I thought now is better timing to understand and throw my hands into. Because short selling, Intra-day trading always fascinated me. Partly because- if you know the game well enough and can read charts, it can fetches better returns than say when you stay invested in good stocks for a reasonable period of time. Ofcourse volatile market is trader’s paradise and nowadays that seems to be the cases. so I thought it may be optimal to try out now.
Mindset is completely different thou. Investing is trusting company with mid/long-term view. So timing buy is not really very important (thou its helps to maximize profit).
I did some reading about tricks, rules of the game and I find following discipline needed for reasonable success:
- Set your objective- profit and loss goals (+/-10%, etc...)
- Don't enter a trade if you are unsure of the trend.
- When in doubt, get out, and don't get in when in doubt.
- Be willing to make money from both sides of the market.
- Always Trade at the markets and never limit your orders.
- Never get out of the market because you have lost patience, or get in because you are anxiously waiting.
- Don't follow a blind man's advice.
- When you lose don't blame it on luck.
- Never risk more than 10% of your total portfolio in a single trade.
- Always use stop loss orders.
- Avoid taking small profits and large losses.
- Never cancel a stop loss after you have placed it.
- Never buy or sell just because the price is low or high.
- Never change your position without a good reason.
- Avoid getting in wrong and out wrong; or getting in right and out wrong. This is making a double mistake.
- Avoid trading after long periods of success or failure.
- Don't try to guess tops or bottoms.
useful link: How to be a successful day trader?