Intraday Trading Profits

Intraday trading is purely a buyers market though you play in a high risk zone, you can make small trades number of times in a day and build profits. 

Is intraday trading profitable? Is a splendid question because the stock markets (NSE/BSE) encourage different kinds of trades like swing trades, and F&O trades.

These trades are more comforting and give you as a seller, a risk free zone to make decent or more money. Still, I recommend you Intraday trading, just check below. 

Intraday trading sets a fixed timeframe in a day for trading, so you must condition your mind to execute your trade plan before you trade. 

In case you are unable to meet your favored stock price you can extend your business day to next day, but that comes under delivery trading.

Here too, you will face umpteen hurdles and sometimes take you closer to losses than profiting. However, let us discuss whether intraday trading is profitable or not?

Yes, follow the steps mentioned below to make the profits to a decent level. 

Steps to Get Closer to Profitability in Intraday Trading:

First, 

Write your goal-set and do not change your trade plan of the day in any circumstances. 

Second,

Adopt stop-loss techniques to avoid loss when you place a put option. 

Third,

Set a control on your emotions and never let sentiments rule you. 

Fourth,

If you are a beginner, then start with an initial investment of INR 1,000. And, if you enter into a loss it can be added to your learning experience. 

Fifth,

Most of the stock brokers provide margin capital to trade intraday, and you can claim up to five times your trade capital.

Although it is risky you can lay hands on, when you have acquired sufficient practice in day trading. 

Note:

Margin trading allows you to trade more capital in trading though you haven’t more of it.

For instance, you have set aside INR 1000.00 to trade, then you can invest in stocks up to INR 5000.00 and the balance INR 4000.00 is borne by your stock broker.

This technique can increase your profitability with less investment on your part. 

Sixth, 

Before you begin to trade, select the right stocks and create a good portfolio picking out of prospering sectors. 

Seventh,

Profitability: 

Remember, when you trade you will be subjected to expenses from different quarters, stock broker, income tax department, and your debts for trade capital. 

Your profitability shall be an outcome of total earning ( income) – incurred expenditures. 

You can make a rough calculations on profitability, check below:

Intraday Profit = ( buying stock price – selling stock price) 

For instance, you buy for ₹1000 and sell the stock for ₹1100 then the profit earned is ₹100. But, it is not your actual profit, you will have to deduct all the expenses. 

Therefore, 

Actual Profit = profit – ( brokerage charges – Income tax deduction) 

In detail,

Brokerage charges = intraday brokerage + STT( .025% on the sell side) + transaction charges + GST ( 18% ( brokerage + transaction charges))

Transaction Charges = ( NSE: 0.00325% BSE : Flat rate/trade INR 1.50, clearing charges INR 0.01/trade.

Intraday Income Tax Deduction: 

Up to INR 2,50,000 , tax is nil

Between INR 2,50,000 to INR 5,00,000, 5% income tax will be levied. 

For INR 500000 to INR 1000000 , 20 % income tax is applicable. 

For income above, INR 10,00,000, 30% income tax is applicable.