Shorting during profit booking phases

whenever profit booking starts i.e. market starts falling i end up loosing money…

this is the time when thousands of traders probably double their account i loose half of my account…

it happened on the election day and it happened again today…

can i get some tips on how to short during this profit booking phase…

as when i short i don’t know whether the market would further go down or not … so i exit my trades quickly booking small profit … then i see a bear flag and by the time i decide to short again the stock has already done a move downward and that means i m entering late and at the very next moment the stock goes up and breaks my CLOSE stop loss (i keep my stops very close so that i cut my loss and also because the volatility is very high during this phase)…

then again a bear flag and again the same f$$kin thing and i loose more …

so getting sopped out again and again has completely wiped out my account and has shattered my will to continue trading …

AJAY , NITHIN, KARTHIK … CAN I GET SOME SERIOUS SUGGESTIONS PLEASE which i WILL religiously follow no matter what …



There is no right or wrong answer to this Karan.

However, if you are an intraday trader then don't look at 5 mins or 10 mins charts. Instead look at the end of day chart and interpret what you could expect for the following day. Based on that view set up a trade for the day.Ensure your stoploss is on an EOD basis. In this way chances of being stopped out is low, even if you do then it would be reason and it would be worth it.

Also, always trail your stoploss. Have your read the this post on bracket orders ? This will help you place an automated trailing order.

End of it all, if its not your day, no matter what you do, it will not turn around. Keep calm and do what is right :)

  1. Stop Trading. Yes that is what I am suggesting. Stop Trading. Do not get me wrong.
    -Wiped out account is good enough reason to stop trading but here are couple of more why I think you should stop trading.
    -Currently what you are doing is looking like impulsive trading which is very dangerous. Not only one can wipe out several accounts, one may wipe generations of net worth. By impulsive I mean not well planned. Before entering the trade - do you decide the entry price, SL, Target, risk amount, position size, reason for entry/SL/Target etc? Do you check for Risk/Reward? Is it favorable? Do you document all these? After the trade do you check if you followed the plan?
    -You are not in right frame of mind, need to take a break, reflect on what you are doing and what you want to do.

  2. " some tips on how to short during this profit booking phase".
    Only one tip - DO NOT SHORT.
    -This is a bull market and from time to time there will be profit booking. There is no reason to short - that is going against the trend.
    -This type of shorting is a known as Scalping. It requires the best skills. For retail traders it is best to start Position/Swing trading first. Refer to
    -Have you observed there are days when market becomes completely unpredictable and behaves very erratically. These are the days one should avoid trading. e.g election day, option expiry day etc.
    -Do you know there are traders waiting for this sort of profit booking/corrective phase to enter the markets.
    -While a red candle (when market is making new highs) looks like a shorting opportunity to retail traders, smart traders start preparing to enter. For them this was a long awaited opportunity to go long.
    -Only reason technical trader should go long or short is some strong technical signal/set up. Not on the basis of what other traders might be doing i.e. just because one thinks other traders will start profit booking.

  3. Stop feeding yourself with negative thoughts.
    -This is not a Silly Question. I think the whole reason Nithin and Zerodha have started this initiative is to resolve these issues. And do not get bogged by negative votes. It is others opinion and do not let yourself be affected by what others think.
    -“this is the time when thousands of traders probably double their account i loose half of my account…”. You have to stop telling your self such things. Doubling the money is not so easy. Many traders lost money on election day and many lost today as well.

  4. Educate your self seriously. Especially on the psychology of trading aspects.
    Go through stuff of Mark Douglas, Ari Kiev, Dr. Van Tharp - for Psychology of Trading.
    Go through books and courses on Technical Analysis, Trading, System Development etc.
    Specific names of books/courses/authors have been mentioned in various questions in this forum.
    There is lot of free stuff available on this on the internet, especially YouTube. Just Google for it.

  5. Develop a trading system for Position/Swing trading. (No Day Trading/Scalping or any other stuff right now).
    I have told you this earlier and I am repeating. First develop a trading system. Thoroughly back test it. Write down all the rules. Do a Walk Forward Testing of the system. Do this on IciciDirect Virtual Game or Omnesys SIM. Keep trading like this in simulated environment till you consistently make money. Then and only then can you come back and start position/swing trading.
    Do not start day trading unless you understand the market very well.

Will you religiously follow all the above? Any day you break these, come back and put a comment in this thread. Lets see whether you learn to trade and make money first or you get “Annotator” tag first.


Chasing the price during breakouts and initiating an order with contrarian view (thinking market is falling down and is going to turn sharply upside now) are two major mistakes what new traders often do during the initial days of trading.

If you expect some volatility on a particular day, set a stoploss trigger breakout entry and watch out the market when it is on move.

Do not trade without a plan, reading the technical analysis stuffs and derive a plan for your trade before entering. The other main difficulty is sticking to your trading plan, when the market is moving as per your plan and you see a small profit, do not impulsively close the position when the market shows some reverse swing for timebeing. Stick to your plan until the close of the day. Trial your stop loss.

well i have sort of written some rules on going long and short and since 1 month i have been seeing daily charts and deciding an entry n also a target price… but i think i have been breaking my own rules by doing scalping which i will avoid now as scalping has only made me losses(even NAI FULLER said in his articles that beginner traders should avoid scalping or day trading)…i had these things in mind but i don’t know what happens to me during trading…
anyways i like ur suggestion of simulated trading till i consistently try to make money and i will try to modify my rules … earlier i was just sticking to breakouts and breakdowns but they were not working for me … chalo shit happens … now first thing TRADING SYSTEM AND BACK TESTING in short DISCIPLINE…
i must say i was waiting for ur answer … THANKYOU AGAIN and when i improve trading live i will come back and put a comment on this …

Glad that was helpful. Wish you all the best. Sorry if the language was bit harsh.