Let me directly answer the question & the answer is yes. Yes, you can start a trading career with ₹5k. But…wait. Does it mean did I also started with ₹5k?

See…I am a professional trader now but initially, when I started trading, I had the mindset to trade just to make money on a daily basis. I started with a capital of 5k. I made some profitable trades but I also made some great losing trades too. Frankly, I ended up losing my whole account.

In this blog, I will share my experience of how I started my trading career with small capital , what mistakes I made, and what I did to scale up the account.

My initial days:

I started my trading with just ₹5k. I thought trading was my golden ticket to making quick money. I was very immature, and I thought that trading could make me rich in a very short time. Surely. I was daydreaming after reading about Warren Buffet and Rakesh Jhunjhunwala and how they became billionaires in the stock market. 

I entered in the market just when the 2007 bubble was at its peak. I saw seeing all stocks are booming. The reality and pharma sector was booming. I still remember DLF was trading above 700. I too tried to take a small pie of this booming market. In the initial few weeks, I did make some money and I was encouraged to trade with bigger capital. I added all my savings in my demat account and that was the biggest mistake. As soon as I started trading with bigger capital, markets started falling. It was 2008 crash. Back then I didn’t know about short selling. I lost everything slowly in the coming months trading penny stocks. Quit the market and take the job. 

This way I learned the first lesson on trading:

“Never trade with big capital until and unless you have made consistent money for at least 6 months.”

I took a break of almost a year from trading. But back of my mind, I knew, that one day I would make it and be a full-time trader. After a year, when I started, I knew this time I must first acquire the right knowledge. Back then 2010, there were not many things available online. I was searching on Orkut for some traders in my city. I found a few traders nearby. I met them, and asked them to help me, teach me. A few traders guided me and showed me the direction. I understood that in the market if you are trading without backtesting, you are just gambling without having any edge. It’s just a matter of time, sooner or later you will lose to the market. 

So, after that, I started testing an Index option buying strategy.I came up with a simple strategy that will take benefit of fluctuations in a range-bound market. It took me 4 months to backtest it as I didn’t know coding at that time & I had to do it manually on 5 5-minute charts, bar by bar, day after day, on the last 8 yrs. of data. The results were promising and again I started my trading journey. This time just with just one lot of Nifty. After trading for 5 months, I was net profitable every month. The profit was less but big enough to give wings to my dreams. From that day I slowly started scaling up my account. In a matter of the next 3 months, I was trading with 10 lots, and next year I was trading with 50 lots. And that journey never stopped.

I understood lately that “Failures aren't setbacks, they're set-ups for comebacks.”

So here is the road map to start your trading journey with small capital:

Mental preparation:

Many people ignore this and later they bang their heads in the wall. So don’t ignore and read the below lines carefully:

• Know the reality: Yes , before starting trading , understand that the market is not a bucket of money where you will come every day and take money out and go home.
• Know your Job: Our job as a trader is to execute the trades as per our plan. The outcome of trade is not in our hands.

Strategy preparation:

Many people argue that strategy is not everything. I agree, there is a lot more than just strategy in the trading world. But if the strategy itself is not profitable, no matter what other factors, you will never make money. So, our next step is to get a profitable strategy:

• Here, look at charts, and try to find a repeatable pattern in the market. If you find any, then make rules for entry and exit. Backtest it on 50 trades before reaching any conclusion.
• If you end up at a loss at the end of these 50 trades, try again from the beginning.
• If you are profitable, then start the major work, now we must be backtest for the last 5 years at least. This makes sure that our strategy is not just profitable in the current market, but will perform well in different market conditions.
• If the results are not good, you must start again.
• If the results are good, you are all set to start your trading career in the right direction with small capital.

Do you know, this time you will not fail, because you will be trading with a strategy that has an edge over the market? There are many other things like risk management, mindset, and patience which will be needed along with this to make your trading robust and consistent.

Conclusion:

In today’s time, If you have the right skills no one can stop you. Remember, Rakesh Jhunjhunwala started his journey with ₹5k only. Similarly, all the famous people who made big in the trading world, started small. 

Be patient, acquire the right knowledge, backtest, and have the right mindset, and you will surely be a successful trader.