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How to Earn 5000 Rupees Per Day From Share Market

Earning 5000 rupees in stock market trading may seem challenging, but it's certainly achievable with the right approach and strategies in intraday trading. Many people consider trading to be a risky endeavour and often associate it with gambling. But you must understand that day trading is not a game of chance. It is a mind game that requires skill, discipline, and careful planning. 

Understanding Intraday Trading:

Intraday trading appears straightforward, but making a profit in this arena can be quite challenging. A deep understanding of the stock market and implementing a well-planned strategy can pave the way for traders to attain high profits. 

Unlike traditional investors who hold positions for the long term, intraday traders aim to profit from short-term price fluctuations. They capitalize on the volatility of stocks, essentially seeking to buy low and sell high or sell high and buy low within the span of a single trading session. 

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Discount brokers offer leverage to intraday traders. This helps them to take higher exposure while paying only a small sum for the open position. Intraday trading is done by using technical analysis and indicators. 

Here are some key indicators to consider:

  • Moving Averages: Evens out closing price data to identify trends.
  • RSI (Relative Strength Index): Detects overbought and oversold conditions.
  • Stochastic Oscillator: Spot potential reversals based on price ranges.
  • MACD (Moving Average Convergence Divergence): Signal bullish or bearish momentum.
  • Bollinger Bands: Identify potential breakouts or reversals.
  • Volume: Confirm price movements with trading activity.
  • Fibonacci Retracement: Use retracement levels for support and resistance.
  • Pivot Points: Determine daily support and resistance levels.

How to invest in the share market via Intraday Trading?

  1. Educate Yourself: Before diving into intraday trading, it's essential to educate yourself about the stock market, trading strategies, and risk management. You can read books, attend seminars, and explore online resources to gain knowledge about intraday trading.
  2. Choose a Reliable Broker: Select a reputable and reliable brokerage firm that offers intraday trading services. Ensure that the broker provides a user-friendly trading platform with real-time market data, advanced charting tools, and quick order execution capabilities.
  3. Open a Trading Account: To start intraday trading, you need to open a trading account with your chosen brokerage firm. The account opening process typically involves providing personal details, completing KYC (Know Your Customer) formalities, and submitting relevant documents.
  4. Fund Your Account: Once your trading account is opened, you'll need to fund it with the necessary capital to start trading. You can transfer funds from your bank account to your trading account electronically.
  5. Develop a Trading Strategy: Before placing any trades, develop a well-defined intraday trading strategy based on your risk tolerance, financial goals, and market analysis. Consider factors such as entry and exit points, position sizing, stop-loss levels, and profit targets.
  6. Research and Analysis: Conduct thorough research and analysis to identify potential trading opportunities. Use technical analysis tools such as moving averages, RSI, MACD, and candlestick patterns to analyze stock price movements and identify entry and exit points.
  7. Place Trades: Once you've identified a trading opportunity based on your strategy and analysis, place buy or sell orders through your trading platform. Ensure that you specify the quantity, price, and order type (market order or limit order) accurately.
  8. Monitor Your Trades: Keep a close eye on your trades throughout the trading day. Monitor market conditions, stock price movements, and any news or events that may impact your positions. Adjust your stop-loss levels and profit targets if necessary.
  9. Manage Risk: Implement strict risk management practices to protect your capital. Always use stop-loss orders to limit potential losses and avoid risking more than a predetermined percentage of your trading capital on any single trade.
  10. Review and Learn: At the end of each trading day, review your trades, analyze your performance, and identify areas for improvement. Learn from your successes and mistakes to refine your trading strategy and become a more successful intraday trader over time.

Do’s and Don'ts of Intraday Trading:

 

​​​​​​​The Do’s

  • Select liquid stocks

The first step in your journey to earning rs 5000 every day from the stock market is to select liquid stocks. Liquid stocks are those that have a high trading volume. It means there are active buyers and sellers at any given time. Trading in liquid stocks offers several advantages like a narrow bid-ask spread and low price volatility. This makes it easier to execute trades and helps prevent significant slippage, which can reduce profits.

  • Go with a Working Strategy

There are numerous intraday trading strategies available. A working strategy typically has a success rate of over 60% and offers a risk-to-reward ratio that aligns with your trading goals. It's essential to approach day trading with discipline and follow your chosen strategy consistently. Refine your strategy and adapt to the changing market conditions.

  • Knowing the entry and exit points

To increase your chances of success, you must determine your trades' entry and exit points. Day traders often rely on technical analysis and chart patterns to identify these points. For instance, you can use support and resistance levels, moving averages, and other technical indicators to decide when to enter and exit a trade. 

  • Always put a stop loss

One of the golden rules of successful day trading is always to stop loss. A stop-loss order is a predetermined price level at which you will exit a trade to limit your losses. This risk management strategy is crucial in day trading because it helps you keep your emotions in check and prevents potentially catastrophic losses. Without a stop loss, you might be tempted to hold onto a losing position, hoping it will eventually turn in your favour. 

  • Book Profits

Booking profits is an equally important aspect of successful day trading. Instead of aiming for substantial profits in a single trade, consider booking smaller profits and engaging in multiple trades throughout the day. This strategy helps mitigate the risk of losing a significant portion of your capital on a single trade. Maintaining a minimum risk-to-reward ratio of 1:1 is ideal for intraday trading.

The Don’ts

  • Go against the trend

This is the easiest mistake newbies make. If the market is in a bullish trend, it's generally better to take long positions (buy) on stocks, anticipating upward movement. Similarly, if the market is in a bearish trend, consider short positions (sell) on stocks to benefit from potential downward movements. Trading in line with the trend increases the probability of success. This is in line with the prevailing market sentiment.

  • Trade on recommendations

It’s not wise to make intraday bets on recommendations. There is a chance that a recommendation may have fructified, but this will never help you to build a strategy. Once you understand your trading style and are comfortable with your intraday strategy, you can build a trading system and discipline. 

In conclusion, earning 5000 rupees per day through stock market trading might seem like a daunting task, but with the right approach and strategies, it's absolutely possible, especially in intraday trading. While some may view trading as akin to gambling, it's important to recognize that successful day trading is not about luck but about skill, discipline, and careful planning.

Intraday trading, which involves buying and selling stocks within the same trading day, requires a deep understanding of the market and a well-thought-out strategy. Unlike long-term investors, who hold onto stocks for extended periods, intraday traders aim to capitalize on short-term price fluctuations, aiming to buy low and sell high or sell high and buy low within a single trading session.

To succeed in intraday trading, it's essential to select liquid stocks with high trading volumes. These stocks offer advantages like narrow bid-ask spreads and low price volatility, making it easier to execute trades with minimal slippage. Additionally, having a working strategy with a success rate of over 60% and a risk-to-reward ratio aligned with your goals is crucial. Identifying entry and exit points using technical analysis tools like moving averages, RSI, and Bollinger Bands, and always employing a stop-loss order to limit losses are key practices.

However, there are pitfalls to avoid in intraday trading, such as going against the market trend and trading based solely on recommendations without a solid strategy. It's important to trade in line with the prevailing market sentiment and to develop your own trading style and discipline.

While intraday trading offers opportunities for substantial gains, it also requires discipline, risk management, and adherence to a well-defined trading plan. By following the do's and don'ts of intraday trading and approaching it with caution, traders can increase their chances of earning 5000 rupees per day. Remember, success in trading comes with both wins and losses, so stay patient and committed to your goals.

 

 

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