This Saturday, I am sharing one of my Quora posts written 3 years ago.
Today also I find similar questions from the same set of traders. On this blog too, we are in the process of finding those answers.
Trading is a fascinating game, mastery is never achieved but good results are possible.
What should be my strategy if I am looking at returns of around 5% monthly? :
At this moment there are 17 answers to this question.
Few of them are discouraging type and few are offering their services to achieve this kind of results.
Some are even questioning why a person who can deploy Rs. 10000000 as investment should be seeking advice here on Quora.
Seeking advice is not uncommon.
Go to wealth management desk of any bank or Portfolio Management Service.
You will find people in their 20s earning a salary of Rs. 25000–50000 per month advising successful people having 2–3 Crore Rupees funds on how to manage their portfolio.
Believe me, these guys themselves never invested a single Rupee in stock market except maybe through some mutual fund SIP. ( Systematic Investment Plan)
Nothing. Only their organization has trained them to offer this service.
But people do take their advice and sometime it works too.
In a sustained bull run anything would work.
This fact is common all over the world.
The person seeking advice may be from a different line of work and maybe looking towards stock market for the first time.
There is nothing wrong in seeking and giving advice.
But it should be done honestly.
Seeking Consistent Returns:
Some people look for windfalls.
They want to double their money in a month.
Some look for 30–40% returns in a year.
Some just want to do better than bank deposits.
All of the above wishes are possible.
One has to find the opportunity, have an exit plan when things go wrong and be patient when the trades are doing well.
Let the returns be decided by the market.
You only decide about the maximum loss you are going to take.
We can not control market direction or momentum. We can not dictate how much a stock price would move during a day or a month.
We can only protect ourselves by limiting our losses in a wrong trade.
We can exit by booking profits quickly also but then would be missing out when the prices go up further.
If committing a capital of about Rs. 10000000 it would be prudent to spend some time on getting trading/investing knowledge also.
For the actual process of achieving your goals, I would suggest reading my earlier answers on similar questions:
It is a common refrain that if such a strategy really existed, why would someone share it?
The fact is that strategies are over rated. They are the fail safe mechanism to satisfy the ego of the trader.
There is only one way to make a profit.
Selling at higher price than the buying price.
And fortunately or unfortunately, this will forever remain the only way of making money.
This is true for whatever you are trading whether it is stocks, commodities or groceries.
It will not be always possible to do so in stock market as prices can go down after you buy.
You have to protect yourself by a sensible stop loss limit.
Keep your losses small and let your profits run.
Do not decide the profit, let the market give it.
It could be more than 5% you are looking for.
Thanks for reading.
Quote Image Source: Google Images
Back to present:
Currently, Money In The Bank seems to be achieving these targets consistently. We have 12 months record to show here and the current month too is doing well.
Bucking The Trend is another strategy which may succeed but is not yet tested over 12 months.
We shall keep on trying various combinations and finally arrive at something what works.
Link to the Quora post:
Thanks for reading.
Please be back here tomorrow for more trading thoughts.