We all do intraday trading (almost 90 % among us) , because this is shortest way to earn from stock market in quick matter.
But how many among us earns in Intraday trading on daily basis , most of the times at the end of the we have only earned some hopes that oh i made this mistake else i would have been in profits today.
And one day hopes also die bcoz capital vanishes and we realize that now only 20 % of original capital has left.
Why Intraday trader looses
Many times bcoz of greed , once we have entered in any position and it went into profit then also we looses bcoz of sudden volatility in market , then we think we should have used trailing stoploss . and will implement it from tomorrow.
Next day we use trailing stoploss and stock after hitting our trailing stoploss goes up by 5 % , then again we think ohhhhhhhh god . What should i do.
So what does matter most in Intraday trading is identification of correct Target. Since Intraday trading involves so many factors , like stock technicals , nifty / market trend , global cues etc etc.. , its not always possible to trace every factor with accuracy. and we losses again .......................
Try this concept for one week
Set target of 1 % and stoploss at 1 %
Always enter if u are 90 % or more % sure of trend
Power of 1%
Most of traders do not understand value of 1% if you can book profit at 1% with good accuracy then you can do wonders .
Just explore power of 1% with example
Mr. X Started trading with 25,000/-and his broker gives him 5 times intraday limit so he can trade with limit of 1 lac in intraday. Mr. X decides that he will trade max 2 stocks at any given point of time so he divided by his limit by 2 and started trading . he buys or sell stock worth rs.50,000/-at a time..
Mr. X always trade with 1 % stop loss and book profit at 1% target it means that if target hits then he earns 1% of Rs.50,000/- i.e. RS. 500 less RS. 50 (Brokerage and another expenses) = 450 .
If stop loss hits in any trade then Mr. X looses RS. 500 + RS. 50 = 550 , SO if he trade is profitable then he earns RS. 450 and if trade is unsuccessful then he looses RS. 550 .
Assuming 20 trading days in a month , we try to find out how much he earn or looses at end of the month , let try different possibilities based on his accuracy. We assume that every day he trades in 4 stocks , so in a month he made trades in 20 * 4 = 80 .
1) If he trades with 80 % accuracy then 64 profitable trade and 16 loosing trades.
a) What he earned :
64 * 450 = 28,800 (After adjusting brokerage of RS. 50 per trade)
b) What he lost
16 * 550 = 8,800 (including brokerage)
Net Profit=28,800-8,800=20,000/- i.e. 100 % times of his capital RS. 20,000
2) If he trades with 70 % accuracy then 56 profitable trade and 24 loosing trades.
a) What he earned :
56 * 450 = 25,200 (After adjusting brokerage of RS. 50 per trade)
b) What he lost
24 * 550 = 13,200 (including brokerage)
Net Profit=25,200-13,200=12,000/- i.e. 60 % times of his capital RS. 20,000
If you think trading with 80 % accuracy is bit tough then even with 70 % accuracy, one can easily earn 60 % of his capital.
If once can trade with even 60 % accuracy then he will earn some thing , or say atleast he won't loose . and if a trader can not trade with even 60 % accuracy then he must left trading
But how many among us earns in Intraday trading on daily basis , most of the times at the end of the we have only earned some hopes that oh i made this mistake else i would have been in profits today.
And one day hopes also die bcoz capital vanishes and we realize that now only 20 % of original capital has left.
Why Intraday trader looses
Many times bcoz of greed , once we have entered in any position and it went into profit then also we looses bcoz of sudden volatility in market , then we think we should have used trailing stoploss . and will implement it from tomorrow.
Next day we use trailing stoploss and stock after hitting our trailing stoploss goes up by 5 % , then again we think ohhhhhhhh god . What should i do.
So what does matter most in Intraday trading is identification of correct Target. Since Intraday trading involves so many factors , like stock technicals , nifty / market trend , global cues etc etc.. , its not always possible to trace every factor with accuracy. and we losses again .......................
Try this concept for one week
Set target of 1 % and stoploss at 1 %
Always enter if u are 90 % or more % sure of trend
Power of 1%
Most of traders do not understand value of 1% if you can book profit at 1% with good accuracy then you can do wonders .
Just explore power of 1% with example
Mr. X Started trading with 25,000/-and his broker gives him 5 times intraday limit so he can trade with limit of 1 lac in intraday. Mr. X decides that he will trade max 2 stocks at any given point of time so he divided by his limit by 2 and started trading . he buys or sell stock worth rs.50,000/-at a time..
Mr. X always trade with 1 % stop loss and book profit at 1% target it means that if target hits then he earns 1% of Rs.50,000/- i.e. RS. 500 less RS. 50 (Brokerage and another expenses) = 450 .
If stop loss hits in any trade then Mr. X looses RS. 500 + RS. 50 = 550 , SO if he trade is profitable then he earns RS. 450 and if trade is unsuccessful then he looses RS. 550 .
Assuming 20 trading days in a month , we try to find out how much he earn or looses at end of the month , let try different possibilities based on his accuracy. We assume that every day he trades in 4 stocks , so in a month he made trades in 20 * 4 = 80 .
1) If he trades with 80 % accuracy then 64 profitable trade and 16 loosing trades.
a) What he earned :
64 * 450 = 28,800 (After adjusting brokerage of RS. 50 per trade)
b) What he lost
16 * 550 = 8,800 (including brokerage)
Net Profit=28,800-8,800=20,000/- i.e. 100 % times of his capital RS. 20,000
2) If he trades with 70 % accuracy then 56 profitable trade and 24 loosing trades.
a) What he earned :
56 * 450 = 25,200 (After adjusting brokerage of RS. 50 per trade)
b) What he lost
24 * 550 = 13,200 (including brokerage)
Net Profit=25,200-13,200=12,000/- i.e. 60 % times of his capital RS. 20,000
If you think trading with 80 % accuracy is bit tough then even with 70 % accuracy, one can easily earn 60 % of his capital.
If once can trade with even 60 % accuracy then he will earn some thing , or say atleast he won't loose . and if a trader can not trade with even 60 % accuracy then he must left trading
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