Took it 2187 days, while operating with more than 30% ROI each year. Here are 10 steps of their wild journey:
I hope it’s helpful to someone.
1) Trading Journey Their journey started in 2017 with a capital of ₹22,500 which was amassed by friends who contributed 500-1000 rs each. What was nice is that they still got started even with a small amount. They kept growing their capital and performed better each year.
2) Introduced to indicators In 201 was introduced to indicators and lost a lot of money on: – MACD – Stochastics – Parabolic SAR and so on… Trading based on indicators was horrible for him.
I always advise people that indicators don’t help. If they worked, a 5th Standard kid could punch orders based on them and make money. Is trading this easy? No. Buying above MACD/VWAP/Moving Averages does not help as you get stopped out too many times.
3) Blew up Accounts multiple times The entire Account was blown up multiple times by Saketh and this was repeated over and over again. This led him to try out Options as they offered – different risks – and rewards. Unfortunately, lost again in Options as well.
4) Trading is a zero-sum game – This led him to ask the question – What is the guy opposite to me doing? If he just could do whatever the guy opposite to him was doing he could start making money consistently as trading is zero-sum. Option Selling is the way to go he realized.
5) Game of Consistent Returns slowly realized it’s not about big returns but “consistent returns.” – They changed their style & Instead of huge profits, just earn something small. – It’s better to earn a penny than lose a penny.
Their monthly average was 3-4% with increased capital and people started trusting them slowly. (2019) They weren’t blowing up and instead making more money. That’s why they got more and more infusions of capital from friends/partners. By covid, they had amassed ₹1.8 crores.
6) Find your zone: Trading style is not one size fits all. Only a single style of trading might not work for all. You have to identify your strengths and build a style that suits you. For not taking a directional bet and short straddles with adjustments worked.
7) Trading is not about strategy but execution. People go behind learning a ton of strategies thinking that strategy makes the profits. If two people run the same strategy. The only difference between a profitable trader and a loss-making trader is the execution power.
8) Confidence Saketh stresses – The most important factor in trading is confidence. If you lose confidence in yourself, you can mess up even good trades. This is why they have always tried to cap their risk and keep position sizing low. So when they lose, they’ll lose less.
9) How do you react when you lose? Profitable Trading is not about what you do when you are right, it is only defined by what you do when you are wrong. Some can’t control their emotions and quantities if they’ve lost is always very cool-headed even in drawdowns.
10) People look for quality and consistency. If you offer a person very high returns and mediocre service or an average return with very good service. Eventually, he will end up preferring the latter one.
People underestimate what they can do in the long term and overestimate what they can do in the short term. So always think long term and stick to one thing so you improve at it. We are proof that thinking longer-term works and you shouldn’t give up.
TLDR Version: – Lost on indicators – Lost heavily as the expectation was high – Understood the guy opposite is making money – Big returns vs consistent returns – Averaged 3-4% a month – Plan long term – Confidence – Thinking long term
and that’s it!