Do you have a plan?

A brief history of how it went from trials to absolute fun for me.

  • Flushed down the drain fundamentals. Reason - Too much time spend to make a decision, each time and every time. No guarantee that I still got it right.

  • Divested investment thoughts. Reason - Investments make money only when market goes up. In trading money can be made whether market moves up or down and even when it is flat.

  • Ignored news based trading. Reason - I was always late reacting. Some one knew it before I could profit from it after hearing the news.

  • Blocked Tipsters. Reason - They sent calls after they were in the position. They exited before I was alerted. Their website showed profit while I booked losses.

  • Forced stop market watching from open to close. Reason - Physically very demanding.

  • Divorced discretionary trading. Reason - Not objective enough to be convincing enough.

  • Said No to stock trading. Reason - Difficult to backtest with data adjustment issues (Splits / Bonus). Liquidity / Circuit freeze issues. There is always someone with more inside info.

  • Dumped into dustbin my profitable 5-min time frame Nifty technical trend following system. Reason - I noticed data changing after market even though datafeed was from NSE authorised vendor.

  • Zip locked trading activity from parents. Reason - They got worried and asked are you not getting salary as an engineer ?

  • Ditched futures and fell in love with options. Reason - Better risk management and lower transaction cost in a zero sum game.

Now 15 min a day, trend following Nifty with Daily charts, buying naked weekly options, I have a ball.

How about you ? Have you figured out your trading plan ?

  • Yes
  • No

0 voters

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Really good points. Thanks for sharing. Yes almost every point you listed applies to me as well in different capacities.

Except for :

I did the opposite of this. Trading never managed to become the primary activity despite my affinity towards it and in my plan was never going to be the main act. It was a side quest. This is still reflected in my trading style. I do not concern about what the rest of the market is making. I enjoy spectating it, watching the multibaggers and multibeggers, the spice. But that is not my money to count. I just care about collecting some premiums every week. So moneys made from trading was always meant to supplement and not replace anything for me. I also do not have yearning for a specific corpus or retiring early, financial freedom or any of that flower power hippie stuff. So its just gonna be week after week of collecting premiums from hereon. But this Sisyphus is happy doing it.

Yes, Best. When I think of markets or sometimes when questions are asked here about bonds or some other sad instruments, I have to remind myself that yes, this too is a valid part of making money from, however, cringe they might be.

Derivatives were game changing, never switched to anything else ever again.

This I have yet to commit to, I understand the theory behind this but haven’t gotten myself to practice it. But I know this has to come within the plan someday. But I won’t hurry it up, cuz its fun and not too much trouble for now - Default Factory settings.

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Nothing but just learnings from your points.

This learning came to me with an experience. It’s good to shut the trading system once you are done, greed, fear and revenge always ends up with a loss.

I would not say that I have a perfect trading plan. Alot to commit and improve on the mistakes, analyze and define a plan. Would take reference from your points as well :slight_smile:

I think many new traders are understanding the fallouts of buying options. It is no wonder there will be such posts of “miraculous earnings” using buy options, “hold till expiry” and ofcourse “zip lock from parents”(Basically buying lottery tickets with all my money and not telling anyone just in case they might suggest otherwise).
Guys you need 300 points move after buying option just to breakeven. Beyond that too rarely options will allow you to hold on to the gains.
Even multi level marketing guys sell you the moon, here atleast it is real money these guys are posting such messages for.

Its a process. There is no magic involved. I don’t simply buy an option and hold till expiry. I buy ITM calls when my software gives long and I buy ITM puts when my software gives short. I exit when the reversal signal comes and take a new put / call position. I book my profit and reduce risk every time my option contracts moves Rs.100 from entry price. That’s pretty much it. I have experimented, observed and only then am I inferring. Proof of the working concept is in the P&L below.

For the record, “ziplock” was when I started trading the market. Now they are pretty happy as they know that I am not betting as if in a casino. Any trade be it on equity, f&o is gambling if there is no sound logic and a robust process to back that decision. I don’t gamble in the market. I place educated bets constrained by a risk management framework.

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@MarginCaller trading is still a side business for me. There is a regular income from my engineering job at this point. A surplus part of that income is directed to my trading account as savings. My parents initially got bit worried because it was the first time that any one in my family had deep dived in to stock market.

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All Roads lead to Rome, so long one walks.

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N number of ways to stock market success. The important thing is to find and then keep walking through a road one is comfortable with.

Quite inspiring to see that you have a detailed well-analyzed trading plan which fits best for you. This according to me is also a part of a better trading setup as you know what’s not working, cut it out, and be more efficient.

I still do this. Maybe because I like reading out on the numbers that are put and their performance over the years. I think if I derive a full-proof trading plan, one of the points would include reading on the numbers.

Most of the points you mentioned are the first steps of a trader in a long journey, There are many things when it comes to other points which I have a slightly different opinion :- :blush:

I cannot imagine a system without inclusion of stocks they provide stability for me by universal law of diversification trust me diversification is not just only for investors it works even more for traders, while i agree there might be issues like you mentioned but in a long run good trending stocks ( even 20% of total) can overcome the cost of issues you have mentioned here

Options are great, I use both since I have a robust risk management plan Futures never gave me a pain , they provide me scalability and they are very simple to adopt in any kind of strategy

Well This is how we roll :heavy_check_mark::bulb:

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After three years of trying different things and surviving the complicated jungle (of FnO trading) without getting killed (i.e. blowing up) though getting bruised badly often, my plan from here on is to give up all the complicated plans and follow but just this one: Support/Resistance with a tight stop loss and no target but trailing stop loss, observing more and playing less, using cash/futures and using options only either for hedging futures trade or for spreads (no naked buying/selling of options). Let us see how it goes. :slightly_smiling_face:

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Honestly Ravi bhai every word that I kept reading made me feel like I have written this. You have done good by accepting what is obvious and weaving a way around it. Great. .

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I can relate, I know you will do great now, you have find most of the things that did not work and the one which works for you :+1: give it some time and success will follow

With My experience I can assure you the things which you mentioned works best are :-

1.0 Support and Resistance
2.0 Observing more Acting less
3.0 Trailing stop loss - Most Important

I want you to explore :-

1.0 Trading non related markets - you never know which one can give best trends ahead
2.0 Robust Risk Management - know not only when to reduce but also when to go Big
3.0 Journaling - Helps to improve and learn from mistakes

Trading needs lot of skills but you dont have to be perfect in every skill but you need to know about all of them

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@AnshumanSharma Glad you liked it :smiley:

But so far I have been a net loss making trader and I have no proof whether this will work :pray:

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@Rupin_Joshi

Thank you so much !
I will explore the three things mentioned by you. :slightly_smiling_face:

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@Ravi18 bhai faith is a hard to thing to afford for a trader and comes at a price with hard experiences, but stay positive and keep trying.

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Trading losses are an inevitable aspect of the world of trading and investment. It requires experience and a solid trading mindset to contain your emotions, learn from mistakes and never let any of them drive the next trading decisions.

Trade with a plan to avoid making mistakes in Forex trading:
Developing a plan to serve as a guiding framework is very crucial to achieve consistent profitability in trading. It is pretty much like a road map that keeps you on track to your trading goals. A good plan will help you in making rational trading decisions, by sticking to its rules. Benefits of having a plan also include:

  • Discipline: having a plan with a predefined set of rules will help you maintain discipline in trading by sticking to these rules, and keeping you from letting emotions control your trading decisions.
  • Trading with ease: by sticking to a plan, you won’t feel stressed as you know what should be done. A clear and precise plan lays out all the needed criteria that must be met before making a trading decision.
  • Performance improvement: keeping a journal of your trading activity is a key component of a successful plan. It helps in assessing the performance of your strategy, thus improving the weakness points to enhance your trading performance.
  • Objective decision making: since trading success is basically based on making the right decisions, having a plan can help in making objective trading decisions, that will give you more confidence with less emotional engagement.

Happy Trading!

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@AnshumanSharma :slightly_smiling_face: :+1: Absolutely right when you say that faith is a hard thing to afford for a trader. It can only come from a trader to another trader. One becomes so skeptic that one starts doubting everything. I think trading is a search for truth and reality.

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YES, I have been down that path also. The real answer is Algo trading. And no one is going to sell you anything that works. Answer: Write your own. And the easiest program that I found is Pine on TradingView. Here is a sample of my own code in operation; wildly trading NQ futures on the 30 second chart. Every bit of that I wrote myself. And then I can backtest it to death before launching.
One contract NQ requires about $1000 margin to hold using AMP. Each $5 box represents $100 per contract.