The Biggest Lie About Intraday Trading

Welcome to the VRD Nation. As a lot of you are aware that we use this channel to explain complex stock market concepts so that we can all become better traders, better investors, and hopefully better human beings. I like those topics that would elevate me and my audience so that at the end of each one, we all can become a little bit smarter, knowledgeable and wiser.

That is exactly why I stayed away from topics that are sensational, provocative and that are simply click-baits because that is not the intent of this channel and I don’t like to waste my time and I definitely would not want to waste your time. So when I was coming up with a topic for this particular video, I thought, um, a lot that, should I be making this video or not?

The name of the topic, “The biggest lie about intraday trading” is very powerful. So I had to make sure that I’m not crossing the line between sharing knowledge versus being provocative. However, after a few minutes of deliberation, it became very clear to me that what I have to say to you is something very important and everyone who wants to do intraday trading must know what I have to share. So I do not doubt in my mind that what I’m going to share with you is going to make you a better trader and is going to save you from taking bigger losses in the stock market, especially in intraday trading.

With that said, let us get into the meat of the topic, “What is the biggest lie about intraday trading”? So the biggest lie that is perpetuated about intraday trading is that you can come to the market and can make 5,000, 10,000, 20,000 or 50,000 rupees, every day. I see these claims made on YouTube, Facebook, Twitter and all these different social media platforms and I’m sure you have seen them too.

So there are claims such as making 5,000 rupees every day using this simple strategy, using this full-proof strategy on bank nifty to make 10,000 rupees or a regular income strategy on the Nifty. People come up with all these different claims. Now that I see these claims being made, I just shake my head in frustration because I know first of all, that they are not true.

More importantly, what I know is that there are a lot of innocent traders who are coming to this market for the first time who get attracted towards these claims and eventually they end up losing a lot of their money.

The people that I’m talking about are not someone who wants to become a millionaire or a billionaire while trading but people who want to make some regular income from the stock market.

They are beginners, who don’t have a lot of knowledge and their attraction towards stocks is towards stability and some certainty and so they follow people who are making such claims and eventually incur a huge loss.

Let me then explain why this is a lie and what exactly is a lie here, because I want to be very precise about what I have to say.

First of all, am I saying that intraday is not profitable? No, that’s not the case because I’m profitable on intraday trading and so I don’t have any reason to believe that those who are making these claims are making false statements. Am I saying that you cannot make 10,000, 20,000 or 50,000 rupees in one day?

Not. I make that kind of money and again, I don’t have any reason to believe that others cannot. I know professional traders who make 7 digit and 8 digit profits in a day and I have seen them and worked with them and that is also not a problem.

So intraday trading is not a problem. Making a lot of money is also not a problem because I believe that if you have the right strategy, the right trading psychology, know how to manage your risks, you can make a lot of money from intraday trading.

What exactly is the problem that I’m talking about? The problem is with the certainty with which people claim that you can make money on any particular day. Claiming that you can make 10,000 rupees from intraday trading is perfectly fine, but when you claim that you can make 10,000 rupees every single trading day, it is a problem.

The problem then lies in the frequency with which people claim that you can make money. The point that I’m trying to make here is that you can be a profitable intraday trader, but you cannot expect to be profitable daily. Now, a lot of you might be thinking that, okay, this almost sounds like a technicality.

Maybe I’m not making 10,000 every day. Maybe I will make 8,000 and some days I will make 5,000 and as long as I’m profitable, I’m fine with that. Also, you might think that I’m not that greedy that this is how a lot of people think, but listen to me very carefully. If you have this mindset to be profitable daily, not only you will not make that kind of money that you think you will make, but you will end up losing all your capital 1 or 2 years down the line.

Now let me tell you from a real-life perspective where the problem is with this mindset? For example, a person decides that I want to make 10,000 rupees every day from intraday trading. The first day that person takes a trade and makes a profit of 10,000 or so and he decides not to be greedy anymore.

They take pride in taking the profit one day and go home happy. But the next day, for example, the first trade ends up in a loss of 5,000. Now let us see what happens when the mental target that you have in your mindset is that you have to make 10,000 rupees per day.

Now that you’re sitting on a loss of 5,000 rupees, you will be tempted to take more trades. Hence, from a loss of 5,000 rupees, your loss will now move to 10,000 rupees. However, the same niggling target keeps telling you in your mind that, just keep playing this game.

You started today as a very smart, mature trader, but as you see, what happened is that as time passed, the mental capacity to make an informed decision based on rationality came down. Your desperation kicked in and started with a small loss. Eventually, by the end of the day, we have a big loss that would wipe out all the profits that had been made for several days and weeks.

People who are watching this video and who have had this kind of experience are requested to share their experience in the comments.

Now, if you compare this mindset with that of a professional trader, a professional trader is not worried about being profitable on a day-to-day basis. They are aware that on some days they will have losses and that is perfectly fine. It’s all part of the setup.

Now let me give you an analogy from cricket that will make a lot more sense. Think about the best batsman whom you are aware of, be it MS Dhoni, Virat Kohli or Rohit Sharma.

They are the best players in the world. Are they hitting sixes on every ball? The answer is no. Why?

Well, the thing is that you can be the best batsman in the whole world, but you need time to adjust on the pitch.

You need time to adjust with the bowlers and even after adjustment with the pitch, bowler and the whole stadium they still cannot hit a six on every ball because they will encounter some balls with spin and balls will bounce more than expected. They will also find that some balls will swing more than expected. So the priority for the batsmen, when they’re facing the bowler is to protect their wicket rather than hitting sixes and fours.

This is the same case in intraday trading because the market is not going to be the same every time. So every day that you go to the market, the market is going to be a little bit different. On a few days, the markets are very well and on others, they are just choppy. You will also find markets to have a very strong trend, range-bound or very event-driven such as elections that are going to move the market.

There are some months where nothing is going on and so the context of the market changes every. Hence, if you are a batsman who wants to score a six on every ball, what will happen is you will take a risky shot and get caught. The same can happen if an intraday trader comes to the market without having any knowledge of the market context and says that he would make 10,000 rupees today, what do you think is going to happen to that trader?

Well, most likely he will not be able to manage this and start incurring huge losses. The point that I’m trying to make here is that there are days on intraday where you can hit that six and a four, but there are also days where you should be just going for the singles. Again, remember that there will be a lot of them where you have to do absolutely nothing.

Your job as a batsman is to just block the ball so that you don’t get out. You cannot be short-sighted and say that I have to be profitable every day, because it is the same as trying to hit each ball for a 4 or a 6.

The other problem that I see with people who have a specific target in mind and want to make 10,000 or 15,000 rupees per day, is that they see the losses as a failure. We need to understand that losses are not failures and are just part of the equation.

So if you’re playing a match as part of a team, lose some wickets, it’s just part and parcel of the game. It is very hard not to move some wickets, but it doesn’t mean that you lose the match.

In the case of intraday trading, if you’re taking a small loss that is just part and parcel of intraday trading and you should be able to accept that. So, according to me, taking a loss for a day, 2 days or even 3 days is not a failure.

It is a sign that you are maturing as a trader. The real failure in life is trading without a strategy and not mastering your own emotions. It is also in not accepting or embracing the loss and letting it become much more than it has to be.

For an intraday trader, including me, the day can end up in one of these 4 scenarios. I can end up with big profits, small profits, small loss or a big loss resulting in a wipe-out. Now I don’t have any control over the first 3 scenarios, just like a batsman has no control over saying that the next ball is going to be a sixer.

What I do have control over is taking a big loss. So that is a perspective with which I enter every day because I know may end up in one of these 3 scenarios and that is perfectly fine because I know my strategies have an edge.

As long as I’m not taking a big loss, my strategies will eventually be profitable in the long run. All I have to do is make sure that I’m not into a big loss.

Going back to the biggest lie about intraday trading. People who claim that they have a fool-proof strategy and a secret recipe for success.

People who do not want to talk about losses and only about profits are not telling you that the truth and have never made any serious money from the stock market. You need to understand what they’re selling. They’re not selling a specific amount, so the amount doesn’t matter.

It can be 5,000 rupees or it can be 5 lakh rupees. What they’re selling is certainty and hence in the world of the stock market, which is filled with uncertainty, they are selling you certainty. They are saying that they will tell you a secret formula for making 10,000 rupees every day.

So whenever people who are coming to the market for the first time and hear claims like this, gravitate towards such claims because our primal instinct is to be safe and certain.

We want to be certain about what we are doing, but the reality is that the stock market is uncertain. Nobody knows what’s going to happen tomorrow. And these are the people who are selling you, that snake oil, that, they claim will take away all the uncertainty and assure our safety.

The reality unfortunately is that innocent people fall prey to them because of a lack of awareness. They follow these people who are selling them certainty and eventually what happens is they lose a lot of money.

Even if they did not lose a lot of money, what ends up happening is they become disillusioned and leave that person.

However, what they do not leave is that mindset they got from the first person. So now they’re in search of some other person who can give them a secret recipe for making 10,000 rupees or 50,000 rupees per day. This mindset is a seed of failure and is going to take them out of the market eventually.

So coming back to the original aspect of this topic, Intra-day trading is a game of strategy.

It is about strategies, risk management and execution. Small losses cannot be avoided and are not bad. As long as you keep them small, you are eventually going to win this back. So don’t be afraid to take a small loss and don’t be afraid of risk. It is fine to acknowledge the risk and brace it and manage it. That is what is required from a good trader and eventually, you all are going to be profitable.