Sunday, 11 August 2013

INTRODUCTION TO DAY TRADING

What is Day Trading?
Day Trading involves taking a position either long or short in the stock markets and closing that positions before the end of that day.

What is the benifit of the Day Trading?
(a) Traders have freedom to take long or short positions, depending upon the trend. If scrips are in a strong uptrend, they can buy at lower price and sell at high price. If scrips are in down trend, they can Short (Selling in high price) and cover( buy) at low price.

Eg: Buy@ 250        Sell@ 300                Profit is 50    ( Long Trade)

      Short@ 450      Cover@ 400           Profit is 50 (Short Trade)

(b) Multiple exposure. No need to pay full amount for trading. eg: Current price of a scrp is Rs 200. if you want to buy 100 Nos, You have to pay 100X200=20000 in normal trading. But in day trading, you have to pay only 10-25% of the actual amount.

                                                                                                                                to be continued....

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