Investing for a living means the practice of investing with the primary goal of generating sufficient income to cover the living expenses. It involves dedicating resources and time to manage investment portfolios rather than depending on a traditional job for financial support. This approach demands an extensive understanding of various investment tools and financial strategies.
How to Learn Trading?
If you want to learn trading for a living and become a profitable trader, read on to know more:
1. Read Investment Books
Trading in the stock market demands a basic knowledge of trading aspects that can impact the share prices, and that information can be gained by reading books regularly. There are a variety of books available in the market that cater to the novel trader or an expert. Choose a book for a beginner and ensure the language used is easy-to-understand.
2. Read Financial Research and Articles
Another way of gaining knowledge about the share market is reading financial articles published in newspapers, financial magazines and social media platforms. The articles are a great way to understand the market to know how the market functions and how you can generate profits while trading for a living.
3. Find an Expert
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- 20 Lac+ unique clients
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If you navigate the stock market, a mentor would help you understand the investment process. A mentor could be anyone who has knowledge about the share market—a family member, friend, teacher, or any other person whom you can trust. A mentor can share trading tips and good learning resources, such as financial books or articles, or help you assess good learning sources.
4. Follow Successful Investors
To be a successful investor, you must learn from other successful investors such as Elon Musk, Warren Buffet, and Howard Marks. Study their qualities, investing patterns, daily habits, and perspectives about the market to become a successful investor. Moreover, read books written by the greats of the market about the strategies they follow to become a successful investor.
How to Start Trading for a Living?
The following are the major steps to start trading for a living in the stock market:
1. Choose a Broker
Research and find a legitimate broker like SMC Global Securities that matches your trading requirements. When choosing a broker, always prioritise safety, trustworthiness, and customer service.
2. Open a Demat Account
To start your trading journey, you must open a Demat account or brokerage account. A demat account keeps your securities that you purchase electronically. Without a demat account, trading for beginners is not possible for any investor.
3. Understand Stock Movements
Stock prices change according to demand and supply, economic factors, fundamental factors like a company’s growth, and investor sentiments. Understanding these aspects can help you gain knowledge about stocks and decide the right time to enter and exit the market.
4. Determine the Bids and Asks
A bid price is the maximum amount you can pay for a stock. On the contrary, ask price is the lowest price at which a trader can sell the stock. It is crucial to decide the correct bid price and ask prices to ensure profitable trading.
5. Fundamental and Technical Analysis of Stocks
For strategic trading, it is important to perform fundamental and technical analysis of stock. Fundamental analysis assesses the intrinsic value of security after considering various factors earnings, expenditure, assets, and liabilities. Technical analysis assesses past price and volume charts to forecast the future performance of the stock. Both methods are essential for strategic trading.
6. Prevent Loss
Volatility is the essential feature of the stock market. A trader must understand how to prevent substantial losses in stock trading. While executing a trade, set a stop loss price to reduce the loss. If you do not put a stop to loss, it may significantly affect your capital.
WHY SMC
- 20 Lac+ unique clients
- 33+ Years of Serving
- Advance Technical Analysis
- Free Demat Account
7. Take Expert’s Advice
Getting expert’s advice helps the traders to make right trading decisions. While no one can make accurate forecasts about the stock market, guidance from the industry experts help the traders to make informed decisions.
8. Start Trading for a Living with Less Volatile Stocks
To avoid significant capital loss in the beginning, start with safer stocks. Although giving you a slow start, These stocks have more chances to perform well even in unfavourable conditions.
Trading Tips for Beginners
The Novel traders must learn some tips that will help them with financial planning, decision-making, and risk management.
1. Associate With Reliable Intermediaries
An intermediary is a person who acts as a bridge between the investor and the primary or secondary share markets. Beginners must choose intermediaries such as stockbrokers or depository participants for different purposes. They help investors with the opening of trading and demat accounts, investment platforms, investment research, and other aspects. Compare the services of different intermediaries and choose one that aligns with your requirements.
2. Choose Companies With Strong Financial Indicators
Perform fundamental analysis to determine the financial analysis of a company. Companies with positive financial indicators will likely be more stable during market movements. Investors must choose stable organisations with solid fundamentals to earn greater returns in the future.
3. Perform Sectoral Analysis
By performing sectoral analysis, you might know different industries in a geographic region. Some sectors may grow at a higher rate than others. Beginners must research to identify the top-performing industries and invest in the shares of companies in the top-performing sectors. It will enhance your chances of high returns in the future.
Conclusion
A beginner of trading does not know the basics of trading, difference between trading vs investing and many other aspects of trading. As you start your trading for a living journey, it is crucial to approach it with understanding trading basics, developing a strong trading plan, and implementing effective risk management strategies to help you deal with complexities of the stock market.
FAQs
WHY SMC
- 20 Lac+ unique clients
- 33+ Years of Serving
- Advance Technical Analysis
- Free Demat Account
1. What does trading for a living mean?
Trading for a living involves buying and selling financial instruments like stocks, commodities, or currencies with the aim of making enough profit to support oneself financially, without relying on a traditional job.
2. What skills are essential for trading for a living?
Key skills include technical analysis, understanding market trends, risk management, emotional discipline, and continuous learning about financial markets.
3. How much capital is needed to start trading for a living?
To start trading for a living in India, you typically need a minimum capital of ₹5-10 lakhs. This amount allows you to manage risk, cover expenses, and generate meaningful returns while trading full-time.
4. What are the risks involved in trading for a living?
Risks include losing your entire capital, market volatility, emotional stress, and the potential for financial instability if not managed properly.
5. Can anyone trade for a living?
While anyone can learn to trade, not everyone will succeed. Success in trading requires a specific skill set, discipline, and the ability to handle pressure and losses.
References
1.https://medium.com/@siennmontgomery/how-to-day-trade-for-a-living-a-comprehensive-guide-9d12f721bea0
2.https://www.investopedia.com/articles/trading/05/011705.asp
3.https://www.ig.com/en/trading-need-to-knows/trading-for-beginners