The day I started trading I hoped to make lot of money, and ultimate goal of every trader is to
trade for a living.
My Guru asked me how you are going to make "a lot of money", I said
some blah blah but Honestly speaking I did not had any concrete answer.
Somewhere in the back of my mind I secretly hoped I will catch the one
big move that will make me enough money to trade like Big boys.
Unfortunately the odds of catching the "big one" are probably the same as those for winning the lottery.
I
hope many traders who are trading or willing to start trading will be
facing with the same dilemma and confusion so today am sharing few
fundas i got from my trading guru. Use them and see the change in your
trading.
Have a realistic trading goal
First and foremost thing my Guru told me "
I should have a trading goal".
The goal did not have to be a large one like being a millionaire in 1
year, Trading goal should be simple and realistic. Having a trading goal
would help me focus better on the markets. I would come to see better
opportunities (note this is not the same as “more opportunities”) as
well as managing my money better. Since I did not have a very large
trading account at that point of time ,My Guru suggested to start with a
goal of
netting 2500 per week out of the markets. So If I could
do this consistently for four weeks, I should be able to net Rs1000 a
month which is almost 10% return on capital.
I told my Guru "Sir its not possible for me to live of Rs 10000 a month !". He laughed at my innocence and told " Bramesh "
If
you could consistently net 2500 a week, using single contracts, for the
next 12 weeks, theoretically there would be no limit on the amount of
money I could earn by trading." Still confused I asked how this was possible.
He
said that no trader, who trades for a living, does so trading just one
contract at a time. The power of making money in the markets comes
through the use of multiple contracts. If you can net just 2500 a week
using single contracts out of your trades, then with four contracts you
should, in theory, be able to net 10000 a week, or 40000 a month.
However, trading multiple contracts like this without first being able to trade consistently would be financial suicide
