Read this article to know if you can leave your job and live a life as a full time trader or not. Some serious advise there to help you arrive at a decision.
First of all Thanks a lot for a lot of “Thank You” messages for my last email sent on Saturday 20-August-2016. If you did not read click here to read. Very important must read. No you do not need to pay me its free for all.
Today also now I received an interesting email:
Hello Sir,
My name is Parag, and I am trading in this market for last 3 years.
Basically I have accepted trading as my full-time profession. I trade only in stock options and I trade strictly Intraday, for the last year or so I have just started learning not to make losses.
Now I want a real business, I know a little bit about options, as I have read your first article, I only do directional trades with strict stop-losses. but till now it is just some profit, some lose game.
As I have told you I am a full time trader, I always wanted to sell options and started trading with the same thinking, but never ever had that courage to do it. I have never studied options Greeks, what is Delta, Theta, Gamma, Volatility etc. I don’t know but just on the basis of technical I am still surviving in this market.
So my Point is to weather to take trading as a profession by trading in options?
As per your strategies I would need a lot of money in my Demat account to earn money for my day to day living, so is it advisable to start trading with just small amount? Of course I would be trading directional trades as well, read your first article, it is good but do you really think that your options course will really help me to reach my Goals? I am a serious trader.
Kindly reply.
Thanks and Regards,
Parag
My reply was something like this:
Humm why you have left your job? Was there any specific reason?
I am not against full time trading but it’s better to earn from multiple sources, not just one source that’s the reason for most it is important to learn stock markets trading and investing to increase our wealth as just Fixed Deposits (FD) will not be able to beat inflation over the long term. If your returns are better than inflation only then you make money. If it is equal to inflation then you did not make any money just got the same money back what you invested like the Fixed Deposits in banks. But if you make more than inflation then yes you have made money.
So people who trade stock markets and are losing money please add the inflation to your loses also. For example in a year if you lost 30% of your capital invested this year, your real losses are 30+7 = 37% not 30% as in 2016 average inflation is around 7%.
Similarly for the profits you will need to deduct the inflation from the profits you make. For example if you made 37% profit for the year your real profit is 37-7 = 30% a year.
Please note that I have not included the taxes as it’s a different issue. Please consider that as well.
So those who want to turn into full time trading its advisable that you leave your job only after you are making consistent profits from trading for at least one year. If making, it is certain that this is statically significant results and the same will happen from next year onward.
Then calculate how much is required to run your home. For bigger families of 6+ members at least Rs. 50,000 per month is required for smaller families of 4 or less Rs. 35,000 is suffice. Now secondly you need to save for future also I believe at least 30% of what you make in an year. This money cannot be invested in trading as you will break the risk management rules of keeping all eggs in one basket. You can keep this money in liquid funds, stocks for the long term and fixed deposits (FDs) and equity mutual funds as well via the SIP route.
So please add that amount to what you want to make every month or year.
Once this math is done and if you are achieving this goal in terms of percentage on a small amount, only then leave your job else you will trade in panic and lose whatever you have saved till date like I lost. Avoid that situation at any cost.
What I did after I lost Rs. 7 lakhs which was my entire savings exactly when my wife was sixth month pregnant with our first child? I went into deep depression but my wife took control of the situation and asked me to take up a job as soon as possible. Luckily I got two jobs the next day I gave an interview. What a relief. One of them asked me to go to Mumbai but I did not wanted to leave my wife alone so I refused and joined the job offered on Kolkata itself though with a lesser pay than the offer for Mumbai.
At that time running my home and staying with my wife for support was more important not my carrier which I could take care of later as well.
The rest you know – I started reading a lot on stock markets the results of that knowledge is this site itself. So happy that this site is helping many retail traders a lot.
So I have explained above when you can consider to leave your job and become a full time trader.
Now as far as my course is concerned as I keep saying always when this question pops up on returns (I cannot lie to take your money) your profits will be limited to 3-5% a month so now you decide whether this is enough to make you a full time trader. Let me tell you clearly not everyone can perform like Ravi. He is an exceptional trader in fact better than me.
I have no egos in saying some of my customers are actually doing better than me. But are you one of them I cannot say as these people integrated my strategies with their own and came out with a better trading module that is working for them. It may not necessarily work for others that’s the reason I do not share their trades with anyone. In fact I know to some extend what Ravi is doing but I will not share as he is not comfortable sharing his strategies with others that’s I reason I cannot. In fact some people wanted to pay me to buy his strategies but I refused. Honesty cannot be bought by money.
But I do share Mr. Inder’s great trade as a bonus to my paid clients as he was not uncomfortable when I asked him if I could share his trade with my paid clients. He said ok so I share only with paid clients as it is my strategy which is part of the course. He made more than 30% return in matter of 20 days. Slightly twisted my strategy to get that return so I share which makes sense.
Hope all doubts on can I leave my job and become a full time trader is answered.
Thanks for reading. If you have any question please leave in the comment section – your email will not be shown in site or shared by me.