I have been trading in live market for 4 months Now. I Started in July.
I started with 50000 Rs. Now my capital is 270000 Approx. Now I’m planning to withdraw 30k per month for my expenses and other needs.
So far my win rate is 62%. Major Gains in October and September.
I target 1:3 R:R. I do intraday option buying (NIFTY and Banknifty). On an average I take only 2 Trades a day but some time I do overtrading as well.
I’m planning to do this Full time. I have no other backups or other sources of income. (Because of some medical reasons I have to leave my job in December 2021, before that I was earning 62000/month).
Is it a good Idea?
What other things I have to keep in mind?
Should I look for job?
if u have followed/developed strategies/logic whose win rate is 62 percent while compounding the money then certainly u may continue. if this is result of some random trades then NO
Trade with 15% of what you have for 2 to 3 years minimum. That ain’t a appropriate decision about 30% monthly. You dont know how market reacts in future but making assumption of result 30% is nightmare.
Dont make decisions in months. Let be your win ratios 100%. Just get experience for 2 years.
4 months is a very small sample. It does not predict future performance. That said you did survive for 4 months, that is good and hopefully you have real edge
50k to 2.7L in 4 months, to me, indicates too much risk. Eventually market will test.
Trading is not good for monthly income. We can have long periods of drawdowns.
Suggestions
Trade with capital that you can afford to lose for first few years. Most people fail at trading.
Try to backtest your plan/system, You need to have some estimate for worst drawdown that you have faced historically ( say last 5/10 years), and use that for position sizing and keep risk within your comfort zone. Ideally should be able to bear 2X this max DD. I prefer to keep max DD within 10-15% of capital at a single system level but everyone will have their own preference. Also, Markets are not bound by past behavior, so future performance in returns and dd can get worse. Probably should assume that it will as competition increases.
Depending on trading for month by month expenses is a recipe for disaster. At least should have expenses for next say 6-12 months out of trading or have some kind of support system so that you don’t have to worry about your bills. Its a good idea to have another source of income. it will increase your chance of trading success. It is also manageable without that if you have large capital and can absorb the ups and downs.
If your body can support you working, I would say work, because you don’t have any another regular income source. Do something that your body supports.
As far as trading is concerned, you can do it even when you are working, although the practical aspects like watching every minute how the trade is going depends on the job. I take delivery trades, so I need to look at price only when buying, after I bought my quantity, I have nothing to do for that trade for the day. My point is, even with intraday you can manage trading to some extent, while working too.
Equity is volatile, we need debt which gives us regular income, once that is built, we can take any kind of risks with the capital allocated to equity, we can be adventurous.
Oh yes correct: this is the best advise Mr.Jaiswal can get - “If your body can support you working, then work.”: 100 percent right when it comes to taking up trading as full time job. Thanks a lot for sharing ur wisdom and experience…
If you body is well, rest all are easy. Live live a monk, treat every rupee as sacred, focus on learning and making money in the market, create a debt corpus, then make big moves.
Because other people may know better, they may help in providing a different perspective, a perspective that refines and enhances our perspective, they may even provide a complete opposite perspective, one that we don’t believe in as we did not experience it but nevertheless a possibility. This is all learning, the very purpose for this discussion boards like these exist.
Of course, one may have found Holy Grail, and if indeed that is true, I guess that person will not ask any questions but answer them.
Market related decisions have to taken from looking at many perspectives, and not from numbers alone. One of the benefits of asking questions is that, members who reply are from different economic backgrounds, different age groups, with different experiences, so their answers help to get a better view of the situation.
