Health Tips for Full-Time Stock Market Traders

Full-time stock traders need good health to make correct decisions to execute trades. It is not easy to make a decision to trade or not, identify an opportunity, take position size decisions and make a decision to take out profits or take a stop loss.

If the trader is not in good health, they cannot make correct trading decisions. Here are a few tips to keep yourself healthy:

Since I follow some simple techniques to keep myself healthy I request you to follow me as they are easy hacks to keep yourself healthy. Here they are:

I do not drink – do not smoke. Please copy me this from today and forever.

I go for morning walks and exercise – Om vilom and Kapalbhati Pranayama (both take just 30 minutes). I also exercise daily with some very effective and less time-consuming exercises. These are:

• 5 squats (45 seconds)
• 5 push-ups (30 seconds)
• 5 lunges (45 seconds), and
• 30-seconds plank.

All of the above take just 30-40 minutes but are very effective exercises for health.

Again I request you to copy me, please. If you can do more exercise, then great.

I never eat up to the brim – I leave 25% of my stomach empty. This is a Japanese tradition called – hara hachi bu — a reminder to stop eating when their stomachs are 80 per cent full. It is in their tradition – that’s the reason the Japanese median age is 50 years. According to Trafalgar, the average life expectancy in Japan is the highest in the world, at 87.32 years for women and 81.25 years for men. In 2020, the average life expectancy for women was around 87.8 years, and for men, it was over 81.6 years.  If you want to live long copy them.

I play badminton/cricket/table tennis for 1 hour daily to stay fit. This is better than hitting the Gym which is boring. If you can, please copy this too. Or if you can go to the Gym twice a week please do.

I’m not sure if you can copy this – I do not see social media (unless required) for more than 15 minutes a day. Staying away from mobile forces me to chat with my kids, wife or friends (this is real not virtual social life). Try to stay away from social media for a day and you will feel the difference. I hope you copy this too.
And now on finances.

Invest only up to 20% of your salary in risky investments like stock markets. If your take-home salary is more than 1 lakh then if you want you can invest up to 30%.

If you can still save more then save them in government-backed guaranteed return schemes like FDs and debt funds.

Do not invest in Gold and cryptocurrencies. I do not have a Cryptocurrency account. Na rahega baans na bajegi bansuri (means ‘to treat the trouble at the source to avoid a bigger or more difficult mess’.) It means (if there is) no bamboo in the first place, there won’t be any noise of the flute (to deal with).

The above is just 520 words but if followed, it can change your life – health-wise and wealth-wise.

Wishing you the very best in the year 2024 and beyond.

This is a copy of my newsletter sent on 21-Nov-23 to my subscribers. If you want to register to receive my emails you can register in the newsletter form on this page.
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I received a lot of emails in reply to the email sent on 20-Nov-23. The text of that email was:
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Hi,

This is just a general question.
Have you planned for your retirement?
How much are you saving and where and what kinds of returns they are making?
Do you invest in NPS (National Pension System)?

Reply and I will try to help you plan your retirement. This will also help me to write a good article on what Indians are doing for retirement – the mistakes they are making and how they can improve.

Thanks,
Dilip
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Here are some of the emails I received.

Email 1:

Dear Dilip,

How are you?

I have only a PF (Provident Fund) for my retirement and to secure my family I have taken a Term Insurance Policy.

I am now 53, please let me know if any better can be done at this age, I know I am late but I have my valid reason, but still, I also understand very well that reasons will have no weight, ultimately we have to have money which has to be the ultimate result, this is the reason I took trading even though it’s known to be risky, please guide me.

Thank you
Regards,
Tony

Here is my reply to Toni:

53 is late – only 7 years to go for retirement.
Of course, you can take a private job till at least 65 years of age if health permits – then retire. This will help you to accumulate more money and be ready for retirement.
In the PF are you investing 1.5 Lakh a year (max limit)? If not please do it for the remaining time and try to extend it to 20 years for compounding to take effect. Real compounding will be in the last 5 years (15-20).

A term insurance policy is a good decision. Make sure to have at least 50 lakh term insurance.

You did not mention any health insurance. If you do not have one, then buy a health insurance policy for 5 lakh minimum for your family.
Once you retire take out all the money from your PF account and invest in a good short-term debt fund. These debt funds are safe and return 1% more than FDs.
In our old age, we must ensure that the money we made/got for retirement should be safe. Therefore I have recommended a debt fund and not an equity fund.
Redeem only what you need every month. This will become your pension.
Hope this helps.

Regards,
Dilip
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Email 2:

Dear Dilip,

I have kept aside some money for retirement. Not sure if it is sufficient or not. Our family do not earn much. My wife is a homemaker.

For retirement, I have plans to do three things.

1. Be a part of an NGO that looks after challenged girl children.
2. Travel to at least one state in India every year.
3. Make my home in such a way that my Children and Grandchildren will love to visit at least once a year if they are not staying with me.

I do not have NPS (National Pension System) since I am an NRI.

The above are answers to the specific questions.

Regards,
Sony

My reply to Sony:

Sony as far as I know NRIs earn very well.
In any case, you can start investing whatever you can save.
If you do not know Non-Resident Indians (NRIs) aged 18 to 60 can invest in India’s National Pension Scheme (NPS) by adhering to KYC norms. The NRIs can make contributions to NPS from their NRO/NRE account.
If you do not have an NRO / NRE account kindly open one and start investing in NPS as soon as possible.

Regards,
Dilip

Note on NRO (Non-Resident Ordinary)/ NRE (Non-Resident (External)) Accounts

This table will help you to know the difference in these accounts:

Email 3:

Dear Sir,

I retired already a couple of years back. Planning was done while I was in service.

Regards,
Gautam

My reply to Gautam:

Thats good.
Do you get a pension?

Regards,
Dilip

I have still not received a reply from him but I guess since he was in some service he must be getting a pension. Or his company must have paid him a gratuity.

What is gratuity? Gratuity is an amount paid by an employer to its employees for rendering their services for equal to or more than 5 years. Gratuity is paid to an employee as part of his/her salary and is considered to be a benefit plan which is designed to help the employee during his/her retirement.

Please note that a Gratuity is paid 100% by the employer to the employee. There is no contribution required from the employee during the term of the service.

If you are also in service and your company has a gratuity program then my advice is that do not avail Voluntary Retirement Scheme (VRS) if you will miss out on gratuity. Some people retire early to get a higher-paying job. But you must do calculations of what you will miss if you retire early before deciding to retire.

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Email 4:

Hi Dilip ji

Not yet…

Sachin Aggarwal

This email surprised me as Mr. Sachin has still not planned for retirement. Retirement and investment planning should be started from the day you get your first salary. The earlier you invest the greater will be returns. If you plan well early for retirement you can retire before the age of retirement.

So I replied to him, “What’s your age and why you have not started to plan for retirement?”

Regards,
Dilip

Awaiting his reply.

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Email 5:

Sir, so far I have not planned for retirement.

Saving in FD, SIP.

I am 25 and want to retire by 45, working in a PSU bank as a clerk.

No investment in NPS (National Pension System) so far.

Thanks and regards,

Anjana

Here is my reply to Anjana:

>>  Saving in FD, SIP

Continue and also invest in PPF. It can be opened in any SBI Branch.

Regards,
Dilip

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Email 6:

Hi Dilip,

I have been actively concerned and investing for retirement from 2016 onwards. The plan was to at least build a 30X corpus of inflation-adjusted current expenses. For that, investing in index mutual funds (Nifty 50, Next 50, Midcap and Small Cap index) 1X of current expense in equity: debt ratio of 80:20 plus EPF (Employees’ Provident Fund).

Still, I am doubtful of achieving the goal. So the plan is to increase the investment by 10% every year.

Start a PPF (Public Provident Fund Account) as well.

Jijesh Janardhanan

Here is my reply to Jijesh:

Continue the other investments – do not break the SIP if the market falls.

Regards,
Dilip

His reply:

Yes PPF is also there, since the interest rates are low, I have stopped in between. Now whenever doing equity: debt rebalancing, will add to PPF (max 1.5L / year).

SIP is continuing.

Jijesh Janardhanan

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I have given you a lot of advice in this post on how you should plan for retirement and why it is important to start as early as possible for compounding to take effect so that you can retire peacefully.

Hope you will start planning for your retirement soon.

Current Nifty price:
19108.20

NSE 31-Oct-23

Source: https://money.rediff.com/index.html

Expiry date: 30-Nov-23

For the Call option, I am adding 1000 points to 19100. 19100 + 1000 = 20100

Here is the price of 20100 CE – LTP is 13.20:

20100 CE NSE 30-Nov-23

For the Put option, I am subtracting 1000 points from 19100. 19100 – 1000 = 18100

Here is the price of 18100 PE – LTP is 27.40:

18100 PE NSE 30-Nov-23

Do not panic when the stock markets are falling. Keep patience and wait for the markets to rebound.

From 20,192.35 on 15-Sep-23 to 18,877.20 on 26-Oct-23. Looks like a big fall right? Yes, it looks, but in percentage terms, it is just a 6.51 per cent fall.

NSE 26-Oct-23

In my opinion, it is not something to fear about. But in reality, see what is happening in the markets. Nifty VIX (a.k.a India VIX) has risen 9.70% today:

India VIX 26-Oct-23

If you do not know India VIX is the measurement of panic in the markets. It is inversely proportional to stock markets – not just in India but across the world.

You can read more about India VIX here:
https://www.theoptioncourse.com/nifty-and-india-vix-are-inversely-proportional/

Strangely, HNIs who have invested a lot in the markets do not panic in the fall – they make decisions based on fundamentals, not percentage fall. They will never invest in a company that looks weak in fundamentals. They see fall as an opportunity to accumulate more stocks. But they will add more only in fundamentally strong stocks. They leave the not-so-fundamentally strong stocks. They do not add more stocks.

They have the patience to hold.
My advice: Copy them. Do not sell your stocks in a panic.

This is not the first time stock markets have fallen more than 6 per cent. Every time it falls, it rebounds. So wait for that re-bounce.

Other things that you can do.

If you are an HNI you can do covered calls and make a monthly income during falls. There is a good way to do covered calls however since it is part of my paid course  I may not be able to explain here.

Or you can create a married put. You can read about married-put here:
https://www.theoptioncourse.com/married-put-explained/

Married put is a put option bought to protect losses from further fall of the stock. If the stock falls the put will make money.

Hedging is a beautiful tool to save huge losses in options, futures or even equities. Though my course is limited to Nifty and Bank Nifty options and futures hedging – once you learn hedging you will be able to trade anywhere like commodities, Nifty Finance, BSE Options and Futures, USD-INR pair trading etc. and create a hedge.

You can check my course fee here.

This is a copy of my email sent to my subscribers on 04-Sep-2023. You can also sign to receive such emails directly in your inbox.

Low India VIX is creating a problem. The markets are in a strange situation neither is it volatile nor India VIX is getting on the higher side.

After so many years traders have seen this prolonged low India VIX for so many days. From April 2023, India VIX is below 15 making a tough call for option buyers as well as sellers.

For option buyers, this is a problem as slow movement kills the premium and for sellers, this reduces the profit and they get discouraged from trading.

If it is not volatile buyers of options will most likely lose money.

If the options premiums are lower, then sellers will make money but it will not be very satisfactory.

Therefore during low India VIX, the volume of trading gets reduced.

But my teachings have always been the FIRST RULE of what Warren Buffet has said:

Never lose money in stock markets.

My addition: Even 1 Rupee profit is better than losing money.

Here are his exact words:

The first rule of an investment is don’t lose money. And the second rule of an investment is don’t forget the first rule.

Here are some more very popular quotes from legendary billionaire investor Warren Buffett:

It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Be fearful when others are greedy, and be greedy when others are fearful.

If you have not lost money in stock markets you are very lucky. But if you have lost then ask yourself – which situation was better:

1. A profit of just Rs.1/- after paying brokerages and taxes, or
2. Your current loss.

Anyone would pick a profit of Rs.1/-, but when you were trading did you ever think of proper risk management so that you do not lose too much?

If you have still not lost too much then good. Still not lost too much is less than 5 lakhs. Anything beyond this is too much. I lost 7 lakhs.

Please do not do revenge trading – you will destroy more of your wealth.

Learn to be both a conservative trader and an investor. It will help.

How long will this continue?

Some major news has to come out which has to shake the markets. Once that happens India VIX will go up. And once India VIX goes up option sellers will join the markets. Once the sellers join the markets the volume will increase.

India VIX is good for option sellers as the likelihood of the profit goes up. But greed does not allow them to sell is a different chapter altogether.

If you are an option seller you can keep selling options. Your return on investments will reduce but the success rate will increase.

Please hedge and sell options as selling options is a huge risk. By hedging you reduce the risk.

You can learn option selling with hedging in my paid course.