For the hundreds who asked me how to travel full time and not worry about money, there are only two options – first is to do a job & earn a lot and then travel in old age which doesnt make sense & second is to have a passive income stream which can generate income while travelling. I have tried most of these passive techniques like blogging, youtube, freelancing, weekend trek leader and realised nothing really works in long term, My search for such income to support carefree travelling led me to share market, specifically trading.
Trading has the power with which you can work for one hour a day & earn enough to last a week or even a month. Trading can be done from any part of the world with an internet access & hence give flexibility to keep travelling .Trading has the power to make you super wealthy but I just look at it as a way to power my travel dreams. I just want to enjoy the untouched nature without worrying about anything.
What is trading ?
Two of India’s most famous stock exchanges are NSE & BSE. When a company is listed on these exchanges normal people like us can buy shares of those company i.e. buy ownership in that company. Depending on the company’s business trend its share value rises or falls. If we have trust in the company’s future prospects we buy the shares now and sell it at a higher price later on.
This process of buying the shares i.e. equity and selling it on later date is broadly said to be
- For short term as Swing trading.
- For long term its called an investment
- If buying and selling happens on the same day it is called intraday trading
The first two take a substantial amount of start-up money and duration, hence to be able to achieve our goal of financial freedom we will focus on the Intraday Trading. Basic trading starts with shares but can be done in futures & options and commodities which require more experience
How much money can be made ?
Trading in share market has endless possibilities. As a beginner we can trade in shares , later on in futures & options and commodities. The profit level goes on increasing as we move up the ladder. There are people who earn crores in a month at a very expert level. However during the learning phase there are bound to be loses. Hence the dream of earning crores should not over write your risk taking capability. Start by deciding that I will take only X amount loss per month and not exceed that limit till you have completed your learning phase. There are lakhs if not crores to be made if you have patience and willingness to learn & scrape through the learning curve without loosing much. Dont be greedy and you will make it.
Where to Trade ?
There are various buyers and sellers for shares which need to meet common place at the stock exchanges. In todays world all such buying -selling happen digitally using online brokers like Zerodha , Fyer etc. To get started you will need to open a account with one of these brokers. There are many brokers but my trust is with Zerodha which is India’s biggest stock broker and had started the Rs.20 per trade brokerage revolution .
The first step towards trading is to open a FREE ACCOUNT and familiarize yourself to the share market.
How to trade ?
Trading account will be active within a day , but learning to trade will take you some time. Once the account is active you can look at the share values of all the companies. Zerodha even provides the price -charts from which you get an idea how the share price have moved since the company listing. Different companies have different value based on the company’s performance and total shares available. E.g. A company can have 10 crore shares with current price Rs 100 per share, while other company may have 10 lakh shares with current price Rs 5000. So different shares trade at different values which change with market forecasts, expectations & the age-old demand-supply.
So Niraj, you gave me the basics but didnt answer how to actually trade. Well share market is not as easy. I would have loved to say its easy, risk free & you will earn in crores from tomorrow. In reality its one of the riskiest business out there. It seems easy but its not & you will definitely take an year to actually start making some money out of it. Bhai tu bata raha hai ki dara raha hai. Just telling the truth. This is for someone who has that inner strength, patience & willingness to learn new things till you get it right. If you dont have these qualities its better to stay at a job. But if you have foresight and drive to learn & tackle obstacles during the learning phase its worth a shot for fulfilling all your future goals.
Trading techniques
For starters it is essential to get hands on with the trading account where you can see all the shares , their prices, price -movement, the company fundamentals ,news etc. Once you are used to the share market eco system then you will start learning the actual trading techniques like
- Price -action which estimates how the price will move and when you should enter the trade to get maximum profits. Since its a theory of Buy LOW , Sell High you will need to learn price action and various chart patterns which guide in predicting price movement like flag pattern, triangles , head & shoulders, M /N pattern etc. These are various names given to how the share -price actually moves
- Technical Analysis while with the above price -action you can predict how the price will move, using technical analysis the chart algorithm will tell you how the price may move using Moving Averages, RSI, MACD , bollinger bands etc . i.e. there are various pre-defined indicators which will tell you where to enter to get maxmum profits.
These naming convention may sound a bit complex but its not. These are just jargons for some simple things. While opening an account is like learning ABCD…., learning the above techniques is like studying for an exam & actual trading is like writing an exam paper. To get good marks in the exam you will need to start studying early. So if you plan to be earning consistent money from trading after an year, the first step would be opening a trading account as early as possible and start your trading journey towards financial freedom. I know people who have left their jobs as trading provided them enough to be self sufficient and left cities for peaceful life in mountains
Getting experience in trading may happen faster for some but few may take some years. What you should be doing is to take it up as side hustle , put in the efforts for a year and hope for the best. Instead of wasting time on youtube , instagram ,watsapp and other useless time pass activities if you spend your time learning price -action, technicals , observing live markets for an year it will do wonders to your trading experience.
How much money is needed to start ?
I started off with Rs 2000 in trading per month & gradually increased the trading amount. Rs 10000, seems to be fair enough amount to get a look and feel of the market. Instead of using that money of buying a shirt or eating out once, I decided to invest this to learn trading. The amount should not be big enough to hurt my emotions in case of a loss & should not be small enough to be taken for granted.
Would there be losses ? During the initial days – definitely. I had set 10,000 of my monthly salary to be used in learning trading. Losses are part of trading during initial days. Instead of paying lakhs to some trading classes I prefer to learn it practically myself which is thousand times better. Losses teach you valuable lessons and the experience you gain from it is everything you need to understand how trading works.
FINAL NOTE
If you put efforts for an some time you will realise if you can be a successful trader or not. This knowledge will not go to waste as you will gain valuable insights on how the Indian finance market works. All your money in banks, LIC, post office, mutual funds, SIP eventually go in to stock market. So instead of going through these channels if you are able to directly understand the market there is nothing like it. If you get success trading then you can move around the world freely with just 1-2 hours of work per day/week. But to reach that level you will need to get started as early as possible first and foremost by opening a FREE account.
Trading is an art, you will only know if you are good at it once you start
This is a first trading related blog I have written. If I get more interest from you guys I will write further detailed blogs on fundamentals, techniques, learnings , trading psychology, risk management, money management and also advance topics of future & options. You can get in touch me with me on my handles. I check insta regularly , other social media on weekly basis. All links at the bottom of the page.
I am already invested in share market via mutual funds. Is trading more profitable than that ?
Hello Kamlesh,
investment & trading are two completely different things. Investment is used to multiply your money while trading is used to create money. Investment starts with big amount & trading can start with smaller amounts. For investments to be profitable you have to wait for years while for trading you have daily returns. As such you can think of investment as a test match while trading as 20-20 or more like a 5 over match 😁. Trading is harder than investment & much more profitable but has a big learning curve
Can I start with my 1000Rs pocket money ?
Learning phase for trading is difficult which requires focus. Rs 1000 is also enough to start trading , but I would suggest to maintain your focus on completing your studies. Padhai khatam karo pehle. Get a job and then you can think of this.
Bro I have been trading for atleast 9 months but I keep on making same mistakes and not making profit . Any suggestions ?
Hello Jaspreet,
Where is the fun in making same mistakes, make new ones 😁. Well the simple & tough answer is only you can stop yourself from making mistakes. Though no one else can help you I do understand what you are trying to say . The name of the game is patience. If you can develop patience within, you can prevent same mistakes again. This is the most important & difficult thing out there . If you can sit silently for hours doing nothing without fiddling your phone you have patience which will surely help you in taking more conscious decisions to prevent old mistakes. Try yoga & meditation. Hope this helps.