If you’re excited and looking to step into the world of stock trading, STOP if you have an unclear idea of how much one can earn in stock market in India. Majority of the people who haven’t started investing think that they could multiply their money in a few weeks, days or even trades. Yes, there is a possibility of achieving that goal, but it is highly unlikely. So, how much you can earn from the stock market?
The answer to this question can be as varies how you approach and trade/invest in stock markets. In this blog, we’ll explore the possibilities and answer the million-dol
lar question – how much one can earn in stock market in India.
Understanding the world of trading:
Before we take the discussion to the earning potential, let’s understand the basics of trading. Trading is done to get profits by buying and selling in the short term in different segments, including equity, derivatives, and commodities. One could take a trade for a day, week or even months.
Before we answer how much money can you make from stocks in a month, as a trader you must understand the various trading strategies and timeframes. On the classification of the holding period, trading could be classified into – Intraday trading (buy and sell a day), swing trading (hold for more than a day but less than 2 weeks), and positional trading (hold for more than a day but less than a year).
On the other hand, there are several trading strategies that could be utilized to make money. These include chart patterns, candlestick pattern on basic candlestick charts, demand supply, price action, trendlines, support resistance, indicators, and a lot more. But to make money consistently, having a well-thought-out and back tested strategy is essential. For this you could enrol into a stock market paid course or even stock market courses online free with certificate.
Factors affecting stock trading profits:
To estimate exactly how much money can you make from stocks in a month, you must have an idea about the factors affecting your profits. Stock market volatility is a both a boon and bane for traders. For Intraday traders, with higher volatility comes the chance to mint higher profits. But if this volatility stays for longer durations say for a week or more, it could impact returns significantly. To remain updated with the current happenings you can even attend a stock market free webinar.
The necessity to stay updated on economic indicators and market news, decreases with your intention to stay in the trade. However, this dependency could never be eliminated. Additionally, diversification in trading and risk management are the pillars of your success in trading and determine how much you can earn from the stock market.
Successful trading requires effective risk management. For you to do effective risk management, you could use stop-loss orders, that close the trade in case it goes opposite to your opinion. This helps you in limiting your losses and saving your trading capital. It’s equally important to set realistic profit expectations to avoid chasing unrealistic goals. Now let’s answer the question- how much you can earn from the stock market?
If you’re doing Intraday trading, a target of 1-3% is good enough.
If you’re doing Swing trading, a target of 3-5% is good enough.
If you’re doing Positional trading, a target of 5-10% is good enough.
Though, in each of these respective fields, you could make more money than the market averages.
Investment Capital and Trading:
Now, let’s address one of the biggest questions after answering how much one can earn in stock market in India – how much money you need to start trading?
The good news is you don’t need a huge sum of lakhs and thousands to start your trading journey. You could start as low as Rs 5000 and try to implement what you’ve learnt. By starting small and gradually scaling up, you can transform yourself as a skilled trader. Also, this recommended approach to start small ensures you don’t risk more capital than you can afford to lose.
While trading you must consider the tax implications. While trading in equity would usually incur the short-term tax gain, any income from trading in futures and options is considered as a business income. Having a clear understanding the tax structure of your income slab will help you manage your finances efficiently. You can even explore the best stock market courses in Delhi for this purpose.
As a beginner or someone who has started with little knowledge, you’ll find various resources beneficial for your stock trading journey like Varsity by Zerodha. If you can invest into your learning, you must consider enrolling in one of the top 5 online stock market courses in India.
To sum it up, how much one can earn in stock market in India depends on various factors, including the skill level, knowledge, strategy, experience, trading psychology and risk management. Remember, investment must always be a part of a trader’s portfolio, so that power of compounding can work in their favour over time. While there are absolutely no guarantees of making money in the stock market, with the right approach, mindset and continuous learning, your trading journey could be profitable as well as successful.