@bonnieb Let's be honest. If it was that easy, everyone would have been a millionaire by now. Making money from intraday is not as simple as it sounds and more than 90% people lose money in the stock market every day.
I were to engage in intraday practice with a capital of about 50k, gaining on average 1% RoI per day for a month, that should net me a month’s equivalent of salary ?
I’ve begun researching since a week. Here’s how I plan to trade :
• Select about 10 stocks with respectable per day volume trade.
Code:
>
Buy those daily, ofcourse, with stop-loss set at negative 0.5%.
Hold if they rise, ofcourse, till 1% gain.
> > • fter and if they’ve a’ready gained 1%, sell them if they ever drop by 0.5%. (I’ve c’me across a term ‘tra‘ling stop-loss’, and guessing this is what it means.)
@bonnieb As a full time trader with a 5+ year experience in the market and a decent capital lets just say it is almost impossible. Also let me tell you intraday trading is probably the hardest segment in trading and should be reserved for the most experience traders who have atleast made 30+% returns year in year out. Trading is a continuous learning process and realistically speaking with a 50k account the best you can do is learn earning will come naturally if you have those innate skills and experience that will teach you along the way.
@realbeliever 1% expectation and performance oer day is almost impossible but realistic targets are achievable even in intraday trading. A 4% return per month is what I target and comfortably make more than that on most months.
@bonnieb From a total noob in equities to another.
Please use the savings to tide over difficult times while actively looking out for opportunities. Have known friends who have gone down this path with nothing to show except regrets.
Suggestion would have been different if you hadn't mentioned "total noob" in the query.
@bonnieb tAssuming 240 trading days a year, 1% per day works out to around 1000% return in a year.
Start with 1 Lakh
Principal = P = 1,00,000
No of terms = t = 240
Rate per term = r = 0.01
Final Value = P * (1 + r)[sup]t[/sup]
= 100000 * 1.01[sup]240[/sup]
= 1089255.37
(Nearly 11 Lakhs)
So if you start with 1 lakh in capital you will end up with around 11 lakhs at the end of the year.
Compounding!!!
Plus at the end of the year, you could also write a book How I turned 1 Lakh into 11 Lakhs in one year - I am sure that would earn you even more. Then Talk Shows, Public Appearances etc, even more.
@bonnieb how unrealistic you ask? take a look at this article. according to nitin kamath, less than 1% of active traders earn more money than a bank fixed deposit over a 3-year period. so i would say that your goals are pretty unrealistic.
@bonnieb D O N T, spend that 50k on quality education to get a better job. I will suck every last penny out of you without regret. This industry is not for people like you.
You can backtest this strategy and find out how it would have worked over a month or over a quarter. On top of everything that has been said, another challenge I see is picking the right stocks every day. From my observation, there is not much movement on most days, however significant movement happens on days when there is news: after hours on result days or when dividends are announced or just before dividend/buyback record date or management change in the company or some government policy is changed or some new product is launched and so on. So you should consider these in your backtesting and find out if it is possible to sustain your strategy.
Not to discourage you, but it makes me wonder *if* it was a workable strategy, some one would have made a financial product out of it. After all, even 0.25% gain every day and 200 trading days in a year would have would have meant 50% returns on your original corpus. Imagine what would it look like if a MF had 50% return every year!!
@bonnieb I didn't even read beyond the title but I want to leave you with this: if you start on 1 Jan with Rs. 1,00,000 and there are 220 trading sessions in a year then on 31 Dec you will end up with Rs 8,92,000.
If there's any reliable way of generating 9x annual return with reasonable risk then everyone and their uncle will jump on the bandwagon.
It's good to be ambitious but one simple answer to your top level question is: extremely unrealistic.
@bonnieb You will make more money in long term investing than day trading. And yes, even the top day traders in the world don’t make consistent profits everyday.
