Trading Stocks for a living

May this Dussehra,light up for U.The hopes of Happy times, And dreams for a year full of smiles! Wish U Happy Dasara…..

When Someone say I am Full Time Trader what image do you get in your mind.

Most of them assume that He is a  guy who is stuck to the monitor for the whole duration of the market and try to trade each and every move of market and developing some Holy GRAIL system which will be make him loads and loads of money.

The reality is Most of Full time Trader I personally know Spend  more time away from the monitor than in front of it.

Even though I do trade on the Intra-day time frame, but my preference and large part of my trading account  have always been on Swing trading using gann and market timing strategy , I have not much to do when doing swing trading as we need to wait for target to come or market hitting the stoploss.

In most business, more the time you spend, greater the possibility of a higher income. If a Ola Cab driver decides to drive for 12 hours instead of 8, he has a very high probability that his Income will be higher.

But when it comes to trading, more time or more trades does not have to mean a better result. Trading is game of probability and probability of making money is always more when number of trades are less not more, I always follow the Golden Rule of trading, Trade Less Trade Better

Markets provide opportunities for a trader every day, every hour, every second. But be as it may, the fact remains that we can identify, execute and capture only a very small number of such opportunities. Only in hindsight do we realize whether we were truly successful or not. Always remember market is opportunity generating machine each day is an opportunity be flexible with expectation but rigid with risk management.

Trading always involves risk. Trade outcomes are never certain, and traders confront complex and incomplete data in every trading judgment. When traders favor mentally efficient thinking shortcuts known to produce errors, they end up making poor trading decisions and these lead directly to poor trading results.

Most of the traders face with another big problem which is Position Sizing

If you put in a large number of trades, the risk per trade needs to be pretty low. But if you were to risk a small amount of capital, the rewards too will be small when measured against the total capital available. So as a Trader you need to train your mind to trade higher capital, You need to increase your endurance power to take more discomfort, Higher capital Higher rewards and Higher Discomfort.  SO if you want to be full time trade work on your endurance power.

How much capital needed to be a Full Time Trader?

If you have a reasonable risk profile and you are trading everyday like a job – you should be able to make 30-50% profit  in one year. This is only for traders trading in account size of less than 5 lakhs as your account grows this percentage will shrink. If you think you can do more – this is a warning sign that you maybe taking too much risk. As far as personal draw downs, you should stop at 20-30% of your trading goal, suppose your goal is 3 lakhs if your draw dawn is in range of 50-60 K stop trading and give yourself break so as to bring yourself together.

I would suggest that a minimum of three to six months of paper trading full time is required before starting with real cash. Ask a trading friend/trading mentor to monitor your paper trades/account to keep you honest and kick you when you do bad … this school of hard knocks in the long run will pay off. However, do not be scared of trading.

15 thoughts on “Trading Stocks for a living”

  1. What I like the most in your blog is Psychology and Risk Management. I believe its the most important part of trading which is ignored by many traders (I was also there before interacting with you )

    Thanks A Lot Sir

  2. Wish All
    Shubh VijayaDashami

    May we lead towards Truth Light and Purity.
    May we overcome all evils within and outside.
    May Dharama get Victory over the Evil forces.

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