How Much we need to earn in Intraday Trading

[ash.paul]

Wonderful thread.

My two cents to it.

The question needed to be asked is whether you are fundamental trader or a technical trader.

I think you have either misunderstood what Ashes was trying to illustrate or you are simply derailing the post in a different direction. Here is what I grasped, According to Ashes Intraday trading can be profitable if a strategy has/more than 60% probability of winnings even with a Risk reward ratio of 1:-1 regardless of what type of approach you have for executing the trade. All he/she is trying to say is dont be greedy just be happy with 1% profit on 1%risk ignoring the trade cost round trip.
So, what does being technical or fundamental matters??
BTW pure fundamental approach doesnt work atleast on Intraday/Short term trading, if yes then we start a new thread on it.

 

[ashes]

"Adapt or die!" Said the Coackroach to the Dinosaur.

@ash.paul

This is best one liner i have ever read :thumb:

Regarding 1 % strategy , i will not say this is holy grail or some thing super natural thing , its very normal and in fact have many disadvantages but biggest advantage is we get out from every loosing streak at 1 % only .

Most of immature traders pray and wait in their loosing trades that price will reverse again after few minutes , some times they do averaging and ends up with bigger loss . every reader of this post can himself realize how many times he himself allowed his small losses to turn into bigger losses.


Regarding gaining 1 % with accuracy of around 70 % or more is bit tricky but not very very tough , we all trade with some trading plans all we have to do is
just choose best plan which have better accuracy with less profits .

Mathematically i know 1 % equation does not sounds great and you might think risk and reward ratio must be at least 1:2 or 1:3 , but that is mathematically but can any one tell me how much he earned in last 3 or 6 month by following such risk reward ratio, some things good in mathematically but not practical in real life trading with real money.

P.S :- Material in this thread may not be applicable to advanced traders this strategy is good only for those who are not able to earn consistently from stock market and still trying their best to earn.

 

[Xaero]

totally agree with ash.paul - the idea is right but the example is wrong but it's just that - an example. I am sure that if anyone uses the 1% stratergy then you won't make any profits because it is hard to get a win/loss ration of over 1/2 (i'm not saying it's impossible), which basically means 1% - 2% = -1% brokerage extra, no one here would be foolish enough not to figure that out but one you have the idea you can build a profitable trading stratergy around it.

However I do feel that we need to add to it and build on the basic idea with further details instead of tearing it down. All of us need to remember that none of us were explained how the solar system worked when we asked where did the sun go and where did the moon come from as kids.

What have to add is this: use parabolic stops or ATR and higher pivot lows as SL which would increases the chances of either locking in profits or preventing SL being triggered by volatility both of which would help the win/loss ratio.

 

[ashes]

, which basically means 1% - 2% = -1% brokerage extra,

With which broker you are trading ??

Intraday trading involves brokerage of just 2 paisa each side , max to max is 3 paisa , so if we take 3 paisa then 3 *2 = 6 paisa brokerage and 4 paisa other expenses lke stt and othets then also it comes to 10 paisa only which is just .1 % . that has already been reduced from profit and added to loss in first post example

 

[sudoku1]

'' How Much we need to earn in Intraday Trading ''

--------rather i would ask as '' How Much we need to earn FOR A LIVING''

a satisfied trader is equal to a satisfied person which answers the abv quest

 

[rajatheroyal]

Instead of using percentage you can keep ur stop at previous pivot and target should be atleast double the points of the stoploss in order to maintain 1:2 risk reward.

 

[HEM]

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

Excellent Writeup ashes. :clapping::clapping:

Hemant

 

[Xaero]

With which broker you are trading ??

Intraday trading involves brokerage of just 2 paisa each side , max to max is 3 paisa , so if we take 3 paisa then 3 *2 = 6 paisa brokerage and 4 paisa other expenses lke stt and othets then also it comes to 10 paisa only which is just .1 % . that has already been reduced from profit and added to loss in first post example

I am not sure what you are talking about. Is there an error in your calculation? If .1% is 10 paise then it means that trade amount is Rs.1000

 

[johnnypareek]

hey,

Well, u can do these things when u r sure u r ennotions are controlled. In last 20 years i just found one thing, when 8 out of 10 ppls say buy, u better sell.

Thing is crowd. 1% either side is like flipping coin.

Well, I know one person who was not able to controll his ennotions. what he started to do is he opened a/c with 2 broking houses and in one a/c he buy n in second a/c he sell. any trade giveing losss he will be out n profitable he keeps. sonnetinne even then he booked loss.

Loss is part of trading. Do not try to be snnart, but polite with loss. When loss connes, welconne n forget.

johnny

 

[linkon7]

hey,

Well, u can do these things when u r sure u r ennotions are controlled. In last 20 years i just found one thing, when 8 out of 10 ppls say buy, u better sell.

Thing is crowd. 1% either side is like flipping coin.

Well, I know one person who was not able to controll his ennotions. what he started to do is he opened a/c with 2 broking houses and in one a/c he buy n in second a/c he sell. any trade giveing losss he will be out n profitable he keeps. sonnetinne even then he booked loss.

Loss is part of trading. Do not try to be snnart, but polite with loss. When loss connes, welconne n forget.

johnny

sorry johnny, couldn't get your point. You are saying that your 20 years experience has taught you that its better to be a Contrarian than follow the trend.

your friend who buys in one account and sells the same thing in another account has to make a decision on when to close the trade of one account and let the other ride. why doesnt he just use that decision to trade that stock in that direction instead of making the broker rich.

and regarding the 1% thing, i think the point here is even if u maintain a risk reward ratio of just 1:1, if your success rate is higher than 50% then u end the week with a profit. A higher risk reward ratio will give you net profit even if the success rate is below 50%....