Nifty is on a roll. India VIX is average at 13.13. The reason is US Job Data that disappointed. It is now assumed that either FED will not increase the rates or the increase will be minimal which may not effect investments in markets.
Of course this is will have a short term effect as you all know these short term traders react to news fast may be for one or two days then all becomes normal.
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Rest for all:
Nifty is now very close to all time high of 9000 which is just 100 points away. But those who also watch stocks may have noticed that NOT all Nifty stocks are now near all time high. For example Sun Pharmacy which is a hot stock for people interested in the stocks of the Pharmaceutical Industries is currently at 782 whereas its all time high was 1172. So it has still to travel 38% to hit its all time high but currently even when Nifty is at all time high Sun Pharmacy a major stock is still 38% far from all time high. Whereas Nifty has to travel just 1% more to hit all time high.
For contradictory traders here is a piece of advice:
Do not start guessing that now Nifty will see a huge fall. Guessing direction of markets or Nifty is dangerous. Here is a real example: A couple of years back when Nifty was going high and higher, I got a call at around 11 pm in the night from a trader in Andhra Pradesh (forgot the city) who was sitting at a loss of nearly 1 crore. When I asked him why, he said he is a contradictory trader and trades in Nifty Futures. He takes contradictory bets. He used to average out in just Nifty futures and most of the times he made money. In fact he doubled 25 lakhs in 6 months. Now this just one contradictory bet which went wrong took away all his profits and now he was sitting at a loss of Rs. 75 lakhs. He was almost crying while speaking to me. I told him, had he done my course just a few months back his loss would have been either a huge profit or such a small loss that he would have not contacted me at all.
He wanted to pay immediately for the course. At that time there was no online payment facility available in the site, but he was eager to pay. I told him you can pay the next day, after all one day cannot change his future. But he said there is an option of paying from debit card to debit card in SBI ATM which makes instant transfer. I was surprised as I heard this for the first time. I had no idea about this. He asked me my debit card number. Initially I was hesitant to give as I thought this to be a fake call. But in 5 minutes I researched the net and found out debit card frauds are not possible online without the OTP (one time password) sent to the registered mobile phones. Or directly swiping the card on the POS (point of sale) in the merchant’s shop. So I gave him the number.
Looks like he was standing just outside the SBI ATM. In 5 minutes I got his call. He said check your bank the money is transferred. Yes I checked online and saw the cash credited in my bank account. This was quite hectic 1 hour for me. All this took time from 11 pm from his call to 12 am till the transaction was done.
I thought this may happen again. So to save myself from the hectic situation again I started taking online payments on my site. What a relief.
Anyway what I am trying to say is please DO NOT take a contradictory bet in Nifty. Like him you may lose all your money. I am not saying that there is no chance of Nifty falling. It may or it may not but, assuming direction of the market is equal to gambling. Please avoid that.
Why do you think people who have done my course are making money almost every month? The reason is pretty simple. We do not predict market direction. We take a non-directional bet. A non-directional bet is when the trader is least bothered about the markets, nifty or a stock. On top of that we have the best place to stop our losses. We are disciplined trader – we do not trade on hope or assume things or sit till profits comes. If we see there is a problem we exit at a defined place. It is written in the course. On top of that hedging makes sure losses are reduced to max 2-3%.
No emotions or technical analysis is involved. We make money that is the end result and we achieve it. Whether we are assuming Nifty direction or not assuming direction is not important – we make money that is important.
Egos do not make money. Financial and trade management does.
Anyway today’s lesson is do not assume market direction. You may make money in the short run. But one wrong bet may take away your months of profits.
I am forgetting name of the company. This company is a US based company. For 17 years it made a profit of 17 million dollars. One wrong bet took them down by 3 million dollars. One wrong trade took away 20 million dollars. 17 years of hard work and profits gone. The company declared bankruptcy and closed.
I know a lot of you are directional traders. My job is to educated you and tell you the truth. But after all it is your money so the final call is yours.
In fact even if 99% sure of the direction, I hedge my trades and trade. I will not let greed take control of me. Yes agreed if right I do not get all the profits – some of it is taken away by the hedged trade. But when I lose money the hedged trade makes sure the losses are limited to 2-3% not more.
Results? I trade without panic. In fact I am writing this after watching today’s morning 9.10 am show of Akira. While most of you were watching Nifty, I was watching a movie because I love to watch good movies. 9 am is the best show time for me and my wife because our kids are in school and we get our privacy and fun. Compare this to short term or Intraday traders who were watching Nifty and were in Panic and away from their families.
Yes my trades too were on, but who cares when there a hedge to protect my trades. Why bother when I am 100% sure the losses can never be more than 2-3%? Yes I will do what I feel like doing and whenever I feel like doing. Who is Nifty or stock markets to control my life? I pity Intraday traders whose only job is to see markets from 9 am to 3.30 pm. Think about this – did your parents sent you to school to only watch Nifty when you grew up? When you can still trade and make money what is the reason to see something from morning till 3.30 pm on which you have no control at all?
Think about it but the call is yours.
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Dilip Shaw, Founder
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