Breaking down the concept of day trading for a better understanding.
First things first – day trading is not the same as investing. As the name suggests, it basically means entering and exiting the trade on the same day, one or multiple times. It is a very risky game for newbies and requires a very well sought out strategy in order to make it work.
“Trading in stocks, commodities or currencies entails initiating a buy or sell position and closing that position by way of profit or loss over a period of specified time. However, in day trading, the trader initiates a long or short position and has to close the same within a short span of the trading day. He or she will be executing various positions during the course of the trading hours for that particular session with the key objective of closing all positions before the day or trading session ends,” pointed out Amar Singh, Head Advisory, Angel Broking.
Who is day trading meant for? To answer this question we must first understand what day trading requires. “Day Trading requires continuous monitoring of the movement of stocks and indices in the market. As and when profit is captured on the intra-day movement of stocks and indices, they need to close their position(s) of stocks and indices immediately,” said Pritesh Mehta, Senior Vice President, YES Securities.
Day trading is something which requires a lot of knowledge and practice. Mehta said that professional and certified traders with an understanding of stop loss, risk-reward ratio and other concepts tend to excel in day trading. “This activity requires dedication and focus from individuals; they also need to make decisions on their toes. Any individual with zero or little understanding of equity markets should refrain from day-trading. They should ideally invest in mutual funds through the SIP route,” he added.
This story is from the September 2019 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the September 2019 edition of Outlook Money.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
7 Steps To Refresh Your Finances In The New FY
Setting goals and then making your money work to achieve them can be a gamechanger for your financial life
Turn Of The Tide: Should You Invest In Debt Funds Now?
The past few years have been challenging for debt fund investors, but the case for adding them in your portfolio is now more compelling than ever
Who Should Choose An Index Fund?
Index funds’ returns are similar to their underlying index, so if cost and protection are high on your list and market-beating performance is secondary, they could be an ideal choice.
What Is Depreciation?
Depreciation indicates a reduction in the value of an asset over time. Typically, it occurs due to wear and tear of the asset over time as a result of continued use to calculate the depreciation of an asset, one needs to consider several factors, one of which is the useful life of the asset.
REGULATORY ROUNDUP
Change: The Securities and Exchange Board of India (Sebi) directs asset management companies (AMCs) to conduct stress tests on small and mid-cap funds and disclose key findings on liquidity and other aspects.
Plan Repayment Before Taking Loan
I have a home loan running but need a loan of around `10 lakh for renovating the house.
Fund Life Goals Before Business
I am in my late 20s and want to invest in the real estate sector.
SECRET ROAD TO FINANCIAL DIGNITY
Dignity is something most retirees want once their active work life comes to an end and it is closely tied to the individual’s financial well-being
'Combined Life, Health Plans Won't Increase Complexity'
The life insurance market in India has recorded a consistent premium growth over the years, but insurance penetration is yet to reach the desired level. Quite in line, HDFC Life Insurance has shown a growth of 5 per cent year-on-year in its total annual premium equivalent in the nine months until December 2023 and has grown on other parameters as well. Its assets under management (AUM) went up 20 per cent, while it recorded a net profit of 16 per cent y-o-y, in the period. Even in terms of penetration, the company’s growth in Tier II and Tier II cities are positive. Vibha Padalkar, managing director and chief executive officer of HDFC Life Insurance shared the secret sauce for the growth in a conversation with Nidhi Sinha, editor, Outlook Money, talked about the challenges the insurance industry faces, and the road ahead in view of recent regulatory proposals. Edited excerpts:
BUCKET YOUR WORRIES AWAY
Once you have accumulated a decent corpus in your working life, the next big task should be to smartly deploy it across different schemes through a bucketing strategy so that your regular expenses are taken care of while your corpus keeps growing. This will ensure that you do not outlive your corpus