4 types of learning paths

there are 4 types of learning paths for new traders:

1. large seed money (which they bring and use for trading while learning), (and stay) in the market for large enough period of time

= this category is invalid, doesn't happen like this unless u a genious / prodigy

2. large seed money, in the market for small period of time

= obviously, u would have been badly hit and out of the market, more or less (with a wounded ego and torn pocket)

3. small seed money, in the market for small period of time

= u are wasting time by being too shy/nervous/unsure/fearful/playing it safe. u probably don't have a method or the one which is too primitive or a mere-eyewash or not sticking to it. u may still be surviving, returning to (horse) trade occasionally but u don't have a great trading future ahead. u are likely to burn out / pissed off soon. no future in the market for the cowardly / overtly cautious / timid / indecisive traders. u are sure to fall in the gap between the two hills if u don't leap decisively from the first one towards the one ahead with some above-threshold energy/momentum.

"playing for a draw is the surest way to lose" - anatoly karpov

4. small seed money, in the market for long time

= u r destined to be successful. ponder seriously if u still haven't.

since u have been in the trading arena since long despite not betting large amounts (and hence having patience and remaining satisfied with small profits as well as small 'non-fatal' losses "till u have cracked the code"), it is enough hint that u have been through the journey awake and cautious. it is strongly indicative that u were deliberately up to something. serious observation, experimentation and learning is strongly evident.

after the 4th step, u should (rather, u would be, automatically) increasing the seed money and will be in the market practically forever, assured of a place in the "hall of non-famous but totally satisfied very successful traders"

stop worrying, start winning

Have u ever gambled?

Have u ever got the privilege to go to a casino?

Yes! Great!

So, here’s my question....

Will u ever go to a casino without money? Will u be allowed inside without bucks in ur wallet?

Well, even if u dare to go there bare pocket and even if they do allow u in, i don’t think they will allow u to sit on the table empty handed......even if they are gracious enough not to throw u out....

So? What do i want to say?

Simple....

If u don’t expect urself to go to a casino without money, how do gather the guts to go to the mother of all casinos, the stock market, without money?!!

U probably would shout at me that i am wrong and that u do go trading with money....but i will not agree to that. Lemme prove that....

When u go to the casino, u take money out of ur pocket, buy the tokens, sit at the table and put them at the stake. Then, u play hard and good, trying to win the tokens put on the table by others also....

While the game is going on, for all those minutes and hours, everyone’s money is fully exposed to everyone present there.....everyone has the equal opportunity to snatch all the money for himself!!!

But what do u do in trading?

U enter the trade pit, take out ur money, buy the lot tokens, put them on the “table” but never leave ur hands from them.....you are always touching your money....ever so eager to take it back at the slightest hint of danger of losing it......

Result?

U r so scared of losing the money that u never start to even think of winning anyone else’s money......u r there just with a false and fake wishful self-appeasement that u have come to “make” money....whereas in-effect u r there just for the thrill of “gambling”....

So, what’s my point?

To win, others’ money, u have to lose focus of “your” money and focus on “others” money. Only then u can win. And like in a casino, when u win others’ money, u also get back all of your’s also.

Those who are too scared of losing rarely win......and never consistently.....

Trade with money u can afford to lose......but never before u have the method in place.....

And make sure u don’t trade with more than 1/20^th part of ur trading capital.....even if u lose the first portion despite method, take it as just a probability outcome and nothing too serious. Take out the next portion and go for the next trade as per the system.....and so on.....you have to stop worrying about losing to win!!!

butchers and draculas

everyone thinks operators make big money.....they make small percentage..... only difference is that there capital is so big the net amount is mind boggling.....imagine 1pc of a billion multiply by 200days

one big loot point is options..... operators have premium for their breakfast and lunch......or dinner they only take scotch

someday i will share the modus operandi of options premium eating thru algo trading by them...will blow ur mind....u just can't beat them....they are bigger than Banks nd 98pc of their guys are below avg traders.but the top 2 pc use the super software hig the rest 98pc are supposed to just monitor. u tube is full of a few startling documentaries on their world

they are bleeding the world.....they make sure they don't overdo....that they keep us alive

they are not butchers....they are draculas

know them to survive them. u have to be in the minority.... with them. dont look for logic if u have their company. they can't harm u if u r ulon their side....

reminds me of the classic Brad Pit movie "world war z"

yes. they also do book loss and kick the a#$$ of the stupid who causes it. that's why they dont let fresher super MBAs touch the trades. treat them like clerks.

a pledge...

i hereby, pledge, to donate all my share trading profits (besides dasvandh from my salary) to the cause taken by Bobby and alike. i earn enough from my salary to support me and my family and live a happy satvik life.

http://thebestbusinessintheworld.blogspot.in/2014/12/17-myths-of-charity.html

lessons from 'freakonomics'

currently reading
"Freakonomics" - by Levitt & Dubner

kept jotting down the lessons in my language or code words to remember for long time............thought u would love to read too
=========================================================

- everything is (or isn't) because of some incentive

- every "conventional wisdom" is a myth

- world is a astronaumical mix of "butterfly effects"

- elephant effects must be obvious, too

- how u look at the data is what it tells u

- economics decides everything

- economics and technology can solver any problem

- there is no truth.....only convenient truth

- perception is the reality

- life is unfair, world is unbalanced, manind is unequal

- goats are born to be milked

- goats are born to be scapegoats

- go to ground zero and check

- demand and supply still decides it

- the whole world is caught in a tournament it knows it has no chance of winning

- try something different to have any chance of making it

- inability to innovate quickly and sufficiently is the world's problem

- time changes the game before u master the rules

- risk vs reward is only for the ruled

- world is the sum total of gangs

- it's all about money, honey!

the hidden truth of trading

there is an unholy question which many avoid, many ignore, many distrust and few acknowledge

"does insider trading happen?"

well, well, well!!!
what a question....

it's something like asking
"does betting happen in cricket?"

o my my!!!

what do i say!!!

in my humble understanding
trading is "meant" to be "insider trading" by the "big" guys

for the majority, the unsuspecting retail traders, the public, the masses
it is 99.9% pure and holy!

--

how many executives of a company know what the numbers of the company's quarterly figures are going to be?
how many officials of a govt department know what the new policy or decision is going to be?
does nobody know a judgement before the judgement?
does nobody know a strategic clearance?
does nobody know a coming or going order?
doesn't the big mafia which is funding a terror network know when what is going to happen?
is that mafia or entity so naive that it won't take "benefit"?
does any new discovery happen in one eureka moment?
does any bank fail in just one day?

the examples are not in dozens or hundreds
they are in millions

there is a very thin line between information sharing and insider trading.

with the corruption at all times high globally it is anybody's guess as to how much secrecy is being / can be maintained in above matters.

some experts are of the opinion that just as the secondary market is bigger than the primary market, insider trading gains are bigger than the primary market gains! so much so that the primary market exists because of the secondary or tertiary (insider) market!!!

how do big investment banks / hedge funds gain edge over competition competing for billions of dollars worth AUM (Assets Under Management)?

if u think that only trading skills are being used, then god bless you!

honestly is too costly and ineffective road for the financial world!!! 

there is more inside to the trading than outside!

"they" know what is going to happen before it happens!!!

the "they" here is a class, not an individual or one institution.

insider trading is a global omnipresent phenomenon.

the one who gets caught brings a bad name to everyone who is doing it "nicely" and "professionally".

insider trading is a big truth like some dirty professions which nobody wants to admit acknowledge or discuss.

reality of investment bankers / hedge funds - II

assume u r sitting in University College London among the students in these videos and listening to Anton Kreil (ex-Goldman Sachs super trader) 

get to know the first peep into the reality of  "operators"

though this is a talk about investment bankers and hedge funds, it gives u a good idea of the jungle and the mafia

try downloading it using torch browser (or any other way) and watch when u r absolutely free and in fresh mind

these videos are one of the many which helped me develop trading muscles in the mind

(will post advance videos later)

enjoy

https://www.youtube.com/watch?v=vbuborn14Mc
https://www.youtube.com/watch?v=-UG11JzWzMY
https://www.youtube.com/watch?v=OReolQm34TQ
https://www.youtube.com/watch?v=apOUbIDOu0A
https://www.youtube.com/watch?v=ZfrRsTd_-mE

reality of investment bankers / hedge funds

this is a highly simplified (though sincere) explanation attempt for the sake of understanding the basics. readers' discretion requested

----------------

What is an investment bank?

= it is the trading BROKER to banks, funds and sophisticated hni clients. Gets COMMISSION to execute trades of its clients mostly DECIDED BY CLIENTS. They don’t trade with their own funds (except for a very small portion). Practically all they do is take orders like salesmen and punch in the computers. 100% of the trade is done by algorithms.  

Very few funds, banks etc hire them for their stock/investment research these days as everyone has their own in-house research teams. Investment bankers are endangered species. Investment bankers these days are living hand-to-mouth lives.

So, if someone says he is an investment banker, it will sound as “order clerk” to me (except for very few, which i will mention later)

---

What is a hedge fund?

= (hedge fund is what i respect after knowing the definition of an investment bank.) a hedge fund, simply put, is the “mutual fund” of banks,funds and hni clients! Not only that, the main thing is that they put in their money also to trade (this is one of the clauses). So much so that they are bound to plough back 50% of their performance bonus back into trading (this is also in the clauses). This gives funds etc confidence to “risk” their money with a particular hedge fund.

Why is hedge fund so called?

Well simple....they take equal no of long and short positions (by value) to give broad umbrella security to the fund god forbid something really terrible happens! This is nothing but hedging. Any money they make while fulfilling this hedging condition is by picking and choosing good stocks for long and good stocks for short opportunities (highly simplified explanation)

They charge

a) fund management fee (typically 1% of AUM asset under management),

b) performance bonus (typically 20% of profits earned)

so a $1billion hedge fund will get $10million in management fee and $40million in performance bonus assuming $200 million profits.

(commission for investment bankers is 0.25% by the way....... not surprising for what they do)

a hedge fund client typically expects an annualised return of 20% with max volatility (running carried forward loss) of 15%, failing which he generally quits with his money in search of a better hedge fund, taking along, in the process, pride, reputation and track record of the hedge fund!

a hedge fund manager is more of a fundamental investor than a technical trader, though he is a quite skilled trader.

I was shocked to know that while fund management fee is invoiced locally, tax is payable on this in the country, while the performance bonus is invoiced at the out-of-country tax-haven office of hedge fund so that taxes are minimised, if not avoided!!!

Since hedge funds are thriving and investment bankers are “starving”, all good traders have left investment banks and either joined hedge funds or doing their own trading! (difficult to retire once u have smelled the big money)

by the way, every consistently successful trader is a mini hedge-fund manager (though managing, as of now, only one side of the hedge!) 

born rich

http://e-psybermatrix.utm.my/My-TAG/bahan_download/You_Were_Born_Rich.pdf

idiot's rich book

http://www.robertsheminbooktour.com/media/IdiotsRichBookPDF.pdf

think and grow rich (book)

http://www.soilandhealth.org/03sov/0304spiritpsych/030413.hill.think.and.grow.rich.pdf

10 warren buffet secrets to become rich

http://jefirst.com/uploads/10_Ways_to_Get_Rich.pdf

expecting solution to the european crisis?

dear venkat, solving the european crisis is like treating a chronic drinker.

if u abruptly take him off the alcohol (easy money supply, poor fiscal discipline, weak economy)
he is likely to show symptoms of alcohol withdrawal
which can be silent or life-threatening!

some of these symptoms are

increased pulse rate
increased blood pressure
increased temperature
restlessness
disturbed sleep
anxiety
nausea and vomiting
headache
irritability
tremor
hallucinations
seizures
and coma.

many of these symptoms are already there in the european union.

withdrawal symptoms last longer in older persons (economies)

withdrawal can complicate other illnesses (political, social, geogrpahical)

--

patients (like india) who are infrequent or moderate drinkers are less likely to suffer withdrawal symptoms.

--

gradually reducing alcohol consumption results in lesser withdrawal effects.

and such a course needs time, will power and luck!

--

if the world is a family
some countries in the european union
are not the only ones needing this daredevil de-addiction rescue.

there is a chronic patient on the other side of the atlantic.

as a member of such a family of chronic alcoholics
india has to bear with sleepless nights!

money in, health out!

recently i was sitting with two of my trader buddies
whom i had met after a long time.
--
one of them
who had not been trading for some time now
said
"sitting in front of the terminal
for 6 hours a day
days after days
months after months
took a big toll on my health.
i have realised
that we can make money here but are losing our health!"
-
the third musketeer
who was listening all this quitely
quickly added
"but where is the money?
we are not getting that too!!!"

from shankar, thru me, to mr.ahluwalia, with love

shankar is homeless.
but he doesn't need money to sleep at the pavement
on the shimla bus-stand.
every morning
he doesn't brush his teeth
because he can't afford it.
but he does spend 5 rupees every dawn
to go to the shulabh facility every morning
in the bus stand complex.
then he buys a bread for rupees 15
and a glass of tea for rupees 5.
the bread keeps the flame of hunger under check
for rest of the day
but he needs two more glasses of tea
worth rupees 5 each
at noon
and at night respectively
to swallow the bread.
all these luxuries eat up 35 rupees
that he had begged the previous day,
already 3 more than
the limit permitted by
the honourable and learned
planning commission
to be an honourable poor.
he has no money left
to buy a soap
to wash the only shirt and pyjama he is wearing since days
he has no money left
to buy
a tablet of paracetamol
to cool down
his hot forehead
engraved with the "not-poor" lines of destiny.
he has no money
to go home
to face his children and wife again.
fortunately
he doesn't need money to drink water from the municipal tap
neither does he need money to breathe the city air.
he would need money for his coffin
but that may not be too soon.
for the time being
he is happy
for not being "poor".

are "the rich" really happier?

why are richer people
overall less happy?

first lets agree
that being rich
is itself a relative term.

the one who has more than the other
is considered "rich".

and the group
which has more than the average people on the planet
are "the rich".

had "rich" being an absolute term
even a satisfied comfortable beggar would have qualified for the term.

-

now we turn towards the question
"why are richer people
overall less happy?"

being "rich" is being "infected with the virus of comparison"

being "rich" puts you "at the permanent risk of not being rich"

comparative "rich'ness'" is more of a punishment than a reward!

the moment anyone feels
that he is "rich"
he sub-consciously "switches on"
a pressure to stay "above" others
and stay "rich".

the fear of not remaining rich
turns real!

the "rich" counter this fear
by building the "Safety cushion"
of "reserve riches"

this leads to the next fear
"how much cushion is enough"

thus, as if the fear of not remaining rich was not enough
it gets compounded by
the fear of the cushion being not enough.

this leads to an unending chase
of the "rich" by the hounds of fear!

this breathless chase, inadvertently leads the poor "rich"
into many one-way traps they find impossible to come out!

as if this was not enough
they find unexpected threats
from the winds of change!

--

so where does this lead us to?

should we not be "rich"?
are all "rich" unhappy?
are "poor" happy?

all three questions are traps!

till you use the word "rich" or "poor"
you are in a race
driven by outside factors....

relatives instead of absolutes!

happiness by absolutes has a chance
happiness by relativity has none!

the secret of getting real rich!

u don't get rich by earning MORE.
u don't get rich even by saving more.

strange statements?
not really!

lets see why.

when you earn more
you spend more.

according to the corollary of parkinson's law

"spending will increase to match the increase in income."

try not spending more
while trying to earn more.

there is strong chance that
so much of negative energy will accumulate inside you
that you will blow it all up in one shot.

the mentality or motivation of "earning more"
is basically an emotionally driven state.

"earn more" is a "feel good state"

so, u r not "earning more"
if you are not "feeling like earning more"!

therein lies the paradox.

you don't and won't consider yourself rich
even if you become one
till you feel rich.

and how to feel rich after gaining the riches?
simple....by spending!

to feel equivalent rich
you have to spend
and wrap yourself
in equivalent comfort and luxury.

and the moment you do that
you slip back to the earlier financial state.

only difference,
this time you may be worse
having gathered debt!

so, it is pretty clear
- you don't get rich by "earning more"

but why do i say that
you can't get rich by saving more?

even this is simple.
the psychology of "saving more"
is rooted in the mentality of "starving"

mind is a dog which is most dangerous
if "starved"!

it is most obedient
if "tricked, trained and befooled!"

the more you "starve" your ego by "saving more"
the more the "feel good" state deteriorates.

and it all collapses
at the wrong time
burying you under!

so?

what's the way to become rich?
real rich?

keep doing what you do.
keep earning what you earn.
consciously keep improving and keep looking for opportunities to grow
but don't de desperate!

don't be conscious to "earn more" or "save more"

just ensure
that you don't waste anything.
all wastage in life
translates into money.

as you eliminate waste
you will realise your real needs.
this will surprise you further
when you will realise that you are much more satisfied and in abundance
than you always felt!
and when this feeling of abundance comes
you will feel better and better.

when this happens
you would have automatically
acquired the state of
feeling rich without having to spend
or without having to possess.

--

u don't get rich by earning MORE.
u don't get rich even by saving more.
u get rich
by wasting less and less
and in the process
unshackling and relieving
your income
from the drags of reckless consuming.

from here on
whatever you earn
will multiply!

and the funny part is
you won't feel the g-force
of becoming rich!

retired before 40

i once attended a seminar
where i was hypnotised and asked

"what are your big dreams in life?"

with a little effort
i listed them

big house
big car
world tour
fat bank balance
freedom to buy anything
long vacations
no need to be in a job
retirement at 40

--

i came back
and as hypnotised
wore the eye-blinders like a horse
and entered the rat race!

while i was moving forward
i met some rats
returning from where i was heading!

the look on their faces were not so inspiring.

i slowed down
and eventually stopped.

"how's the place u r returning from?"

the rat i talked to
didn't reply.

he handed me his walkman

i put on the headphones.

it was jagjit singh's voice

"patthar ke Khudaa patthar ke sanam
patthar ke hii insaaN paaye haiN
tum shahar-e-mohabbat kahate ho
ham jaan bachchaakar aaye haiN

but-khaanaa samajhate ho jisako
puuchcho na vahaaN kyaa haalat hai
ham log vahiiN se lauTe haiN
bas shukr karo lauT aaye haiN"

i quickly handed him back his walkman
and i became a runman
back!

back home
i took out that dream list
and made some changes.

house in place of big house
car in place of big car
mental balance in place of bank balance
'wisdom to buy what i need' in place of 'freedom to buy anything'
'living as if on vacations' in place of 'long vacations'
'loving and enjoying my job' instead of 'no need to be in a job'
'google earth and earthtv.com' in place of 'world tour'

i am yet to turn 40
and i am
truely retired!

the future we ate!

"as we sat out at our
favorite fast food restaurant,
eating a feast of chicken
sandwiches and french fries,
we started to contemplate,
- how much is this lunch really costing us?
we knew the prices—$2.99 for each chicken sandwich
and $1.59 for each order of french fries
—but how much would this one lunch cost us
over 1 year, 5 years, even 10 years?
not to mention the calories we are consuming.
we checked our money calorie counter for the answer.
what a shock!
one chicken sandwich was 660 calories and the accompanying
french fries 460.
if we consumed a chicken sandwich and fries (or similar fast food)
five times a week, it would be equivalent to
291,200 calories per year, or 83 pounds.
the cost would be $1,190.80 per year.
but if we put that money in a mutual fund account for 5 years,
we would have saved $7,684.34,
in 10 years, we would have $20,327.45;
in 20 years, $75,354.70."


- the opening para from
Rich and Thin
by deborah mcnaughton and melinda weitstein

a consolation gift for those who lose!

majority of retail traders
venture into stock trading
alongwith their jobs
or small-time businesses.

all they seek is
a 5-10% return per month
over and above
whatever they are making
in their current occupations.

they come in the market
with dreams
and they get caught or ejected
with nightmares.

to these very friends
i share below
a difficult
but sure-shot method
which can give them
consistent monthly returns
approximately equal to
10% of whatever they are earning
in their current occupation.

i have tried it myself.
and it works.

the method i am about to share
is dull, bitter, down-market
unexciting, psychologically demanding,
but starts giving
immediate results!

the surprising part is
that it gives better results
when the markets are closed
than when the markets are open!!

no technicals required
no fundamentals
only awareness
and thirst to make that 10% extra
every month
month after month
lifelong!

there is no copyright for this method
only promise i seek from you is
that you will share this
with every needy person
friend or stranger or even foe!

since u r already agitated
waiting for it
here it comes.

whenever u take out a currency note
or a coin
or a cheque
or the credit or debit card

just ask yourself
would you like to earn the amount you are about to spend
more than
the thing or service you are about to spend it on?

if the answer is no
go ahead
and spend it.

if the answer is yes
put that coin, note, cheque, card
back in the wallet
but in a separate compartment.

i did this.
i do this.
i can't imagine myself not doing this for the rest of my life!

i made 12% the first month.
thereafter it keeps fluctuating between 10-35% per month.

i am SHOCKED at the amount
i used to throw
at things
i really didn't need!

every evening
i empty the saved money
or chits marked with amount i save on cards
in a drawer in my study
(i consider it spent and gone!
no available for spending!!).

at the end of the month
i trasfer that amount to a separate account
which i don't touch.

trust me,
when i see the balance in that account
i feel like the most intelligent financial planner of MY world!