Today May 04, 2020 India VIX has surged 26.42% with a huge fall in NSE.
And here is graph of NSE today (May 04, 2020 at 11.06 am):
Why have I written this article? Just to tell time and again that India VIX is inversely proportional to Indian Stock Markets.
I have written a detailed post here that Nifty and India VIX are inversely proportional.
Why you should see India VIX before taking a trade?
You can gauge the fear factor in the markets. If India VIX has risen anything over 10% then that day is a dangerous day to trade. You have to trade with caution.
In such times trade with reduced lot size and always keep an eye on the trades. Need I say again that you must hedge your trades even if it’s just a single lot?
I have said this time and again in my site that trades who do not hedge are the biggest losers in the markets.
They are the ones who are overconfident and destroy their wealth.
I will also repeat again now that I have been telling since years – that it is impossible to make 10% a month consistently for even one year, which most traders in the world are trying to make. But its unfortunate that trades just cannot control their greed and are destroying wealth since ages and will keep doing so in future as well.
However 2-3% a month is possible, but for trades, this is way too small.
Just imagine if a bank gives a guaranteed return of 36% a year? Now the same return looks extraordinary big. I fail to understand why the same return does not look big when you trade options and futures.
You just need to change your psychology of thinking, then even 24% return a year from stock trading will look big.
If you want to learn to trade stock markets and are happy with a 36% return a year – you can do my conservative option course.
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Dilip Shaw, Founder
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