How Much Can One Earn In Day Trading In India: Most traders who are new to the stock market have certain expectations of how much money they will be able to make from trading and most of these expectations are very unrealistic because either they lack the capital to make that kind of money or they lack knowledge and experience and sometimes both.
In this article, we are going to discuss how much can one earn in day trading in India so that traders who are just entering the stock market have a clear idea of what to expect and keep their expectations realistic and achievable.
How Much Can One Earn In Day Trading In India?
Well, there is no limit to how much you can make from trading in a month. The money you can make by trading can run into thousands, lakhs, or even higher. Some factors that impact the amount of profit that one makes include:
- Amount of capital do you trade with. The trading capital you have played a very important role in how much money you can make. Let’s take an example of 2 traders who are trading in the stock market and have 2 different account sizes. Trader A has an account size of Rs 10,000 and trader B has an account size of 1,00,000.
It will be much easier for trader B to earn Rs 1000 from the market as compared to trader A because he can enter the market with a large volume of shares and thus need to capture smaller move to make Rs.1000. And that’s what makes the amount of Trading capital important.
- How much risk can you take per trade? Another important factor is your risk-taking capability while trading. A person who trades with managed risk is always likely to make more money in the long run compared to a person who takes trades even when the risk to reward is not favourable. This style of trading will eventually lead to capital depletion which is not ideal for any trader.
- Trading experience and Knowledge of technical analysis. Another very important factor that determines how much money can you make in trading is how much knowledge you have of price action and technical indicators and how long have you been in the market for.
If you cannot understand how price moves or don’t understand how technical indicators work and have just started your trading career then you have had realistic expectations to start with. The more experienced a trader gains, the higher the odds he will understand the situation better and will be in a position to make higher gains.
- Patience & Discipline. These are key virtues that every successful trader must have. You have to be patient to wait for your setup and not enter the market anywhere because of the fear of missing out (FOMO). You also have to be patient after taking a trade and have to give time to your trade to move. You should be disciplined enough to follow the rules of your setup and always have the discipline to exit a trade if your stop loss is hit.
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How Much Capital Should You Have To Become A Trader?
To answer this question you must ask yourselves these questions as the answer varies from individual to individual.
- Are you a part-time trader or a full-time trader? If you are a full-time trader and trading is the primary source of income, then your capital would have to be a lot more as compared to a person who is a part-time trader and trading is his secondary income.
- How skilled are you in understanding the price and technical analysis? You have to ask yourself how skilled are you and how well you can trade because a highly skilled trader might need much lesser capital to achieve certain targets whereas an average trader might need a bigger capital to achieve the same targets.
- What are your goals and expectations from the market? It is very important that you ask yourself how much money you want to generate from the market on a weekly or monthly basis or what percentage of your total capital. Let’s say a trader wants to make Rs 50000 every month and is able to generate a 5% return. so he is going to need a capital of Rs 1000000 to be able to achieve his desired result.
- What are your monthly expenses? This is the most important question you have to ask yourself if you are a full-time trader and your livelihood depends on it. Let’s say a full-time trader whose entire income comes from trading and has a monthly expense of Rs 50000 and is able to make 1% of his capital every month, is going to need a capital of Rs 5000000.
Once you answer these questions it becomes very clear how much capital you should have to become a profitable trader.
Also Read: 8 Best Books For Intraday Trading – Top Reads For Beginners!
In Closing
There is no end to the money you can make from trading in India given that you have the skills, knowledge, patience, and discipline to execute your plans.
In this article, we discussed how much can one earn in day trading in India and the various key factors that determine how much money can you make.
We also discussed the capital that is required to become a trader and the questions you need to ask yourself to understand how much capital is required according to your trading style.
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