How much can you make from stocks in a month ? : Introduction, Factors, Types of Trading, Long Term Investment, Short Term Investment, Recommended Trading Software, Summary
Often newbie people ask the stock investor or stock adviser this question, How much can you make from stocks in a month ?
I am very scared to hear this question Because they want to enter the stock market with the objective that how much money they can make every month in the stock market. Without understanding and knowing the stock market.
Without knowledge, without planning, without any technique, they dream of getting rich soon by coming into the stock market.
Because they believe in quick get rich schemes but believe me the investing is not a quick get rich scheme
You can use investing to get rich quickly under some conditions, you have to understand the stock market and their working, you have to understand businesses, and you have a proper plan and technique to invest in the stock market.
The answer to this scary question ” How much can you make from stocks in a month ? ” is, that there is no limit, you could earn an indefinite amount from investing in the stock.
But the conditions are you have knowledge, plan, and technique. Otherwise, you can lose even your 100 % invested amount. so Let I want to clarify here, that this is a risk-reward situation.
Scenario: How much can you make from stocks in a month ?
When was a newbie in stock trading, I started rupees 2,00,000 Lakh ( $ 2700 approx ) with a diversified portfolio of 20 companies and my expectation was so high and crazy that I would make double the amount every year. But after one year my 2,00,000 Lakh rupees ( $ 2700 approx ) became only 2,36,000 ( $ 3200 approx ).
So it was my totally unrealistic expectations, I have learned from it my first lesson never to make unrealistic expectations.
In the starting, you first gain the knowledge and implement it in your plan along with the strategy you will apply in the stock market.
Set a small goal like a 15% annual return in starting then enhance your goal with confidence when you completed the previous one.
Let’s discuss the factors dependent that how much can you make from stocks in a month ? Below are some important factors that can’t be ignored to earn money from the stock market.
#1 Your Capital
Whenever you trade with a higher trading amount, you can take bigger trading positions and make bigger profits if the trade favors you. We try to understand it with the help of some examples below.
Let’s assume you are taking 10 winnings and 5 losing trades in a month with a 1 % risk on your trading account.
If your trading capital is $60,000, so your risk is $600 per trade ( 1% of your capital ) to make $1,200.
Your total profit is $12,000
Your total loss is $3,000
Your total net profit for the month: $9,000
If next time your trading capital is $2,000 and your risk are $20 per trade ( 1% of your capital ) to make $40.
Your total profit is $400
Your total loss is $100
Your total net profit for the month: $300
So the above example helps us to understand how your capital is dependent that how much can you make from stocks in a month , large capital can make a large sum of money.
#2 Your Trading Strategy
Trading Strategy is one of the basic factors that determine how much can you make from stocks in a month , Every professional trader has a trading strategy and he always sticks to his trading strategy.
A trading strategy is a systematic process to use buying and selling stocks in stock markets. Traders have their own set of criteria to make a decision on buying or selling the stock.
That may be simple or complex both like trade only in great company, have a good financial along with a good business for future aspects.
A trading strategy has a win-loss ratio if a trading strategy has a good win ratio then it is a good strategy.
#3 Your Trading Skill
The third most important factor is your trading skill which determines how much can you make from stocks in a month , As sharp as perfect your trading skills is that much profitable trade you can take from stock trading.
We all have to work on our trading skills, a good trading skill includes a lot of things like advanced risk management skills so that we will minimize the risk, ability to money management and ability to keep our emotions under control.
So we will not lose money under any emotions of greed and fear. Always have a good trading plan and stick to it along with discipline on your research key points like financial statements, fundamentals, etc.
#4 Leverage You Use
The fourth important factor is leverage which determines how much can you make from stocks in a month , you can trade in stock without leverage and if you are a newbie then I strongly recommend you trade without leverage.
Leveraged in trading allows you to take a much larger position than your own capital because your broker provides you leveraged amount to take a bigger position and when you make a profit you will return the broker’s leveraged money with a very small percentage of your profit money and you also can lose your money when a trade is not in your favor.
In simple words, without any leverage if your trading account holds only $50,000 then you can only buy stocks up to $50,000 worth and with leverage, you can buy more than $50,000 stocks means you can borrow money from your stockbroker to trade stocks.
Leverage refers to ratios like 1:5 means you can buy $5,000 worth of stocks if you have $1,000 in your trading account. Leverage can help you to maximize your profit but it can also spoil your whole trading amount.
Let’s assume, you bought 100 shares of ABC Company at $10 and sold it at $15.
without any leverage, you would make a profit of $500.
With 1:10 Leverage, you could buy 1000 shares of ABC Company at $10 and sold it at $15 same, Now you would make a profit of $5000.
So, it is very true that you can increase your profit using leverage but it can lose your money also if the trade is not in your favor.
Types of Trading
There are some trading ways that determined how much can you make from stocks in a month .
#1 Day trading
In the day trading way of stock investment, You have to buy and sell the stocks within the same trading day. It means you have to close all your positions before the market closes for the trading day.
#2 Position trading
The position trading way of stock investment is a popular long-term trading strategy, You hold a position for a long-term for months and years.
#3 Swing trading
In the swing trading way of stock investment, You buy stocks for a few days to several weeks or months and try to capture short to medium term gain in stock over that period.
#4 Scalping Trading
In the scalping trading way of stock investment, You are trying to profit off small price changes in stocks and it is one of the quickest strategies of active traders.
Long Term Investment
If you stay invested in a good company for a long time, then you can make a big capital by earning a good profit.
The thing is that If you invested for the long term and picked a great company then you will see smooth volatility from month to month but hope that you will enjoy some great long-term benefits.
If you always trading stock in and out then you not investing you are just gambling ( in our opinion ), You are hoping that the month will be a good profit if not, you just lost your money.
Some people invested in trading stock in and out the way but I’m not one I always choose a great company with good fundamentals and good financial and business future growth.
Short Term Investment
Short-term investment or investing in trading stock in and out are the same, The market is very volatile in the short term because here we discussing how much can you make from stocks in a month .
As we know very well the market is very volatile and the stock price goes up and downs so when we invest in short time investment with a great company as well as good fundamentals and financial still not a chance to get consistent gain in all the investments even sometimes your investment goes negative.
If you looking for an investment in stock as monthly income then the short-term investment is not a good idea, you can go with a long-term investment with a great company with great fundamentals and financial statements.
In a long-term investment, you can earn money by dividend, share split and increasing the value of stock prices.
Recommended Trading Software
TradingView is my number one choice for stock chart analysis.
As a stock screener, TradingView has provided all things including fundaments of the company, economic and financial details and extensive chart functionality built on advanced HTML5 technology.
TradingView screener covers all international stocks and funds from all over the world. That is the reason we pick TradingView as one of the best Stock Screeners for Global Investing.
Some benefits of the TradingView Stock Screener are given below.
- Excellent selection of fundamental screeners, Here we can sign in and create screeners as our own logic for selecting great companies.
- The TradingView Screener has extensive charting capabilities, it provides lots of indexes along with international indexes.
- The TradingView Screener has also provided an expansive selection of global stocks.
- The TradingView is a very user-friendly and robust design, For beginners, it is very easy to use and understand.
- The TradingView covers a wide range of markets such as stocks, bonds, futures, forex, and cryptocurrency.
- It provides a huge range of technical indicators for technical analysis.
- It also provides a free plan and for newbies free plan is perfect.
- TradingView Stock screener provides customers with a 30-day free trial.
All the above causes make TradingView my number one stock screener.
In Summary: How much can you make from stocks in a month ?
As I mentioned above, it depends on 4 factors:
- Your capital – Your start capital for investment.
- Your trading strategy.
- Your trading skills – Like how you manage risk.
- Leverage you use for investment.
Based on these 4 factors, you use simple mathematics to calculate how much can you make from stocks in a month and make sure you have a good understanding of businesses.
The stock market and risk management first before you are trying to invest your hard-earned money in the stock market.
Q : How much can you make from stocks in a month ?
Ans : There is no maximum limit to earn from stock in a month, you can earn infinite amounts but also you can lose 100 % investing amount too.
Q : How much money can you make from stocks?
Ans : In very simple words, there is no limit for anyone on how much money one makes from stocks it depends upon some factors like capital one investing, strategy and skill, it is a risk-reward market.
Q : Is investing in stock worth it?
Ans : My honest answer is yes, for me investing in stock is worthwhile but I have researched and understood the market, make my own technique of trading and then invest my hard earn money.
You can read about the same from the top article Link is below…