SOME THINGS YOU NEED TO CALCULATE TO DETERMINE OUR CAPITAL NEEDS
HOW MUCH OUR NEEDS PER MONTH
The first thing we need to know is how much we need each month, our advice should be to focus on basic needs, such as clothing, housing, water, electricity, internet, transportation, children's tuition, etc.
Special expenses such as holiday budgets, advances to buy new cars, etc., should not be included in it. We will discuss the way we meet these special needs.
KNOW THE BENCHMARK AVERAGE MONTHLY PROFIT TRADER
Benchmarks are usually used by the average JCI increase every month in the past few years. Usually the average used is from 2007 to the present, or from 2010 to the present. If we calculate from 2007 - June 2018, the average monthly JCI performance is 0.98%. If we calculate since 2010, the average monthly JCI increase is 0.84% / month.
It feels small, but that's the benchmark of our performance as a trader, if so far our average monthly profit is more than 0.98% per month, so we can already call ourselves a great trader.
Believe that regardless of how much profit many traders show on social media or stock forums, we strongly believe that more than 80% of traders in Indonesia fail to beat these benchmarks, you can also ask yourself the same questions, are you also from traders who have an average monthly profit of more than 1% per month from your total capital?
If all this time your average trading performance is still worse than the JCI performance, it means that it's not the time for you to decide to become a full time trader, regardless of how much capital you need. But if your average trading performance is greater than the JCI performance, then you need to measure more deeply about your trading performance so far.
MEASURING PERSONAL TRADING PERFORMANCE
In the table above we can see an example table of trading performance of one trader in the last 30 months compared to the JCI's performance in the same period.
From the table above it is found that this trader, has a better average performance than the JCI, when the average JCI performance is 0.62% per month, the average performance of the trader is 1.2% per month.
So the average monthly trading performance is 1.94 times the JCI and in the last 30 months this trader managed to overcome the JCI performance 21 times and 9 times below the JCI performance.
If you analyze the performance of this trader in the last 30 months, it seems that this Trader has enough ability to become a full time trader, there are 2 important points that we can draw from the performance table above, among others:
Trading period of the last 30 months, in trading sometimes we can be lucky and make big profits in 1 or 2 months, that's why a long enough sample is needed before deciding to become a full time trader, our advice is to trade for a minimum of 2 years, before starting to think to work as a full time trader, because long periods of time will delete the 'lucky factor' and show our true abilities.
A fairly stable profit, and above the JCI, sometimes the high profit earned by a trader is not obtained from consistent profits obtained from month to month, but because only 1 or 2 trades produce profits of tens or even hundreds of percent. So it could be that the trader in question suffered a loss 25 times in the last 30 months, but due to the large profits obtained in those 5 months, the average performance of this trader can still be above the JCI. Getting profit in this way is not something wrong, but traders like this generally do not need to be full time traders, just trade as part-time jobs, and focus on looking for stocks with huge potential profits. No need to leave the profession before, and focus on observing the market every day.
