Investing as a Habit Vs Investing as a vocation

Saving your money can help you set aside cash for an emergency, however, if you are looking to generate wealth, investing is the key. Investing can help you achieve your life goals such as buying a home for your family, financing the education or marriage of your children. It also helps provide for a comfortable retirement for you and your spouse down the years. As opposed to saving, building an investing habit helps your money grow exponentially to beat inflation, giving you a potentially higher yield on the invested capital.

Depending on your capacity to take a risk, you can park your savings in fixed deposits, government bonds, and schemes such as PPF, NSC, NPS, or even the more lucrative mutual funds. Staying invested for the long term gives you the advantage of the power of compounding and is advisable especially if you invest in the equity market. This is because a longer horizon reduces the erosion of your hard-earned money due to market volatility.

If you are a beginner at investing, the prospect of a stock market investment may seem risky, but with a little bit of insight and experience, you could be trading stocks for a living taking care of your monthly expenses. No more waiting for months and years to recover the cost of your investment when you can do it in a day!

Day trading as a career

Unlike long-term investing, intraday trading utilizes the stock market movement to buy or sell stocks within the same day. A person trading stocks for a living monitors the fluctuation in share prices during the day, taking long or short positions and squaring these off to earn gains at the end of the day.

An intraday trader can make money even when the markets take a dip. Can anyone make money in the stock market, you might be wondering? Well, a career in the stock market can be riskier than taking the mutual fund route, however with enough expertise and insight you can select the right stocks by analyzing the current market trends. This gives you the winning edge.

How to make money trading stocks at home

As someone who is taking up trading as a career in India, you need to be agile while following the rules of intraday trading. You could either work-part-time or full-time, although the latter is preferable. Intraday trading requires discipline, research, analysis, and quick thinking. Here are a few strategies to help you make the most of day trading as a career, especially when you are just starting:

Invest small:

Set aside a certain sum of money for day trading to avoid any financial setbacks. Decide how much can you afford to lose per trade as well as over the day. This helps you trade in your financial comfort zone.

Build a trading plan:

A smart and well-thought-out plan for day trading is the key to a successful career in the stock market. There are many inherent risks that you have to deal with as an intraday trader. Going into the day’s trade without a game plan could set you up for a loss as you make decisions in the heat of the moment. You should know when to pick the trade, book gains, and cut your losses. Having an eye for any other opportunities that arise can also be helpful.

Know when to ‘stop loss’:

What separates winners from losers pursuing trading as a career in India is discipline and the habit of ‘stop loss’. It is an automated order that facilitates the sale or purchase of a stock when its price reaches a specific level. Using ‘stop loss’ efficiently in intraday trading can save you from holding positions with marked-to-market losses that are difficult to manage.

Avoid overtrading:

The biggest mistake that you can  make at the start of day trading as a career is to overtrade in enthusiasm as a beginner. Rather, analyze and select a few stocks to trade and keep track of market trends to avoid going overboard,

Entry and exit plan:

Stick to intraday trading guidelines and devise specific strategies to enter and exit the trade. Do not get fascinated by a stock, losing sight of how to make money from it at the end of the day.

Stay aware:

Keep track of corporate news, announcements, financial results, and other macros to help you guide through the day’s trade and make effective decisions based on the data. Remember intraday trading is not about split-second decisions.

Track your performance:

The stock market is dynamic and hence you should also revisit your trading strategy and modify it accordingly. You can do this by taking stock of your wins and losses daily or weekly. This will help you spot any gaps in your trading plan so that you can better it for the future.

Prefer business over stocks:

Going for the most popular stocks might seem like the right method. However, it is better to understand more about the company. Evaluate company performance, market reputation, etc. before making the trade

Keep emotions aside:

It is natural to be on a high when you make money and feel demotivated when you lose. However, try to be neutral and be business-minded evaluating stock prices to make the most of opportunities.

So, if you are still wondering how to make money trading stocks at home, just follow the rules mentioned above and you might just score a homerun. Stay focused, follow the principles of risk management, and trade with a disciplined approach when doing intraday trading in India.  Remember the outcome of each trade is unknown, which can be both a risk and an opportunity depending on the strategy you apply to make the most of it.

As a caveat, practicing trading as a career in India should not be viewed as an opportunity to make big bucks or gamble. It is an avenue for those who are serious about trading and want to further utilize their skills to fund their living expenses and make a steady income. As your knowledge of the market grows and you gain more expertise, intraday trading can become a full-time career.