I have attached a clip by Mr. Ramesh Damani where he says,
“Trading/Speculation is always done by slip book & not cheque book.”
Though he explains the meaning of the above phrase in the following line I still didn’t get the meaning of what he wants to convey. Can someone explain the above phrase in simpler terms?
By slip book, I am guessing he is referring to the delivery instruction booklet. A delivery instruction slip in the offline world is provided to the broker after every sell transaction.
I guess he is referring to trading/speculating by selling your existing stocks/holdings and not by transferring new money using a chequebook.
But doesn’t add up. Maybe he is trying to say something else.
@Meher_Smaran, if he is on social media, maybe ping him and ask. If not, can you try finding his email (Som can help)? I can write to him and share the link to this post.
slip book used to be pay-in-slip to withdraw small amounts of money. whereas you need a cheque for bigger amounts.
so he might be hinting at keeping your trading account funded with low value to avoid big draw down.
Will do, Boss.
I watched the full video few times and I think he means the following things:
Don’t bring in fresh money (as the questioner asked that money always seems less for traders) and use slips (Delivery Instruction Slips) to trade from which you receive money from the sales proceeds, rather than Cheque book where Fresh money is going outwards.
He always spoke against taking leverage and by meaning, slip book, he says one has to trade only when one receives funds from profits/losses made from previous trades. (Advocating churning of portfolio)
He also says one needs to have keep a long term view and look to compound money.
Reference: Timestamp 4.00 minutes to 5.45 minutes