Note: Extract of my newsletter sent on 14th December, 2015 to my newsletter subscribers. If you want to receive such newsletters please register here.

In-spite of turmoils in the world Market Nifty has shown support at 7600 and actually is moving up.

Refer my email dated Dec 7, 2015 that you can find here:

http://www.theoptioncourse.com/how-to-trade-nifty-now-december-2015/

I had written this:

But I think 7600-7700 is a good support for Nifty. (That does not mean you buy a Future – I do not give suggestions so that you trade without research based on what I say in this blog. Please do your own research before taking an investing decision.)

The recent low is 7610.45. 🙂

BUT the point is this – there is BIG news coming on 15th and 16th December 2015 – The FED rate hike, and markets all over the world, like I have said before will figure the results by today or tomorrow’s closing.

Now, Nifty showing resistant is a GREAT sign. But that does not mean we declare 7600 is the bottom.

But We Can Take Calculated Risks

INDIA VIX is at 17.89 that is 4.13% up from Fridays close.

It may go up tomorrow because we will know the results only on Wednesday or may be Thursday here in India. Once the result is out VIX drops and our trade benefits.

How Can My Paid Subscribers Trade FED Rate Hike?

This part is only for people who have taken my conservative stock option course. Strategy 1 looks the safest. High VIX and not much chance of Nifty moving 5%, but very high chance of VIX dropping.

Risk-Reward is very favorable.

You can trade that. But remember that VIX may increase tomorrow as well so if you have cash, trade some lots today and some tomorrow.

If you are already in strategy 1 and its at break even and if you are trading with a discount broker, I would suggest close some lots and create a new strategy 1. You will profit more in the SAME time. If you are on 5 close 2 or 3 and make a new trade. No need to close all lots as we are looking for risk-management NOT jumping from one trade to another just because VIX is high.

For aggressive traders: Strategy 2 can also be traded directly PUT side – risk slightly more but rewards are great.

Highest Open Interest in Nifty 7500 Strike – So We Can Take Calculated Risks

I have found something interesting. 7500 strike has the highest OI (Open Interest). See this:

http://www.moneycontrol.com/stocks/fno/marketstats/options/openint_inc/index.php

Increase in OI: 884,000
Increase (%): 14.80%

15% increase means most market participants believe 7500 is a very crucial level for Nifty and it may not break that.

But remember that this is what most of the trades believe – but many time open interests are broken.

Since OI is highest at 7500, Will Nifty break or not break this?

Please remember that anything can happen in markets. But here is some common sense that can be applied.

Someone asked me yesterday what software I use? Well I DO NOT use ANY software – my only software is common sense which comes from experience. No one can device a software to take decisions based on common sense. It is a different story that software do not make money. If they did, we just need a software to trade on our behalf and we enjoy life and the world collapses. That day will NEVER come. 🙂

So people looking for software, please use your common sense and learn to work hard. Ok back to topic.

Applying some common sense:

The whole world knows 25 basis points increase (0.25%) is almost certain. Nifty will factor that in by tomorrows’ closing. If that does not happen Nifty is headed up. If that happens, since its already factored in, on Wednesday or Thursday (meeting is for 2 days) morning, Nifty will NOT show any gaps up or down, but VIX will drop for sure.

Now what are the chances that FED will increase rates by 50 basis points or 0.50%? Very slim. For us the real issue is chances of FED increasing rates by 0.50%. If it happens Nifty for sure will gap open down by at least 1-2% and keep going down. But chances of 0.50% rate hike is NIL. So I do not expect a very huge (like 5%) gap up/down after the news.

And all paid subscribers of my course know that a small movement is nothing for us. We benefit.

I have NOT taken your paid course – What can I trade?

Well of course I cannot reveal the strategy here of my course, but please do not buy options for next two days until VIX is increasing – you will lose money big time. And if you are selling options please hedge. DO NOT sell naked – risk-reward is never in favor of naked option sellers when a big news is expected.

And ask yourself what is stopping you from taking my course? There are many traders who have known about my site since the last 1 year and have not taken the course. After 1 year they email me saying all their money got wiped out, please help. Now when everything is gone and you are left with some 10 or 20k how can I help? Do not let that happen to you. Rest its your call.

Hope you all make good profits.

Best.

==== End of Email =======

Update on 15 December 2015 – 1.30 p.m:

Today INDIA VIX is at 18.06 up by 1.46%.

This was expected as written in my yesterdays email (see top of this page).

Nifty is not showing much movement today which indicates it has already factored in a FED rate hike.

A 25 basis points or 0.25% increase is what it has already factored in and probably will close at current levels of 7650.

If FED does not increase rates – still markets won’t move much as that is the second possibility.

However if FED increases rates by 50 basis (0.50%) points then Nifty may fall 100-150 points.

But VIX will drop for sure even if there is a fall. Quick profits to be made.

Strategy 1 right now looks very safe.

Note that FIIs have taken money out from our stock markets in the hope that FED will increase rates. If it doesn’t I assume they will again start pumping money in our stock markets and Nifty may start moving up again.

So its great time to accumulate your favorite stocks in cash. Make sure not to make lump-sum investments – but keep some cash for further downfall. If the stock moves up you make profits anyway.

Best Regards,
Dilip Shaw
9051143004
Click Here to Learn Conservative Trading and Make Consistent Profits

Part of newsletter sent on 10-December-2015. Register to receive newsletters here.

Some people complain that the cost of my course is too much. Really? Have a look at this – an email of my client I received today morning. In 15 days one of my clients made Rs.6930.00 Profit. And all this with a Full Time Job. You can click on the image if you cannot read it clearly.

Testimonial by Yogesh on 10-Dec-2015 Rs.6930.00 Profit in 15 days after taking the course – Results may vary for users

Tell me, is paying 5k or 6k really too much when you can get your money back + some more in 15 days? On top of that you get my support for 1 year.

Tip For Those Who have taken my course: Have you ever tried Strategy 1 (the non-directional trade) on STABLE STOCKS? You know what, stocks have more volatility, so the premiums are also more – therefore you can make up to 5% a month. However with a slight increase in risk. Let me tell you that liquidity will be a issue, so please try on stocks with good liquidity. Luckily stocks with good liquidity also are VERY Stable – so that is an added advantage.

Try it. If you fear trading stocks, do paper trading for about a month and get in. Please remember that margin blocked may be more. For that consult your broker.

If trading options, it is very important that you trade with a discount broker who charge low brokerage so that you do not feel the pain of paying too much getting in and out of a trade.

Another thing you must keep in mind is that it does not matter if margin blocked is more – ultimately it is the ROI (return on investment) that matters. Return of 3000 on 1 lakh is same as return of 15,000 on 5 lakhs.

As you can see above if you really like the magic of compounding to work on your portfolio, you must try to bring more money into your trading account.

Remember with a discount broker number of lots does not matter as you are paying only a fixed price for one order. Even if you buy/sell 10 or 100 lots you still pay a fixed low brokerage. So I request you to trade with a discount broker to save your money.

If you want to open your account under me with the best and the safest discount broker in India – send me your name, email, and phone number and I will set up you under me.

And if you want to know anything about my course, please contact me.

Learn and trade, else you are in a better position to know whats happening to your account by speculative trading. Please stop your losses and do the course now.

And if you are not taking the course because you think 3% a month is too less a return then think again – is making 3% a month better or worse than losing money every month? All in all your losses may run in lakhs or ever crores in the hope of getting 10% a month and you will never know.

You can pay for my course online here.

Update: Just before sending this email I got update from the client that he traded the stock option strategy 3 (not non-directional) on ITC because of my recommendation on 7-December-2015 here:

http://www.theoptioncourse.com/how-to-trade-nifty-now-december-2015/

People who have taken my course, can you see how strong the conservative stock option strategy is? Check your email where I send the strategies, you will find this written by me – “Do Not Fear Trading Strategy 3 – The Stock Option Strategy – You will leave money on the table”. By not trading the conservative stock option strategy, you are actually leaving money on the table.

Note: In spite of the above my suggestion remains same – you should paper trade the pure non-directional strategy in some stable and liquid stocks like ITC, HDFC, HDFC Bank, SBI and see the results. If you are able to devote a little more time, I guarantee that you will see better results than Nifty in Stocks, as they have a higher premium. Even Bank Nifty options have higher premium than Nifty because of the high volatility. I assure with slightly more risk you can make that magical figure of 5% a month.

Interestingly a lot of people call me and ask if they can get a loan and trade after doing my course. After-all a personal loan is given at 12-14% interest and if they can make 24-36% per year then they can take this profit home after paying back the loan.

Well sounds good but really a bad idea. Go back to history – name 1 person who took a personal loan or borrowed money from general public/banks/lending companies on false promises of great returns, and converted it into stellar returns from the stock markets – returned back the loan and lived happily ever after. No, not a single person has ever done that. What gives you the confidence that you can?

In fact you may have heard a lot of Scams and failures on these lines but not a single success story. Some are actually behind bars.

Why? Why do humans fail to convert a loan or borrowed money into stock market success story? We will explore in this article.

Well here is one email I got that inspired me to write this article. Email slightly edited to hide sensitive information.

Dear Sir,

3) Then using collateral value (approx 8 lakhs) I want to trade every month using below conservative nifty strategy-1.

[Email edited here as the Strategy 1 of the course was written here. However this gave me almost an attack when this person told me that he will trade my strategy AS IT IS BUT WITHOUT PROTECTION (THE HEDGE) – to generate MORE returns.

Here is the main reason why traders fail to convert loans into spectacular returns from stock markets

Since he has to pay 12.99% as interest a 3% return is less, which is quite correct, BUT THIS IS WHY traders all around the world lose money trading.

There is a limit to what you can make trading in the stock markets. Once that is achieved, the mind set once they start making money changes pretty fast to how to trade more aggressively and make money. The “I can never go wrong” mindset comes in. And this is exactly where things starts to change dramatically. Note that the problem is not with their mindsets – the stock markets does not know you or your mindset – all it knows is the trade you have taken. The problem is changing the style of the trade from may be conservative or disciplined trading to very aggressive trading.

With aggressive trading let me guarantee you this – the best of the best traders will get stuck in one bad trades out of 10 trades they take – and the spiral of losses begins. Even he loses 1% trading aggressively remember that he has to return 12.99%. He has already lost 12.99%, now 1% more. This is 14% money already lost. This keeps playing in his mind – to get that he trades even more aggressively this time with more risk and loses even more money, until his account shows a zero balance, or he gets a margin call.

On social front when he loses money the trader gets into a reclusive mode and sometimes even avoids his own family. He knows that his dream of being extremely rich is over and he does not want to face the reality. That’s the reason he starts avoiding everyone, and gets irritated on everything. This is where he recognizes that he did a huge mistake. End result – some go to jail, some suicide, some check into counselling centers.

Aggressive trading means there can be a loss of 20-25% in a single trade. Well there can be gains as well but when do aggressive traders wait for a 25% gains?

However loss of 20% is quite common if there is no hedging. One single loss and his game is over for good.]

4) If Nifty still moves further 200 points then I will stop loss that side options & will enter into your Conservative Strategy-2. I made this modification to gain around 4 to 4.5% per month using conservative strategy. Only risk would be if Nifty give one side moves of around 300 to 400 points in one day then I will in huge loss.

Another bad modification to my strategies which is not required. Modifications are OK as long as there is a strong logic behind it and protections are in place.

So you already know that there can be huge losses, still you want to try. WHY?

I need your advise on below points:

A) Whether risk reward would be favorable on point no 4.

Thanks & Regards,
Dhiren

Mr. Dhiren, you got my answer. DO NOT take a personal loan and trade especially aggressively – you will play with fire. If you lost money trading then you lost it. Remember that when you are making money now please do not think that you are “getting back” your money from the stock markets. This sounds like revenge and revenges do not work in stock markets. Think that you learned from your past mistakes and are now doing better in the business, that’s it.

Now lets discuss your points, point by point.

>> 1) I am planning to have personal loan of 10 lacs @ 12.99% interest rate which I am offered from ICICI bank.

Great. But other than trading or investing in stock markets is there any reason? If not you are better off without the loan. You will have 10 lacs at 12.99% rate for nothing.

>> 2) With this amount I am planning to build portfolio using entire 10 lacs into Axis bank, HDFC, SBI, Coal India, TCS, Infosys, NTPC & L&T at current price with equal fund allocation before 15Th Dec 2015.

Stocks looks good for the long term but still investing in stocks at one go is NOT advisable. Read my articles on investing in Axis Bank, ICICI bank and Sun pharma. In none of these articles I have told buy at one go. I have always maintained that start buying and keep some cash to buy more at a 10% drop – else sell to book profits ar 10-12%.

All 10 lacs investing at 1 go in stocks markets, even if in great companies is a bad idea. Markets are currently falling and we do not know when they will bottom out. Trying to time the stock markets is the biggest mistake of investing. No doubt why option buyers lose.

>> 3) Then using collateral value (approx 8 Lacs) I want to trade every month using below conservative nifty strategy-1.

Strategy 1 – the most conservative strategy in my course is intended to be traded with YOUR MONEY (the money that you own), not your parents or friends or money that you got from a loan. The real essence of the strategy is that you trade peacefully – not with any kinds of stress or panic in mind. On top of that you are tweaking the conservative strategy to become an aggressive strategy. Once you do not buy hedge, it is no more the same strategy.

>> 4) If Nifty still moves further 200 points then I will stop loss that side options & will enter into your Conservative Strategy-2. I made this modification to gain around 4 to 4.5% per month using conservative strategy. Only risk would be if Nifty give one side moves of around 300 to 400 points in one day then I will in huge loss.

Really? Conservative Strategy-2 is not made to be traded like that. You are making modifications to lose 4-4.5% and not gain. Yes a sudden 200-300 points move does come and while traders trading it conservatively will lose only 1-2%, your loss will be at 5-6%. And do not forget that its a loan – so your losses are even more.

>> A) Whether risk reward would be favorable on point no 4.

No. In my book trading without hedge is NO trade. Risk reward is BAD on a 10 lakh account.

>> B) Whether should I use entire capital of 8 Lacs to buy this 8 stocks at current price or should I buy in three steps. Because current level seems very attractive valuations for all these stocks.

Read This – How To Invest In Stocks:

Three four steps to buy stocks is good BUT you cannot and should not do it on entire corpus that you want to invest in markets. At any give time, you can invest in a couple of stocks – not 3 or more. Moreover no stock should be allocated more than 10% of your trading capital. In fact the less the better, but no less than 5%, because if any stock performs its profits should have a meaningful impact on your whole portfolio – else if you allocate too less to any stock even if it becomes a multi-bagger your portfolio will not show a meaningful return.

So basically if you know a little math, you stock portfolio should not contain less that 10 or more than 20 stocks. And investment has to be done gradually NOT at a single time. If possible invest the entire corpus can be into to a liquid fund generating 8% return and take even money out every-moth and invest in any one or two of the stock in your list. Once you have booked profits in any stock, you can wait for its fall to invest again or research another stock.

Remember that the number of shares can differ according to the price BUT the money invested should be the same for entire year.

Looks like I am telling too much for free. Let me stop here. 🙂

>> C) Do you have any view on my stock selection, I mean will it be balanced portfolio or is any stock you feel to eliminate?

Now this is an interesting question. I am an options guy, not a stock guy. I have a close list of 10 stocks that I follow. 20-30% change every year. And these are stocks to be traded/invested for medium to long term. The risk is mine – so I do not tell any one asking for advice on stocks. Barring a few stock investing ideas in my blog I do not usually recommend any stock, until there is a very strong reason to do so.

Frankly, I do not know if you are following any risk-management methods. So someone may invest his entire savings in one of the stocks I recommend and if that stock does not perform – he will scold me for giving wrong information. In reality the trouble was not following the risk-management principals. Just like how it has worked for others – my stock portfolio has worked the same – some returned great, some I had to exit in losses. People who have taken my course know that I do not invest stock and forget – I trade the conservative stock strategy on it so all in all even if the stock does not perform I can make money. However you may not know the strategy and lose money. On top of that why should I do stock research for you?

>> D) In one of your article of How to become smart trader, you mentioned that why not earn more than 3% when you are fully Hedged. Can you please suggest is there any modified version of Strategy-1 which does have little risk but we can earn upto 4 to 5%. This because EMI for my personal loan would be Rs. 22700 & I am planning to earn 35000 from 8 lacs every month using conservative strategy.

Good question. Read that again – I said why not earn more than 3% when you are fully Hedged – NOT when you are NOT hedged. You are doing exact opposite of what I said or you are trying to understand what is not written there in that article.

I have given you the best possible strikes to chose for strategy 1. You know very well how to try to take more risk and try to make more – but that’s an experiment you need to do and that’s not my job. I have done enough research and got to those strike prices. Rest depends on the trader. If you are good trader you can always better that. How can I do research for you?

Now this is VERY Important thing he said that summarizes why you should not take a loan and trade:

“This because EMI for my personal loan would be Rs. 22700 & I am planning to earn 35000 from 8 lacs every month using conservative strategy.”

So you will trade in panic. You have no other choice but to make more than 22,700 per month or you pay money from your pocket. And this needs consistency – every month this person will have to make that amount. There cannot be a single month of losses. And if there is a loss of 20,000, then total money he needs to create a balance is 42,700 the very next month. To cover this up this guy will take even more aggressive trading involving Futures. Now he will get trapped – this 42k loss will convert to 1 lakh and then some more.

>> E) No one would advise taking personal loan to trade in stock market but still I am gaining confidence in earning consistently through nifty conservative strategy so what is your view on taking personal loan for trading conservative strategy in stock market?

Its good and nice to know that you are earning consistently through nifty conservative strategy – its meant for that. But it is meant to be traded with your money and with the money you do not need for next few years not months – so that you can compound. A loan is a money that is not yours and you will have to return it very soon. Even if successful you only get to keep the profit percentage of the trading. You cannot keep 10 lakhs with you – that you will have to return to your banker. All in all the money you make is not substantial as you keep only a percentage of the profits, not all profits. Compare this to the hard work you do – this is not significant. To me the Risk-Reward ratio is NOT in favor.

>> Request for your advice/comment on above points to fight back all my past losses in stock market & Your advise does really have lots of weight-age on my decision making.

Read this “fight back all my past losses” – were you fighting the stock markets when you were trading and losing? You lost the fight, now you want to fight back and win. This is called ego. No egoistic trader has made money trading the stock markets. Not just that. No egotist person has ever won a war, let alone the stock markets. Never trade with revenge in mind – stock markets have humbled 95% of traders and will continue to do so. The rest are highly disciplined traders making huge profits – but they am sure are very humble towards life as well as towards the markets.

Just be happy with the small profits you are making and forget the occasional losses – you can never win always – that is part of trading. If you can get to that figure of 20% return a year from your whole portfolio, remember that your returns are one of the best in this world during the current times.

Conclusion why traders fail to make money on borrowed capital or loan:

1. They are over-confident and think that they can never go wrong.
2. And therefore start taking very aggressive trades and start losing.
3. To recover losses they trade even more aggressively so that they not only recover losses but make huge profits.
4. They make more losses.
5. When they see that their ship is drowning and they cannot sail anymore – they declare bankruptcy or give all sorts of excuses to their bankers/lenders.
6. End is bitter for both the trader and the person/entity that gave them loan.

So the lesson is – Trade with your own money – part of which you can afford to lose. If you find success, only then increase your capital, gradually.

Have you ever taken a loan and invested in Stock Markets? If yes what as your experience?

Note: Part of newsletter sent to my subscribers today. If you need such newsletters please subscribe here.

Since a lot of time Nifty is doing nothing. All my customers of the conservative option course trading the strategy 1 – the non directional trade would have made good profits.

But there are indicators that now any day Nifty may move. Which direction we do not know – but there can be a move. I know there are lot of you who DO NOT trade with the hedge – I recommend for next 30 days be 100% hedged. Those who hedge always need not worry.

If GST bill is passed – Nifty is headed up.

But I think 7600-7700 is a good support for Nifty. (That does not mean you buy a Future – I do not give suggestions so that you trade without research based on what I say in this blog. Please do your own research before taking an investing decision.) You can buy Nifty BeES though, hold them till you make 5-6% profits. Well you can also switch some of your debt mutual funds holdings into equity. But only some of it. Read this article for more information.

Which Stock To Trade?

ITC Ltd. is looking very attractive at 313. Start accumulating the stock. Some now at around 300, then at 270, then at 243 (probably it will not go there). It is going down because GST will severely effect taxes paid by ITC. But we all know if that takes place, ITC will increase the price of their products especially cigarettes. And humans will keep inhaling cigarettes – it does not matter what the price is – habits don’t die easy. 🙂 And ITC will once again bounce back.

If you have cash trade the conservative stock strategy on ITC.

What Will Happen to India VIX:

It closed today at 15.87. Still good for strategy 1. But if you have cash read below:

If FED does a rate hike we may see some correction on worries over FIIs taking their money out from the stock markets. But if you know strategy 1 who cares? The Fed, holds its next policy meeting on Dec 15-16. So I assume VIX will again increase and will be at a good high on Dec 14th (Next Monday). If you have free cash trade strategy 1 on Monday or Tuesday.

You can even trade this Friday, 11th December, 2015. Since we have 2 days off weekend if there is not much increase in VIX then you can get the benefit Theta depreciation during holidays. Remember that Theta also depreciates during days stock markets are closed. 2 days benefit is good if VIX does not swell. If nothing it pays off your brokerages.

What may happen short term to Nifty?

There is a strong signal that FED will hike rate by 0.25%. But if nothing major happens to Nifty and GST bill is passed, Nifty is then headed for 8300-8500. The only issue is the FED reaction – but there are a lot of signs that markets will not panic like they did a couple of years back.

Since the signals of rate hike is very strong I think Nifty will factor it end this week itself.

Remember VIX cannot factor anything before the news except going up, so it will only increase. And even if it does not – it will fall after the news.

Good opportunity – make money. 🙂

Thanks for being my subscriber. More information on my Conservative Options Course is here:

http://www.theoptioncourse.com/learn-how-to-trade-options-for-monthly-income/

Disclaimer: This post is for educational purpose only. If following any advice written above please first do your own research. Stock market investment are subject to market risk so please have a proper money risk management plan.

Some of my visitors ask for stock market advice for free. I help as much as I can, but some emails are hilarious and some impossible. Read this article to know some real interesting people. There is a lesson too.

Now that my site www.TheOptionCourse.com is getting somewhat popular (I still feel a lot more needs to be done), I get regular emails for help.

Let me be very frank. No person on this earth can know everything. I am a human too. Its not possible that I know everything – so its quite obvious that some emails goes into “Ask Me Anything” folder of my account for further research and later reply. My apologies if you do not get a quick reply.

However whatever I know I do try to reply quick. Please also understand that my customers are my first priority and if I find time I do reply the emails asking help for free.

But at the end of the day – I am the same human being as YOU. I have a family, a consulting job and of course this site which keeps me super busy. And I like that.

However sometimes I get strange messages where people take me for granted.

This person claims to be 51 (well could be true). Has 1 lakh in his trading account. I am sure he has saved some money, probably 10x of the cash in trading account – but wants help from me for free. Its not clear what he wants. Does he want me to give him the strategies for free or he needs money – its not clear. And his name is NOT Manas as in some previous emails.

His first email was :

Dear Mr. Dilip Shaw,
I need Rs.50,000 per month to run my house.
And exactly after 28 months I need Rs.30 lac.
How much money I need use as capital?
I want to learn your nifty strategy whether futures or options.
Please help me.

So it looks like he is asking for the course for free. And look at his demands. 🙂

I replied back with:
Currently do you have a job?

His reply was: No.

Then I asked:
And how much cash you have in your trading account?

His reply: 1 lac

Then I did not reply as 1 lac is good to take risk with stock markets if you are slightly younger and have a steady job, but starting with 1 lac at 51 especially if you do not have a job/business is risky.

But today this person wrote something strange that I would like to share with you. Have a look at this email below (all personal information of the sender hidden as usual for privacy):

This is what was written in the email:

If you help me get my financial problem solved, I will keep your photo along with Gods in my pooja room & worship you till I die.

I am in deep problem. Off-course one who will take out of it will be nothing but God for me. Your daily worship video will be sent to by attaching to mail or if you want to see live , I will show live by web camera.

These are words of 51 year old man in huge trouble.

Really my photo along with Gods? I am alive and kicking dude and I am NOT GOD and don’t want to be one. This makes me utterly uncomfortable. Please do not write fake sentiments. That does not work in real world. Let me tell you one fact of life:

“You are the only person who can help yourself in trouble. Not your parents, not friends, not relatives, not even your kids – you are the only one who has to get yourself out of trouble.”

Others can only give you advice, but in trouble it is you who can help yourself the most – no other person on this Earth can.

When I was losing money trading I was in the same spot – wife pregnant, 1 Lakh personal loan, zero balance in bank accounts, sacked from Job, and on top of that whatever was left was taken away by tips providers. My back was against the wall, but Thank God, I turned it around. Who helped me? Of course my parents, friends chipped in with advice and my father-in-law paid for my wife’s delivery (Thank You Papa) – but that’s it – I had no other choice but to work hard and make sure the trouble goes away. And it did.

I looked for a stable job. Any job – it DID NOT matter whether I liked it or not. At that time making money was paramount. I was willing to work day and night, nothing else mattered. Beggars cant be choosers right? In 2 days I got a good job. Then with my first salary I bought books. Did not waste time reading them. Like I was reading books while traveling to office, after coming back from office till late in the night.

Of course I knew this that if I am losing money, there are others losing money too and so I made this website to help the retail traders trade to make a profit. But then I hope you understand I have my limitations too.

If you think someone from the skies will come and take all your troubles away and do nothing – hell you will get into more trouble.

At at 51 if someone thinks like this then its is quite surprising.

This person wants help but has set a time limit for me to reply back. How interesting is that?

The email says this:

I am planning to adopt delta neutral strategy trading in Nifty options from next series. But instead of shorting any option and hedging it by buying the same option(of course different strike price), I am planning to short both put and call options at a far away price i.e. if Nifty at 8300 shorting put of 7900 and call of 8700. Also readjusting my positions according to movement of Nifty to earn full or maximum premium at or near expiry. Please inform whether I am on right track or do I have to take some extra precautions. Please reply before 30th October(start of November series) Thanks in advance.

See how he is to asking me to reply back before 30th October. He is not my customer.

Here is another email, though this is more to do with “you are helping that’s fine – but I need more”. See this email:

It says:

Dilipji sometimes you send regarding vix down or up and your strategy worked for 3 to 6% like that. Its alright but you did not told about which call or put options buy rate and sell rate please next time mention the options rate also.

So basically I kick my service good bye and help this person make money for free. When I requested him to take my course – there was no reply. Basically this person does not want to work hard and just wait for my tips to make money for free. I am sure if I do that he will next ask me to send him SMS on time – again for free. 🙂

If you are not willing to learn – no one can help you. No tip provider can ever make you rich.

This person is an Option Teacher somewhere in Mumbai. So ideally this person should know everything on options since he is teaching options. This is the email he wrote to me:

Hi Dilip,
Can you help me with regards to the below query, also can u share your contact details as I wanna learn more about Options.
With regards to Option I have a question on below mentioned chart.
In this chart Nifty 8300 call option on 1st of June shows settle price of 555.05, at this time there is no contract traded and also open interest is zero.
Question is how exchange has arrived with this price when there is no one trading.

Ok the question is good but silly if an option teacher is asking. Even if not traded an option will have some value. Ask and bid are based on the option premium provided by the market makers. So an option will have some value even if no one is trading. He has also NEVER traded options by the way. 🙂 He called me and told me that.

Here are some other interesting emails I would like to share. I am not attaching a screen-shot as it is not required.

I am 63 year old and retired from Govt. Service in the post of Accounts Officer. I have started trading since 2012 and lost nearly above 40,00,000/-( Forty lakhs) My retirement benefits have gone with in the period of 3 years. Please help me in recovering my loss at least 20% or 25%.

Another email:

Sir,
For a long time from 2005 i am trading in this market and lost RS 12 Lakh in this market by trading option and futures. I have already tried for more than 24 tips provider at last i had faced loss with them ultimately. One day i saw your advertisement on a website and replied. I am watching your mails for more than two months but i could not understand the way by which i can get back my money back which i have lost in this market.

I have only Rs 2500/- in my trading account but having holding of stocks valued RS 130,000/-and for this i can get exposure of the same amount for just 5 trading days only for a single trade. My account is with India Infoline and Brockrage is Rs. 80 for option per lot one side and 5 paisa intraday RS 150 for future one side. Now please suggest me is it possible to trade any option strategies in this kind of situation ? I have stopped trading since six months as i have lost my confidence and guts to loss.

I am 55 year old with practically small savings and on the verge of retirement. Positive thing is that my children are well settled and can look after themselves and can provide only basic necessities of my life. I have got a sickly wife whose medical expenses are 2.5 lacs per annum and which is my 50% of my annual income.

I can offer a risk money of 1 lac for building my retirement corpus which is 3 years away from now. I am interested in options trading and had been learning a lot about them, but I had not taken the plunge. Suggest how you can help me and also approximately how much retirement corpus I can build in 3 years time with 1lac I am going to invest now. Please explain to me in detail. I may be able to spend at least 2 hours for trading every day. Thanking You.

I am sorry if this email hurts anyone – but what I am trying to say through this article is “You Are The Only One Who Can Help Yourself In Trouble”. So just get up and learn to work hard. There is no free help. You either pay money or your pay through your time. Its your choice – but hard work you must do.

Note: Extract from my newsletter sent yesterday. Please register your email here if you like to receive such newsletters. You will also receive a free 5 days course on options.

Yesterday (30-Nov-2015) evening I had emailed my subscribers this:

INDIA VIX today closed at 16.43.

It could increase before the announcement of RBI Policy tomorrow at 11 am sharp.

I assume it will drop after that.

What can you trade tomorrow?

If you have taken my course trade Strategy 1 BEFORE the announcement is made at 11 am – NOT after.

If you are already in Strategy 1 – please see if you are getting reasonable profits at around 1 pm. If yes close your positions and book profits. VIX would have dropped and index stable. Great time to take profits out.

Enter again when VIX increases. Looks like 17 is the best to enter. But there is no need to keep waiting. There are no major news at least for the next 15-20 days – so it looks like VIX will be more or less in a range 15-17. So any day you see a spike, enter Strategy 1 again.

If you are an Intraday trader – SELL ATM (at the money) options (both calls and puts at 9.30 am) and book profits end of day or if Nifty moves 1% from the time the options were sold (this is actually stop-loss in profits). Do not sell after 11 am tomorrow.

A 1% move will NOT damage the positions – VIX drop means you will still be in profits.

========== End of Email ==========

Why I asked to sell options before 11 am today?

The reason is this that VIX will be high before the announcement is made and after that it will fall. Sellers can make quick profits trading Intraday.

As you can see VIX today opened at 16.43 – same as yesterdays close – but at the time of writing has dropped significantly.

All Intraday option buyers will lose money today as I do not expect huge movement after this news.

And remember – options buyers, especially the short-term ones or Intraday traders, get very active on these days as they expect huge movements. When nothing happens they close their positions in losses. Sometimes even when the move comes – they still lose money because of the drop in Volatility which leaves them confused as to why they lost money even when Nifty moved in their direction.

Well now you know why. 🙂

Why There Will Not Be Huge Movement?

That is because what happened was expected anyway and now the traders DO NOT know whether to buy or to sell and that could be stocks/options/futures whatever. In situations like these there is going to be a balance and markets will not go anywhere ensuring losses for the buyers.

In today’s case the markets expected no rate cut and exactly that happened. Reserve Bank Governor Raghuram Rajan held repo rate steady at 6.75 per cent in his monetary policy announcement today. When markets expects something, it factors the movement much BEFORE the news is out probably a couple of days before. So markets move huge ONLY if what they expected did NOT happen or something very unexpected happens.

For example if RBI would have decreased rates, then markets would be flying high now. Had it increased rates, markets would have nose-dived. But since the news met expectations nothing major happened – except the drop in volatility.

What is INDIA VIX now?

When I started writing this article at 11 am it was 15.97 (-2.80%) down from yesterday’s close.

Now at 11.45 am it is 15.88 (-3.35%) down from yesterday’s close.

The fall may continue today so the best time to book profits is after 1 pm.

Update at 1.50 pm: Like I said it will keep dropping at 1.50 pm INDIA VIX is at 15.70 (-4.44%) since yesterday’s close. Nifty also did not show much movement for the day – just 10 points is virtually NO movement. Book Profits NOW and close your Intraday positions. If making reasonable profits in strategy 1 close it too. Do not wait more.

We will wait for another opportunity to enter markets. Good traders are NEVER always in the markets. Enter when there is an opportunity and exit with profits as soon as you can.

Update at 3.30 pm: INDIA VIX closed today at 15.63 which is -0.80 from previous day’s close or -4.87% down from yesterday. Nifty also did not move much – closed at 7954.90 or 19.65 (+0.25%) points up from yesterday close.

I think a lot of you would have booked good profits.

Build Wealth Slowly Should be Your Mantra.

Enjoy the profits.

I hope you are enjoying my newsletters and profits too. 🙂

All The Best.

Note: The strategy you will read here is well explained in another PDF file. You can get this strategy for free if you open a brokerage account account under me in ZERODHA. To do that you have to register an account now by clicking here. Once your account is opened just contact me. I will send you the strategy. You can see some real trades and testimonials here.

Please Teach Me To Make Rs. 2000 Daily Trading Intraday Strategy

This converts to 2-3% everyday. Now for the time being forget stock markets. Think about any business that makes 2-3% everyday or a 100% return every quarter? Does any business comes to your mind? No, Nada, Nothing. There is no business that can generate that kind of returns. If there was some business like that – all other businesses would simply not exist.

However making 2-3% per month from trading options is possible if not more. This in my view is significant if you can compound accumulated profits month after month to make more money. The idea is not to withdraw profits and re-invest the profits back in to trading conservatively and keep making profits. In my options trading course I teach conservative strategies that can help you make 2-3% a month from trading. Click here to read more about the course.

100% A Month Return Is An Impossible Dream That Can Be Sold Easily

This is an impossible dream which traders love to dream. They day dream something like this – “If I can make Rs. 2000 from one lakh everyday, I can invest 10 lakhs and make Rs. 20,000/- everyday which is more than 4 lakhs a month. Enough for a comfortable living”. Their day-dreaming does not end there. They then dream of pulling crores from friends and relatives even from banks and make crores every year.

Yep I am not lying. My website gets traffic for “how to make crores from 1 lakh in stock markets in 1 year?” and they are directed to this page – “How to Make Crores from the Stock Markets“. LOL

Hell they do not even know why they need so much money in the first place. 🙂 But dream they do. Sadly this dream costs them dearly. How?

You see all stock market advisory companies, Intraday tip providers, options & futures tip providing companies and others in similar business know this very well and are able to sell these people their dreams. Hell even I am a victim. I wasted Rs.40,000 paying money to various tip providers and lost close to Rs.60,000 trading their tips. Thanks to them I turned to books, but that’s a different story.

But fact is its very easy to sell a dream. Just Google “Intraday tips” or “stock tips” or “option tips” and see the results page. You will see dreams being sold. Advertisements like “over 10% monthly returns”, “100% Percent Returns”, “50K to 2 Lakhs”, “Over 1000% Returns”, “100% secure tips”, “Make Rs.5000 Daily”, “100% Accurate Analysis” and lots more will pop up.

Tell me now, do you think its possible? If no then why do you buy such dreams? Let me tell you in a very blunt language – making money is hard – you cannot make it rich by getting tips from someone. You have to walk your own path, that’s why God has given you brains. If making Rs. 2000/- daily is possible just by paying someone 2-3k a month and 1 lakh/50000 in trading account then why do people study in costly schools and colleges? Hell borrow 1 lakh from your parents, open a trading account, and pay a tip provider 2k a month and laugh your way to banks. Life ain’t that easy. Is that even remotely possible? In fact Thank God its not possible else the world would had collapsed. No one would work. All would wait for that next tip to get rich. It would be a strange world.

You Mean Intraday Trading Does Not Work?

No, I never said that. I only said if you are thinking tips providers will make you money giving Intraday tips then that will NOT work. You can of course work hard and become an expert day trader. There are many books written on them, you can do online research or try your own strategies to try your hand at day trading. But its only you who can help you to become an expert Intraday trader. No one else can.

When I was losing money I tried several Intraday strategies on my own. Most of it is not worth sharing but there is one that I feel may work if you try which I will reveal shortly.

Please Tell Me Good Intraday Trading Techniques

Ok. But I tried a lot of strategies. I will tell you something that may work Intraday, but you will have to practice to perfect it.

Note: What you will read below needs a lot of patience and practice. However there is an easier way to trade Intraday trading not written here. If interested to know please please contact me.

There is something known as scalping. According to Investopedia.com:

“A scalper is a type of trader that may dart in and out of a stock or other asset class dozens, or in some cases even hundreds, of times a day. The reason these individuals are so active is that they hope to reap a small profit on each trade and that these small profits will add up to big dough at the end of the day.”

In other words a trader takes lots of trades (mostly done in equity cash because of high liquidity – but it can be done in Nifty Options as well) and will try to make small profits in most of the trades. Of course the profit in terms of cash should be double that of loss. So one profitable trade means the trader can take two more trades. Like this if the trader takes 10 trades in a day and has a success rate of even 50% – he can make Rs.2000 to Rs.3000 daily from a small account.

Scalping is an art. Whether you know technical analysis or not is not important. Lots of practice, planning and patience is required to be a successful scalper. Also its a full time job. You cannot become a successful day trader with another full time job. Day trading needs your time and attention. Not monitoring your trades or leaving your monitor without stop loss in system can be disastrous.

To reduce stress, especially in western countries, there are many automated trading systems that are based on the scalping methods. Since its automated hundreds of trades can be taken in a day. And they can book profits in tenth of a second. You got the idea of how fast it can be if automated.

Of course automating trading is a costly affair. So here is how you can do scalping.

Which Stocks To Trade in Scalping and How To Trade It Intraday?

Highly liquid stocks. Here is something I tried but could not take it further as I lost interest in Scalping due to the stress.

Disclaimer: Please note that this is an advice. Please do your own research before doing real trading. Stock market investment is risky. Please paper trade before committing real money.

At around 11 when the trend got clear I used to visit http://money.rediff.com/index.html. Then click on NSE. On the right you will see the day’s top 5 gainers and losers. See this:

Then I used to open graph of top 3 gainers and losers. The idea was to pick stocks with clear trend and with high liquidity. (See there is NO technical knowledge required but BOTH my objectives are met when I am doing this. One I am trading in highly liquid stocks and two I can see the trend at least for the day). Also remember the idea was to scalp – so even a small profit would do. Of course I used to trade in only 1 stock at any given time. After 2 pm I did not trade.

Lets see today’s graph of top 3 gainers and losers. (Well this is nostalgic – I am remembering those days 🙂 )

Top 3 Gainers:

Top 3 Losers:

Ok as you can see around 11-11.30 am Hindustan Unilever Ltd. is showing a clear trend. HDFC not. Reliance Industries Ltd no. Bosch Ltd. yes. Adani Ports yes. Maruti Suzuki India Ltd. Yes.

Next I used to go to http://www.moneycontrol.com/ to read any news on the stocks showing clear trend to know why they are gaining or losing most. In the above case Hindustan Unilever Ltd., Bosch Ltd., Adani Ports, & Maruti Suzuki India Ltd.

According to news I used to pick my stock. News like being acquired by someone, or corruption charges on management, quarterly results etc have big impact at least on that day of trading. Based on how strong the news is a stock was picked. Of course its easy to understand that I used to go with the trend. For example if the news says Hindustan Unilever Ltd. profits more than expected then there is a strong possibility that the stock will not reverse direction. Or news like Maruti Suzuki sales dropped means at least for day the stock will have more sellers than buyers. You see in this trade your real threat is a whipsaw (stock reversing direction).

What Was My Profit or Loss Target?

Well my account was really small after losses. I did not want to risk too much and I was in the experiment mode, so in terms of money it was very small. In terms of percentage you can try initially with 0.5% of profits and 0.25% loss on margin blocked. This has to be maintained. Of course you can do 1% profits and 0.5% losses, choice is yours, but to succeed you must make double your losses. And both stop losses should be in system. Of course if a trade is making profit you can keep increasing stop loss (called trailing stop loss)to take out the maximum profits for the day. But again that needs to be practiced. Its an art.

If you can practice and perfect the above you can become a good scalper and Intraday trader.

How To Scale And Make Lakhs Per Month Trading Intraday

Start with a small account. Risk only Rs.3000-5000 initially. See if you are profitable doing this in 20 days of trading. If you are, double your risk or increase it Rs.10000. That way you will gain some experience and of course confidence of risking more money. If you straight away start with 1 lakh and lose 10% of it in 20 days of trading then you will not have the confidence of trading more. So start small.

Once you become successful and have proved yourself, take multiple trades a day. Remember its more about controlling your emotions than that stock’s movement itself. When a lot is at stake we tend to behave very abnormally – so you need to learn to control your emotions to become a successful Intraday or day trader and scale your profits. This can only come by practicing and hard work.

You cannot buy hard work, can you?

Conclusion:

Nifty has continued its downfall. Some people have reported stop loss in strategy 1. In that case there is no point in waiting and hoping for a recovery. See the document – if according to rule you have to go to strategy 2 then go. Stick to discipline.

If the loss is less around 10 points only – there is no need to go to strategy 2 – just close your current strategy 1 and get into a more comfortable position.

Some people are telling me that OI (open interest) is most in the 7700 Puts.

You can see OI (open interest) here:
http://www.nseindia.com/products/content/equities/equities/oi_spurts.htm
After reaching there click on “By Contracts”.

If you do not know what an open interest is then in short its the total number of open (or not closed) contracts. So basically right now (at this moment only) on the 7700 strike there are more number of open options & futures trades open than on any other strike.

But the fact is, it is AS OF NOW. This may change in 1 hour. In that case what you do? Do you close your trade and again re-enter because what open interest is telling you? This in my book not a great way to trade.

Fact is open interest does not work. When it works traders think that open interest did the trick, when it doesn’t they blame on other factors.

More open interest means the market is expecting that Nifty will not break 7700 or even if it breaks – on expiry it will be above 7700 PE.

Also note that I checked 1 hour before it was around 1 lakh+, now reduced to some 78,000+. Please bear in mind that OI will keep changing, which means basically you have to keep a tab on it. This is where I am not comfortable and rather stick to discipline.

Well frankly no one knows what will happen on Monday – a gap up or a gap down? Therefore I would rather stick to discipline than go with the open interest. The point is if it breaks 7700 then the losses will accumulate pretty fast as 7700 will become ITM (In The Money) and delta of 7700 will become greater than .50. This situation must be avoided.

Of course if you listened to me and got into a more comfortable position after the Bihar elections then I am sure stop loss is not hit and you are safe.

In that case stay put and wait. No need to panic.

Thank You: I think I got more than 100 wishes from you all on Diwali day. Really means a lot. Overwhelming Joy seeing your wishes. 🙂 Your trust on me gives a lot of satisfaction and motivation, especially in an industry where there is lack of trust on tips providers. Some messages were very interesting and some very motivating.

Thank You All once again for the lovely messages. Will upload some of them in my blog. Of course your phone no or emails will be hidden. I take confidentiality of your personal information VERY seriously.

Today on Diwali day the stock markets will open only for Muhurat Trading.

These are the timings:

5.30 pm to 6.45 pm – Equity & F&O (NSE, BSE, MCX-SX)
5.45 pm to 7.45 pm – Commodity (MCX)

Intraday positions will get automatically squared up around 6.30 pm.

Why You Should Not Trade on Muhurat Trading

My sincere advice is please do not trade on Muhurat Trading. You have just one hour and at least Intraday it does not makes sense. Plus people celebrating the occasion have a lot of things lined up for the evening – Lighting Diyas, Laxmi Puja and Burning Crackers. And of course lovely food. 😛 Obviously your minds will be there and you will not be able to trade peacefully.

So its better do not even open the trading app or your TV to look at whats happening in the markets.

But I know there are some people who will do some trade on this day as they feel its auspicious to do trading on Diwali day.

Well when investments are concerned its your knowledge that brings returns not the day or time when you are trading.

Muhurat Trading Tip 2015

Still if you are forced to trade then I would suggest start buying Sun Pharmaceutical Industries Ltd in stages like some today, some after a decline of 10% and some after a decline of 20% from here. Its looking very strong at 726.00. Its now at 52 week low as well. A very strong company. Though it is having some issues right now, they are short term and the stock will recover very fast when the management will solve those issues. The stock should give you good returns within a few months – but please do not invest a lot, and, invest in stages. If the stock goes down 10% more from here buy more. Or if the stock goes up 10-12% sell and book your profits.

Note: The stock gave a return of 10% in 45 days and I emailed my subscribers on December 28, 2015 to exit the stock when it closed at 790.85. Next day the stock opened over 801 for trading and my subscribers made a profit of more than 10% in 45 days. Please note that the profits may have come earlier, but stock markets investing should be done with proper research and proper money management rules must be followed.

Another good stock is HDFC Bank Ltd. Its looking very strong at 1050 levels. A very strong company – actually an evergreen company and a heavy weight stock. Please note that there can be issues with this company in future like NPA (Non-performing asset is defined as a credit facility in respect of which the interest and/or installment of Bond finance principal has remained ‘past due’ for a specified period of time. NPA is used by financial institutions that refer to loans that are in jeopardy of default the so called NPL), bad loans (loans that cannot be recovered), some management issues etc, but I am sure with time this stock will prove to be a great stock to invest therefore invest in stages not at one go.

Update on 07-Nov-2018 (Diwali Day) – Let us see how this stock has performed over the last three years:

HDFC Bank Nov 2015 – Nov 2018

Closed at 1946.55 on 6-Nov-2018 – this is a return of ((1947-1050)/1050)*100 = 85.43% in just three years.

HDFC Bank 06-Nov-2018

Hope you made good money in this stock. 🙂

Here is Wishing You All and Your Family A Very Happy Diwali 2015, and a Prosperous New Year.

TheOptionCourse Muhurat Trading Happy Diwali 2015

Disclaimer: Stock market investment is subject to market risk so please do through research yourself before investing in any stock even if the recommendation is coming from me or anyone else. This investment is proposed for a long term and not short term, therefore please invest with the money which you will not need for at least 1 year.

Here are some of the Happy Diwali 2015 Wishes from my customers. Thank You so Much for believing in me and wishing me. I hope your next Diwali is even brighter. (Please note that the signal is missing in images because my mobile got corrupted and these are snapshot from my mobile with a non-working SIM. I had changed my mobile by then.)