Description

Day trading is a very short-term trading. As the period of trade reduces, its risk level increases. If you do not have in depth understanding of the market and accurate trade strategy, one should not enter into day trading. But, It doesn’t mean that we should not do day trading. For doing day trading in the equity, we must check following things, What is the trend of broader Market i.e., Nifty or Sensex? What will be the support or resistance levels of broader markets? Is there any event like result in any particular stock on trading day? After understanding first two points we can decide whether to buy or short sell the shares. Example: If broader market is in down-trend then we should select the stock which is about to fall for short selling. And vice versa. Means, we should place trade in the direction of broader market to increase the accuracy. Now, we need to answer following questions, How to understand direction and depth of broader market like Nifty or Sensex? How to select the bullish stocks for long trade and bearish stocks for short selling? Understanding overbought and oversold levels is also very important for day trading.