how many lots?

How much money do u want to make thru trading per month?

1lac? 2 lac? 5 lac? 10lac?

Ok....1lac?

Fine!

How?

Well, well, well.....

Wishing means nothing without the way!

Market doesn’t owe u anything. U have to name it to claim it.....

Right!

Come, lets see how u can make 1 lac per month....

First u need a method...that too a tried and tested and great one....

And this article is not aimed at helping u get one.....it is assumed that u have one....already...

U will be tempted to say that what else is left to be done if u already have the method...

Well, right, and worng....

Right because the method that works is the key...

Wrong, because u r still far from the dream of making that 1lac u want per month.....

So, what is that which is left?

......what is left is

........applying that method to the effect....

Let’s take an example....

Suppose, u want to trade in nifty and with 10 lots.

A small back of the envelop calculation will tell u that u need

Rs.1,00,000/10lots=Rs.10,000/- per lot per month to total that 1 lac.....

That would mean Rs.10,000/25lot size=400 points per month per lot....

Easy?

Well, not impossible....but certainly not easy.....

Besides, history confirms that there are many months where market vibrates within 200,300 point band all month....and squeezing 400 points every month is not a joke....

Is there a better, more pragmatic way?

Let’s see....

Rs.1,00,000/50lots=Rs.2,000/- per lot per month to total that 1 lac.....

That would mean Rs.2,000/25lot size=80 points per month per lot....

Right?

Right.

Easy?

Yes....!

Except...the guts to actually put on the table that much....

Increase the bet-size bit by bit.....practice it...

practice,practice,practice....

can’t ignore lot size without never getting close to your dream!!!

(but ofcourse, got to have a method first.....)

3 levels of trader training

there are three levels of a trader's training.
--
at first level
a budding trader is supposed to
learn the technique of
(1) trading
(2) consistently / repeatedly
(3) with tamed fear
(4) with control over the trade
(5) with cool head
and
(6) profitably
(7) with surety to a reasonable degree!
--
only
after this
the trader reaches
level two of training.
--
in this second (advance) level
he needs to find
safe and effective ways
to leverage
his
proven technique
to build his networth!
--
in the third level
the trader
has to learn to manage
his millions
to keep gliding
like an eagle high in the sky
without much fluttering of wings!
--

4 simple rules of Richard Dennis (words from masters)

1. Trade with an edge

- Make sure that you have a trading strategy that will make money.

2. Manage risk

- Don’t trade with so much leverage that you risk losing everything.

3. Be consistent

- Do this to reap the benefits of your trading strategy.

4. Keep it simple

- Don’t try to make trading more complicated than it actually is.

"Holy Gambling"

I met Rishant after a long time. (Those who read my earlier posts might remember him as the one who had perfected the art of BTST!)

He came to my office in a gleaming brand new Ford Icon!

And after the initial exchange of pleasantries I was struck with awe to know that he had just bought this car in cash (no loan) from the returns entirely from the "holy gambling"!

"Holy gambling" is the code word we had given to "gambling" he used to do with options once every month.

Once every month he used to buy "deep out of money" 2-3 months away call or put options of a stock which his technical analysis predicted was set for drastically shooting up or down!

He typically used to put at stake 2500 bucks per game per month.

This money he used to "spare and forget" out of his monthly fat salary.

"I assume that I have blown this much less or saved this much extra during the month!" he used to share with me.

"This gives me tremendous entertainment besides often resulting in 5 to 20 times returns in a month depending upon market conditions and my technical extrapolation."

"This is not gambling in real sense. it is the ultimate testing of my technical abilities. Calling it Holy Gambling is just a fun way of branding this low-risk high-returns trade."

How & when I use options!

I trade options

-only when I have to take a position for maximum 3-4 days

-when expiry is atleast a week away

-when I want to minimise risk against overnight disaster

-when i want to leverage more with same capital

I don't use options for hedging or spreading or straddling.

I don't write (i.e. sell) option calls because I consider it defensive play for the mischievous or those who use big money to swallow the adventurous traders.

Call options are wonderful tools in the right hands, rather right minds!

Stunt Trading

Disclaimer & Warning : This article is just to share a concept and experience and not a recommendation to do stunt trading or gambling. Gambling is illegal in many countries. It can be highly dangerous and potentially financially disasterous to gamble or trade big without professional guidance and without developing highest level of trading competence. This article is purely meant for education and discussion purpose for adult and professional traders only! Readers descrition is solicited. Author doesn't accept any responsibility for any loss or profit arising out of the discussion below!)

=================

Professional gambling is not gambling in true sense.

It is placing extraordinarily high stakes

on the extraordinarily favourable odds!

(Only those who understand the literal meaning of the above two lines can truely grasp what I mean, otherwise there is a real danger of getting me wrong and should not read more of this!)

The result is extraoridnarily high returns!!

I remember, in an interview telecasted in a program in Discovery Channel, a highly successful stuntman from Hollywood said "All our unbelievable stunts are totally secure! All these are scientifically pre-tested and calculated acts of seemingly extreme bravery! Anyone doing an unsafe stunt is a fool!"

Professional Gambling in stock market is nothing less than Professional Stuntmanship.

Anyone doing an unsafe stunt trading is a fool!

I do get a chance to do stunt trading atleast once every fortnight!

But I have certain immutable rules for it.

I never do stunt trading on the short side.

I always do these on the long side.

I always do these with index and not stocks.

And I always do these with options.

I typically buy upto 10 or even more index option lots when I am 99.9% sure of being successful.

I never hold these for more than a few hours.

And when do I do this?

Well, out of 10 times my indicator tells me to buy, I find the best 1 trading opportunity out of those 10 buy-calls which I consider safest for stunt trading!

It gives me decent money in a flash, a super kick and professional satisfaction.

As a double-safety measure

I call off the trade the moment I feel I am excited and not cool, or when there is a slighest of doubt!!!

Last, but not the least, I experience high adrenalin levels even when I have zero doubts!

(Having goose bumps even while I write this!)

Open your mouth!

When my son was a little boy I noticed that his bites were tiny!

The piece of chapatti (or rather anything) he used to put in his mouth (with 4 teeth) were amusingly minuscule!

Every family member used to laugh at the wonderful sight.

Only a sparrow could fill her tummy with that bite size!

But for him, that bite size was big enough!

Kids are not Ph.D.'s but they know by sheer "inbuilt" sense that they should be interested in only as much as they can bite!

As big as they can chew!

As big as they can digest!

Now, he has grown up from a little boy to a boy.

And his bites too have grown up.

Still smaller than bites of mine but big enough for his mouth and body!

This reminds me of the bites we take in our stock market trades!

Sometimes, some of us bite too big! too much!!

Big enough to excite our trading 'tongues'

but also big enough to embitter our peace of mind.

Often we land ourselves in a position when we can neither swallow the wrong jumbo bitter bite nor can we spit it out and get rid of it!

Afterall, it is not just food but money caught in our mouth!

not just money but (at times) our entire existence and happiness that is in our mouth!!

It becomes a choking lump in our throat.

Often killing many a "baby" and "boy" traders!

So, what to do?

Bite what u can chew

Chew what u can digest

Time the bite as per hunger, capacity and discipline instead of senselessly grazing anything, anysize, anytime anywhere!

Next time your father asks you

"Johny,Johny....open your mouth"

What should come out is

"Ha! Ha! Ha!"

and not

"Ah! Ah! Ah!"