Tips for BTST Trading – Concept, Strategies, Benefits, Risks & moreLast Updated Date: Aug 11, 2022
Learn everything on Tips for BTST Trading here. Tips for Buy Today & Sell Tomorrow Stocks are also provided here.
Often it has been observed that when the market moves upward and closes for the day, the next day starts with an upward movement as well.
So, to churn out profit out of this bullish market, BTST trading can be helpful. In this article, we will discuss this trading practice in detail.
Along with that, we will provide multiple trading tips for BTST or STBT trading practices.
What is BTST?
BTST stands for Buy today sell tomorrow. As the name suggests, here the trader buys the stock today and sells it in the next trading session only.
This is mainly done to capture the rise in price over consecutive trading sessions. The traders mostly do BTST trade with futures and options.
However, you can do BTST trade with equities as well. In BTST trading, you can go long on the stock in today’s trading session.
Then in the next trading session, before it closes, you need to square off the position.
What is STBT?
STBT stands for sell today and buys tomorrow. Here the trader sells the futures or options or stocks first. Then in the next trading session, square off the position by buying them from the market.
Here the trader is short selling and it is applicable in a bearish market. Generally, STBT trades are done if the market becomes bearish towards the close of the trading session for the day.
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Tips for BTST Trading & Tips for STBT Trading
Find out list of stocks or shares for BTST Trading here. These Tips for BTST Trading can help you achieve you financial goals.
Check out Sentiments of these of these BTST & STBT stocks & do real-time analysis here.
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Tips for BTST Trading or STBT Trading
Check out various Tips for BTST Trading & STBT Trading here.
No Trading During Major Economic Events
BTST or STBT trades must not be performed during any major economic event.
For instance, if there is any economic or political event going on in the Indian or global economy, it has an impact on the economy.
So, in that scenario, BTST trades are not advisable. As the markets become volatile during such events.
Stop-Loss Order – Tips for BTST Trading
When doing BTST or STBT trade, make sure you place a stop-loss order. As you read above, there is market risk.
The price of the stock you bought anticipating a price rise, may fall the next trading session. So, to avoid the loss or to minimize it, you need to place a stop-loss order while doing BTST trades.
15 Minute Candlestick Chart – Tips for STBT Trading
You can use the fifteen-minute candlestick charts for BTST trades. In this fifteen-minute chart, mark the highest and the lowest point.
These two are the resistance and the support levels respectively. If the resistance level is broken the stock, then it signals a bullish trend.
Similarly, if the support is broken, then a bearish trend. You can buy or go long if it is a bullish trend in the market and vice versa.
Don’t be Greedy – Tips for BTST Stock Trading
Make sure, you do not become greedy while trading especially when doing BTST or STBT trades.
You should book profit by squaring off the position when the target price is achieved.
It has been observed, that in BTST trades, often traders become greedy and finally end up losing all the money.
Google Liquidity Quotient – Calls for BTST Trading
Finally, you must find out stocks that are having a good liquidity quotient. It is important to do BTST or STBT trades in liquid stocks.
This ensures that you can easily buy or sell the shares in consecutive trading sessions.
When BTST or STBT Trading works?
The market is unpredictable, it can rise or fall within a fraction of seconds.
A stock that had no significant price movement throughout the trading session, can jump up suddenly during the close of the session.
For instance, ABC Company’s shares were trading around Rs. 500 throughout the day. Around 2:55 pm, it suddenly jumped twice.
Once it reached Rs. 508 and then surged to Rs. 517 around 3:10p. Now, at this point, you can buy the share if you think that the price rise will continue till the next trading session.
You bought the shares of ABC Company at 3:15 pm.
In the next trading session, the opening price of the stock was Rs. 520, so, your prediction was right.
You can sell it now or wait for the trading session to proceed and check how much the price increases. Then before the end of the trading session, square off the position.
Similarly, with STBT trade, if you see the price of the stock/future/option is dropping towards the end of the market session, sell them.
The next day, buy the same and square off the position.
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Risks involved in BTST & STBT Trading
BTST or STBT trade may sound simple and easy but there is market risk involved in this trading practice as well.
Suppose, you bought 500 shares of the ABC Company as mentioned above when the price surged to Rs. 517.
Then the market closes for the day. The next day, the price of the ABC Company falls to Rs. 505 and continued to trade around this price.
So, your prediction goes wrong. In this case, you get trapped and incur losses. You can either hold on to the position and wait for a reversal or square off the position.
Tips for BTST Trading or STBT Trading – Conclusion
Buy today sell tomorrow or sell today buy tomorrow trades may be great for day traders if they can analyze and anticipate the market well.
These trading practices help in earning profit from the short-term bullish or bearish trend in the market.
You cannot be greedy while doing BTST or STBT trade otherwise can end up in complete loss.
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Tips for Buy Today Sell Tomorrow Trade – FAQs
Check out various FAQs on Tips for Buy Today Sell Tomorrow Trading –
What is squaring off?
Squaring off means closing the position. If you have bought shares, then you need to sell to square off the position.
Similarly, if you have short-sold the stocks, you need to buy them from the market to square off the position.
What is the bullish market?
Bullish market means the price of the stocks is rising overall. The indices are rising like Nifty or Sensex.
However, it can be for a single stock as well. Then it is called the bullish trend in the stock.
What is the Bearish trend?
Bearish trend is when the stock price is falling or signaling a fall.
Are BTST or STBT trades safe?
Yes, if you can anticipate the market well then BTST and STBT trades can be beneficial for you. You cannot be greedy as well.
What if the next day or ‘tomorrow’ is a holiday in the market?
The name says Buy today sell tomorrow or Sell buy tomorrow. But this ‘tomorrow’ in actual terms means the next trading session.
For instance, if you buy on Friday, then the ‘tomorrow’ for the BTST trade would be Monday again.
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