How much profit does a Full-time trader deserves in a Month?

[sibu3168]

Hello

Whatever I am writing here is coming directly from hearts. I is my confession in front of my highly esteemed forum.

Entry into Secondary Market

Till that day (around mid 1994), I was completely frustrated because of failure in Civil Service Examination (ICS). I thought myself as very good at studies and my papers in ICS were Physics and Mathematics. It was my third chance and I had cleared Prelim two times before but could not able to score much in Mains. But the profit of 50000/- had changed my view for ever and suddenly I saw a ray of hope in life. After that day I completely abandoned the ICS and thought about taking Financial Market as my next career. But first I wanted to give couple of years as a try. In the next one month, after discussing with my friends, I thought it was better to go for secondary market as primary market was a lottery. Till that day, I was completely ignorant of stock market. Forget about Technical Analysis and Fundamental Analysis.

In search of secondary market and to find a reliable broker (in those days where manipulation was the norm), I had searched Nehru Place, Bhikaji Cama, Cannaught Place, Rajendra Place like a mad man. At that time, since I was staying in South Delhi, I zeroed on a Dehli Stock Exchange broker who had a office at Nehru Place. I contacted him and conveyed my intention. At that time, NSE was not established and Delhi was one of the most promising stock exchanges and trading was done for two hours in afternoon and it was an open cry system. When he heard me he was literally very happy. He immediately registered me in his client list. In this process I had never require anybody's help. Only casual discussion with room mates. Since they were from commerce back ground, from them I came to know about some market related terms such as Book Value, EPS, PE, Dividend, Bonus. I zeroed in these terms. I bought a Capital market magazine and using that magazine I shortlisted some share. My criteria was CURRENT MARKET PRICE SHOULD BE LESS THAN 10/- and BOOK VALUE SHOULD BE GREATER THAN 20 & IT SHOULD BE A DIVIDEND PAYING COMPANY. On the basis of that criteria, my first purchase was 3000 Aravali Leasing & Finance (ALFC) @ 8/- and the second Purchase was 2500 Rampur Distillers (Now it is Radico Khaitan) @ 10/-. At those time, transfer of shares took almost 3-6 months. When my shares were on transit, suddenly price of ALFC had been doubled. Fortunately, both the companies had transfered these shares into my name within one month. By the time I got those shares, ALFC was quoting at 12/- per share. Since I had seen the price of 16/- so I decided to wait for some period. Finally I sold ALFC @ 15/- per share and Rampur Distillers @ 13.50 per share. From that day, I decided that I will never send for transfer. On the basis of that criteria, I invested for the next one year and believe it or not my entire 50000/- had turned into whooping 6,40,000/- (around August, 1995). Actually, I was already becomes a hero in the eyes of my broker and my friends also. Everybody thought, I got inside information from somewhere. But the truth was something else. But in this process, I met various people in this market and that gave lots of insight regarding how market works.

Now just wait for the next.

With Best Wishes,

Till then

Good Bye

 

[strongBuddy]

Thanks for the reply sexytrader and nirhajan. i am 39, am into real estate after suffering 12 years working in the bpo industry. i buy and sell land. i am just investing 10% of the money i have.

//after suffering 12 years working in the bpo industry//
suffering?

 

[strongBuddy]

Hello Megapixel, if you dont mind, i dare to contradict you. My point is , there are 80 to 90 % consistent losers in trading , ie in different formats . Very clearly, in Positional trading failure rate is low and intraday trading this failure rate is very high. Do you mean to say those all 80 to 90% people are failed in their lives . Is it looks convincing to you. How the society sustains and grows with 80 to 90% people who are failure. Certainly never. Trading is different game. It makes every one humble. Yes again iam stressing , it makes each and every one humble. There is no exception. Humble ness is not SELF SABOTAGE. Humble ness is a trait developed when negotiating uncertain , un known environment.
I may not explain , but the fact is above.
Wish you all the best in trading.

Please read it carefully. Actually megapixel is throwing it as a question to Anillal who had said so.

 

[sibu3168]

Hi,

DOOMS DAY

Now everybody wants to know how this was possible i.e. how 50000/- becomes 6,40,000/- in one year. In fact, I don't have that answer. I think some credit goes to IGNORANCE and some credit goes to the system of that era. At that time, a settlemet procedure took almost 15 days to complete and if you wanted to take delivery, it again took minimum 21 days to have delivery. So automatically, when I trade for delivery purpose, I got those delivery after more than one month. In between that period, the price of a sub par (below 10/-) security becomes 12-13 rupees or more. So I got around 40-50% return within 45 days. The most astonishing fact was that market was in a downtrend in that period. Even now when I look back to my past, I become completely dumb. Anyway that was my golden era of my career.

After getting so much money, I became completely restless. Gradually, I thought it is very easy to make money from this market. So I thought about to take more risk. In last one year, I came to know about a term called FORWARD TRADING, but I did not know much.

After someday, suddenly I found an advertisement regarding trading in forward market from a broker at Bhikajicama Place. He gave four times leaverage. So I immediately contacted him and came to his office for a meeting. At that moment he had some meeting in his chamber. After sometime, he called me to his chamber. There I saw a big graph paper lying on his desk and there were some graphs on that paper. He was talking to somebody in his chamber regarding charts. He was uttering some words like candles, good reversal and 100% accurate. At that moment I could not understand anything from his words but it was my first encounter with Technical Analysis. From him I knew some basic things about forward market. He advised me to first take some investment on leverage basis then go for forward market. At that moment, all my money were lying with my first broker at Nehru Place. When I went to him to take my money, he very strongly opposed to the idea of leverage trading. But I took all my money from him and started to make more visit at Bhikajicama Place. My first leveraged trading was Jai Prakash Industries in forward market at Delhi Stock Exchange. I took 20000 shares @ 60/- per share . All costs me around 12,00,000/- with 5,00,000/- as margin money. I kept 1,40,000/- with myself. It was Friday and this day was the turning point of my life. On Saturday, i.e. the nextday, around 9 A.M. a person from his office came to my room and called me to contact the broker immediately. I was completely surprised by this act and immediately went to his office. There I came to know that I have to take those shares as delivery because of book closing. I tried to convince him that this deal was not intended for delivery as it was done in forward market. But he forced me to take the delivery as there was a dividend of Rs. 2/- per share. So it came around 40,000/- rupees. Since I did not know much about rules and regulation of the market so I agreed to his idea send those shares to transfer into my name but at the address of the company. He also charged me a interest of 2% on 7,00,000/- per month and took some writings on a stamp paper. It made me very nervous and I already got a hints of my wrong doing but I had no option. At that time JP Ind. was considered as a blue chip company and the transfer process took almost 3-6 month time. After 3 months, the price of JP Ind was around 35/- per share. Now everybody get tensed as I had already lost my part (5,00,000/-). Again to my disbelief, all shares were returned to me as bad delivery. I rectified all those bad delivery and when I got those shares in my name after two months, the price of JP Ind was 9.80/- per share. That means the entire value of the investment was 1,96,000/-. Still I was short of 5,00,000/- to get away from his liability. The only positive point was I had already gave him 70,000/- as interest money (which I had taken from my 1,40,000/- deposit, I kept with myself). Again I gave 40,000/- (which I got as dividend) to him towards his initial prepayment. So he had good faith on me. Now it was completely impossible for me to pay back 4,50,000/-.
But he was no way to hear my words. So I decided to start day trading in this market and my net worth was 70,000/- rupees.

Please have some patience for my next adventure.

Till then

Good Bye

 

[sunny_ndl]

very interesting journey of senior trader. First of all i thanks to traderji forum, without this forum , it is not at all possible to know the experiences , pitfalls of experienced traders. Their real life struggles, psychological rollercoaster journeys, every thing we can now. particularly iam from remote semi urban taluk headquarter town having population of 2.5 lakhs. For me accessing this information and experiences of seniors are thrilling. Dont think otherwise. I have read Market wizards by jack schwager. But the fact is, they are great, but you can not connect with them. You can not imagine the stocks they traded, and the geographical and cultural technological epilogue is different.
Ok , we want hear more from Sibu.
Have happy trading

 

[sibu3168]

Hi

Enter Day Trading

Within that trading phase of my life, I convinced my father to take some risk in stock market. He was totally a non-risk taker. After understanding my interest, he invested around 1,00,000/- in IPO as well as in secondary market. These two investments were IDBI IPO issue (where he got 400 shares at 135/- per share) and 1200 shares of Eicher Motors @ 40/- per share. Total investment was around 1,02,000/-. After keeping for more than year, that investment did not yield a single rupee (in fact there was a loss of 22,000/- on MtM basis) whereas his other investment in US 64 had earned him around 16% per annum with tax benefit. In fact, that put me in a very embarrassing situation. In case of IDBI, which was belived to be the best investment in that time, had taken more than 10 years to cross its IPO price. Since I wanted to start day trading, so I was needing some more money to pay back the interest due and to have some extra balance also. So I convinced my father and took those IDBI shares and Eicher Motor Shares from him. Actually, he gave me those shares in sympathy after seeing my failure in competitive examination. He also wanted to see my success. When I got those share, I immediately sold them in market and realised around 91,000/- rupees (still it was a loss of 11,000/-).

Now I had 1,60,000/- rupees but I did not know what to do with them. Before starting my trading career, I beg to that broker to spare me the interest component and after some heated discussion he agreed to cut down the interest from 2% per month to 1% per month. In gave me a huge relief. In that time, there were not much charting facility and the internet was out of the reach from a common man. All these fascilities were used by either brokerage houses or high net worth investors. I had not seen them in any broker's office. When I discussed about trading with my broker, he offered me whether I wanted to go to Delhi Stock Exchange Floor or do Screen based trading (As NSE had already marked its presence.). I decided to go for screen based trading and to trade 4 to 5 times per week. He happily agreed to me. He charged me a brokerage of 0.15% (Just think there was no STT, very low transaction charges around 100/- per crore, no service tax & no stamp duty). My first position was +100 Reliance @ 330/- and I sold it at 334/- and got 300/- as profit (after deducting the brokerage). But in the subsequent trading, there was not much profit but I managed to keep my deposit intact. Although there was no loss but I had to pay 4500/- as interest. In the second month, same thing happened which put a lot of pressure on me. In the mean time, I was very close to 2-3 dealers of that office who operated NSE terminal. They constantly encouraged me. Suddenly a mishappening occured. At that time apart from software scrips, other famous counters were ITC and TATA TEA (Now Tata Global). I ordered to buy 100 ITC @ 830/- but one of the dealer wrongly bought 1000 ITC @ 830/-. For the next one and half hour we did not check our position as it was not in our favour. Suddenly ITC moved to 870/-. At that time I went for launch. When I came back I saw everybody was looking at me and my broker asked me '' are tune kya kardia". Your ITC was on move. Since there was a profit of 40/- so I told him to book profit in 100 shares. I thought my position was nil and went to my room happily. In those time DSE opened 30 minutes earlier than NSE and closed 45 minutes after the close of NSE. Around 7:30 PM suddenly I saw my two dealer friends came to my room and said you had done a marvelous thing and what will you do with your rest position. First I can't understand their words but they said I had open position of 900 shares of ITC. At that moment I was completely dumb. I clearly remembered I could not able to sleep in that night. In the next day, I saw ITC was quoting 890/- at DSE. Finally I sold all those shares at 895/-. I had realised 60,000/- as profit for this unexpected trade. I immediately paid 60,000/- to my broker and went to my home for holiday.

Have patience and wait for the next part.

With Best Wishes

 

[strongBuddy]

Hi sibu3168,
after reading this part i was laughing. Thanks for that .

 

[TradeJoker]

haha . its like reading a thriller. thanks sibu

 

[stock72]

I guess many of us may find ourselves in this thriller at least in some portion if not completely .... anxiousity grows to hear his result / final words...

haha . its like reading a thriller. thanks sibu

 

[summasumma]

Hi

Enter Day Trading

Within that trading phase of my life, I convinced my father to take some risk in stock market. He was totally a non-risk taker. After understanding my interest, he invested around 1,00,000/- in IPO as well as in secondary market. These two investments were IDBI IPO issue (where he got 400 shares at 135/- per share) and 1200 shares of Eicher Motors @ 40/- per share. Total investment was around 1,02,000/-. After keeping for more than year, that investment did not yield a single rupee (in fact there was a loss of 22,000/- on MtM basis) whereas his other investment in US 64 had earned him around 16% per annum with tax benefit. In fact, that put me in a very embarrassing situation. In case of IDBI, which was belived to be the best investment in that time, had taken more than 10 years to cross its IPO price. Since I wanted to start day trading, so I was needing some more money to pay back the interest due and to have some extra balance also. So I convinced my father and took those IDBI shares and Eicher Motor Shares from him. Actually, he gave me those shares in sympathy after seeing my failure in competitive examination. He also wanted to see my success. When I got those share, I immediately sold them in market and realised around 91,000/- rupees (still it was a loss of 11,000/-).

Now I had 1,60,000/- rupees but I did not know what to do with them. Before starting my trading career, I beg to that broker to spare me the interest component and after some heated discussion he agreed to cut down the interest from 2% per month to 1% per month. In gave me a huge relief. In that time, there were not much charting facility and the internet was out of the reach from a common man. All these fascilities were used by either brokerage houses or high net worth investors. I had not seen them in any broker's office. When I discussed about trading with my broker, he offered me whether I wanted to go to Delhi Stock Exchange Floor or do Screen based trading (As NSE had already marked its presence.). I decided to go for screen based trading and to trade 4 to 5 times per week. He happily agreed to me. He charged me a brokerage of 0.15% (Just think there was no STT, very low transaction charges around 100/- per crore, no service tax & no stamp duty). My first position was +100 Reliance @ 330/- and I sold it at 334/- and got 300/- as profit (after deducting the brokerage). But in the subsequent trading, there was not much profit but I managed to keep my deposit intact. Although there was no loss but I had to pay 4500/- as interest. In the second month, same thing happened which put a lot of pressure on me. In the mean time, I was very close to 2-3 dealers of that office who operated NSE terminal. They constantly encouraged me. Suddenly a mishappening occured. At that time apart from software scrips, other famous counters were ITC and TATA TEA (Now Tata Global). I ordered to buy 100 ITC @ 830/- but one of the dealer wrongly bought 1000 ITC @ 830/-. For the next one and half hour we did not check our position as it was not in our favour. Suddenly ITC moved to 870/-. At that time I went for launch. When I came back I saw everybody was looking at me and my broker asked me '' are tune kya kardia". Your ITC was on move. Since there was a profit of 40/- so I told him to book profit in 100 shares. I thought my position was nil and went to my room happily. In those time DSE opened 30 minutes earlier than NSE and closed 45 minutes after the close of NSE. Around 7:30 PM suddenly I saw my two dealer friends came to my room and said you had done a marvelous thing and what will you do with your rest position. First I can't understand their words but they said I had open position of 900 shares of ITC. At that moment I was completely dumb. I clearly remembered I could not able to sleep in that night. In the next day, I saw ITC was quoting 890/- at DSE. Finally I sold all those shares at 895/-. I had realised 60,000/- as profit for this unexpected trade. I immediately paid 60,000/- to my broker and went to my home for holiday.

Have patience and wait for the next part.

With Best Wishes

similar event happened to me once few years back...
Got 45,000/ profit in intraday without knowing the quantity i have entered and was happy @ EOD with unexpected profit. :clap: :clap: :clap:
But lost more than 60,000/ in next 10 days trading, thats a different story :rofl: :rofl: :rofl: