Thread by @scorpiomanojFRM

#TRADING
Is it possible to earn above average returns in intraday? Answer is POSSIBLE , at least mathematically .

Suppose the trading capital is Rs 1,00,000.
Risk appetite per day is assumed at 3% on the trading capital, which is Rs 3000.....

...... Risk Reward accepted is min 1:2 ie you take a trade only if you get 1:2 RR.
Assuming you take 5 trades per day. Hence risk per trade is Rs 600. Reward per day is Rs 1200.
So, per month the total no. of trades will be around 100 assuming 20 working days per month.....

..... Scenario 1: At a success rate of 50%, no. of profitable trades is 50 and no. of loss making trades is 50 per month.
Hence, profit amount is 50 x 1200 = Rs 60,000 per month; similarly loss amount is 50 x 600 = Rs 30,000 per month.
Net pnl = Rs 30,000.
Retn per annum = 360%.

..... Scenario 2: At a success rate of 40%, no. of profitable trades is 40 and no. of loss making trades is 60 per month.
Hence, profit amount is 40 x 1200 = Rs 48,000 per month; similarly loss amount is 60 x 600 = Rs 36,000 per month.
Net pnl = Rs 12,000
Retn per annum = 144%

... Scenario 3: At a success rate of 35%, no. of profitable trades is 35 and no. of loss making trades is 65 per month.
Hence, profit amt is 35 x 1200 = Rs 42,000 per month; similarly loss amt is 65 x 600 = Rs 39,000 per month.
Net pnl per month = Rs 3000
Retn on capital p.a=36%

The breakeven is around a success rate of 33-34%.

The biggest challenge is definitely not related to a right trading system ; It is actually application of the above consistently with discipline.