How can I Earn Decent money in Day Trading?
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Best Way to Earn Consistent Income from Intraday Trading
Intraday trading requires not only money, but a combination of skills, strategy, and discipline to succeed.
While there are no guaranteed strategies or indicators in day trading, here are some practical tips that will help you navigate the complexities of the Indian stock market and potentially earn income through day trading.
1. Learn & Practice:
Start by building a strong foundation of knowledge about the stock market, technical analysis, and trading strategies.
There are 1000+ online sources available to learn anything and everything about the stock market. The only thing you need is a burning desire to learn.
Here are some free online channels offering free knowledge out of their experience.
Also, there are free stock market ebooks available online, you can download it and learn.
So, nowadays everything is available online to learn, the only thing lacking is the desire to learn.
Most novice traders just watch 2 to 3 videos on YouTube and directly jump into the market with a goal of becoming the world’s best traders. Unfortunately, that is not going to work for more than 2-3 days.
2. Design Your Trading Plan:
Create a practically working trading plan that includes your risk tolerance, financial goals, and strategies.
Having a plan helps you stay disciplined and avoid compulsive decisions while trading.
Maintain a trading journal and note down the following
Monitor the journal closely and do not repeat the mistakes done in the past. This will give you a very good boost believe me.
3. Risk Management:
Set strict risk limits for each trade to protect your capital. A most common rule is to risk no more than 1-2% of your trading capital on a single trade.
This helps prevent significant losses and keeps you in the race for the long run.
Always maintain the risk-reward ratio of at least 1:1 or 1:2. If you maintain a 1:2 risk-reward ratio, even if you lose 50% of the trades, you will in the profit side.
Example: If your stop loss is about 1000 rupees.
Whenever you lose the trade, you lose 1000 rupees and when you win, you will get 2000 rupees if you maintain a 1:2 risk-reward ratio.
Even if things go wrong 50% of the time, you will get a decent return.
4. Start with a Demo Account:
Before dumping real money into the market, practice your strategies on paper trading sites and do trial and error.
This allows you to refine your skills and gain confidence without financial risk.
There are a few paper trading sites available, you can check them here.
5. Technical Analysis:
Technical analysis plays a vital role in intraday trading. Master technical analysis to identify trends, support, resistance levels, and key chart patterns.
Understanding technical indicators can enhance your ability to make sharp decisions.
6. Control Emotions:
Every trader must become a robot during trading hours. Means absolutely ZERO emotions.
Emotions can make you implement compulsive decisions. Develop the emotional discipline to stick to your trading plan, even when you lose.
Attend some online workshops or do some yoga practices to get emotionally stabilized.
7. Diversify:
Avoid putting all your capital into one stock/ position. Diversification can help spread risk and reduce the losses when things go wrong.
8. Learn From Mistakes:
Even if you have 20 years of experience in trading, still you must learn new things. The stock market is ever-evolving, and successful day traders continually update their knowledge and adapt to new market conditions.
Your earning goes down when you stop learning. Both are interlinked.
Apply these practically possible ways to become a successful trader in India.
Tips to Earn Regular Income from Intraday Trading
Pretty interesting to find such a query ‘ how to make money in Intraday trading’ and the answer is simple. Follow my simple tips that shall boost your morale and later you too can earn regularly in Day Trading.
Check your Trading Capital:
I had financial limitations and so decided to indulge in intraday trading to benefit from it, but what is your trading capital?
Thumb Rule: You must opt for buyers markets (day trading) when you have small trading capital which is huge trading capital in sellers trading otherwise.
A decent Profitability, and good risk management can give instant return on investment in day trading only after you strategize a clear trade plan.
In stock trades, you must realize that depending upon the type of trades you prefer and the trade strategies you adopt you shall reap profitability.
For instance, in the stock markets, you can think about how to make money in day trading, scalp trading, swing trading, options, and futures. In every trading, you need to adopt specific trade tactics to skip risks and make good money.
Rules of the Game
In day trading, you must understand the rules of the game. The trading session in day trading lasts for a day, which means, you must buy and sell the stock on the same day’s trading session. You will make money or lose money in a day.
Follow experts’ advice that says, buy and sell stocks multiple times in a day trading. It will help you to make money in small chunks thus creating a decent amount of money.
You can trade and earn at least 2 to 3 percent in a day and by the end of the week, you can fix a profit target of 5 percent.
Check-list Before You Enter Day Trading:
Review the previous day’s closing and current day’s opening stock positions.
Check for the 1-minute to 4-minute time frame to confirm it to be buyers’ day or sellers’ day. If you observe it to be sellers day then avoid entering the stock markets.
From the 15-minute time frame charts, you can find the right timing to buy and sell the stocks while to understand the movement and the direction of the stocks you must analyze the day’s time frames.
The intraday trading session begins at 09:30 am and ends by 03:30 pm and the usual buy/sell operations reach their highest activity by 01:30 pm.
Before you begin to trade in day trading you must have a clear picture and clarity about the market directions and you must buy/sell stocks when you find your chosen stock in the upward trend. It means you must buy when the stock price is low and sell as the stock price rises to your expected levels.
In the trading session scenarios, a high stock volatility can cause a loss when the stock prices decline sharply and fall below the bought price of a stock. And, if you fall to apply a stop-loss to about 10 percent then you can incur heavy losses due to the stock decline.
Day Trading Limitations:
You may not be able to do trading when a particular stock hits the higher circuit or lower circuit because the trading on that stock gets stopped for a time.
And, the trading resumes after the upper circuit (selling)/lower circuit (buying) patterns calm down.
Upper circuit/ lower circuit situations arise when a company comes up with good/bad news in the markets. In such circumstances, you must stop your buying/selling activities.