Basics of Indian Stock Market & Intraday Trading Tips

You listen a lot about investing making money from stock markets. But you don’t know basics of Indian stock market intraday trading.

Especially if you are a beginner then you are scared of the very word Indian stock market.

However, we made things easier for you. You can read this very concise article and get a basic idea of Indian stick market some of the intraday trading tips make money as a beginner.

basics of Indian stock market

Basics of Indian Stock Market Earning Potential

In one word there is no limit to how much money you can earn in Share market.

It depends upon how serious how knowledgeable you are.

  • There are traders who make just Rs 5000/- per month to Rs 50,000/- per month from Indian stock market.
  • In another category traders make Rs. 100000/- to Rs. 10,000,00/- Per month.
  • Then some traders also make Rs 1 Crore Per month to Rs 10 Crores Per month.
  • There is no limit investors could make because Rs 50 Crores to Rs 500 Crores per month is also possible.
  • Finally there are Warren Buffet who made $80 Billion and George Soros who made $20 Billion out of stock market.
  • In India, Rakesh Juhnjhunwala made over $2 Billion from Stock Market.

So there is no limit how much you can make, starting from Rs 2000/- per month to $2 Billion.

But if you make mistakes or become greedy, there is equal chance of losing money.

So read the entire article to get complete idea of making money through share market.

Intraday Trading VS Long Term Investment

There are two ways you can make money. One is Intraday Trading and other one is long term investment.

In Intra Day trading you buy and sell stocks same day. Suppose you bought a stock for Rs 200/- and sold it for Rs 210/- same day then you can book a profit of Rs 10/-.

However, in Long term trading you can buy a stock and hold it for months or year and sell it at the right time. You don’t have to sell same day like day trading.

In this article we shall discuss only about Intraday trading with some of the best intraday trading tips that can help you to earn some decent income.

Basics of Intraday Trading Some Tips

The basic thing of Intraday trading is you buy a stock and sell it between 9 am to 3 pm same day.

Suppose there is a stock for a company called Reliance Power worth Rs 40. Then you have to buy the stock anytime between 9 am to 3 pm and also sell it within the same period of time.

The trick here is you have to buy the stock at lowest price and sell it at highest price.

Take Example of Reliance Power. When the trading starts at 9 am and price of one stock is Rs 40 then between 9 am to 3.30 pm the price will fluctuate.

Price could go down like Rs 39.40/- or Rs 38.24 or Rs 37.32 and so on.

Similarly price can go up also Rs 40.75/- or Rs 41 or Rs 42 etc.

Now you have to buy the stock at lowest price say Rs 37.32 and sell it at a profit of 1% or 2% which could be Rs 39/- or Rs 40/- or Rs 41 etc.

So you make a profit of Rs 3.50/- on one stock.

  • If you bought 10 such stocks then 10 x 3.50 = Rs 35 profit in one day,
  • If you bought 100 then 100 x 3.5 = 350 profit per day
  • If you bought 1000 then 1000 x 3.5 = Rs. 3500/- profit in a day.

However if you sell below the price you bought then you can make a loss.

So the trick of the day trading is buying the stock at low price at the right time of the day and selling it with maximum percentage profit same day in few hours or even few minutes.

You can make the profits only when the market is going up.

But can you make money in share market if you predict that market is going down.

Yes, indeed!

You can also make money when you know that prices of the shares are falling down.

There is a concept short selling in share market that allows you to sell the shares without owning it

In such situation, you can sell the shares first when the price of the stock drops, you can buy that stock in order to book the profit.

Choose One of Your Broker and Trading Platform

I don’t think this would be any problem because you can get your broker in any part of the country you live in.

Usually there are two ways. If you have a bank account then you can ask your bank to also open a DEMAT account.

So that you can also trade with that account and money will be added or subtracted into your account.

Or you could go for a broker like Share Khan or Angle Brokering or many others.

Both ways you have to pay a brokerage fees. However, people choose to go with a brokerage firm like Share Khan etc because brokerage fees is very less like only .02%.

However if you have DEMAT account with SBI, ICICI or HDFC bank then the brokerage charge is too much.

Developing a Trader’s Psychology

After you are done with opening a trading account it is time to develop a trader’s psychology.

If you are serious about making money from stock markets then you have to know everything about the markets.

First thing is to start hanging out with friends who are traders. If you live in Mumbai then it would be easy for you.

Developing Psychology is important because you are going to invest money in coming days.

Attend seminars, conferences etc, meet people who trade daily. Like traders who trade daily with Rs 10 Lacs or even Rs 1 Crore.

Meet them and ask about trading strategies.

MoneyControl.com the Best Way to Start

It is most likely that you live outside Mumbai and it is really difficult to find other traders.

Then in that case you could go to a website called MoneyControl.com where you get all the information about different stocks.

Check out prices for both NSE (Nifty) and BSE (Sensex). Then visit top companies sector wise like IT, Bank, Infra, Pharma, Energy, Auto, FMCG, PSU etc.

Keep note of all the top companies and their prices for each in an Excel spread sheet. You can also find out more about a company like their board member, stock holders, management and related news.

Dig deep into every detail at this website. Know more about companies and history, how the stock price performed over the period of 6 months.

Everything is given at MoneyControl website.

Do Listening to Analysts and Experts on CNBC, NDTV Profit or Other Networks Help?

If you can’t hang out with other traders or have no interest in going to MoneyControl.com and finding details then you can at least listen to some of the news channels like CNBC, NDTV Provfit, Zee Awaaz, ET, Bloomberg UTV etc.

All of these channels are dedicated only to stock markets and other business news.

They could be the best way starting to develop a trading psychology. As you listen to daily news about stock prices of different companies you will start getting an idea.

So these were few ways to develop a trading psychology as a beginner. It is very important to have a well-developed psychology before you really start trading.

However, as a word of caution when you start day trading don’t take these analysts or experts seriously for their words.

Don’t make decisions like buying a stock and selling it by going through what analysts are mouthing on these channels.

Refer:- 6 Common Mistakes Day Traders Make

Study the Basics of Intraday Trading Tips in Theory

Before you take a plunge into day trading you need to study basic theory of Day Trading.

You can go online and there are various websites that teaches everything about day trading like analysing candle stick charts.

You also get to know various terminologies that are used in day trading like selling, shorting, stop loss, open, close, bull, bear, support, resistance, moving average, break out, entry, exit, different kinds of chart patterns, graphs, etc.

So study all of these things and then enter the market. You can find all the material on the internet.

You can also watch videos on YouTube, how they trade daily.

Clear your basics then enter the market.

Charts and Technical Analysis

To put it simply day trading is all about analysing charts and technical details. I can’t explain all the things in just one paragraph but I can give you basic details.

If you want to make money with share markets then you got to learn everything about technical charts.

Japanese Candlestick charts are the best.

You have to buy stocks or enter the moment when graph start moving up, and when it has reached up to 2 to 3% you sell it and exit the market.

Day trading is all about making a judgement call, the right moment in the day when you buy the stock and sell the stock.

The time gap between buying and selling a stock could be few hours or even minutes. Like you bought at 11 am and sold at 11.10 am.

Therefore keep reading charts on daily basis and do research like when it is the right time to enter and exit the market.

Refer:- 15 Chart-Secrets for Choosing a Million Dollar Stock

Analysing How Markets are Performing on Daily Basis

Well in theory it looks simple, however to make profits on daily basis you need to analyse markets daily.

People make losses and they quit day trading. Day trading is not like gambling. Here you have to read the sentiment of the market.

Is market bullish, going up or bearish, going down? You need to make a decision. You can start with analysing CNX 100 or even Bank Nifty on MoneyControl.

You cannot make a call when to buy and sell a stock unless you know where market is going.

If in a given day market is going up then there is a chance to buy a stock and sell it for at least 2% in profit.

You can only make the right decision when you have analysed the markets completely otherwise you may lose money.

Take 2 to 3 Months of time Before You Start Trading

Making money from stock markets is not at all gambling. There is method to madness in stock markets.

Do not expect that in just one week you are going to make consistent profit. First you have to know how market behaves each day from 9 am to 3.30 pm.

You will make profit only when you have entered and exited the market at right time.

Only then you will make profits otherwise you start losing money every day.

Hence take your time, start with MoneyControl website and CNBC, study the stocks of different companies do some research, learn every chart pattern, doji, harami etc.

Invest 3 to 4 months before you take a plunge.

Just Start with Rs 5000/-

After investing 3 to 4 months you can start day trading for real.

You can start with just Rs 4000/- to Rs 5000/-. You don’t have to risk too much as a beginner.

You can buy a stock of a company like 40 to 50 shares each worth Rs 80 to Rs 100/-. Or you can buy 80 to 100 shares of worth Rs 40 to Rs 50 each.

Your budget should be less than Rs 5000/-. As you learn you increase the amount.

How Do You Choose Stocks?

Well there are over 1500+ companies listed on NSE. So how do you pick few stocks for day trading?

If you are beginner then you can’t look into every stock. So I suggest you to start with Bank Nifty because it fluctuates less hence more stable.

You can easily get 1% of profit daily if you follow it carefully.

Initially you need to look out for indices, watch how they are performing and choose a stock.

You can also listen to advise given on these TV channels.

When is the Right Time to Buy and Sell Stocks in a Given Day?

Again this is the million dollar question as we discussed above.

Intra Day or day trading is all about the right time you enter the market and exit it.

You can learn this art only by experience and following the market daily.

You need to follow the markets on daily basis, analyse every chart patterns, learn about every news and then you start your day.

You enter or buy at a point when a stock begins to start moving up and sell it as soon as it has reached 2% of the purchased price.

What Profit Margins Should You Expect? 1%, 2% or 3%

Initially you shouldn’t expect more than 1%. If you are new to stock market then you can’t expect profit from more than 1%.

It is because you have to look out for the right time when a stock is moving up and at its peak. Before it starts sliding down, you sell the stock.

And the difference wouldn’t be more that 1% to 1.5%.

However with experience you watch more stocks hence your opportunity increases so margin could go up to 2% to 3%.

How to Mitigate Risks?

Stock Markets could be risky and you must know how to reduce your risk. Although there is stop loss but you have to know more than that.

Always curb your greed, when you see stock moving up buy it and sell it as soon as you get 2% of profit, don’t wait wondering it might go up 3% or 4% that is greed. Go by the book.

Moreover don’t put your eggs in one basket. It means for same amount buy different stocks of different companies rather buying just one.

Why going with Stocks and Not Commodities?

You should go after stocks not commodities like gold, silver, oil etc. The reason is there is more trading opportunity with stocks rather commodities.

Commodities are for lazy people because here you have to watch only one or two stocks. It could be risky and trading opportunity is also very little.

Quit Intra Day Trading if it is Not Working

Finally, I would say if you are going nowhere with day trading then you can quit. There is nothing to lose because you invested only Rs 5000/- to Rs 10,000/- that’s it.

If you are not following the markets and analysing it then it is not for you. It is not a gamble. You need to find patterns and that is done only by following the markets and doing some research daily.

If you can’t, then quit but don’t take it as gambling.

So this was easy and concise step by step guide to make money from stock market. Read full article and understand it. You can find more information through Google and YouTube.

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