On Sunday, I met someone who wanted to quit his job and start day trading for a living.
We talked a lot about it discussing the likely pitfalls and chances of success.
I am not a great fan of day trading but am not dismissive about it either.
I believe that as a trader it is our responsibility to use the best tools of trade available to us.
I had written this almost two years ago on Quora.
My views remain the same today.
Please read on :
A Traders Life:
First of all you have to learn that a trader’s life is not easy.
You live by your wits each day, trying to outdo the markets. There will be good days followed by bad days, at times too many of them continuously.
It is at such moments that a trader has to rethink whether he did right in quitting the safety of a pay check from a regular job.
But nobody ever became rich from working at a job.
Naysayers will tell nobody becomes rich from trading as well.
Fortunately, it is not true.
Traders with discipline, dedication and a trading plan have earned money in the past and will continue to do so in future.
I too believed trading to be a loser’s game till I came across the wonderful interviews compiled in the book:
The book contains interviews with successful traders who make more than $ 1Million per year through trading. ( Not Investing )
Belief is of paramount importance. Unless you enter trading in the markets with a firm belief that you will succeed in making profits, you are destined to lose.
After the belief come knowledge of trading and the funds for trading.
Knowledge for Trading:
Trading is like swimming or driving.
Reading books will not make you a good swimmer or a good driver.
Get a coach and jump into the pool to learn swimming.
Get a driving instructor, sit behind the steering wheel and follow instructions. Soon you will become a good driver.
Similarly keep reading on Quora. Read some good books.
Get a friend who trades , it is better if profitably and get into the real world of trading.
Must read the above book.
Let knowledge flow happen in small trickles.
Funds for Trading:
You have mentioned that available funds are about One Lakh Rupees.
In my view, this amount is not sufficient to get good returns from trading. There shall be draw downs and money will be lost.
I would advise to continue with your job for some more time. Save more money to build up your trading capital. If you are able to save Rs. 20000 per month from your salary, there will be additional Rs. 240000 for trading.
In this time, learn all you can about Options Trading.
But do not fritter away funds on unplanned trades.
Even the best plans have a way of going wrong.
Start trading when you have the Belief, Knowledge and the Capital.
Real Knowledge Comes from Real Trades:
When finally you are ready to jump, be prepared for every eventuality.
Expect the unexpected.
Maintain your composure while making money or losing it. Be ready with alternate plans. This knowledge will come either from own experiences at a huge cost or by reading other traders experiences.
There are many good experiences narrated in the Market Wizards. My own story is here, you can learn few pointers from this as well:
I would suggest and advise to take some time before committing to full time trading. I know few people who have actually quit their jobs and are active traders, but not many of them are getting the results they had hoped for when they took the plunge.
And once you are in, be ready for anything.
Follow your goal with determination and dedication but be practical in implementation of your methods.
Trading success is not easy, but is possible to achieve.
Link to original answer on Quora: