Trading as a business

[bombaybullionassoc]

I aggree with all points. Trading is not a problem for most of the participants in the market. You will find that it is not your lack of knowledge about trading that keeps you from succeeding in the markets
Trading is a business. business is simply the effective management of cash flow. A
successful business generates more cash than it consumes. This is the goal of
trading as well. There is one trade market that is Bombay Bullion Association ltd which includes new updates and trends in this trading community.

India Bullion and Jewellers Association Ltd. formerly known as The Bombay Bullion Association Ltd. was established in September 1948, because the then prevailing circumstances in the market warranted an association with multi-faceted approach, which the association is fulfilling and currently has projections which stretch far beyond the visions of its original conception.
http://www.ibja.in/

 

[toingpoing]

Any of the TJ members trading stock specific futures with proper hedging,welcome to post and share with other members!

 

[arcus]

Hedging also means taking opposite positions.For example if you have gone long in the current month future you can go short in the next month future. Here exiting is very important ,otherwise you will be trapped.Follow daily open/high/low /close for any stock from nseindia.com.

It doesnt make any sense to do a calender spread with futures for hedging purposes.

The only time people use calender spreads in futures is to roll over existing positions into the next month.

 

[toingpoing]

It doesnt make any sense to do a calender spread with futures for hedging purposes.

The only time people use calender spreads in futures is to roll over existing positions into the next month.

Arcus,sorry to disagree with you,regarding calender spread.I am a professional Portfolio Manager and have been using it since last eight years with one hundred percent success .But one should know how to exit each month position.You should have seperate levels for different months.Only calender spread strategy has been saving me from all types of unexpected market variations.Ofcourse,I deal only in stock specific futures and NEVER in Nifty.

 

[arcus]

Arcus,sorry to disagree with you,regarding calender spread.I am a professional Portfolio Manager and have been using it since last eight years with one hundred percent success .But one should know how to exit each month position.You should have seperate levels for different months.Only calender spread strategy has been saving me from all types of unexpected market variations.Ofcourse,I deal only in stock specific futures and NEVER in Nifty.

Okay. Give me one example where you used calender spreads in stock futures for hedging purposes.

Whenever you buy one futures contract and sell the next months futures contract, you end up with a delta that is almost equal to zero. So, it doesnt serve any hedging purpose.

 

[toingpoing]

Okay. Give me one example where you used calender spreads in stock futures for hedging purposes.

Whenever you buy one futures contract and sell the next months futures contract, you end up with a delta that is almost equal to zero. So, it doesnt serve any hedging purpose.

Arcus,what you say is true only when you close both month contracts simultaneously.Like in Ranbaxy today..Suppose you had long and short calender spread,you should have closed both positions simultaneously,because of sudden crash of more than twenty percent.Forget profit but you would have nothing to lose.Imagine the other way round.Suppose you had carried forward Ranbaxy long in futures yesterday,morning you would not have had time to put even stop loss!To make profits from spread,you have to
make exits seperately and also re enter.Both month contracts have different levels for entry and exit.Hedging is not necessary for intra day trading.You can always put SL and exit. It is very interesting and useful.Do give it a try.:thumb:

 

[toingpoing]

One of those super days , like today's crash in NSE,highlights the importance of calender spread and hedging!! Congratulations to the TJ members who are using the same...

 

[Cubt]

Arcus,what you say is true only when you close both month contracts simultaneously.Like in Ranbaxy today..Suppose you had long and short calender spread,you should have closed both positions simultaneously,because of sudden crash of more than twenty percent.Forget profit but you would have nothing to lose.Imagine the other way round.Suppose you had carried forward Ranbaxy long in futures yesterday,morning you would not have had time to put even stop loss!To make profits from spread,you have to
make exits seperately and also re enter.Both month contracts have different levels for entry and exit.Hedging is not necessary for intra day trading.You can always put SL and exit. It is very interesting and useful.Do give it a try.:thumb:

People who followed Ranbaxy chart would have not gone long for sure. The stock had huge resistance around 475, it tried moving up to 480 levels, unable to mobe higher it started its decline.

Again it fallen from 460 levels to 430 level in a day and it furthrr declined to 400. When a stock falls from such high, there will be a pull back and that should be used to go short. Following the simple chart would have helped the trader to go short at 420 just day before the big fall.

Without hedging he would have earned handsome profits.

 

[NayaBaccha]

Is that 8% per month of your trading capital? I unfortunately do not have any experience to speak of but ever since I stopped loosing I have been doing more then 3% every single day with an odd 15%+ I did on Friday but there has not been a day with less then 3% gains.

I am not here to boast but to get a word from seniors here to see if expecting this on a consistent basis would be foolish of me or am I doing something right here and can see myself repeating this performance day after day?

I must add that I only started making profits since last Monday and its only been 6 trading sessions that I am talking about. I have noticed that only about 70% of my trades end up in gains and rest 30% run into losses. Is this out of sheer luck or is this what everyone else gets as well?

I am not trying to hijack your thread... Just need your word on this as I believe you are a very realistic trader and I could use your advise. Please be as blunt as you can be, I would appreciate it. I am trying to a reality check.

 

[NayaBaccha]

People who followed Ranbaxy chart would have not gone long for sure. The stock had huge resistance around 475, it tried moving up to 480 levels, unable to mobe higher it started its decline.

Again it fallen from 460 levels to 430 level in a day and it furthrr declined to 400. When a stock falls from such high, there will be a pull back and that should be used to go short. Following the simple chart would have helped the trader to go short at 420 just day before the big fall.

Without hedging he would have earned handsome profits.

I looked at Ranbaxy's chart the day before it went to the dogs... I only do intraday in stocks (because I do not understand derivatives) so didint carry any shorts but I did make a killing on Friday and a decent trade today as well. Ranbaxy looked like a ripe apple ready to fall off the tree on Thursday.