If you are looking for an additional source of income, you could consider investing your money in the stock market. In fact, there are many who regularly invest in stocks to earn some extra income. Some even choose stock market trading as their primary profession. But how much money can you actually earn from stock trading?
Let’s dig in to find the answer. Basically, stock market trading refers to the process of buying and selling stocks the same day. As an intraday trader, you can use technical indicators, observe price chart patterns, and implement various momentum strategies to make a profit in trading. The primary difference between a long-term investor and a trader is that as a stock market trader, you need to observe the market regularly and closely to make money, unlike investors. Read on to know more about how to earn money from share market.
How much money can you earn by trading?
When considering trading in the stock market to make money, the question that often comes up is: Is trading really profitable? Even if it helps to make money, the bigger question is how much you can earn from it. Many are left wondering how to earn money from share market.
Well, if you want to know how much you can make from the stock market, your answer is as much as you can. There is no limit on how much one can earn from stock market trading in a month or year. To be honest, the money you can earn by trading a stock can range from thousands to lakhs or even more.
There are certain factors on which the profit from intraday trading depends. Some of these are:
1. How much risk can you take in your intraday trading per bet?
2. How much capital are you willing to put in the stock market regularly?
3. Loads of patience
4. Knowledge and expertise in trading market and technical indicators.
You can double or triple your investment or lose it all depending on your ability and expertise in judging the intraday trading moves. Are you still wondering how much you can earn from intraday trading? Well, your earnings from intraday trading on a monthly basis can go up to Rs. 1 lakh or more only when your trading strategies are in place and you have the requisite skills to execute successful trading.
Does it necessarily mean that intraday trading is profitable? No, nothing is guaranteed. In fact, there are several studies that show almost 95% of Indian traders register huge losses from trading. If you want to know how to earn money from share market, you must remember that one needs sheer expertise and knowledge of share market as well as enough time to observe the market movements closely to make enough profit from it.
Points to note while trading
If you want to know how to make money in stock trading, you should keep in mind certain factors that impact intraday trading. We have listed some of them below.
Stop-Loss
The first point you need to keep in mind is the stop-loss order. Stop-loss order in trading refers to the process that enables you to limit or cut losses from intraday trading. To know how to earn money in share market, you should make full use of the stop-loss order. When you put a stop-loss order in your intraday trading, the stock gets sold automatically when its price falls below the stop-loss price level.
For instance, you purchased stocks of XYZ company at Rs 500 apiece and put a stop-loss order of Rs. 450 on it. So, if the share price falls below Rs. 450, they will be automatically sold to limit your loss per stock to Rs 50 only.
Thorough background research
If you are willing to learn how to earn money in stock market, you should always do background research. Remember, successful intraday trading requires a lot of observation and research work. Your trading moves need to be backed by in-depth research on the company and the historical performance of the stock you are going to invest in.
As a trader, you must be skilled enough to analyze trading metrics, price charts, oscillators, monitoring volume, ratios, and other market indicators properly. You may need to take training from experts before you try to do it on your own. Stock market returns are highly volatile especially when you are participating in intraday trading. Therefore, backing up your stock selling and buying with proper research and excellent analysis is essential.
Regularly monitor your investments
Regularly monitoring your investments is a must while investing in the stock market to gain profits. Remember, monitoring your stock market investments regularly is one of the most important qualities of a successful stock market trader. This would enable you to sell your stock immediately if you think the stock price is going to fall significantly in the near future. The skill is all the more important in intraday trading as it involves higher volatility.
Requires patience
If you want to make a lot of money from your high-return stocks, you should have loads of patience. It is another essential point to keep in mind while investing in intraday trading to make higher profits. Intraday trading is a very volatile market and making buy-and-sell decisions on a whim can lead to significant loss. So, if you want to know how to earn money from the share market, you must have enough patience to learn and observe the market and the historical performance of the stock before making any trading decisions.
Avoid herd mentality
Lastly, avoid herd mentality while doing intraday trading. This means not to buy or sell a stock just because everyone out there is doing the same thing. As a stock market trader, you must understand every individual trader has his unique trading goals and investment objectives like you do. So, copying someone’s trading strategy will not take you ahead in stock market trading. You must analyze your decision with the help of various market metrics and indicators.
Conclusion
To conclude, there is no limit to earning from stock market trading so long as your investment decisions are backed by thorough analysis and market knowledge. While it is possible to make good money from intraday trading, loss of principal is also a distinct possibility. If you want to know how to earn money from share market, you must first equip yourself with sufficient knowledge and stock market expertise. We have discussed how much you can earn from intraday trading and tips to improve your chances of making profits.
