Is my decision correct or wrong

[sartaj]

HELLO EXPERTS,
i am new to real day trading .but i learnt minimum basics from the trading forums.and i did trade well in the "SHARE BAZAR GAME" of reddiff website.
i saw some shares NEARLY 25 RS which are in "A GROUP" varies minimum 5 paise and 10 paisa frequently with in 5 seconds, and they traded in high volumes.finlly i want to ask,,,if i buy large volumes like 50,000 shares and i sell with a profit of 5 paisa.i mean i will get 5 paise on each share .i caluc lated with brokerage percenta of .03 and also add all the service charges lime SST,STT,STAMP DUTY which are requird. than also i will get for 50,000 shares (with the profit of 5 paisa on each share) 1450 RS. so if can trade for 20 times on each day the profit will be good for me .
THIS IS ALL I EXPECTING, PLEASE TELL ME SUGGITIONS FOR THIS .AND CORRECT ME IF I HAVE ANY MISTAKES.

 

[SwingKing]

Re: Is my decition correct or wrong

Dear Sartaj,

Please please and please get this vague idea out of your head. This is just NOT going to work. Please try and invest/trade with time on your side. You will certainly do better. But please do not try these things.

Tc

 

[sartaj]

Re: Is my decition correct or wrong

dear sartaj,

please please and please get this vague idea out of your head. This is just not going to work. Please try and invest/trade with time on your side. You will certainly do better. But please do not try these things.

Tc

please can u tell me whats wrong with me .plese tell me in detaile .........

 

[trader.trends]

Re: Is my decition correct or wrong

please can u tell me whats wrong with me .plese tell me in detaile .........

For starters
Minimum brokerage is five paisa.

 

[sartaj]

Re: Is my decition correct or wrong

For starters
Minimum brokerage is five paisa.

I asked to EDELWEISS BROKING they told me that .03 % for intraday.

eg:for today 13-4-10


ISPAT INDUSTRIES LTD varies nearly at 20.60 rs to 20.75 rs ........((and it does not got down even 1 rs in a single day ,thats y i want go with this type of scrip.and for buying high volumes, investment also low comare to othe high volume treaded and which are in" A " grade scrips.))

if i buy at 20.60 rs
brokerage is .00618 for each side..so adding all the two side brokerage and sst,stt ,stamp duty and what require all are below 2 paise for each share.
so if i sell for min 5 paise profit i will get 3 paise for each share.and if i buy 10,000 share i will get 10,000*.03 for each trade.ie 300 rs..is it all looks foolish.plese tell me if uu think......

 

[nac]

Re: Is my decition correct or wrong

Sartaj,

It's good that you have a confidence in you that you could do well in trading. But don't blindly believe just trading in virtual way. Its good trying it before hand. But don't rely on it.

Our TJ members were saying, that most of the broking firms are charging minimum brokerage. You said, Edelweiss brokerage structure is .03%. Here, your minimum brokerage could be 3 paise per share. If you are buying 50k shares and selling 50k shares, you would be charged Rs. 3000/- (for both buying and selling). Here is the calculation,
Buy Qty - 50000; Sell Qty - 50000
Brokerage - .03% (Subject to minimum of 3 paise per share)
Buy Price (ISPAT) - Rs. 20/-; Sell Price - Rs, 20.05/-

As per your calculation you would be paying Rs. 600.75/- as brokerage.

Type	Qty	Price	Amount	Brokerage
Buy	50000	20	1000000	300
Sell	50000	20.05	1002500	300.75

But they would calculate like this and the brokerage would be Rs. 3000/- i.e.,
Buy Qty 50000 * 3 paise = 1500
Sell Qty 50000 * 3 paise = 1500

In this case, your Gross profit is 2500/- But you have to pay 3000/- as brokerage apart from this you need to pay other statutory levies like service tax, STT etc...

For assumption I took 3 paise as minimum brokerage. If your broking firm says minimum 5 paise, you would be paying 5000/- as brokerage.

And one more thing when you are doing it in real live market. When you are trading virtually, you would get your order executed as soon as price hits, irrespective of size of your order(no matter its 10 shares or 50000 shares) But when you are trading live, this could not happen. Its very hard to get all the 50000 shares get executed at once and cover them in another 5 seconds. Practically, its impossible to get in and get out with this much order size.

Don't think its foolish, its just ignorance. You would get to know about lot of things when you start swimming in trading pool.

Hope you would understand something from this post.

Take care and Happy Trading...

 

[FanaticTrader]

Re: Is my decition correct or wrong

HELLO EXPERTS,
i am new to real day trading .but i learnt minimum basics from the trading forums.and i did trade well in the "SHARE BAZAR GAME" of reddiff website.
i saw some shares NEARLY 25 RS which are in "A GROUP" varies minimum 5 paise and 10 paisa frequently with in 5 seconds, and they traded in high volumes.finlly i want to ask,,,if i buy large volumes like 50,000 shares and i sell with a profit of 5 paisa.i mean i will get 5 paise on each share .i caluc lated with brokerage percenta of .03 and also add all the service charges lime SST,STT,STAMP DUTY which are requird. than also i will get for 50,000 shares (with the profit of 5 paisa on each share) 1450 RS. so if can trade for 20 times on each day the profit will be good for me .
THIS IS ALL I EXPECTING, PLEASE TELL ME SUGGITIONS FOR THIS .AND CORRECT ME IF I HAVE ANY MISTAKES.

Trust me my friend and don't get me wrong...When you start trading with real money its a diff ball game altogether...We are really good when we do paper trade and play this virtual games every move works in our favour but when you plan to apply the same in real cash markets it can be very nasty

 

[rkkarnani]

Re: Is my decition correct or wrong

Minimum brokerage maybe be as less as 1 paise and also further negotiable!!! But do consider the scenario where you enter long and before you can realise the price in one swift move goes against you by a 30 to 40 paise or more , you loose your profit for 6 to 8 trades at 5 paise per trade.
Most important : Do not forget "impact cost"!! The moment you give a trade to buy or sell 50000 shares that it self will move the market by 5 paise or more against you.
Why dont you try it with just 100 shares though the results would be different with 100 and 50000 shares in view of the impact cost.

 

[sartaj]

Re: Is my decition correct or wrong

Sartaj,

It's good that you have a confidence in you that you could do well in trading. But don't blindly believe just trading in virtual way. Its good trying it before hand. But don't rely on it.

Our TJ members were saying, that most of the broking firms are charging minimum brokerage. You said, Edelweiss brokerage structure is .03%. Here, your minimum brokerage could be 3 paise per share. If you are buying 50k shares and selling 50k shares, you would be charged Rs. 3000/- (for both buying and selling). Here is the calculation,
Buy Qty - 50000; Sell Qty - 50000
Brokerage - .03% (Subject to minimum of 3 paise per share)
Buy Price (ISPAT) - Rs. 20/-; Sell Price - Rs, 20.05/-

As per your calculation you would be paying Rs. 600.75/- as brokerage.

Type	Qty	Price	Amount	Brokerage
Buy	50000	20	1000000	300
Sell	50000	20.05	1002500	300.75

But they would calculate like this and the brokerage would be Rs. 3000/- i.e.,
Buy Qty 50000 * 3 paise = 1500
Sell Qty 50000 * 3 paise = 1500

In this case, your Gross profit is 2500/- But you have to pay 3000/- as brokerage apart from this you need to pay other statutory levies like service tax, STT etc...

For assumption I took 3 paise as minimum brokerage. If your broking firm says minimum 5 paise, you would be paying 5000/- as brokerage.

And one more thing when you are doing it in real live market. When you are trading virtually, you would get your order executed as soon as price hits, irrespective of size of your order(no matter its 10 shares or 50000 shares) But when you are trading live, this could not happen. Its very hard to get all the 50000 shares get executed at once and cover the in another 5 seconds. Practically, its impossible to get in and get out with this much order size.

Don't think its foolish, its just ignorance. You would get to know about lot of things when you start swimming in trading pool.

Hope you would understand something from this post.

Take care and Happy Trading...

thanks for the quick reply and explining me .but again i asked the EDELWEISS EXECUTIVE for about brokerage.he told me that they charge
.03% on the total amount .((they dont charge 3 paise on single share as the minimum brokerage on the share)).ie what ever the share reate it does'nt need.
and if i pay 4000 as the subscription charge they charge .01%.

 

[prst]

Re: Is my decition correct or wrong

In short, "there is no free lunch".