Is it possible to become a millionaire by trading? 

We humans always think of the way to earn easy money. And earning money through trading stocks is the first way that comes to our mind. The answer to the question ‘Is it possible to become a millionaire by trading?’ is YES! 

Blur, Chart, Computer, Data, Finance

You can become rich by trading stocks. I would use the term rich here and not a millionaire because it’s in your hands how rich you want to be with trading options, as there are few examples in this world where people even became billionaires with trading. Warren Buffet is one of the greatest examples of this. He became one of the richest human on earth, mostly with the help of this, he bought about 45% of the Apple’s shares which makes the most of his net worth. He believes that one cannot achieve anything without taking risks.

Day trading or long-term trading stocks- 

People confuse these terms a lot. As for most Indians, trading stocks is a new hot topic. Day trading is when a person purchases stocks, currencies, shares, or holds bonds and sells within the same day of purchasing. On the other side, long trade investment excites expert traders a lot. It’s like holding the purchased shares for a long period, most likely more than one year. May experts say that long-term trading is of more potential than short-term trading. But as in this universe,, everything has a dark side. 

Short-term trading restricts our growth and blocks us from having big profits. Long-term trading gives us both the long-term profits and the compounding that is interest on the capital invested.  

Based on the person’s phycology- 

Suppose you are a person who is impatient, having a lot of strategies in mind and tricks. You can’t bear the risk for a long time, as you want easy and fast returns, then day-trading is surely for you. 

But if you are a patient person, want to understand the company’s market as well, and believe in higher returns, then long-term trade is surely for you. At times, you surely have the exhaustion that most of the money is invested only in a few stocks, and you might think that you can make the most out of it if you had invested in short-term stocks. But just make your mind and focus on the bigger things. 

There is also the biggest advantage for long-term traders is that they only need to pay half of the taxes paid by the short-term traders. Like, as only 5 to 10% for long-term traders and 10 to 20% for day traders. 

Chart, Arrow, Businessman, Stock, Panic

Trading Stocks Plan- 

Do you ever wonder why any successful person has a pre-scheduled day? Why schools or institutions are pre-scheduled? Anything which is pre-planned has most likely to be successful, just like using a trading plan before jumping into trading. A trading plan is the written data involving details of a trader’s entry, exit, and money management criteria. This will help you to determine which stocks you should trade or the trade options. No doubt this is the milestone which can make you a lot of money. 

There is a practice known as backtesting which allows one to take a trading test before risking ‘real money. And after having good results in both the planned strategy and backtesting, the user can go for investing real money in stocks. 

Either 1.00% or 100% trade- 

There are many people who get 100% successful with trading, and there are people who neither even get 1%. There are a few things that they keep in mind before investing. 

  • Professionals never overtrade- The fact is that many people get excited with the idea of big trading, big trading stocks. The dark side is that successful traders never overtrade. They never do this, don’t hesitate to make your decisions.  
  • Set a target for everything, whether it is a profit or loss. Just set the numbers of the trade, and you are ready to go with that. 
  • Trade when the trading conditions are met. For this, you need to understand the nature of the trading. In simpler terms, when the trading conditions are favorable, just go ahead to invest your money. 
  • Before jumping into trading, understand the market phycology. You can also go for the trial-and-error method. There are many platforms that encourage us to invest in demo money. Just get yourself done with the theoretical parts, and then go for the practical ones. 
  • Be patient and trust the process. Never hesitate with your investment. Just believe in your knowledge, strategies, etc. Even if there is any loss, then analyze that mistake, analyze mistake. Learn from your mistakes, and you have already crossed the milestone of professionalism. 

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Dark Side & Big players- 

Either you can make a lot of money from it, or you can make nothing from it. Both are dependent on how well you can go with handling adverse situations. In my opinion, just go for the long-term investment, as there are many experts who recommend the same. As there is a big scope in the long-term market. There is a truth that not most the people make a lot in this as there are many big players in the market like mutual funds and hedge funds. These have the most shares in the market. There are many experienced people in the market but for that, just go for self-learning and self-training. Just have control of your greed and emotions; the rest will be under control. As it is the game for big money. The moment you lose patience, the next moment you will lose your great reward.

If you are interested in making money online, do check this blog!

Focus on losses- 

We used to hear from most of the people that go for-profits that trading is all about making profits. Just a big no to this mentality, and you can never succeed as a trader with this thinking. Newbie focuses on profits, whereas the professional focuses on losses. Just have analytical thinking that if you are focusing on the losses, then you might have chances that you never have losses again. Just focus and analyze the losses; profits will come along the way. 

Stock Trading, Investing, Stock Market

This heading, ‘Is it possible to become a millionaire by trading?’ is just hypothetical? 

It is not a hypothetical situation, and it’s a reality. 

A 19-year-old Manish Gupta inspires. He doubled his capital in less than a year and then started automating his strategies through Amibroker software. With automation in place, he could focus on developing more strategies instead of being glued to the system screen during market hours.

*Personal View*

If you want to earn instant, then you must go for day trading as it will help you to earn the money next moment if you will win. But if you want to generate wealth then you must start working on the long-term investments which can surely contribute to making you great wealth. But for the sweetest rewards as it needs patience. You can change your mind, the next moment you are hearing that your shares are getting devalued, then you would think to sell it, but actually from my personal view, its the actual time you need to hold that share.

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By Saima Sheikh

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