I echo your feelings, and most of us have gone through this. For past 20+ years, I am doing investing / trading, have taken lot of courses spending lot of money. Finally, I have found a suitable investing style. So the time you have spent in market is not waste, and it certainly has given you edge over newcomers.
Now coming to taking up something outside trading - you should never depend on stock market income as your bread and butter. It could be cherry on top :-). So please take up something which will give you regular money. If you have enough funds, then first start investing them for risk free consistent income.
Also while trading - IMPORTANT - use only 10% of your funds for trading (until you find a profitable setup). Use this money to experiment and learn. Market will be here for ages, so RETURN OF CAPITAL is important then RETURN ON CAPITAL. Do not rush, just learn with very small amount of money. Once profitable, use that system with incremental funds. Do not put all funds at stake.
Your view that setups loose their edge overtime makes sense. However, new setups might loose their edge by the time I gain confidence in them after back testing them. How would you deal with that?
I trade systems with signals that have been tested and working for 10+ years. 1 in profit for 4-5 years live another now working for 1yr+ live. Both being scaled up and compounded.
It might get tougher yes, some due to competition but some of that is also probably cyclical.
But i donāt think edges are going away yet. There is always that risk and so there is uncertainty, but if your backtest results keep failing in live env, either you are not giving it enough time in forward test or your backtesting approach has some issues. Make sure there is no future data leak and make sure to add realistic transaction and slippage costs in backtest as these can be substantial ( esp for intraday) .
Also when you trade day by day, tough periods can encourage you to look deeper and see whats happening, and often that can lead to some insight that improves your system and makes it more resilient. So that may be one way of dealing with this ( to the extent possible).
Not always, but they can - depends on how traders evolve too. My guess is things might get choppy and edges could get erratic, but they wont go away en-masse. If systems start losing edge, you will have to diversify and use multiple systems.
Not that much in stocks I would imagine - not as many people trade them, not as many systems deployed in them.
Previously i think we had more in index futures and stocks and systems worked back then too.
And same is possible in index futures too. I do have simple signals that have worked for 10+ years. But its not easy, we can get tough years and yeah maybe its getting tougher. Last year was tough for them as ranges contracted, but that will change.
But anyway, yeah, i agree that with more noise and more competition, edges will reduce. But its also cyclical. Edges reduce, people stop, edges improve, people start and so on.
yeah, in any case diversification is good and important to reduce risk.
Andrea Unger probably has 100+ systems across markets. He even has a system on top of systems that selects which systems to run ā¦
Iām 49 year old (my username gives a hint). You can simply call me old or old-fashioned or whatever. When I read that youāre just 22 years old, I realized it more strongly that I wasted many years and began stock investing very late. I entered the markets in 2015 with a small capital of around 6 lacs. I started with mutual funds and Smallcases. I learned a bit and began to invest small amounts in individual stocks, but only I was confident.
I am still not aware of many fancy terms and have zero knowledge of F&O. I also donāt know how to read charts and patterns. What I know is that there are good stocks and there are bad stocks - based on some fundamental parameters. I keep on buying those good stocks at regular interval, and also keep selling them in profits and buying more at the opportunity. Some stocks do fall heavily and I never sell them at loss. Iāve seen many such stocks breaking old highs quite often.
I do only CNC orders. No intraday, although I have enough time to sit in front of my computer all day. I have all the time to wait patiently after I enter a stock.
My portfolio has grown to 32 lacs this year. This includes mutual funds worth 8 lacs. Of course, I infused some funds after 2015 but it was less than what I withdrew when I needed.
I wish I had courage and money to start earlier, even at the age of 35. You are at a very crucial age. Not too young, not too old. In fact, thereās no right age to start investing. The best time is Now.
Iām not against any kind of trading, be it F&O or Futures, or Intraday. Iām just sharing my experience with markets. Iād suggest you to invest a part of your funds in quality stocks and MFs. Iām sure, gains will not be amazing, but youāll always see your money growing with occasional ups-and-downs , which are part of the game.
Sorry if I sounded like preaching, itās just age factor.
First, the replies by community is truly gem, i have gone through it and thatās all that you may need at this phase of your learning.
What else other i may suggest you is sometimes itās better to just sit back and relax for some time, rather than trying to figuring out things with very tensed and frustrated mind if the it is so, especially when you are too confused over multiple entangled things bouncing in your head.
From starting itself, your first post given me impression like you have learned, formulated and tried to apply too many things with over eagerness to success.
Iām not demotivating you in any sense, but let your head settle down the things, the noise that is buzzing. Donāt leave it completely out of your mind but at the same time Just chill if things are becoming very confusable. With some time, as things settle down in your head, you will gain more clarity and which will ease to figure out the way, to build right approach.
Donāt just get completely involved in this one thing, keep itās learning as side by side with other valuable things that you aim for in your life. You are young, an early starter and so can give sufficient time to build skills in it.
Dear Parikshit, If you go for any regular corporate job u wonāt get annual package worth of crores in the first, second or not even after 10 years of experience but the one thing is sure that after years of experience your package will be higher. Consider the same thing in the market. Just do your job(trading), self doubt will haunt you sometimes but same happens with any other working professional.
No other person or a book but itās your own journey that will lead you to your answers and yeah itās gonna take a very very long time.
You are very young, I wish you luck.
Dear Friend,
I would suggest please try hedging it will reduce the SL problem. Because you can place now SL far and also it will reduce the loosing cost in case of sl.
Try to add in your setup, definately it will improve your trading psychology and behaviour, fear of taking trade.
Do not worry about profitability SEBI report clear this very well. Mostly are in loss. So if you are breakeven still you are in 10%.
