Comment on Intraday stock trader par excellence
commented on
14 Sep 2013, 11:42 AM
Yes, I have seen some good traders make 15% per month and it is very much possible.
With cover orders and 20 times leverage, earning 1.5 lakh average pm with maximum leverage can compress the required “working capital” (50K) and make it a fraction of the actual trading capital (10L).
But many traders fail to understand that and may start to act recklessly watching such apparent 200% returns pm.
Both Zerodha and the trader should mention explicitly that this is only a portion of their actual trading capital. What some traders would like to refer to as “working capital”.
Without that, the interview itself becomes a mere sensation rather than a guiding voice.
All of the Market Wizard interviews and even the book by Alexander Elder called “Entries and Exits” which is a series of interviews of profitable traders measure returns as a percent of the “trading capital” as opposed to just the “working capital” with the broker.