Does Intraday Equity trading success even exist?

The purpose of this post is to clear my self doubt and get opinions of experienced traders in this community.

I started active trading (small size trades only) in 2018 and since then I am learning rigorously. I am not good in options and find it challenging as well, so never considered it. Before 2018, it was occasional & newbie type trading only.

I just want to know if there is anything like successful intraday trading in equity only? In all these years I found that all the forums are full of option traders sharing their success stories? Why Indian equity market is full of option traders? I know that the intraday charges are high in equity trading when we compare them with F&O or swing trading. But, is that the only reason or there is something else? Maybe lack of volume or volatility?

Coming to my self doubt part. I was making 7-9% every month from last 6 months or so and started increasing my trade size. Soon I realised that I am just making 0.88% a month after all the cost deductions. I was not looking at cost while practicing earlier because I thought it is meaningless to consider cost while practicing with small trades.

So, basically one has to take out 10-15% a month to reach 5% return target in equity trading.

Can you guys share some references of successful intraday traders particularly in equity only (if there are any)? Do they face cost issues too?

This is why you do proper backtesting with all the costs involved.
once you do this, you will be shocked to see that the cost of trading will eat up anywhere from 20-50% of your trading capital.

you can have profitable strategy but that does not mean you will be profitable after all the costs of trading.

Too many leeches in our country.

Seems like transaction cost is killing you. Switch to a free charge broker like Finvasia. That will save you Rs.40 per two way trade. While one cannot do away with what exchange or govt levies, brokerage is something we can do with out as there are options available now for the same.

Intraday Equity is possible, I am profitable for few years with one system and now have another working system too. But yes costs add up a lot. They esp hurt more in mediocre years when your margin reduces, and proportion of expense vs returns increases.

Best to include expense in your backtest and then try to improve edge/trade. Slippage is also a cost too, and must be part of backtest. Slippage depends on contract size, but roughly you can make it equal to fixed mandatory costs.
Even after all of this, live results will be decently worse than backtest due to data errors/optimization to noise/more competition. So you need a really great looking backtest to get good actual returns.

You can also try stock futures.

I did considered doing this after checking your posts here and on Dhan. But, Finvasia is not offering trade from charts and in my day trading I miss opportunities when I try to create orders manually. Same with profit booking and whenever the order slips. It is quite easy and fast to manage everything on charts than managing them in a traditional way.
Even Mstock offers 0 brokerage plan, but they are also lacking trade from charts feature.

Btw, do you think that there are successful equity intraday traders in India? By successful I mean majority of returns coming from equity intraday only.

Good to hear that.

By years, you mean to say more than 2 years?

And, I am not sure how to backtest price action as my trades depend on price action only. Indicators involvement is minimum in my trade decisions. I also tried streak, but experience was not good as they barely provide proper instructions to create algo steps and majority instructions are indicator dependent.

I never tried futures. I thought I will enter into that segment once I am able to print some good profits. As soon as I saw most of the profits getting washed away in the cost, my confidence dropped. I started feeling like this intraday equity is not for me. I am not giving up, but surely doubting my efforts and decisions now.

Btw, you are doing futures or cash trades on intraday basis?

it’s depressing, how can it take so long to get the know how

either one is not comitted or severely lacking luck

thus got curious about you

Dhan has trading from charts and Rs.10 brokerage for women. So if you can tap that opportunity you can save Rs.20 per two way trade and have trade on chart feature.

Personally I don’t know anyone trading stocks and making consistent profits. But it is reasonable to assume that there should be few people like that.

1 Like

2 years of systematic - i started with serious capital from early 2020 just before covid fall.
1 year of semi discretionary before that - traded with small capital but made some small money - enough to buy a cheap laptop :slight_smile:
Before that was learning for many years ( 5+ ). On its own profitable period isn’t that much but i have experience now and have made decent money too without taking undue risk.

Yeah nothing can be done, you will have to make some serious efforts in back/forward testing with discretion manually. So take trades, log them and evaluate while staying consistent. Its crazy amount of work if you want to try different variations of the system or perhaps to try some tweaks - as you will have to verify each rule over decent sample size.

I could not do this and did not really have any clear understanding of how trading works while i was trying.
Major improvement happened only once i started complementing discretion with statistical tests, eventually ended up shifting to fully mech system with automation.

There is no compulsion to trade stocks intraday. You can try other things where costs are low. That’s probably why most traders trade index options now. Its also much more liquid than stocks and that is important for scaling up.
Stock Futures has lower stt so that’s decent reason to trade it but it can only be done once you are ready as you will need to put capital. And position sizing with be tougher. And also leverage is much lower here.

Intraday cash only right now but will work on moving some of the capital to stock futures after Aug 1 as peak margin rules should get manageable.

This can be done. I will try to open that account.

That is why I am facing self doubt situation. Every single day I think about switching to options as majority proves that equity trading is more difficult.

Let me be honest and please don’t for a second think that I am being negative. You are up for a bumpy ride ahead. These last 2 years are historically trendy years and there was little drag. But, as you said that your learning period is of 5+ years then you can become a better trader. In my humble opinion, please consider your trading as success only when you see the other part for a year or so. It could be bearish, it could be consolidation or mix of both. Once you come out of that with profit, you can label your trading as sweet success.
Once again, please don’t consider this as negative comment, I am just sharing my opinion.

That means you are doing algo trading only? Can you share if it is streak or any other platform?

That is the problem, I am not good in options. I tried understanding all the concepts, but I always felt like it is going over my head. I did lost my money doing naked options :zipper_mouth_face:
Also, after dedicating such a long time to the equity part, it is hard to let it go and start from scratch.

5 years is a sweet spot for many.

The main problem with equity is you have lots of names. Then comes price range, liquidity etc.

Solution: choose few stocks. Trade 2 fno stocks with good liquidity. If there is movement, then there is a way to make profit.

I mean if you trade the index, you are trading mostly nifty / banknifty. But in stocks, people tend to scan a lot of sectors. That ends up with many stocks in the watchlist.

And about cost, for equity I ll end up giving 0.15% per trade. So, need to do your calculations here, position sizing, risk reward etc.

I mean you have been trading equities. That’s must have made you good there. I don’t know about options. So can’t say anything about it.

Are you taking too low R?

Even I think so, I sometime wonder if I am learning too much and doing too much analysis. I don’t know.

This was and is the biggest challenge for me. I tried number of scanners, I still end up with same type of results. I also tried gap up and gap downs only, that scanner worked for 2 months, but during that time as well I get 5 good stocks one day and 0 the other day. The day I get 0 good stocks in that scanner, I drag myself to the breakout scanner.

Maybe my Risk Reward is not good. I mostly take 1:1 and rarely take 1:2. I also tried partial exit when I reach half of my target and ride it until it reverses, that also keeps me from getting to 1:2.

I tried learning options, but soon realised it is not the one I want to do. I may try to learn them forcefully, but don’t want to by heart. I am purely into equities, be it intraday or swing.

I think so. But, I rarely see Indian stocks giving 1:2 everyday. I tried algo trading as well (using streak). The rule in every strategy was to take 1:2 but even automated trades were not giving 1:2 because 80% of wins were either below 1:1 or slightly above 1:1 only. Even in the backtests of streak there were limited incidents where they hit 1:2

How do you determine your trade qty?

Maybe there lies why you rarely see 1:2.

I am not sure if I am doing it wrong. But this is how I do it. I keep my number of trades limited at 4-5 per day, I do not trade more than that. And, if there are 1lakh in my account then I divide it by 5, so 25 thousand for every trade excluding margin. Hence, I decide trade quantity by keeping 1 lakh for every single trade. In simple terms, I can take 5 trades a day with my capital + 5x margin, so every trade is of 1 lakh only.

Actually, covid broke some of the intraday market behavior. Now, shorts with trend are not working as well for long time. Markets tend to reverse more when full market is one sided. No one knows whether this is permanent.
Initially, it did not matter as longs worked so well in 2020-21 but last year was tougher than usual in comparison to 10 year data for my 1st system. But not the worst year. Last 6 months have been very noisy - this is hardly a trending market.

Advantage of backtesting is that i know what to expect - the ups and downs. And experience makes you understand uncertainty of future. I know, things can break down. Main system of my friend has stopped working for a year now - it was working well pre covid. 2018-2020 were very easy years with low drawdown.

So don’t be under the impression that these are good times for everyone. Instead accept the uncertainty - things can stop working. Only way out is diversification and large capital. I don’t care for labels, past success is not certain to continue - for everyone. So focus for me is keep adding 1/2 new system every year.

I use my own tools over python

Equity can work too. i don’t touch options either because i have not done the work and i prefer to focus on one thing at at time.

1 Like

Though systems are intended to make no brainer trade execution once rules are established, periods of lacklustre or drawdowns ll always be a hamper.

And there is no way of knowing before hand. Yes, backtest might let you know what you are dealing with, though it is not always the case.

On the other hand, as @jay11 mentioned, he cannot backtest certain parameters as instinct.

This best way to practice this type of trading is go back bar by bar, and anticipate what you would have done. The bar replay function will be great if one has access to it.

Trading is just insane. We cannot be all sure and certain of everything anytime . That’s why there is stoploss to tell your trade ain’t working.

Take the loss and move on to the next trade.

Intraday trading demands for fast decision making mindset in derivatives or equity .Firstly ask yourself , are you capable to handle the noise in intraday ?
Mostly people jumps in stock market and starts with intraday and this becomes the reason of their failure . Even the actual process is vice- versa . Start with taking delivery in equity market . Spend some time in understanding that how the equity market behaves . After being profitable in holdings then go for intraday or derivatives whatever you want .
Yes , one can become profitable in equity intraday trading with pro level skills which you can learn from any course or books whatever you want to choose .
Take your time and focus on learning . BEST OF LUCK

A question.

As it is clear that you have been a lot of work, did you think of swing or positional trading and not just intraday?

I mean if one can dedicate fully for trading, create screeners, doing back testing, calculating charges, looking at charts every minute for 6 hours, having a system in place, so why cannot all of this be used for delivery trades. Is it important that it should be intraday only?

From my very little experience, I find delivery trades relatively easy compared to intraday. Not that all delivery trades will be profitable, they fail many times, and stop loss has to be applied if the capital is limited, but with experience, I believe one can be good at this.

And if one wants to add fundamentals to technicals, and do techofunda trades, the chances of profit are much better.

I know this is a different way of making money, but still the opportunity exists, and I guess the effort put here is less compared to intraday, with more peace of mind.

1 Like