In the month of April there were 19 trading days till April 26, the Expiry day.
NIFTY moved up on 15 of these days. A very positive month.
We had made a total of 12 selections. BUY –3 SELL –9.
With NIFTY moving up by more than 500 points and majority of the trades on SELL side initially there was a setback.
I have stated many times that let us put faith in the selection method and then let market do the rest. All the talk about targets for PROFIT is just talk. Let the market decide your profit. Your focus should be on managing the loss.
This theme will continue in next series too.
Here is the review of the performance by the selections:
BUY SELECTIONS :
3 Selections 3 Right. It was expected as the markets had moved up.
Profit from 3 trades- Rs. 108750.
SELL SELECTIONS :
We had 9 selections for SELL.
6 out of 9 went wrong. The 3 that went well actually made more profit than the 3 trades on the BUY side.
Overall, there was a small profit of Rs. 6226.
Not bad considering we are wrong about the market direction.
Summary :
Total Trades — 12
Right — 6
Wrong –6
Profit — Rs. 114976.
The profit is a result of Selection Process, Patience, Belief and Trusting the market for your profits.
It is not the number of trades which counts but the profit from the right trades.
April series has been a good learning experience and I hope and believe that along with the March series, the readers will now start to believe that there are no secrets to stock selection for trading.
You can do it as good as any expert.
We move on to May Expiry contracts.
May Expiry :
Our selections were posted yesterday.
I will repeat them here:
BUY SELECTIONS:
M&M
HINDUSTAN UNILEVER
SELL SELECTIONS :
SBIN
TATA MOTORS
BHEL
HINDUSTAN PETROLEUM
We start with a list of 6. More will be added as the month goes on.
Disclaimer: This post and examples are for teaching purpose only and are not meant as advice/suggestion to trade in these stocks. Trading in Futures and Options can lead to big losses and should be done with appropriate knowledge and advice only. Mentioning the stocks here does not imply that I have a trading position or likely to take a trade in these stocks.
Comments
Shankar April 27, 2018 at 4:53 pm
Sir,
ReplyConsidering that there is a bit of focus on traders with a small capital, wouldn’t trading in Futures defeat the purpose as it requires margin and the margin will be significant for 12 trades. I understand that the major emphasis is on the selection process rather than on Options/Futures. Nevertheless, it would be great if you can do a series on Options as well
admin April 29, 2018 at 8:06 am
Dear Shankar,
The May series will be about Options.
ReplyYou can read it from today.
Jignesh April 27, 2018 at 8:07 pm
Hello Sir, can I use same Technic for intraday.
ReplyI mean, every day I will buy the stocks from “Buy selection”. and sell the stocks from “sell selection” at 9:30 and closed my position around 3:15 pm.
Will it work?? I am retail trader. I can’t afford to trade with future and option.
admin April 29, 2018 at 8:05 am
Dear Jignesh,
I am not sure it will work for day trades.
ReplySatish Kumar April 28, 2018 at 1:18 pm
Hello Mr. Pramod. Thank you for the post and sharing the trading in the most simple concept. Two questions:
1. Do you put stop loss in your option trades ?
2. As you know, each day time factor, eat away the premium value. If one know the trading going wrong or maybe the trade script selection wrong, it is still advisble to stay in the trade upto expiry ?
Thank you. Have great weekend.
Replyadmin April 29, 2018 at 8:04 am
As long as the price is near the strike price, I stay in the trade. A sudden volatility can make a trade profitable even when it looks lost.
ReplyIn April, I had bought HINDPETRO PUT 300 at Rs. 7.20 on March Expiry day ( 28-03-18 ) for April Expiry. It went wrong and I was looking at a price of Rs. 1.20. Next day it crashed from 362 levels to 340 level and we were back in Rs. 7-8 range. Another few days of steep decline and I gout out at Rs. 30.00.
For me it was Rs. 30.00 from Rs. 7.20. It could have been rs. 30.00 from 1.20 as well.
On expiry day. it had gone to Rs. 38 also at one stage. That is what is possible with Options.
Vedanta 300 PUT was bought at Rs. 1.30 on Monday ( 23-04-18 ) and it ended the day at 2.60. Next day it briefly touched Rs. 12 but ended the day at Rs. 3.35. I could get Rs. 11.oo on Expiry day. The trick is to stay with the trade to try for big profits. At the worst I could have lost Rs. 1.30.
There were many losing trades, but when you are having trades giving 4-8 times profit, the losing trades do not matter.
Satish Kumar April 29, 2018 at 12:01 pm
That really so patience work in trading. So inspiring also. Thank you for replying Sir.
Replydivyank June 1, 2018 at 7:27 pm
sir
Replyin Futures: if A stock has 3000shares in 1 lot and B has 1500shares only for almost same share price,
is it fair to take 1 lot of both of them? ,so that loss in larger one doesn’t affect more as it did in sbin case in may expiry!
admin June 1, 2018 at 9:25 pm
Hi Divyank,
For comparison purpose, we are taking 1 Lot of every selection. These are supposed to be of equal value but in reality the value varies. Ultimately everything evens out.
When we initiate the trade, we hope for every trade to do well irrespective of the lot size. Finally we take what the market gives us. That is — Keeping It Simple.
Thanks for reading and the comments.
Reply