Okay this post I am putting up since one of my friends from a yahoogroup asked about the link I have in the right hand side called 'Basic Nifty Intraday Trading System' and how to use it.So I thought I will devote a post to this.
If you click on this link - It will take you to a yahoo intraday nifty chart which has parabolic SAR, slow stochastics and MACD histograms added to it. You can play around with this chart to add in more indicators and parameters.
Now see my title above :-) --> Daytrading is really an 'extreme' sport :D. It can be compared to maybe extreme sports such as bungee jumping..lol.
Before I start out let me just say this method of trading will offer a lot of excitement, exhilaration, fear, downright panic...In other words a cornucopia of emotion - Stay away if you cannot handle it. I know a lot of friends who do not make any money but they still stick to day trading - Why? - Simply because daytrading makes them feel like somethin! I tried it, made some, lost some and then just decided it is not worth it - It does not fit my personality - This is very important. A trader needs to keep searching for timeframe, indicators, method until he finds something that completely 'fits' his emotional makeup. I have found that daytrading is NOT for me. Positional works for we very well - Especially if I keep the leveraging to a minimum. But thats just me. Some people will do very well in daytrading so you can try it out a few times - Be sure to try with a contract or 2 only and check it out. Believe me very very few daytraders ever make money consistently. Very few NORMAL traders do that but daytrading kinda skews the picture even further.
Ok now to the chart. :-)
Now if you see above, I have marked the inflection points on the slow stochastics indicator which tells us when to buy and sell. A crossover of the blue above red tells us to buy and a reverse tells us to sell. This will work very good on trending days and you can get 2 or 3 good moves. The rest of them will tend to be whipsaws. The parabolic SAR(stop and reverse) is a indicator/method which tells you where to set your stop. You can tighter stops in most situations but that depends on the trader. Since the profit margins for a daytrader is very less - You need to make sure you use tight stops and be very nimble.
This chart is obviously not what a good day will look like...Infact you get much better trending days than this quite a lot of times but more than often you get a whipsaw day and this is really the bane for most day traders.
Try this paper trading for a while and see if it works out before launching into real trading.
Ask me questions if any in the comments section and I will try to address.