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Learn if managing or adjusting a trade can turn a loss making trade into profits.
In short the answer is yes and no. But technically speaking answer is NO.
I was a bit surprised. All these four people were highly educated – as the way they were speaking fluent English I guess they were well educated.
In general this is what I answered:
Do you invest in equity mutual funds? All of them said Yes. Then I asked but they clearly say in disclaimers that “stock markets investments are subject to markets risk and returns are not guaranteed”, then why you invest your money there?
All four had no answers. Then I said, look when you trade, buy a stock or do any trading in stock markets in cash, derivatives or commodities, risk is always there. What is more important is that after one year of trading if you can beat inflation in the country where you are trading, then you are making money else you are not.
For example currently in India inflation is in the range of 6% to 7%. So if in trading or mutual funds investments you end up making more than 7% after paying brokerages and taxes you are doing better than a Fixed deposit in banks.
In USA inflation is close to 0%. So there even if you make 2-3% a year from stock trading you are making money not losing it.
But in India if you are making 2-3% a year you are losing money because inflation is 7%, and you have to beat that else inflation will eat your money.
Indian government has made strict rules that other than fixed deposits no one else can say that this much return is guaranteed. That is the reason even mutual funds never say the results are guaranteed, but results do come we all know.
The guaranteed word if used is illegal and I just cannot do anything illegal. This is the reason why I am against giving tips though I get many calls everyday asking me to give tips and these people are willing to pay instantly. I refuse instantly and keep the phone down.
I am also morally against providing tips as it makes people lazy. There are thousands of lazy people willing to pay to make money without working hard. These are targets of tips providers. I am sure a lot of you know after paying them what happens. You lose money trading their tips, you lose money giving them their fees every month, you waste your precious time, you learn nothing. All in all FOUR losses.
I am also totally against telling anything illegal in my site therefore in every testimonials you will see these lines: Results may vary for users.
Since it is a course it is common sense that results will differ from trader to trader, as they enter and exit at different times but at the end of the year if they made above 7% return they made money. It does not matter if one made 25% and the other made 35% in one year. What matters is they both got the course’s worth and their money’s worth what they paid for the course.
Refer my yesterdays post where I had written – The right path to success in increasing order – is patience, persistence, knowledge, hard work and humbleness.
The wrong path are – greed, dishonesty, illegal means of making money, taking short cut to success (speculative trading).
If you take the right path and have patience, success will touch your feet one day. But to compound it, you still need to keep walking in the same direction called the right path.
If you take the wrong path, you may see small success pretty soon, but that’s called beginners luck after that destruction will take over, and you will start losing money fast.
Lazy people looking for tips to get rich take the wrong path and the results they see in six months or less. Just read the above paragraph – this exactly happens to them.
Next question most ask is Can Adjustments or Managing A Trade Turn Losses Into Profits?
Let me take an example. A lot of people trade the short strangle or short straddle. And keep moving it as per the stocks movement and they think they are adjusting or managing it. Really? What if you close a trade that made a loss and got into another trade? In technical terms you took a loss in your first trade, you did not manage it, and then got into a second trade. The second trade has nothing to do with the first trade.
The result of the first trade is that it made a loss that is all. If the second trade made a profit you took 2 trades and the first made a loss the second made a profit.
You did not manage it or adjust it. This is what you think. But the fact is you traded two trades. The first went for a loss the second result is unknown until you close it.
So please do not live on the thinking that managing a trade means there is some trade in the world that guarantees profits 100% of the times.
Let me tell you loud and clear.
THERE IS NO AND THERE WILL NOT BE ANY STOCK DERIVATIVE STRATEGY IN THE WORLD THAT GUARANTEES A PROFIT EVERY-TIME IT IS TRADED. THERE IS NO 100% GUARANTEED TRADE OR STRATEGY IN THE WORLD.
If someone is telling you this please be warned – they are just telling you a lie and please stay away from these people.
With my Strategy 1 in the course the success rate is 70-80% in one year and the rest of the time there is a small loss of 2% on margin block due to powerful hedge and then we move to Strategy 2 to recover the loss. This is called a well planed strategy not managing the strategy to convert a loss making strategy into profitable one.
I will never tell a lie to sell my course nor over-state it. I just tell the truth because honesty and client servicing is much more important to me than the money that I make from the course.
If I become dishonest one day either the laws will punish me or Gods. I fear both. I just want to live a peaceful and happy life which I am living now. Money cannot buy love, peace or happiness it only buys luxury. I have my own home and a lovely family. I want more love, peace or happiness and thank you messages from my clients (which I get plenty everyday). Thank You Very Much. 🙂
I am very happy the way life is going and due to greed I will not destroy it. I would rather destroy greed which I have already done.
To conclude managing or adjusting a trade does not mean turning a loss making trade into a profitable one. It only means taking a limited loss in a trade and getting into another trade.
My Strategy 2 is not just another trade, it is a well planned trade, for that to beat, Nifty has to show some ego – which it does not have. Strategy 2 is basically taking benefit of a situation in a well planned way which is very rare to give loss.
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You can read about me here and my trading mistakes here.
Dilip Shaw, Founder
INCOME DISCLAIMER: Any references in this site of income made by the traders are given to me by them either through Email or WhatsApp as a Thank You message. However every trade depends on the trader and his level of risk taking capability, knowledge and experience. Moreover stock market investments and trading are subject to market risks. Therefore there is no guarantee that everyone will achieve the same or similar results. My aim is to make you a better & disciplined trader with the stock trading and investing education and strategies you get from this website. Please note that I DO NOT give tips or advisory services by SMS, Email, or WhatsApp or any other form of social media. I strictly adhere to laws of my country. I only offer education on finance, investments on stock markets in the best possible way as much as I can through this website. Still, you must consult an authorized advisor or do thorough research before investing in any stock or derivative before trading any strategy given in this website. I am not responsible for any investment decision you take after reading any article given in this website. Knowledge is the only way to get success in stock markets. I try my best to give stock market investing and trading knowledge through the articles posted in this website. Thanks for visiting my website.