9:03 am
You get an SMS alert from your broker. The hot tip says you buy XYZ with stop loss at Rs 552. It also says price can go touch Rs 582 to Rs 595 intra-day.
9:32 am
You enter office and instantly onto ICICIdirect.com to view your holdings. You also check moneycontrol.com to read the pre-opening commentary.
10:03 am
The market is open and stock XYZ opened at 564, up 2 per cent to 575. It’s very close to the target of 582. So, you wait a bit for it to cool off. When you see the price hit 569, you buy 500 shares of XYZ at 569.20 each.
The trade value is approximately Rs 2.6 lakh (Rs 260,000), done with a limit provision of 6X, ie you have Rs 50,000 with the broker and thus your trade limit is Rs 3 lakh (Rs 300,000). Oops! Now it’s down to Rs 567 and you are losing Rs 1,000.
You decide to follow the wait-and-watch strategy as the stock is moving between 576 and 572. Here’s the plan: You decide to wait for it to touch 585, which will mean a gain of Rs 16. Then you’ll pocket a cool Rs 8,000 for 500 shares and walk home with a new Barbie set worth Rs 2,000 for your daughter.
11 am
You start work 90 minutes late! After checking a few e-mails, you have a quick peek at XYZ. Wow! It’s trading at Rs 574 and you are up Rs 2,500. You think: maybe I should quit and start doing this, full-time, from the cosy confines of home!
1:04 pm
Almost lunchtime, and you check the price of XYZ. Damn! It’s at Rs 546. If only you were watching, you would have been able to cut losses. That’s Rs 18 down and you are down by Rs 9,000.
1:40 pm
Post-lunch, you exchange some ‘hot tips’ with your colleague; he just bought 1,000 stocks of XYZ at Rs 555. He got a wind of some internal news that markets will move up and XYZ will hit Rs 580 in no time. You are happy to be privy to such inside information.
2.10 pm
You check the price of XYZ and it’s trading at Rs 556 and it’s up by Rs 10 from where you saw before lunch. Your friend is resourceful! You now change your strategy and decide to build exposure.
You want to average out your cost from Rs 569. You buy another 500 at Rs 557 and now your average price is Rs 563 and you place a sell limit of Rs 581. If this happens you make a Rs 18,000 profit for the day. That’s 25 per cent of your salary in just a day, phew!
You ask your boss if you can post-pone your meeting to 4 pm; the markets close by then!
2:41 pm
XYZ is now moving up and is at Rs 569, now. You are happy, confident that XYZ will make you rich today.
3:03 pm
XYZ is at Rs 566, the prices are coming down again and your heart is pounding. It’s now down to Rs 543. You don’t know what to do. Should you cut your losses or wait? Okay. Here’s another strategy — whatever the price is at 3:25 pm you will sell.
3:17 pm
XYZ is moving up again and is currently at Rs 557. Boss is calling and you are out of patience. So you sell 1000 shares at Rs 557. You lost Rs 6,000 based on your average price of Rs 563. But there’s always tomorrow.
4 pm
You are in a meeting with you boss, discussing the strategy for the quarter. But you are still thinking about XYZ; you have some unfinished business! You need to work late and file in reports.
4:30 pm
You are back at your desk. Your curiosity gets the better of you and you check the prices of XYZ. It has closed at 570. What a pity! Had the boss not called you, you would have ended in a plus today.
The verdict
That was a snapshot of a typical day in the life of a trader on the stock market trading is a zero sum game. One person wins while the other loses. But the addiction is immense, as the feeling of having a turnover of Rs 1 crore (Rs 10 million) in a month is overwhelming. Instead of spending time speculating, focus on the job at hand. Money will come your way, anyway.
Quick tips for working professionals
Dos:
1. Make an investment after due research.
2. Always have a long-term perspective.
3. Spread your investments wisely. Invest in stocks as well as mutual funds
Don’ts:
1. You cannot beat the markets, so don’t waste time trying to.
2. If you made money in day trading, someone else must have lost it. Don’t push your luck too far.
3. Don’t speculate.
Recent Comments