Every fresh entrant in stock market comes with a dream that he will be a millionaire within next few days or months. But market breaks every dream and shows its reality, that it will go according to its own way, not according to someone's personal belief or interest.
Those who survive after their dreams are shattered, learn slowly with the market and starts to take profits going with the flow of market.
Then they realize that the market provides limited opportunity to take profits.
If we talk about NIFTY, the trader may aim to earn 200 points a month, which would be a very good trade. But how much do we earn from it??
If we trade one contract (50 units) of NIFTY and we gain 200 points, so our profit will be 50(1 contract)*200=RS 10,000. Its a fine trade, but is that enough for us,earning Rs10000 a month??
It all depends on a person's needs and on his own desire, that how much he wants to earn a month,but one thing is sure - a single contract can give only s much and not more.
So the motive is clear, if we want to increase our income, then we have to increase our investment capital. We can increase our income only by increasing our investing capital. One contract trade cannot make anyone a millionaire.
So moral is market provides opportunity for profits but we can take limited profits from it. If we want improve our income or want to survive only through the market,then we have to be properly capitalized.