[00:05] All they need to do is sit down, do a bunch of jing bong and make a lot of cash. And I know you feel if they can do it, why can't I? I've been trading for a while now,
[00:26] And it's not that nobody makes money from intraday trading, but I think the expectations is a little crazy on the Internet. So before we delve there, let's first understand what's intraday trading,
[00:40] and then talk about if it's possible or not. And we'll also talk about situations where it's actually profitable. Intraday, as the name suggests, is intra-day, as in within the day.
[00:57] which means you take a trade. Let's say you buy a stock at Rs 100 and then the market appreciates that stock goes to 110.
[01:09] You exit that stock before the day ends, so it's intraday and you make a Rs10 profit. Now the cool thing is, if you had 1000 shares that you traded with, you made Rs 10,000 before brokerage taxes and all the other things.
[01:24] Another interesting thing you can do when you trade intraday And we'll talk about this later. But the point is that a lot of influencers online nowadays
[01:38] are making it look that intraday is an easy way to make millions of rupees. But the reality is completely different. So why do people like intraday trading? And they're tempted to actually try it.
[01:53] Let's talk about the expectations that the Internet will set for you for intraday trading, the first expectation it will set is low capital. With a small amount of money,
[02:06] And because of this, your profit will also be larger. the problem is if you invest in, say, a fixed deposit,
[02:18] That doesn't sound too interesting. If you invest in stocks, as we've explained before, you have to compound it for five years, seven years, ten years. We'll grow old by that time.
[02:33] But with Intraday, something interesting can happen. You will look at it and it will feel like you can make a lot of money with a small amount of capital. And let me show this to you with an actual example.
[02:47] Now, first, let's look at it from the perspective of a long term investment. I'm just trying to show you what long term versus intraday looks like So in Dabur, the stock is trading at about Rs 650.
[03:03] I have Rs 12,017 in my account right now, which means I can only buy Rs 12,000 worth of shares for the long term.
[03:15] I will open Dabur shares. I'll open the buy. So this buy order basically shows that I'm going to buy Dabur on this exchange. It's one quantity
[03:27] Amount is like you guessed. So since I have 12,000, let me change this to say I guess 15 and refresh it.
[03:41] And I'll see that it shows 9800. I have 9800. That means for the long term, I can spend 9800 and buy this stock for a long term investment.
[03:55] But now let me switch from long term to MIS. Let's see what happens and keep your eye on that amount area which says 9800 right now.
[04:07] See that, it's become 1900. If I want to invest long term, 15 shares, all I can buy. But if I want to intraday trade, 15 shares only costs me or requires a margin of 1961.
[04:27] I can trade with more, right? Okay, 90 quantity. So 90 shares, if I trade, I will require 11,746
[04:41] which otherwise would have required a lot more money for an investor. which means my profit will also be larger and so will my losses.
[04:53] Traders, especially beginners, are big optimists. So let me place an order and actually buy this stock. I place this order and I'm going to the order window and I can see that Dabur has been placed.
[05:08] And you can see why this leverage increases your profit multifold if the market goes on your side. That is precisely the problem.
[05:21] If this stock falls by just 1% and I am ten times leveraged, Just because your broker allows you leverage
[05:33] Leverage is a double edged sword that beginners should not touch. On one side, if you had taken a long term investment with 15 shares and on the other side you had done this intraday trade with 90 shares.
[05:49] And let's say Dabur moved up in our favor by Rs 10 in just a few minutes. Rs 10 multiplied by 90 would be Rs 900 profit in just a few minutes.
[06:01] And over here it would be just Rs 150. So you can see clearly why people think, less time, less capital, very exciting, very spicy. I'll get bored.
[06:16] People think that they can make small amounts of money really quickly. It fell 20, 30, Rs 40. Also imagine that you were doing this with a larger capital, like one lakh or two lakh.
[06:33] Could you really lose 10%, 20% in just a few minutes? The second expectation that you'll be sold on the Internet and by all these people is guaranteed returns.
[06:47] People will say if the market goes up, an intraday trader can make money. If the market goes down through something called short selling,
[06:59] Now I remember around 2008 or 2009, I met this one uncle and he said, son, I think you know if you learn a little bit of analysis, trading can be very simple.
[07:15] He said, very simple. I know that this company moves Rs 10 every day. I have been watching it for a while. Every day it moves Rs 10 with some capital that I have, I will buy 1000 shares.
[07:31] Whether I go long or short doesn't matter because it's moving Rs 10. As soon as it moves Rs 1 in my favour, I'll exit and make Rs 1000. And I'll do this a few times in the day. And I'll walk with 5 to Rs 6 thousand a day.
[07:46] I am a simple man. I just need 5, 6K a day, times 20 days, I'll trade. I'll make some money. I'm happy. That's my strategy.
[07:59] That's not a strategy, that's a bankruptcy plan. One, the costs of trading are more than you think. You will pay government tax if you make a profit. You'll pay income tax.
[08:13] If you enter, you have to pay transaction taxes. So your entry, if it's at 100, it's not hundred, it's hundred plus expenses. Which means that the market needs to move a little more in your favor now, for you to make that profit.
[08:27] Now, we always imagine the markets are going sideways all the time and we will make one, one Rs 1000 and it will add up to a lakh by the end of the month.
[08:39] Here is what's actually going to happen. You will wait for one rupees to go up for you to make that 1000. But that day, the market will reverse and fall Rs 30 and you will lose Rs 30,000.
[08:57] wiping away any gains that you made before that. It's possible for you to make money sometimes when you do this.
[09:09] But one, two, three bad trades will wipe away everything and take away that capital too. So now let's come to point number three, "The Magic Strategy". Or you can read a book and you'll feel like you figured something out.
[09:27] So what I'm going to do is I'm going to open a ten minute chart of Dabur, choosing this stock completely randomly. This magic moving average is orange in color and it's a 100 moving average.
[09:47] What it is, is it's tracking the average movement of Dabur over the last hundred bars. Each bar is ten minutes long. Now, all you need to do is look at it. Whenever the price comes close to the orange line, after some time, it bounces back. See?
[10:03] Over here, it's bounced back. So all you need to do is track when the market comes close to this. and you'll make money on the way up. Like look at this.
[10:18] the market moved up a full 2%. But let's look at it a little closer. Here, you'll notice the market came down. You would have bought it here, but the market fell completely.
[10:33] Now you think that the market went up, but it's intraday. Actually, the day ended, so you would have had to close your position and the market, well, gave you a loss. After that, the market gapped up, went all the way up.
[10:48] There was no way for you to enter because it just moved very quickly and you missed the entire move. until you see a sideways market. multiple times during the day you would have tried to enter multiple times and got nowhere.
[11:09] So looking at this strategy from afar looks really good, but executing it intraday changes a lot of things. News will affect it.
[11:23] But the amazing thing about a magic strategy is it will always feel like And if you lose money, it'll feel like you just didn't analyze enough.
[11:35] Maybe if you add one more rule, one more technicality, The final expectation is probability. If you understand this, you'll understand the entire game of money.
[11:49] Now, you'll think a trader, a successful trader, probably makes money nine out of ten times. Most traders make money 50-50 or 40-60, So that's 1,2,3,4 and they lose the rest of the times.
[12:11] It could also be that they're making money only three times out of ten. But the difference is when they make money, they make a little more than how much they actually lose.
[12:23] And just that difference of how much they make, makes all the difference. So they make a little more money than they lose. So 1:2 or 1:3 is quite common.
[12:37] Now understand this. In trading, you have to take multiple trades and be right many, many times. And every time you were right, you'll accumulate that into a profit.
[12:51] Now let's compare this to, say, Warren Buffett's portfolio. He may have a worse loss rate than this. He would have probably invested in many, many stocks over his entire lifetime.
[13:06] But a few of these stocks earned him all this money just like that. Just like any other profession, if you spend loads of money, time, effort to figure it out, of course you can.
[13:22] But they don't approach it as a get rich scheme. They treat it as a business, mathematically.