Rules of trading are opposite to rules of life

 

1. In life you protect your ego; in trading you protect your capital.
2. In life persistence pays; in trading persistence in a wrong position destroys.
3. In life more effort brings reward; in trading more effort brings overtrading.
4. In life big risks bring big success; in trading big risks bring ruin.
5. In life experience makes you wiser; in trading experience can make you biased.
6. In life you plan and predict; in trading you react and adapt.
7. In life emotions make you human; in trading emotions make you vulnerable.
8. In life control is power; in trading surrender to uncertainty is power.
9. In life reputation matters; in trading only results matter.
10. In life you seek to be right; in trading you seek to stay solvent.
11. In life hustlers win. In trading lazy win. 

Why trade with less lots

 If your trade is right, even less lots will have effect of more. But if your trade is not right, even more lots will not be of any help. In fact, loss on more trades will do much more damage. 

So, always trade with less lots (eat less than hunger, trade less than you want to). 

Trading with peace of mind =trading without fear +ability to take trading signals

IPOs and BTST

 There are many success stories of “investors” who trade the IPOs. 

They are not investors in strict sense. Just traders. In fact not even traders, but scalpers of cash and carry. 

They just apply for IPO share allotment and when they get, which happens often, they offload immediately on opening day.  In profit; which often ranges from 5 to 50% (sometimes even more), rarely in loss. 

I know many such investor scalpers who do nothing else in market except this and have made good money. They are willing to bid for even PP Waterballs (remember Jaspal Bhatti?)

They don’t mess around in trading if they are not comfortable, especially when they keep getting good net returns in IPOs. They have multiple demat accounts in the name of their family members. 

Good strategy. 

Last minute BTST is also like quick instant gain opportunity at listing of IPO. 

No waiting, binary good chance. And you don’t need to risk anything during day time and thus avoiding operator manipulation  

And this opportunity comes daily. Just judge the overall short term trend and take trade in the last minute. It is likely to work like IPO majority times. 

Just that the direction judgement has to be well judged.

Benchmark for number of day trades

 At any given time

There is one trade on 15 minute chart in 2-3 days

1-2 trades on 5 min chart per day

3-7 trades on 1 min chart per day

The last one is to be avoided except scalping.

Why 95% lose in trading?

 Market can only go up or down. So 50% win is assured. Then why 95% lose in trading?

Reasons are a few

First 95% losers are not number of trade wise. But net loss wise. 

And that is because traders book profit early and book loss late. Fear Psychology does that. One big loss wipes out 5-10 profits. 

Second, even number of trades wise, traders lose much more than 50% trades (~66%) because they trade on common mass herd sentiment built on public forums like business channels, groups etc. 50% win rate is statistically true only if trades taken randomly without any external influence or with fixed rules. 

Forget all chart lines and…

 Trading self tip: 

Remove and forget all chart lines, forget all projections every morning. 

Draw fresh lines, reach fresh understanding and trade with fresh mind. 

If new lines and inferences tally with previous ones, they only reinforce it all. But go back to the drawing board honestly every morning before opening. 

Being successful trader is like…

 Being a successful trader Is like being a wildlife professional. Catching the right trade Is like catching a snake or crocodile or beast etc without getting hurt. 

You have to wait. You have to observe. You have to learn and practice the skill. 

You have to be bold and yet be well protected. 

You do sometimes miss catching the target. It’s not always successful. That’s ok. But you always have to get away almost unscathed in every failed attempt. 

Finally you do get it. Always. 

And the success ratio improves over time  

Trading is not bravado. It is livelihood. It is a job to be done well and calmly.

Simple history and future of USD

 American dollar had ordinary value

It asked Saudi Arab and others to accept oil payments from countries only in dollar, in exchange for US security 

Every country started buying dollar

Dollar artificially went up in value

Then US could import anything for dirt cheap 

Above that, US kept printing dollar

That meant, US could buy anything for almost free as long as dollar value was many times value of other currencies (actual productivity of US dollar was v v less)

If dollar now losses value, import costs will sky rocket. Dollar hyped value will collapse US will be in deep crisis

15 laws of Opportunities

  

1. Every opportunity has a shelf life– delay too long, and it expires.

2. There is opportunity after every opportunity – missing one doesn’t mean the end.

3. No opportunity is the same – each carries its own timing, risk, and reward.

4. Opportunities rarely announce themselves – they often disguise as problems, risks, or extra work.

5. Preparedness amplifies opportunities – the more ready you are, the bigger the door that opens.

6. Opportunities multiply when acted upon – seizing one often creates more.

7. Most opportunities demand sacrifice – you can’t grab them without letting go of comfort or something else.

8. Perception creates opportunities– two people see the same situation, one sees a problem, the other sees potential.

9. Opportunities test courage more than skill – the fear of failing blocks more doors than lack of ability.

10. Missed opportunities teach, seized opportunities transform – both have value, but only one moves you forward.

11. Opportunities often come dressed as small beginnings – dismissing them as “too small” can cost you something huge later.

12. Not all opportunities are meant for you – chasing every door spreads you thin; wisdom is in choosing.

13. Opportunities respect speed and decisiveness – hesitation is often the difference between getting it and watching someone else take it.

14. The bigger the opportunity, the lonelier the path – few will see what you see, until you make it real.

15. Opportunities compound with relationships – doors open faster and wider through trust, networks, and goodwill.

the Trader with spy mindset

It is sad that people look down upon technicals. Technicals are the footprints of the operators and masses. it is like a Morse code of secret communication. Technical traders have to have the mindset of a spy. 

The best way to master any indicator is to learn in reverse. Mark 100 high and low points of any chart and see what that indicator did at ALL  of those points. the secret will be revealed to you. like Bruce Lee advised, practice one (or select) technical(s) a thousand times....self talk

the mercy of operator

markets give you next pain only when you have forgotten the previous one. so never forget your pain...self talk.

if market is applying savlon to your wounds, be alert.

--

you may not know what the market is going to do, but you can definitely react to what the market has overdone. and overdo it definitely does as part of the game to trap/confuse/bluff.

which strikeprice option to buy?

- very far out of the money, like 5-10 value = for thrill, not trading

- far out of money like 30-35 value = for aggressive betting on profit from earlier trades

- out of the money like 70-100 value = normal trade position

- in the money like 100-150 = when you are confident 

- deep in the money like 250-400 = alternate to buying futures

- deeper in the money = not much extra benefit though risk increases

Once the value of the option enters the next, higher level, you may skim the option to lower/earlier category and take some profit/money off the table.

Caution : Never put 5% (at worst 10%) of your trading capital in single trade.

except aggressive betting of profits of one trade. eg you turn 10 to 12 lac....and want to bet aggressively with that 2 lac profit, provided you have an evolved dependable tested plan. several traders have made big sums with that approach.

should we buy or sell options? my take

Selling options only if you have backup funds to withstand big adverse moves and still have a plan. And when you have that much, it is better to buy stocks the investor way. Almost all big professionals do that. I mean those beyond 10-20cr funds.

I know some traders who made crores, lost crores multiple times selling options. They falter tragically in trending and volatile markets. 

They failed to go beyond a level because they didn’t know how to know the trend, which is the same reason they switched from buying to selling.

IMHO a disciplined, successful options buyer has all it takes to become an investor ultimately. The %cagr on a big corpus makes them financially free without anxiety and still grow their net worth.

--

Traders think that they need more money to buy 100 lots instead of 10 lots. Actually, they need a mindset.

Money comes easily. Mindset doesn’t

--

Mental maturity and stability are required. Not money. Money comes.

Until our thinking changes, our financial standing doesn’t change.

If trading doesn’t change you, you are not progressing

--

Option buying is gear one and two. Not required after 15 km/h and 25 km/h. Option selling is the third gear. Investing is 4th gear and overdrive,

--

Option buying is like buying futures with a premium as interest of borrowing or hafta. People don’t buy options except for the reason that they don’t have larger money. 

Those who have money to short options have either inherited or are blowing their savings OR are geniuses.

--

Both buying and selling are good tools. Nothing wrong with both. Both are different tools for different situations and stages imho.

--

Both shouldn’t be looked down upon. These are not show-off concepts.

I mean buying and selling options

DIIs FIIs use all tools at their disposal as per the situation. They also buy options.

--

It is difficult to make trading difficult

 A trade is like the sail of a wind sail boat. All a trader needs to do is to judge the direction of the wind and adjust the direction of the sail. A trader, like a sailor, can’t decide on the amount of thrust the trade boat will get. That depends upon the velocity of the wind decided by factors not under his control. Big storms or good winds or short bursts come randomly. To be ready to catch them is all that is that a trader sailor has to align with. 

--

Trading is easy because that is all a trader needs to do. The rest market does. It is difficult to imagine that someone may find it difficult to judge the direction of the wind. It is difficult to make trading difficult.

All we have to decide is whether to buy a put or call. One of them is always right. It is the only gambling with a 50% assured result. We still lose because we either buy too big to hold without anxiety, or we change our mind at the drop of a hat, or we don’t have any logic to pick the trade side. Self talk

my notes on US Tariff saga

 if there is no trade barrier, efficient countries/businesses will eat the inefficient

--

but that is ok if every country has a niche

--

but those who don't have a niche, they'll perish

--

if tariffs are similarly high for all, the one with the trade deficit will be at loss

--

and if they opt for not importing, the global quality of life will be seriously hit

--

and then, the rich countries will predate the poor. because military power = economic power. poor won't be able to defend themselves

--

US trying to force enter the inefficient beyond its already high trade surplus.

--

those without efficiency niche will get destroyed, those with efficiency will get partially saved.

--

US will become uncompetitive in the world where it is depending on raw material imports. unless it removes duty on those things

--

US has destabilized/kicked a highly sensitive and complex domino system

--

it is an act of global sabotage

--

it is a mind-numbing gamble on global scale

--

US should have exempted non self-reliant raw material imports

--

because of retaliatory counter tariffs, US is shutting the global market gates on itself where other competitors are there without those tariffs

--

only local nationalistic boycotts can help, temporarily, and to some extent...once the disadvantaged coerced countries lift tariffs for US. afterall, even US exporters wont be giving you anything without you actually paying for it.

--

you don't need to protect your strengths.

--

US is just trying, in futility, to protect its weaknesses while gambling to get into inefficient bazars for incremental export addition.

--

China did all that, but dramatically increasing productivity and innovation, and long-term strategy, not in this crude fashion. this act of US only shows that US has run out of ideas, or is hiding some other underlying mega-crisis

--

US is betting on countering impending inflation with increased revenue from exports. but inflation marred people are not the same as export incentive beneficiaries. this will lead to unrest in the masses soon.

--

US policy is inclined towards corporates, but they too may be hit by avalanche of side-effects 

--

this act has been done/started with recklessness.

--

all this may help China and its proxies

--

those countries which are not in a position to negotiate tariffs may lost to those who can, further widening the rift between have and have not countries

--

this is much more devatating disruption than it is looking to be

--

it is equivalent to WW3

--

may lead to unthinkable collateral damage and consequences unaffordable

--

serious chances of down circuits in the global markets in coming days...

--

unless US subsidizes the costlier imports, inflation of un-substitutable imports will be swift.

--

habit changing of US consumers will be painful, and hence not happening

-

susbidy anyways will be laughable, akin to funding the tarrifs on the very countries slapped with tariffs.

--

till this mess is sorted out, global orders pipeline will crash/dry up

--

it is covid like disruption in scale albeit with longer term serious disrupotion

--

prices may shoot up globally for the items where there is a global scramble to replace US as supplier. and the prices may crash for the items which the supplier countries may divert elsewhere in distress selling once the demand in US slumps

--

if the US feels that it is losing or realizes that it has blundered, it may opt for flexing its military might in frustration.

This may be the end of NATO alliance

--

china may emerge as a saviour, albeit at a cost

--

strong domestic economies may survive with lesser trauma.

--

US currency will start losing its status as global currency

--

is it the definitive beginning of the end of the US dominance?

--

US has lost credibility and trust. It was still great, before this madness to make it great "again"