Everything in short term trading is timing and Indian day traders have evolved a specific sensitivity when it comes to the overlap between the domestic and the international markets. The time between the Indian market open and the early afternoon session has a particular energy, as the traders observe both directions of Nifty and global indicators at the same time, changing their positions as new information emerges from European pre-market activity. That split focus has resulted in a generation of traders who are at ease handling multiple streams of data simultaneously.
Retailers in India have now become sincere followers of opening range breakout techniques. The line of thought is simple, price usually sets a level within the initial thirty minutes of a trading session and a decisive movement outside that level may give the clue of direction in the rest of the day. Traders who apply this approach to index futures or currency pairs would set their parameters the night before and they would be at their screens with the levels already marked and their decisions already framed. The field this calls on is convenient to traders whose experience, in many cases, has taught them at great expense that improvised entries made on the spot cannot be trusted.
Scalping draws a vocal group among Indian trading communities, especially those individuals who perceive markets as a main source of earnings, and not as an addition to a salaried occupation. It is the frequency of opportunity that appeals. A scalper does not require a pronounced directional movement in order to make returns, just adequate intraday volatility and a platform that can actually place orders without any significant delay. CFD trading is somewhat compatible with this style in the situation when brokers are providing tight spreads on large instruments but the cost of transaction piles up fairly quickly when position sizing and winning rates have not been properly controlled.
News-driven trading also has a dedicated following. India provides a regular flow of high impact domestic data, both official decisions by RBI on policies and quarterly earnings of big index constituents, and traders who are sensitive to international events superimpose global calendar events on that schedule. A trader who has studied how USD/INR moves in the thirty minutes after the US non-farm payroll announcement has developed a reliable, repeatable edge that cannot be based on technical analysis only. These traders tend to refer to their practice as pattern recognition, as opposed to prediction, which is a sign of true sophistication concerning what markets know and what they do not know in advance.
Mean reversion strategies lie on the other end of the temperamental spectrum of momentum trading. At the same time that breakout traders are seeking acceleration, the mean reversion players are seeking exhaustion, instances when price has gone too far too fast and is bound to reverse towards a recent average. Indian traders who have applied this logic to CFD trading in the commodity markets have found this especially relevant during periods when the price of oil or gold shoots up on geopolitical news only to fall back as the initial response wears off and cooler heads prevail.
Position management separates the traders who last from those who do not. Across all the popular day trading methods in use in Indian markets, the common thread among traders who build consistent track records is not the time of entry or indicator choice. It is the skill of cutting losing trades in a short time, the skill of not being tempted to average down into bad trades, and the skill of saving money during inevitable losing streaks. The old members of the online community repeat this lesson with a frequency that borders ritual and the idea that the lesson remains unprocessed by the newer members is an indication that the lesson is indeed hard to assimilate.