How to invest 40 lakhs in equity, FnO, commodities etc.

[SexyTrader]

Oh ok...

I agree that margin is very risky, but I have had it good with margin exposure...atleast till date

Like a simple 5 Lakhs gets me a margin exposure of 20 Lakhs...isnt that great ? :clap:

Profiting on 20 Lakhs exposure in day-trade is not so tough, but it is risky...maybe I have been just plain lucky or have got the hang of it.

Since I have managed to grow my capital to 40 Lakhs, I was thinking if I could segment it in such a way that I get a total margin exposure of 1 Crore 60 Lakhs to day-trade and swing and position trade with your suggestions ?

I keep a stop loss of 2% with such exposure...is that ok ?

 

[Smart_trade]

Thanks ST,

But if I take margin, I can get more exposure...so will these percentages suggested work with the margin exposure too ?

Coz I can get upto 4 times margin exposure on my capital...so will the percentages remain the same if I do on margin ?

As traders we have to consider how much risk we take in relation to our trading capital at hand ....margins charged by brokers are irrelevant when we talk about position sizing in relation to the capital....

Let me ellaborate... If your allocation for daytrade is say 15 L and you trade 3 scrips with 5 L each allocation, and suppose your first trade is triggered and if you are risking 1.5% on a trade you will risk 7.5 K on this trade and if your stops are 25 points away, you will trade 300 quantity....also assuming similar stops for other two trades you will trade 300 +300 +300 in these 3 scrips ( assuming lots, prices etc almost same for simplicity ). Your broker may allow this quantity in say 2.5 -3 L margin...but dont increase the quantity because margins allow higher quantities....that will be overtrading...keeping some money for M to M ....you keep Rs 4.5 to 5 L in your trading a/c and put the rest 15-5 = 10 L in a fixed return safe investment avenue which will earn some interest for you.

Be very careful with risk....you are a trader yourself so you know that we play with fire every day...so play safe....

Smart_trade

 

[SexyTrader]

Oh ok ST

fixed return you mean like a FD or something ? Or ?

Thanks

 

[SavantGarde]

STrader,

While you possibly have a knack for trading...which I shall not discount it..

... and don't get swayed or jump into Futures by my next statement.... but from my Personal experience there is nothing that gives you more money than futures.... please be forewarned... I am purely a futures trader.

As the capital grows.... beyond a certain point... one runs out of idea on how deploy it effectively... & that's precisely what has brought you to TJ with your query.....

Once you have started trading Swing & Positional... and learn the ropes... I would still suggest stay away from margin....

I have seen too many rookies during a bull run ...who mistake themselves for a Financial genius..... and that was usually short lived....

You have to learn the tricks of trade...besides Intraday....which you have been doing it quite successfully....

SG

Oh ok...

I agree that margin is very risky, but I have had it good with margin exposure...atleast till date

Like a simple 5 Lakhs gets me a margin exposure of 20 Lakhs...isnt that great ? :clap:

Profiting on 20 Lakhs exposure in day-trade is not so tough, but it is risky...maybe I have been just plain lucky or have got the hang of it.

Since I have managed to grow my capital to 40 Lakhs, I was thinking if I could segment it in such a way that I get a total margin exposure of 1 Crore 60 Lakhs to day-trade and swing and position trade with your suggestions ?

I keep a stop loss of 2% with such exposure...is that ok ?

 

[IAtma]

guess with Sawant or ST u r not saticefy...., well I have a much better solution.

U can give that 40 lacs to me....

I will turn it in 4 lacs or 4 k & will return u......

what says.........

fixed return you mean like a FD or something ? Or ?

 

[Smart_trade]

I have seen more number of traders getting ruined because of excessive leverage and overtrading than any other reason.....so trading large on margins is a strict NO for me....

You dont need to take huge risk...with 1.5 to 2 % of the capital risked on every trade one can make very decent 3 figure returns.....so why burn oneself with high leverage ??

One may be very good in trading but markets will always have a few unexpected and unexplained price shocks and if excessively leveraged, one such shock is enough to permanantly put us out of the game....

Trading is too interesting to put such a great career in jeopardy with leveraged high risk positions....

Smart_trade

 

[DanPickUp]

Trading on the level of just can or are willing to have just the margin in the account is only for hard core traders. Nothing for baby traders or sexy traders.

Doing so, means having enormous experience in live trading and it means, knowing your tools and indicators like your pants bag.

 

[SexyTrader]

Trading on the level of just can or are willing to have just the margin in the account is only for hard core traders. Nothing for baby traders or sexy traders.

Doing so, means having enormous experience in live trading and it means, knowing your tools and indicators like your pants bag.

Personally my style relates to something that I love, hence day-trading and swing and positional equity and options works best for me....I do not have much experience on the Futures as yet.

All the tools and indicators are available on any good stock charts sites...I do have a look at them, but do not believe in following them like a religion :clapping:

Thats coz I believe one needs to know what one likes and then fit it to the market scenario...I do that and I have maybe got less profits, but thats much better than losing :rofl:

I play on price differentials...some days I make excellent, some days not so good....but as long as it covers my brokerage and capital gains and yet makes a profit, it does not bother me :thumb:

So what do you all think about this kind of approach ?

 

[SexyTrader]

I have seen more number of traders getting ruined because of excessive leverage and overtrading than any other reason.....so trading large on margins is a strict NO for me....

You dont need to take huge risk...with 1.5 to 2 % of the capital risked on every trade one can make very decent 3 figure returns.....so why burn oneself with high leverage ??

One may be very good in trading but markets will always have a few unexpected and unexplained price shocks and if excessively leveraged, one such shock is enough to permanantly put us out of the game....

Trading is too interesting to put such a great career in jeopardy with leveraged high risk positions....

Smart_trade

Yes I agree to that ST

But a covered high exposure can work to one's advantage on some days right ?

I do not excessively leverage, coz as long as the exposure is worth playing on....how can one lose ?

Not much idea about Futures as yet, but day-trading equity and options is pretty exciting....reminds me of my school days playing Monopoly and winning it all

 

[anuragmunjal]

Not much idea about Futures as yet, but day-trading equity and options is pretty exciting....reminds me of my school days playing Monopoly and winning it all

hi sexytrader

If I were u I would try n make my trading monotonous,boring...and not exciting.

regards