The biggest fraud on Social Media is the idea that one can make a living as a Full Time Trader with a small amount of Capital. So many MTM Screenshots showing huge Profits and Traders talking about earning fantastic ROI's on Capital employed.
I've watched the best Traders in the business Trade and any of them would be content with a 30% RoC-very few make it. Trust me, it is impossible to consistently generate 60% type of RoC's on Capital on an amount which will enable you to live decently by Trading full time
While this kind of Return may be possible fo a short time, it will come with a level of Risk which is certain to blow up any account in short order. My personal view is that if one needs say Rs 1.5 lacs/month, they should have a Trading Capital of at least Rs 1cr
If one is consistently making an average of 18%, on this amount, they are doing well. 24-30% is the domain of very skilled Traders and upto 40% of the exceptional ones. Anything above that can be a long winning streak which will not sustain
My advice to new Traders is not to get fooled by those whose primary objective is to stroke their own egos by looking good on social media. Before embarking on a full time Trading profession take the time to talk to do some research and only then take a decision.
Warren Buffet has become one of the richest men in the world compounding his wealth at around 22%. Some of the best PMS schemes manned by the finest brains in this country earn about that-albeit on a much smaller Capital. It shocks me to see people mocking these type of Returns
Yes, Traders should and do earn more. But that comes at a cost. More Risk. The Market does not provide any free lunches and any excessive Return comes from Taking more Risk. Not being aware of this is the biggest reason for ruin of many, many Traders.
