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How to Earn 5000 Rupees Per Day From Share Market

24 Nov 2023

Introduction

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.

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. 

Conclusion

Intraday trading requires discipline, risk management, and a well-defined trading plan. By selecting liquid stocks, always using a stop loss, booking profits wisely, identifying entry and exit points, following a working strategy, and aligning with the market trend, you can improve your chances of achieving 5000 rupees daily. Approach day trading with caution and be prepared for both wins and losses along the way. 

 

Related Articles:  How to Earn 1000 Rupees Everyday From Stock Market | Dividend Paying Stocks in November 2023 

 

Popular Stocks:  HDFC Bank share price | ICICI Bank Share Price | UPL Share Price | Tata Consumer Share Price | Divislab Share Price

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