Everyone in this market has a story to tell and every word is uttered out of an experience quite unique to that person. Some come into this market with maturity and character and that helps in dealing with this worthy adversary(Market) and some come into this market and gains that maturity and character.
Fortunately, Mr.RajaGopal belongs to the former and it is visible from his experience that he has brought with him the kind of maturity and character that has helped him to find a method to deal with the "unpredictable market".
I have posted below his mail that shares his thoughts and I am sure you will find them useful.
God’s grace I could make some money in this market. I have been watching the market since 1990 and mustered the courage to enter in March 2009. I discussed with my wife and after her total approval invested money given to me (by wife since she manages the funds) to buy a car. First three advantages for me from the above are:
a. I know the environment – though may not be a technician.
b. I know the RISK and so does my wife.
c. God forbid – if my capital is hit – it will not hurt me financially.
Above three points give me great confidence and a care free approach to my trades. I am relaxed and feel as though I am playing chess against a much intelligent player (market).
Question to you: Where are you on the above three points? What can you do to get the freedom and confidence? Basically do you believe you can make money in this place?
Once in the market I learnt a few more facts:
- What ever I buy will go down
- What ever I sell will go up.
- What ever goes up will come down.
- What ever comes down will go up.
So, we may not even be making 60-70% correct trades on entry but if we can survive and hold, market will oblige us.
Bottom Line: Do you have the capacity to hold your trades?
I am not much big on technical and you would have read enough funda on market. Hence I limit with my above understandings alone.
My trading style:
1. I believe making money in day trading is a misnomer – you can make but it cannot be the sole trading methodology. Reasons 1 and 2 above – and we are forced to close trade at cut off time. (Post which time our trade will be in green). Hence the trade funds are divided between Day and Positional trading capital (20% day and 80% positional), Do you do this demarcation?
2. I have been a single side player – just converted into both sides – long and short and now finding my revenue growth. Do you play both sides?
3. I have created a basket which consists of:
a. Aban Lyod b. Bharti c. DLF e. HDFC f. HDFC Bank h. ICICI j. L&T m.M&M n.RIL o. SBI p. Tata Motor r. Tata Iron s. Axis t. BHEL u. Hero Honda v. Sunpharma w. DR Reddy x. NIFTY y. Bank Nifty z. Infosys and TCS.
You will notice that each of the above are vibrant counters with daily action. Every eod, I take a download of this page from my terminal and note down the TOP gainers and losers.
If there is Gain or Loss on two successive trading days, for me that counter is eligible for either Short or long on third day – provided there is no stark negative news. Example Infosys kept surging with great flow of +ve news and results. Ran for more than 5 sessions – did not short it, since the information was noted. Now, Bharti went down for two days – being basically a good scrip, I entered on the third day for Long.
So my Rule no:1 is:
Gain for two days eligible for a Short (must not be a recovery from bad patch)
Down for two days eligible for a Long (must not be a wrong tagged one)
Rule no: 2 is: Which ever stock goes near its 52week high and hesitates deserves a Short – provided the market is not surging blind.
Defence: My Longs are in current futures (if in future). My shorts are always in NEXT future and SHORTS ARE ALWAYS IN FUTURES ONLY.
I don’t spend much time in Technical studies. I am guided by Ilango. Imagine if one person has BP and cardiac problem, it is enough to know that he has these and what the medicines are prescribed by the doctor. Must he spend time analyzing his medical status every hour? He has to believe his Doctor – and Ilango is my Doctor.
Last but not the least – keep good personal rapport with your broker.
Don’t think you are a loser. As the saying goes you have not lost anything till you lose your self confidence.
Meet your broker with confidence of a trader who will win. Not as one who is afraid. Your broker will be a big help in holding your position. I am immensely benefited from all my brokers.
Don’t want to bore you. Don’t want you to lose money.
Our friend "Anandan" in spite of his exuberance is good with his calls. Kindly send him a mail and ask him to include your id. He goes by Ilango’s formula in identifying the trade. Validate them and use them.
Please be in touch. I am not a great trader. But God blessed me with a habit of making money. I fight away my losses like a third rated street thug.
All the best. Smile, relax and Joke, your trades will be winners.
95% of Profits are generated by our positive thinking. Tata Motors went down Rs 9 from my cost, I was so sure it will bounce back…..
Don’t be trigger happy with your Stop Loss.
Though I do not agree with "holding on to a losing position", the point that has been made here is that often the "holding capacity" of an individual determines the winning or losing.
Come ...Share your experiences with all your fellow traders..