- Puneet Arora

# How many trades are too many?

Too simple a question to ask, isn't it? The one-line answer is that the number of trades that one should take depends on his trading style.

If you are a swing trader, you can use this calculator to see how much you can earn in a year, depending on how well you can trade.

Lets say that you keep an average capital of Rs. 3 lakh per trade, and achieve 15% average profit per winning trade, with a stop loss of 8% on losing trades. Now all your trades will never be successful, so I have kept only 65% as the win ratio.

If you can take 2 trades in a week, it turns out to be around 100 trades in a year. That sounds to be a lot of trades, but I am talking of 2 trades in a week, not in a day. With above-mentioned variables, and 100 trades in a year, it will earn you around Rs. 20 lakhs (Rs. 20,85,000 precisely).

What if you take just 1 trade a week i.e. around 50 trades a year? In that case, your annual profit will reduce to ~Rs. 10 lakhs (*see Figure 1 below*).

But if you can improve your average profit per winning trade to 25% from 15%, you get to Rs. 20 lakhs again (*see Figure 2 below*).

**If you have a strategy that improves your win ratio, increases your average profit per trade, and reduces your stop loss level, the result will be far far better.**

Use the calculator on top to see how each variable can impact your trading income, and decide what is optimal for you.

I use** Pro-Setups script for my swing-trading**. If you also want to try it, ** check it out here**.

*Note: This article is written for individual discretionary traders, trading in cash with no leverage.*