Only for Full time traders - Trading Psychology

Hi All,

Trading is like a competitive exam with negative score so you have to be well prepared especially if you are planning for long term. Suppose if you have a trading strategy to make 1:2 risk reward ratio, is it possible to take 100 trades?

For Example, If want to trade BANKNIFTY FUT on daily basis with Stop loss: 100 points and Target:200 points

Margin required: Rs, 1,70,000 (NRML)
Commissions: Around Rs,175 per trade and Rs,17,500 for 100 trades
Stop Loss: Rs, 2500 per trade and 250000 for 100 trades (excluding slippages)
Total capital requirement for 100 trades: 1,70,000(margin) + 17500 (Commissions) + 250000 (Max loss) = Rs, 437500

So, You may need around Rs, 437500 to successfully execute 100 trades. Most of the times, Peoples can’t use the same strategy if there are consecutive losses. But If you have prepared to your mind to accept the maximum loss of Rs 2,67,500 then you can execute the 100 trades without any problem. There are chances that you can win more than 50 trades but you should be ready to execute all trades.

This is just an example, If you want to become a full time trader then aim for a long term goal rather than short term excitements.