50% net profit in one month
Will you believe if we say “you can make 50% net profit in one month”?
Your answer is “NO” right?
Then please have a look on following example and we are sure you will start believing that you can 50% net profit in one month.
Let’s take one small example
How much you earn in a month with the investment of Rs.10, 000?
If you follow a simple strategy “Take small profits and do multiple trades” then you can make 50% net profit in one month.
Have a look on below example how much money you make in a month.
= Rs.50 per trade as net profit (how you can do this is mentioned at the bottom).
= 10 trades per day (how much trades are possible, you will come to know by doing your own
paper trading, according to our estimation 10 trades are quite possible)
(Paper trading link is given at the bottom of this page)
= total Rs.50x10 = Rs.500 per day.
= total approximate 20 trading days in a month.
So Rs.500x20 = Rs.10,000
Can you believe you are just making your investment double in one month? What else you want?
You can make 50% net profit in one month
On the other side let’s imagine that you have made losses on some days and you are not able to trade on some days.
So let’s consider Rs.5000 as compensation for above losses and for not able to trade.
Then also you are making straight 50% (Rs.5000) profit per month.
So the bottom line is forgetting greed factor and taking small profits will make miracle to your investments.
So believe in small and end up the day with big profits.
Have a look on following practical example
Take small profits and do multiple trades
This will assure you to that you do profits, and all the profits that you do through out the day, will add up to good amount and this is what you want, right?
So please have a look on following example about taking small profits and doing multiple trades and how it will provide you a good amount at the end of the day.
Following few things about day trading brokerage and taxes calculation
- The current maximum intraday brokerage offered is 0.05% for buying and 0.05% for selling (you may even have less brokerage and if you
are paying more brokerage then you should either negotiate or change your broker)
- The service tax is of 12.36% only on brokerage.
- The STT (Security Transaction Tax) is of 0.025% only selling amount.
- The stamp duty on total turnover for a day which is 0.002%.
- and finally you have to pay Regulatory charges on total turnover for a day which is 0.004%
- Don’t worry these all taxes will add up to very small amount at the end of the day compared to your profits in thousands.
Now let’s see how to take small profit which will add up to big amount at the end of the day by doing multiple (more then one) trades.
Example
Buy KotakBank at Rs.315, quantity - 100 i.e. Rs.315 x 100 = Rs.31500.
So if you have Rs.10, 000 in your trading account you can do day trading because you get margin on your available amount for day trading.
Some brokers provide 3 or 4 times or even higher margin amount.
So you bought Kotakbank at Rs.315, Qty - 100 i.e. Rs.315x100 = 31500 and sold it at Rs.316.
You took only Rs.1 as profit for Rs.315 share price and you sold 100 shares so your profit is Rs.100.
So you get Rs.100 as profit in single trade.
Now lets calculate how much you have to pay as brokerage and taxes and finally how much you will get as your net profit behind this single trade.
Your buying amount is
= Rs.31500 (Rs.315x100 Qty shares)
= 0.05% as brokerage (we took it maximum brokerage but you may have even less) on 31500 which comes to Rs.15.75
= you have to pay service tax of 12.36% only on brokerage
= so 12.36% on Rs.15.75 comes to Rs 1.92
The total brokerage + service tax on buying is Rs.15.75 + Rs.1.92 = Rs.17.67
Now let’s calculate the brokerage and taxes on selling amount
= you sold KotakBank shares at Rs.316, Qty - 100 so the amount comes to Rs.31600 (Rs.316 x 100 Qty shares)
= 0.05% brokerage on 31600, comes to Rs.15.8
= service tax 12.36% on brokerage comes to Rs.1.93
You have to pay STT (Service Transaction Tax) of 0.025% on selling amount which comes to Rs.6.32.
So total brokerage + taxes you have to pay for selling is
= Rs.15.8 + Rs.1.93 + Rs.6.32
= Rs.24.05.
Total amount you have to pay on buying and selling is
= Rs.17.67 (buying) + Rs.24.05 (selling) = Rs.41.72.
You also have to pay stamp duty and regulatory charges on total turnover.
Your total turn over is calculated by adding the buying amount and selling amount.
- Buying amount is 31500 and selling amount is 31600 which adds up to Rs. 61300
- Stamp duty - 0.002% and Regulatory charges - 0.004% adds up to 0.006%
- On total turnover amount (Rs. 61300) the taxes comes to Rs 3.8.
- So the total amount you have to pay including brokerage and taxes is only Rs 41.72 + 3.8 = 45.52
- So now the conclusion is you are paying Rs.45.52 while you earned the profit of Rs.100.
- So don’t you think more then 50% profit in single trade is quite enough to do thousands per day.
- If you continue doing such small trades with such small profits then it will end up with big amount at the end of the day.
Suppose if you do 10 trades in a day which is quite possible to add up to Rs.500 per day (Rs.50 per trade as per above example).
Now let’s see how to do thousands with same strategy as mentioned above. Its simple you just have to increase your quantity of shares.
In our previous example you have brought only 100 quantities, if you make it double then your profit will also get doubled.
For paper trading practice please Go here
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