Few Tots: I remember when I did intra-day trading for the first time...made a cool 10% return on Adlabs just by making 2 calls. The next day I tried my luck on Bombay Dyeing...bought at 480 odd. Then the markets plunged. Stop loss got triggered at 458...and the bloody stock reversed from 454 and ended the day at 484. Lost more than what I had made the previous day. The next day bought Bombay Dyeing at 505 as an investor and held on to sell at over 700. Its almost a well known fact that trading has an almost equal probability of going wrong and if u can make profit on 70% of your traders, your skills would be Godlike! We all read about greats like Warren Buffet, Peter Lynch Benjamin Graham in our quest to make money in the markets but end up doing just the opposite of what these greats did. May be this depends upon the time-frame and expectations set from the market by everybody. Perhaps its the desire to get rich quickly which pushes people to trading. My experience has been that when we try to time the market both ways long and short - the fall as well as the rise, we mostly (about 75%of the times) end up losing money. Intraday is great for ppl who have got solid insider information or know who’s buying or who’s behind the fall/rise. Amateur traders do it impulsively and lose money. My most recent experience is Baffin eng where I have invested 28000 bucks @ very high levels and it touched rock bottom - 50paise. I forgot about it and never bothered to sell, thinking that it s as good as I have lost it entirely. but today, after almost a year, if I sell I lose only 50% of what I have invested. That’s the best part of investing. If it goes down after investing, do not sell if you can afford to. It come back mostly (>90% of the times). I have seen ppl who barely understand stock markets making huge money by investing and also ppl who understand markets well but they become over confident and try to time it every time - up and down. Hence, "trade to lose and invest to win .Much of the pain we have in the system is in my opinion a result of this speculative F&O segment. Most of the hedge fund collapses take place because of some F&O trade going horrendously wrong.Net pal of mine lost one fourth of his capital in one single currency related F&O trade going wrong... Most of the legitimate bankruptcies in the Financial world ( i.e bankruptcies not arising out of fraud but due to some genuine trade mistake) like Bearing Bank crash, the Amaranth crash have been caused by some leveraged trade going badly wrong.. ( in case of Amaranth the hedge fund betted on the wrong side of crude price movement and in the Bearing bank's case Nick lesson judged the direction of Nikkei's movement wrong).I have same story as you .... I started with 50k .... Made some money in intraday cash segment and then started F&O ... lost all my gains and even the principle amount went to 35k .... Then became an investor and since then recovering my losses ... slow and steady recovering losses and making profits more then before in a month .... as someone said 75% its losing money.....1)No one can get a stock at bottom most price and no one can sell the stock at maximum price 2)Only 5-10% of people make money in intra day trading rest all just lose their mind and money 3)Never love a particular stock so much that u just carry it on and on without booking profits. Always book profit at certain levels. 4)Apart from TA, FA sentiments too drive Indian Market 5)Some times pure common sense is more helpful than ant TA,FA. neither TA nor FA drives teh stocks ... only money flows drive the stocks and this is fuelled by only fear and GREED ..
(Thanks to Milu for this message
from may charts team and Jay )
for all other people calls please trade at your own risk