I am Pankaj Kamaliya, It feels immense pleasure to share my new article on ” Stock market :- Traders Casino “
==> You do trade to make profit or loss ?
==> Want to be a successful Trader ?
==> Have you ever lost or blown away your fortune in day trading?
Then read on…
I started my trading Since 2012 when I had my own savings & wanted to use it productively.At the age of 18, I got married and it just added more responsibilities on me towards my family.My father was a farmer by profession and my brother and i would help him in farming in small way,since there was no permanent source of income, we would always depend on monsoon for our income and this income was at all not sufficient to meet our livelihood.During my college days,I always worked hard so that i could meet by basic requirements,so that i would help my family in some way,but i was really tensed about how my life is going to take shape.Since I was always keen and passionate about stock market ,also studied the basics and i was good with analysis which also helped me make some good money during my college days. So with this experience and my self-belief, i considered myself to be smart enough who can work with discipline and commitment and can “possibly” do better than “average” in stock market (every one thinks like that only). So I decided that Stock Market was the right place for me.
My friend was also much interested in stock market and he is very good at technical level and started working on taking education .Later when I started networking with various traders through Facebook group ,LinkedIn ,advisory ,workshop, U-tube , Book and many more , I got connected with one person named Mr Pratik Patel , who was equally enthusiastic about stock market, he is having more than 7 year of experience, he shared his dream and vision with me and i liked it very much(the person is none other then the C.E.O of NIFTYMILLIONAIRE) and just like “Alcoholic meet the Alcoholic”, Over the next few months we made various plans on how we can make every one financial free and every one can achieve his / her dream and start earning passive income. he is ( Mr Pratik Patel ) already earning good amount from market and we thought every one can make money and can be financial free.
So our next step was to open Traders Cub. ( Every one come together and trade and earn )
Things were all set, we were about to start the race. and Later we Google & register domain with the name ” Niftymillionaire.com”
I was not able to take risk so i started my first job with Niftymillionaire, which is now India’s most trusted traders club for Up coming millionaire. He opened India’s first traders club in Feb 2013 . The first phase started at annual charges 11500/- for 2 year, seemed too small to us compared to what we would be minting in coming months. When he said its “ 2 Year ” for the first Phase, we were like – “We won’t mind even if you charge 10X for that in the first year” . We go in market with new concept called “Compounding” While we were ready to start our journey to serve in stock markets . This was something new concept in Stock market. We didn’t focus too much on “high return” part , the only thing we could read was “Low Risk” part. So next moment, 20-30 Client come through Online and asking about our concept and some of decided to start investing through Compounding and trading as tools , we will learn about Retail traders investment style and way of investing and make sure we don’t leave any stone unturned for make our “millionaire dream” a truth. It was a bit hard for us to delay our “Vision” for few months￼ Learning more about traders psychology, Before entering in market we have done survey on 10.000 trader, We learned that in india 95% trader are losing money and only 5 % are earning money. Our profit margin went really high (but we didn’t focus too much on Return factor we much focus on Risk factor) So were all set with high energy.
Finally we started Traders Club..
So one day we got a sms from bank – “Your account Credited XXXXX Amount” . we logged into my system and start serving Retail trader.
we made Rs 60000/- profit in first year , a 100% profit during 1st year on investment and now we were planning to start compounding , if we focus on day trading then we are not able to take 100 % Return but we are focusing on Right time to take entry and right time to take exit and work with Proper Risk management , Money management and trade management,we realized years later that one should never make profits in their first trade in stock markets, it fuels the overconfidence in you like anything and gives you a false sense that you are really some smart guy ! Now the Learning Starts ,Till now we were giving you the background of what all happened before we started our Club journey . For next yrs, we were very much involved each day helping Retail trader in there financial Life , made some money to achieve financial freedom , Retail trader lost a lot more money, got frustrated , some short-lived happy moments came in too and finally one day they put a big break on there trading . we learned a lot of lessons in those 3 yrs of our journey of Niftymillionaire and realized that we can pass on some learning’s to others who are now trying to enter the markets or are fascinated with the potential stock market trading holds . we are not saying our learning’s are some hidden secrets which are very new, but we can share what all we learned From retailed traders Experience when they share with us , we are sure it will help someone who wants to learn from mistakes trader. These few points will help you to not make mistakes.
Mistake #1 –Trader Never Focus on Knowledge.
When we talk with client we first understand which actual problem is faced by Trader and that is ” Lack of Knowledge “. through some news , Friends , Advisory company they start doing trading even if he dont have knowledge but if we go to some of his experience when i told one Trader to jump in River and he say i dont know swimming so i told why you are doing trading if you dont know when to enter and when to exit,so after he go to Amazon purchase book and search in Google , U-tube and start Reading article but here is not the end if you have knowledge it does not mean you are ready to take profit in the market but certainty not the holy grail I am not saying that one should not focus on “knowledge” part, all I am saying is that it’s not that KEY thing to succeed. Over knowledge will only create problems for you. One of the famous stock trader Ashwani Gujral says in his book – “How to make money trading derivates” – that as per his experience over many decades, he feels that knowledge of charts etc contributes to just 10% of success for any trader. Here is the chart which explains what he mentioned in the book￼So, learn things in stock market and then concentrate on the other important elements which you will learn in some time. Dont over think about
Mistake #2 – Only Gambling and Prediction.
What I have seen is that all the new traders somewhere want to challenge the markets and want to predict when markets will fall and when it will rise. They want to predict when the trend will reverse. They want to catch the top or bottom. This is the essence of where most of the failed traders are stuck .I realized that all the time I was just trying to swim against the wave in River, If markets were going up, I tried to predict when it will fall and how much and vice versa, and in that process I never stayed with the trend. Below you can see last 1 yr graph of Cipla and see that there has been an uptrend in market and it has risen from 175 in 2009 to around 750 in 2015. That’s 428% increase , but imagine someone who didn’t stay with the trend and always tried to predict when will market fall and looked at markets with suspecting manner and never got in the trend itself.￼So just make sure that you never go against the flow in general.
try to identify the overall trend (upside , downside) and then make sure whatever is your trading style , be with the flow itself. There is nothing wrong in having a contrarian view and predict when the markets will turn its direction, but be sure you know how you will take that decision. You can surely take a call against the trend , but make sure you accept that you were wrong in case you fail. Don’t try to prove yourself right if you are wrong, because it’s only going to harm you.
Mistake #3 – No Risk Management , Money Management and Trade Management.
I personally think this is the most important part of being a successful trader . The biggest reason for my failure was that – I was very casual about money management and made the biggest mistakes in this area. Money Management in context of trading is all about managing your overall money and how much part of your overall trading capital you put at risk in each trade. I Read Intelligent Investor’s – ” Follow The Foolish Four by O’Shaughnessy.
Lets Consider whether this ” strategy could meet Graham’s definitions of an investment
==> what kind of ” ” Through analysis ” could justify discarding the stock with the single most attractive price and divind-but keeping the four that score lower for those desirable qualities ?
==> How could putting 40% of your money into only one stock be a ” minimal risk ” ?
==> And How could a Portfolio of only four stock be diversified enough to provide ” safety of principal” ?
Mistake 4# – Trading Mean’s sure Profit Not Losses.
Psychology plays a big role in being a good trader. Since our childhood we are programmed to WIN and that same mindset takes over rational thinking in stock markets trading too. We want to WIN on all the trades , It’s hard to accept that we were wrong , being wrong means taking a LOSS . LOSS equals FAILURE and we are never taught properly how to take failures.
I was so WRONG
Winning MORE times is not same as making MORE money in stock markets trading. I know some of you who are reading this are confused with this statement , but let me explain this important point
So when it comes to stock market trading, you can’t choose how many times you WIN or LOOSE, but can control HOW MUCH you will win or lose !
All you can do is 3 things
1. You can control how fast you can get out of loosing trade (getting out of a bad decision)
2. You can control how long you will stay with a winning trade
3. And You can control when you will take the decision using your knowledge.
WINNING MORE , but still LOOSING
Every trade you make in stock market, you should make sure that your profits potential is generally much higher than the risk potential. Here is how it should look like