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Introduction

•Background
•Surviving since 2010
Why Trading ???...
• To make trading Income as a Daily source of
Income.
• Want to take it as Business & Grow your
wealth.
• Feel high / Addiction / Gamble.
• Expectations to become Rich Fast.
• Not satisfied with Current Environment of
your Business/Job.
Expectations V/s Reality
Uniqueness of a Consistent Losing
Trader.
• Trade Size / Leverage Trading
• Ego / Over-Confidence /Greed / Fear
• Weak Money-Management.
• Not willing to set Rules for Trading
• Not taking Responsibility
• Expectations of Random Rewards
• External V/s Internal Control
• Treats Trading as Gambling
Uniqueness of Consistent Profitable
Trader
• Trades in Fixed Positions size once Decided.
• Stays Humble / Disciplined
• Strong Money-Management (Risk : Reward)
• Trades as per Plan
• Takes Responsibilities
• Doesn’t Expect, believes in the Process
• Treats Trading as a Business.
Define yourself
 Intraday Trader (actively Involved)

 Positional Trader (less actively Involved)

 Part-Time Trader ( Involved as per comfort)

 Expiry Day Trader ( Involved Once in a week)


Pain Involved in Trading
• Emotional Pain. (Greed and Fear)
• Financial Pain. (Drawdowns)

The Threat of Pain generates fear, and fear is the


Source of 95% of the errors that you are likely to
make.
Backtesting your strategies:- The most
Important Part of trading.
• Important Terms:-

Equity Curve
Drawdown's
Slippages/Expenses/Roll over cost
Opportunity Cost
Interest
Drawdown’s and Drawdown Duration
System
Drawdown:- Pain
experienced from
Peak to valley Fall
in Equity curve.
DrawDown
Duration :- Length
of peak to peak
Period until new
equity Curve High’s
Defining a Account size for Trading
• If a system has a Drawdown of say (x) and
security margin required to trade that very
Instrument for positional basis is (y) then your
account size should be equal to

Account size= 3(x) + 2(y) { for positional }


= 2(x) + (y) { for Intraday }
Positional System
• System 1
Conditions:-
1.Closing value of Current week should be greater than
previous week High
2. Buy on Friday near closing time
3. Stoploss should not be more than 2% of the entry price
4.First occurrence of (1) should be taken as fresh entry
WEEKLY POSITIONAL SYSTEM
BackTesting Of System 1
• Underlying:- Banknifty Futures
• Total no. Trades in 6Years :- 60
• Total DrawDown:- 1,10,000/-
• Margin for One Lot : - 60,000/-
• Account size Needed to trade :- 4,50,000/-
• Ending Capital today :- 12,00,000/-
• Annualized Return :- 17% on Account size
• Annualized Return :- 52% on Margin
Equity Curve of System 1
System 2 (positional / Intraday)
• Conditions for buy

 Keep Note of Previous Day High , Compare it with First


1hr high.
 if 1st hour high is Greater than previous Day high Buy
above Day High after 1st Hour.
Stoploss is 1%
Vice Versa For Sell
Example:- Venkey’s on 31st Jan
Backtesting of System 2 (Positional)
• Underlying:- Banknifty Futures
• Total no. Trades in 6Years :- 298
• Total DrawDown:- 1,30,000/-
• Margin for One Lot : - 60,000/-
• Account size Needed to trade :- 4,50,000/-
• Ending Capital today :- 11,00,000/-
• Annualized Return :- 15% on Account size
• Annualized Return :- 47% on Margin
Equity curve of System 2
Pivots
• Formula for pivots:-
– Today’s Pivot=(Y_Day_H+Y_Day_L+Y_Day_C)/3
– R1 = (2 * Today’s Pivot ) - Y_Day_L
– S1=(2 * Today’s Pivot )-Y_Day_H
– Range= Y_Day_H - Y_Day_L
– R2= Today’s Pivot +Range
– S2= Today’s Pivot -Range
System 3 Intraday
• Conditions :-
» Buy Above R1 if whole candle of
10mins is above R1
»Stoploss few ticks below R1
»Target Exit By EOD at 3.20
» Vice Versa for Sell
System 3 Backtesting
• Underlying:- Banknifty Futures
• Total no. Trades in 6Years :- 280
• Total DrawDown:- 20,000/-
• Margin for One Lot : - 60,000/-
• Account size Needed to trade :- 1,00,000/-
• Ending Capital today :- 4,15,000/-
• Annualized Return :- 28% on Account size
• Annualized Return :- 37% on Margin
System 4
• Positional Cash :- Stan Weinstein Method.
• Credits to my friend Manoj Kumar @scorpiomanojFRM
who taught me about this strategy.
• Time Frame Weekly
• Plot MA of 10 and MA of 30 on Weekly Chart
• Stock Should have 10x of Average volume when making 52
high
• MA10 should be above MA30
• Entry Should be at close
• Trade to be taken on Midcaps and Small caps
• Exit only if Whole bar below MA30 or have a Money
management Stoploss of 10% Initially
Merck
Praj_Industries
Value of Regret is always More Than Value of Discipline.
Simplicity is key to Success.
Be Practical and true to Yourself.
There is only one who can Help you, you Yourself.

My Inspirations/Motivations

S.ParamJit Sachdeva, HoshiarPur.

Thank You
Angad.