The right way to pursue trading with your 9-5 job.

Right way to trade

The first question that comes in the mind of a person with a 9 to 5 job is whether they should pursue trading with a job or not.

The straightforward answer to this question is “YES“.

As per the statement given by Mr. Nitin Kamath, Founder, and CEO of India’s biggest discount brokerage firm Zerodha who says ‘People who have different sources of income tend to do better in trading than the people who are doing trading without any other source of income.

So having a job and doing trading to make some extra bucks is a good decision to make your life better.

Now let us read the case study of two  friends to understand things in depth.

Rahul and Nikhil are office friends. They both are fascinated with the idea of making some extra money besides their primary income from the stock market.

After having a deliberate discussion with each other Nikhil decides to quit his job and start full time trading so that he can do it with more focus and ultimately get better returns on his capital and time. On the other hand his fellow mate Rahul decides to continue with his job and quit it only when the results from trading can sustain his life properly.

Before we move forward and describe you more about what happened next, let us take a look at some of the important figures which we will need to understand this case study in a better way.

1) Both started with a capital of ₹1lac which they saved from job.

2) Both have a fixed monthly expense ₹4,000.

3) Rahul is earning a salary of ₹12,000.

4) Nikhil has to withdraw money from trading account as he has left his job.

5) Rahul do not withdraw money from his trading account. His expenses are covered from his job.

In the image posted below we have shared the performance of Rahul & Nikhil in the first 4 months ⤵️

Important observations from trading account of both individuals in the first 4 months ⬇️

Rahul ⬇️

1) 2 months have ended in profits and 2 months have ended in losses.
2) Biggest loss is ₹3,000.
3) Biggest profit is ₹11,000.
4) Total Profits are ₹15,000.
5) Profit in % = 15%

Conclusion – Rahul has done very well as he is able to make a side income besides his job. He has used passive trading strategies like Option Spreads, Swing Trading to generate returns on his invested capital. Also, he has kept his losses limited and created strict rules for himself to maintain discipline and protect his capital.

Nikhil ⬇️

1) 3 months have ended in profits and 1 month has ended in loss.
2) Biggest loss is ₹9,000.
3) Biggest profit is ₹10,000.
4) Total profit is ₹15,000.
5) Total expenses are ₹16,000.

His expenses are greater than his profits and hence he has ended up losing 1% capital after 4 months.

Conclusion: Nikhil has not done well even after giving more time and higher focus to trading. This is because of few reasons. Firstly he has left his job, which means his expenses will now be covered by his trading income/trading capital. Secondaly full time trading needs higher discipline but due to overtrading his biggest loss is almost equal to his biggest profit in the market. Another reason of failure is the pressure that he is feeling while trading as now making money from trading has become mandatory for him unlike Rahul.

CASE STUDY CONCLUSION 🔽

Rahul and Nikhil both started with same amount of capital but still we find a magnificent difference in results.

Having same capital is not having the same success. Even after giving more time and focus to trading Nikhil has been on a losing side. Rahul is able to do better because of the following reasons ⤵️

1) Other source of Income: If you have money flowing in from some other sources you will have more confidence and less pressure while trading.

2) Capital: If you are switching to full time trading then you should have more capital so that you can cover any emergency expenses and it does not hamper your trading. Here having the same capital was also one of the reasons why Nikhil made a negative return.

3) Learning > Focus: Focus is overrated and learning is underrated. If you are fully focused and still not able to learn from your mistakes it is going to keep you on the losing side. Rahul made a small loss as he was less focused but Nikhil made a big loss as he was continuously tracking the market and trying to make a profit on every move.

After reading this case study, One thing which should be clear in your mind is having a job gives you an edge and not a reason to avoid trading.

If you can make some extra bucks, then why not actually make it.

Now let’s discuss how you can make money from the stock market if you are occupied in your 9 to 5 job ✌️

Capital Protection

In trading – protecting what you have > making new money. So if you are going to be busy while the market moves make sure to learn about some important money saving hacks.

1) GTT Order: Passive Trading involves using GTT (Good till triggered) orders instead of normal stop-loss orders as they are valid for 1 year. A Swing trader who do not frequently track prices can place this order to avoid any big drawdowns on invested capital.

2) Avoid Scalping/Very short term trading: If you are going to divide your focus into two things, it is always better to avoid high risk trading opportunities. High risk gives high rewards but if you are not attentive then high risk can take your capital to 0 before it becomes double.

Right Strategy

Using the right strategy is very important when you are serious about making money from trading even after your 9 to 5 job.

1) Option Spreads/Option Selling: It is important to learn about different option hedging & option selling techniques so that you can get benefit of both trending and non-trending markets.

When you buy an option you have 33% chance of winning but when you sell an option you have 67% chance of winning.

When you are busy it is often recommended to go for a strategy that offers a higher probability.

2) Swing Trading: Learn how you can find, buy/sell stocks that can go in one direction for few days to few weeks and give you money for your patience.

Passive trading involves holding positions for some days to some weeks and liquidating it when your expected target is achieved before hitting your stoploss.

You don’t have to be very attentive as a swing trader. A person with 9 to 5 job can look for swing trading opportunities for money making.

Automation

If you have done an effort to read till this point you are definitely someone who want to take advantage of your primary source of income.

We are not going to disappoint you! It is 2023 and relying on options that make our life easy is not a bad choice.

If you have capital and an urge to grow it, you can take help of an expert to automate the process.

Chiku Charts Passive is one such platform that enables people with less time to automate the process of trading!

So, what are you waiting for?

Enjoy the passive income. Fill this form ⤵️

https://tinyurl.com/ccpassive

Leave a Reply

Your email address will not be published. Required fields are marked *