Everyone comes to the stock market hoping to make money. It is considered as the most lucrative money making avenue as it provides better returns as compared to other financial avenues. Now the question arises whether 500 rupees can be earned daily from the stock market.
The answer is yes, anyone can, provided he has the necessary knowledge, skills, experience, discipline and ability to time the market. However, most people fail in this attempt and blame the market for it. But it should be noted that the market is always correct and gives every trader a chance to make profits, no matter what direction they move.
Thus, trading is nothing more than a strategy based art. Some may consider it a gambling game but for others it is a great source of income. Keeping the above in mind, with hard work and practice, in a period ranging from six months to a year, one can earn Rs. 500 rupees daily from the stock market. So let us discuss about some such ways by which any person can earn 500 rupees daily from the stock market.
1. Take small profits and make multiple trades
Since the main objective here is to earn regular income, it will be necessary for the trader to focus on small profits and to make multiple trades in a day for the trader’s profit.
Traders need to keep in mind that it is highly impossible to make 2-3% profit on a consistent basis in one trade. However, applying this strategy will help them achieve profitability by increasing the number of winners and sacrificing win size.
This is in contrast to the “let your profits run” concept where the trader has to sit through a lot of uncertain price action, and can eventually turn their profits into losses.
Therefore, whenever the opportunity arises, the trader should keep booking profits instead of getting out of his weakness.
The strategy revolves around three basic ideas:
(I) Exposure to a dynamic market for a shorter time frame will limit the likelihood of an adverse event occurring.
(II) It is easier for a stock to move up by Rs 2-4 in a day as compared to Rs 20-30.
(III) Small price fluctuations are more frequent than large ones. Even when the market is range bound, there can be minor movements that a trader can take advantage of.
Thus, applying this strategy will help traders to take many small wins throughout the day, which will increase the amount of daily returns.
In this way they can earn Rs 500 daily from the stock market.
However, this does not mean overtrading and he should take positions only when he is confident.
2. Trade Stocks in the News
The momentum in either direction is very essential for the stock to provide a significant intra-day return. It is usually driven by news flow, which has a direct impact on the price of the stock.
News can significantly move a stock price in any direction based on earnings reports, orders, brokerages, product announcements, FDA announcements, economic data releases, geopolitical factors, and other macro and micro issues.
Tracking and understanding the daily news will help traders choose stocks faster and place their trading bets accordingly.
Trading in momentum stocks will increase the chances of making profits, which will increase their daily income.
This is another way by which you can earn Rs. 500 daily from the stock market.
3. Stop Loss Discipline
One of the golden tips to maximize profits is to place a stop loss in trading for each intraday trade. A trader can decide the stop loss percentage based on his risk appetite and volatility of the stock.
Using stop-loss helps a trader in the following ways:
(I) Protects capital erosion.
(II) Helps to withdraw money faster, which is essential for increasing the profitability in the business.
(III) Helps a trader to reduce the concentration of positions in risky stocks for a longer period. Thus, reducing the number of open positions, which are sensitive to market volatility.
So, it is clear from the above that adhering to the strict stop loss will limit the losses of the trader to a great extent, thereby helping him earn better daily returns.
4. Minimizing trading cost
This will help a trader to maximize his quantum of daily profit. A trader should keep in mind that every trade that he places comes with a cost and are incurred irrespective of profits or loss made by them.
Trading cost includes brokerage fees, Securities Transaction Charges/Commodity Transaction Charges, Turnover charges, GST, SEBI charges, Stamp charges and AMC (Annual maintenance charges) among others.
Transaction costs impact day trading comparatively more as it usually involves huge volumes and a higher number of transactions.
Let’s understand this through an example:
Mr. Z , an intraday trader who bought shares worth Rs 1,00,000 and sold the same for Rs 1,01,500, thus the total volume for the day will be Rs 2,01,500
Assuming 0.1% brokerage.
Sell price – Cost price = Profit
Rs1,01,500 – Rs1,00,000 = 1,500
The actual profit earned is Rs 1,500 i.e., 1.5%.
Now, let’s calculate the return applying the necessary transaction costs.
So, from the above it can be understood that about 18.35% of the profit is lost due to transaction cost, brokerage being the highest.
The solution to this is:
(I) A trader can open his trading account with a Discount Broker. Discount brokers charge low brokerage as low as Rs 10/trade, irrespective of the order value. In this case, the total brokerage & tax would be Rs 83.78 according to the above table.
(II) A new concept is emerging in the market called Free Intraday Trading where brokerage is charged as a flat fee of say Rs 999 on yearly basis i.e., Rs 83.25 per month. In this case, the total brokerage & tax would be Rs 157.03 according to the above table.
These will help a trader to reduce his brokerage significantly and maximize his profits so that he can easily earn a daily return of Rs 500 from the stock market.
Frequently Asked Questions
Is the income earned through the stock market taxable?
The advantage is that it can be applied to any kind of business irrespective of its size or capital requirement. The disadvantage is that it does not take into account the risk of depreciation in the value of the money due to the time taken by the business.
How to earn from the stock market as a beginner
The payback period basically means by when does the amount invested into the business is returned back to the businessman. That is in what time does the Initial capital generates more capital which beats initial capital and hence business starts generating positive cash flows.
Is it difficult to earn from the stock market?
No, as we have discussed in the blog it is not difficult to earn from the stock market if you trade with discipline.
What is the maximum amount one can earn per day from the stock market?
The maximum amount that you can earn per day from the stock market depends on how much capital you have deployed in trade and also your risk appetite.
What is the difference between day trading and swing trading?
The main difference between swing and day trading is the time frame. Day traders work with a short and limited time frame whereas swing traders work with a much longer time frame. If the trader is patient enough, swing trading is better, otherwise, day trading is better
You can use Stockedge to get a cutting edge over others in both short-term trading and investing. Hence, you not only get data at one particular place but can also create your own combination scans based on your own technical and fundamental parameters. We hope that you found this blog informative and use the information to its max potential while indulging in intraday trading. Show some love by sharing this blog with your family and friends and help us in our mission of spreading financial literacy.
- Assuming that the market functions for 240 days a year, Rs. 500 from the stock market daily means that the stock market will provide a sum of Rs 1,20,000.
- Implementing requisite knowledge, correct strategies and discipline will be the perfect ingredients helping a trader to earn this daily income.
- A trader should not get emotionally attached to any stock or sector; rather they should focus only on profit and loss and should always adhere to stop loss.
- He should learn the art of timing the volatile & risky market and take position and book profits whenever he sees opportunity rather than on his weakness.
- He should never go against the prevailing trend of the market. He should trade in strong stocks during uptrend and weak stocks in a downtrend to lower the potential for loss.
- He should keep in mind that the market is always right and it’s his capability, focus and hard work that will help him to generate a daily income from the stock market.