Can stock trading make you Rich? — NSE Planet
I somebody posting on Twitter that, they are earning millions in Trading. Be cautious.
If Rajesh Junjanwala can, why can’t I?
I am trying to give some insight on this.
Yes, there are real-life examples of traders who made millions by trading. But the percentage of successful traders is what will give a real answer to the questions here.
Especially when you are a part-time trader, then the statistics are against you. 98% of part-time traders haven’t find the cult or tasted long-lasting success.
Trading may look simple from the outside, but when you get into it you will understand that it is another way around. It is a combination of science, Art, Maths and Emotional control. Sometimes it may look like the toughest job on earth as well.
What Decides the Success:
Success depends on how much you are willing to learn. A typical trader needs to consistently learn and evolve as a student. A trader who was a champion a decade back is not able to earn the same level of money in the current context.
This is a time of Algos and Smart Money and powerhouses ruling the indices. Nobody knows the full potential of DIIs, FIIs, and Fund houses and the carnage they can unleash. If they decide, it will be a blood bath irrespective of Technical analysis and charts. Those who have a bigger pocket call the shots here. This is the order of the world and it is no difference in the Stock market too.
A trader who can adapt himself to the changing dynamics of the market can only survive. If you think, easy or quick money on the table for grab, thing again.
Will people lose Money in the Stock market:
Many people have lost their entire life savings in a single week, leave alone people who lost part of their savings in a day or in fact in an hour.
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One of my clients, who was a millionaire took a strong bet on one stock in the futures market and all hell broke loose. He lost a little over 5 crores (50 million) in over 3 days. You know what, now he is on a day job to feed his family.
There are people, who lost money and too. Till the major chunk is gone, we will not realize that we are on the losing side. So be prepared for such a situation, if you want to take a plunge.
When you enter also matters:
Those who entered trading before 2021 March were on the losing side and deserted trading whereas those who entered after April during lockdown minted money at least for a shorter period of time.
This plays a moral role in people’s minds and can break their confidence and dent their wish to become successful traders in the long run.
Can stock trading make you Rich?
Yes. 2% of retail traders who have the persistence to learn and unlearn very and willing to stand still during storms and cyclones can survive.
As I said earlier, following the process day after day without looking at daily profit/loss and being willing to look at the monthly status have a good probability to become a successful trader.
Those who have a single process/strategy/system for a longer run stand a better chance to be successful. Even for them expecting more than 40% to 50% as an annual return will be a difficult task.
Butter considering compounding with a 40% annual increase will do wonders for the capital invested.
In summary, yes you can become rich by trading in the stock market. But you need to have persistence and patience to bear the fruit when it is available and you should not expect the tree to bear fruit one a single day. 40% to 50% return on the capital itself is a super profit and will make you rich one day.
Originally published at https://nseplanet.com on July 19, 2021.
