The Best Trading System

[varunkochhar]

Yes rolling over and adding

 

[varunkochhar]

 

[varunkochhar]

This is a daily chart of Bank Nifty. I got a signal to go long on 2nd. of march at 15109.6 when price closed above the pink line(36EMA) marked by Green line on the chart. From that time price never closed below the pink line (That was my SL a close below 36EMA). In fact it touched it 4 times in the subsequent months where i added to my position. This trade is indicator free as you can observe just price and 36 EMA. The levels of add are shown at the right side of the horizontal lines. The plain vanilla thing was to buy a Bank Nifty future at all these levels and ride it but that would have resulted in a lot of money being blocked by way of margin with the broker. So i did what i have always been doing for my positional trades. Bought a call of strike price 100 points below the trigger price (thereby giving very less premium) and rolling them over at each expiry. I called it quits at 20000 levels which was enough for me. Now do the maths yourself. The beauty was the 1st call that i purchase of 15000 at around 150 which not only paid for itself but all the susequent adds.

 

[varunkochhar]

The power of 36EMA is such that not once did it close below it in the whole uptrend.

 

[varunkochhar]

My cousin taught me this technique. He rode Yes Bank From 200 levels to about Rs.1400 and Maruti from Rs.1000 levels to around 6000 recently thereby amassing more than 15lacs in these 3 years from a maximum inlay/risk of a few thousand rupees. He bought more than 50000 shares of NHPC from his profits which has given him a return of more than Rs.50000 per annum tax free by way of dividends and his corpus has also more than doubled going by current price of rs.30 of NHPC. (Though his acquisition of these were absolutely free but his purchase price was about Rs.18 per share)

 

[varunkochhar]

The icing on the cake would be at some point in the next 20/30 years NHPC may become Rs.1000. Just think what great wealth he would leave for his next generation.

 

[varunkochhar]

Now the temptation to sell early was never there because of the calls becoming free to me after the first add. That is what traders mean to "Cut your losses short and let your Profits run"

 

[varunkochhar]

i hope i am not messing up your thread.

 

[vijkris]

i hope i am not messing up your thread.

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[varunkochhar]

If you analyse this though my initial investment was 150*40 = Rs.6000 (though i think the lot size was 25 then) Age is catching up i tend to forget. My risk was not more than Rs.2000 as if at all the price would have closed below 36EMA at any given point (maybe the next day also) the ce would not have become zero at worst it would have eroded by Rs.50 (so 50*40= Rs.2000) so my actual risk would not have been more than Rs.2000. So who says that you need to have big money to make it big in the stock market. So a journey from 2000 to 8 lacs is also possible. You donot need another wipro infy or eicher to become rich.