Trading is considered as a complicated business and human mind complicates it further. We always tend to think that anything simple and easy won’t gain us any profit, and so we start exploring complex trading strategies which can make us millionaire in a month. After spending years in this field, I very well know that such strategy doesn’t exist. One becomes wealthy step by step by following a trading system with discipline and consistency. It doesn’t matter whether this system is simple or complex.
In this post, we would see how you can grow your money by earning just 10 points a day. We have considered NSE Nifty for calculation purpose but you can replace it with any stock or index you wish. You can earn this 10 points in one trade or multiple trades, by following news or charts, it really doesn’t matter! We would not discuss any strategy which can help you earn this, rather we shall focus on the tremendous profit potential if you consistently make 10 points a day. Refer our ‘AFL of the day‘ section or ‘Excel Trading‘ section to explore profitable strategies:
Let’s suppose you have an intraday trading system which earns you 10 points a day in Nifty futures. Lot size for Nifty is 75 and the margin required to buy/sell 1 lot is 45000 Rupees. So if you consistently make 10 points a day and invest all the returns back into your trades, your capital becomes 16 times in just 200 days. That means 50000 rupees invested would become 8 Lakhs in a matter of 1 year (considering 200 trading days in a year). See how your capital grows with time in the below graph:
That’s great Isn’t it? But wait, if you are doing purely intraday trading then you can put MIS orders and save money on margin. For my broker, intraday margin for Nifty futures is just 15000 Rupees. If we re-draw the above graph considering this margin, then it would look like this:
That’s almost 70 Crore rupees in 200 days. Did you ever imagine you can multiple your money to that extent by just earning 10 points a day. I just proved that it’s possible on paper. The Excel sheet with detailed calculation will be shared at the end of this article.
Now coming back to the mysteries of human mind. 99% of traders do not stick to any rules for more than 1 month. Did you observe what’s common with the above two graphs. The returns are very low in the first few days, and they spike up towards the end. Seeing the low returns in the beginning most of us tend to give up. Its not difficult to discover a system which gives you 10 points a day, but the difficult part is to stick to it and letting your money grow. Compounding your money is most essential to be a successful trader.
It’s not difficult to discover a system which gives you 10 points a day, but the difficult part is to stick to it and letting your money grow. Compounding your money is most essential to be a successful trader.
Download the excel sheet from below link. You can play around with margin amount, lot size and number of points to estimate your capital growth over time.