Have you ever wondered why starting small always work?
A question that we as a new trader had to answer before starting trading is how much capital should we starts with?
Most of us who are new in markets start excitingly, and try to put as much money we can afford with just a thought others are making money let me also make some so this solve all my worries of home expenses, EMIs, etc etc, and
when things become a bit difficult we start to lose not only our capital, but faith and patience and forget trading forever.
And, why all this started – A Video… that convinced us that its easy to make money just by simple indicator, trendline patterns, following news about Trump and how this all will impact the market or a much larger dream to replicate the lifestyle where you are your own boss, travelling the world with no 9-5 job obligation, buying all luxury cars or clothes like any Dubai Forex trader, etc etc.
This all. Convincing us… that it is not just possible, but Easy Peasy.
But… Trust the DATA, It is Not! And, Its Scary! Not just Scary… A lot Scarier!
SEBI published a report about what happened since FY 2022 till now :-
- “During FY 2025 and FY 2026, approx 1.2 Cr Indian individual traders lost ₹2.03 lakh crore in derivatives market while only 8.1 Lac traders made ₹25,020 crore in the same 2 years. A whopping 90+% traders lost money with an average of ₹1.97 lakh/trader.
- And, during the same two FY, traders who were active for more than 100 days accounted for only 42% of traders, they generated 94% of total derivatives turnover and resulted in 87% of total losses. So, approx 50Lac traders lost ₹1.9 Lakh crore i.e. ₹3.8 lakh/trader.
- In last 5 FY, Individual traders paid approximately ₹1 lakh crore in transaction costs where brokerage of ₹45,000 crore was paid to broker and ₹25,000 crore of STT was paid to government.
Now… think just for a little while.. Who is responsible for all this?
Youtube Trading Guru, Instagram Reels, Podcast, Or Brokers?No One.. Its US only!
Like every broker or instagram channel selling us dreams have a right/deserve to grow their channels and made money..
But don`t we… who earn hard, traded to make life better for self or family… deserve the right too…
And, There is Only and Only.. One Simple Way
Start Small!
Think of it.. You are new or already had a bad time earlier, You will lack market experience and knowledge in your initial trading days, and there will be a lot of unavoidable trading mistakes or learning tution fees that need to be paid first (in terms of time, money, frustation, sacrifice, learning)…
Once we start trading, you realize that it more than just buying & selling the stocks or markets and will should rather work on all the different aspects of trading business – Psychology Management, Money Management, and Trade Management. This all, we will discuss in some other post.
So, during the early days, it is more about learning not about markets… Rather Knowing SELF!
Who Am I? What Am I? How Am I? Where Am I?
And these really need a lot of strength…. Because we will get to know a lot of bitter side of us that we never bothered to accept or work on or considered as a weakness ever.
But market results told us that… It need something more that what we are now. And knowing this helps tell you what market to trade, whether to do intraday or positional? when to book losses quick or when to let winners run? As you get to know whether you are a aggressive or a calm person… whether you really follow what you plan? whether any small fight argument or loss makes you angry to fight more and so on and so on……..
Therefore, It is always advisable for new traders’ to start with a small account to learn & experience the bitter side of self, mechanism and wide aspects of the market, learn how to choose the stocks or markets to follow and trade, structure and formulate the trading plan & strategies, training and inspiring self at every step to see real insights, and putting strategies to test on your chosen market everyday and reframing everything again and again and again….
then you will be in a position to look at the nuggets all together.
And accept that to be profitable in markets.. it need vision for trading for life and not a short term way to solve life issues we are forced to go through or created by us!
With time and experience, the learning curve starts to slope upwards and if we manages to take care of our trading account wisely, follow the formulated rules and policies as planned then we start to make some consistent real money (may be small) from the markets and this proves yourself that you are ready to take responsibility for more money than before.
Conversely, if you manage your trading account poorly, don’t put in the necessary efforts or trade more on hope than facts and not following your trading plan and strategies then the market will snatch your money, give it to another trader, and will throw you out forever.
Lastly, starting small always make sense for a newcomer to the markets because it is always good losing small than all. Even if you lose your small committed initial seed capital during this learning phase, you will still be in the market.
You can come over again after refining your trading strategies; enter the market with the capital set aside and this time with incomparable and priceless learning & experience. But think of the case, where you put all the money you had as the trading capital, and loose it then you will have no way to come back and trade the market again.
So, before jumping on and rushing to enter the markets with a large seed capital, ask yourself how much do I know about myself and my habits? My Strengths and my weaknesses? How is my physical and psychological health?
Then how much i know about the markets or trading business?
Do I really possess the trading skills to start big with my hard earned money? Or whether I am ready to take this big responsibility with no experience and knowledge just because some youtube podcast or video or reel influenced me to be free and enjoy life with full time trading?
Remember –
Advice:-
- Don’t be too anxious to trade Big early
- Do not risk money in a stock you don`t know anything about.
- Do not trade on hope, fear, tips, or news.
- New traders should avoid taking leveraged and intraday trades. So focus only on stocks positional trading
- “Believe in Yourself” and….
Enter the Trading Business to Stay Their “FOREVER”
KNOWLEDGE IS POWER & ACTION IS THE KEY!
Hi,
Justtrading.in
First of all i’d like to congrates the team for this wonderfull,motivating initiative Justtrading.in,
I want to thank author of https://justtrading.in/have-you-ever-wondered-why-starting-small-always-work-in-trading-business/ for this inspiring & guiding article for me and for millions others like me.
Sir,my name is amit,a research student,i want to learn trading options but now at current scenario of hiked lot size,will it b a smart choice for person with limited money in hands as the mobile shop person in this article https://tradeacademy.in/the-good-the-bad-the-ugly-of-sebis-fo-contract-size-hike-a-traders-view/ what are the alternative we have now to get in to FnO segment ? Pl Guide.
Thanks
Sincerly
AMIT
Dear Amit
Thanks a lot for taking you time for sending us your wonderful and motivating thoughts. We are really happy to hear the positive outcomes of our heart full efforts and initiative to help traders across to be independent and learn the skill of trading.
Also, we are very happy to know your interest and willingness to learn about the markets and the opportunities available.
Please bear with us for this big reply.
Regarding your question for a trader with limited resources, We believe that “Big Businesses are big because of Big Ideas not Big Money” and we have a strong belief that “ALL GREAT THINGS START SMALL”.
Also, being a trader myself, I strive to learn and improve my market knowledge & understanding so that I can achieve higher end of Reward to Risk.
The idea here is to be good with your market research so that you can enter the market with very small or less risk. So, for this hiked lot size, the trader has to prepare a trading plan with strict money management rules which can help him manage and risk small part of his capital on every trade.
And as the article Have you ever Wondered why Starting Small always Work in Trading Business? says, at first learn the mechanism of the market, structure and formulate rules your trading plan & strategies, putting your strategies to test, trading on facts and strictly following your trading plan and strategies and keep on refining it to achieve your trading goals. Then you will be in a position to look at the nuggets all together.
To put it simply, if you are trading Bank Nifty Options then understand the mechanism and price movement of Bank Nifty Future to come up with some directional and trading view on the index so that you can enter the market very close to the reversals with strict stop losses in options. You can also refer stop losses as per the Options Chart. Then keep on refining your trading system and plans accordingly as per the results.
So, start analyzing the bigger time duration say Weekly, Daily & Hourly chart of Bank Nifty Futures and get in close by analyzing the small time frames like 15 or 5 Minutes to get close entry level with small stop losses. Take a directional view as per the big charts and setups and take close entries on the smaller time frames to achieve higher reward to risk ratio, i.e. Risking less to Reward with more on every trade.
One day, you will be able to enter the trade with very small risk and hopefully with very large number of lot size.
We truly believe that learner and effortful people like you will surely have a reward full and better trading career. All the very best.
You can refer to the articles below to get answers to your questions. These will give you a better understanding on Trading Index Futures, Learning from the Story of Trading Legend – Jesse Livermore, and how to frame a trading plan and learn more about money management and trade management rules.
12 Step-wise Trading Rules for New Traders to be Safe in the Market
How a 14 year Old Kid Transformed Himself to Become the Greatest Trader of the Wall Street?How to Trade Bank Nifty Futures?
Part IV – Getting Started With Trading – Importance of Developing a Trading Plan
Thanks for giving us an opportunity to serve you and we are very happy to connect with the traders like you & be of any help.
I have started the trading with a small amount,sometimes I have traded with Rs 500 & traded Suzlon with margin trading.
Slowly I have increased the amount & I am happy with it
Dear Abhijit
Good to know that you are climbing up the stairs one by one.. Keep working, keep refining your trading ideas…. We are sure one day you will surely make it very big.. We wish you all great in the future… and a lot of profitable trades…