Wishing You a Joyous Dussehra! Celebrate the victory of good decisions in your financial journey!
Wishing You a Joyous Dussehra! Celebrate the victory of good decisions in your financial journey!
SEBI Registered: Research Analyst | Investment Adviser | Call: +91 97730 15000 | Email: research@stockaxis.com
July 26, 2024
|In today’s fast-paced world, the allure of making quick money through intraday trading is undeniable. The idea of waking up, making a few trades, and ending the day significantly wealthier is a dream for many. Imagine this: you start your day at 09:15 am, invest Rs. 20,000 with a 5X exposure, and by 10:30 am, your stock goes up by 5%, netting you Rs. 1,000. Repeat this daily for 250 trading days, and you could potentially earn Rs. 2.5 lakhs in a year. Sounds too good to be true? Well, it probably is.
A study conducted by SEBI (Securities and Exchange Board of India) revealed a stark reality: 7 out of 10 individual intraday traders in the equity cash segment incurred losses in FY 2022-23. The number of participants in intraday trading surged by over 300% compared to FY 2018-19, with a significant portion of these traders being under the age of 30. Yet, despite the increasing popularity, the majority ended up on the losing side.
These statistics paint a grim picture for anyone considering intraday trading as a reliable source of income.
The belief that anyone can succeed in intraday trading is a dangerous myth. While the success stories of the top 1% who make substantial profits may be inspiring, they are far from the norm. The reality is that intraday trading is a zero-sum game, where for every winner, there’s a loser. When you factor in commissions and other costs, it often becomes a negative-sum game for retail traders.
If you're serious about making money in the stock market, consider long-term investing instead. Unlike intraday trading, which relies on short-term price movements, long-term investing focuses on the fundamental strength of companies. By researching and understanding a company's business model, financials, and market position, you can make more informed investment decisions.
Well-known investors like late Shri Rakesh Jhunjhunwala, Warren Buffet, Peter Lynch, and Bill Gross have built their fortunes through long-term investing, not trading. The majority of successful investment books are written by or about long-term investors, not day traders.
Intraday trading is a high-risk activity that, for most people, leads to losses rather than gains. The statistics and personal stories of countless traders support this conclusion. Rather than trying to beat the odds in a game stacked against you, consider more sustainable and less stressful alternatives like long-term investing.
Remember, there are no shortcuts to wealth, especially in the stock market. So, think twice before diving into intraday trading. Instead, invest time in understanding the market, researching companies, and making informed decisions. In the long run, this approach is far more likely to yield positive results. Happy investing!
For more details, refer to the SEBI study attached. The source of these statistics can be found on SEBI's official website: SEBI.