Since i have joined few social groups , I have constantly read that One cant make money from trading in the long term.
No doubt , value investing is one of the best ways to multiply your money . But Trading has its own charm .
There are many people who dont have surplus money to invest for 5-10 years . Everybody has its own financial restrictions .
Thus One should be a trader + investor .
Earn through Trading and invest part of the profits for long term .
There is a common belief that one cannot earn through trading in the long term .
But the actual fact is - "One cant make extra ordinary gains through trading "
Now , This is the only thing people fail to understand .
Personally speaking , I am an active trader and i can assure that you can make money through trading .
Now the Question arises - Who do People fail then ?
Here is the answer to this question - There are only 2 reasons that leads to the failure of traders
- People try to make extra ordinary gains- This is the biggest problem with majority of traders . They aim to earn 10-20% per month . And this leads to over trading . Please understand , Stock market is not a wealth of unlimited wealth from where you can mint as much as you can . One needs to take stock market as a business and focus on earning 2-3% per month .
The moment you take this as a business - You will see a significant change in your returns .
Its 2-3k per lakh .
Now some people may say -- This is very less .
LEt me show you the reality
If you just earn 2 % of 1 lakhs per month for 30 years then i lakh will become 124756112.775 (12 crores )
100000 * 1.02^360 (basic compounding )
12 crores from just trading and if you invest a part of your profit everytime - Sky is the limit .
This means that even if you have 1 lakh in your life to start with - you can still earn a few crores . + your regular job .
- People Dont have Proper knowledge of Technicals -
Biggest problem . 90% of the traders lack the basic technical knowledge about charts . They dont know when to enter and when to exit . They depends either on CNBC analysts or some facebook groups . Many people fall for the scams of call providers and end up loosing money .
People commit these basic mistakes and this creates a common perception among people that with trading - You will loose your last shirt etc .
I myself believe in long term investments but along with it , Trading is also important because there are many people who depend on Market for some of their needs . So Dont neglect Trading .
Thus members should not become rigid towards trading and attain proper knowledge to excel in trading as well .
I would love to hear from you guys !!
Regards