How to Make Money in Intraday trading stocks in Indian Share Market
This statement loosely translates to – can no one earn in the stock market? In this article, we will be finding out just that.
Established in 1875, BSE Ltd., is Asia's first Stock Exchange and one of India's leading exchange groups and has played a prominent role in developing the Indian capital market. Countless fortunes have been made and lost since that time, while shareholders fuelled an industrial age that is now spawned a landscape of too-big-to-fail corporations. Insiders and executives have profited handsomely during this mega-boom, but how have smaller shareholders fared, buffeted by the twin engines of greed and fear?
There is no limit to the amount of money you can make by trading stocks.
We are talking about the Indian stock market. It is one of the highest liquidity markets where people can earn any amount of money but remember that people can lose too.
It all depends on who is trading. If you have no stock trading experience, it is highly likely that you will lose money – if you are not careful.
When it comes to trading, research is essential. It takes time to understand how the market works, what currencies to trade and which setups to rely on. While it can be tempting to jump into trends in the hope of making quick gains, hasty decisions could result in unnecessary losses.
Researching the markets before entering positions will help you make well-informed decisions. Technical analysis and fundamental analysis are two approaches used by traders to make sense of all the market information. While the former focuses on information provided by charts to predict market movements, the latter deals with external factors that impact the market, such as economic data releases or geopolitical developments.
A significant part of trading is coming up with a trading plan and sticking to it – rather than being impatient and making spontaneous decisions. Panicking during an unexpected price movement, for instance, could result in pulling out of positions early and missing out on a potential gain. Market fluctuations are common, so it is much better to make a plan, see it through and learn from it in the future.
FOMO or the Fear of Missing Out is an emotion experienced by many traders who want to follow in the footsteps of other traders or make moves for a potential gain. While it is natural to want to capitalise on price movements and volatility, keeping calm and evaluating various trading opportunities is key. So, if the urge to overtrade hits refers to your plan to stay composed and in control.
Losses are all part of the trading world. While a string of losses can hamper confidence, it is important to learn from your mistakes and not simply sweep them under the rug. So, rather than stopping trades altogether, use the losses to evaluate what worked and what did not. It could take a while to get back into the game and regain your confidence, but perseverance is the key to surviving the markets.
Leveraged trading is risky in volatile markets. The first thing to consider is the amount of money you can afford to lose on a single trade. This is the risk-reward ratio, which needs to stay constant across every trade. Also, following through with your plan is critical. Backing out or changing strategies with each trade is a sign of both impatience and indiscipline.
A disciplined trader considers several aspects, such as the risk-reward ratio, profit goals, account capital, market fundamentals, to make a sound plan. After that, a demo account could be used to test out strategies, without risking actual money. Having a realistic goal is also an important part of ensuring good trading discipline.
Risk management should be at the forefront of every trader’s mind. Before entering a position, consider where you would set the stop-loss and take-profit. Be disciplined with this based on your attitude to risk. Discipline is essential to stay away from emotions like greed. When stop-loss levels are set, manipulating them according to your whims and impulses could be a recipe for disaster.
There will be times when decisions backfire in the markets. The market is sensitive to geopolitical developments, which can cause sudden trend reversals. At other times, trades fail due to other factors, such as lower leverage, poor trading strategy, shorter stop-loss distances, or latency in the trading terminal. At such times, it could be useful to evaluate the reasons for the failure, to not repeat them in the future. Trade journals are useful for just this. They allow traders to keep track of and learn from past trades, which could be helpful to improve strategies.
A focused mind is a key to success in any endeavour and the forex market is no different. There are many participants, trying to hedge exposure in the markets. By having a robust plan in place, traders can refrain from emotional swings that can lead to impulsive trading decisions. But there also are times when mental exhaustion can arise from long-term trading. This is when it is a good time to take a break from the live markets and instead focus on improving your strategy and enhancing trading knowledge.
Trading in the financial markets is a highly technical activity. To become successful as a trader, you need a good understanding of the financial markets and how they work, you need a good understanding of the companies you trade-in, you need the technical expertise to analyse market trends, as well as a great understanding of the factors that move the market.
Still, even with all these technical skills, it is impossible to become a successful trader if you lack one key attribute – trading psychology.
Trading psychology is basically the right mindset and the ability to think on your feet, remain disciplined, and exercise control over your emotions even when the market is going against your expectations.
Every successful trader knows that the markets are constantly testing traders, and anyone without the right psychological mindset and the ability to control his emotions will have a hard time making the right decisions.
Aside from having the right mindset, traders also need the discipline to stick to their trading plans and strategies regardless of what the market throws at them like I mentioned above.
Fear is a natural human reaction to anything perceived as a threat – in the case of trading, the threat is the possibility of losing money.
The larger the potential loss, the bigger the amount of fear experienced. Fear during trading manifests itself in several ways. The most common manifestation of fear is being too afraid to get involved.
Like our trader from the example up above, your fear of losing money makes you too cautious, and as a result, you end up missing all your entries.
While being cautious is an important trait, being overly cautious to the extent of missing all your entries turns into a disadvantage, because you are not going to make any money in the market unless you actually get into trades.
Sometimes, the fear might come when you have already entered a position. Some breaking news about the stock you are trading, or the general market might cause a temporary movement in the market. In such situations, a fearful trader might be compelled to exit the position before their pre-planned exit to avoid losing money. While such a fear-driven exit will help you avoid certain loss, it also prevents you from making gains once the market recovers from the temporary volatility caused by the news.
Alternatively, someone might exit a position early because they are afraid of holding a position for more than a day. The first key to overcoming fear as a trader is to understand that losing is a natural part of trading. It is impossible to trade without losing. Even the most successful traders experience losses from time to time.
You can think of loss as the cost of doing the trading business. Once you understand that losing is a natural part of trading, your perspective changes from being afraid of losing to trying to manage your losses.
One of the best ways to overcome fear by managing loss is to have a trading strategy. If you trade without a strategy, you are more likely to be swayed by your emotions. Having a strategy, on the other hand, keeps you grounded even when the markets seem to be going against you.
For instance, if your strategy wins 70% of the time, you will be expecting a few losses here and there. Therefore, having one or two losing trades will not cripple you with fear, because you will be comfortable with such losses.
Another way to overcome your fear is to start slowly and gradually build your trading experience. Instead of leaping into the waters hoping to make big bucks, start with stocks that have slow and small movements, and only trade small position sizes.
A lot of times the stock market movement is in response to speculation. It is being regulated by the financial news and sentiments present in the market. As we know, the financial market is volatile, and this reflects in the movement of the share prices. The economic activities of the world are driven by this volatility, and the stock market can be regarded as a snapshot of the health of these activities. The importance of global financial news for a stockbroker cannot be underestimated.
The stock market is also affected by other events and natural phenomena. Terrorist attacks, civil movements, socio-political events like elections, natural calamities like floods and famine, international diplomacy, and even oil prices. These events have a significant effect on the financial and economic conditions of a company, a country, and the world. It is hence, crucial to be in touch with the latest news so that one can be up to date with the expected outcome and speculate accurately.
Traders and investors should be aware of the speculations, and make trading decisions accordingly, to avoid losses. They should be able to guess the collective thinking and take immediate action to prevent losses from falling share prices. At the same time, they should make most of a bullish market due to positive sentiment and buy shares to book profits. The soundest way is to keep track of the news is by having constant access to it.
There are many sources from which financial news can be obtained. The most convenient and the best one is the internet. The internet can be accessed from the convenience of your smartphone or your PC. There are many websites which update current news within seconds. These news-sites cover the news about the most active stocks. They provide information about the stock updates and market movement. Always follow the advice given by a SEBI regd investment advisory as they should act in the fiduciary capacity for the client.
There are several TV channels today that track the live movement of the stocks throughout the day. The channels also provide information about various stocks from a sector and their speculation. They correlate the performance with the current market conditions and business news. They also predict the performance of the stock market and advise on buying and selling of stocks, mutual funds, and other securities. Many market experts from major fund houses and financial institutions offer their opinions. However, you should not always blindly follow the channels as they have their hidden agenda.
The other source of financial news and information are newspapers like the Economic Times and Business Standard. These daily newspapers provide information about the performance of various stocks, news about businesses, analysis of the markets, political and social conditions that affect the economy, etc. There are business magazines that are published fortnightly or monthly. These magazines oversee the performance of listed companies and provide information useful for traders. They also cover other news which may have a direct or indirect effect on the market. They watch the performance of sectors and industries. This can help traders and investors make decisions about sector stocks and make the most of the information.
While patience and discipline in forex trading prove immensely helpful, there are no definite rules for successful trading. This is one area where you constantly learn and evolve over time, achieving greater knowledge and confidence with experience.
To sum it up one can state that it is always better to follow the Best SEBI Registered investment advisor which has large free content and who does not get after you by the constant phone ringing or lure you with a free trial as it is itself a scam by itself. Remember you always require a mentor in your life to walk you through.
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