Is earning in Day trading so very easy?

[kevin_shah]

HI New-to-markets

Actually speaking i tried doing this for quite some time for about 2 months and i did very well as i was able to capture 10 points on almost 50% of trading days
But the problem was those days were unidirectional ...I am talking about after Jan when i had only shorted nifty many times and capture about8-10 points sometimes more

COME TO MARCH, because market did not show any direction my hit ratio became 10% and i consistently lost as stop loss was hit frequently
U KNOW WHAT I LOST MY HALF OF CAPITAL THAT I BUILD UP IN FIRST TWO MONTHS AND SITTING ON BREAKEVEN

The morale of story is day trading is always been tough as u have to guage the direction to make entries; if there is no direction or u are unsure about it u are going to hit stops

SINCE, Volatality increase in some periods u are bound to do impulse trading and just like me loose all your capital

As per me 7-8 points in nifty in futures seems easy in theory but in practice for 12 months not possible dude.....
atleast i have 9 months remaining but still every month i am not going to profit


SPECIAL TIP:
For, capturing those 7 points in nifty u should have good amount of patience and good money management skills with no emotional strings of greed and fear attached... as even if u are not making 50% of capital; still u will not loose much if u are discplined---


You can try this at home but impulse trading is injurious to your wealth and after that your health

KEVIN SHAH

 

[vibhunair]

I agree with kevin.. On days like we ve had last few days of this month it s very difficult to get the direction right. You need a solid methodology to get that going.. And once you have that then well nothings impossible...

 

[jagankris]

< 6 months

NTM,

Amateurs focus on the reward while professionals focus on the risk.
I think you must have the answer for yourself by this time in your own experience.

Jesse levermore one of the greatest traders who made several millions in 1920's commited suicide in 1935 after violating his own trading rules and incurring great loss.

So realizing risk and money management are very important if you want remain in this business for ever.

Money,Method and Mind - the 3M's are the key for success in trading.
At least I find the psychological part being the most difficult one to develop and cultivate.But nothing is impossible with practice one should be able to "Trade in the zone" .

Good Luck.

 

[.Pride.]

Lets talk numbers

Assumptions:
1. Nifty is trading at 5500
2. Our broker is Zerodha
3. We have Risk:Reward of 1:1.

You win 7 points with 10 lots - Profit = Rs.2610
You lose 7 points with 10 lots - Loss = Rs. 4388

So, you need a win rate of more than 65% just to break even.

Not a good idea, in my opinion.

 

[jagankris]

Lets talk numbers

Assumptions:
1. Nifty is trading at 5500
2. Our broker is Zerodha
3. We have Risk:Reward of 1:1.

You win 7 points with 10 lots - Profit = Rs.2610
You lose 7 points with 10 lots - Loss = Rs. 4388

So, you need a win rate of more than 65% just to break even.

Not a good idea, in my opinion.

Dear Pride,

I got the point - you are adding brokerage and taxes.
But could you explain in detail.

RR is 1:1.

How 7 point profit with 10 lots is 2610 ?
7 points profit with 10 lots - 7*50*10 - 3500 rs profit

And 7 point loss is 4388 ?

Does brokerage and taxes eat 15 % :annoyed: ?
FM - Down down

 

[CASPER]

Jagan...,

The first post by N2M it is mentioned that brokerage and taxes would be 2 points.., hence if one profits 7 points its actually 5 points and if one looses 7 points it works out to 9 points ..., Now if we calculate

Wins : 7 Points = 7-2 (brokerage +taxes) *50*10(Lots) = 2500
Loss : 7 Points = 7+2 (brokerage +taxes) *50*10(Lots) = 4500

So 7 trades win and 7 trades loss would incur -2000 LOSS

Hence i think Pride's calculation is correct...,.


Let me know if i have missed any element of calculation.


Best Wishes...,
Nithin.

Dear Pride,

I got the point - you are adding brokerage and taxes.
But could you explain in detail.

RR is 1:1.

How 7 point profit with 10 lots is 2610 ?
7 points profit with 10 lots - 7*50*10 - 3500 rs profit

And 7 point loss is 4388 ?

Does brokerage and taxes eat 15 % :annoyed: ?
FM - Down down

 

[harisince1988]

Hi all

Iam just wondering whether earning in Day trading has become so very simple and easy

Consider this....

With an investment of Rs 1lac, with a broker like Zerodha, we can take positions of around 10 Lots in Nifty

Even if we manage to get 7 pts positively on a daily basis, we set to earn around Rs 2500/- per day (excl brokerages, as i read in Zerodha thread, they charge around 2 pts per lot as total charges incl brokerage, taxes etc)

I mean just trade one trade for 7 points positively, we can earn 2500x20 which is equal to Rs 50000/- per month :clap:, which is 50% of our investment.

Am i talking sane here?
Are these do-able?
Is anyone doing like this?
Is anyone tried doing like this and failed miserably?

Just 7 pts, think shud be achievable in any market, even in dumb non-moving market may give that 7 pts.

Anyone who has experience in this may share their thots here
Sadistic, sarcastic comments are also Welcome :lol:
But please dont post something like, "you do it in minifty and post the results here after 1 month" types

here i wil solve your doubt with the knowledge i have....Im not a technical expert..just a normal trader..

i will share u my technique i use..all depends on the fund management..

let us consider we have 10 k as our initial investment...my broker provides me 6 to 7 times intraday limit..lets consider 6times as our intraday limit...

lets consider 50 % returns as u said..(u can earn even 100 to 150% returns per month)

now for 50 % returns in a month i need 2.5%(2.5 * 20 trading days= 50 %) returns each days..if u cummulate ur earnings u can earn more than 50 % in a month..

now at the start of the day we have 60 k as our intraday limit..

let it be any broker..correct intraday brokerage is 0.03%..totally it wil come 0.1%(0.03+0.03+taxes extra) as brokerage for completing one trade..

now my script is unitech here in this example..

fro 60k as my limit..i can buy 1600 shares of unitech at 39.35/ share...

now if v see a profit of just 0.2 we wil earn 320 rs...now our 2.5% daily target is (250+60 as brokerage) totally 310...now we earned 320 with price movement of 0.2 per share..if its 0.35 then 5% which is 100% returns per month..


Intraday is really the best way to earn lot...but not easy way...til now i have said the positive side...but look of the negative side..if price moves 0.35 against your direction then u lose (560 + 60 as brokerage) 620 which is more than 5% of ur investment..


so u can earn lot in intraday by using the intraday limit booking profit with very small price movements..but the sad thing is its very risk..

i dint tel its not possible..possible with risk attached to it...

if u do two trade as above and both was in loss then u loss more than 10% of ur investment...

but if u luk profit then its 10 % perday which is 200% permonth..

you can cumulate ur earning to luk more returns...

al depends on money management and knowledge of the market and picking the right stock at right time...



if u are luking for trading in nifty or mini nifty then i think this thread wil be useful for u..

view this link

http://www.traderji.com/day-trading/49911-intraday-view-its-my-view-not-calls.html
:thumb::thumb::thumb:

 

[.Pride.]

Dear Pride,

I got the point - you are adding brokerage and taxes.
But could you explain in detail.

RR is 1:1.

How 7 point profit with 10 lots is 2610 ?
7 points profit with 10 lots - 7*50*10 - 3500 rs profit

And 7 point loss is 4388 ?

Does brokerage and taxes eat 15 % :annoyed: ?
FM - Down down

Hi!

Pls download Zerodha's brokerage calculator.

7 points profit with 10 lots = 7*50*10 = 3500 minus (brokerage+taxes) of Rs. 890.

		Qty	Turnover	MTM
Buy Price	5500.00	500.00	2750000	3500
Sell Price	5507.00	500.00	2753500	
Turnover	5503500.00			
Brokerage	40.00			
Stt Total	467.80			
Total Tran Charge	297.19			
Stamp Duty	50.00			
Service Tax	33.72			
Education Cess 	0.67			
Higher Edu Cess	0.34			
				
Total Tax and charges	889.72			
Points to Breakeven	1.78			
Net MTM	2610.28

 

[new-to-markets]

Ok

thats very good insights into the game guys.

But why not we form a group and try to earn that so called elusive 7pts?

anyone interested in "7Pt-winners" group?

I think we can toil day in out to get to our objective

 

[4xpipcounter]

First of all, if you are talking about making only 7 points per day on the kind of market like Nifty is that has a daily range of 119 points per day, then you better be talking a scalping strategy rather than a daytrading strategy.

There are several fallacies you present (It is just my objective view.). You are talking about trading 20 lots at a time. I trade forex, and to be conservative, I need to have $200,000 in my account before I put 20 lots on one trade. Unless you're loaded, I'd like to know why you are risking that much money to begin with.
Even if you are going to start with $100,000, then my question is, "Why are you running that high of risk just beginning your trading career?"
In terms of a more practical risk, you are only talking 1.13% per day simple interest, and that is if you are winning 100% of the time.

Pride makes a good point that you have to win 65% of the time in order to break even. As a nominal average, traders have to win 58% of the time in order to break even. This is because the commissions, brokerage fees, and / or spreads have to be made up before the trade is even. Pride's fallacy is that your SL is not his TP. Your SL is your SL, and his TP is his TP, just like his losses are his losses.

I know TraderRavi meant to be factious in his comment, but there is still an element of truth to it. Everything looks good on paper. You can make $1 million your first week of trading on paper. The idea is can you first do it, practically on a demo account, and then can you proceed from there and carry it forth on a live account. In essence, the only way you can answer your question is through personal experience.
Let me say that even experienced traders have their times of struggle. That is something to consider. You better, first, be a consistent winner on a demo account over an extended period of time, before you jump in the ring with your live money.

Jagankris mentioned how it all looks good. You wanted him to give you an analysis. Let me give you another cold hard fact, "There is none." Someone could show you a % of gains, and discourage you because it is too much. Someone else could show you a % of gains and discourage you, because you had higher expectations. It all comes down to personal due diligence. Take your idea, open a demo account, and trade on a demo account, and then you can answer your own questions. I don't want to discourage you from asking questions in a venue like this one, but there are some questions that get answered only through personal application. When you find out what you can do and have done personally, then all your questions are answered. If there is a part of your methodology that needs some fine tuning, then there are some people in this forum that can help.

Sumo made a valid point. Brokers all offer the same basic deal. I trade forex. I'm not going to get ruffled if my broker offers a 5-pip spread, and another offers a 3-pip spread. I'd be more concerned with their customer service.
Also money talks. If you are throwing 20 lots at a time, I'll open a brokerage and let you trade with me. Respectfully, when I know you are a beginner, I know I'm going to be rich. You know the old saying, "A fool and his money are soon departed." (I'm not calling you a fool. Just take the point I'm trying to make.)

You made this comment, "Wasting the time with you? Ofcourse u can suggest some other profession." I can suggest flipping hamburgers.
Simply put, if you are entering the markets as a newbie and wanting to trade 20 lots, you're better off flipping hamburgers. At least you'll make a little money rather than lose it all.

I disagree with Kevin. I made several excellent trades on the USD/CAD when it was trading in a close range. When markets are range bound, it is the trader's duty to find the range and trade it accordingly. When they are moving sharply north or south, then just jump in for the ride. Forget 7 pips. By the same token, you can end up on the wrong side of things and go for a ride in reverse on high trend markets.

Bottom line, as Vibuhnair mentioned, establish a methodology, and anything is possible.

Hi all

Iam just wondering whether earning in Day trading has become so very simple and easy

Consider this....

With an investment of Rs 1lac, with a broker like Zerodha, we can take positions of around 10 Lots in Nifty

Even if we manage to get 7 pts positively on a daily basis, we set to earn around Rs 2500/- per day (excl brokerages, as i read in Zerodha thread, they charge around 2 pts per lot as total charges incl brokerage, taxes etc)

I mean just trade one trade for 7 points positively, we can earn 2500x20 which is equal to Rs 50000/- per month :clap:, which is 50% of our investment.

Am i talking sane here?
Are these do-able?
Is anyone doing like this?
Is anyone tried doing like this and failed miserably?

Just 7 pts, think shud be achievable in any market, even in dumb non-moving market may give that 7 pts.

Anyone who has experience in this may share their thots here
Sadistic, sarcastic comments are also Welcome :lol:
But please dont post something like, "you do it in minifty and post the results here after 1 month" types