Since last 2 days stock markets have fallen a lot. From 11500 to 10500 is a great fall.

Do not forget that What Comes Down Has To Go Up is a great Mantra to trade and make money in stock markets.

Pic updated on 15-Feb-2018:

Nifty Fall Feb 2018

Now is the time to buy stocks not trade. Some great stocks have fallen and its time to accumulate them.

Look out for large-caps not mid-caps. Large-caps recover faster than mid-cap stocks. If you want a list of good large caps that you can invest for long term you can contact me.

Today, India VIX is very high 33% up and above 21.

Do not trade until it comes down to 16-17.

By next week it should come down.

Update on 15-Feb-2018 – India VIX has indeed come down below 17:

India VIX EOD 15-02-18

You can see latest India VIX here.

What is the role of India VIX in option trading?

It has a big role to play in deciding the option premiums.

Higher the VIX, higher the premiums. If VIX drops option premiums also drop.

Today Nifty is seeing Amazing Fall – DO NOT TRADE. Its very dangerous to trade when stock markets are falling sharply.

The reason is pretty simple – you take a short position and suddenly government releases a good news to arrest fall of markets and your trade will stop out.

Check my earlier emails (if you are my newsletter subscriber). I had said clearly to be safe many times.

Hope you listened and stopped trading before Budget Day 2018.

10% Long Term Capital Gains announced in the Budget is the problem for fall.

Anytime buyers will get in and when recovery will come it will be sharp too.

Update on 15-02-2018:

Buyers are already back, see this:

Nifty Bounce-back after fall on 5th Feb 2018

Do not trade anything until 12-Feb-2018.

Its better to be safe and wait for things to get clear after a major event.

Keep your money safe until its not a good time to trade. When opportunity comes start trading.

If you are my course subscriber, I will send you email when to start trading.

Controlling yourself to trade is also a BIG WIN over your emotions.

As a trader you must learn to control emotions.

You know what, since I was out of all derivative trades (not long term investments), by 30-Jan-18 itself, I will not even look at Nifty anymore after writing this post.

Why I did not exit my long term investments?

Because they are long term, not short term. Short term volatility – I am least bothered. Let them go down 5-8% I still do not care. I know with time since they are good investments they will come up. If you want to know the six stocks I have invested for the long term you can email me.

Who will help me to make money?

DIIs, FIIs and retail traders 🙂

Good stocks have a limit of fall (unlike Satyam), after that limit is reached they will be up again. Thanks to DIIs, FIIs for it. 🙂

Coming back:

Nifty right now is 10675.

Can you see how market pundits who speak a lot on TV (business channels) and online popular websites are humbled by markets?

Time has proven them wrong time and again. History is proof of that.

Before budget everyone of them said Nifty Target is 12000 etc etc. I am sure because of them many retail traders must have lost huge, especially future and option long (BUY) traders. In one day’s fall after the budget day 2018Rs 4.34 trillion in national investor wealth got wiped out 🙁

I am sure many of my newsletter subscribers must have lost too. It’s sad but I did my job, asked you not to trade, but you did. What more can I do?

This is the reason I do not listen to market pundits. Last time I watched any business channel was in 2015. After that it is only business news that is important for me not what experts are saying. They are paid to say so they will say.

If you read other websites I am sure you must have read some experts saying go long, some saying go short etc.

What I said? DO NOT TRADE WHEN THINGS ARE NOT RIGHT.

I repeat start trading only from next Monday, 12-Feb-2018. It is better to save money than lose money,

What did you learn?

Look at this:

Nifty – 02 Feb 2018

Source: http://money.rediff.com/

This was the SEVENTH BIGGEST FALL in the history of Sensex (source: moneycontrol.com)

Sensex Steepest Fall In History

How much you lost?

I can tell for sure that more than 70% of retail future traders must have become greedy and out of hope would have been long Future Buy on Nifty and then 256 points fall. This is a loss of 256*75 = Rs.19,200/- in a single lot.

But during these times people get greedy and trade with as much money as possible. Some even borrow money to trade. Its not good to borrow money to trade. 🙁

And now its payback time with interest.

I have told this many times that if you are one of those who think you will make a lot of money from stock markets in one or two years – then please STOP dreaming. Even Warren Buffet took more than 25 years to make a lot of money. But he made it slowly, taking one small step month after month.

I can go on and on but its Sunday today. So signing off.

This Nifty Fall was expected after Budget 2018. If you were my option course member it would have saved you money (they get different newsletters from time to time what to expect from market in near future, which strategy to trade etc).

Anyway if you were long on Nifty I suggest do not wait for any kind of hope. Long term investors are not happy due to Long Term Capital Gains Tax at 10% and exiting their positions.

You can either:

1) Take a stop loss and exit and wait for markets to stabilize, or,
2) Hedge your positions and exit whenever you want – if you know what I mean.

The second option is better because you never know when a bounce back may come. We have enough time for expiry. If a bounce back comes you may regret the stop loss, therefore its better to hedge your positions and sit tight for a reversal.

Proper hedging is part of my course and cannot be explained here.

Whatever you do PLEASE DO NOT TRADE ON HOPE.

After a major news its either BIG Profit or BIG Loss, I want you to be safe – so was reminding you since very long via my newsletters and posts in my blog to be safe.

I do not know if you listened to me or not.

The course will not only teach you good strategies but there is some very good hedging techniques there which will stay with you forever till you trade.

It easy to make money if you are happy with small profits, its hard to make money trading if you are looking for 10% a month.

I know what I am saying will not appeal you but what I am saying is a fact. Lot of people will not do my course just because I am promising them a fact, but they will easily pay 30k to someone who promises to teach them strategies that makes 10% a month.

I have told you the truth – its up to you to believe or not.

Course fee can be paid here online.

Save your hard earned money.

Check my yesterdays post. What I wrote yesterday is now the truth.

Long Term Capital Gains Tax (LTCG) – investments in equity mutual funds and stocks over 1 year, will now be taxed at 10%. The set date is 31st of January, 2018. The highest price traded on that day of the stock investors had bought will be calculated as base price to check for the final profits.

This is very complicated as many investors may not now the highest price traded on their stocks on 31st of January, 2018 (Wednesday), and may end up paying more taxes which will never be refundable.

BAD news for long term fund investors and equity investors.

Along with a short term trader I am an investor too. Sad news for me as well along with many investors. 🙁

Anyway luckily there is no change in Short Term Capital Gain (STCG) taxes. STCG is taxed at 15% of the profits made in a year.

Now think about this – since in mutual funds investments and equity investments, we do not get leverage we have to invest a lot of money to make a lot of money. Though long term taxes over 1 year till now was ZERO, fact is result is known only after 5 years that a mutual fund or the stocks you bought performed well or not. So most were invested for years.

Rarely anyone invested for one year just to save tax. It was for both – save tax and make more. Now one part is gone for certain and second part is unknown.

This is a LONG WAIT and then even if you make a profit – give back 10% of it to the government.

THIS PROFIT YOU CANNOT HIDE UNDER ANY CIRCUMSTANCES like most Indians do.

Waiting for years not knowing what will happen to your money and then paying 10% tax on profits is painful.

Frankly if you can compound your money with a regular income every month still paying 15% tax is much better than waiting for 5 years and then do not know if you will ever make a profit.

There is another point – we do not invest small money for the long term as we know it will not make sense even if it gives a profit. Every month 10k SIP monthly for 10 years equals investment of 12 lakhs and then if you make let say approx 6 lakhs profit – pay a tax of 60,000 to the government reducing the profit to a large extend.

🙁 🙁 🙁

Anyway I feel 15% tax is much better than 10% tax if you are sure WHATEVER happens you will still make 25-30% a year (I am not even taking an average of 3% a month – I am deliberating reducing it) – year after a year. Instead of waiting for 5 years and not even knowing what will happen to your money. And then profit also gets reduced.

You can do my conservative option course and make at least 25-30% a year – whatever happens in the markets. Say for example Nifty stays at 11k to 13k level for next 3 years which is very much possible, we do not know, or it may go into recession or crash – who knows? But you will still make money every year.

Take small steps every month and move forward. You do not know what will happen in 5 years time. Time will pass anyway but finances should be controlled and it should be IN YOUR HANDS.

Why wait so long?

You can pay here for the course and start making monthly income for life by the side.

Nifty falling, India VIX also falling is a strange indication. It looks like HNIs as well as DIIs are not expecting anything extraordinary from the budget plus there is a small indication from different media sources that government may implement taxes on Long Term Capital Gains (LTCG). Right now Long Term Capital Gains are not taxed. This will be bad news for investors.

Long Term Capital Gains will increase short term trading. More than 70% of investors do not sell stocks and mutual funds just to save taxes – including myself. I do not know if that become true what will happen to the markets but this is not a good news.

Anyway if you are an option trader your only concern is avoiding losses and maximizing profits. This is only possible through hedging your trades. You can learn hedging in my course.

At least for next 10 days, until the budget is out and things become clear, trade with caution please.

Sensex/Nifty and India VIX are inversely proportional.

Look at last 5 years graph of India VIX:

5 Years India VIX 29-Jan-2013 to 29-Jan-2018

Source: http://www.moneycontrol.com/indian-indices/india-vix-36.html

And now look at 5 years graph of Nifty:

5 Years Nifty 29-Jan-2013 to 2-Jan-2018

Though its hard to find out everyday – you can still see how Nifty has continuously gone up but Inida VIX has fallen.

India VIX has a range, usually from 10-15 which is normal.

In the last five years India VIX was highest at 37.71 on 09-May-2014:

Highest India VIX

India VIX rises during major events. Because Budget 2018 is just 2 days away India VIX has gone up from average of 13-14 to 17-18:

One Month Rise of INDIA VIX due to Budget 2018

It will come down from 2-Feb-2018 onward after the budget day 1-Feb-2018.

India VIX is fear factor index of traders. In the US traders can trade VIX but in India the volume is almost zero.

The trading symbol of the future contract of India VIX is INDIAVIX but no one trades.

Read this article to know more about India VIX trading:
India VIX Futures – Trading The Volatility

What you can do during Budget 2018?

Option buyers are at huge risk as VIX may drop anytime after the budget and they may lose money. If you are option buyer it is advisable to reduce your risk.

But that does not mean sellers will make huge money. Yes you will if there is a move in the direction you shorted your option, but if not it will become a naked future trade going wrong.

TRADE WITH CAUTION.

Budget (high volatile) times may make you more poor than rich.

Please trade with smaller quantity than what you usually trade.

What Is Swing Trading

Swing trading is buying low and selling high in a short span of time. Some traders do it Intraday called as day traders and some take position for a few days.

Swing trading combines fundamental and technical analysis in order to find the stocks direction from the current position. Swing traders do not look for only up direction, if they feel the stock may go down they short them. All they are looking for is short momentum.

When they see the stock is not poised to move they do not take the trade. The benefit of swing trading is efficient use of time and money and higher returns. However their are drawbacks as well like high brokerage commission and high losses if their trade goes wrong.

Swing trading can be difficult for the average retail trader who is not equipped with either technical or fundamental knowledge. Some of the good technical indicators are Bollinger Bands, Candlesticks, moving averages, Average True Range – ATR etc.

The professional traders have more experience and information. They always trade in brokerage houses with lower brokerages. On top of that they get better margin.

Large institutions trade in very big lot sizes. They usually get in an out quickly. Some automate their trades. This is called algorithmic trading.

Knowledgeable retail traders can take advantage of these things in order to profit consistently in the marketplace. In this article, I will lay out what should be daily routine for traders like you and me. Its not that hard to be successful.

How To Do Swing Trading

Before reading this article I suggest you read this article on Swing Trading Rules.

Pre-Market Research:

You must read newspapers to know what has happened in businesses when you were sleeping. Look for any major news that may move the markets. This will help to find potential opportunities to trade.

Keep An Eye In The Following

Traders must be thinking why Nifty is running up like mad? This is a Budget 2018 Rally nothing else.

Its called Expectation Rally.

Do not forget that after GST implementation this is the first budget of this government.

Hope has no limit.

The rally will end once the budget is out.

But all this is tension of a speculative trader.

You may be long or short I do not know but if you are not making profits 70% of the times you trade then you are for sure losing money.

When there are strategies where you need not predict market direction yet make money then why are you still losing money?

Its better to be a conservative trader looking for small but consistent profits rather be an aggressive trader looking for a home run which never happens.

If you will be happy with 2-3% of profits on margin block per trade then do my course. You need not read newspapers and speculate on hope after you do the course. You will not need tips providers either who rarely give great tips to make money. You will get a proper plan to trade – you are paying to learn that plan not just a random strategy..

You can pay for the course here – click to read what you get and about support.