To the beginners...
There are two types of trading in the share market:
One is Delivery based trading in which the customer based on the Company
fundamentals, trade information etc will purchase. Then customer takes delivery of the shares and hold it till he finds a favorable rate and then sell it.
Second type is the Day Trading in which case the customer buys and sells on the same day without taking delivery of the shares.
On an average, there is 2-3% volatility in the market every day.
A customer who wants to utilize the opportunity does the purchase or sales depending on the rate fluctuations in the market.
We are mainly concentrating on Day Trading for those who wish to operate without investing huge money and who can do business for a reasonable amount everyday.
Here we will discuss in short about the common mistakes done by the Day Traders. Generally most of the investors loses money in the Day Trading due to the following facts:
Investors does not know the correct rate of buying or selling or the exact time of entry.
Most of investors do not concentrate on Stop Loss Concept which is very important in Day Trading.
The investors generally sets their minds (bullish/bearish) for shares they are trading and will not follow the Stop Loss Concept and losses their money.
The investors normally takes delivery of the shares in case if the price falls thinking that they will be able to sell at profit on the next day or two which actually may or may not work out.
In which case they will be blocking their money in the market and also increases their loss.