Dont Believe What I Say: My Trading Rules & Style

iGuru

Active Member
#1
More than two years back when I lost my job due to slowdown, and because of it I was very much upset & frustrated in my life as I was not getting some decent job in my line of interest (Financial Sector). I was very much confused that what to do next in my life means shall I keep on searching a good job or to start some business. With this dilemma I asked my father for some help, and then he asked me whether I want to be a rich man or a wealthy man in the life. I asked him what the difference between the two is, as both the word means the same. Then he explained me that being rich means you really have lots of money & different assets with you and to become a rich person in your life you just need to work in some company starting your career form an entry level executive to become a manager or an independent director in that or other organisation. You will be working 8-10 hours....... sorry at least working for 10-14 hours day, minimum 6 day a week and so on........ in a year. You will be having maximum holidays of 16-25 days in a year (even that your manager or HR will not let you enjoys those holidays). By this way you can make & save millions of rupees.

Secondly being wealthy means you actually have time to enjoy those money that you had earned, has time to do what you want to do and when you want to do it in your life. And to become a wealthy person in your life you just have to do anyone of the mentioned thing in your life.......... being adopted by a millionaire, marry a girl who is millionaire or her parents are millionaire, keep on buying lottery in a hope that someday you will become a millionaire, invest in real estate and finally start your own company or business.

This thing changed my view towards the life. I really asked this question to me and finally I came to a conclusion to do something different in my life and to become a wealthy person. As the first three options are the rarest of the rarest opportunity for me and for all of us, so I opted for the remaining two options to become a wealthy person in the life. As investing in the real estate requires a good some of money, currently I ignored this option and the final option that remains for me is to start my own company or business.

So, I started my business by becoming the sub broker (currently for Commodity Segment only) and providing the technical calls with general advisory & training related with trading to my friends who are the clients of mine. And also become a Day Trader, trading in commodity segment (MCX) only. As this is the area of my interest.

Currently being a sub broker, I am earning less than my previous job. But I am happy now as Im doing that is interesting to me and the things that I wanted to do in my life. Someday I will earn more than what I used to earn earlier as Im enjoying doing the things that I wanted to do and it will definitely help me to grow in my life. Not only me but to all those who want to or doing something in their line of interest in their professional career & life. But being a day trader.............. better I keep quit & tell you about it later on in this article.

So without diverting from the topic, I would like to share my experience of trading with all of you. My idea behind this article is to give all of you enough information regarding to trading which can make you self-reliance. But personally I will advice not to do trading fulltime by quitting your current job as anyone can do it part time being in a job.

Once I read it in an article sometimes back that 90% of traders who ever trade lose money in the market & more than 20% of traders actually go bankrupt out of them and remaining 10% are actually able to preserve their capital & only 2-3% of them are really able to make money out of the market. Why is it that there are such a large number of traders failed in the market? What I think is not because of that we are stupid as most of the traders are well educated, have a good knowledge about market & trading etc. So then why do we fail or lose money? Does it because the lack of trading education that we have. Here by education, I dont mean by learning how the technical indicators work, but what I mean is when & how to interpret these indicators, understanding the correct risk management techniques & trading techniques and applying all these in your trading.

Being a professional trader (Strategic cum Technical trader in Commodity Market) for more than a year, I am quite sure that my experience in trading as a day trader is similar & parallel to those of many in this field. Like others I have experience both successes and failures in my trading life and at the same time both satisfaction & frustration too. I had to stretch myself to grow as financial markets. When the market get closed, I devote my time to prepare myself for the next day by doing the market research, news & the most important to work on my own mindset/physiology. Being a trader I may not have mastered the skills of trading but I have become the master at beating stress, anxiety & dealing with the mental side of trading. I have also figured that if I can take care of this particular area of metal stress then the number will take care of themselves and I have seen that this has worked for me to keep me in the market.

For many traders & the members of Traderji, Day trading can be a simple way. But as per my opinion, I will suggest never make the mistake of thinking that day trading is a simple & easy way of trading.

I know that there are lots of news channels, websites & seminars that try to tell us differently about the market and they really make us think that we just have to read few books, attend a seminar of 2-5 hours or days and then magically we will become a successful trader in the market and we can become a millionaire within a few months of span. There are lots of software companies & broking firms let us believe that we dont have to learn anything about the market and we just need to believe on their magical system (technical analysis softwares) that generates calls to buy & sell or blindly follow their recommendations without knowing and understanding anything about the market in which we want to trade. This all are for some aspiring traders who think that they dont have to learn a single thing or they can rely on the advice of some market Guru for their trading decisions. Even they think that they can trade consistently with more than 80-85% accuracy. They can make around Rs. 1, 00,000 out of Rs. 25,000 within 6-7 months. They think that they can buy or have trading system that will be 100% accurate and have a trading strategy with zero percent risk. They can predict the market within a minute including the turning points. And the most important they think that they can/will quit their current profession and make their living full time as a trader after a few months of successful trading.

I just want to ask you guys a question that how could by reading few books, a small amount of information available on internet can teach us to make more money than other people who have gone to schools and colleges for years to excel in their respective areas. As per me it cant. Like any other profession in this world we also need a concrete education, knowledge & practice before we get started as a trader.

My another question is that all of us have & read the various books on trading, technical analysis, technical analysis tools (charts) etc....... in a single word we have a great trading system, then why are we still losing money in the market just because of one main reason and that is Greed which makes a winning trade to losing one. So first of all we must need to win the Battle within Ourselves, before we can truly win in the financial market.

Over more than a year of trading and reading lots of books related to trading in these years, I have found certain principles which are to be true for me. By understanding & using these basic principles, it has acted for me as a parachute while jumping into the crazy world of trading. Whenever I find myself questioning my own judgement & my own ability to trade successfully, I just pull out my parachute (my basic trading principles) and review them. This is all what I am going to discuss here in short and it might be already known to many traders & might be some concept new to some of the traders. I dont have all the answers nor do I act to be some kind of guru for trading, but what I hope to be of some kind of help to you all in the right direction.

My Golden Rules for trading:

My first rule of trading is that I have developed a discipline for trading. This is one of the hardest rules to follow by any trader including me and it is one of the important rules to follow. Without it none of the trader in the market will be able to control their fate.

My next rule of trading is that I always try to protect & preserve my capital # The new and inexperience traders always enter the market with a focus on how much they can make in a trade. But while putting my trade I always focus on how much money I can risk in trade and how to minimise those loss. If I take care of this thing, then profit will take care of itself. So for doing it I always put my stop loss (I keep the stop loss in my mind rather than putting it in the system). Second the moment I realise that I had a bad trade immediately I square off my position (Cut the losses short and let the profit run by using trailing stop loss).

My next rule is I know that why Im trading. It is important because millions of people are trading with many reasons in the market. So before trading we need to understand why we are here or want to trade is it because of financial needs, to grow your capital very fast, you enjoy taking high financial risk or just simply you enjoy to trade, there are lots of reason for trading. Whatever our reason, we will enjoy it more if once we understand why we are doing it.
More than a year back when I had started my trading, I didnt jumped into the market directly before testing the market and my ability for trading. I started my trading on paper, demo account (with virtual money) and then once I gained my confidence, I started with 1 mini lot (as Im a Commodity futures trader) and now to 1 standard lot....... and I will keep it increasing till 4 lots per trade. No matter which markets you trade or start trading, Ill always advice to understand & get familiar with the market and its mechanism for trading before anyone start doing trading.

My next rule, I never put my eggs in the same basket means I dont put all of my money in a single position/trade or in the same market. I have diversified my capital in different financial market. But it doesnt mean that I trade a lot in different market, rather than that I focused only in commodity futures simply because I understand it & enjoy this market than any other financial market.

My next rule, I never let my emotion to overrule my brain or studies. Hope for better is good for us, but it may be very dangerous in trading.
My next rule, I always set my goal for trading on monthly, weekly & daily basis, and then I trade towards it. And I always set a realistic goal which can be achievable.

My next rule, never add a losing position. Once in my life I did this mistake not by adding 1 lot but with 4 lots due to which I had to book a good amount of lose in the market and I had to stop my trading for couple of months. And I always let my profit run until I have reason to cash it. (Most likely by hitting the trailing stop loss or due to change in trend)

My next rule, if I have taken a position and in a given timeframe it doesnt move either direction, then I simply exit from that position. I again wait for the right opportunity to trade.

My next rule, Instead of having or trying to take a huge profit, I rather take small one in a safe manner.

My next rule, I always stop trading a week earlier to a contract expiry for a script.

I have developed a methodology for trading and I always stick with that. I dont change this on daily basis. But I keep working on for better methodology to trade.

I never try to become someone else like Warren Buffett, Jim Roger etc. I always try to be myself. The moment I will think I want to be like someone else....... my greed & temptation will overrule my mind and this is not at all good for trading.

As per my Intraday Trading Style:

Currently Risk free rate (10 years Govt. Bonds) is at 8% & Inflation is at 11.25% as on Sep 2010.

(8% x 2) + 11.25% = 27.25% p.a & 2.27% p.m. So any investment who can give me equal to or more than this, then I will be interested on those investment (MF & Equity). I keep on adjusting this calculation on monthly basis.

Total Investment is Rs. 2, 00,000 (Trading Investment is Rs. 1, 00,000 and balance in my bank account for M2M).

My monthly net target return is Rs. 20,000 which comes to Rs. 5000 a week & Rs. 1,000 per day (assuming 20 trading days in a month). But I kept my target of Rs. 2,000 per day. So to earn Rs. 2,000 per day and being a commodity trader, I have selected few scripts in which I trade daily (selection is based on margin money, volatility, risk factors & other economical news with respect to the script).

On the basis of this, I trade in Crude Oil, Copper, Natural Gas, Lead & Zinc. I have brokerage of 1 paisa (0.01%) so my break-even comes to: Crude Oil @ Rs. 2, Natural Gas @ Rs. 0.10, Copper @ Rs. 0.15, Lead & Zinc @ Rs. 0.05
I trade only for: Crude Oil @ Rs. 5-10 (Net Return around Rs.300-700), Natural Gas @ Rs. 0.50- Rs.1 (Net Return around Rs.500-1000), Copper Rs. 0.50- Rs.1 (Net Return around Rs.300-800), Lead & Zinc @ Rs. 0.10-0.25 (Net Return around Rs.300-1000)

Once I achieve my intraday target of Rs. 2,000, I usually stop trading and watch the market for the rest of the days or do other things. I only trade further If I get a good opportunity to trade again, else I dont trade. By this strategy currently Im getting a minimum monthly return of around Rs. 20,000 25,000 per month means on an average 10% return per month which is more than my target return of 2.27% p.m (By this strategy I have already recovered my loses and will recover my trading capital by next few months and do trading on my profit amount only) from next financial year Im planning to start trading with 2 lots and I will keep adding it each financial year to 4 lots max to max. (Or once I will have an additional capital of Rs. 1 Lakh, whichever comes first)

My favourite strategy for commodity trading is Spread trading.

Some trader has the concern for brokerage for trading intraday and I know there are few brokers who provide cheapest brokerage in the market. But I still preferred to have brokerage of 1 paisa or 2 paisa because for me as a trader value added services are more important rather than having a cheapest brokerage. Being a client & sub broker my broker provide me & my clients an exposure of 2-3 times intraday, provide Odin Diet with very minimum down time and etc which is very important for me as an intraday trader. If any broker who can provide all these services with the cheapest brokerage then I will not mind to trade with them and I think no one will mind to trade with them. Also being a sub broker (and as a client) & my client doesnt have daily or monthly commitment for turnover which gives us an enough space to trade with a peace of mind.

These are some basic but very important rule which I had learnt & follow while trading. There are lots of more things I wanted to discuss here but the time consent doesnt allow me to do so. Hope to share it in some next article someday.

The final thing I want to tell you that not to believe anything that I said here. Just verify and check it out for yourself because it may be a mistake for you all to accept anything that I said above without a complete verification or checking it for yourself in your trading. Just because I or anyone says it doesnt mean that it will be true or correct. As of now I believe it to be true for me as it has been tested by me. I always believe accept the thing that works for me and dont that doesnt. Do not believe in anything simply because you have heard it and rumoured by many or it is found written in the books. But after observation and analysis, when you find that anything agrees with reasonthen accept it and live up to it.


Regards

iGuru
 

veluri1967

Well-Known Member
#2
More than two years back when I lost my job due to slowdown, and because of it I was very much upset & frustrated in my life as I was not getting some decent job in my line of interest (Financial Sector). I was very much confused that what to do next in my life means shall I keep on searching a good job or to start some business. With this dilemma I asked my father for some help, and then he asked me whether I want to be a rich man or a wealthy man in the life. I asked him what the difference between the two is, as both the word means the same. Then he explained me that being rich means you really have lots of money & different assets with you and to become a rich person in your life you just need to work in some company starting your career form an entry level executive to become a manager or an independent director in that or other organisation. You will be working 8-10 hours....... sorry at least working for 10-14 hours day, minimum 6 day a week and so on........ in a year. You will be having maximum holidays of 16-25 days in a year (even that your manager or HR will not let you enjoys those holidays). By this way you can make & save millions of rupees.

Secondly being wealthy means you actually have time to enjoy those money that you had earned, has time to do what you want to do and when you want to do it in your life. And to become a wealthy person in your life you just have to do anyone of the mentioned thing in your life.......... being adopted by a millionaire, marry a girl who is millionaire or her parents are millionaire, keep on buying lottery in a hope that someday you will become a millionaire, invest in real estate and finally start your own company or business.

This thing changed my view towards the life. I really asked this question to me and finally I came to a conclusion to do something different in my life and to become a wealthy person. As the first three options are the rarest of the rarest opportunity for me and for all of us, so I opted for the remaining two options to become a wealthy person in the life. As investing in the real estate requires a good some of money, currently I ignored this option and the final option that remains for me is to start my own company or business.

So, I started my business by becoming the sub broker (currently for Commodity Segment only) and providing the technical calls with general advisory & training related with trading to my friends who are the clients of mine. And also become a Day Trader, trading in commodity segment (MCX) only. As this is the area of my interest.

Currently being a sub broker, I am earning less than my previous job. But I am happy now as Im doing that is interesting to me and the things that I wanted to do in my life. Someday I will earn more than what I used to earn earlier as Im enjoying doing the things that I wanted to do and it will definitely help me to grow in my life. Not only me but to all those who want to or doing something in their line of interest in their professional career & life. But being a day trader.............. better I keep quit & tell you about it later on in this article.

So without diverting from the topic, I would like to share my experience of trading with all of you. My idea behind this article is to give all of you enough information regarding to trading which can make you self-reliance. But personally I will advice not to do trading fulltime by quitting your current job as anyone can do it part time being in a job.

Once I read it in an article sometimes back that 90% of traders who ever trade lose money in the market & more than 20% of traders actually go bankrupt out of them and remaining 10% are actually able to preserve their capital & only 2-3% of them are really able to make money out of the market. Why is it that there are such a large number of traders failed in the market? What I think is not because of that we are stupid as most of the traders are well educated, have a good knowledge about market & trading etc. So then why do we fail or lose money? Does it because the lack of trading education that we have. Here by education, I dont mean by learning how the technical indicators work, but what I mean is when & how to interpret these indicators, understanding the correct risk management techniques & trading techniques and applying all these in your trading.

Being a professional trader (Strategic cum Technical trader in Commodity Market) for more than a year, I am quite sure that my experience in trading as a day trader is similar & parallel to those of many in this field. Like others I have experience both successes and failures in my trading life and at the same time both satisfaction & frustration too. I had to stretch myself to grow as financial markets. When the market get closed, I devote my time to prepare myself for the next day by doing the market research, news & the most important to work on my own mindset/physiology. Being a trader I may not have mastered the skills of trading but I have become the master at beating stress, anxiety & dealing with the mental side of trading. I have also figured that if I can take care of this particular area of metal stress then the number will take care of themselves and I have seen that this has worked for me to keep me in the market.

For many traders & the members of Traderji, Day trading can be a simple way. But as per my opinion, I will suggest never make the mistake of thinking that day trading is a simple & easy way of trading.

I know that there are lots of news channels, websites & seminars that try to tell us differently about the market and they really make us think that we just have to read few books, attend a seminar of 2-5 hours or days and then magically we will become a successful trader in the market and we can become a millionaire within a few months of span. There are lots of software companies & broking firms let us believe that we dont have to learn anything about the market and we just need to believe on their magical system (technical analysis softwares) that generates calls to buy & sell or blindly follow their recommendations without knowing and understanding anything about the market in which we want to trade. This all are for some aspiring traders who think that they dont have to learn a single thing or they can rely on the advice of some market Guru for their trading decisions. Even they think that they can trade consistently with more than 80-85% accuracy. They can make around Rs. 1, 00,000 out of Rs. 25,000 within 6-7 months. They think that they can buy or have trading system that will be 100% accurate and have a trading strategy with zero percent risk. They can predict the market within a minute including the turning points. And the most important they think that they can/will quit their current profession and make their living full time as a trader after a few months of successful trading.

I just want to ask you guys a question that how could by reading few books, a small amount of information available on internet can teach us to make more money than other people who have gone to schools and colleges for years to excel in their respective areas. As per me it cant. Like any other profession in this world we also need a concrete education, knowledge & practice before we get started as a trader.

My another question is that all of us have & read the various books on trading, technical analysis, technical analysis tools (charts) etc....... in a single word we have a great trading system, then why are we still losing money in the market just because of one main reason and that is Greed which makes a winning trade to losing one. So first of all we must need to win the Battle within Ourselves, before we can truly win in the financial market.

Over more than a year of trading and reading lots of books related to trading in these years, I have found certain principles which are to be true for me. By understanding & using these basic principles, it has acted for me as a parachute while jumping into the crazy world of trading. Whenever I find myself questioning my own judgement & my own ability to trade successfully, I just pull out my parachute (my basic trading principles) and review them. This is all what I am going to discuss here in short and it might be already known to many traders & might be some concept new to some of the traders. I dont have all the answers nor do I act to be some kind of guru for trading, but what I hope to be of some kind of help to you all in the right direction.

My Golden Rules for trading:

My first rule of trading is that I have developed a discipline for trading. This is one of the hardest rules to follow by any trader including me and it is one of the important rules to follow. Without it none of the trader in the market will be able to control their fate.

My next rule of trading is that I always try to protect & preserve my capital # The new and inexperience traders always enter the market with a focus on how much they can make in a trade. But while putting my trade I always focus on how much money I can risk in trade and how to minimise those loss. If I take care of this thing, then profit will take care of itself. So for doing it I always put my stop loss (I keep the stop loss in my mind rather than putting it in the system). Second the moment I realise that I had a bad trade immediately I square off my position (Cut the losses short and let the profit run by using trailing stop loss).

My next rule is I know that why Im trading. It is important because millions of people are trading with many reasons in the market. So before trading we need to understand why we are here or want to trade is it because of financial needs, to grow your capital very fast, you enjoy taking high financial risk or just simply you enjoy to trade, there are lots of reason for trading. Whatever our reason, we will enjoy it more if once we understand why we are doing it.
More than a year back when I had started my trading, I didnt jumped into the market directly before testing the market and my ability for trading. I started my trading on paper, demo account (with virtual money) and then once I gained my confidence, I started with 1 mini lot (as Im a Commodity futures trader) and now to 1 standard lot....... and I will keep it increasing till 4 lots per trade. No matter which markets you trade or start trading, Ill always advice to understand & get familiar with the market and its mechanism for trading before anyone start doing trading.

My next rule, I never put my eggs in the same basket means I dont put all of my money in a single position/trade or in the same market. I have diversified my capital in different financial market. But it doesnt mean that I trade a lot in different market, rather than that I focused only in commodity futures simply because I understand it & enjoy this market than any other financial market.

My next rule, I never let my emotion to overrule my brain or studies. Hope for better is good for us, but it may be very dangerous in trading.
My next rule, I always set my goal for trading on monthly, weekly & daily basis, and then I trade towards it. And I always set a realistic goal which can be achievable.

My next rule, never add a losing position. Once in my life I did this mistake not by adding 1 lot but with 4 lots due to which I had to book a good amount of lose in the market and I had to stop my trading for couple of months. And I always let my profit run until I have reason to cash it. (Most likely by hitting the trailing stop loss or due to change in trend)

My next rule, if I have taken a position and in a given timeframe it doesnt move either direction, then I simply exit from that position. I again wait for the right opportunity to trade.

My next rule, Instead of having or trying to take a huge profit, I rather take small one in a safe manner.

My next rule, I always stop trading a week earlier to a contract expiry for a script.

I have developed a methodology for trading and I always stick with that. I dont change this on daily basis. But I keep working on for better methodology to trade.

I never try to become someone else like Warren Buffett, Jim Roger etc. I always try to be myself. The moment I will think I want to be like someone else....... my greed & temptation will overrule my mind and this is not at all good for trading.

As per my Intraday Trading Style:

Currently Risk free rate (10 years Govt. Bonds) is at 8% & Inflation is at 11.25% as on Sep 2010.

(8% x 2) + 11.25% = 27.25% p.a & 2.27% p.m. So any investment who can give me equal to or more than this, then I will be interested on those investment (MF & Equity). I keep on adjusting this calculation on monthly basis.

Total Investment is Rs. 2, 00,000 (Trading Investment is Rs. 1, 00,000 and balance in my bank account for M2M).

My monthly net target return is Rs. 20,000 which comes to Rs. 5000 a week & Rs. 1,000 per day (assuming 20 trading days in a month). But I kept my target of Rs. 2,000 per day. So to earn Rs. 2,000 per day and being a commodity trader, I have selected few scripts in which I trade daily (selection is based on margin money, volatility, risk factors & other economical news with respect to the script).

On the basis of this, I trade in Crude Oil, Copper, Natural Gas, Lead & Zinc. I have brokerage of 1 paisa (0.01%) so my break-even comes to: Crude Oil @ Rs. 2, Natural Gas @ Rs. 0.10, Copper @ Rs. 0.15, Lead & Zinc @ Rs. 0.05
I trade only for: Crude Oil @ Rs. 5-10 (Net Return around Rs.300-700), Natural Gas @ Rs. 0.50- Rs.1 (Net Return around Rs.500-1000), Copper Rs. 0.50- Rs.1 (Net Return around Rs.300-800), Lead & Zinc @ Rs. 0.10-0.25 (Net Return around Rs.300-1000)

Once I achieve my intraday target of Rs. 2,000, I usually stop trading and watch the market for the rest of the days or do other things. I only trade further If I get a good opportunity to trade again, else I dont trade. By this strategy currently Im getting a minimum monthly return of around Rs. 20,000 25,000 per month means on an average 10% return per month which is more than my target return of 2.27% p.m (By this strategy I have already recovered my loses and will recover my trading capital by next few months and do trading on my profit amount only) from next financial year Im planning to start trading with 2 lots and I will keep adding it each financial year to 4 lots max to max. (Or once I will have an additional capital of Rs. 1 Lakh, whichever comes first)

My favourite strategy for commodity trading is Spread trading.

Some trader has the concern for brokerage for trading intraday and I know there are few brokers who provide cheapest brokerage in the market. But I still preferred to have brokerage of 1 paisa or 2 paisa because for me as a trader value added services are more important rather than having a cheapest brokerage. Being a client & sub broker my broker provide me & my clients an exposure of 2-3 times intraday, provide Odin Diet with very minimum down time and etc which is very important for me as an intraday trader. If any broker who can provide all these services with the cheapest brokerage then I will not mind to trade with them and I think no one will mind to trade with them. Also being a sub broker (and as a client) & my client doesnt have daily or monthly commitment for turnover which gives us an enough space to trade with a peace of mind.

These are some basic but very important rule which I had learnt & follow while trading. There are lots of more things I wanted to discuss here but the time consent doesnt allow me to do so. Hope to share it in some next article someday.

The final thing I want to tell you that not to believe anything that I said here. Just verify and check it out for yourself because it may be a mistake for you all to accept anything that I said above without a complete verification or checking it for yourself in your trading. Just because I or anyone says it doesnt mean that it will be true or correct. As of now I believe it to be true for me as it has been tested by me. I always believe accept the thing that works for me and dont that doesnt. Do not believe in anything simply because you have heard it and rumoured by many or it is found written in the books. But after observation and analysis, when you find that anything agrees with reasonthen accept it and live up to it.


Regards

iGuru
:thumb:.................:)
 

iGuru

Active Member
#5
Awesome mate. How long did it take you to type all this? I say around 2 hrs. Anyways, Thanks for sharing your valuable experience with us. :D
Thaxs for your comment


Regards

iGuru
 

iGuru

Active Member
#6
btw, can you explain breakeven cost for 1 lot of crude oil. How is it 2 rs per lot for you.I think it should not cross 1 rs per lot for brokerage + taxes. :confused:
Hi,

Currently Crude oil is trading at 3460, so the turnover for crude oil at this rate will be around 7,20,000. (assuming the buy & sell price is the same price)

Our calculation will be:

Brokerage @ 0.01% = 7,20,000 x 0.01% = Rs. 72

Turnover Tax (TO tax) @ 0.0025% = 7,20,000 x 0.0025% = Rs. 18

Stamp Duty @ 0.002% = 7,20,000 x 0.002% = Rs. 14.40

Service Tax (on Brokerage + TO Tax) @ 10.30% = (72+18) = Rs. 9.27

Total = 72+18+14.40+9.27 = Rs. 113.67

So our breakeven comes to 113.67/100 = Rs. 1.14 which means minimum price movement of Rs. 2 (or 2 tick)

I hope now it is clear for you how i got it Rs. 2

Happy Trading


Regards

iGuru
 
#7
Dear guruji...

absolutely i agree with you... with descipline and.... aiming for net Rs. 500 to 1000 per contract seems to be manageable for over all 20k returns for 100k actual investment. (based on my experience with stock f&O)... ideal for retired life...

cheers...

uday
 

Tradejack

Active Member
#8
Thanx iGURU for sharing ur experiences .bulky message but quite informative.keep it up!! Can u please tell me ur broker name.i m trading with karvy comtrade.also give information about crude, NG,and base metal prospects.
 

iGuru

Active Member
#9
Thanx iGURU for sharing ur experiences .bulky message but quite informative.keep it up!! Can u please tell me ur broker name.i m trading with karvy comtrade.also give information about crude, NG,and base metal prospects.
Hi,

Thanxs for your comment.

My broker is Mangal Keshav Commodities.

Please tell me what type of information do you want with respect to your query/prospects.

Regards,

iGuru
 

Tradejack

Active Member
#10
Hi,

Thanxs for your comment.

My broker is Mangal Keshav Commodities.

Please tell me what type of information do you want with respect to your query/prospects.

Regards,

iGuru
hi iGURU,I want to know about crude n copper specially.which stragety i should follow for these commodities. I mean how i calculate target ,stoploss ,entry n exit point. If u have some gud stragety then please share.i m basically in job .that's why i used to trade after 7 pm to till 11.30pm.whether i follow daily trade or 1 or 2 day holding stragety.