- Always, play
with 20% of the available funds. That to delivery based, if the
situation warrants, or else you can square it off.
- Choose the
right stock, since a fall from entry point would mean ultimate
marriage. One would have to take delivery, and play another 20-40%
and operate the way out. Another fall can take the balance funds.
- So once you’re
stuck with a share, you may have to operate in that scrip for
almost 6 months or even 1 year to get out, with ofcourse, atleast
50-75% returns, not bad for one year right?, Very safe too.
- So scrip selection
and fund management is the only key to this game, where profits
are occasional interludes in this strange game of losses.
- One’s long,
and books losses. One’s short and also books losses, and a
monthly high low is about 20-30%. So, why not try to tap atleast
10% in 1 month? After all it’s a lot for a month!
- See, in any
business, one has to set up an infrastructure, have a lot of
overheads, involve a lot of capital, procure / produce a product,
market it and give 30-60 days credit and make a profit, which
takes atleast 2-3 months. So an average turnover should be around
4-6 times the capital employed, and with depression or a huge
interest outgo, the net profits would be around 40% annualised.
Now, we play this game, with an urge to make money in an hour? 3
hours? 5 ½ Hours? Or maybe a week? Not fair right? So always
wait for a correct entry, patiently for a week or even a month.
Sometimes, even months of waiting can fail, like tatatea. After
a wait from Feb peak at 600, non-stop fall and from March,
consolidation for 5 full months at 350 levels, now, even that
entry at 320 would need to be averaged at 254 (10 year Major
Monthly support line), and below that it would mean 233 / 224 /
211 / 185. So one needs a lot of time, patience and money to keep
buying and wait for a couple of months to get 40-60% returns.
- So keeping all this
in mind, try to buy in the following pattern to always be a
winner.
-
buy 10 @ 100
-
buy 10@ 90
-
buy 20@ 81 trade it at 90 if it re-bounds technically.
-
Wait and buy again if it falls to 81, same 20 shares.
-
Buy 40@ 70-72. Trade it at 75-80 levels 40shares everytime.
-
By this time, it should have been a month, and with so many intra-day
trades, the cost for 80 shares should be well below the present
market price. But bear in mind that you will start selling only
above 100, whenever that happens, until then you can keep on
trading in that single stock all year through.
-
Another, pattern is that say, in SBI, RIL, TELCO, buy 10 shares
for every 10 rupees fall & sell on every 10 rupees rise. This
works out every week as they all move up & down atleast by 10
bucks EVERY week. So you can enter in the mid-price and keep
trading until the year low happens, eventually, once every year,
and buy a higher volume there for stock-in-trade and keep on
trading until the year high, which also happens once in a year.
(I’ve seen this happen in the past 2 years and these methods
seem to be sure fail-proof methods) But to do this, one needs to
control to 2 important values in life, Divorce Desire &
Greed, and Marry contentment and satisfaction from what you get.
One may see infosys surging or Satyam zooming and Himachal
shining…..but if you’re a trader in SBI, then that’s
all you should care about, and let the BSE/Nasdaq/INFY/SIFY/EURO/USD
and whatnot go to hell for all you should care. There can never
be a loss, since you use last-in, first-out basis of trade, and
if you buy for every 10 bucks fall and sell for every 10 bucks
rise, how can you ever lose? SBI would need at the most 30000
bucks even if it comes to 50bucks. In the long run, over a
year, only those with a discipline of taking deliveries and
averaging their Blue-chip stocks (not the junk stocks) win in
this game, as many a foot has trodden to the broker’s
office, but only those who invest come regularly, and new faces (traders)
come and go, never to be seen again…….!
-
For this reason, I always choose the BSE-A group stocks as you
have the option to carry-forward all through the year, if you
keep on trading, that is. (An idle position cannot be carried
forward for over 10 weeks as per rules, but your broker may
permit that, if there are others trading in that scrip during
that 10 weeks).
-
Another thing, in this type of strategy, there’s no question
of any stop-loss orders. After all we want to make profits and
absolutely NO losses at any point of time, right?
-
Last but not the least, a compulsive trader is always a
loser and a conservative trader rarely loses!
-
Winners never quit and quitter’s never win. So, try trading
along the lines mentioned above, and bring name to this business
of trading in stocks. It’s always shunned and treated as a
gambling joint, and at times it’s disgraceful when someone
calls it as a pure game of luck and like a card game or like the
horse-races, ‘cos 80% of the guys are trader’s who don’t
mange their funds. Since they book losses, nobody respects
a day-trader much, even though he may trade profitably on these
lines. Finally, you’ll be compared with a “smart”
investor guy who sat at home and bought Infosys at 20 bucks and
Satyam at 75 bucks and has make a killing with the bonus and
stock-splits, blah, blah,!
There was a
guy who bought on Bonus News and sold before bonus ND. He bought
Cipla at 1500 when even the seasoned investors thought that the
move from 600 – 1500 meant that the bonus is discounted,
hold your breath, he sold around 4000. Then moved to GujAmbCem at
520 & exited at 620 or so, then Aptech at 2100 and exited at
3000. Guess how much he made on 2-3 lacs? A whopping 10-12 lacs
in 1 year! All he did was 3 trades in 1 year! Now who’s
smart? Him? Or You & me as day-traders? Now whatever you cry
or scream out loud or call him a dumbo, for he could have bought
Cipla at 600 and sold GujAmbCem like I did, by carrying forward
in Badla and sold for 410 i.e 820 equivalent, and could have
waited and bought Aptech at 1500, the fact remains that he’s
still got money almost 300-400% appreciated! No, he dowsn’t
know ABC about technicals! He reads about the company and
believes every misleading line in the stupid newspapers and
magazines! I saw it work with my own eyes in the past 1
year. So one can even try that bonus strategy and try to do just
5-6 trades in 1 year. And, oh, by the way, he puts all his eggs
in 1 basket too! God, quite unimaginable even to techies! or ANY
FII or ANY FUND MANAGER!
