Is it possible to make a living out of trading?


#1

Fulltime trading
#2

Yes, quite possible. You have so many living examples in this forum.


#3

Yes, if you are a broker. Because broker gains either client loses or wins.

No, if you are trader. Reason----price can move in any direction. I have done many types of analysis of charts, volumes, etc. Everything fails in long run and after many number of trades. You can win some trades but majority of them will be loses. Even big mutual fund manager lose and small trader lose even more.

But the best you can do with the market, is to do arbitrage trading for example if there is a price difference between spot price and future price of a stock. You can buy the stock shares in spot and sell futures if price of future is more than spot. In this process whether market moves up or down you can have a fix profit at expiry date.There are many other types of arbitrage trading you can do. But do gamble by taking single directional position.


#4

if u have a source of passive income, then definitely yes, because it needs a safety mindset to trade successfully. you need to experience this to know what i mean. if u have a family, then things can get even worse…


#5

yes an no.  I'll share my case....iam close to 38 years of age and have been in the markets for the last 8-10 years.  Started with IPOs, then secondary market, then day trading, then position trading (due to losses in day trading), then derivatives - Futures and Options, then commodities....

i kept jumping from instruments and techniques like a monkey from tree to tree....end result?  i realized that the techniques and instruments were not wrong, the issue was with me - i lack the discipline to stay with a technique.  one loss was enough for me to switch trading system.  While i day dreamed of making crores, my actual trading record bleeded.  All my hard earned money (and my family's), were burnt.  

I was like a addict who got high from the flashing terminal quotes and day trading....

eventually i gave up....took a job and then started learning...even more learning...watching videos on internet about trading....the important part of my learning is that i needed to work on my discipline - specifically the stop loss part.  

thankfully, now i can comfortably say that i am surviving (may be not successful yet) in this market.

you need to have:

enough capital that you can survive 3-5 events of account being blown up.

enough discipline to not make the same mistake again.

enough discipline to follow stop loss.

enough money buffer so your monthly expenses are easily met.

enough patience to wait for the alchemy process of becoming a trader to complete 

and lastly (lastly) a trading system.

all the best.


#6

Definitely yes, I have been in the market since 2006, and I have etched out a living out of it. Profits and Losses are there, but in my case there are more profits then losses, but it took me quite some time to develop/imbibe the discipline, especially S/L and Money Management.


#7

The answer to your question lies in the shayari ​'Zinda-Ho-Tum' from 'Zindagi Na Milege Dobara'. Trading is wonderfully picturised in the video till the end! 


#8

arbitrage is a waste of time for a retail trader, for the simple reason that brokerage will be very high. also given the liquidity now a days, the premium/discount is very small to make a living out of it. third, instituitions have super computers to spot the difference, which a retail trader does not have. so by the time u spot the opporunity, instituition would have taken the trade by then… conclusion is that though theoritically it sounds very exciting and profitable, its not the case in reality.


#9

You are right. Therefore people should not trade frequently. The most profitable method for retail trader is investing for long term.


#10

Thank sir, lessons learnt…


#11

Sorry to hear that Lokesh! If you are not yet comfortable after 10 years, I should seriously consider precaution with the idea of trading full time.
Anyways, best of luck and thanks for the key points!


#12

Hi AastroGuru,
comfort has set in now. But i avoid day trading at all cost. That’s not my forte, nor is it for almost 99% of the crowd that enters the market almost every day. Some people do make it, many success stories can be found in Zerodha Challenge winner’s list/articles. But, i have realised that my domain in the markets is with Swing trading and not day trading. It is important to realize what you are good at.
And it took 10 complete years. I wanted to share my experience so that my fellow traders(new and old) can take a cue from my experience and avoid the mistakes that i made.
I definitely DO NOT discourage anyone from TRADING or MARKETS ! Never! in fact, this is the only place where money can compound faster than any other business. Just that, Market pays people who are disciplined and that quality has to develop from within. Unfortunately, Discipline comes when market beats you up and you resolve not to give up and try again and learn your lessons.


#13

Nicely said. Thanks!


#14

Yes sir you are right. The main thing is discipline and the rules which you make for youself…
If you break the rules and don’t trade with discipline you can’t be trader what so ever …


#15

loke4300, dil kholkhe jo apne share kiya hein, Hats-off!


#16

To put things in perspective, all AMCs / Mutual Fund Managers are making a living out of trading. The frequency of trading varies. Check out the turnover per year of the Equity mutual funds. It goes up to 300% + for some of the funds.