Trade Only in Liquid Stocks with High Volumes

The NSE website provides a list of stocks that are very active in the current session, meaning those traded in large volumes.

Traders should follow the crowd. Stocks traded in high volumes are either likely to rise sharply or decline significantly. Trading in such stocks can be beneficial as fluctuations in their prices are less.

With a large number of buyers and sellers, there is a lower chance of your stop-loss getting triggered.

Additionally, brokers usually have lower margin requirements for these high-volume stocks, often called liquid stocks. For example, for a mid-cap stock with low volume, a broker might block 3-4 thousand rupees for a trade of 1,00,000. However, for a high-volume large-cap stock, a trade of 1,00,000 might require only 1,800 to 16,00 as a margin.

Margin amounts vary based on stock liquidity. Therefore, only stocks with large volumes should be chosen for trading. It is advisable to select stocks from the high-volume list of the previous trading day to enhance your success rate. You can download the previous day's rates in Excel format from the NSE website and pick stocks with the largest volumes from that list.

Another method is to visit the 'Live Market' link on the NSE website and select 'Most Active Securities.' This will show the most active securities for the current session. You can choose from here also.

Trade today in stocks that had the largest volumes the previous day. Stocks bought the previous day in anticipation of profits may be sold today, causing the price to fall, and you can profit from short-selling. Conversely, if a stock is traded based on an expectation that remains today, its price may rise further, allowing you to profit by taking a long position.