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The Fee: Rs
12,000 for 3 months.
Let's assume
that you have a deposit of Rs 25,000 in cash (paid by cheque or
demand draft, of course) with the broker. On this, the broker
allows you to trade
maximum of 6 times exposure.
Therefore, let's assume that at the beginning of the day your
trading limit is Rs 1,50,000.
First step: Set your daily income target. Let's assume it is Rs
1,500.
The rule of thumb calculation for targeted profit is 0.6% to
0.9% for expensive stocks like Infosys, ONGC, Reliance
Industries; around 1% for mid-priced stocks - Rs 500/700 and 1.5%
- 2% for stocks priced between less than Rs 100 to up to Rs 700.
PRESENTLY, ANALYST IS SUGGESTING TO
TRADE PRIMARILY IN
NIFTY FUTURES AS IT IS NOW A MUCH SAFER AND PROFITABLE.
Individual stock price movements will be very erratic,
unpredictable and very stock specific, making it extremely
difficult to spot individual stock winners from among thousands
plus stocks traded on NSE.
Decide on no. of trades. This is important as you would not like
to risk buying too many shares in one go in a bid to earn the
profit in a single trade. Ideally, if the target profit is more
than Rs 1,500, it should be
earned in 2 trades. However, if you have the limit, you may
enter 2 trades at the same time as BUY calls are issued on 2/3
stocks. Later in the day you can have another trade if
opportunity comes but it is unlikely to have more than 2 ideal
trading moments in a day.
Assuming you receive the following message on the chat software
during the day:
BUY HLL, PNB, M&M
(Generally, no price point is given and you are
supposed to buy immediately at the ensuing market price)
Assuming again that we have already worked out the trading
strategy for you where you will make 1 trade a day earning
APPROX. Rs 1,500.
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Two trades on the same day delivering the same profits
is not always possible. In fact, as a matter of
precaution, we advice the second trade to be in a lower
price stock or if the price is similar to the first
trade, a reduced no. of shares. The logic is, if there
is a sudden loss, you can still protect some of the
profits from the first trade because now you have fewer
stocks on which loss has occurred. |
You may use
up to 90% of your trading limit (Rs 1,35,000) for the first
trade which will be on 1 scrips: PNB.
Buy PNB 270 @ Rs 500 = Rs 1,35,000.
As explained to you during strategy discussion, you decide to
exit 50% of the trade at 1% profit on PNB. So you
decide to take Rs 5.00 profit on PNB. When PNB rises to Rs
505, your target price is reached and you sell off 50% of the stocks you held (squaring up in stock market language).
You now have a gross profit of Rs 675 from the trade. You
then sell the rest 50% as price rises by another Rs 1.50. That
gives you additional profits of Rs 877.50. So your total profit
comes to Rs 1.552. From
this, brokerage and taxes (STT, Service Tax and levy) are to be
deducted by the broker, leaving you approximately with Rs 1,200.
You can similarly do a second trade on the same day but on
reduced size and may add another Rs 800-Rs 1,000 to your
profits.
This is a conservative but very likely scenario if you aim for
steady regular income. Although unspectacular, if this success
can be repeated 80% of the days, you may end up with an income
of Rs 20,400 or more in a month. That's a mind-blowing 82%% ROI
PER MONTH!
It should
be clearly understood that this calculation does not imply that
all your trades will be similarly profitable. No one can have
100% profitable trades on all 22 trading days of the month. But
if you keep your head cool and follow the instructions of your
online analyst, your have much better chance to end everyday
profitably. |
