What is a Day Trading?

The term “day trading” is a widely misused and misunderstood term. Real day trading means not holding on to your stock positions beyond the current trading day; in other words, not holding any position overnight. This is really the safest way to do day trading because you are not exposed to the potential losses that can occur when the stock market is closed due to news that can affect the prices of your stocks.

Unfortunately, many people who claim to be “day trading,” hold stocks overnight because of fear or greed, thus setting themselves up for the catastrophic elimination of their capital. When day trading currencies, the term “day trading” changes slightly. Since currencies can be traded 24-hours-a-day, there is no such thing as “overnight” trading. Thus, you can have open positions for longer than a day with active stop losses that can be activated at any time.

Day trading can be further subdivided into 2 styles, including:

1.Scalpers: This style of day trading involves the rapid and repeated buying and selling of a large volume of stocks within seconds or minutes. The objective is to earn a small per share profit on each transaction while minimizing the risk.

2.Momentum Traders: This style of day trading involves identifying and trading stocks that are in a moving pattern during the day, in an attempt to buy such stocks at bottoms and sell at tops.

Do's and Don'ts

It is imperative for the investors to follow the Dos and Don’t in general while dealing in the stock market. As there are attendant risks associated with it.

Given below are the Dos and Don’ts in general for investors who are dealing in Stock markets.

Dos

Always deal with the market intermediaries registered with SEBI / Exchanges.

Give clear and unambiguous instructions to your broker / agent / depository participant.

Always insist on contract notes from your Broker. In case of doubt of the transactions, verify the genuineness of the same on the Exchange website.

Always settle the dues through the normal banking channels with the market intermediaries.

Before placing an order with the market intermediaries please check about the credentials of the companies, its management, its fundamentals and recent announcements made by them and various other disclosures made under various Regulations. The sources of information are the websites of Exchanges and companies, databases of data vendor, business magazines etc.

Adopt trading / investment strategies commensurate with your Risk bearing capacity as all investments carry risk, the degree of which varies according to the investment strategy adopted.

Please carry out due-diligence before registering as client with any Intermediary. Further, the investors are requested to carefully read and understand the contents stated in the Risk Disclosure Document, which forms part of investor registration requirement for dealing through brokers in Stock Market.

Be cautious about stocks, which show a sudden spurt in price or trading activity, especially low price stocks.

Please be informed that there are no guaranteed returns on investment in stock markets.

Don’ts

Don’t deal with unregistered brokers / sub-brokers, intermediaries.

Don’t deal based on rumours .

Don’t fall prey to promises of guaranteed returns.

Don’t get misled by companies showing approvals / registrations from Government agencies as the approvals could be for certain other purposes and not for the securities you are buying.

Don’t leave the custody of your Demat Transaction slip book in the hands of any Intermediary.

Don’t get carried away with onslaught of advertisements about the financial performance of Companies in print and electronic media.

Don’t blindly follow media reports on corporate developments, as they could be misleading.

Don’t blindly imitate investment decisions of others who may have profited from their investment decisions.

NSE HOLIDAY LIST FOR 2011

1. New Year - 1st January 2011 - Saturday

2. Republic Day - 26th January 2011 - Wednesday

3. Mahashivratri - 3rd March 2011 - Thursday

4. Holi (2nd Day) -2 0th March 2011 - Sunday

5. Ram Navmi - 12th April 2011- Tuesday

6. Dr. Babasaheb Ambedkar Jayanti - 14th April 2011 - Thursday

7. Good Friday - 22nd April 2011 - Friday

8. Independence Day - 15th August 2011 - Monday

9. Ramzan Id - 30th August 2011 - Tuesday

10. Diwali Amavasya (Laxmi Puja) - 26th October 2011 - Wednesday

11. Bakri-Id - 6th November 2011 - Sunday

12. Christmas - 25th December 2011 - Friday

13. Moharum - 26th December 2011 - Saturday