Never give up in Life but it's good to give up in Trading..

[SevenD]

Asking for ledger, will not give proof of intentions, as it could be fudged and fluffed. Instead it would help if we ask Pradeep to share what was the turning point in his trading career that has made a difference.

 

[Pradeep Narayan]

I had quit my job in 2013, with only one intention – establish & grow as a trader in stocks/futures. Why? In my opinion, a job is a person’s greatest risk & liability. I had learned it the hard way… my company was taken over & folks like me (old & high paid) had 2 options – take a severance and leave or work for new terms & conditions.


Since I did not have much liability, I had the good fortune to observe how my colleagues behaved – some of them went for another job (after taking severance pay), some others opted to stay back. And why did they do this? All of them had home loans or other monthly liabilities. Since all had families – a logical option seemed to be: “Let me compromise, so that my family does not suffer!”


While it was tempting to do what others did – and logical it seemed. I was thinking, what if I can create enduring wealth, so that me and my family can have a good living – whether I have a job or otherwise.

 

[Pradeep Narayan]

I wanted to do some business, but I realized that all business don’t grow exponentially with limited manpower & thus limited efforts. The ideal business where income is not directly proportional to efforts & where increase in efforts leads to huge increase in income was stock trading. And this was one line where my interaction with outside world is more in my control & hence discreet – unlike a shop or service establishment.
Thus, I became a trader!

 

[Pradeep Narayan]

Like all of us, I too evolved every day. I will put my thought process of my early days & now, as succinct as possible:
CNBC, ET Now

• Earlier it was for general market analysis by experts. Global market views. Company Results and various trading ideas. And Flash News!
• Nowadays, I watch to get a quick snapshot of global markets between 08.30 and 08.45 a.m.

Candlesticks

• Earlier, I used to think this is the tool for price action & trading. Read Japanese Candle Sticks, Chart Patterns (Suri Duddella, Tushar Chande, Toby Crabel, Tom De Mark et al).
• Nowadays, I don’t use candlesticks patterns

Technical Indicators

• Earlier life was around RSI, Stochastics, MACD, EMA/SMA/TMA, Ichimoku, Bollinger Bands, Alligator, GAPO, TRIX, CCI, SuperTrend. I used to try various combinations and parameters for all these indicators, but somehow it did not work consistently
• Nowadays, after understanding how these indicators were developed, I use them very rarely.

Volume & Market Profile

• I spent quite some time taming these 2 monsters and found that these can be easily misinterpreted & can quickly make one go astray.
• Now I have my own volume based analysis tool that I use to determine support or resistance levels.

Pivots

• Earlier it was Camarilla, Woodies, De Mark and Fibonacci Pivots that determined my entry and exits
• I have trashed them all nowadays

Money Management

• This was the ‘Dude’ stuff to master. Having a high RR was paramount in identifying trades. Risking 2% was key . Van Tharp & R multiples were just the right thing.
• Today my MM has matured quite a bit. I risk 5% across all open positions and keep a healthy win ratio, so that my instantaneous risk is around 3%. This subject is quite interesting. As for RR, I trade 1.5 to 2 RR.

 

[Pradeep Narayan]

So, what led me to becoming a trader from a green-horn?

• Keeping the trade strategy simple
• Keeping fixed entries and exits for each trade
• Questioning my belief system & changing my point of view
• Focusing on sustainability instead of profitability
• Not thinking at all while trading, just focusing on trade signals from the system & following the plan

What was the turning point?
Well, I had blown up 6 accounts. The first 3 were typically 'fresher accounts', costing 1L each. After losing 3L, I felt I should reduce my account size. So the next one was 45K.
Then after vaporizing 45K, I did 2 important things:

• NO MORE F&O TRADING, till all losses are recovered.
• No more funding on loss making strategies/techniques

The next account was 5K, this was used to sharpen my entry & exit on equities. I grew this account to 25K and then blew it!
Again I started with 5K and grew it to 20K. Then I added 5K more - logic being, increase exposure when strategy is giving positive results. The pressure to make money made me over trade & blew this one also.

Then last year, I took a break, polished my strategy and came back with 1L funding. I trade only cash segment & only intra-day. My overall risk for a day will not exceed 5K, and I trade 4-10 stocks per day. I monitor 150 stocks daily. My net RR is around 1.25 to 3 times daily risk cap.

I am earning & learning ... touch wood!

 

[Raj354u]

@Pradeep Narayan
The reason I asked for ledger report is ...it would have given motivation for all of us.. I appreciate you replying in a calm composed manner not criticising like some of the people are doing here including me..nice to see a matured person out here..
So good to know you are trading only equity now...do you hold your position overnight if in loss or you use stop loss and exit in small losses..do you trade in cash or use intraday leverage..
One more question how are you managing day to day expenses with such small capital?

 

[maneverfix]

@Pradeep Narayan
The reason I asked for ledger report is ...it would have given motivation for all of us.. I appreciate you replying in a calm composed manner not criticising like some of the people are doing here including me..nice to see a matured person out here..
So good to know you are trading only equity now...do you hold your position overnight if in loss or you use stop loss and exit in small losses..do you trade in cash or use intraday leverage..
One more question how are you managing day to day expenses with such small capital?

All trades are intraday trades, no overnight positions, i guess
he is making around 2 to 3K perday, that's approx 50 K per month.

good enough for comfortable living.

 

[Raj354u]

@maneverfix
Seems you check his trading account/bank account daily...
Give some realistic figures bro..if someone is making 50% returns on monthly basis then yearly returns comes to somewhere 600% without compounding...At this pace he will beat Bill gates within few years...
Do you know mutual funds/hedge funds only make 20-30% returns annually that too with loss some years...
Come out of your imaginary world..let's be practical...
Let him speak bro..hold your horses.

 

[SevenD]

Pradeep Narayan,

Thanks for responding positively with a detailed and endearing account of your journey, I too am sailing in the same boat, please do continue sharing, its motivating at the same time a lesson in hard work, patience and self belief.

Thanks, please do continue..

 

[timepass]

Raj, in your 12 years of trading, didn't you come across stories similar to yours ? Traders quitting the market, traders saying that the markets were all fixed, that no one could make money here... etc.. etc..