Me too Trying to Become CrorePati

[Sunny1]

Hi Sunny I have been a silent reader of your posts and I would like to share something from my part. I am not that much into regular trading as one point of time, I have made huge losses while trading options. Prior to that I was actively into Technical Analysis and every other thing related. But what I lacked was money management. So my first suggestion to you should try "Money Management. I follow a simple strategy which I would like to share and ask for comments.

1. Total Capital: 25,000
2. Capital Allotted for Trading: 12,500 & Back Up Capital: 12,500
3. Capital alloted for Equity Trading: 6250 (from 2)
4. Capital allotted for Option Trading: 6250 (from 2)
5. Profits from Equity Trading - Divide into 50:50, then add one portion to the capital allotted for trading and rest to back up
6. Profits from Option Trading - Divide into 50:50, then add one portion to the capital allotted for option trading and rest to back up.
7. In case of lossess (maximum 4-5%), back up capital to be used. Once loss is accrued, the first target becomes to cover the loss and then proceed.
8. If I make profits / lossess beyond my thoughts, I stop trade for a day or two. Do Back testing to regain confidence.

I assume my fellow friends would share their ideas also.

Regards,

Dipen

Hi Dipen , Thanks for nicely elaborating in point wise.

Initially even I thought to break up capital in this way but it is good if we capital of 50k to 100k. I will definitely follow this after building capital.
for 25k it will limit our profits too much but it will restrict my losses too giving
me better confidence.

6k to 7k is enough for option but for equity I think it will not be enough.

What if I follow this: take 50% (12500) position with stop loss, if trade goes in favour we will move SL to breakeven and add rest 50%.

or
I should keep 12500 for equity
6250 for options
6250 for Back up
plz comment.

 

[bunny]

Sunny, why don't you trade only NIFTY (mini)futures instead of so many scrips?
Some benefits I see:

1. Very less margin, only about 12K to open a contract.
2. Can hold overnight positions(applicable in other derivatives too, but not in cash segment where you have to cover at any cost)
3. No delivery. (See note 1 below)
4. NIFTY levels are widely followed and tracked than any other scrip or derivative.
5. Difficult for an operator to play with since NIFTY is a very big thing.

Note 1 : In equity, waiting for the delivery can be dangerous at times. Example:
Day 1: The stock gives a breakout and you buy a share @ Rs. 100.
Day 2 and Day 3: The stocks still trades above Rs. 100, say 104.
Day 4: By now you have a delivery but today the stock trades at 102.

If it was futures, you could sell at at 104!

And avoid multitasking - trading in multiple securities, unless you can do so successfully.

 

[AW10]

Just to add to the list of points in favour of Mini NIFTY/ Nifty future,
1) no need to scan 100s of stocks and to find which one to trade tomrrow. Just one chart to analyse.
2) gives u specialisation over a period of time. After few days of keep observation, u won't need new indicator to judge volume, strength of move, range of move, contraction or expansion etc

Only limiation that comes with NF / mini is the lot size. So for lot size of 20, and say stop of 10 points ( I think it is minimum stop size u will need on 5min chart) , you need 20*10 = 200 rs of risk on each
trade. That means, if 200 is 1% of your account that u want to risk on any single trade then yr acct size shd be 200 * 100 = 20k minimum. Depending on your strategy, this stop size will be even more then 10 points.

You can do sensible stock trading with even 25 rs per trade risk.. cause u can buy as low as 1 stock. and still put 25 points of stop..

Just be careful about carrying Mini position overnight. Specailly with small account, u don't have much of the breathing room. So opening gap of 40/50 points, which is quite normal, would hurt your
account badly. You can still daytrade Mini on intraday basis.

Happy Trading.

 

[Sunny1]

Sunny, why don't you trade only NIFTY (mini)futures instead of so many scrips?
Some benefits I see:

1. Very less margin, only about 12K to open a contract.
2. Can hold overnight positions(applicable in other derivatives too, but not in cash segment where you have to cover at any cost)
3. No delivery. (See note 1 below)
4. NIFTY levels are widely followed and tracked than any other scrip or derivative.
5. Difficult for an operator to play with since NIFTY is a very big thing.

Note 1 : In equity, waiting for the delivery can be dangerous at times. Example:
Day 1: The stock gives a breakout and you buy a share @ Rs. 100.
Day 2 and Day 3: The stocks still trades above Rs. 100, say 104.
Day 4: By now you have a delivery but today the stock trades at 102.

If it was futures, you could sell at at 104!

And avoid multitasking - trading in multiple securities, unless you can do so successfully.

Well I agree on this.
First I have to pay 18k margin not 12 . One loss that hurted my capital stopped my trading in nifty as AW10 said we have to be careful taking overnight position.
I still trade nifty with options sometimes but missed today.

Another fact is that many stock change 5-10% in a day . if we analyze right than we can book great profits in that.

I dont do multitasking and delivery trades.

 

[bunny]

Well I agree on this.
First I have to pay 18k margin not 12 . One loss that hurted my capital stopped my trading in nifty as AW10 said we have to be careful taking overnight position.
I still trade nifty with options sometimes but missed today.

Another fact is that many stock change 5-10% in a day . if we analyze right than we can book great profits in that.

I dont do multitasking and delivery trades.

Yes, when I started trading, this is how I also thought, but to my bad luck, either the stock already opened up, or did not give much movement. Its very difficult to spot the one or two 5%+ on a daily basis consistently.

 

[AW10]

Whether u carry stock or Mini position overnight, u are carrying undefined risk with you.
IMO, for small account that could be dangerous.

 

[BULL4ME]

My only advice would be better trade in midcaps which are at the verge of breakouts.

You cannot get a 10-15%gain from trading in the large caps.
Because it is simply not parctical to expect these stocks to jump 10-15% in a single day.
Take a cnbs tv18 connection
do some news based trading.
Firtly tryro understand which news make the impact on the scrip related and then guess the mood of the market.

U cannot become a crorepati by adding 500-1000 rs per day not excluding your brok and dp charges.
Also keep track of the hidden charges.
This profession attracts the best mind and u cant differentiate betweenhumans and foxes.


Happi trading
boluck.......

 

[bunny]

The best way to make money by "Trade less, profit more" is to get into a stock just before the upper circuit Do nothing and still gain 5% everyday. If the circuit is maintained for a month continuously, you will double your capital.

Hope this happens to somebody

 

[columbus]

The best way to make money by "Trade less, profit more" is to get into a stock just before the upper circuit Do nothing and still gain 5% everyday. If the circuit is maintained for a month continuously, you will double your capital.

Hope this happens to somebody

Do not trade till 3.30.That means ,no fresh exposures
in end session but if your trades are in profit,let them run.

 

[learn2trade_ar]

The best way to make money by "Trade less, profit more" is to get into a stock just before the upper circuit Do nothing and still gain 5% everyday. If the circuit is maintained for a month continuously, you will double your capital.

Hope this happens to somebody

But the million dollar question is how will you know that this is going to start upper circuit