How to Make Money from Day Trading – a Full Guide

How to make money from day trading.
How to make money from day trading.

Introduction to make money from day trading

Day trading is the activity of buying and selling financial instruments such as stocks, bonds, options, or futures within the same day or even multiple times with the intent of profiting from price movements within a single trading day. The best day traders in India will buy and sell shares of stocks over a day.

Ideas and tips to make money from day trading

It’s not an easy thing to earn money in day trading in the stock market. Everyone enters into the day trading with the hope of making good money. But, most of the time you may hear day traders making a loss. That is the main drawback of the stock market. Everyone should understand day trading is an art but not a gamble. If you understood this fact then the probability of making profits of your day trading will go up obviously. Knowledge, strategy, and a bit of luck are perfect ingredients to earn more money in day trading.

One must be aware of certain things to be successful in earning Rs. 5000 in intraday trading. You can visit trading fuel’s articles and blogs to gain that awareness in day trading. Despite our articles and blogs, we will give some tips and suggestions to earn Rs. 5000 or more in Intraday trading in this article. Therefore, if you are a new trader or already a trader, this article is for you to learn how to start day trading in India, and here are some tips to be followed:

Tips to earn money in intraday trading

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Day trading tips for beginners.
Day trading tips for beginners.
  1. Select liquid shares: The first and main tip of day trading is to select liquid shares. Those are the shares that have good capacity. You must square off before the market hours in intraday trading. You must select the share to trade where you will have enough buyers and sellers at any time. You can lead to holding the shares by trading in liquid stocks.
  2. Start small: As a beginner, just concentrate on a maximum of one to two stocks throughout the season. With a few stocks it is easy to find the track the opportunities. Nowadays it has become the usual thing to be able to trade fractional shares, so you can specify smaller amounts you wish to invest.
  3. Always put a stop loss: Putting a stop loss is a golden tip to earn money in day trading for beginners. Stop-loss is a price level. At this level, the trader should not hold the stock and need to exit by booking a loss. You have to make sure that the trader’s emotions are under control. For traders who indulge in short selling, stop loss is very important.
  4. Knowledge is power: Knowledge of basic day trading procedures is enough. Also day traders need to keep an eye on the latest stock market events and news that affects stocks. So just go with your flow. To keep yourself informed about the general markets and the selected companies, make a wish list of stocks that you would like to trade.
  5. Find the entry and exit point: If the position in a stock is not taken at the right place intraday trade can go wrong in some way. The trader should find the entry and exit points of a stock that he wishes to trade. During the first 30 minutes of the trade, the fluctuation in any stock is highest. So that, entry and exits point should be determined as per the day high and low. Once the position is taken make sure that profit or loss booking is done at the target price or exit point.
  6. Stay cool: In every business, there may be profit or loss but you have to stay cool. In critical times, the stock market tests your patience. As a day trader, you need to learn how to keep greed and hope. Decisions should be taken by logical thinking but not by the emotion.
  7. Avoid going against the market: The next important tip in day trading is to avoid going against the market. The biggest mistake a day trader does is to take a position against the trend of the market. Taking a short position in day trading can lead to losses. Therefore, understand the current trend of the market and then decide on the intraday position accordingly. Taking a right position in day trading as per the trend of the market will lead to high profits.
  8. Research your wish list: One of the basic tips in the stock market, research your wish list. This means research before taking a position in day trading. You need to make a wish list of stocks that you want to trade. Find out the intraday price moment and direction of the stock. You can use the internet to find out this information. Because of this study, the trader can understand the day trading in the stock market more closely.
  9. Don’t over trade: Last but not least tip to earn money in day trading is not to over trade. One important thing is to select a few stocks and take the positions only in them. Remember that day trading will not give profits every day. If the market is not supportive you need to book a loss but there is no other option if the trader has taken multiple positions. So the very important rule of day trading is to know your limit and trade within it.

By following the above tips you can earn Rs. 5000 in intraday trading. Following the strategies of day trading and having good knowledge will always give you profit in the stock market.

What day traders do?

Day traders will typically find a way to make money by buying financial instruments while holding positions for short periods. Anyway it’s from a few minutes to a few hours before selling back them again. Day traders enter and exit trading positions as per the trend of the market within the day (hence, the term day traders) and rarely hold their positions overnight. The goal of day traders is to profit from short-term price fluctuations. Taking a short position will tend to lose, whereas taking the right position as per the market trend will lead to profits.

Get started in day trading

Getting started in day trading is not an easy way of investing in the stock market. Anyone can invest with a few amount can buy shares of a company and keep it for months or years.  In the United States, people who make more than 3-day trades per week are called pattern day traders and they are required to maintain a minimum amount of $25,000 in the equity market in their accounts. This means day traders must have enough capital to make a profit. And it is not compatible with keeping a day job because day trading requires a lot of focus on it.

Most of the day traders will dive into the stock market to make profits by putting their capital into risk. In addition to the minimum balance required for day trading, a day trader needs to be connected to an online broker and have the right software to track their positions, for this you need to do a lot of research, and log their trades. Brokerage commissions and taxes on short-term capital gains can also add up.

Make money in day trading

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Money making tips in the Day trading.
Money making tips in the Day trading.
  1. Know what kind of trader you are: Basically, in the stock market there are two types of traders. Those who follow fundamental investing will come under the first category and second are speculators. Traders who trade in the capacity with the object of profit are therefore speculators. The trader who follows fundamental investing gives less importance compared to the speculators. To be successful and make money in the stock market, one should practice the fundamental method of investing.
  2. Try and avoid the herd mentality: Many traders buy or sell a stock that is influenced by their associates. Avoid these kinds of practices as those will not work in the long run.
  3. Never try to time the stock market: The expert investors do advice never try to time the stock market as no one has ever done this with success. By trying to time the stock market, one can lose their money in less time.
  4. Have a disciplined approach for investment: Due to the fluctuations in the stock market, the number of investors lost money even the market had a trend. At the same time, the investors who put their funds with a disciplined approach have generated outstanding results. If you want to be a successful trader in the stock market for a long time, do invest in a systematic approach.
  5. Never let your emotions influence the judgment: Number of investors lose their money in the stock market as they are not able to control their emotions. When the trading is in the bull market, they will have a temptation of making more money and they will end up with lose. So greed and fear are the two factors that you have to be controlled in trading shares.
  6. Always have realistic goals: Traders can hope for the best of their investment they have made, but if their goals are unrealistic they might get into real trouble. Never expect a huge profit from the stock market and always have realistic and achievable goals.
  7. Always invest your surplus funds: If you are a beginner in day trading, invest your surplus funds rather than opting for the loans or debts. Once you get the profit in shares re-invest the same amount. 

Money required to start day trading

The amount of money required to start day trading will vary from person to person, a small day trader can invest 5000 also and a rich investor can start with a capital of 5 lakhs too.

You have a lot of money but you are new to share market, we still want you to start with a small capital of say 25,000 to start your day trading for a few days. Later on if you are gaining confidence and also earning some money in day trading, you can always increase the capital in the future. Risk capability will differ from person to person so any trader should take a risk as per their capability.

How much money can be made by day trading?

There is no limit to making money by trading stocks.

We are talking about the Indian stock market as it is the highest liquidity market where people can gain any amount of money, but remember people can lose too.

It all depends on who is trading. If you have no stock trading experience, there is a high chance of losing money if you are not careful.

But if you are a skilled trader, it is even possible to make Rs.1 lakh per day with Rs.1 crore of investment, i.e.  1%.

Benefits of day Trading

  • Many day traders are self-employed, working by themselves and answerable to no one as they are independent
  • You can make serious money quickly
  • No overnight risk
  • Becoming a day trader is simple
  • You can set your hours during market hours
  • Day traders can trade from anywhere in the world

Drawbacks of day trading

  • Day trading is stressful
  • Day trading requires more discipline
  • Sometimes you may lose a lot of money in less time
  • Day trading can be very boring
  • You can’t control the emotions in day trading
  • Day trading requires split-second timing

The bottom line of day trading to make money

Day trading is not a gamble or an activity that you can do every once in a while if you are serious about doing it to make money. You need to follow some strategies in day trading that will help you to set up yourself and lock you in gains while minimizing losses. Because there is no guarantee that you will make a profit every day in day trading and you are not even able to predict your average rate of return over any time.

You need to have patience and discipline to be a successful day trader. The two factors that you have control over them in day trading are greed and fear. If you’re interested, review the best stock brokers for day traders as the first step to choose the right online broker for your needs. In case if you like this: Dairy Farming Plan in India.

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