Quotes.

On Risk
Worry is not a sickness but a sign of health. If you are not worried, you are not risking enough.

Put your money at risk. Don't be afraid to get hurt a little. The degree of risk you will usually be dealing with is not hair-raisingly high. By being willing to face it, you give yourself the only realistic chance you have of rising above the great unrich. Worry is the hot and tart sauce of life. Once you get used to it, you enjoy it.

Minor Axiom l
Always play for meaningful stakes

Minor Axiom ll
Resist the allure of diversification
( Because it forces you to violate precept minor axiom 1 )
( Because it creates situation where gains and losses cancel each other out.
( Because you end up with too many balls in the air )

--ZurichAxiom

On Hope
When the ship starts to sink, don't pray. Jump.

Learning to take losses is an essential speculative technique. MOST never learn it. Take losses at once and move on. Take small losses to protect yourself from the big ones.
Beware the 3 obstacles to jumping ship:
- fear of regret ( that the loser will turn out to be a winner when you've bailed-out )
- Unwillingness to abandon part of an investment ( become willing to abandon )
- Difficulty of admitting you made a mistake.

Minor Axiom lV
Accept small losses cheerfully as a fact of life. Expect to experience several while awaiting a large gain.

--ZurichAxiom

“There is always a reason for fluctuations, but the tape does not concern itself with the why and wherefore. It doesn’t go into explanations. I didn’t ask the tape why when I was fourteen and I don’t ask it today at forty.”

 -- Jesse Livermore

Money management (No nonsense Mathematics):

Capital: 3.5 Lac

Risk per trade:  1% i.e. 3500 INR (Reduced from 1.5 to 1%)

Calculate net profit / loss at end of every month and if in profit add 50% of profit amount to risk to take per trade.

E.g. Say I make 20000 INR in a month. Then I will add 50% of this amount i.e. 10k to Risk/Trade. So risk per trade would be 13500.

That’s the strategy to scale.

Currently I am undercapitalized. Hence would not want to request a Pay-out at end of every month. Banking the money is very important. Even the greatest like Jesse made a mistake of not taking the money home. I should not make this mistake. 10 lac is the amount I am looking forward to. Once that figure is achieved then would plan a strategy to take home / invest the profit is other asset class(Less risk asset class that is)

Also there would a hard stop in place. Meaning If have X number of loss making trades in a month then I will not trade for rest of the month. Just to protect one bad month from wiping me out.

There are no targets that I will like to set for myself. I will take whatever markets have to offer. I am quite sure that if I get it right I will have satisfactory amount.

About me...

I was born in Mumbai, brought up in Nasik. I hold B.E in computer science. Started trading since age 16, been passionate about it since then. I started well but lost all I made and more in May 2006 crash. I learnt a few lessons the hard way. Good thing about it was that I had nothing to lose in 2008. I have been making small comebacks every now and then. I completed B.E in 2010 and took up a job Mumbai as a software developer. Software development does interest me but trading amuses me no end. If I don’t make it as a trader then I would like to be in IT industry.

 I have been into software development since 3 years now. I have quit my job now to chase my dreams. I will try and make a living out of trading. There were many choices to choose a career path. But only three of them made it to my list:

1.       Trading

2.       Higher studies (Masters)

3.       Continue as a software developer

I gave all of them a good thought. Trading is what I love to do. Higher studies option was easy to get rid of. Because I believe degree is just a piece of paper. Education is not knowledge. He who wants to learn will learn anyways, colleges are not required for someone who is determined to learn. Also, things which I want to learn will not be taught anywhere. Also it will take 2 years. These two years are very important for my life, can’t waste it on education. Other option was to continue as software professional. I like it but I like trading even more. So I have taken a bold decision to risk all I made in last three years. I have no debt now. I have paid my education loan and I don’t owe money to anybody now. I am undercapitalized, but then I can leverage my cash. Also, I will be trading intraday so I will have enough to pay the margins. This doesn’t mean that I will be ruthless and be stupid to put it all on line for every trade. My past experience helps here; I have done the Math and won’t risk more than 1.5% of my capital on any single trade.

No one seems to support this decision of mine. But it’s my decision and I will stand by it. Family and few close friends oppose this decision calling me a gambler. I do understand that I have been there before and lost everything I had on two occasions. But I have put in efforts this time and have learnt lessons the hard way. And I want to give myself a chance to try again. There is a lot of risk involved and I know it. If I don’t take the risk now then I won’t be able to make it at a later point. I am 25 and don’t have any responsibilities as of yet. As I grow older responsibilities will come in and then I won’t be able to risk it. Also trading requires full time commitment so can’t do anything else along with it to have a steady income. That’s a part of risk I need to take and I will take it. It’s all about probability and I am not sure if I will make it. Chances of me making it I feel are 55%. Let’s see how things pan out. Decision remains and I will risk it all.

Jan 1 trade.

Net loss 1344.

Purpose...

This blog is like a journal to me. I will jot down anything and everything I feel like. Things which I would like to archive and which I may forget after a few years. I would be happy if someone finds it useful.

Gyaan.....

Following are the lessons I learnt the hard way. These are the things I want to keep in my mind while trading:

1. There is no holy grail. Period.
2. Never borrow money to trade.
3. No broker is there to make you rich.
4. Learn Compounding - A 100% Profit in 3 months is better than 1200% Profit in 3 Yrs.
5. Losses are due to our own FOLLY. Take responsibility. Decision to pull the trigger for every trade is yours. Hence, never blame anyone (tipsters). Blame game never got anyone anywhere.
6. Cut the losses immediately when the reason/reasons you entered a trade do not exist anymore.
7. Markets will always remain uncertain, live with it. Stay away from people who say that particular scrip will go to level ‘X’ in certain period of time for sure. Or when you hear words like 100%, 110% or ‘I can give you in writing...’ you know that someone without knowledge is in action.These people don’t know that they don’t know! How can anyone be SURE?
8. Don’t be a compulsive trader. Trade only as per the plan AND when risk: reward ratio is favorable. Markets are ocean of opportunities, there will always be another day. Markets are here to stay. Game will always be the same only the players and pockets will change.

My trades 31 december.