I’m writing this post as lot of people have been asking me on Twitter, Facebook, Email and Whatsapp about how to get started with trading especially intraday trading.
In this digital age, things move fast. We message to our friends/relatives at click of a button, do video chats and see them at that very moment. We now do shopping on our mobiles and things are delivered to us in a day or two. That’s what technological advancements have done to our lifestyles. Certainly financial markets are not untouched by these digital technologies.
We can buy/sell shares, mutual funds; check, review and apply for insurance policies, all online.
We can trade or invest in stocks just from palm of our hands via smartphones and tablets.
Now coming back to the actual question of – are you really missing on an extra income generation opportunity?
I’m talking about “Trading in stocks” be it day trading or positional short term trades (this depends on time at one’s disposal)
Whatever field you are into, everyone has set their financial goal and accordingly having a financial plan.
Personally I have separated my goals and objectives as far as trading and investing goes.
That’s earnings from intra-day trading and long term investing goals. I have kept 25% of my capital for intra-day & short-term positional trades (trades that last for 2 days- 1 week) and rest of my money goes into long term investing.
I will get to why I love intra-day trading?
First, I don’t need lot of capital for it.
In fact on a typical normal day I just use Rs.25000- 40000 for intraday positions. And on that I make anywhere from Rs.2000-8000 per day without much risk. I have set my daily earnings target of Rs.3000-4000. Considering 20-22 trading days per month, at least I make Rs.60000 on the capital of Rs.35000.
This is not even full-time income just a part-time, which adds and supplements to my monthly income. It’s more than enough to pay for my Car EMIs, credit card bills, monthly expenses.
And how much time do I allot for intra-day trading?
Since I already have my target set, I don’t have to give my whole day to it. My trade system and strategies just get me to my targets in 2-3 hours; sometimes it’s just 15-20 mins. On some tough days it stretches to 4-5 hrs but then I’m not glued to my laptop/computer whole time.
One more thing – I only do Options trading in Nifty or news based trending/momentum stocks. No leveraged cash margin trading. Because sometimes volatility is so high your stop losses get hit.
I just choose 1-2 stocks a night before based on technical parameters and news in it. Whether it’s positive or negative news doesn’t matter. Just news enough to give a substantial movement in its stock price the next day. My favourite is Nifty options. It gives lot of trading opportunities whole day. With right strategy, right timing and disciplined execution it’s easy to make Rs.3000-4000 just in one trade per day in Nifty Options.
Discipline is the key here. Always keep your Stop loss and Targets in mind. Get out of it as soon as it hits either of it. Your Exit and Entry points should be well defined, even before the execution of trade.
As far as my personal trading setup goes, I consider 9.30 a.m- 11.30 a.m and 1.30 p.m-3.30 p.m best time slots to make some quick bucks and get out. Many a time I have reached my target within 10-15 mins and by 10.30 a.m I’m free to do my other work. DON’T OVER TRADE. Once your target for the day is reached, sign out of your trading account. That’s keeping your emotions in control. No Greed No Fear.
We are not here to get rich in a single day nor we are into any get rich scheme.
Slowly but surely when you add your daily profits you will find that you have made a substantial money at the end of the month.
Also the monthly income of Rs.60000-Rs.100000 that I make from day trading gives me enough money to build up my long term investment portfolio. I invest all the extra income into high dividend paying blue-chip and mid-cap stocks.
Smartphones have made trading a lot easier.
The best part of digital revolution is you don’t need to be seated at one place. You can trade while you work, keeping an eye on market and your stock positions via apps. The brokerage firms have come with apps for all the operating systems whether you own Android, Windows or iOS based smartphones or tablets.
My Mobile Trading Screenshot
Whether one is in office (working professionals) or in Kitchen (housewives) you can trade effortlessly everyday without disrupting your daily routine.
Trading is simple but not easy. When I say not easy I mean you need to learn few of the technical parameters associated with stocks and trading. It helps in spotting ideas and opportunities to trade. Of course it’s not tough but you need to give some time to it. Then you need a trading plan for yourself based on your financial objectives and risk profile.
You can learn about how to set your trading plan and accordingly choose your strategies here.
Do share your trading experiences in the comment section below.