Trading Nifty

[Gaurav Kumar]

This post is for moves on Friday as well as a reply to Ratan Jain

1. Thanks to a big fall in the US markets, our markets would also be affected. We would prefer to wait and see how the market behaves today. We shall not take any decision on the basis of panic, but would decide on the future course of action after the market closes today. Action on the basis of intra day moves can be faulty.

2. Answer to Ratan Jain: What i look for is patterns in the markets. Thus when i day that i could be wrong is when there is a change in the pattern of market moves, which has little to do with levels or stop losses.

3. If i find that there is a change in pattern and the market would move in a direction opposite to what i had expected earlier, i would do either of two things. If my loss is small, i would book it. If it is going to be bigger, then i would hedge. Then i would see where the pattern would give a small retracement, which i shall use to exit loss making position. Thus overall i am able to minimise losses.

4. Use of stop losses means that you are at the mercy of market volatality and a volatile market (as we may expect today), would surely lead to losses. So stop losses are best avoided.

Gaurav Kumar

 

[alokdaga]

Hi R.K.Karnani,
In reply to what you have asked.
1. I have indeed given a target of 4700.
2. In my first post three-four days ago, i had mentioned that the market would open weak and it would give an opportunity to get in at 4500-4530 levels. Plus minus a few points is irrelevant.
3. Every day i have continued maintaining that the target is indeed 4700, so if you were getting Nifty at say 4570 or 4550, what is the fear?
4. Stop losses are advised by those who do not understand market movements or are scared that they would be wrong.
5. Had you placed any stop loss, your stop loss would have been trigerred by now almost on a daily basis, leading to losses.On the other hand we are about 50 points plus from our buy price, without any stop loss (and without any fear)
6. My calls can indeed go wrong (nobody is god), but when they do go wrong i either book a small loss or hedge. Stop losses are always true to their name, i.e. they lead to losses. So i never place stop losses (well almost never).
7. If you have anything above 1,00,000/- or more available for investment, my methods would ensure that losses are rare and very small. One could almost say that they are not there.
8. Most people do not understand markets or how to invest in them, so they make common mistakes and they keep on repeating the mistakes.
9. My investment strategies are very different from others in the field.
10. Please carry out paper trades only, till you understand my methods. I would not like anybody to loose any money.
11. While my thread is on nifty, i apply the same principles on stocks also.

Hope i have answered you satisfactorily,
With best wishes,
Gaurav Kumar

Your views Gaurav considering the present market scenario.

Regards

Alok

 

[ratan jain]

Alokdaga:

Its no use

He has a great system

And if he holds for a few years, sensex will cross 25000
so why keep stops?
let it correct a few thousand points.
After all, its going to 25000.

The only problem is the pain involved when u watch the market goes against you.

I prefer accepting that my analysis is wrong, which is QUITE often, standing aside, and then taking a fresh position, if my system says so.

I may not make as much money as gaurav, because of his superior system, but at least I am comfortable with my trading...well almost comfortable

Best of luck Gaurav
Hope the market crosses 25000 for u

 

[Gaurav Kumar]

Dear Ratan and Others,

I am not surprised at your comments.

Lets see from my first post where i advised taking a long position in nifty at range 4500-4530, we are about 130 points down or Rs. 6500/- .
Agreed.

What most people would have done is to book losses or their stop losses would have been trigerred. I have not booked a loss at all, so far. Lets examine what the market is likely to do.

The market has to return to 4550 level. If i have to exit i shall do so at that level, booking a profit. The question is when it shall reach that level? Most market indicators show that the recovery should be very fast and next week itself. The only thing that needs to be seen is development in US markets (the cause of the fall). If things do go adversely again tonight, we shall hedge rather than book a loss.

Remember booking losses is the easiest thing to do and that is why most people end up doing so.

I shall give my next comment on monday morning when i shall be more certain of the course of action we need to take.

I am of NOT targetting 25000 in sensex, but i would definitely not like to book losses. I am NOT in the market to speculate and put in my money just for fun.

Money is serious business and needs to be taken seriuosly..

Only those who are CALM and COLLECTED make money in this market, rest don't..... Those who trade on impulses make a lot of money FOR BROKERS in the form of BROKERAGE

With best wishes

Gaurav Kumar

 

[swagat86]

Best wishes to u Gaurav.

I hope markets dont get into a bear market. If it does so u wll have to keep holdin the nifty. U know the fate.

One more thing the run in the last 3-4 yrs have made ppl very confident that it will pullback some day. careful abt that.

Nifty future u have to pay MTM dont forget that.


Thats all

 

[rajaram.dilipkumar]

Hi R.K.Karnani,
In reply to what you have asked.
1. I have indeed given a target of 4700.
2. In my first post three-four days ago, i had mentioned that the market would open weak and it would give an opportunity to get in at 4500-4530 levels. Plus minus a few points is irrelevant.
3. Every day i have continued maintaining that the target is indeed 4700, so if you were getting Nifty at say 4570 or 4550, what is the fear?
4. Stop losses are advised by those who do not understand market movements or are scared that they would be wrong.
5. Had you placed any stop loss, your stop loss would have been trigerred by now almost on a daily basis, leading to losses.On the other hand we are about 50 points plus from our buy price, without any stop loss (and without any fear)
6. My calls can indeed go wrong (nobody is god), but when they do go wrong i either book a small loss or hedge. Stop losses are always true to their name, i.e. they lead to losses. So i never place stop losses (well almost never).
7. If you have anything above 1,00,000/- or more available for investment, my methods would ensure that losses are rare and very small. One could almost say that they are not there.
8. Most people do not understand markets or how to invest in them, so they make common mistakes and they keep on repeating the mistakes.
9. My investment strategies are very different from others in the field.
10. Please carry out paper trades only, till you understand my methods. I would not like anybody to loose any money.
11. While my thread is on nifty, i apply the same principles on stocks also.

Hope i have answered you satisfactorily,
With best wishes,
Gaurav Kumar

dear gaurav,

I dont understand how you can hedge after incurring losses.....e.g. if u hold a 4600 call and the market opens at 4450 ,at this stage u have already incurred a loss ....and by hedging do you mean buying 4600 puts and holding on to 4600 calls ( to make things worse premiums for put option in a falling market will rise at a faster rate than premium for call option in a bull market ). That way you are locking your losses that you already made . Infact fund houses resort to hedging to lockin their profits or minimize potential losses but they do that after making money not after losing money..
Pls dont take this as bashing or advice ...take this as a piece of information and never trade without SLs ( my brother inspite of repeated calls from me never had any SLs has lost lakhs this month . I dont want that to happen to anyone ) .

 

[MAGNET MAN]

dear
ratan jain,alok daga, technical trader , raja.

i think u all are perfectly perfectly right that one shud always play with sl
stop losses dosen't mean losses
it means i can't afford more loss, so please stop my loss.
and gaurav u said most of time ur sl will hit
if u r a true technalyst than ur sl will hit 2 or may be 1 out of 10 times

in future without sl i can't imagine.
what if mkt goes in bearish hands(though chances r very very very minimum)
but question remains the same what if it goes.
u will have 0 margin money
than it dosen't matter that u have
1 lakh
5lakh
50 lakh
or
1 crore

it will just turn into zero.

warm regards
magnet man

 

[ratan jain]

Dear Ratan and Others,


The market has to return to 4550 level. If i have to exit i shall do so at that level, booking a profit. The question is when it shall reach that level?

I am sure it will listen to you and reach 4550

In fact, the next time I meet nifty I will pass on the message

And YES the question is when it will reach it?

After your mtm losses have wiped out your equity?

But you really are a great analyst Gaurav.

I now wish the market goes to 3500

good opportunities for all, what say?

I dont think even if it goes to 3500 many people will loose much if they have accepted their losses and stepped to the side.

People who WANT mr. nifty to reach a particular level will be left holding just contract notes

 

[swagat86]

I am sure it will listen to you and reach 4550

In fact, the next time I meet nifty I will pass on the message

And YES the question is when it will reach it?

After your mtm losses have wiped out your equity?

But you really are a great analyst Gaurav.

I now wish the market goes to 3500

good opportunities for all, what say?

I dont think even if it goes to 3500 many people will loose much if they have accepted their losses and stepped to the side.

People who WANT mr. nifty to reach a particular level will be left holding just contract notes

arrey Miss Nifty

 

[maxmak]

Dear Gaurav
The market had been rising everyday with Gap up, this situation meant a breakdown would be sharp. It has happened.
There are ways to look at stop losses.
One can buy at price 11 and keep stop loss at 12 if the price goes up.
to 13 or something. This way at the least a positional SL would give a return and reduce the risk of Loss.
Regards/Max