Today I was reading the article Day trading or taking position on
sudarshan blog (http://www.sudarshanonline.com/). I respect his market
knowledge & his experience which has been a source of guidance to
all of us.
Since his article clearly indicate most money can be made on swing rather then positional & day trading.
I recall my full career 4+years trading experience & thought of writing a article.
Here goes...........
DAY TRADING BY COMPULSION OR CHOICE?
During trading course under Mr.gujral I was mostly trained in positional & swing trading. In fact he never put much emphasis on day trading & many time told me day trading is fastest was to get killed. ( It was way back in 2007). Since in 2007 market was in uptrend & every week we saw index making new high. I was not a great deal in making money on positional trade & I have also made reasonable money on my account with little capital of 30k.
Soon in the start of market 2008 market crashed & volatility increase exceptionally & I was fortunate to turn this downfall into opportunity & able to cash in by this time my account get bigger by 70k. Now total account size become little less than 1lac.
When high volatility settle down & it is time my problem started. I realize volatility is still on higher side & market taking no direction I was unable to trade because of higher margin required in nifty futures plus initial stop loss have to be bigger. Considering my trading experience of less than one year, it was very frustrating moment. Soon realize, I can not trade with bigger initial stop loss with this capital as it can wipe my 4-5% capital per trade. And the result it can be my trading death.
But on the other hand observing good swing in Intraday & try doing trade with initial risk capital which is under my risk tolerance level. Also able to cash in short trade which was not be possible with little capital to make position in shorting futures. With many hits & miss I was making little profit steady but occasional draw down on account for lengthy period, making me even more frustrating. Overall I was not happy with my own performance. With no guidance from any experienced day trader some how I learn from my mistakes and it took little longer time to put things at my functional level. And I am still learning my lesson.
I want to tell other neither there should be compulsion on you to choose swing trading as it made more money or any other form of trading should not be choice. Rather your action should be best in line with market. What shoot you best is mainly define by your risk management & individual physiology.
Dr. Elder has told money neither made on right trade or wrong trade. It is made on comfortable trade. It does not not matter you are making more or less compare with any other trade. What matter is you return should be reasonable.
Question arise what is reasonable rate of return?
You might have remember few months back there is a trading contest on CNBC Awaaz called "Khatro Ka Khiladi". During contest I calculated average return of all trader participated ( include all type of trader) in contest live is 1.3 % gain weekly. If your return is 1% weekly (50% annually) you are not less than any one & if you are earning 2% (100% a.n) weekly then you are ahead than many other trader.
There is no life in trading after financial death.
Remember great trader of it time Livermore has lost four time every thing he made & once he declare bankruptcy. But again come back. "every one is not that capable" and in the last he gone.
Successful trading can not be compulsive or by choice.
Since his article clearly indicate most money can be made on swing rather then positional & day trading.
I recall my full career 4+years trading experience & thought of writing a article.
Here goes...........
DAY TRADING BY COMPULSION OR CHOICE?
During trading course under Mr.gujral I was mostly trained in positional & swing trading. In fact he never put much emphasis on day trading & many time told me day trading is fastest was to get killed. ( It was way back in 2007). Since in 2007 market was in uptrend & every week we saw index making new high. I was not a great deal in making money on positional trade & I have also made reasonable money on my account with little capital of 30k.
Soon in the start of market 2008 market crashed & volatility increase exceptionally & I was fortunate to turn this downfall into opportunity & able to cash in by this time my account get bigger by 70k. Now total account size become little less than 1lac.
When high volatility settle down & it is time my problem started. I realize volatility is still on higher side & market taking no direction I was unable to trade because of higher margin required in nifty futures plus initial stop loss have to be bigger. Considering my trading experience of less than one year, it was very frustrating moment. Soon realize, I can not trade with bigger initial stop loss with this capital as it can wipe my 4-5% capital per trade. And the result it can be my trading death.
But on the other hand observing good swing in Intraday & try doing trade with initial risk capital which is under my risk tolerance level. Also able to cash in short trade which was not be possible with little capital to make position in shorting futures. With many hits & miss I was making little profit steady but occasional draw down on account for lengthy period, making me even more frustrating. Overall I was not happy with my own performance. With no guidance from any experienced day trader some how I learn from my mistakes and it took little longer time to put things at my functional level. And I am still learning my lesson.
I want to tell other neither there should be compulsion on you to choose swing trading as it made more money or any other form of trading should not be choice. Rather your action should be best in line with market. What shoot you best is mainly define by your risk management & individual physiology.
Dr. Elder has told money neither made on right trade or wrong trade. It is made on comfortable trade. It does not not matter you are making more or less compare with any other trade. What matter is you return should be reasonable.
Question arise what is reasonable rate of return?
You might have remember few months back there is a trading contest on CNBC Awaaz called "Khatro Ka Khiladi". During contest I calculated average return of all trader participated ( include all type of trader) in contest live is 1.3 % gain weekly. If your return is 1% weekly (50% annually) you are not less than any one & if you are earning 2% (100% a.n) weekly then you are ahead than many other trader.
There is no life in trading after financial death.
Remember great trader of it time Livermore has lost four time every thing he made & once he declare bankruptcy. But again come back. "every one is not that capable" and in the last he gone.
Successful trading can not be compulsive or by choice.
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