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How much Capital is required to become a Full-Time Trader?



how much capital is required to become a full time trader

Are you planning to opt career as a full-time trader? It is considered an enticing career choice as It offers high returns and flexibility in work. However, it’s hard to generate consistently high returns in the stock market.

Before switching to full-time trading, there are some crucial factors to consider. One of those is how much capital is required to become a full-time trader and How to arrange funds. Let’s understand these crucial aspects of embarking on one’s journey into full-time trading.

Financial Preparation

Success is not achieved overnight, it requires time, patience and, efforts. Traders practice trading in the stock market as amateurs before becoming professional traders. These years of practice make them aware of market dynamics, price history, and detailed knowledge about the working of the stock market. The constant cycle of profits and losses in trades helps them build a strategy for themselves.

The strategy that traders built over the years gives them maximum returns. Additionally, it has been experimented on several times which increases its reliability. This reliable back-tested strategy is a key ingredient in full-time trading.  

Create Emergency Fund – The emergency fund includes the amount set aside for unforeseen circumstances. This fund is used in any situation that requires immediate financial attention. This provides a sense of financial security and peace.

Traders are advised to create an emergency fund to cover potential losses in the initial days. This fund is for safety purposes that is used to cover potential losses and sustain oneself in case of heavy losses. These emergency funds must include 3 6 months’ worth of living expenses.

As it’s an emergency fund, one can need it anytime. So the instrument to park an emergency fund should be low volatile and highly liquid. Additionally, it should at least keep pace with inflation. The favorable option could be a savings account, corporate debt funds (taxable), hybrid funds, money market funds, and liquid funds.

Traders should evaluate their emergency funds with changing incomes and expenses.


Stock Market is dynamic and is influenced by external factors such as positive and negative news in the market, corporate actions, etc thus involving risk. The risk can be minimized by considering the following points before investing your capital.

  1. It is always recommended to at least set aside 3- 6 months’ worth of living expenses. This allows traders to sustain themselves in case of heavy losses in the initial days.
  2. Always create an emergency fund to recover potential losses.
  3. A trader should make a management plan for potential risk and determine a stop loss level. This includes the maximum amount the trader is willing to risk in each trade.

“In trading, you can’t stop loss from happening but you can avoid big loss by using stop loss in your trades.”

 Olawale danie

Stop loss limits the potential risk. By setting a predetermined exit point, traders can control the capital they are willing to risk. This saves them from heavy losses due to unexpected market movements.

The average true range (ATR) can be used to set stop loss in trades. It measures the volatility of the price over a period of time. If the ATR period is set at “14”, it will calculate the average range over the past 14 trading days. This helps traders to set a stop loss for their trades to minimize losses.

How much capital is required to become a full-time trader ?

One should make a reasonable investment to handle drawdowns. It is hard to generate consistently high returns in stock markets.

However, Capital requirement depends upon several factors such as trading type, market type, individual risk tolerance, and individual expenses.

Understanding Trading Style

  1. Day trading – This requires more capital than swing trading This is because of higher leverage than swing traders and more frequent trades.
  2. Swing trading – This allows traders to hold positions for a few days or weeks. This requires more capital than day trading
  3. Position Trading – A trader can hold the position for a few months or years, aiming long term benefits. This requires the lowest amount of capital.

Calculation of the exact amount of capital

The key ingredient to profitable trading is practice and knowledge. A well-experienced trader can start with Rs 20,000 or Rs 2,00,000, or Rs 20,00,000. Mastering the art of trading is crucial to become profitable.

Points to consider before calculating capital for full-time trading –

  • Average return per month earned in last years.

Firstly, Calculate the average returns a trader is capable of generating from its investment in the past months. For instance, the average return on investment was 7%. In such a case trader shall consider 5% (reducing your expectations can solve maximum problems) as the market is dynamic and doesn’t give the same returns every time.

  • Monthly Expenses

Secondly, consider the monthly expenses of the trader. For instance, say Rs 1,00,000.

If a trader generates a 5% return and expects a Rs 1,00,000 return in a month, he shall invest 20 lakh (1, 00,000 / 5%) as capital per month.

This 20 lakh is capital to start a career as a full-time trader. This doesn’t include the amount of emergency funds or other expenses.

How to arrange funds?

In addition to profits generated from trading, traders must have a regular second source of income. As in the initial days, traders are likely to blow up their accounts before becoming consistently profitable. So it would be helpful for them if money is coming in from another source as backup and provide support for mistakes and losses.

Before opting for a full-time trading career, traders need to arrange capital by saving a proportion of their income (from the other source). Working and part-time trading simultaneously is considered a good strategy as this helps to arrange capital and master the skill of trading.

For instance, If a trader saves Rs 40,000 per month, he will be able to arrange Rs 20 lakh in 4 years.

In summary

Being a full-time trader requires careful consideration of one’s finances, risk tolerance, and trading style. While no fixed amount of capital guarantees success but it can be estimated by deciding one’s rate of return and expected profits. A trader must have enough funds to sustain himself, cover potential losses, and diversify their portfolio. With experience, knowledge, and the right mindset one can make their trading journey remarkable.

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Finance World

Why Muthoot Finance is not affected by the small cap and mid cap fall?



This week, if you’ve been keeping an eye on the stock market, you might’ve noticed something unusual. While the small cap and mid cap markets took a serious dive, Muthoot Finance seemed to just avoid it, falling by a mere 2%. So, what’s their secret?

What is the business of Muthoot Finance?

First up, Muthoot Finance has a strong foothold in gold loans. Now, why does this matter? Well, when other investments seem risky, people tend to fall back on gold because it’s considered a safer bet. With gold prices staying high, Muthoot’s gold loan business is like a stable ship in a stormy sea.

Muthoot Finance target price by Kotak

Kotak Institutional Equities is pretty optimistic about Muthoot, recommending a “buy” with a target of Rs 1,500. They think Muthoot is in a prime spot to grab a bigger slice of the gold loan market. Plus, with some Non-Banking Financial Companies (NBFCs) hitting a rough patch, Muthoot has a clear ground to expand and grow further. Unlike NBFC, Muthoot has a strong ground presence with offices and branches, they have physical repo with their customers, unlike NBFC who operate from AC offices.

New Friends and New Frontiers

Muthoot isn’t just sitting pretty with its gold loans; it’s also making moves. It teamed up with Evfin to finance electric two-wheelers across India. And there’s more – Muthoot FinCorp has brought Veefin Solutions on board to kick off supply chain finance operations. This means they’re planning to lend a hand to small and medium businesses, helping them keep the wheels turning. So, its a great news that Muthoot is expanding into fields that are not dependent on gold loans alone.

Spreading Their Wings

Muthoot Microfin, a part of the Muthoot Group, is pushing into new territories too. They’ve just set foot in Telangana and have their sights set on Andhra Pradesh next. This move is about bringing more people into the financial fold, especially in places where banking services might be hard to come by. This gives an edge to Muthoot over banks and NBFC.

Are you wondering whether to invest in Muthoot Finance or Manappuram Gold? Take a look at this:

So, What’s the Deal?

While the market’s mood swings have sent some companies into a pit, Muthoot Finance has managed to stay stable. Thanks to its focus on gold loans, strategic partnerships, and expansion plans, it’s not just surviving; it’s set to thrive. So, while the rest of the market might be catching its breath, Muthoot is marching on, steady as ever.

Keep following us for more such latest news on TradeAlone.

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Finance World

Infibeam Avenues Ltd expands into the US Market with an Acquisition



Hello, digital pioneers and fintech enthusiasts! Let’s dive into a groundbreaking announcement for Infibeam. Infibeam Avenues Ltd, an AI-powered financial technology, is embarking on an exciting journey by acquiring a 20% stake in XDuce. XDuce is a mastermind in enterprise Application and AI development based in the United States. This bold move involves an investment of USD 10 million. This also marks a significant milestone in Infibeam Avenues Ltd’s global expansion narrative.

XDuce: A Hub of Innovation

Nestled in the heart of New Jersey, XDuce boasts a team of over 150 software developers. They’re a team behind the curtain for marquee clients like Bank of America and Morgan Stanley, to name a few. XDuce’s expertise in business application implementations and transformation is nothing short of legendary in the financial and insurance sectors of North America.

A Fusion of Giants

So, what happens when Infibeam Avenues Ltd and XDuce comes together? Infibeam Avenues Ltd wants to merge it’s AI Solutions and CCAvenue Payments business into the network that XDuce has built. This collaboration is about expanding business footprints, revolutionizing how AI-driven technologies are employed in fraud detection, authentication, and risk identification in the financial sector of the US.

Redefining Financial Technology

Imagine a world where transaction fraud is no longer a looming threat, thanks to state-of-the-art AI technologies. That’s the vision Mr. Jay Dave, CEO of XDuce, and Mr. Rajesh Kumar SA, CEO of Phronetic.AI, share. By integrating PhroneticAI abilities with XDuce’s solutions, they will offer businesses and consumers in the US with security and efficiency.

The Road Ahead

According to Mr. Vishwas Patel, Joint Managing Director of Infibeam Avenues Ltd, international business currently contributes less than 10% to the company’s total revenue. But with strategic moves like this, they’re aiming for international business to soar to 30% of total revenue in the coming years.

Infibeam Avenues Ltd at a Glance

Infibeam Avenues Ltd is at the forefront of offering digital payment solutions and enterprise software platforms across the globe. With a transaction worth INR 4.5 trillion (US$ 54 billion) processed in FY23, and a client base of over 10 million. Spread across digital payments and enterprise software platforms, they’re leading digital revolution.

Wrapping Up

The strategic investment in XDuce is a bold step towards Infibeam Avenues Ltd’s vision of global expansion and innovation.

Stay tuned with Tradealone, as we continue to follow this exciting journey of Infibeam Avenues Ltd. Stock price for Infibeam closed 7% up today. We also see a continues profit growth for Infibeam Avenues over the past 4 years. Although, we cant recommend a buy or sell call for the stock, however we feel this stock deserves your attention.

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Finance World

Satin Creditcare Expands its Reach by entering Telangana and Andhra Pradesh, stock has doubled so far this year



In a country where financial inclusion remains a major yet challenging goal, the expansion of services to underbanked regions marks a significant step forward. Satin Creditcare Network Limited (SCNL), a leading name in microfinance, announces its strategic entry into Telangana and Andhra Pradesh. This move not only amplifies SCNL’s presence to 26 states and union territories across India but also underlines its commitment to empowering the economically marginalized communities with vital financial services.

A Leap Towards Nationwide Financial Inclusion: SCNL’s mission to drive financial inclusion is more than just a business expansion; it’s a pledge to reach the unreached. The opening of two new branches in Telangana (Warangal and Huzurabad) and one in Kadiri, Andhra Pradesh, is a testament to SCNL’s dedication to making financial services accessible to all, especially in rural and semi-urban areas where banking facilities are scarce.

Why Telangana and Andhra Pradesh?

The choice of Telangana and Andhra Pradesh for SCNL’s latest expansion is strategic. Both states have shown promising economic growth yet house significant populations that lack access to basic financial services. By stepping into these states, SCNL aims to fill this gap, offering microfinance solutions that can serve as a catalyst for economic empowerment and sustainable development. Moreover, Telangana is a fast growing hub for Pharma industry as the state capital Hyderabad leads the way.

SCNL’s Blueprint for Empowerment

SCNL’s approach to empowerment through financial inclusion is holistic. Focused on rural India, with 76% of its operations dedicated to rural communities across 97,000 villages, SCNL is not just providing financial services but is also contributing to the rural economy’s growth. This expansion is a stride towards enabling access to credit for the underserved, thereby fostering an environment of economic resilience and growth.

A Message from the Leadership

Mr. HP Singh, Chairman cum Managing Director of SCNL, remarks, “Our expansion into Telangana and Andhra Pradesh is a significant milestone in our journey towards a financially inclusive India. It’s not merely about increasing our geographical footprint; it’s about touching lives, empowering the marginalized, and contributing to the nation’s economic fabric. We’re here to make a difference, one individual, one community at a time.”

Ashirvad Microfinance is a fast growing company as well. Check it out if you are interested.

Beyond Expansion – A Look at SCNL’s Innovations

SCNL’s innovations extend beyond traditional microfinance. The institution’s portfolio includes loans to MSMEs, affordable housing loans through its subsidiary Satin Housing Finance Limited (SHFL), and the commencement of MSME business through Satin Finserv Limited (SFL). These initiatives demonstrate SCNL’s commitment to diversifying financial solutions that cater to various needs of the underserved.

The Road Ahead for SCNL

As SCNL carves new paths in Telangana and Andhra Pradesh, the future looks promising. This expansion is not just about growth but about deepening the impact of financial inclusion across India. With continued innovation and a steadfast commitment to its mission, SCNL is poised to create significant strides in empowering communities and fostering economic development across the country. Moreover, the stock price for Satin Creditcare has almost doubled in the last one year.

Conclusion: SCNL’s expansion into Telangana and Andhra Pradesh marks a new chapter in its mission to facilitate financial inclusion across India. By reaching out to the economically marginalized sections of society, SCNL strengthens its role as a catalyst for economic empowerment and sustainable development. As we watch this journey unfold, the prospects for a financially inclusive India appear brighter than ever. Despite that we do not see any positive signs from the revenue and profit growth of the company over the last 5 years. Thus, we feel that investors must be cautious while investing here.

Remember that microfinance companies also face competitions from the major banks. However, as this move is towards uncharted regions of Telangana and Andhra, we do not think that the banks would pose any risk to Satin Creditcare.

Call-to-Action: We invite you to join the conversation: How do you think SCNL’s expansion will impact financial inclusion in Telangana and Andhra Pradesh? Share your thoughts and insights in the comments below. Let’s discuss how financial empowerment can transform lives and communities. Also, please follow Tradealone for more such latest updates.

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