How to Trade in BTST and STBT:
The general criteria for trading in stocks for BTST and STBT is to trade when the stock break out in either direction during the market hours. Like for example, Reliance Industries is trading around 800 during the day and at 3 pm it suddenly rises to 815. It suggests a breakout in the price moving pattern. In such case, the BTST position can be taken. The trader can purchase the stock today and sell it tomorrow at a higher price.
Similarly, the STBT position is also taken on the basis of a breakout in the stock in the downward direction. Like for example, if Reliance Industries trading at around 815 suddenly falls to 800 levels during the end of the day, STBT position can be taken. The trader can cover his position in the f&o segment on the next day at a price that is lower than the price trading today.
A stock market is a risky place. While taking any BTST or STBT position, the trader needs to be careful. Any wrong interpretation of the price movement can trap the trader. The markets can move against your expectations and ultimately leaving no option for you but to book loss. Therefore, BTST and STBT positions carried overnight can trap the traders by showing an opposite move.
⇒ Tips for Trading in BTST and STBT
BTST and STBT are highly attractive stock market strategies. However, one must be careful while trading in BTST and STBT.
It is advisable that you should trade with a stop loss in place. Also, follow the decided stop loss at the time of buying and selling.
Another rule to keep in mind is you must avoid trading in BTST and STBT when there is high expected volatility in the market or when some major event is expected to happen overnight. These events could be related to Indian stock market or global market. Few examples are Fed meeting, RBI policy declaration, company result day, etc.
With these golden rules, you will definitely make good money and build wealth.
⇒ Conclusion :
Trading is an art which requires skill and knowledge. If you are a beginner in the stock market, you must get a basic understanding of the market before investing your hard earned money in it. At Nifty Trading Academy, we endeavor to empower investors and traders by educating them. Our blogs cover a wide spectrum of topics. Right from the basic concepts to advanced level concepts, you will get everything under one roof. Moreover, we bring to you the latest news and updates on the stock market.