When I started trading,there was no concept of trading capital and I thought Rs 20,000 to 25,000 will be enough trading capital just to fund our day to day profits and losses. That time settlement used to be of 15 days which was later changed to 1 week and the margin ,VAR margins etc were not that strict...so the broker used to ask only M To M losses and small margin to cover the risk.But that was dangerous as the losses used to mount during the 15 days period and when they become unbearable traders used to close the positions.Traders used to take large positions too large for their trading capital and Trader failure rate was high that time too. Markets are much safer today with strict implementation of margins.
I started trading with just Rs 20,000 in my bank account ( but that was 25 years ago when family household expenses used to be Rs 5,000 so it will be equivalent to Rs 1,25,000 today ) ) and I remember my first daytrade was I shorted 50 shares of Tata Motors..( it was called TELCO or Tata locomotive that time and we used to daytrade Reliance,Telco,Tata steel or Tata ordinary,Orkay) ..but it is difficult to manage on shoestring budget and the capital formation is very slow. I had to support my household expenses plus my HDFC housing loan EMI.....capital formation goes up exponentially when the trading capital reaches 4-5 Lakhs levels..this is because your profits go up but household expenses don’t go up in that proportion leaving surplus for capital formation.Initial period of capital formation is very difficult and frustrating.But I had an advantage that we were trading sitting in brokers office and there were handful successful traders there.They used to be very secretive , ( never used to even talk to new traders like me and they accept you in their group only when they know that you have become a successful trader ) and will not share their methods but our passion for the markets and the confidence that if these successful traders can do it,we can do it too led me to improve my trading though I blew up my capital 3-4 times ....many new traders fail in this initial period and some are successful in Initial period but they disregard risk and fail later due to excess leverage without good risk control....even though initially I was a losing/ breakeven trader,but I never had slightest doubt in my mind whether money can be made in trading.....I was confident it could be made,few are making it and I must figure out ways of doing it myself, no one is going to hold my hand and teach me.As I went ahead, I was fortunate to come in touch with positive people and some extra ordinary traders and I could get some valuable inputs from their talks.Each trader had different way of trading but there was a common thread of controlled aggression ,risk control,respecting the market much more than their own views and cutting losses ruthlessly when wrong and pressing the accelerator paddle when right and staying calm during all this.
Hope the post is not getting too long.....
Smart_trade
Thanks once again for sharing this insight.
