Is Intraday Trading Profitable?

what is intraday trading? Is intraday trading profitable? How much money can you make from intraday trading? Can intraday trading be a source of earnings?
what are the benefits of intraday trading?

These are some of the questions that a beginner or any other stock market enthusiast often asks before stepping into the intraday trading segment.

Just like any other business or work that we start, it is a general human tendency to wander and think about the gains it can generate.

Intraday trading is often considered a riskier zone because of the narrow trading window, highly volatile market, and quick decision-making. But there are a lot of traders who have made millions of fortune with intraday trading.

So, which case should we take here? Let us try to solve the dilemma Is intraday trading profitable in this article?

Is Intraday Trading Profitable In India

Yes, Intraday trading can be profitable if you invest money in diverse or multiple trade in same day and in small amount the chances of getting profit will increase but analyse the market carefully before investing in any stocks or in other words.

Intraday trading can be a way to earn money if you are patient and careful. Instead of aiming for big profits in a single trade, it involves making small profits through multiple trades in a single day. It's essential to understand the market and its risks realistically. With the right approach, you can turn intraday trading into a consistent source of income.

However it has been claimed that a lot of people who start trading with the intraday segment often leave trading very early. Is it because they are not getting the profits that they desire?

Or they are not aware of how to do intraday trading?

The answer is ‘MAYBE.’ But the question now is WHY?

It is because of the lack of proper understanding of the market and statistically speaking, adequate research and knowledge can take the success percentage from 3-4% to at least 6-7%.

So, coming back, if we try to answer the question that we started with, then YES, intraday trading is profitable.

This can be done easily if you are aware of the:

• Market Trends
• News
• Knowledge of technical indicators

Apart from this, it is also essential that you clear all your basics of intraday trading. You can refer to some books on intraday trading and make intraday trading wonders for you.

There are certain other things that an intraday trader should keep in mind to make the best out of the available intraday trading time.

So, if you are wondering how to make money in intraday trading then here are some of the factors that can help you to earn profit from as low as 2% to as high as 40%.

• If there is sudden news about a stock or company, then there are chances that the stock prices will react accordingly. So, for example, in the case of some positive information, there are chances that the stock prices will rise.
• The bulk deals and FII data also influence the profits in the stock market.
• The announcements of financial reports also alter the stock prices.

So, intraday trading profit percentage depends on a lot of factors, and if appropriately traded, it can give you good returns.

How Much One Can Earn in Day Trading in India?

The earnings from day trading in India can vary significantly and depend on various factors such as the trader's skills, risk tolerance, capital, and market conditions. Some day traders may earn a substantial income, while others may experience losses. It's essential to approach day trading with caution, proper education, and a well-thought-out strategy to maximize potential earnings and minimize risks. There is no fixed or guaranteed amount that one can earn through day trading, as it is inherently speculative and volatile.

Let us now have a look at some points that can help a trader make a profit from intraday trading/ day trading.

Know Your Goals

An intraday trader should be very clear about the goals. The target price and the risks that they are willing to take throughout the trading journey. It is often seen that traders get excited and wait to gain more even without considering the losses.

It is therefore essential to stay away from greed when it comes to intraday trading. This will take you away from the significant gains and make you lose the profit you earned.

Set a target for yourself and exit with strict stop-loss. Stop loss will also help you define your risk appetite and minimize your losses. Here before using it, consider the important parameters to set stop loss for intraday trading.

Selection of Stocks

Now the most crucial step of trading is the selection of the right stocks. Since intraday trading involves the buying and selling of the shares on the same day, you have to pick stocks that are volatile.

So here comes the question, how to select stocks for intraday trading or in simple terms how to filter volatile stocks?

If a stock is not showing significant movement in a day, then there are no chances of gaining profits. You should also remember to choose liquid stocks. It makes it easier for you to enter and exit.

You can look for the market trends and then choose the stocks that are also falling in the same arena.

If you ride with the market trends and buy the right intraday trading stocks, then it is more likely that you will generate profits in intraday trading.

Technical Analysis

Technical analysis plays an important role when you are selecting a stock for intraday trading. With the proper research and technical analysis, you can increase the chances of your profits in the stock market.

It tells you which stock to pick and tells you when to enter and exit the stock. In addition, technical indicators give you signals so that you know the right opportunities for a stock.

Therefore, you should keep an eye on some technical indicators: RSI, ADX, Moving averages, and MACD.

For better results learn how to use ADX indicator for day trading along with other simple and complex indicators provided to you.

Time Frame for Intraday Trading

Now the intraday trading window is only from 9:15 AM- 3:30 PM. It is therefore vital to choose the right time.

Usually, the early market sessions are considered suitable for intraday trading as the market is generally more volatile during that time. If summed up, it can be from 9:30 AM- 10:30 AM. Now there is no rule that you should only trade during these hours, but one can consider it.

It is also advisable for the beginners to wait for the initial 15 minutes because it is when the market reacts to the news from the previous night.

The experienced traders usually make a profit in the first 15 minutes of the market hours, and the beginners can also take this as a cue.

The most suitable charts are the daily charts, and the time durations can be 5 minutes, 15 minutes, hourly charts.

So, you can use these time frames to make the best out of your intraday trade.

Choose the Right Trading Platform

The price fluctuations in the market happen within seconds, and intraday trading is all about making the best out of this. So, to execute your orders properly, you need the right trading platform.

FinX by Choice offers you a seamless, fast, and effective platform so that you can execute your order at the price that you want. You can also get access to intraday research tips for better profits.

Besides keeping all these points in mind, you have to be patient, consistent, and dedicated to making money from intraday trading.

Avail the Margin Benefits

Next comes the benefit of leverage facility in intraday trading. To do intraday trading, the trader can avail the margin from the stockbroker depending upon the scrip to multiply the profit.

So, let’s suppose you have ₹10,000 in your trading account, now on the basis of this, you can avail up to 5 times the margin, so let’s say you take the leverage of 5x from the broker and hence trade profit with the amount of ₹50,000.

Now consider a situation where the stock increased by 7% in its value, so with the initial amount you would have earned the profit of ₹700 however with the margin money the profit is ₹3,500.

This is the way to increase your profit, but in the last year with the SEBI new rules for intraday margin, it has become difficult for traders to reap the benefit of margin trading.

The situation has put the traders in the dilemma of how to do intraday trading without margin.

How To Calculate Intraday Profit?

There are various advantages of intraday trading including higher returns. But to make it more profitable, you will have to keep the above-mentioned things in mind.  Now the question is, how to calculate intraday trading profit?

For example, if you bought a share for ₹10000 and then sold it on the same day for ₹11000, then the overall profit is ₹1000.

But when you calculate the intraday trading profit, you also have to keep in mind that you have to pay several other Choice Intraday Charges. The overall profit will therefore be calculated after deducing all these costs.

The charges that you have to pay are given in the table below.

So, in the above case, you will have to pay ₹4.2 as brokerage and the other charges as well. The final profit will therefore be calculated after deducting these charges.

By the way, do you know is DP charge applicable on Intraday trading or not? That’s something you must be aware of too.

The next question that bothers many traders is whether "Is intraday trading taxable or not"? Let us talk about this at length in the next segment.

Income Tax on Intraday Trading Profit in India

Yes, the profit on your intraday trades is taxable. Just like any other thing, you will have to pay income tax on your intraday profits as well.

Intraday profits are part of your business income and are included in your business income, salary, etc.

The profits are taxed according to the income tax slabs and also according to your income. The tax can range from anywhere between 0-30%. The income slab can range from 0-2.5 lakhs to ₹10 lakhs and above.

So if a trader has an annual income of ₹2.5 lakhs, including the intraday trading profit, he will not have to pay income tax. But a trader having an income of ₹10 lakhs or more will have to pay around 30% (amount exceeding ₹10 lakhs).

So, it solely depends on the percentage of profit that you generate.

Highest Intraday Profit in India

Now in the above segments, we concluded that intraday trading is profitable keeping in mind that you follow the right strategies. But if we talk about numbers, what is the highest intraday trading profit in India?

If we look closely then the profit that you generate in intraday trading also depends on the segment that you choose. You can do intraday trading in the equity, commodity, or derivatives segments.

Those who have an idea of how stock market works, have an idea of the compounding growth. So even if you are earning a 5-6% return every day, you can still manage to earn great profits.

It might sound a little impossible, but it is not. If you follow the right direction, you can make a good profit.

There is no doubt in the fact that the growth might not be consistent. Some days, some stocks can even give you a 20% return and some days it can be as low as 2%. But, in all, intra day trading yields great returns.

Interesting right? But another question that crosses the mind is, when does intraday profit settlement take place? So, the profit you make from intraday trading is credited to your account in T+1 days and then you can access it.

Conclusion

Summing it up, intraday trading is profitable only if done with the right mind and follows the intraday trading rules. As it is rightly said that a bit of knowledge is dangerous, it is essential to understand the market, and the trends, analyze them, and then trade efficiently.

If you want to generate profits from intraday trading, open free trading account today and start trading!

FAQ

Is Intraday Trading Good or Bad?

It might not happen right away, but with patience and research, it's possible. Don't expect to make big profits in a single trade. Instead, make a plan for multiple trades and aim for smaller profits. Often, traders trade too much and lose money.

Can I Start Intraday Trading With 1000 Rupees?

Yes, Absolutely there is no doubt. As there are no limitations you can start intraday trading with 1000 rupees and your budget. All you need to do is engage in trading with a substantial volume or Simply trade with a higher volume.

How to Make Money Intraday Trading?

The intraday stock prices frequently fluctuate in response to market sentiment, so to generate profits through intraday trading, it's essential to align your trades with the overall direction of the stock market. For instance, during a bullish market, consider engaging in multiple buy and sell transactions to accumulate incremental gains instead of waiting for a significant price swing.