Is this calculation correct :
Crude Oil : Lot size 100
Margin required as per 7th Aug Closing Price of 2848 (Zerodha site) : Rs.19103/- i.e. approx 6.75% of Lot Value
Considering max value of Crude in 2015 at Rs.4000/- the max margin required would be Rs.27000/-
Adding Rs.54000/-(27000X2) for MTM, we use Rs.81000/- for trading 1 lot of Crude.
To earn 100% p.a. we need to earn consistently at an avg of : 6750/- per month. (81000.00/12)
For expenses and slippage we add 13500 to 6750) i.e we need to get a profit of approx Rs.20000/- per lot
Rs.20000/- per lot comes to 200 points per lot ! (20000/100)
So taking the worst scenario we need a gain of 200 points per lot per month to min. double our Capital applied !
It can further be said that, to get 200 points per month, we need just 10 points net per trading day, considering 20 trading days a month!
So any strategy for doing it successfully with least heart burns !
And not on serious note :
Can we further say that one needs to gain just 2 points per hour (actual calculation comes to less than 1 point per hour) of trading to double his/her Capital in Trading Crude on MCX!!
Crude Oil : Lot size 100
Margin required as per 7th Aug Closing Price of 2848 (Zerodha site) : Rs.19103/- i.e. approx 6.75% of Lot Value
Considering max value of Crude in 2015 at Rs.4000/- the max margin required would be Rs.27000/-
Adding Rs.54000/-(27000X2) for MTM, we use Rs.81000/- for trading 1 lot of Crude.
To earn 100% p.a. we need to earn consistently at an avg of : 6750/- per month. (81000.00/12)
For expenses and slippage we add 13500 to 6750) i.e we need to get a profit of approx Rs.20000/- per lot
Rs.20000/- per lot comes to 200 points per lot ! (20000/100)
So taking the worst scenario we need a gain of 200 points per lot per month to min. double our Capital applied !
It can further be said that, to get 200 points per month, we need just 10 points net per trading day, considering 20 trading days a month!
So any strategy for doing it successfully with least heart burns !
And not on serious note :
Can we further say that one needs to gain just 2 points per hour (actual calculation comes to less than 1 point per hour) of trading to double his/her Capital in Trading Crude on MCX!!
Carry this calculation further. Create an Excel Sheet to calculate :
We trade 1 lot Crude for 200 points for 3 months. Capital used 80000/- (Accumulated gains : 60000 max and say min.20000/-)
We trade 2 lots Crude for 200 points each for next 3 months. We introduce extra Capital max 60000 plus 21000 profit) : Capital 140000/-+20000 Profit
(Gains in 2 lots for 3 months max 120000/ min. 40000)
We trade 3 lots Crude for 200 points each for next 3 months. We introduce extra capital 40000+add profit to margin 40000) : Capital 240000/-(180000/-+ 60000)
(Gain in 3 lots for 3 months max : 180000/- min. 60000)
We trade 4 lots for 200 points each for next 3 months. We introduce extra capital 20000 + add profit to margin 40000) Capital used 320000 (Self 200000+120000)
Gain in 4 lots for for 3 months max : 200000/- min. 80000/-
In 1 year we gradually increased our own Capital exposure to 200000 and added 120000 of profits and at close of 12 months we would have generated a profit of Rs.200000/- (Every three months resepectively : 20+40+60+80=200 Thousands) We gradually used a capital of 2 lakhs and had a gain of 2 lakhs, a 100% return. And do note that this should be bare minimum.
So we trade 4 lots for the entire 2nd year and generate a minimum profit of Rs. 320000/- (4 lots X 80000 min per 3 months)
We saved 80000/- out of 4L in first year and used the balance 3.20 L as working capital.
In second year we gained minimum 3.2 L, a 100% min. return.
In third year we increase the trade size to 8 and in 4th year to 12 and finally to 20 lots in 5th year and continue that for next 5 years!
We generate a gain of Rs.16L per year from 5th year onwards !
All calculations in place, all we need is a strategy and immense trading discipline!
Discipline, I am sure I have, but need a strategy! So please help!
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