Not Successful In Day Trading Then It's For You

Day trading is all about momentum and nothing else.  You need some way to identify stocks with momentum.  Though a knowledge of technicals surely helps, it is not completely fool proof.  You should always rely on combination of technicals and not on a single one.  You need to devise your own methodology and test it by paper trading before entering the real market.  If you are a intra-day stock futures trader keep the following as base and then supplement with further value-additions:

1) Stock selection for trading intra day futures:

   a) Do not trade during the first half an hour of the opening.

   b) By 10.00 am you will definitely have a fair idea about the general trend or atleast the market sentiment.  This is a function of prev day DJIA performance, current day's Asian markets performance, etc.

  c) If general sentiments appear to be positive, look for stocks with momentum that can be gone long.  Similarly if sentiments appear to be negative, look for stocks with momentum that can be gone short.

   d) Now comes the crucial aspect of identifying stocks with momentum (bullish and bearish).  At 9.50am to 10am, go to  the market watch section of exchange's website  and find out stocks which have the following characteristics :

i) Open price is the lowest price / near lowest of the day so far. (indicates bullish trend with momentum)

ii) Open price is the highest price / near highest of the day so far. (indicates bearish trend with momentum)

The above can be easily automated in excel by downloading the excel link from the exchange's website. If the general sentiments appear to be positive, focus of item i) else focus on item ii).  If the general market trend is directionless and range bound focus on a combination of i) and ii).  Few more parameters can also be supplemented to i) and ii) to confirm the momentum.

e) Last but not the least is discipline.   Have a strict SL depending upon your risk appetite.  If you are in profit do not hesitate to book it as greediness is the biggest enemy of a trader.  If you are in loss, SL will take care of your exit.   Do not overtrade.