Gentlemen,
A gentleman came to me and quietly asked a question.
I thought I knew the answer but honestly speaking,I know I am guessing things without real time impact.
My view is presented here. Learned members may please present a realistic
solution to this problem which every new investor and trader begin thinking
intesively.
------------------------------------------------------------
The question you have asked is not a simple one.
there may be more than one answer.
time peroid=3 years=36months each having 22 trading days.=792 days of trading.
medium to invest=stocks(simple),index futures,options-both the last 2 need study
10laks=target amount at the end of 792days
---------------------------------
Assuming you make 4% a month, or 10% a quarter of three months,
If you start with Rs 3 laks, assuming no losses, at 4% gain every month, you will end up reaching a target amount of 12.31 laks after 36 months.
If you just trade for for 31 months you reach 10.11 laks.
--------------------------------------------------------
Assuming you make only 2% a month on 3 laks, you reach a conservative estimate of
6.12laks at the end of 36 months. if you dont loose any thing.
---------------------------------------
Assuming you manage to make 3% every month by your trading, you reach a
target level of 8.69 Laks at the end of 36 months.
------------------------
That is calculations to begin with.
The fact remains in trading losses are always there. How much and how do you control it decide the maximum loss one can encounter. so you have to make allowances for the losses apart from profits.
The only way you can do it is by trying for more profits and less losses.
How do you handle these losses?
Fix up your maxium loss level in advance and get out of market once your loss levelk is hit.
Money management is the key. trade ten trades,have 6 losses at 2% each,gain 4 trades at 8% each,net gain=32-12=20%
If you want to make 4% a month, you need to aim at making 8% , and even if you loose 4%, still you reach your target.
What is thing you will trade? one of these= stocks,futures,options
Which is the method you will use? daytrading,swing trading,long term trading
Day trading.
Not an easy thing if you dont know what giant evil demon you are dealing with, and if you dont have right kind of weapons,you might loose all you got.
weapons=a trading software, auto squareup facility, a very low brokerage at 0.02%,faster trade execution,and right stocks with high volatility to trade,and above all
a strict risk control strategy in the face of sudden market crashes. Smart people with smart techniques can only do this.
swing trading.
you buy stocks at right timing ahead of uptrends,well before a trend really begins, and you exit after weeks and months with maximum profits. If a marketcrash occurs after you bought stocks,you must have an automatic exit from all your positions minimising major losses. point is you invest along with major indices and exit fast if the indices begin to dive down.Trendline techniques can help a lot.
Long term trading.
Here I have two great people who proved to the world.
Part-1 Warren Buffet Value investor in the lines of GRAHAM,his mentor
Part-2 Nicolar Darvas A hungarian dancer who used a DARVAS BOX theory
Part-1 WARREN BUFFET STYLE
Every one says Dont buy and hold-you will loose.
Warren buffet is one guy who proved to the world that you can make maximum profits doing a buy and hold,but only if you select best of the stocks and buy them at best of times at lowets of prices. it means vision,waiting,long period of time,proper evaluation and selection of stocks,above all right timing to enter.
Part-2 Nicolas Darvas (Big daddy of momentum investors)
Darvas came out with a box theory.
BOX theory that made millions
He believed stocks have the prices consolidate before they rise or fall.The consolidation period varies from few days like 3 to 6 days or so.
Highest price in the consolidation zone is the top of the box. YOU BUY JUST SLIGHTLY ABOVE THE BOX TOP,only if the price crosses above the box top.
The bottom of the box is made of the lowest price in the consolidation zone.
You use the bottom as stoploss, and exit if price begins to fall through the bottom of the box.
How do you generate the box?
There are rules not so simple. but you can buy a software that draws you the boxes on a chart and you just follow the rules.
Millionaire makers in India.
People who bought Infosys shares at 90 rupees or 150 rupees reached a value level of 3 laks from 9000 or 15000 rupees in a span of three years. these people just bought and stayed cool.Wipro -same thing happened.
----------------------------------------------------------------------
Now think about all these methods pick your vehicle and travel to your destination.
--------------------------------------------------------
Rvlv....what is the mininmum amount we need to invest in
stocks...to make 10 lakhs in 3 yrs???...
A gentleman came to me and quietly asked a question.
I thought I knew the answer but honestly speaking,I know I am guessing things without real time impact.
My view is presented here. Learned members may please present a realistic
solution to this problem which every new investor and trader begin thinking
intesively.
------------------------------------------------------------
The question you have asked is not a simple one.
there may be more than one answer.
time peroid=3 years=36months each having 22 trading days.=792 days of trading.
medium to invest=stocks(simple),index futures,options-both the last 2 need study
10laks=target amount at the end of 792days
---------------------------------
Assuming you make 4% a month, or 10% a quarter of three months,
If you start with Rs 3 laks, assuming no losses, at 4% gain every month, you will end up reaching a target amount of 12.31 laks after 36 months.
If you just trade for for 31 months you reach 10.11 laks.
--------------------------------------------------------
Assuming you make only 2% a month on 3 laks, you reach a conservative estimate of
6.12laks at the end of 36 months. if you dont loose any thing.
---------------------------------------
Assuming you manage to make 3% every month by your trading, you reach a
target level of 8.69 Laks at the end of 36 months.
------------------------
That is calculations to begin with.
The fact remains in trading losses are always there. How much and how do you control it decide the maximum loss one can encounter. so you have to make allowances for the losses apart from profits.
The only way you can do it is by trying for more profits and less losses.
How do you handle these losses?
Fix up your maxium loss level in advance and get out of market once your loss levelk is hit.
Money management is the key. trade ten trades,have 6 losses at 2% each,gain 4 trades at 8% each,net gain=32-12=20%
If you want to make 4% a month, you need to aim at making 8% , and even if you loose 4%, still you reach your target.
What is thing you will trade? one of these= stocks,futures,options
Which is the method you will use? daytrading,swing trading,long term trading
Day trading.
Not an easy thing if you dont know what giant evil demon you are dealing with, and if you dont have right kind of weapons,you might loose all you got.
weapons=a trading software, auto squareup facility, a very low brokerage at 0.02%,faster trade execution,and right stocks with high volatility to trade,and above all
a strict risk control strategy in the face of sudden market crashes. Smart people with smart techniques can only do this.
swing trading.
you buy stocks at right timing ahead of uptrends,well before a trend really begins, and you exit after weeks and months with maximum profits. If a marketcrash occurs after you bought stocks,you must have an automatic exit from all your positions minimising major losses. point is you invest along with major indices and exit fast if the indices begin to dive down.Trendline techniques can help a lot.
Long term trading.
Here I have two great people who proved to the world.
Part-1 Warren Buffet Value investor in the lines of GRAHAM,his mentor
Part-2 Nicolar Darvas A hungarian dancer who used a DARVAS BOX theory
Part-1 WARREN BUFFET STYLE
Every one says Dont buy and hold-you will loose.
Warren buffet is one guy who proved to the world that you can make maximum profits doing a buy and hold,but only if you select best of the stocks and buy them at best of times at lowets of prices. it means vision,waiting,long period of time,proper evaluation and selection of stocks,above all right timing to enter.
Part-2 Nicolas Darvas (Big daddy of momentum investors)
Darvas came out with a box theory.
BOX theory that made millions
He believed stocks have the prices consolidate before they rise or fall.The consolidation period varies from few days like 3 to 6 days or so.
Highest price in the consolidation zone is the top of the box. YOU BUY JUST SLIGHTLY ABOVE THE BOX TOP,only if the price crosses above the box top.
The bottom of the box is made of the lowest price in the consolidation zone.
You use the bottom as stoploss, and exit if price begins to fall through the bottom of the box.
How do you generate the box?
There are rules not so simple. but you can buy a software that draws you the boxes on a chart and you just follow the rules.
Millionaire makers in India.
People who bought Infosys shares at 90 rupees or 150 rupees reached a value level of 3 laks from 9000 or 15000 rupees in a span of three years. these people just bought and stayed cool.Wipro -same thing happened.
----------------------------------------------------------------------
Now think about all these methods pick your vehicle and travel to your destination.
--------------------------------------------------------
Rvlv....what is the mininmum amount we need to invest in
stocks...to make 10 lakhs in 3 yrs???...
Last edited:
. sometimes his system works, sometimes not. 