How much return on 1L?

[kgbalaji1983]

Hi,

Greetings.

I am a beginner, i need the thread members help to start trading.
for the past two months i am studying the market. i was gone through all the threads, it is true that nothing is stable.
specifically, which we are expecting that will not gain. so i understand that, i have to learn a lot to predict.
1. can you please clarify me the concept of auction, how the stock value going up & down.
2. I found many stocks are gaining a lot (even 50 Rupees in single day). what you suggest on that to invest, please give me an idea how to find such stocks & when it ll go up and down.
3. i found in some where in the thread some one said that, even the profit is less do "BUY-SELL, BUY-SELL, BUY-SELL".
how about this concept. is it feasible. Bcoz, HDFCSEC web site provided with millionaire game option. which is nothing but live trading - virtually (intraday & delivery). as i am keep on doing the same, it is giving me good profit (after deducting the brokerage charges & other charges).
4.From where we can get "BUY & SELL" signals continuously.

i hope i'm not disturbing you.

Thanks & expecting your comments.

 

[Rinchen Bhutia]

Advise given by hc9001 to begginers is very realistic. Thanx.

 

[abir]

Dear fish,

you must be feeling a little alarmed after reading the replies so far. Just becoz someone else failed, does not mean you will also fail. I will mention my experiance. Hope it will help.

My story
1) started trading on others' advice - tv/internet. Made some money : Lost some -> not satisfied.
2) came across technical indicators like EMA/oscilators etc etc. Thought I have won the market. Did paper trading for 2 months. Had amazing result. Started trading with real money. Initial strategy EMA crossover. First 3 attempts resulted in whipsaws. Then didn't take position and market zoomed. This or nearly like this continued for nearly 6 months. It left me with a lot of bruises. I didn't give up.
3) Came across price action / candles. Put a lot of effort understanding highly probable candle patterns and importance of volume. And never looked back. I have been following this since jun 2011 with positional trade in NIFTY and happily made minimum 200 points monthly basis.
4) I never tried to day trade before until recently nearly 3 months back. There also I followed a very simple strategy based on break out supported by volume and made nearly 500 points monthly, trading NIFTY and BANKNIFTY together. You can refer to my "Mid Day Break out Trading" strategy if you want. There I will try to post my real time trades.

My suggestion
1) If want to follow technical indicators, do so but make sure that your trade is supported by price action and volume.
2) Have your target atleast twice or thrice of your stop loss. So that even with success ratio of 50% you make money.
3) Don't follow others. You should be able to answer "why you are in trade???".

Thanks

 

[fish]

abir,500 points on NIFTY means what?
1 point=??(I dont know anything abt Index Option trading).

-Lini

 

[Taurus1]

Some info on futures and options here
http://money.howstuffworks.com/personal-finance/financial-planning/stock-future.htm
http://www.investopedia.com/university/options/option.asp#axzz1kGCQ7meS

For the moment, think of 1 lot Nifty as equal to 50 Nifty "shares"
Every 100 point Nifty move up or down is a 5000 profit/loss depending on the trade direction.
The option chain for Nifty
http://www.nseindia.com/marketinfo/...strument=-&date=-&segmentLink=5&symbolCount=2



Lets say we think DLF will go up
http://www.nseindia.com/marketinfo/...strument=-&date=-&segmentLink=5&symbolCount=2

We can buy 1000 shares at Rs.214; 1000 x 214 = Cost Rs.2,14,000
OR
Buy 1 lot DLF futures(lot size 1000)= Cost(margin) approx 20% of 2,14,000
OR
buy 1 lot DLF 220 call at Rs.2.00= Cost Rs.2000

Possibility 1
Next day DLF opens Rs.10 down or 5%, due to bad news
Shares lose Rs.10 x 1000= Rs.10,000 or 5% of capital
Futures lose Rs.10 x 1000= Rs.10,000 or 25% of capital
Call option loses Rs.1.50= Rs.1500 or 75% of capital

Possibility 2
Next day DLF opens Rs.10 up or 5%
Shares profit Rs.10 x 1000= Rs.10,000 or 5% of capital
Futures profit Rs.10 x 1000= Rs.10,000 or 25% of capital
Call option goes to Rs.6, profit is = Rs.4000 or 200% of capital

 

[leo73]

i wouldnt discourage you on this ,

Yes this is possible even with a capital of 30K. considering your broker lends u 70% of the capital for day trading, while you keep 30% in your margin a/c.
but that is not you should be looking at, to begin with...


First, do the NEEDFUL .

for ONE month sit in front of the screen, keep only one stock open in front of you, watch the price move, without taking your eyes off.
Make a note of every movement in the price, and try to analyze the reason behind such movement.

Keep the candle stick chart patterns (pennants, wedges, dips, triangles, tops, flags etc. ) with you as reference
and see, which of these patterns match the price pattern of YOUR stock. ( there are lot more indicators, but mastering the candle sticks are the first steps) , so Do this everyday.

Note : Every scrip moves up/down largely from 1.00 - 3 Rs in a day, some even more... All you need to do is to trap the move, and make money ....

Paper trading dosen't work in real time. Unless you have a stake, you are not serious.

So trade a very small volume, say 100/150 stocks of a scrip, ( ex : mid caps like DELTA CORP, STERLITE, SINTEX etc. on either of the indexes )
See how much you make. Keep in mind.. your profit is less brokerage,sebi,stt,serv tax.

To begin with, be positional do not trade in MARGIN.

Remember ! DO NOT TAKE YOUR EYES OFF THE SCREEN during the trading hours , 9.15 AM - 3.30 PM
see how it goes. Happy Trading....

 

[bpr]

See this apporch or thinking has a big flaw.
When I started my trading I used to think exactly like this.
We can not dictate how much percent that you can earn per day/month/year from the market.
Nobody can.
Let me explain.
Lets assume you have a perfect trading system which never looses(100% win) and you are a perfect trader.(ideal condition)
Now lets see some sample values how much you make per day per 1L? for the next 10 days.
1k
0.1k
0.2k
0.1k
0.1k
-0.1k
0.1k
-0.1k
-0.2k
-0.5k
Woah what happened?See First day market was trending and all remaining day market was flat severely limiting your earnings.
and what abt the negative days see even if the trading system got you out with 1 point profit the overall brokerage makes it negative.

Long story short Market decides how much it is ready to give you.
And then depending on your trading system+trading skills decide how much you can extract from whatever market has to offer.

 

[wishmeluck006]

hi abir,
ur reply was useful. am a new trader. just started to learn today. what is position trading and day trading? are there any articles to elaborate.

thanks
wish me luck

 

[FanaticTrader]

hi abir,
ur reply was useful. am a new trader. just started to learn today. what is position trading and day trading? are there any articles to elaborate.

thanks
wish me luck

Day Trading applies to trades getting executed and closed on the same day whereas positional trades tend to span over few days