Day Traders:
These type of traders execute there buy and sell positions in the same day to generate profits. Generally, they close there positions on the same day.
Scalpers : They exit their positions within seconds after creating an open position in the stock market securities. Trading the stock markets with large sized
positions these traders are famous for their aggresive trading strategies to make profits.
Swing Traders : In share market, swing traders hold their position for some days to capture a majority movement of the on going trend.
WHAT Is FAMILIAR IN ALL OF THEM ?
- All Stock market traders use Technical Analysis method to speculate the price targets. Reading and analysing charts, technical analysts use combinations of different indicators, Price, Volume and Price action strategies with Reward/Risk management. This helps them to predict future trends in the stock market securities and eliminate noise which can mislead them during high volatility periods in stock market.
Key Benefits :
A.) Profits or losses are realized on the same day.
B.) No risk involved from the news that may impact stock market prices after the market closes, since the positions are squared off on the same day.
C.) For traders who have less capital but high probability strategies, brokers provide higher leverage for intraday trading allowing the intraday traders to trade larger sized positions with relatively small capital.
Tools for Intraday traders:
Brokers provide charting software to traders to analyse the share market prices. These softwares include tools like R.S.I, MACD, STOCHASTIC and different types of moving averages with options of different time frames of charts like 1 minute, 2 minute, 1 hour, 4 hour, 1 day etc.. whichever suits the trader.
Patterns : Chart patterns are primarily used in share market for predicting the future price movements. High probability, High rewards, Low risk is what attracts the traders in these chart formation analysis. Head and shoulders pattern, Inverted head and shoulders, ascending triangle, descending triangle, cup and handle, penants etc. are some of the most used patterns.
Common mistakes to avoid :
1.) Do not try to chase a trade.
2.) Always create your positions which are going with the trend, not against the trend.
3.) Stock market traders should have a pre defined trading plan for the day . Over trading can lead to high brokerages and emotional trades.
Tips for Beginners :
1.) Paper trade or use a demo account before trading with real money in share market. This will help you adapt to market conditions.
2.) Focus on few stocks.
3.) Analyze your trades at the end of the trading session to identify areas of improvement.
Conclusion :
Stock market trading is a rewarding field for traders who are disciplined, informed and well prepared with their strategies and concepts. If you are a beginner remember every trade is a Lesson. MHV Education offers you with a wide range of intraday courses which can help you create and execute high probability strategies in the stock market.
START SMALL, STAY FOCUSED AND NEVER STOP LEARNING.