Can you trade for your living?

Depends on your lifestyle. Just for the illustration purpose of evaluating your financial requirements, let us assume that you are getting Rs. 50,000/- per month as your salary. Now I can say that you can leave your job and trade full time if you can consistently make a profit of Rs. 50,000/- per month.

Now, follow me through the following calculation.

Number of trading days in a month = 20.

My minimum daily target = 50,000 / 20 = Rs. 2500/- .

I assume that you can trade using 8 NIFTY lots, which is equal to 8 x 25 = 200 no’s.

So, minimum number of points I should get to make my living = 2500/ 200 = 12.5 points.

Add a round trip commission of 5 points.

So, total number of points I should get to make my living from trading = 12.5 + 5 = 17.5 per day.

I don’t take the trade if the risk is more than 10 points.

I can only risk 1% of my capital. To trade with 8 lots with a maximum risk of 1%, I need Rs.2,00,000 as my capital to trade.

NIFTY is moving a minimum of 110 points in a day and I have to catch only 17.5 points out of it.

In a movement 110 points, a typical trader with some experience and a strategy can catch around 80-90 points.

Yes.. I can trade for my living and you can toooo…. Just start learning…

User says:

hi jagadeesh
u told ur risk 1% of 2lakhs ie;rs 2000 and u wont take the trade if it is more than 10points . how many trades u take per day if it hits sl.
kindly share ur money management.

It’s been more than one year since I traded Nifty. So I lost the touch with its volatility. I used to take around 2-3 trades in nifty those days. But most of the times, I scratch the trades before hitting the stop-loss as I actively manage them.
Having said that, I do have a clearly defined risk management rules that cover,
a) Maximum loss per setup. This saves me from stubborn entries when the market is proving me wrong.
2) A maximum number of attempts per setup. This saves me from risking too much on a single setup and from over-trading. it depends on the markets we trade.