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.
maybe
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
So I wrote to Ramesh, and grateful that he took the effort to draft the below note.
I attribute this saying “speculation is done with the slip book and not the cheque book.” to Shivkishanji Damani, father of the legendary investor and businessman Radha Kishan Damani (RKD), the D-Mart promoter.
RKD listened to the above saying, as a child from his father who repeated it over the phone many times to his friends and associates. Radha Kishan than passed the saying on to his friends and associates, as examples of a few of the ultimate truths about the markets.
Speculation is about leverage. Hard core speculators believed that when the speculative trade is marked to market (in the old days of badla trading, it was once a fortnight.) the long or short trade should show a profit to you and the broker should be giving you a cheque for the difference which you would then deposit, using a deposit slip, in your bank account. Conversely if you had to issue a cheque to the broker, your bet was going the wrong way. In that case reduce or terminate a position.
A lot of poorly educated speculators, assume that with a power of a bank balance, they can keep riding a bleeding position. Hence they fund the position with their cheque book and bank balance. Keep paying the mark to market difference. That is dangerous and can eat large amounts of capital.
As one of many examples of this motto, that I witnessed in the early 1990’s, was of ACC. The stock a liquid, market barometer had traded between Rs 100 to Rs 300 for over 30 years. Then with economic liberalization and the Harshad Mehta bull market it rose to Rs 10,000 over the next three years. The shorts kept thinking a collapse was near, kept shorting and funding the bad trade through their “cheque book.” The longs feasted, because every fortnight they got to deposit their “mark to market” gains through a slip book. Hence the saying. History is replete with more examples of the folly of funding trades through cheque book power.
This famous quote from Reminiscences of a Stock Operator is a useful reminder and summary of the motto for a good speculator.
“Always sell what shows you a loss and keep what shows you a profit.”
Hope this helps.
Ramesh S. Damani
This has to be the most basic rule to trading the markets (maybe even in life) that most retail traders often forget. Cut the losers & hold on to the winners. By the way, the tendency is for retail to hold on to the losers and cut the winners fast, exactly the opposite. Which is maybe like a guaranteed way to lose money in the markets.
Thanks, Ramesh.