guys first of all a happy and prosperous new year to all
coming back to this method, its a god system provided you follow very strict money management rules. i repeate very strict money management rules. if you dont follow them, then it could drill a big hole in yr pocket. since its a EOD system you need deep pockets. i followed this system with 10 stocks for 1 week with 10 lakhs, strictly as per the method (yes, capiatl prorection rules are followed). guess what 1 week i lost 5 lakhs. dont worry its paper trading. but i could have ended up with a profit of 5 lakhs with some 'luck'
what spoiled the party ? the gaps. i got gaps in opposite direction . if i had got gaps in my favour i could have ended up with 5 lakhs profit.
so whats wrong with my trades ? i didnt follow strict MM rules, i would put it this way, i havent designed my MM rules before i started trading. since any EOD system involves greater risk/return, we need to define what would be the maximum risk i can take per trade. ok, this could be 2% or 3% or 5% or 1 %. but the real issue is NOT that. i took 10 stocks. so the total risk became 30% (with 3% per stock). most of the times ALL these stocks move in same direction (i took all index stocks like RIL, SBI, EXIS, TATASTEEL etc). so if i lose one trade, most likely i will lose 10 trades !!! i did in futures as this is EOD system in both LONG/SHORT direction. i took care of the margin requirements.
i would request every trader to do these things before jumping into this (later dont blame the system if you are not desciplined)
1. Take a capital of 10 lakhs (on paper) and trade in LIVE market for 2-3 weeks
2. Put a starting max risk per trade as 2%.
3. Take some 5 stocks and nifty. Try to take from different sectors
4. strictly follow the rules of this method
5. at the end of the test period, see where you stand.
6. now try to optimize the max risk and number of stocks.
important thing to survive in sny system would be to pass through all the bad, good phases and have confidence in the system. after a few initial losing trades you give up, then you may be missing a big run. thats why MM rules are very very important
pl be aware this is not a get-rich-quick method. understand the system, apply MM rules, you will definitely gain in the long run
good luck