The question of how much money is needed to start trading may sound fun, for the casual investors into the stock market. But if you want to make your profession in the stock market and make it a way of livelihood, it is not. Here before understanding how much money is needed for livelihood depends on what kind of lifestyle do you lead, or you want to drive.
Ok, the question here is if you wish to live on the earnings that you made on the stock market, how much money you need in a month to make your living. As we all know, the total amount of money that we need depends on the lifestyle of the individual. It depends on you want to live with the comforts, or you wish to live with the luxuries, or you want to go on a two-wheeler, or you wish to travel in the four-wheelers.
Let’s work on the monthly income needed, at the micro-level, for basic living with the necessary comforts and made some vague answer.
Suppose you live in a rented house for 5000 INR
Your food expenses are close to 4000.
Your electricity bill is around 500.
The internet bill and other TV with the other entertainment stuff are 1500.
Medical expenses 1000
Travelling expenses, etc. are 1000.
Let us consider the mobile and other charges to be 1000 INR.
Let us say you want to make the savings of 2000 INR every month for the future spends.
So, the total income that you need for every month is INR 16,000.
The monthly stock trade that you do must meet this amount. When you plan, you should consider how much you win and how much could lose as both of them cannot be avoided. So, assume, and you should work to earn at least three times a week and also twice in a week, as possible losses. You should make the potential wins in a month. And as the losses cannot be avoided, the only thing that can be done is to minimize the losses.
So, per win, if you can make at least 1000 INR, you should make at least one win per day, considering 25 days a month. So, you will have at least 25,000 in your account. As the losses cannot be avoided, make sure that the loss will not be more than 500 at any instance. The maximum limit that should be set to the number of losses must be ten times a month. So,
What you win per month = 25,0000 and
What you lose per month = 5,000 and
The balance will be 20,000, which should be more than what you need for the expenses of the month.
So, based on what you want to win every day and eventually for the month, it is essential to invest in the shares that can give you the returns of 1000 per day or 6000 per week.
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