What are your best lessons from the stock market?
Was analysing my trades over the last 3 years to understand my best and worst trades ever, then coupled that with my "Trade Diary" to see what were the difference of thoughts between both trades. I was levered heavily on these F&O trades by holding a margin position. Made ~73k that day with a Capital at Risk/Trade under 25k at all times. I have since left F&O, I have found better use of my time elsewhere and taxation on F&O income is not worth it anymore to me. What about you all? Any trades/lessons to share for all of us?
Lessons from the market:
1. Stress adjusted returns as a philosophy works best. Risk is misunderstood by most and people lose the shirts off their back chasing alpha. Only bite as much as you can chew.
2. If you don't bring significant heft to your investments, even multi-baggers can't move the needle. Play big or go home.
3. In addition to 2, concentrated bets work best.
4. Always always have an advisor. If not for the actual advice, atleast for an alternate PoV and a sounding board.
5. Time in the market is absolutely vital. Accumulation of corpus in the early years is underrated and needs to be understood and executed better by people investing for the first 10Y.
@TallTales69 lost a ton of hair trading for sure. 😂😂
Most people would do well just SIPing into NIFTYBEES every month. 📈
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majboormajdoor
Stealth
10 months ago
I started my first job as a Quant in F&O trading and used to occasionally come upon the financials, settlements and charges. Realized that profits aren't meaningful unless we have a high capital and I can never supplement F&O as a passive income because it needs huge effort and is time sensitive. So I have never traded on my own money, only on client's money.
1. Regarding trading, as a beginner, focus and trade on very few scripts (5-8). Else you will spread yourself too thin, burnout without learning anything.
2. Own a philosophy, either strategize to earn small regularly or win very big during events. In any case, need to have risk framework well built. Use spreads instead of naked positions, this helps in diversification.
3. I am biased towards mean reversion, but that requires patience. Momentum is frequent to trade. Have calculated exposure to both themes.
@majboormajdoor Not going to lie, all good principles to lean on. You’re spot on, the risk is hyper-aggressive and I certainly sleep much better now.
majboormajdoor
Stealth
10 months ago
Another I missed. Do pairs/spread trading. You can build a good and clear thesis and less risky. Say I believe that Auto sector is gonna go into recession and wanna short it. Either find something else that will benefit from that or find an Auto firm which can ride the storm well to offset your short.
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Qwerty2398
Stealth
10 months ago
Don't open account with zerodha
I have so so many people saying “I have left f&o” it’s crazy .. stock market isn’t a cakewalk.
@TepidFanny11 Mostly, if you are doing something more meaningful it isn’t a great use of your time.
What I have learnt is that trading is all about execution. People can give all sorts of wise lessons, tips and what not. Only those who are disciplined and are able to follow it in the long run are able to succeed. Rest unfortunately are thrown out by the market.
"I have since left F&O, I have found better use of my time elsewhere" --- Can you mention what that is?
@Motamama Realized that trading was a small game in the grand scheme of things. Made more money in side hustles(Consulting) etc. Risk Adjusted and Time Adjusted returns are much better.
Thanks for the reply. Doesn't Gojek have issues with ur side gigs?
Kamlesh
Stealth
10 months ago
Don't do more than 40x leverage on trades xd
@SuchMemeMuchWao I have done so much risky shit but thankfully it was with money I was okay to lose.
Kamlesh
Stealth
10 months ago
Biggest lesson I learnt, don't use money you can't afford to lose.
+ F&O, for that matter even Equity investing/Trading -- needs time to get hold of. It takes multiple years to be comfortable and truly educated on the subject. It's vast.
+ It's also about how someone is built philosophically and psychologically. After giving time to the market, one will be able to find what suits whom. One may be an options guy, another may be a swing guy. It takes time to discover this and in the process sometimes discovers oneself.
+ it's business. Not a job. This makes a lot of difference. You are responsible for your own decisions and actions.
+ we see a lot of people, mostly youngsters with low income ( < 1lk investable income per month ) trying to do sips in MF / Equity, assuming things will work over with SIPs. We are not against it, but why wealthy families don't manage there money on there own. Give it a thought.
+ we see many individuals, enter the market, try random things, and exit in less than 3 to 4 years, with no learnings and negated views for things that dint work out for them.
Multiple factors at play here.
But things work. Even F&O works. It takes time to learn and action on it, if one decides to do on his/her own.
I think investing in IPO including SME IPOs is pretty good. Getting a good return from past few ones. Recently got for Cello, 28% return - sold on listings.
9 out of 10 retail traders lose money in F&O. SEBI study suggests.
Interesting read here : https://rn619dmj.r.us-east-1.awstrack.me/L0/https:%2F%2Feconomictimes.indiatimes.com%2Fmarkets%2Fstocks%2Fnews%2Fsebi-study-suggests-89-pc-retail-traders-in-equity-fo-suffered-losses-in-fy22%2Farticleshow%2F97322969.cms/1/0100018b840776fb-e0eb6344-0f0e-485d-93cf-c7e6b3b4ab41-000000/rSa5bSUXqHfIfU6p-7snGGL9RDs=345
Pvykey
Stealth
10 months ago
Even have greed with a limit.
Pvykey
Stealth
10 months ago
Even have greed with a limit.
ThoseFarrow
Stealth
10 months ago
Don't read about f&o, if you do don't start, if you start end it right now.
StartupStealth
Stealth
10 months ago
Just a overview of past 5 days, for the first 4 days , made 9000+ on an capital of 18 k.
Then on the fifth day list 11,400. Today is the sixth day 8k losses. I don't know what should I some it up to. Drop any recommendations or suggestions you may have
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