Wednesday, January 28, 2015

trading nifty like an old car dealer

everything is psychological...
following is a way i managed some anxieties of trading...

one of my friends in shimla is a second hand car dealer. he buys old cars and sells at a higher price, with or without refurbishing, mostly as it is...but verbal rosy painting...

he is, by now, well established in the area for his trade adn keeps receiving many offers everyday. he generally keeps 2 or 3 lacs cash in his pocket to clinch a good deal as and when it pops up.

there is one more reason for him to keep ready cash with him....and this is a smart one...

suppose he wants to buy a particular car for 1.5 lacs but the customer wants 2 lacs and is adamant on it.....my friend brings the negotiation to a point of "take it or leave  it" and then plays a tactic.....he takes out the bundle of cash and puts it on the table....

very often, as he told me....the customer budges after seeing the cash and finding it too hard to refuse the "heap of money"...

so many deals he has clinched this way....at unrealistically low prices!!!

anyhow, this is not the thing i want to share....the reason i am sharing his story is the following...

my friend gets a lots of offers to buy old cars, majority at fair prices...but he doesn't buy them....!!!

why?

simple.....he knows he has to sell the car after buying....he knows he is not buying to keep the vehicle!!!

so he buys only if the customer is willing to sell at min 20000 or more (depending upon whether it is a 10lac car or 5lac or 2lac) below the tentative price my friend can resell it for!!!

logical....

do the sellers agree to this?

well, not easily....

that is the reason, he has to employ the tactics as above....

so, what's the point...

the point is simple and straight....

when nifty trading started getting on my nerves for more than one reason, i wanted to psychologically trick myself into enjoying trading without changing the trading per se....so, this is what i did....

i started imagining my nifty trades as the second hand car trades...

when i buy nifty...i consider it as an offer of buying out a used car at a price lower than my understanding says it could be sold for.....

i don't buy the nifty car unless my trading method confirms me to a reasonable degree of probability that i will find a "buyer" for a higher price soon....

in that sense, since that day.....i "trade".....like that "used car trader"....

i no longer have the mental pressure or anxiety or stress that other fellow traders bear...."share trading" are very heavy words! loaded with horrible pictures in the minds of the speaker and listener....

i now just feel like a traditional brick and mortar trader....

buy the thing lesser than what it is worth and sell it to someone at more than it is worth!!!

now, i am least concerned by the heights or depths of nifty....4000 or 8000 or 16000 mean nothing to me....

nifty is just an old car which promises to make me some money if i trade right!!!

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