Earn Faster Intraday Trading Profits

Hello friends. I hope you're trading well in the markets and the markets are returning good profits to you for your endeavours.

Friends, as a day trader, we all endeavour to earn the highest possible profits, in the shortest possible time, and preferably, with a controlled element of risk.

These three factors must all be met simultaneously. Otherwise, our efforts towards trading for a living, as full time traders who depend only on trading, from trading profits to kind of run their home and hearth expenses, will come to a naught sooner rather than later.

Don't Miss: Key Information for Long-term Investors

Now everybody tends to focus on the price and price alone as traders and this is something that discussed long enough in my videos on Equitymaster. It's almost been two years now since I've been recording these videos on trading and market techniques and I have told you that for an intraday trader the price is supreme.

But the other aspect of intraday trading, and particularly intraday trading, is time. Time is often the forgotten, the neglected, and the understated variable in trading.

You see whether you're an investor or a trader actually, time means a lot to us. Now for example, if I was to tell you, example, this is just a hypothetical example, if Reliance was trading at Rs 2,000 and I was to come up in tell you, Hey, I think you need to buy Reliance, it's going to go to Rs 3,000, what have I told you?

If you actually come down to thinking about it seriously, I have told you nothing. I have actually told do nothing. Why? Because I didn't specify the time.

If Reliance is going to go from 2,000 to 3,000 in six months' time, that means you're going to make 50% return in six months. Now 50 divided by six should be a mouth-watering number. But if it's going to take 10 years, believe me, you're better of putting your money in a bank fixed deposit, much better off, even after taxation.

So the element of time is something even investors have to take very, very seriously and as we day traders know, we must close our positions, it's called going flat out, we must close our positions by 3:30 if at all you want to wait that long. You do not take overnighters or carry forward positions as day traders.

So number one year to look at the price and number two you have to look at the time. You must square up your trade at 3:30 if not earlier. So is it possible that and your friends, are sitting together and trading like we all do sometimes I go to my club with my laptop and a couple of friends, start trading, and we have a healthy competition? Let's see who is gonna make more money today.

Is it possible that your friends are making a lot more money as compared to you, assuming that you all have a similar amount of span margins in your brokerage account and those guys happen to trade a different stock as compared to yours and wind up taking more money? Is it possible that there are times when you enter a trade, wait for almost half a session, three-fourths of a session or even up to close, only to twiddle your thumbs because you're taking mediocre profits?

It happens to me many a times and when it started happening in the early stages of my trading and I've been trading since 1986, I was taught by a trader who I respect very much and the gentleman is still active in the market, almost 80 years of age. I was taught by this gentleman who was a very senior practising technical analyst in those days, that I must use a tool which is so common and so close to our eyes that we almost always discount it.

I am talking about a protractor, something that your child would be carrying in his or her geometry box in school.

Now, why is this protractor important? It's important for a very simple reason that if you are going to take a position, a long position in a counter, I am sure you would by now know that you're trading terminal, both as a desktop application as well as mobile app, has charting software.

So if you open up a chart, say, for example, a five minute chart, which is the most common and obviously the most relevant time period for any intraday trader, a five minute chart is good enough. If you were to take a five minute chart and you're seeking long entries, obviously the stock would be rising higher, which is you want to buy it.

So you would put this protractor onto the chart. It's not always necessary that you can plot a straight line with a protractor and the price is going along the straight line. It will be meandering up and down along a trajectory. If that trajectory is here 40 degrees, minimum, you should be going long in that counter.

Through trial and error, through many decades, I have found that stocks that are rising at 40 degrees tend to give quicker profits as compared to stocks, which are rising at 20, 25, 28, 30 or 35 degrees. They tend to be slower because the trend line is flat. You want the steeper trendline.

Does it mean that there could be whipsaws and the stock could be volatile and it could even come down faster? Yes, but that's what trading is all about. That's what intraday trading is all about. You're gonna get chopped out both ways, but faster and the amount of money when you go right, when you place a stop loss, a tight stop loss and you're going right, it will give you bigger amounts of money.

Now I am sure there would be traders who would ask Vijay what about going short? Invert the process. Invert the process. Go like this. You want something that's falling at forty degrees.

If it all you are expecting the trajectory to gain acceleration, what we call impetus, go for something that has a minimum, a minimum, of 30 degrees. Do remember that stocks tend to fall faster and gain acceleration on the downside, faster than the gain acceleration on the upside.

So this Rs 5 tool that you will get in any stationery shop next to any school will help you energise your profits. Is this necessary in the physical world? Is this an outdated tool in this day and age of free charting and online charting? Yes and no.

I use Metastock, which is the gold standard of technical analysis. It's by a company which you would have all heard about. It's called Reuters. Reuters has created this technical analysis software called Metastock. I am sure ninja trader. I am sure all other softwares would have the feature that I am gonna talk to you about. It's called trend line with angle. So when you plot the trend line, it will also tell you the angle of the slope of the trend line, both bearish and bullish.

This feature may or may not be there in free charting websites. Many of you are aware of many such websites, right? So unfortunately, being free websites, they may not have all the full feature tools that you actually need is a professional trader.

Be that as it may, if the free charting website that you're using for a day to day trading does not have that, by all means, I think you can get this low cost Rs 5 plastic protractor from any stationery shop and do note that you should, as a day trader, not get involved in any stock, which is rising or falling at a trendline angle of less than 40 degrees.

I hope this energises your trading profits and your experience. Do join me every Saturday between 11 am and 12 noon on Equitymaster's YouTube channel for a live Q&A session wherein I'll take up all your trading queries of how to make more money from the trading journey.

With this note, I'll bid goodbye to you not before reminding you to click like on this video if you like what you saw. Subscribe to my YouTube channel if you haven't already done so. Click on the bell icon to receive instant alerts about fresh videos being put up out here. Good, bad, or ugly, let's keep the comments coming. I welcome all your feedback and help me reach out to fellow like-minded investors and traders by referring my video family and friends.

Thank you for your patience. Thank you for being with me in this video. Till we meet again in my next, this is video Bhambwani signing off for now. Have a very, very profitable day. Bye.