Intraday and short-term trading|Not for you

                                                                   

Intraday and short-term trading

                                               

                

Intraday and short-term trading-Not for you

Most of us start with trading and end up with huge losses despite start with SIPs(Systematic Investment Planning) either in a good fund or in blue-chip stock. Why it is so? Intraday, short-term trading and options are futures are nothing but another form of gambling.

When we begin our education and go to school the very first time then we start with ABC likewise we start to study any new subject we start with its basics but in the stock market, I have seen people trading for years and they don't know about basic terminology.

Trading is a definite way of losing money for retailers

Trading is sure shot way to lose money, especially for retail investors. Trading is not meant for a retailer investors, the retail investor is the investor who is not full-time professional in this field who only invest some portion of their money to earn profit or dividend on their investment. Trading is meant for institutional investors who do trade with a big amount after hedging their funds and they are very professional and have expert staff and time to devote into it so they can make money into trading but not retail section. Maybe some of the retailers not satisfied with my opinion right now as they are making short term money but be alert, I hope you would not lose all the amount in a single trade that you have earned till today.

Further, if you like and want to earn from trading then leave your job, do a proper course, and virtual trading sessions at least for 6 months, read charts as much as you can before playing in the field, and once you start achieving 90% success rate in your trades than start trading.
Think, Learn, Read, Watch, and then start.

Never do trading on leverages

People get tempted with leverage options they get from their brokers, Traders treated this leverages as the boon for them but this is the only curse that has the ability to make them ruined.

Understand this from the below example:
Suppose Mukesh has 1 lack to trade and brokerage is giving you 10 lacks limit as Leverage and he was using it for big trades to make more money and he traded for 10 lakh in a day and at the end of day suppose your stop-loss triggered at 10 % loss then he can only come out with 9 lakh with you. Right? so can you understand here how much he lost?

He did not lose 10% rather he lost 100% of the money that is Rs 100,000, but still, his broker and government would be in profit as they will receive their commission and taxes/DP charges respectively.

Drawbacks of Intraday and short-term trades

Limited time frame: No matter how much capability and deserving you are but you have very little time and at the end of the day you need to book something either profit or loss whatever occurred.

Time value: In options, You cannot take your trades and sit like the delivery of the shares because as the time passes your money value would be deteriorating, Suppose you take a call of 1 week at a strike price so as the day passes the value of that call would deteriorate and at the day of expiry it will become complete 0. You can lose your entire money into this.

Required full attention: Day traders need to devote his full attention and time to this, anybody doing this job as time pass or side business would be in trouble at the end of the day because it can lead to huge losses.

Need to be well-versed: You should have complete knowledge of all the charts and trades to be taken after full research work and strategy have to be made and entry and exits points are very much important because just a small unattentiveness can become a disaster for your money. 

Brokers tips can make dig a big hole to your money: Kindly note that your broker cannot make money from your long-term investments, they can only make money from your day trading as they will sure shot get their commissions and taxes.

Brokers always encourage participants to do trades, they will tell that so and so person doubles their investments in 2 days and all but you just need to say that to them then why are you struggling so much to earn little commissions from me, Trade and double your investments daily and become a billionaire in a month.

Ignorance is not allowed: In this profession, ignorance is not allowed at all otherwise your complete savings and earning will be ruined. You need to be attentive all the time and checking your technical charts is a very crucial point in trading.

Can be dangerous for risk-averse individuals: Intraday trading can be dangerous for risk-averse individuals, in fact, many people can get a heart attack while losing money.

Also, read https://bijimoney.blogspot.com/2020/06/Investment-Strategies.html

Those who would like to start their carrier as intraday day traders please check your risk profile and all the drawbacks should be taken care of before taking any decision. If you are ready to earn that you should be ready to lose in intraday and short-term trading. 

"Money can be made by "Buying right and sit tight", not by trading"