I was going through a Top Trader in India who was boasting 50% Profits. It is really impressive gain that Most Traders will not be able to Achieve 50% Profits. BUT Still he is at Loss!
Most Traders do not realize that Trading is an Active Income – It is comparable to your Job or Business where your Time, Energy & Infrastructure costs a lot to do trading. You need to Consider the Tax Implications, Expenses, Opportunity Cost of Time to come to the Real Profits.
In the following example, we are Calculating the Actual Trade Profit on Rs. 10 Lakh Capital. Although he made 50% Profits in current year – the Actual Profit is only 22% after considering all expenses.
As you can see from the above Calcuations, Instead of Trading he could have went with Passive Long-term Investing & Made 30% Easy Returns without all these hard works. In the past 2 years we had 100-150% returns also – but considering the long term we take only 30% as Long-term Investing Returns.
This is the reason why Warren Buffett do not trade.. why Ramesh Damani do not trade.. But Do Investing!