T7 Wealth Creators

A Trader's Diary

An ordinary guy on the street with an engineering degree, regular MNC job and no pedigree or godfathers decides to dabble in the market. The goal of course was to make little bit more money to supplement the engineering job income. A near zero brokerage from Reliance Money packed with a zero balance ICICI account sounded nice for the initial kick start. First trade was a penny stock where few paise were made in profit. The happiness about this auspicious profitable start withered away when the contract note from the broker came in. It showed a net debit owing to the transaction cost submerging the miniscule profit. First lesson from the market thus was that its not just the brokerage that needs to be paid when a trade is placed. From there it was an engaging learning experience with several experiments, observations and calibrations done using many different strategies, platforms etc. Figuring out the market to the point where profit could be made took time and effort. All that to create something that was profitable yet simple and consistently followable with acceptable trade off between risk, accuracy and profitability. This story belongs to our founder director and the key decisions made along the way is chronicled below.

    • Flushed down the drain fundamentals - Too much time was spend to make a decision, each time and every time. No guarantee still that it was the right decision.
    • Divested investment thoughts - Investments make money only when market goes up. In trading money can be made whether market moves up or down and even when it is flat.
    • Ignored news based trading - The reaction was always late. Some one knew it before a trade based on the news was placed on the trading platform. Therefore a chance to profit didn't really exist with acceptable risks.
    • Blocked Tipsters - They sent calls after they were in the position. They exited before their customers were alerted. Their website showed profit while customers booked losses.
    • Divorced discretionary trading - Not objective enough to be convincing enough.
    • Said No to stock trading - Difficult to backtest with data adjustment issues (Splits / Bonus). Liquidity / Circuit freeze issues. There is always someone with more inside info.
    • Forced stop market watching and then dated auto trading - Chart watching is physically very demanding. Automation helped with seamless execution and exceptional consistency.
    • Dumped into dustbin a profitable 5-min time frame Nifty technical trend following system - Noticed chart data changing after market even though the datafeed was from NSE authorised vendor.
    • Ditched futures and fell in love with option - Better risk management and lower transaction cost in a zero sum game.
    • Zip locked trading activity from parents for a brief while - They got worried and asked are you not getting salary as an engineer ?

Now 15 min a day, trend following Nifty with Daily charts, buying naked weekly options, every market day is a fun day. How about you ? Have you figured out your trading plan ?