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Smart_Trade Fan Club

Discuss Smart_Trade Fan Club at the Words of Wisdom within the Traderji.com; Dear friends, Smart_trade (ST sir/Da) is become a household name now for every traderji members. ...


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  #1  
Old 6th August 2016, 12:58 AM
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Thumbs up Smart_Trade Fan Club

Dear friends,

Smart_trade (ST sir/Da) is become a household name now for every traderji members. I'm also not an exception in this case. I just would like to start this thread so that many of his valuable posts/gems which are lost in many threads can be recovered. Some point of time in our trading career we are at our lows, and we desperately look for such posts, may help us to renew our spirit.

This thread might serve the purpose of it to all our new and old fellow traders. I humbly request to all my friends, please share here all posts by ST sir.

Please do not post your views including any thread reference started by him. Only posts from ST sir, if over the time posts get repeated no problem, let's post here.

Hope this will help a lot to many traders.

Thanks
rip07


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  #2  
Old 6th August 2016, 09:25 AM
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Default Re: Smart_Trade Fan Club

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Originally Posted by Smart_trade View Post
Yes,I was having my own very successful business ( not related to stock markets) before I entered trading business.Before that I worked in multinational American company as corporate executive but always wanted to have my own business.So I have been doing audit and filing IT returns from my business days and I continued that practice though initially trading was just break even/ loss for initial years.

I used to buy Income Tax Ready Reckoner by N M Mehta and study various provisions,even study various case law and court decisions on Income Tax.So I have been filing tax returns and paying taxes for last over 25-30 years.

ST
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  #3  
Old 6th August 2016, 09:29 AM
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Default Re: Smart_Trade Fan Club

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Originally Posted by Smart_trade View Post
I will give short answers in the same serial order as the questions.

1) I came to stock markets at the age of 26-27 but that was mainly for investments in stock markets. Invested in FERA diluting companies,new issues and companies like Reliance,Colgate,L&T ,Hind Lever, Tata Steel etc. There was no thought of trading as I was in a high paying job . Trading I started from age of 35 and my first trade was sell of 50 Telco in cash market in daytrade.

2) Started trading full time from the age of 40 on small capital and that was definately tough to support household expenses and HDFC housing loan installments on trading income as there was no second source of income.

3) It took me almost 4-5 years to be a consistantly profitable trader.There were many up and downs in that period.The performance improved when I started understanding that I should not get attached to my analysis and the action of the market is supreme and I have to adjust myself according to that. Analysis should take a backseat and price should take a driver's seat in our trading.And if analysis and price action both match, there you have a winning combination.

Smart_trade
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  #4  
Old 6th August 2016, 09:31 AM
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Default Re: Smart_Trade Fan Club

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Originally Posted by Smart_trade View Post
As far as I remember, longest spell of losing trades in daytrading was about 10-12 continuous losing trades. But worst is after long spell of losing trades we get few winning trades and losing trades spell starts again.

Continuous losing days about 5-6 but 2-3 months of flat trading where nothing seems to be going your way. Anything you do does not seem to work. I have encountered such 2-3 months spell which is very frustrating and heavy on mind. You have to take such spells in your stride and that is why position sizing and MM is very important.

There is bright sunlight at the end of dark tunnel and after such spell we get huge trending moves. But one has to survive in these dark tunnel period.

Smart_trade
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  #5  
Old 6th August 2016, 09:53 AM
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Default Re: Smart_Trade Fan Club

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Originally Posted by Smart_trade View Post
Advantages of Spreading The risk

I have a friend who is from the colony where I grew up. Very brilliant guy, All India topper in Senior Cambridge exam, then IIT Mumbai ,IIM Ahmedabad...ex Citibanker and then a promotor of a successful finance and leasing company. He had an office in Nariman Point in Mumbai and I used to drop in for 10-15 minutes chat whenever I used to be in that area.

One day I dropped in at lunch time and he ordered some lunch for both of us from outside. As we were waiting for the luch to come, in the meanwhile his secretary came in and informed that the MD of a difficult account which they had given some machinery on lease is on the line. My friend told her to put him on the line...then next 5 min the conversation went on in which my friend was very strongly telling him to pay up the dues or his company will file for winding up petition against the defaulting company for dues recovery...

I was very surprised that my friend was talking tough with the defaulter company MD inspite of his money being stuck up...normally in such cases one expects concilliatory talk, installments, rescheduling...request for payment etc.... I asked him how can he talk so tough with the other guy...he may get offended and not pay up at all. His answer was an eyeopener for me regarding taking business risks. He said that their company policy is not to take exposure of more than 2 % in a single company and not over 5 % in a business group...so he can afford to talk tough and tell the defaulters who are willfully defaulting ...and he said that he is very sure that the payment will come after the tough talk and if it does not, then they plan to proceed against the company as the stake was only 2 % maximum....if the stake was 10 or 20 % then he would be begging for getting the payment.....

So true in our trading too..with 1-2 % risk we dont care if the trade goes bad but a trade with 10 or 20 % risk puts us in hope and prayer mode....

Smart_trade
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  #6  
Old 6th August 2016, 10:00 AM
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Default Re: Smart_Trade Fan Club

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Originally Posted by Smart_trade View Post
When I was a losing/breakeven trader, even then I never had even a thought that I should quit trading . I knew that trading is profitable and I have to make some improvements in me to make it happen.I find that without this passion it is difficult to succeed in this business. I have not found a single successful trader who is not passionate about the markets.

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  #7  
Old 6th August 2016, 10:14 AM
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Default Re: Smart_Trade Fan Club

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Originally Posted by Smart_trade View Post
Markets are mostly random but sometime they get into non random phase and that is where good traders make money.Random market behaviour is discussed in economics but the people who discuss it in great length remain economic professors and analysts.But if markets are always random how does one explain few traders make consistant money from the markets..weeks after weeks and years after years. They cannot be lucky every week and every year.

So we have to take our pick...either believe that markets are random and no one can make a rupee from it in the long run or find out how consistant performers are making money and follow them....it is our choice really.

I believe that money can be definately made very consistantly from the markets...so I belong to the second group

Smart_trade
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  #8  
Old 6th August 2016, 10:20 AM
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Default Re: Smart_Trade Fan Club

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Originally Posted by Smart_trade View Post
Bonus are good tools for short term profit harvesting also. For example buy Bajaj Finance....and after bonus and splits sell the qty bought x splits. The remaining qty sits in our portfolio as bonus with zero cost of acquisition and we hold it for 1 year to make it LT capital gain. The short term loss on shares sold can be adjusted in short term profits we have in other scrips....

I am planning to do this .....

Smart_trade
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Originally Posted by Smart_trade View Post
Yes, I am holding Bajaj Finance and many stocks like Bajaj Finserv,Maruti,HDFC,HDFC Bank,Asian Paints,Bosch,Eicher Motors for last more than 2 years.Bajaj Finance now is the largest valuewise contituent in my portfolio and I am planning to hold it for 2-3 more years as I am sure of 20-30 % CAGR over this period.

The short term profit harvesting is by putting some additional money, for just 8-10 days we get tax shelter...I am not selling anything from my core portfolio..in fact I will be adding some more qty in profit harvesting. Will let the compounding work for next 3 years atleast.

Smart_trade
Quote:
Originally Posted by Smart_trade View Post
http://www.moneycontrol.com/news/tax...y_1294791.html

http://www.business-standard.com/art...1501047_1.html

Read these articles.If any doubts about how to do it,I will explain with Bajaj Finance example.

ST
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  #9  
Old 6th August 2016, 10:23 AM
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Default Re: Smart_Trade Fan Club

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Originally Posted by Smart_trade View Post
Finding a multibagger is a very tedious process. One should consider oneself lucky if he identifies 6-8 multibaggers in the entire year. If you get more than 15 then it is a sure sign that our research standard is going down.

Such thread will have to discuss fundamental facts of various companies and will be very time consuming process which I am unable to take .

Best is read Motilal Oswal Wealth Creation Studies .They do a study every year and it is having some good information on how to spot multibaggers at initial stages.These are available on their website.

Smart_trade
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Everybody is a market wizard in bull market.But when the tide turns, people investing in sub 20 stocks will lose their capital and the fund manager will run away. Every bull market breeds such great fund managers and his ignorant clients who won't know what these companies do and how they perform.

Smart_trade
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Originally Posted by Smart_trade View Post
Most important factors are growth in earnings,quality of management,sector it is in,Govt controls in that sector,how big you think is the opportunity in that sector ,scalability etc.Growth in earnings is very important.Take TCS as an example...great company,great management but no earnings growth in last 2 years so it is stagnating.Same way Reliance is stagnating for last over 5 years destroying shareholders wealth as no growth in earnings.

On longer term, I have found that the CAGR which the stock gives approximates the growth in earnings.So HDFC and HDFC bank will grow at 25% CAGR ...it will not grow at 40 and 50 % but Bajaj finance will grow at 40-50 % CAGR because it's profits are growing at that rate.

One can study the fast growth in past in companies like Pressure Cookers and Appliances,Nestle,Heromotocorp,Asian Paints,Sun Pharma ,Lupin etc and every time we find that the superlative growth in prices are over periods when the profits have grown in similar manner.

Smart_trade
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Originally Posted by Smart_trade View Post
I always buy 50 % immediately and wait for balance 50 % to buy in correction. So if the correction does not come, you have 50% position and if correction comes, you can buy 50 % at lower rates.Traders strategy, so that we win both ways..

These shares have lot of upside still left in my view....

ST
Quote:
Originally Posted by Smart_trade View Post
http://rakesh-jhunjhunwala.in/how-bi...cking-ability/

Good investment article,worth reading.

ST
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  #10  
Old 6th August 2016, 10:42 AM
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Default Re: Smart_Trade Fan Club

Quote:
Originally Posted by Smart_trade View Post
When I started trading, there were no futures and options. That time we used to trade Reliance,Tisco ,Orkay both intraday and positions. That time weekly options unofficially were there ( they were called Phatak in local language) ,I used to trade those Phataks also. There used to be unofficial Badla in the market where one can hold positions in Badla. There were Dabba trades...I have traded all.I have used leverage as that time margin rules were not that strict and settlement was on 15 days period.

But all trading positions. Nothing in delivery. I have almost blown this initial capital couple of times and had to put additional money selling my stocks which were bought when I was in a job. Those were crazy days...

Smart_trade
Quote:
Originally Posted by Smart_trade View Post
We were a group of 6-7 traders trading from broker's office.Some of us traded with high leverage and gone burst as they wanted to become rich fast...1-2 took up jobs as they failed in mastering their mindcontrol and failed in trading ,from the group I am the only survivor who is still trading the market happily. Few other traders were there who were not chart traders and they are very successful and still in trading because of their passion....success rate is very low in this business.

ST
Quote:
Originally Posted by Smart_trade View Post
Was a chart trader all along. But that time intraday charts were not available on any chart data service. So used to plot reliance chart on a graph paper by hand...graph paper,a pad and pencil....1 point change and we used to plot it. Very tedious process but it gave me great advantage in chart reading.We used to keep those graph sheets, put them on the dining table and look for long term trends and S and R levels on weekends.

People used to look at us chart traders as some kind of black magicians or Whoo-doo artists....few used to make fun saying " chart seedha pakadna hai ya ulta" or " chart dekhkar koi rupiya kama sakta hai kya....." but soon they realised that we were few profitable traders in the market.

Smart_trade
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