Axis bank is now looking attractive. 484 is really good. I assume it should give a 10% return soon.

If you have taken my course:

Go for directional strategy for next month. Go for Future buy. The rest you know – it cannot be revealed here as this newsletter goes to all paid as well as non-paid members.

If Future is in profit great – we make money. If not then the options will make. Here is the asset quality news:
http://www.moneycontrol.com/news/buzzing-stocks/axis-bank-tanks-7asset-quality-analysts-still-bullish_3824081.html

So there is going to be some volatility I assume. And we make money if the stock is volatile – the direction does not matter.
Wait for at least 5% up or down to book profits. The more it goes up or down the better.

Now if the stock falls 5% or more. Close your trade in profits and BUY the stock in cash. 🙂

And sell when stock is up 10%. Make profits everywhere. 🙂

If you have not taken my course:

Just buy the stock in stages please. Do NOT buy in bulk at once. Learn to manage risk and buy with the cash that you can afford. Do not sell in loss. Average at 10% down. When you are buying a stock in cash your only aim should be to make more than 10% in a year. That’s good in my books. Axis bank will give that.

Divide the cash in three: Step one: buy now. Step two: add more at 435. Step three: add more at 392.

DO NOT buy more. Your sell will be at 10% above your average.

Thanks.

Part of newsletter sent to my subscribers today. If you want to receive such newsletters please subscribe your email. Form is available just below this article. Thanks.

Currently I am writing an article on why you should not invest in an IPO. However its taking longer time than expected.

In view of the upcoming IndiGo’s parent “InterGlobe Aviation” IPO – I had to send this email in a hurry.

Please DO NOT subscribe to this IPO.

DO NOT Buy IndiGo IPO as the company recently paid huge dividends to its owners just before IPO – it is not a good sign.

In any case subscribing to an IPO is a bad investment idea for retail investors. But I am sure many of you must be interested in this IPO as IndiGo is a profit making company.

Remember that DLF was also making huge profits when it came with its IPO – but see how it performed after the IPO. Still languishing.

If you really want to buy IndiGo share its better to wait for the IPO to be over and after couple of months you can take a decision on whether to buy or not from the open market. By that time you will get an idea of how the stock is performing, but please do not buy shares in its IPO.

Couple of months is also a very small time frame – but still its better than investing in IPO.

Let market decide the correct price in a few months after the IPO then buy/don’t buy IndiGo’s shares – but for now just DO NOT subscribe to its IPO.

Thanks.

When stock markets are stable its much better to short options than to buy even though VIX is low.

India VIX fell sharp today by 5.75% and closed at 18.02.

I have a feeling that stability that we were looking for since the last two months has come. In that last few weeks a 1% or more movement was very common. One day up next day down – very frustrating for buyers as well as sellers. When markets are stable traders can do some planning, but when its not, there is no plan. Every time you take a trade stop loss is hit. Buyers take a stop loss one day, next day its turn of the sellers. Stable markets are best for option traders especially the sellers. We will shortly know why.

VIX Was Just Not Falling

This again is very uncomfortable situation for buyers. When you have VIX above 20, you just pay too much as premium of options. In my view its not justified. If you are buyer and not comfortable paying a big amount for premium – just don’t bother trading. No one is forcing you to trade. I do not trade if I am not comfortable with option premiums. Whether buying or selling, if I am not comfortable with a trade I will not trade. That’s it.

VIX was not falling because of multiple reasons, but the main reason was no clear solution of China issue. Now that its over and markets have got some good news, we may look forward to a stable market at least for a couple of months.

Look at the image below:

India VIX Last Six Months Graph (source moneycontrol.com)

Can you see how VIX behaved since 24-Aug-15 (the day China slowdown news broke out and Nifty fell 6%) till 24-Sep-15? Before that VIX was averaging 15. People who took my course made good money all this month until 24th Aug struck (some people made good money even on a fall) and we were on our toes for about a month. Now again the clouds have cleared and its time to make money.

Since we are properly hedged, these troubles look small and eat only a portion of our profits. Look this is traders life and some months will not be good. You have to accept that and move one. But we have to make sure those losses DO NOT eat away months of our profits. That’s the reason my course teaches to hedge. You never know when it will work. 🙂

Here is a peace of advice: If you can identify these troublesome months and stay away from trading your returns can be amazing in a year. I agree though its very hard not to trade and also identify the troublesome months – but if you can stay away from these volatile months it will be great for your account.

VIX is a great indicator of trouble in markets. Hope you remember I sent a warning message on September 1, 2015 when VIX crossed 30 and I asked all of you to halt trading.

During volatile times the directional trades works best. Those who traded made money.

VIX Was High, Did Option Buyers Make Money?

I feel now VIX will come down and get stable. Because historically Indexes are suppose to trade in range 80% of the times thus favoring the sellers. Yep 20% the times the markets have to favor the buyers for poetic justice, but I seriously doubt last 1 and a half month buyers made any money. If you are an option buyer please be honest and let us know in the comment section if you made money last few weeks. If yes, was it significant like above 30% of capital traded? If no this was your best time to make money and if you failed during these times too, then Good Luck more though times ahead.

Important Advice For Option Buyers

August to September 2015 were buyers months. If you were unable to make money buying options during these months – then I bet you cannot make money buying options. Close your account and keep them in some liquid fund. Now VIX and Nifty are getting stable and it will be even more difficult for you to make money. Please do not mind the practical advise. I am trying to save your money and its for you to decide.

So Should You Sell Options Next Couple Of Months?

With trading there is no guarantee, but when markets are stable its more sensible to short options with protection. When markets are stable the theta of options will eat the premium of options as time passes and you can exit with profits. Of course trading non-directional is even better as we don’t even need to predict direction – its the job of the buyers not sellers.

Well my course teaches the best possible way to trade non-directional, but its for you to decide if its worth it.

Note: Part of newsletter sent to my subscribers on 12-Oct-2015. If you want to receive such newsletters please sign up at the end of the post.

Refer my yesterday’s newsletter on Infosys results: How To Trade Infosys On Quarterly Results Day.

There is no huge movement in Infosys today after the results.

When there is no movement there is no trade. Just 2% move is not considered a move if the strategy needs a movement. This is in fact true for any directional strategy.

Those traders who bought call and put options on Friday must have lost a lot of money, and those who sold must have made a lot. Why? Because VIX dropped and 1 or 2% movement cannot destroy the sellers.

Sellers mostly win. 🙂

However those who have taken my course can trade the directional strategy on stocks that move a lot after the quarterly results. But be prepared for the small loss that may happen if there is no movement.

How to counter the “no movement”?

One way to hedge the “no movement” is to sell some calls and puts slightly out of the money.

Now if there is movement – you make money from the directional trade – but if there is not much movement then the sold options makes money to compensate for losses.

The biggest mistake traders do is to buy ATM options before quarterly results. The stock needs to move at least 7-10% for the buyers to make money and it has to happen the next day which is rare.

Why such a huge movement is required to profit?

Because VIX will crash by at least 20% the next day as all speculations are out and options premium will fall. So you will see even if the stock moved by a couple of percent, the options did not move and the trade made a loss. However if a lot of movement comes – like more than 5%, the theta loses but delta makes for the loss and the trader profits.
On top of that inflated VIX means they pay a lot more to buy ATM options. It does not matter whether you have sold options to hedge or not, VIX will drop and loss will be more on the buy options. OK losses will be less if you sold options too – but we don’t trade to make losses.

After the Infy email I got a lot of WhatsApp messages from my paid subscribers (and also traders who haven’t paid) on which direction to trade.

There was a time when I helped people for free and it ate a lot of my time. I have learned to respect my time now so I do not offer advice for free and/or for trades that does not come under my 5 strategies.

However some of my paid subscribers ask for help on trades done prior to doing my course which are making huge losses. I help them as I feel its my duty to save their money. They have paid for my service and I am morally obliged to help.

Anyways, which direction to trade is a silly question because the trade needs direction, the direction itself is NOT important. So why bother?

Here is an important tip: When the news is bad the stock will crash, but have you ever heard a stock crashing up? Well even that can happen with the stock hitting the upper circuit which happens very rarely. But mostly its stock crashing like 10% or more if there is a bad news. If its good news, the stock at the most will go up 3-4%.

This is where money can be made in directional trade. Just be on the buy Future side always. Check the strategy and see if stock crashes even 7% – you can make at least 20% on your investment in one day, though you will make huge losses in Future – this is exactly you want. 🙂

This is important from the risk management perspective – do not try in more than 4-5 stocks in a quarter. Limit your losses – but if the stock crashes – its a home run. Enjoy the profits.

Thanks again for being my subscriber.

Learn Conservative Option Trading Today and learn to make small but consistent profits from trading:

More testimonials added:
Page 1, Page 2, Page 3.

Hey, I am getting testimonials so why shouldn’t I add them? Also I DO NOT ask for testimonials by calling – people send me because they want to thank me. 🙂

Thanks to all those who have sent me testimonials. Please keep them coming.

Pay for course here.

Part of newsletter sent on Sunday, October 11, 2015 to my newsletter subscribers. If you want to receive such newsletters please subscribe at the end of the post.

Read to know how you can trade Infosys (Infy) on quarterly results day – this can be traded after the results are declared.

Refer my yesterday’s email on trade to be taken on Infosys tomorrow.

One of my subscribers informed me this – “Infosys results are to be declared before opening of Markets on Monday. If the strategy is on Infosys, can we still take position after results declaration as market would have already moved in one direction.”

I have confirmed and I see that Infosys will announce results at around 8.45 – 9 am tomorrow. In that case the movement will occur as soon as markets open. There will be a gap opening. The directional trade of my course needs movement – it does not matter where. Those who traded on Friday will get lucky. If the movement has already happened, then its better not to take that trade.

The news is out by that time means VIX also would have dropped as on Friday it rose by almost 20% before closing. So there is no point in selling options. It is now almost 3 weeks to expiry – we have enough time on hands.

How To Trade Infosys On Quarterly Results Day

If the Infosys drops too much say more than 5% – just buy a Future and hedge with buying ATM PUT in the hope that the trade will be profitable in the next few days.

And of course if Infy opens more than 5% up – sell a Future and buy ATM call in the hope that Infy will fall and the trade will be profitable before expiry.

Where to take profits out?

Since I am a 3% man – take profits out when you are making 3% on margin blocked. 🙂

What is the maximum loss in the trade?

The premium you pay to buy options – that’s it – therefore you can stay long in trade.

When to take Stop Loss?

No need since the trade is hedged and max loss is defined.

Why am I taking the opposite trade?

Infy traders are known to give knee jerk reaction to quarterly results which makes the price either too cheap for short term or too costly – both will correct over time.

What happens if you make a profit?

Just say a Thank You. That’s enough for me. 🙂

What happens if you make a loss?

Yes that’s a possibility that’s the reason I am asking you to hedge and not trade naked. The real idea is you learn the benefits of hedging.

Do not lose money friends – the stock market is there to help us increase our wealth NOT destroy it. So please trade sensibly.

Still I will be sorry if you make a loss in this trade, but my intention is to help. Stock market trading is a risk and that risk you will have to take. However with hedging your risk gets minimized.

Thank you Mr. Purushottam. Your email helped me to inform others well before opening of trade on Monday.

Please keep such emails coming. Though I read a lot, its humanly not possible to read everything related to stock markets. If you send me suggestions I will be able to help others as well. That way we all can grow. Its not possible for me to keep track on everything so please inform me of any events that may shake markets or a stock.

By helping others you always feel good.

Thanks for being my subscriber.

Learn Conservative Trading Today and enjoy the benefits of Hedging and conservative trading.

Note: Part of email sent to my subscribers on 09-Oct-2015. If you want to receive such newsletters please subscribe at the end of this post.

On September 4, 2015 I had recommended to buy ICICI Bank shares. On that day the share was trading at 256.

You can read the email by clicking here.

In that email I had said, “If you have free cash you can buy ICICI Bank equity shares in cash for a quick 10-15% return probably in 2-3 months.”

Right now ICICI bank is trading at around 285.

This is a return of 11.32% in just 35 days. 🙂

If you listened to my advice and bought the stock, please sell and book your profits.

11.32% return in about a month is a great return.

Hell, I made some more profits here. 🙂

Why I Did Not Buy Options of ICICI Bank?

That is because my view was bullish but I had no idea when the target will be hit. Like I said in that email my view was that it will take about a couple of months or more to hit that target. Now if I buy options and the stock does not move for a month then I lose all premium paid for the stock. Mind it ATM (at the money) options on stocks are very costly. I did not check but it must be close to Rs. 20,000 for one lot. So what happens is my view is correct but I still lose 20k – that’s pretty bad. It is no good situation to be in. I mean your view is correct but you still end up making a loss. If my view is correct I should be able to make money – it does not matter to me from where the money comes. For me a profit is a profit – it does not matter it comes from stock buying or option & future trading.

Why I Did Not Buy Futures of ICICI Bank?

Agreed had I bought Futures my profits would had been much more, but again it was not an option. Today if the stock was at 200 – I would have been sitting at a huge loss. This is something I really hate. I am OK with a small loss but I will never take a trade that can make a huge loss. Yes I could have hedged my Future trade by buying a Future and buying a Put as well – but again that would mean that the trade will finish on the expiry day of September 2015. I will have to take profit or loss on that day whatever it is. Since my view was that the stock will take at least 2 months to reach there – my trading plan and risk management was not allowing me to trade Futures even with hedging.

It is a totally different thing that the stock hit the target in one month. But I don’t look at it that way. I know I could have been wrong – and on something that’s very predictable I do not want to lose money there. I am willing to wait for my profits. Also I can be wrong next time. So I will trade only what is the best possible trade there. I will not force myself to trade options or futures or cash. I will take my view, and plan accordingly without any bias towards the instrument I am going to trade.

It is my money after all and I will trade what is the best possible trade for me at that time.

I am now looking to hedge my mutual funds profits here through options, as I have decided on a 10% return, I cannot let go a 6% return which it is currently at right now.

If I do a trade will surely inform you.

If you have not taken my course I strongly suggest you do it now. Lot size is increasing next month 3 times on Nifty. So if you are losing money I bet your losses will increase 3 times too. Do not let that happen. Invest in knowledge. Please do not waste your time and money with tips providers or your brokers’ recommendations. Only knowledge can help you make money from stock markets. And if you think you cannot learn then sorry you are mistaken and are underestimating yourself. If you decide to learn no power on this earth can stop you from learning.

Click here to read about my Conservative Strategies Course Now.

Hope you are enjoying the newsletters and making some money too. 🙂

Thanks for being my subscriber.

August and September 2015 were really though for both option sellers as well as buyers. When the volatility is just too high and not willing to go down then its not a good sign for option sellers, as even if the time passes option prices do not melt.

For buyers its the stress rather than the volatility. Simple reason being they pay more to buy options – that’s stress. When VIX was low they never paid so much to buy an option of a similar strike. Say ATM (at the money) – when VIX was hovering around 12-15 they only paid 120-150 for ATM option. VIX at 20 means they will have to shell out 200 or more points to buy ATM option.

Exactly 4 weeks to expiry Nifty ATM 8100 CE is quoting at 174.00. VIX at 19.88. This after two weeks already passed since the start of October 15 series.

So lets assume buyers were lucky last time and made a cool return. At that time VIX was low and ATM option was quoting at around 150. If they take it out at 200 – a 50 points profit. Next month when VIX is high they need to shell out the principal + the profits made from previous trade to take a chance. Now when this option reaches 150 – the buyer is not willing to take a loss since his reasoning is that after all at this point he is breaking even and can therefore wait. Unfortunately one day movement against the buy option will take the option to 100 and he is staring at a loss of 50 points and two months time gone.

VIX high is very good for option seller as now they get more money for the same risk they are willing to take. However there is a new problem they have to face and that is of huge volatility in markets.

If you look at Nifty movement last 2 months the high was 8563 and the low was 7545. That’s 1018 points from high to low. In percentage terms fall was 11.88%.

This was a great trading opportunity.

What Can You Do When The Fall is More Than 10% in Index

See we are talking about an Index, and not a stock. There is more of a chance of recovery in Index than a recovery in stock. And I am a person who look for such opportunities and what can be done to use these kinds of opportunities.

If you remember I sent an email a few days back on what I traded when Nifty was around 7545. You can read it here: http://www.theoptioncourse.com/how-to-trade-mutual-funds/

Here is a small snippet from the post on what I traded:

Instead of doing FDs, I park extra cash in ICICI Prudential Flexible Income Fund – its a liquid fund giving around 9% return. So the large cap fund had to be from the same fund house as switching is possible in the same fund house.

The best large cap fund as of now in the ICICI mutual fund house is the ICICI Prudential Focused Bluechip Equity Fund.

Source and Target decided.

Here is What I Did

I logged in my account and switched 50% of the cash from ICICI Prudential Flexible Income Fund to ICICI Prudential Focused Bluechip Equity Fund.

Well at the time of writing Nifty is at around 8120 levels and the ICICI Prudential Focused Bluechip Equity Fund is giving a annualized return of 78.14%. Point to point return in 6%. 🙂

The trade was done on 4th September 2015 – today is 8th of October. 6% return in 34 days. 🙂

A lot of people will do this and make a profit. And next time when they get an opportunity they will shift all their money to some fund because they made a quick profit last time. This is where traders do mistake. They do not define risk and once they are in profits get into the next trade with all force. Then they lose it all.

Look at how I only took a part out of holding in my liquid fund and transferred cash in an equity fund.

Why I did Not Buy Options When I had a Bullish View

Read that article again. My only wish was to bet the returns given by the liquid fund. That’s it – no greed here. That too on a part of my holding in that particular fund.

Lets do some trading on options:

On that day (4th Sep 15) the 7600 CE was quoting at 220. And at expiry day (24th Sep 15) it closed at 269. Well great if I held it till expiry my return would have been 22.27% in a matter of 20 days. But the big question is how do I know?

You know what on 07th Sep 2015 the same option was quoting at 154.60. Hey you really need heart not to take a stop loss at that level. At that time as an option buyer my only feeling would had been what if this option expires worthless?

And I am 100% sure I would have taken a loss and exited the trade. And the loss would had been 30%. So 30% of a big chuck of my saving gone in 3 days. 🙁

These are the situations I will avoid at any cost. I will not let greed overtake me even if there is a 99% guarantee that a particular trade will make me money.

I will protect my hard earned money – divide my risk – and take a calculated risk with my trades.

Why I Did Not do Both The Trades?

You mean trading the mutual funds and also buying the option. I will NEVER increase risk in a particular view. Here my view was for 1 year not 30 days. And once the target was clear it did not allow me to buy options. Today if Nifty was at 7400 – still I would have been happy as I know I still have 11 more months to hit my target. Even if it does not hit I can still hold it longer. With options however there is a time limit and that time limit is very short to make a trading decision.

I am only a Future and Option Trader – Please Tell Me What Can I Do in Such a Situation

If you find a great opportunity in a stock or even Nifty there is nothing wrong in trading it with derivatives but you must ensure 2 things:

1. Risk is defined (its not unlimited and also it not very large so as to impact your demat account)
2. The trade is hedged (for overnight protection)

I mean I have told this thousands of time and I tell it again to Future buyers and Sellers – hedge your trades with options. There is a great hedging trade in my course that you can trade if you have done my course OR at least buy ATM options to protect unlimited loss your Future can take.

If selling Futures buy ATM Call and if buying Future buy ATM Puts. There you are your unlimited loss is not limited to the price you paid for the options.

Next time Nifty falls 10% within a couple of months – come back and read this article. 🙂

Well enough for today.

A lot can also be done when Nifty moves 10% up within days – that is a shorting opportunity. Well that’s for another day.

This is how some people especially the young ones who were told by, ahem, well “someone” that lots of money can be made in the stock markets very fast think like this.

Read the WhatsApp message I got in my mobile today and enjoy.

Hey kid, to make 50 lakhs from 30,000 in 2 years will need a compound return of 1191% in both the years. 🙂 The best of the best option traders will fail to match even a tenth of that. And Warren Buffett the best stock market investor in history (who never traded options, futures or any other derivative) is currently averaging almost 30% a year, I think, since 1950. Last 15 years return of his company Berkshire Hathaway Inc., is a bit less that 25% compounded annually. Still amazing. Compare this to the aspirations of this young kid. 🙂

Well do you think 30% a year is less? If someone started trading in 1950 (the year Warren Buffett started trading), with just Rs.1000 (one thousand only) and made a modest return of 30% a year, today after 65 years, his investment would be worth Rs. 25,486,951,936.00. (More that Rs.2,500 crores – yes more than Two Thousand Five Hundred Crores). Calculated using this compound calculator.

There was another WhatsApp message by a young trader just out of college who told me that “positional trades are boring”. He did not take my course because it teaches positional strategies only. He was only interested in Intraday strategies. Well really? I can bet that at least 5% of positional traders are making money but 99.99% intraday traders are losing – yet the young ones love intraday trading.

Agreed, intraday trading is more fun. But we get into trading to make money not to have fun isn’t it? That is one reason why you see thousands of tips providers offering tips on Intraday trading. How many of them offer positional trading tips? I think less than 10%. It is easy to sell Intraday tips, and very hard to sell positional stock options and futures tips. Business goes where money is there. It is a different story what happens after you pay them.

Intraday traders hit the reality once they lose 1 or 2 lakhs. Some are stubborn and end up losing more than 2 crores.

Stock market is a business. Just because entry barrier is easy does not mean it’s easy to make money in Stock Markets. On the other hand, those who understand, have the knowledge and discipline to invest, and show patience can grow their wealth over time.

The real reason why people lose money in stock markets is that they have huge expectations, they are greedy and they just do not have patience. They all want to get rich in one trade that gets over by the day markets close. How is that even remotely possible?

Like the story “slow and steady wins the race” – it’s the same in stock markets. Those who invest slowly, trade with discipline and diversify their risk are the ones who will make money.

Those who come with lakhs and risk crores to make crores, lose crores. Stock market is NOT a place for greedy people and people who want to get rich quick. This is one market where rich or poor does not matter. The only thing that matters is the trading strategy.

Manage risk, take calculated risk, know where you need to get out of trade and grow your money slowly. And yes compounding is also very important, else you will end up having some fun for years and end up with nothing to show. If you do not compound, even if you are making Rs.100 a day, you still end up making the same amount years from now.

Once you get to know the strategy that works for you – just start increasing your trading capital on that strategy. Again slowly – like 1 lot increase every month. Remember one lot is not a small amount – it is going to be more than 5 lakhs from November 2015 once the new lot size comes into effect.

Some people think that the margin blocked is the max risk. No its not. When you are taking unlimited risk like trading Futures – you can lose more than the margin blocked. Ask traders who get a margin call. A lot of them got that call when Nifty nosedived by 6% in one day on 24-Aug-2015.

That again is a big reminder how hedging your trades is very important if you are leaving them over-night.

I got a call from a trader the day Nifty fell 6%. He made 3 lakhs selling naked options in 2 months, and that day was sitting at a loss of 13 lakhs. He got a margin call from his broker and he called me. Tell me how can I help? Of course I cannot give him 10 lakhs. 🙂 Though I gave him an idea, but to be frank he did not contact me after that so I do not know what happened to his trade.

Conclusion:

The motto of the post is that it is possible to make a lot of money from the stock markets – but you can’t do it by speculating or taking tips from anyone. And also do not expect that you will get rich in a day or even a few months. But you can get rich, very rich, if you are willing to put in efforts and have patience to wait for a few years to make it rich.

So, Stop Dreaming – Start Working!

Note: Newsletter sent on 29-September-2015 to my subscribers.

Refer my yesterday’s email: What to Trade Tomorrow RBI Policy.

RBI surprised everyone by cutting repo rate by 50 bps. There was a knee jerk reaction to this and within a matter of seconds Nifty jumped from 7700 to 7800 exactly at 11. However after that there was a slight drop – obviously a 100 points run will trigger stop losses of a lot of trades.

Interestingly VIX did not fall till around 12 noon – but after that VIX stated falling and Nifty rallied from 7762 to 7917 – almost 155 points – that’s 2% Intraday.

INDIA VIX closed at 21.57 which is 0.46% lower than yesterdays close. Frankly I was expecting more fall, but I can assure you this will fall further in days to come.

Those who took this trade – “If Nifty going north (up) – Sell ATM Put and buy OTM Put”, would have made good profits. Unfortunately from 11 to almost 12 Nifty kept falling, so I am sure some trader may have taken the opposite trade. But I am sure they experienced how the hedge saved them from a huge loss (if they hedged) – on top of that VIX falling ensured the loss was minimized.

I hope you learned two lessons out of today’s trade:

1. Sell when VIX is falling and Buy when its going up, and,
2. Hedge your trades so that the risk is managed.

Remember I also told two methods for taking profits. The first one would have given the maximum profit to the trader – After some time if the trade is in 5-7 points profit, increase your stop loss by 3-5 points until Nifty breaches it. Close the other (buy trade) as well. This will give you the maximum profit for the day. (Best method)

This would have hit SL when Nifty was around 7900. See how after 7917 Nifty came down and closed at 7843.

Frankly if you ask me Intraday trading is best avoided. It is a full time job and it still ain’t easy to make money Intraday. Intraday is more about practice than technical or anything else. Scalpers are the ones who can make money trading Intraday. But its more of an art than science. And its a full time job.

I am sure there are many traders (you could be one) who have a job or a business and also trade Intraday. This is dangerous.

Think seriously. How is it possible that you are present at two jobs at the same time and doing great at both? One or the other will suffer – usually its trading.

If you are one of those who are on a full time job or business and trade Intraday then my request it to think again. If you are doing good, then congrats, continue. But if you are doing this since the last 3-4 months or more and losing money than stop trading Intraday right now. Hope does not make money.

And if you decide that you will leave your job to try Intraday than I would suggest get another Job that you love. But do not try Intraday trading by leaving your job. This will prove to be a financially destructive decision. You may repent your whole life.

Getting a job paying 30,000 a month a very easy now days. But making almost 1500 everyday trading is very difficult. (There are 22 trading days in a month so you will have to make more then 1000 a day.) And within 6 months you can jump to another Job paying better or ask for a salary hike. Here you have just one Job and if it sucks you are gone.

Yesterday I got a call from a young buy just out of college who wanted Intraday tips. I asked him why he is not looking for a job. His answer was he wants to trade Intraday with Rs. 20,000/- in his trading account and want to make a lot of money in a few months. I told him to buy some books on Stock Markets and discouraged him from taking my course.

With 20,000 you cannot start a business – so how can you make a significant income with that money? Even if your return is 30% in a month you only earn 6000 a month and if you lose 50% next month your trading capital is now worth 13,000. You will not have the courage to trade again.

Then I get messages like “save me Sir lost 2.5 Lakhs last week by buying Infy options that expired worthless”. My eyes got pooped out – 2.5 lakhs gone in a week. Even if this guy earns 5 lakhs a year, he lost 50% of his salary in just a week.

I mean you must have that real guts to even buy options worth 2.5 lakhs. If this guy hedged his loss would have reduced by 80%. He felt bad that he did not hedge and is still thinking about taking my course. 🙂 Because I am sure he is now in a revenge mood – he will surly bring more money in his trading account to try to make 5 lakhs in a week. And you know the results.

After losing 10-15 lakhs he will probably take my course. 🙂

Still traders do not want to hedge. Strange!