Day trading is buying a stock and selling it the same day before the markets close for the day. This is one way of trading in order to save on commissions and fees as well as to ensure some level of safety. I will disclose how I pick stocks for day trading and make a profit at the end of each week.
To begin with I down load the copy of the entire days stocks that have been traded on the Bombay Stock Exchange - as I live and trade in India. This is called the 'Bhav Copy' and is available for free online the Bombay stock exchange web site home page after 6:30 pm every working day. Other stock exchanges in the world have the same system anda little research will reveal where they hide the record.
I use two methods to trade a stock during the day. First of all I keep my ears peeled for breaking positive news on a stock. This I get through the television channels if and when the news emerges I immediately prepare to go into action. I wait after the news has broken and watch the stock movement. Should there be any spikes in price of volume I buy and wait. When I am satisfied of the profits I have made I exit and never give the trade another though even if it shoots through the roof.
The second way is to do a bit of research the previous few days and pick out the stocks with the most liquidity i.e. the stocks that are traded most on the exchange. Sorting out this list I then pick the stock which ahs a price I am comfortable with. I usually pick the stock between 20 to 30 Indian Rupees. This is called trading on volume.
The stocks that have the most volume offer the most liquidity. This means that it is comparatively easier to buy and sell such a stock as it would be to sell a stock with low liquidity. I also pick a stock that has a lot of swing. This means that the stock has a price movement that is very wide and offers a lot of volatility and good profits can be made by trading such stock.
I will explain how I do my research in part 2 of this article.
Dexter Figg is a fulltime professional freelance writer and is based in India. He and his wife (Post-graduates in English Literature) work from their home-office setup from 9 to 5 India time, Monday to Friday. Being in the business of writing for the past 6 years and with over 15 years of work experience behind them, they have written on various topics for the web and print media. They have together created over 24,000 SEO articles, e-books, features, guides besides fresh website content for many sites across the world.
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