What is the strategy to earn 5 percent monthly from stock market?

Making 5 percent monthly is possible from the stock market. But you have to rule and system base trader or investor and diversify your initial capital.

Keeping in view my experience I am going to some strategy to make 5 percent monthly from the stock market.

1. Delivery Base Trading


 Equity delivery or delivery-based trading is one of the manners in which you can exchange the offer market. In an equity delivery, you buy some shares, and hold them for quite a while in your Demat account. In delivery trading, you can hold the shares however long you need, after they have been conveyed to you. You have total responsibility for stocks you buy and can trust that a fortunate second will sell them at a decent benefit. This is an unmistakable difference from the next most basic kind of trading in shares, intraday trading, where you buy and sell shares inside one trading day. You don't have to follow through on the full cost of the gazes in intraday trading. Then again, to buy shares in delivery, you need satisfactory assets in your account, since no edges are advertised.

 

 
2. Options Trading

Making money in options trading is high risk and high reward, there is some options strategy in which you can make a handsome amount of money when you follow religiously.

  •     Covered Call
  •     Bull Call/Put Spread
  •     Bear Call/Put Spread
  •     Long Straddle
  •     Short Straddle
  •     Long & Short Strangle
  •     Iron Condor/Iron Fly


 3. Always Hedge your positions

Whenever you make any position irrespective of short or long you have to hedge your position. Hedging helps you to minimize your losses and save your capital. Options are the best and cheapest way to hedge your position. It's possible to make 5 percent monthly with hedging.

4. Do Not Over Trade

Overtrading destroys your profit-making trades, when you take lots of trades you are going to increase your expenses like brokerage and charges etc. And you have to maintain the favorable risk-reward.

5. Money Management and Risk Management / System & Rule Base Trading.

Managing money means you have to diversify your initial capital into multiple trading strategies or financial assets. I use the 50/25/25 rule which means. I deploy 50% of my capital into delivery base trading and 25%  in derivatives and 25% in intraday and scalping.

Risk management means you have to manage your risk according to risk rewards. The minimum risk-reward should be 2:1, which means every losing of 1 point you are going to make 2 points.

System and Rule base trading is a style of trading in which a person is very ruled base trading, he is following their rules very stickily. You have to make some system, like entry and exit condition and some rules to make you an emotionless trader or investor.

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