerably go long.

Trade on appetite: If you think that you have made enough profit/loss stop trading.

Trade after trails: Start with small lots and go for volumes after enough study.

Trade on previous trend: Instead of buying a stock with previous days declining trend, it will be prudent to buy a stock with previous day’s uptrend on declines.

Instead of selling a stock with previous days up trend, it will be prudent to sell a stock with previous days downtrend on up move.

Trade on dates: Stocks rise/fall prior to announcement of results. Have knowledge on this date which will help in making decisions.

Trade on volumes: Rising/Falling Stocks which shrink in volume indicate that the run is nearing final state. Watch for change in trend.