Yesterday Nifty closed almost 1% up totally ignoring what market pundits were saying on Raghuram Rajan retirement. Not only it did not close in the red but close almost 1% up. This clearly proves do not listen to what others say on the markets just concentrate on your job and trade. One day of trading will not make you rich anyway so why bother? And mind it you can also lose money – and since on these days you trade heavily if you are wrong the losses are also big.

Hope those who shorted Nifty yesterday or sold calls learned a lesson to avoid speculating. Speculations never make money in the long term – its only knowledge, discipline trading, patience, greed control and proper risk management that makes money over the long term not what’s happening in the world.

Even the best stock investor in the world Warren Buffet did not invest all the money he had in one stock – based on his research findings he used to allocate a percentage of his net worth in that stock. If the research was very positive he invested more, if it was somewhat balanced he invested less. This brilliant money management skills and control over greed made him richest stock investor in the world. Please also note that a lot of hard work was required to this. He used to visit factories and personally see manufacturing process and marketing techniques of the companies he wanted to invest in. He also used to talk to the owner of the company and the management. Unlike most of us, he just did not see profit and loss statements or took tips and invested in a stock.

His minimum time frame was also at least 10 years to stay invested in that stock once he decided to invest. In an interview he said that the best time to sell a stock is NEVER. Basically he meant was do not sell the stock until you need the money.

Please also note that to become the richest man in the world it took him some 25 years to get that crown. Also he had other businesses – most of the money was coming from an investment business that was generating millions. Therefore he had that privilege to invest a lot of money in the stock markets without worrying much about quick returns.

Also note that the average return of his whole portfolio since the last 25 years is only some 2%+ a month. When the best stock investor of our times was able to make only 2%+ a month – you need to have more knowledge than him to get better returns than him for the next 25 years.

One month return of 10% and next month return of -15% will not make you rich in fact will make you poor.

Do not fall for something that’s just not possible. Be happy with small returns but consistent returns and compounding your money – those small returns over the years will definitely make you rich. So plan and execute your trades well and be patient.

Hope you know that our RBI governor Mr. Raghuram Rajan on Saturday 18th of June 2016 said that he will not continue as RBI governor when his tenure ends on 3rd of September 2016. Hope you also must have seen how all market pundits jumped into conclusion that on Monday Stock Markets will see a major fall because of his exit news.

This was in fact printed in all leading newspapers also the very next day. Because of this reason I was also flooded with emails and WhatsApp messages by my clients on what to trade on Monday.

You know what I wrote them? Stick to the rules of trading as written in the document. Markets do not work on somebody retiring from their job. Let markets do what they want to do. If Stop Loss is hit exit, else stay on. Do not worry on silly news of somebody joining or resigning from their jobs. The world does not care for one persons’ job.

Let us see what exactly happened:

Nifty did open in the red today but recovered very fast. Right now at the time of writing this post at 10.19 am Nifty is in fact 20 points up from previous close at 8190.

But didn’t the so called Market Pundits said on Saturday that Markets will open in negative and will see a sharp downfall? Yes they said. But what happened in reality? It did open in red but proved them all wrong by going pretty fast up. I am sure many Future traders must have sold Nifty Futures at 9.15 am today as soon as markets opened for trading and were dreaming of making millions in one day. The result? All of them lost money. 100% of them. Because of whom? All those speculators’ who show that they are great Market Pundits.

So what you want to say Dilip?

I want to say that make rules of trading on what works for you best and stick to discipline and risk management rules in spite of what’s being told by speculators.

I also could have written an email about this on Sunday and made some quick money by selling some ideas. But like I said my integrity, peace and my jest of teaching you all to control greed and trade well with proper risk management comes first. Money comes later. A printed paper with ones and zeros printed on it me does not inspire me. I am teaching you the right thing and getting a thank you from you inspires me more than money. I do not care for people who live and die for money. Its not that I am not making money but for me peace and happy living comes first, money is secondary.

When every market pundit said on Saturday and Sunday, “Market would see sharp downfall on Monday on Raghuram Rajan’s retirement news” – I did not care for this news neither was thinking on what to trade on Monday to make more money.

I have said this and will repeat again – I am a positional conservative trader and just stick to my rules and do not care what others say about the markets movement. When I used to listen to them I lost money. When I got the knowledge to trade and was happy with even 1 or 2% a month I started making money. 🙂

So what I want to say is do not fall for greed because of some news. And even if you make money in one day of trading will that make you very rich? I mean will that make 10 lakhs or more? No, maybe you end up with 5000 profit. Next news trading will take you down by 10000. So there is no benefit in trading according to news. Yes you may get some fun and excitement but you must never trade for fun. It comes at a huge cost.

Some people might tell me that VIX increased. But let me tell you that VIX is increasing due to focus on the June 23, 2016 Brexit voting in Britain. After that whatever the results VIX will surely fall. I will write an email later on Brexit voting.

VIX has nothing to do with Raghuram Rajan Retirement News. One person vs a country. Its obvious markets will give more importance to a country than just one person’s job.

Did you notice that people who are too excited to make money because of news and Intraday trading actually end up giving their peace and money. And people who are disciplined traders and are happy with small profits live in peace and make money too.

Now it’s your choice what you want to do? I will always walk on the path which is peaceful and makes money too although slowly, not a path with full of surprises, no peace and speed of losing money far exceeds speed of making money.

One of my clients yesterday asked me the same thing what to trade on Monday because of this news. I replied I do not care for such news but you can go ahead if you are interested but do not blame me if you lose money. Had he traded he would have lost. See this:

Humm just in actually he traded, did not listen to me and lost money:

Imagine what must have happened to Future trades. They must be scratching their heads.

I am sure people who were eager to short Nifty on Monday must not have slept well on Saturday, Sunday and since they have lost money on Monday, will not be able to sleep well even today.

Walk on the right path then see how both peace and money will come your way.

Conclusion:

Read to know this article why it takes time to create wealth in stock markets because it is a business and every business needs time to grow and make money.

First something for my customers who have done my course: I feel that Nifty is going to be stable for some time now. After a lot of volatility stability comes. This is common logic.

Those who have done my course please enter the Strategy 1 as VIX also looks quite attractive.
http://www.moneycontrol.com/indian-indices/india-vix-36.html

17.36 is great VIX to enter this trade.

Those who are new and still doing paper trading can enter with one lot at least to learn in real markets how this strategy makes money over time and how there will be ZERO stress in trading.

I hate making money with lots of stress. What’s the point in making money if it takes too much of stress? I can’t always keep thinking about money I hate that. Ask any Intraday trader – they keep thinking only about money from 9.15 am to 3.30 pm and take a lot of stress to make a lot of money everyday. And whats the results? 99% of them lose money. What is the point in doing such a kind of trading, where stress is more money is less?

If you have not done my course please think again. I am not someone promising huge returns because making huge returns from markets every month is impossible. If it was possible then many traders would have made more than 10% returns every months since many years. But such a person does not exist because it’s impossible to make 10% return every month from stocks markets.

Just because you see one option that was selling for 10 going for 90 after a few days does not mean everyone knew when it was 10 that it will go to 90 one day. In fact not a single person on the Earth knew it – those who bought it must have sold it by the time it reached 20. This is pure fluke that’s the reason their very next trade takes away that profit of 10 points or even more. If it was not fluke they would have doubled their money in every trade – that does not happen. So profits are fluke, losses are also fluke. Basically trading without knowledge is pure gambling. It never makes money.

When that option which was 10 became 90, you knew it only after it happened not before that. But you fell for greed thinking you can convert your 10 lakhs into 90 lakhs every month. Your losses then starts. When you cannot even predict your own future how can you predict the future of an option?

So the only way to make money trading is to go slow and accumulate wealth over a long time. I guarantee, you cannot do it in a short time. I am saying good wealth that can change your life – something like 1 crore. It will take years to make 1 crore from trading – you cannot make it in months in fact in any business. So why do you think it’s possible in stock markets. Do not run after something that history has proven is the wrong path to make money.

In any business it takes time to make money and grow business. Stock trading is also a business and it will of course take time to make money. Live in a real world and you will be happy and making money. If you live in a virtual world you will keep losing money in the hope that one day you will make too much of money. Unfortunately that hope will remain always a hope, because that one day will never come. Even if it comes next day will again take away your wealth.

You can read about my course here and decide for yourself if it is worth it.

Also I do not have any marketing team like other companies. So if you call me I will talk to you but NEVER ever call you again if you do not buy my course. I am not a gold digger especially for money that comes without hard work. Who in the world gives support for 1 year for a mere 5000 rupees once paid? The reason is I want to see you grow and make money. That make me happy.

Also I can easily increase the price to 10,000 but am not doing it. The reason? I have full control over my greed and do not allow myself to charge huge amount. I only charge what I feel is correct. How many people think like that in this industry? And my customers love me for that because after years they paid a very small amount for a course that has started making them money.

Though we make less but at least we make money unlike others who promise to make 17 lakhs in one day from 1 lakh, then take your money and make sure that your 1 lakh also becomes zero. I am not one of them. If you believe me that’s good, if you do not I have no issues because it does not matter what people think about me, because I do not have any control over their thinking. What matters to me is is what I think about myself and what God thinks about me.

Thank You for reading.

I got an interesting comment in my article “As Predicted Nifty Hits 8000 in 14 Days” and thought that the question and my reply is both worth sharing with you and post it in a new article. The reason is my website visitors usually do not read the comments in the post. Please note that to hide the real person’s name I changed it to just his initials.

Here is the interesting comment:

Dear Mr Shaw,

I must accept that your writings are very true and many who read can relate themselves to the facts mentioned in your writings, like lose too much money too fast, and I am one of them, may be its greed or desperate attempts to recover the lost money, which is never recovered and losses mount till one throws the towel in with nothing left to trade.

All said and done, I wish you could advise investors when and where to invest and when to book profits than giving them courses to learn to trade, frankly no one has the time to learn and grasp the ever changing funds of market, you can have your conservative charges for buy and sell calls, I think that will generate more confidence in you than your courses. After all everyone is not Dilip Shaw to predict market moves like a true fortune teller.

Never the less love reading your write ups.

Keep It Up.
Regards,
KPS

This was an interesting question and my reply become too long so I did not post the reply there instead its here as a new post which I want you to read:

My reply to the above question:

Thank You KPS for the encouraging and nice words. The idea of writing in this blog is to share the knowledge of trading and options I have with my readers. And remember its free for all who want to read, no one is forcing them to pay me before taking knowledge away from this site. It is sad that only 10% who visit my site subscribe to get my free 5 day course, option beginners free course and newsletters full of trading knowledge for free. I think 90% do not register because they think – “Oh again some hard work I do not want to work and study”. 🙂

Note that I share true trading and life knowledge not fake ones like many blogs share. I do not believe that depending on someone can make money ever in any business. To make money in any business you will have to learn the trade and for that hard work is required. Stock trading is also a business.

Why do people do MBA or Engineering then? Why not take a Job and take help of tip providers and complete the job and keep getting promotions? Because God has made sure that short cut to success does not exist in this world else everyone would take the short cut to success route. In that world no schools or colleges will exist at all, because no one will go there to study. Because tip providers are there, why study and work hard? Do you think that world can ever exist?

In that kind of world then who would seek knowledge when short cut to success already exists? In fact within years you will not find any tip provider too because everyone will look for tip providers no one will take the hard route to seek knowledge and the whole world will collapse because there will not be a single person who has true knowledge. God will never allow this to happen.

Name me one person who has made it rich in any business taking help of tip providers? Not a single person exists in this whole world in any business who made millions by getting ideas to trade by tips providers.

Moreover I hate lazy people and I do not want to make money doing a SIN in the eyes of God creating lazy people. I fear God and I am sure God will punish me for that. I know that if I start giving sell and buy signals I can make a lot of money every month because people believe me and trust me – but I will feel guilty for my life for taking that money because it will be in my mind that I am doing a sin. So frankly I do not want that money. I love peace more than money.

Also I fear God and do not want to make money by making people lazy and dependent on anyone to make money. I am very happy where I am today in my life and do not want to run after money that will surely make me unhappy. I have written my goals in life and how much money is required to achieve those goals and I am going right on track – that’s more than enough. I do not want to destroy my peaceful life and make more money because I do not know what I will do with that money. If you buy something that you have never used in your life then you wasted money. In other words I do not want money that I will just keep in my bank and make the banks rich and I myself will never use it. Whats the point in earning that money?

Let me tell you a bit more about myself – I love people and want to see them prosper in life through hard work. I do not love money like most people do. They just run after money day and night and do not care about their health, family, and peace. The result? They do make some money or do not, but Gods make sure they live a pathetic life without knowing that they are living a horrible life. 24*7 they think about only one thing that is money. Their health suffers, they live a stressful life and are always unhappy in life because there is no end to zeros that can be added to their net worth. Adding zeros is unlimited which never ends so their dream never ends. They want to keep making more, and they ultimately die without enjoying the money they had made. And you know what their families also suffer when they were alive because these people never give time to their families they only give their time to a printed paper with something printed on it. God only knows what makes them fall in love with that printed paper so much so that they destroy their life.

Simply speaking people lose money in stock markets because they want to take short cuts to make money fast and do not want to get any knowledge or do any hard work. Here is some proof – less than 1% of people who visit my site enroll for my course. Which proves that 99% of them just do not want to learn and are only looking for a tip provider. You know the result – they lose money trading their tips too and on top of that they pay them to lose money.

After a few month they realize their mistake and call me to tell their story. Looks like they feel guilty after failing in the short cut way to make money. People looking for tips forget that their parents sent them to school to get education and knowledge and work hard to make money. If tip providers can make money then people can save lakhs of rupees on school fees by not sending their kids to school, but as a parent you will not do this mistake but you yourself are willing to commit that same mistake and of course end up paying a heavy price for it. Mind it this is not a small price but a heavy price – with this money you could have sent your kids to a better school making sure they get a better career and life – but they pay a price throughout their life for you trying to take short cut to success.

Due to almost 10 phone calls I get in a day, I have experienced that controlling over greed is the biggest issue with most traders even those who are trading since last 10 years and have lost heavily in markets. Most people who have taken my course are making 2-3% a month, but then some mail or call me to ask if there is any strategy which can make 5-10% a month because they are not satisfied with 3% a month return. I give them a very simple answer – when Warren Buffett the best stock trader in the history of stock investing is averaging only approximately 25% a year return since the last 20-25 years and became the richest man in the world how on Earth do you think you can beat him? Do you think you have more knowledge than him? Then they realize that they are falling for greed and keep their phone down of course after thanking me.

So if you are making even 2% a month return from trading or stock investing be very happy with the returns. Today’s inflation is around 7% and you are beating inflation by 24-7 = 17% a year. That’s huge.

Do not fall for greed because it will take away whatever you have made till date. And do not forget that compounding is the best magic in the world which most of us can try and do but do not want to take benefit of it.

See this: Rs. 1 lakh invested every year for the next 25 years (which is highly possible with most of us having a good job) at the rate of return of just 24% a year will become Rs. 133,017,562.18 (Rupees Thirteen Crore, Thirty Lakhs, Seventeen Thousand, Five Hundred and Sixty Two). How much was your investment? Only Rs. 25 Lakhs. Assuming that you are 30 years of age having a good job the above investment is very much possible. Now by the time you become 30+25 = 55 years of age you are richer than many people in the world. On top of that still 5 years are left for retirement. Do not forget even Warren Buffet took two to three decades to become the richest stock investor in the world. He did not achieved it overnight or in 2-3 years. He knew it will take some time and knowledge. He was willing to give time, and see the results are in front of all of us. Strangely we want to read about him but we do not want to follow his patience and hard work way of investing. How on Earth you will succeed in making more than him and create history?

You said that no one has the time to grasp the fundas (fundamentals) of markets. Oh really? You have all the time in the world to watch movies, have fun on weekends, go on long holiday trips, watch 5 days cricket match, other sports and serials on TV but when it comes to reading news on markets you say you do not have time? That’s an excuse. Say that you do not want to work hard.

As far as confidence in me is concerned I am not wring in this blog so that you have confidence in me, I just want you to read and get some knowledge. If you get it its fine else it’s your life over which I do not have any control so I cannot force you to learn. If you are willing to learn you benefit else it’s your life.

When I said that Nifty will hit 8000 in some time, I was NOT trying to show off that look I am a fortune teller. The idea was to tell investors to trade it in the correct way to make some money which was also written in the post. In fact we all knew that Nifty may reverse any time because stocks were looking very attractive and DIIs and FIIs will definitely start buying them. It is a different story that my prediction came true in 14 days. I agree that it could have taken more time but 8000 was on the cards and how I plan to make money from these medium term predictions was shared in that blog post to help people get a free idea to make money – that is it – not to prove that I am a fortune teller. Some people did say in comments that it is not a big deal and I accept that it was not, but I made money out of that prediction, how many of others make? I just wanted to share that idea with my readers and help them make money. I do not know if anyone followed the idea and I never forced anyone to read this idea but still some people had issues. Somebody is working hard to help investors for free and you have issues – isn’t it strange? Actually it’s not because I have experienced this many times that giving free tips is not at all valued by people.

Therefore these kind of ideas will now reduce significantly because a lot of people hate free advice even from experts in stock markets. I got too many people unsubscribing from my newsletters on that free trade idea article. So I have decided to reduce the free ideas in my blog especially prediction of markets. This was an exception because I cannot control myself when it comes to helping my blog readers.

It is strange that you have lost too much money to greed but still are not willing to work hard and learn and want to take tips. Let me tell you that if you do not have time to invest in knowledge then you can never make money in stock markets because people who have invested in knowledge will take your money away and they deserve it and its justified too. Why do you think only 5% of traders make money? Because these people invested first in knowledge then in markets. Those who took short cuts and invested in markets out of greed without any knowledge keep losing time and money for years.

Hope this article helps you to understand that knowledge, hard work, risk management and patience is the key to success in any business and stock trading is also a business. If you are not willing to listen to me it’s up to you, no one can force you to learn. But let me tell you that time will force you to learn or you will lose money and regret and stop trading. I just hope you listen to my advice and do not let that time come in your life.

Thanks for reading. Do you agree that knowledge helps in trading? If yes or no please write in the comments section.

Lots of people ask me if I have any strategy to trade and make profit on expiry day. I ask them a counter question – why you want to trade on expiry day only? Most of them have no answer. However some say because options are dying (expiring) that day why not benefit from this situation?

OK let’s forget options for some time. Let’s assume a close relative of yours is dying on a day and you go to the hospital to see him for the last time. At that time do you think about making money using him or you try your best to console him and save him?

I hope you get the point. The day options are expiring it’s better not to trade them rather think about next month or wait for a better opportunity to trade.

Risk reward ratio is pathetic on expiry day trading.

Please remember that on expiry day all options whether they are In The Money (ITM) or Out of The Money (OTM), have lost most of their time value. Any option with 2-3% away (Out of The Money) from the spot price will be near 0 by 12 pm and all ITM (In The Money) options will have only the intrinsic value and no time value.

Intrinsic value is the distance between the spot price of the stock and the strike price of options. For example if Nifty strike price is 8250, then 8500 strike call option will be near zero by 12 pm and 8150 call option which is In The Money will be near 100 by 12 pm. Basically all In The Money options will behave like Futures not Options.

All options on expiry day are near Delta of 1 or 0. All Out of The Money (OTM) options have near ZERO Delta and all In The Money options have Delta near 1. Just like Futures delta.

So if you buy on expiry day 8150 Call if Nifty is at 8250, then if Nifty goes up 10 points you will make a profit of 10 points just like Futures buy, and if Nifty falls by 10 points you will lose 10 points just like Futures losses. Can you see the risks involved?

If you sell ITM (In The Money) options let us see what happens:

Assuming 8150 Call is sold when spot of Nifty is at 8250. If Nifty comes down 10 points the seller will make a profit of 10 points and if Nifty goes up 10 points the seller will lose 10 points. What if Nifty goes up and reaches 8350 at 3.30 pm when markets close? The seller of 8150 option will lose 100 points.

Of course since there is not much premium in Out of The Money Options very rarely traders trade them on expiry day. The buyer of options knows that it may expire worthless and they may lose 100% of the money buying them. The sellers do not get much money to sell OTM options and they think risk is too much for such a low payment so they do not sell OTM options.

The problem is in spite of all these risks people keep searching Google for expiry day trading.

So Why People Like to Know About Expiry Day Trading?

1. They hear from some source stories that someone is trading on expiring day and making good money. The problem is no one wants to know who that person is or exactly what they are doing. And if there is any truth in whatever they heard. Since they do not know the source and therefore do not know how they are trading – they Google it to try to find out.

2. Early in the morning on expiry day ATM (At The Money) options in Nifty are around 20-30 depending on VIX (volatility). Sellers of options want to make quick money on expiry day. So they think if they sell both ATM Call and Put options early in the morning and if Nifty expires within 20-30 points they can easily make 20-30 points in one day. Agreed if they are correct they will make. Let’s assume they get 25+25 points = 50 points credit by selling At The Money options. So if Nifty expires within 50 points range either above or below they will make a profit. What they forget is that on the expiry day a lot of movement is seen. This is very normal as all derivative traders are closing their position. The movement starts after 12 pm when these people come into action. So even if they make a profit in two expiry days, the third expiry day may see a huge move and all they made in last 2 months is gone plus markets will take away some principal as well. Where is the profit? Note that this is the most popular trade on expiry day. Hope after reading this you know the risks involved and will not trade this.

3. If one day trade can make them rich why trade for one full month: This again is a lazy trader’s mindset that is why they search for expiry day trading. They think if they can get rich by trading just one day in a month then why do all the hard work for the full month? They forget the simple fact that no one in the history of trading has ever become very rich by trading on the expiry day. Another fact for those who think on these lines – do you think you will become extremely rich by trading (working) just 12 days in a year? How can that logic be justified? Stock market trading is a business. Name me one person who has become extremely rich in any business in the world by just working 12 days in a year? Is that possible? In fact business owners work more than people who are doing a job because they know the more they work the more money they can make. Which is a fact. People who chose to work hard and not take lazy route to success are the ones who actually archive success. May be it takes a few years but at least they succeed. People who take the lazy path to make money never see success ever, not only that they are the ones who are the most stressed people in this world, because they see their hard working friends earning more than 10 times than they do within a few years and they are nowhere near them. This gives them stress and jealously. But dude you are responsible for your failures as you chose the wrong path to achieve success when time came to decide the path. So blame yourself no one else.

Frankly this is my personal experience. When I was a lazy person and was looking to make easy money without working hard through stock markets I lost all my savings in three years 2007-10. To survive I had to take a 1 lakh loan. My wife who was heavily pregnant at that time told me the truth – God is punishing you for being lazy and still trying to make money taking short cuts. You are responsible for this situation, no one else is. However you still have time, you are young just chose the correct path to make money. Start working hard from today onwards.

And man how correct she was. I thank her for changing my life. The very next day I started researching and reading about stock markets, options and futures trading, managing finances, mutual funds etc as well as trying to improve my job skills by reading related books.

The idea was to improve my skills at my current job plus make money from investing in stock markets as well.

The result? I got a promotion within 3 months in my job. Salary doubled. 1 lakh loan that was to be paid back within 2 years, I paid back in 6 months. Started investing in four of the best mutual funds of that time within 6 months through the SIP route. Within 2 years I bought a car and a house. Can you see what I destroyed in 3 years through laziness, I got back 10 times that in 2 years only. So do not think hard work takes too much of time to pay back. It only takes a few years and your life can change.

If you chose the wrong path to succeed you will never see success for years. In fact you may end up destroying whatever you had done all these years and then regret your decision for the rest of your life.

Yes I do get calls from people aged above 50 who have destroyed their wealth trying to make too much of money and taking too much of risk in stock markets without knowing what they are doing. The result is obvious some are sitting at a loss of 40 lakhs and some more – 2 crores. If you are young and reading this please do not try to take any short cut to make money it will never work and will take away whatever you have made till today.

Do not think that you are an exception – you are not. In Gods eyes everyone is same – it does not matter you are rich or poor the almighty will punish you if you take the wrong path.

Name one person who took short cuts to make money in any business in this world and is living a rich life today. In real world such a person does not exist and will never exist. So how can you be one?

The worst part is these people who are above 50 and lost too much money left their high paying jobs to trade the stock markets and lost everything they had made. The problem is since they are now near retirement age they will not get a job – so everything they achieved in life is gone. Please do not be in that situation when you are 60.

I get too many calls from young people who want to leave their jobs and trade full time to make money. I do not understand why. After all you got this job after a lot of years of studies and hard work – so why leave it to live a lazy life? Can you not trade while on a job? Yes you can, so why leave it? Even I had a job while I was trading. Since I am a very conservative trader who is happy with even 1% profit a month – the profits coming from stock markets never bothered me, and I could concentrate on my job as well and within years was promoted to a very senior position. So basically I was willing to work hard and gain knowledge because of this my life improved drastically. Think about this – I also started this website in 2013-14 to help traders get some knowledge and imagine the time I had to work. Almost 12 hours daily. Even while traveling I never wasted time – I had books in my bag so that I could read them while in a metro.

When you chose the right path – right things starts happening automatically in your life. If you chose the wrong path – wrong things will start happening automatically.

I hope it is now clear that risk reward ratio is not good in expiry day trading so I request you to avoid it. Trade with knowledge and have patience while trading. No person on this earth has ever become rich overnight by trading though many have lost their fortunes trading aggressively overnight in few months. But traders who are patient and follow proper risk-management techniques and giving themselves time to make money are actually making money. Now you chose which path you want to travel.

People who think it’s easy to make money though stock markets actually speculate to make money fast, you know the results how can a speculator make money fast? One bad speculation can take away months of profits and this will go on for years. People who have knowledge and trade to make money slowly actually end up creating a lot of wealth over the years and lead a happy life and retire rich.

The path that looks easy to achieve success actually does not exist – it exist only in dreams not in reality. The path which looks a long way to travel and hard to travel actually leads to success though it may take some time. But frankly it does not take too much of time. Ask any successful people in your neighborhood and they will tell exactly what I am saying.

Just 45 days back I met with a serious accident and doctors have advised me to take rest for next 3 months – but I am still working around 10 hours a day and I am very happy working. I have a big excuse to give myself to hit the bed day and night but I am not doing it. I love working hard and cannot live without it. Hard work pays and I will never forget what my wife said years ago which changed my life.

I hope you will refrain from expiry day trading and leaving your job to become a full time trader. When you can do both why trade full time? Isn’t it easy to make Rs. 50,000 a month from a job but compare this to making Rs. 50,000 a month from trading. May be you can make but a very large capital is required to make that amount. And do not think trading full time is easy. It is actually more difficult than doing a job. You will be stressed seeing the stock moving in the other direction of your trade. Be ready to take stress from 9 am to 3.30 pm. A job is much better really. My point is when you can make money from 2 paths, why leave one path when you can travel both the paths without stress?

Stop thinking of making money easily from stock markets it does not exist. Start learning about stock markets trading and you will start making money – this one does exist.

Thanks for reading this long article of 2,401 words.

Hope you remember that on May 12, 2016 I had written on my site and emailed you that very soon Nifty will hit 8000. My prediction came true in 14 days. Today Nifty closed at 8156.65 – in fact 8000 was achieved a couple of days back.

Let me tell you that there was no Technical Analysis involved, in fact I am NOT a TA. It was based on pure experience and logic that whatever falls will go up one day especially if its a good stock or Index. Its obvious that when Nifty is falling some of the great stocks are being sold at very attractive prices and people will rush with money when they see valuations of great stocks going down. This will lead to the rise of Nifty. So I saw an opportunity to make money.

What trade did I do? Simplest trade in the world when I have an idea of the direction of markets:

See this image please note that profits will increase more today:

ICICI Nifty Index Direct Fund – Results may vary at different times

Since yesterday’s close the profit is Rs. 28,068.15 I think it will cross Rs. 30,000 today as Nifty closed 1.08% up. I have now shifted this fund to a liquid fund so that I keep this profit forever. Note that I started SIP in this fund from November 2015 from the time Nifty started falling. I knew that Nifty cannot keep falling forever, it will go up some day and I can book profits. Reason of my thinking is given earlier. Total return is 13.62% in few months – what more can I ask for? I am very happy.

Update 28-May-2016: After the yesterday’s NAV adjustment the profits are now Rs. 33,220.20 – so this is the final profit that will be shifted to the liquid fund. Note that the expense is also in this and there is ZERO exit load so all the thirty three thousand plus profits will be booked and shifted to liquid fund. See the image below:

ICICI Nifty Index Direct Fund 28-May-2016 – Results may differ at a different time

Note that the annualized return has increased to 16.12%. So this converts to 16.12/6 = 2.68% return a month since the last 6 months.

What are the benefits of these kinds of risk-less and greed-less trading?

1. There is absolutely ZERO stress: I traded with the money I did not need for next 5-6 months as I knew it might take that much time to rise once again. Though as you can see it took exactly 6 months. 13.62% return in 6 months converts to 2.27% every month. (After the final day returns the annualized return has increased to 16.12%. So this converts to 16.12/6 = 2.68% return a month.) Note that SIP was automated. My only work involved was to take a decision and decide how much money I wanted to invest in this fund. Rest the system took care. Note that there is no Exit Load in ICICI Prudential Nifty Index Fund – Direct Plan. Expense is also very small at 0.56%. So basically they will shift almost all profits and money to the liquid fund today after new NAV is adjusted as per today’s profits.

2. No hard work is required: Read point 1 above as you can see I worked for just half an hour in November 2015, to take a decision if I will do this or not. Once my brain said yes, I logged in to my ICICI Mutual Fund account and made the system work to do the job. A half an hour job resulted in 16.12% profit in 6 months. Remember that last full month I was sick – met with an accident and was serious for 15 days in hospital. So basically I did nothing but still made a return of 2.68% that month. In fact I did nothing with this investment for last 6 months yet clocked 16.12% return. So absolutely zero hard work.

3. Risk is very less: I am not saying that risk is not there. Nifty still could have been today at 7500 and the fund would have been in a small loss but we all know that Nifty is not going to go on in one direction forever. Somewhere down the line the stocks will look very attractive and people will start buying them. Nifty will then rise. Exactly the same happened. Look at the stock prices now and compare them to when Nifty was at around 7200.

4. Sticking to basics: Remember the most popular phrase by Warren Buffet the best stock investor of all times – “Buy when everyone is selling, and sell when everyone is buying“. I follow this rule in investing even today. So I was buying when all Future traders and stock owners were pressing the sell button. Some of the Future traders would have lost a fortune when they pressed the sell button a few days back and Nifty jumped 5-6% in few days. And now when they are pressing the buy button I have sold my profits. Can you see how easy it is? It needs some patience though. Greedy traders will never get attracted by this great and easy trade because they want to make too much money too fast and in reality they lose too much money too fast. And some want to trade everyday for fun and it costs them a lot – they still do not learn. I trade only when I see an opportunity else I do not trade.

5. Risk management: This money was shifted from a liquid fund to the index fund once in a week since the last 6 months. As you can see I did not let greed or speculations take over me and shifted all 4.5 lakhs in one day to try to show off myself that see how smart I am in trading. In fact I knew no one knows till where Nifty will fall. Therefore I let the system decide that it keeps investing every week and I get to the lowest level as well and average my investments in the best possible way. Which the system did because it does not have greedy brains. Now obviously the investments have been stopped and the profits shifted back to liquid fund. Note that this profit would have come in almost 2 years had I not taken that decision to invest in this fund. 2 years profit came in 6 months, that too without any work. What more do I need? But greedy traders will try to make this profit in one month the result is obvious – they lose money.

Be patient with your investments and take very conservative decisions.

Ask any conservative trader I bet they are all making at least 20% return a year with no difficulty and stress at all. Ask any aggressive trader – most will come out with lakhs of losses in couple of years. Now you chose what you want to be.

I am very conservative trader whether its options trading, stocks buying or mutual fund investing. In fact me and my wife are very conservative in life as well. We do not buy costly items to show off even though we can afford, as frankly no one cares if you show off. Tell me how many of people make more friends who have mobile phones worth Rs. 50,000? Do you think they buy mobile phone worth 50k for some extra features. NO. They just buy it to show off to their friends and they do not know that their friends do not increase respect or love for them just because they have bought a costly phone. They do not realize that their life remains same and they become poorer by 50,000 rupees. On top of that a person who bought a mobile phone worth 50,000 is always worried about his phone. What if it gets stolen or falls and break? So basically he wasted 50,000 and bought more worries. So what was the benefit? NOTHING. Live in real life and you will always be happy.

My Conservative Option Course will help you become a conservative trader. Here are some testimonials. And here is where you can pay online.

Today I received a very good testimonial by an expert Technical Analyst. Here is the screen shot:

Michael Testimonial 25-May-2016 – Results may vary for users – Click on the image to enlarge

If you cannot read from the image here is the text of the email:

Hi Dilip,

Just wanted to let you know that the position mentioned in my previous mail, finally went in to profit (right on futures after a few days, plus also had the benefit of time decay on sold options). What I liked about this trade is, even though I was initially in loss, I did not have to bother much as the position is properly hedged. In this particular trade, I exit with around 1.7% profit. In fact, as I am writing this mail, the market is shooting up in the futures direction, after I exit the trade with small profit. But considering tomorrow is expiry, did not want to take chances. And most importantly, I do not have the “should have” attitude.

Overall, in a margin of 55k, I took 2 trades within a period of 10 days and my overall profit is around 5%. I know the directional trade could have made much more, but considering the market is highly range bound for the past few weeks, this seems good enough for now.

Having been in the markets for several years and spanning through a lot of Technical Analysis, the only thing which I was unable to learn is proper control over emotions / risk management, due to the fear of losing money. Burnt money on intraday trading. However, after learning about the directional strategy, I know that all my TA knowledge can be used but this time without any fear/worry/emotions.

Thanks for sharing your strategy with others !

By the way, I appreciate not only your conservative approach towards trading but also towards life. Read your last post “Why Traders Buy Calls and Puts and Lose Money” 🙂

Thanks,
Mike

Some important points to note from the email:

1. Technical Analyst losses fear of trading because the trades are properly hedged. So if you are TA my course will give you confidence of trading and you can start trading without fear. Note that even if you are NOT a Technical Analyst you will still trade without fear because your trades will be properly hedged.

2. 5% profit in 10 days in the directional strategy. Though results may differ for everyone the point is this strategy will immensely help if you are an experienced trader especially if you trade Futures.

3. Margin blocked will be only Rs. 55,000/- to take one lot trade.

4. The strategies will help you to have control over emotions like greed and fear and you will by default do proper risk management while trading because the hedges will manage your risks.

So three main basics of trading gets covered:

a) Control over Greed,
b) Control over Fear, and
c) Proper Risk Management.

Now tell me if all the above conditions are met why will you not become a successful trader after doing my course? So please do my course not just for the 5 strategies it has, but more for the knowledge of hedging you will learn in the course.

Remember that investment in knowledge gives the best returns.

Do not delay your decision especially if you are losing money trading. Do the course today else by the time you enroll you may lose ten times the cost of the course just by trading.

Here are the details of the Conservative Options and Futures Trading Course:
http://www.theoptioncourse.com/learn-how-to-trade-options-for-monthly-income/

Here are some more testimonials:
http://www.theoptioncourse.com/what-people-say-just-after-taking-my-course/

Here is where you will find fee details and payment options. You can pay by credit card or by NEFT:
http://www.theoptioncourse.com/bank-details/

Note that to do the course you do not have to go anywhere. You can do it from your home. Strategy 1 can be traded the very next day you get the course materials. Just two Strategy 1 trades will recover the cost of the course making the course free and my support for 1 year also free. What more do you want?

You can also contact me here.

Thanks For Reading.

These are very kind of emails that I receive almost every day:

Email received on 18-03-2016

Here is the text of the email:

Dilip,

Need your advice. Could you help me?

Before I became your subscribed member, I made the following mistake:

NIFTY 31st March Series:

Bought Put Option 7450 @ Rs. 148.80.

Bought Call Option 7800 @ Rs. 24.40 2 lots.

Today the Put Premium is Rs. 35.85.

and Call premium is Rs 7.80.

So my total loss ( 148.80-35.85) X 75 + ( 24.40-7.80) X 150= Rs 112.95X75 +16.6X150
= Rs 8,472+2,490
= Rs 10,962

Yes I made idiotic decisions for which I repent. it’s my idiocy.

Now as an advisor could you tell me any strategy to mitigate this loss?

Looking forward.

First let’s get into psychology of these kinds of traders why they love to buy calls and puts.

When most of us first learn about options on the Internet or in any book or by our brokers, we are told that “option buying is unlimited profit and option selling is unlimited loss.” As soon as we read it an idea comes into our minds (mostly to do with greed and easiness of trading).

This is the virtual dream that we start dreaming:
“Let me buy any Call and any Put – if Nifty goes down Put will make unlimited profits and if Nifty goes up Call will make unlimited profits. It is so easy. I will become very rich in couple of years.”

And then they press the button of a Call buy and Put buy the next day without using their brains and they feel happy that they have done a great trade. After a few days reality kicks in. Both calls and puts lose money. Then they see their virtual dream breaking and search the Internet in vain for help. They do not get any help and close their position in losses.

Wait the story doesn’t end here. They think they were unlucky so they try another time. And this time to recover the losses they buy 2 lots of both calls and puts. After a few days the story repeats. First loss was around 10,000 this time 10,000 more so total loss stands at 10000+20000 = Rs. 30,000/-.

Unfortunately the story continues for years and now the losses stands at lakhs. Then they either stop trading or start selling options. Unfortunately even after losing money in lakhs they do not understand that hedging your trades is very important. Just like a medical and a term insurance is important for all of us, hedging is like an insurance in option trading so its an important part of option traders life. This time in one or two trades they make a profit then one day a huge movement comes in.

Remember that selling options means losses are unlimited. But somehow they forget that or live in the hope that before expiry Nifty will reverse and they will end up in profits. It does not happen. So now this loss not only takes away their last two profits but they lose even more. Again the story continues. Then one day they realize losses standing at more than 5 lakhs.

Now they understand the reality – they are not good traders and need help. Here tip providers comes in. Welcome more losses. 🙂

Did you notice that most of us want to take the easy route to make money? Nobody wants to learn about stock markets but still think they think they can make money.

How is that possible tell me?

Trading Options and Futures in not an investment it is a business. If you are not willing to get knowledge someone with knowledge will take your money away. Also remember that in any business lazy people who look for making easy money never succeed in making money. So why do you treat stock markets as a different ball game? Stock markets also needs hard work and knowledge to succeed.

Do you think Warren Buffett made money easily in the stock markets? No. He used to visit the offices and factories of the companies he wanted to invest in. He used to even talk to managers of the companies he wanted to invest in. He used to calculate MOAT of the stocks to know the real valuations of the companies he wanted to to invest in. Only after some conditions were met he invested in only those companies those passed his test. How many of you do research on the companies that you invest in? Most of you invest out of pure speculations no research. Because research involves hard work and we do not want to work hard.

You may have heard and read it a thousand times but I will repeat it again.

To achieve Success there is NO substitute to Hard Work. Do not take short cut you will destroy your wealth.

If buying options and making money was very easy then imagine what kind of world we will be living in. No one will go to school. Because our fathers will be buying options calls and puts and making huge money and they will teach us the same when we turn 18 and give us 1 lakh, open a trading account and tell us the easiest way to make money. The whole world will collapse. No one will open a factory, no one will start a business, no one will become a scientist. So there won’t be any offices or jobs. The only work in the world will be buying options. So all will be option buyers. There won’t be any farmers too. So there won’t be any food to eat too. Even though we will be earning a lot we all will die of hunger. Do you think there can be a world where the only job people do is to buy options? And one more thing – if option buying only makes money then no one will sell options. If no one will sell options then trading will also stop. The whole world will collapse. God knows this and therefore makes sure that greedy and lazy traders lose money so that they get back to work.

People do not use their brains and think what I have written above, but just press the buy button because they only think about unlimited profits. No one thinks of the possibilities of losses. Only when they start losing they realize the fact that option buying cannot make money.

They also forget that options premiums are decided by five factors: Delta, Gamma, Theta, Vega & Rho and when they buy they are fighting against Theta (Time). Tell me in the history of this world who has won against time? No one so why and how do you think you will?

Ok some of you may have made money by buying options sometimes but how many of you got unlimited profits? Remember that unlimited profits are only in books. In reality you press the sell button much before unlimited profits kicks in. Because of the fear that the profits may again go away and turn into losses. So in real world buying options is only limited profit trade.

So unlimited profits is only in the books, not in real world. Long back I had written why option buyers lose money. Please read it for more information.

Once they realize that knowledge is important to make money trading options they enroll for my course. But unfortunately by that time lakhs are already lost and when they tell me their story I feel sorry.

By the way. I was also in the same shoes once upon a time. I did a lot of mistakes and lost about 7 lakhs in my first 3 trading years. 700000/36 = Rs. 19,445 lost on average every month for continuously 36 months. My salary at that time was just 25,000 per month. So basically I lost all my savings of years. I realized my mistake that I wanted to make easy money without gaining any knowledge so I lost. To this day I regret the losses but those losses changed my thinking.

I am today not only a very conservative trader but very conservative with my spending as well. I can easily live a more luxuries life, but to save money I am sacrificing them. To give you an example I can right now walk in a car dealers shop and buy a car worth 12 lakhs without taking a loan but I still use a car that’s less than 5 lakhs and 5 years old. So I save 12 lakhs. You know what whether a car is worth 12 lakhs or 4 lakhs, its only job is to take me from one place to another – so why should I spend more? Hope you get the point I now tell myself the real way the world works and do not dream a virtual world. Do you think if I buy a car worth 12 lakhs my business or life will improve? A BIG NO. So basically I will just waste 12 lakhs on NOTHING. Luckily I have a great and supporting wife too. She was and still is a very conservative shopper. We always see the newspapers for offers and discounts and never leave such shopping opportunities. I think because of this in one year we save thousands on shopping itself.

Obviously money saved is money made. We will teach our children the same. Believe me showing off your wealth to others is very costly and no one cares. Over the long run you only lose money showing off. Live a lifestyle below what you earn and I bet within years you would have saved a lot and it will make you very happy.

One more thing – after my accident I realized the importance of health. I realized that health is more important than wealth. What shit a life will be if you have crores in banks but you spend nights in hospitals. All that money will only be lying in the banks. So now I have decided to start exercising and eat very healthy food to remain healthy. Good health will allow me to work harder and create more wealth for my family.

If you are reading this and are still losing money trading options I highly recommend my course. Apart from the strategies it offers a lot of knowledge. You can even apply this knowledge in your own strategies as well or make your own strategies. You can pay for the course here. Remember that you can do this course from your home. It’s done through email only. I will support you for one year to become a better trader. Who in the world offers support for one year for less than 100 dollars? So do it now.

There are a lot of people who trade to have fun. Since life is very boring in their jobs or business the only thing that can give them some excitement is trading.

Read this email from one of my clients:

Testimonial by Uday May 2016

I am surprised that a strategy he paid for to learn and looks good him does not get his attention to trade because it takes 15 days to make money. Strange that people who do jobs get paid once a month. A trade that pays twice a month feels boring to him. Seems like people do not use the best gift by God to humans – their Brains. 🙂

How You Start Trading For Fun. This is how it happens:

1. You are approached by a stock broker to open an account with them. All they promise is amazing low brokerages and great tips. So you start dreaming a great and rich life and open an account with them. (Note: If you are paying money per lot for trading then please know that you are paying too much to your broker. Let me know your name, email and mobile number. I can help you save money trading. Contact me here.)

2. Once done you transfer cash in your demat or trading account to start trading. I think in India average amount transferred for the first time now is Rs. 50,000 to 1 lakh. A few years back it must be within 10,000 to 30,000.

3. The broker sees you have shifted funds. Now his time starts to make money. Note that your broker cannot make money from you if you do not trade. 100% brokerage goes to his bank account.

4. He gives you a call and advises you to buy xxx stock and guarantees that this stock might give 20-30% returns in 3-4 months. You say yes. He keeps the phone down before you can ask any question. He then buys the stock in your account.

5. You have fun watching the stock movement during office hours. After all you also opened the account and traded to have some entertainment during boring office hours.

6. After four months you see that the stock is still at same rate or down 20-30% instead of up. You then call your broker and he gives you some excuse like this happened or that happened which no one had an idea else the stock would have performed well. You think he is right.

7. He knows that if you trade again he will make money again. So he now advises you to exit from this stock and get into another stock which is looking promising.

8. You start dreaming again. In any case you were bored of seeing the same stock movement for months and you wanted a change to have some fun. So you say yes again. Broker keeps the phone down.

9. Within seconds he exits from that stock and buys the one he advised. Remember that these people never hit “Limit Orders” to get the best rates. They hit “Market Order” to save time and make sure that the trade gets executed. If you don’t know “Market Orders” gets executed at the worst rate going at that time. You buy the stock from the highest bid seller, and you sell the stock to the lowest bid buyer. Broker does not care.

10. An Advise: Do not let your broker trade. You must have a demat trading account where you can trade online. So you must trade your money yourself. If its not allowed to trade in office then trade from your mobile or during lunch go to the nearest Cyber cafe login and trade. All it will take is 5 minutes. Try to get the best rates by hitting “Limit Orders”.

11. Do not trade to have fun during office hours. Trade to make money and be happy even if you make 15% return a year. If you have friends in USA ask them the Fixed Deposit rates there. Its almost 1-2% a year. Why? Because inflation there is ZERO. In India inflation is around 7%. So if you are making 15% you are making 8% more than inflation. So your real return is 8% a year. Isn’t it much better than losing money trading but having fun? I think it’s much better to make money feeling bored, working hard and using our knowledge, rather than buying fun in stock markets.

So basically you must:

a) Get knowledge as much as possible on trading whatever you want to trade in stock markets.
b) Manage your own funds.
c) Trade yourself.
d) Know the risk you are taking and invest the amount of money in that trade which is reasonable. For example if the risk is very high, reduced the money involved in that trade. If the risk is low, increase the amount.
e) Do not listen to tips from your brokers as all they want is that you trade. They are least bothered whether you make money or not. All they want is that you trade so that they can make some money.

If you are a broker and reading this I am sorry but this article is saying what I have experienced from my first five brokers till now. I am sure many others too experience the same. Most of my initial trades were done because my brokers advised me. Not a single advise by them made money for me.

Conclusion:

1. Open trading or demat account to accumulate wealth over long time not to have fun during office hours.

2. Do not trade to have fun but trade to make money. Stick to trades that are making money for you even if that are boring.

3. Even if boring trades make money stick to it. With the profits go and buy some fun like watching movies or sports in a stadium.

4. Remember that even actors who sell us entertainment work hard and take their work very seriously to make a movie. When we pay for the movie tickets they get a part of it and they end up making crores. Then to celebrate success they organize a party and have fun. This comes in media and we get jealous seeing them enjoying life. What media does not show is when they work hard while making that entertainment for us. So why should we be jealous of successful people when they work harder than us?

Most of them are bored from their work, but they know if they start working on easy movies their market value will depreciate and they will be paid less. So they keep working for hours in great banners every day. We do not get to see that. Sportsmen or actors – those who keep working hard everyday keep rising the ladder of success and keep making more money year after year. Those who don’t are out from the money market. Their popularity and market value goes down. Why do you think some players and actors are paid more than others.

Learn from them.

4. Write down your goals in life and work to achieve it everyday. I bet that if you are honest and working hard, God will give you that goal before time.

5. Never be jealous of anyone in life just because they are happy and rich, because you do not know how much work they have done to achieve success. Ask them. They will give you free lessons to work hard to achieve goals. You will then actually thank them and appreciate them.

6. I admire successful people because I know they are different from others and are hard workers. If you are also successful in life due to hard work please share your story in the comments section or send me an email.

Thank You For Reading. Hope this article will motivate you to work hard even if its boring.

Note: If you are paying per lot in options please email me your name, email and mobile number. I can help you save money.

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http://www.theoptioncourse.com/learn-how-to-trade-options-for-monthly-income/