Category Archives: Exit

Opportunity

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Knock knock!

Who’s there?

Oppo.

Oppo who?

Oppo – rrrr – tunity, which don’t knock often (enough).

Yes, huge opportunity is knocking.

Global talent will stay indoors, to a large extent, from now onwards, come this September 21st, i.e. today onwards.

Brain gain time for us.

India is going to boom. Forget about tomorrow, next week, next month, but come medium term, and, going on to the long term, India will shine.

Sure, tomorrow, Indian IT will probably be down. Who’s in it for just tomorrow? One doesn’t get one’s house valued every day, week or year. One might do it when one is contemplating a sale, maybe after twenty years of owning it. Same goes for very long-term held compounders. Like Indian IT.

So, down? Maybe. Out? NO!!! Drag other markets? A bit. Effect to continue? Very short-term.

Beautiful thing is, Indian and possibly other corporates have been working on their plan Bs, and perhaps their plan Cs, and have, slowly but surely, been implementing these.

Also, government is boldly stepping up and refusing to get bullied. Watch out for the measures to be announced that will further boost the economy, to counter this ‘shock’. Thing is, where other nations have started thinking and acting short-term only, India has started to play a longer-term game. One can call it a meta-game.

Bottom-line.?

Time to answer the door-bell, open the door, and let the knockers in.

In my opinion, it’s safe to put one’s money on the line here.

Should Indian IT fall, large quantities of domestic funds will be lapping it up. Smart money will definitely be buying into offered margin of safety.

Why?

Fundamentals.

Clean balance sheets.

Free cashflow.

ZERO DEBT.

High RoE.

Large number of diligently purchased start-ups owned.

AI incorporation and development.

Steady growth.

Technical margin of safety being offered, possibly, tomorrow onwards.

And now, brain gain.

These are some of the big pluses that Indian IT offers.

So, one can easily and calmly go out there, and, with a cool head, put one’s hard-earned money into any margin of safety exhibited by these potential compounders with amazing track records, with a clear-cut goal of generating long-term wealth.

Wishing you happy and lucrative investing!

🙂

Task

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Pockets…

…burn.

Other ones are still stable.

There’s no telling when…

…some of these will start to burn too.

Such are the times, that a new war commences within hours.

Meanwhile, our subconscious immunity to newsflow reaches new highs everyday.

That’s a huge marker for over-confidence.

Those entering propped markets in full flow are showing this trait in vast degrees.

At a time like this, where do we need to be, financially?

A 1.0.1. tenet that applies here is that basic finances need to be at our beck and call. No 48hr+ lags please.

Also, one needs to be in things one understands oneself. Ulterior motives rule amongst all financial institutions in extreme times, and the helm needs to be firmly in our hands, even if part of our finances are in theirs. So, nothing discretionary, please. Don’t leave yourself at the whim and fancy of a fund manager. Funds are yours. You will do a better job, specifically because your lifeblood is on the line.

Let’s plan for…

…entries, …

… exits, …

… continuity, …

… and legacy.

When it comes to personal finance, the job required is nothing short of thorough, solving for all nuances possible and conceivable.

Wishing you happy and lucrative investing!

🙂

Signposts

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Noise, …

… currently, …

… is deafening.

Posturing, …

… rebuttal, …

… a coup nearby, …

… printing, …

… and what have you, …

… have now become par for the course.

What are the signposts we follow, amidst this chaos?

First up, let’s not be afraid of chaos. Big returns are made exactly there.

We are going to follow high-growth, …

… and specifically, value offered in a high-growth market. Ya, we’ll never get away from margin of safety. It keeps coming back, in one form or another, whether one is investing, or even trading. We use it to get a little better value while entering, facilitated by Technicals. We understand that it’s in volatile times and markets that growth offers value, very temporarily.

Needless to say, basic Fundamentals need to be intact, on the path that we tread.

The governments, and managements we invest in need to show integrity, and develop trust.

We remind ourselves, that high growth is a non-linear entity, and thus we need to stay invested.

We achieve this by keeping our Cost-Free-Ness in the market, like, forever.

We toil to create more and more Cost-Free-Ness.

What this exactly is has been explained ad nauseam in this space, at many earlier instances.

Creation of Cost-Free-Ness means that our principal goes to work repeatedly. Its mini-units are like soldiers that go into battle, bring back winnings, and then they rest, to be deployed another day. If some deployed principal is losing, we wait for it to win. If losses mount, we always have the option to bail it out, or to switch its battle.

The beauty about Cost-Free-Ness is, that since it remains in the field, like, forever, there then is no cap on its upside, in a high-growth market.

Wishing you happy and lucrative wealth-creation!

🙂

Mini Models

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Hey.

Patterns …

… keep changing.

Sometimes, markets move with a rhythm.

At other times, there’s none.

Rhythm, that is.

What is there, then, at these times?

Nothing recognizable?

Noise?

Something developing, but still not discernable?

A mix of all this?

It’s ok.

We don’t have to have a pattern at all times.

We’re ok with occasional mini-models.

Once defined, one moves as per these.

When the mini-model doesn’t work anymore, one discards it.

Examples?

Mondays are slow. Then they’re not. Helps in entry-planning, and sometimes also in exit-planning.

There’s one breakout in the watch-list per day. Then there’s none. Helps during profit-booking and / or exit-planning.

There’s one addition to one’s in-profit watch-list per day. Then there’s none. Helps in recognizing bullishness picking up and slowing down.

Monthly profit target not met by far, and it’s nearing the last week of the month. Rally slowing down? Reversal coming?

One gets the gist. Make up any mini-model.

Make up?

Yes. That’s the thing.

Working with something that no one else in general is using, or has thought of, is an edge.

What this means is, that while others might be making use or no use of slow Mondays, these haven’t become a mass pile-on party like a Fibonacci event, which the whole world knows about, uses, and can be fooled with.

Our own mini-models work …

… just for us,…

… and then they don’t, …

… which is when we discern the next one that is working.

We traverse from mini-model to mini-model, learn tremendously, and …

… create more and more cost-free-ness.

Over time, all our created cost-free-ness makes one’s cup run over.

🙂

Gaugers

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Hey.

We gauge…

…situations, …

…sentiment, …

…reactions, …

…anomalies, …

…hubris, greed, fear, depression, …

…and, amongst other things, also the tendency of the human being…

…to give advice.

Sometimes, we find ourselves giving advice too, randomly, unwarranted. We gauge that too.

Our effort focuses on identifying market pivots.

Why?

We act on pivots.

These are the most lucrative points in a market’s trajectory.

These are also very difficult to predict in advance.

However, because of our mental tuning resulting from constant gauging, we are somewhat in a position to recognize pivots when they have started to develop, or when they are just about to finish developing.

That’s the cut-off.

Meaning, that if action goes in any later than that, rewards lessen.

Once the whole world knows that a pivot is in play, price zooms or tanks from there rapidly. We want in or out before the zooming or tanking, respectively.

So, apart from technicals and fundamentals, comprehensive gauging allows for better thought synthesis and thus better market action.

Whilst gauging, we learn a lot about human beings and the psychology that drives our financial life.

Markets teach us so much, that they become a fulfilling profession.

Wishing you safe and happy wealth multiplication!

🙂

A-Gamers

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Hey, …

…nowadays, …

…we only play our A-game.

There’s no time for formalities.

It’s late in the day.

All weapons are out.

This is the need of the hour.

So, what are the salient features of our A-game?

A well-forged, multiply-faceted, time-tested road map – our system of systems – our one Strategy. This one’s 360 degrees. It incorporates both trading and investing, and leads to very long holds in cost-free form. Includes more than twenty highly competitive, sharpened, edge-providing Modules, about which I wrote a few articles back. As far as strategies go, we are cruising in a Maybach on the Autobahn. No worries there.

Patience. In the last twenty odd years, we have learnt how to sit. Makes biggest money, said we know who. Patience is ubiquitous, or is it? Many people have developed it. Many are born with it. But then, many are not. And, markets demand their own kind of patience. Over the years, we have learnt and developed market-patience. We wait for our levels before acting. We sit on our Cost-Free-Ness, like, forever. We are not in a hurry. I ‘can behave’ as if this is my own module 🙂 (do allow me the indulgence), but patience is universal and out there for everyone to incorporate and exploit on their own.

Liquidity. This is a module. Am reiterating it here since it is key. Our initial small-entry-quantum strategy (remember, that’s how we started!) allowed us ample liquidity, always. Yes, we were always liquid in situations, when they came, while building up the backbone of our portfolios. Slowly, portfolio-size started to grow. Then came the incorporation of position-sizing, thanks to my learnings from Dr. Van K.Tharp. Subsequently, I instinctively added my own twist to this, making it Non-Linear Position Sizing (NLPS) that we follow. NLPS initially allows for small entry quanta. As portfolio-size increases, so does each entry quantum-size. However, the latter increases more than y = x, i.e. more than linear. This means that over the very long term, entry quanta become remarkably substantial in size. Nevertheless, we still maintain balance by perhaps Fine-Tuning entries and exits to the nth level, i.e. with huge win probabilities, which automatically / mathematically leads to lesser entries. Strategy thus goes on cruise-control. Furthermore, outstanding entry-prices, followed by Quick Generation of cost-free-ness make our very long-term holdings as Anti-Fragile (thanks for the term, Mr. Taleb) as possible.

Talking of cruise-control, our back-end allows for full Automation at button-clicks. All transactional trail-mail is auto-forwarded to every required avenue. It’s a one-time self-setup time-expense, so don’t be afraid of it, since the reward is disproportionately huge. Each avenue allows preview and further transfer / storage after button-clicks. Taxation? Button-clicks. Indexing? Button-clicks. Retrieval? Button-clicks. Viewing in any format? Button-Clicks (baby).

Time. We have all the time in the world. We do our own thing. Income is sorted. Wealth is being generated on auto, and is multiplying. Learn languages. Travel. Pro-bono. I teach kids. To manage their own finances. From a young age. Currently I’m teaching four kids. It’s a give-back, and they can pay it forward.

In a nutshell, that’s my A-game. I’ve taught it forward, so I can talk about a we. You’ve seen it develop in this space over the last 14+ years. I’ve nothing to hide. It’s for everyone to use and benefit from. The act of Giving gives me the most Satisfaction in life.

Waiters

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Hey, …

…what’s your hurry?

This is a long game.

It will continue…

…after you.

Hurry will spoil the curry.

Learn to wait…

…for your level.

We’re waiters.

We win…

…because we wait.

No level, no action.

If we’ve leant how to wait, we’re already ahead of most players. Almost 90% don’t know how to wait.

What’s the worst that can happen?

Our level doesn’t come, and we don’t get some particular action. Could be a buy, could be a sell.

Fine.

We can live with that.

There’s always another day, another opportunity, another set of actions, …

…just move onto the next scrip, entry and / or exit available.

What’s most important is that we have kept our liquidity intact.

We are financially sound for the next action.

A hurried entry without the level coming would have used up this particular liquidity, making it unavailable for the next action.

We act…

…at our level.

Our level is set to make winning highly probable.

That’s why, in the long game, …

…we win.

Obviousness

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Knowledge streams…

…at unprecedented speed.

You want it?

You got it.

Lag is negligible.

Everyone has access.

Conclusion? Fazit? Nichor? Bilan?

What seems obvious is likely a trap.

Fundamentals can be fudged, to an extent. A closer look at gaps between fundamentals vs actuals unveils those who fudge. Actuals on the ground will need to match fundamentals, somewhere. For example, if there’s no debt on the balance-sheet, there will well be a surplus which the company in question accumulates, and there will be a path on which this surplus flows. This path should be visible in the annual report. If there’s no surplus, company will show visible signs of stagnation. If something officially declared by a company doesn’t match (visible) actuals, the fudging window opens. We steer clear of companies with even a fudging crack open.

Technicals can be used to set entry and exit traps.

By professionals

For the masses.

Masses act at levels.

Generally, price hovers around an obvious level till the majority has acted. Then, generally, price goes against. When crowds cut entries, institutions enter on their exits. This strategy paves the way for relatively easy and heavy entries.

Moral of the story for us?

We wait for an obvious level.

We don’t act. Yet. However, we are on alert.

We envision an aftermath play in our minds.

Entry pivots are coming quick, nowadays. There’s hardly any time to act, especially if one has an otherwise busy schedule.

Therefore…

…we only deal in GTTs. Period.

Thus we feed in our GTTs, as per mentally outlined situation, and back up these with funding, if entry-trigger is less than 5.2% away. All this we do in a cool moment, after market hours, away from the noise, when we can think clearly.

And, most importantly, …

…we do it away from the obviousness.

Winnings

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Not all…

…winnings…

…are tangible.

Intangible winnings…

…can be far greater…

…in stature.

One can carry these with…

…anywhere.

Don’t need to know more.

They’ve won their case already.

Let’s break this down, using a concrete example.

Let’s take this blog.

First, the losses.

Subscribers?

Hardly.

Financial loss?

A few pennies a day, equalling domain charges plus plus divided by 365.

Effort loss?

Yes, a lot of effort goes in. However, it is rewarded heavily, though indirectly. Since there are no more losses, let’s talk about winnings.

Sharpening of skill – maximum.

As words flow, ideas are elucidated, take greater shape, and are cemented into a system.

I’ve often spoken about the fact that this blog can also be seen as fundamental / critical / what have you research towards developing a 360 degree unified market field approach. I think I’m there.

Let’s look at the system that has evolved over the last fourteen years – specifically, let’s look at modules incorporated.

Small Entry Quantum.

Non-Linear Position-Sizing.

Cost-Free-Ness.

Long-Term-Hold.

Positional-Hold (culminating in trade booked with cost-free-ness generated).

2 Demat Approach.

GTT incorporation.

Buy Low.

Sell High.

Entry.

Sitting.

Letting Profits Run.

Exit.

Averaging Down.

(Stop-)Loss attenuated by Cost-Free-Ness’s capability to rise by…

…’Banking on Infinity’…

…in a Non-Linear Long-Term Growth-Market.

The Zone.

The Line.

Fitting.

Market Forces.

Market Presence.

List goes on.

Bottom line is that what has emerged is a decent-size double-digit list of modules incorporated into one clear-cut, multi-level and dynamic wealth-creating strategy…

…with results that make ‘losses’ due to lack of subscribers statistically too small to even mention.

I write to create a magnificent system, and to keep fine-tuning it.

My system creates wealth for my family.

I donate a small part of our wealth to charity.

Hence my writing facilitates pro-bono work.

Some of the few readers of this blog might one day choose to implement a few modules, or perhaps the whole approach. I’m happy for them. God bless them. Magic Bull is completely free, and is part of my give-back to society.

I create good causes with my writing.

While writing, I feel buoyant, sharp, and fulfilled, carrying this combination of feelings into the day, spilling them over into other good causes created over the whole day.

Am thankful for this avenue, since it gives my creativity an outlet.

🙂

Bridging

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Rules of the game…

…are quite clear…

…and out there.

People like me…

…talk about them.

Everyone’s heard of, seen or read them, somewhere or the other.

Why hasn’t everyone cracked the markets?

There are some aspects to these rules, which are difficult to execute for most.

Like?

Buying low.

Selling high.

Holding.

Sitting.

Bridging.

Etc.

Today we’ll talk about bridging.

Actionable situations are few in number.

One acts from situation to situation.

The time in between – one bridges.

How?

By investing in oneself.

What’s that?

It’s something intangible, like learning a skill.

Or fine-tuning one.

Yes, that’s right, one bridges gap after gap, with investment in oneself.

This kind of investment is never wasted.

One carries it like a stamp on one’s soul.

Eventually the Universe knows how to utilize one, and one’s skill

First let’s put ourselves out there for the Universe to utilize.

Money made in the markets through lucrative action implemented at actionable situations will remain in this domain.

The satisfaction emanating from having worked, even temporarily, for the Universe, is something one will carry.

Wherever one goes.

Oh, forgot to mention, repeated investment in oneself keeps one sharp, ready to recognize the next actionable situation, and poised to act in the most lucrative possible manner.

Discerners

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Hey,

We learn…

…to discern.

Primarily, what we’re looking out for…

…is a real deal…

…amidst noise.

To reiterate, we need to know the difference between noise and situations we must act upon.

The thing about noise is, …

…it’s messy.

It’s not difficult to recognize the stalky forest of noise.

However, sometimes, …

…one has trouble seeing the forest for the trees.

One needs to give noise space.

View it from a distance.

Hands-off.

For a while.

One will know it’s noise.

Situations requiring action are much clearer.

Mostly we pre-define them.

When our definition is hit, we get alerted.

Then we act.

We’ve taken any fear out of our action by mentally preparing ourselves by the time the action situation arrives.

Sometimes, situations develop very fast.

There’s been no pre-definition.

This is where we are tested.

Are we there to see the fast situation unfolding?

Mostly not.

The solution to this is to pre-empt lucrative scenarios and feed in good till triggered (GTT) orders.

These remain in the system for one year on some platforms.

If we’ve been lazy and haven’t fed in our GTTs, we need to recognize an unfolding situation.

Most have that capability.

Most are also afraid.

Can we quickly eliminate fear and act?

Those who can win big over a large sample size.

Wires

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In a one-liner…

…the ‘magic’ formula…

…to crack the market would be to…

…’buy low, sell high’.

Reading this line in a normal mental condition, it is natural for us to say…

…’oh, so simple?!!’

That’s just it.

Cracking Mrs. Market is a ‘simple’ process… … … .

However,…

…the question that screams for our attention is…

…’pray who is in a normal mental condition?’

And the answer is this.

When it counts, almost no one.

When does it count?

At lows and highs.

At lows we are in a frenzy. Panic. ‘Blood’. No one considers buying, even remotely. Those who want to, and would have, are not liquid. Exceptions take the plunge.

At highs, we are exuberant. We know it all. We are the kings. Please don’t tell us to sell. We’re not selling. ‘Hubris’. Those who want to sell, and would have sold, are told irrefutably by family members to forget about even thinking of selling. Exceptions ward off the pressure and make the sale.

We want to be those exceptions.

How do we get there?

It’s about wiring.

Our normal wiring makes us act normally, in a manner where big profits can’t be made.

We need to rewire.

We need to be uncomfortable when markets rise, uncomfortable enough to at least take our principals out. During lows, we need to find comfort in the very idea of entering, thus redeploying our freed-up principals.

How does one rewire?

By being in the market…

…small…

…for long…

…learning to lose small…

…and to win big by letting profits run.

Perhaps very big, over time, by allowing one’s cost-free-ness to remain in the market for a very long hold.

Opportunity

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Knock knock.

Nobody home.

See you, bye. Maybe never.

Knock knock.

Come in.

This is the requirement.

No funds.

Bye.

Knock knock.

Hey. Funds not a problem.

Guts?

What if I lose?

Bye.

Knock knock.

I wish to invest and the risk is digestible.

Ok. Pull the trigger.

Should we wait for a better price?

Bye.

Knock knock.

Let’s pull the trigger.

Ok.

There.

Bye.

Hey, it’s been a month and I’m up 10%. Let’s cash out.

Ok. Bye.

Knock knock.

This time I’ll let my profit run. The last one doubled in 6 months, but I’d cashed out after a minuscule rise.

So you’ve learnt how to sit?

I keep a lookout for you. If I’m not home I get alerted to your presence, so that I can act in time.

Then, I always maintain ample liquidity for you.

The amounts I put in make my risk digestible, looking at the total size of my portfolio and liquidity.

Once you knock, I’m not afraid to pull the trigger anymore.

I’ve learnt to let multibaggers develop. I don’t nip them in the bud anymore.

Wonderful. Now add cost-free-ness to your repertoire.

Why?

It’ll trick your mind into holding your multibagger eternally, so that it is given the chance of becoming a megabagger.

Will do, thanks, cost-free-ness won’t cost me anything, right?

Not a penny.

2050?

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Yes.

Why?

Why what?

Why 2050?

Growth trajectory.

Whose?

India’s.

What about it?

Spurts with bottlenecks. Not linear.

So?

Will take 2050 till fruition.

Meaning, for you?

Quest for multibagger accumulation will be successfully achieved.

By 2050?

Yeah.

Anything else?

My own trajectory.

Will you be around?

Not relevant.

Why?

I’ll leave the assets as my legacy.

To whom?

Family. Country. Charity.

Striving and then leaving it?

Doesn’t cause me any reaction.

Why?

It’s cost-free.

Meaning?

My principal is not invested. Pulled it out in profit. What remains in the markets is cost-free. I live and enjoy my life on my income, simultaneously creating a cost-free legacy. The cost-free-ness tricks my mind into an eternal hold. I stop jumping. Vicissitudes of price path have no meaning for me once something has become cost-free.

And why stop in 2050?

Growth culmination. India enters first-world territory. It becomes difficult to create multiples fast. Life is far more efficient, and so is price, then. Loopholes are filled in by artificial intelligence before an EoD chap like me can react. Info-flow is so fast and transparent, that everybody knows. Everyone is smart because they use the appropriate tools. Since all money is smart, there’s no edge anymore. But that’s 2050. Today, oh, there are edges. Inefficiency lasting longer than EoD. Sometimes lasting months. Loopholes. Pattern related. Operator related. Price related. AI is not fully there yet. Most market players are not smart, I think the official statistic reads 88%. Almost all tools look at the wrong stuff. By the time one reacts to indicators, which are a function of price, most of the edge is gone. Information-flow is not fast enough, and if you can read it in the numbers or the chart before it happens, the edge is huge. And, forget about transparency. It’s just not there. We’re sitting of big edges currently.

So, 2050, stop, and then what?

No idea. Let’s go with the flow. Right now the flow is leading up to 2050.

And what if there are world-shattering events before that?

We buy. We are almost always highly liquid. When we’re not, we start creating liquidity. We are never illiquid. 2050 is just a number. We have numbers to go on, like lamp-posts. It’s another lamp-post, like 1984, or Y2k, or what have you.

Do you want to be the person remembered for 2050?

That’s not even a question for me. I’m flowing with 2050 because that works for me. I don’t care about the rest. If you wish to think with that mindset, that’s on you.

Why rude?

Nothing rude or not rude about it. 2050 is part of my framework. Nothing more, nothing less.

I see.

2050

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Hey,

There’s a Street View… ,

… , and then there’s a street view.

I rely on…

…my street view.

Making it a point not to heed that the Street thinks, I repeatedly look for micro and macro signs on my street.

My street is where I am.

I mostly spend my time in my own country.

And, my street view is one of staggered growth.

There’s development…

…with holdups waiting to happen out of nowhere, and often.

That’s India, for me.

Am I going to cry?

I scream, actually, at apathy prevailing, but from the inside. To no avail. At one point the screaming stops. The only thing remains is to take advantage. I’ll make it up for India. Part of the money earned will go towards a private initiative towards my country’s development. So, no guilty-conscience here. My country gives me repeated opportunities. Why should I not take them? India does give me grief too. It’s ok. I love my country. We both can take liberties with each other, as do parents and children between themselves.

Owing to our attitudinal coordinates, our country is full of bottlenecks, and these bring a rising entity down, regularly.

Apart from that we’re emotional.

Over-emotional, actually.

So what’s going down goes down by an unhealthy multiple.

Activation.

Chart Pattern?

Numbers talking to you?

Method.

System development.

Pinpoint.

Enter.

Sizably.

Making size a function of portfolio magnitude.

When something here rises, one lets it ride with a stop that eventually triggers, then trails.

One never books a winner fully in India. Not in this bull market.

Billion dollar strategy.

One first goes cost-free.

And then some.

After one’s in-the-profit stop is triggered and then hit, one takes one’s principal out, with which one will fight the next battle, the next quest for cost-free-ness.

One leaves one’s cost-free-ness created on the table and shifts if out of sight and out of mind.

One’s cost-free-ness can be held for a long, long time.

Till 2050?

Yes, if the underlying has been duly whetted for a 2050 hold.

That’s how we play India.

Till 2050.

Throw-Offs

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Hey.

Stumbled upon a concept.

Calling it the throw-off, and…

…sharing it with you.

How many times have you booked too early?

Booked late?

Gotten in early?

Late?

Not risen to required action?

Made a bad decision?

Lost faith in the market?

In yourself?

These are results of throw-offs.

Something has thrown you off your game.

This something is the ongoing market action at the time.

Action has been such, that it has thrown one off one’s track.

It’s not your fault. Action is such.

Price hits a stop, for eg. You take the stop. Price resumes in same direction.

Price hits a target. You get out. Price resumes.

Price falls just short of the stop, resuming. You double down. Price then breaches stop and a down-trend starts.

Price shoots past target, not giving you time to act. You then define a new target. Price nose-dives beneath old target, just as fast, eating up a good portion of your original profits.

Examples can be many. Common factor is market action throwing you off your profits, or throwing you out in loss.

Where do we stand?

Is this cause for alarm?

Is there something we can do about it?

First up, market action is a sum resultant of all market behaviour put together, and is perhaps impossible to defy. Our pockets are not deep enough by miles.

We don’t fight market action.

We use it.

Yes, since we can’t defy it as such, we make it work for us. Also, if market action alarms you, do something else which doesn’t. That’s where we stand.

It’s ok to be thrown off while following one’s trading plan.

It’s not ok to be thrown off, having been psyched into altering one’s trading plan mid-trade.

Meaning that it’s not ok to book below target owing to adverse market action above one’s stop.

Also, when a trade is going against us, again, it’s not ok to exit owing to adverse market action above one’s defined stop.

One exits at stops, not above. Sticking to this one rule will nullify throw-offs above stops. Defining is easy. Doing is difficult. Over time, with practice, we define and do. Period.

Now we tackle targets.

How do we knock-out throw-offs here?

Another day, another defining rule… 🙂 … .

Don’t exit at targets.

If you don’t exit at targets, no one can throw you off before a target.

Ok, so what’s the exit strategy whilst in profit?

Have a target.

When it comes, it triggers your stop into existence, which you have defined x% below this target.

So, we now stop using the word target. We use ‘trigger’ instead.

In other words, your stop gets activated, or triggered into existence, once a certain profit-threshold is crossed.

This stop, which has just come alive, is dynamic in nature, towards the profit-side only.

It moves in the same direction as the price, in a proportion defined by you.

As price keeps moving, your stops keeps locking in more and more profit.

You’ve knocked out the throw-off, since your exit is completely rule based, and no one else knows the parameters (numbers) you are feeding in for exit.

Eventually, price action makes you exit rule-based, when price reverses above the ‘trigger’ and hits your dynamic stop. Market action hasn’t succeeded in throwing you off your game.

Notice one thing?

You’ve been in control of your trade all along.

Your head is sane, your emotions are stable. You have set yourself up to take some very profitable decisions.

Wishing for you lots of profits…

… 🙂

.

Beta

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We’re not afraid…

…of beta.

In fact, we want beta to be there.

And, we want it to be big.

Beta is part of wealth-generation through cost-free-ness.

Why…

…are we not afraid of beta?

When we make an underlying cost-free, there are two parameters that are of prime importance, in the game that we are playing.

First up, speed of cost-free-ness.

How much time has it take us to reach the desired stage?

Too much time?

Work at the strategy.

Short time?

Great.

With large betas, we take lesser time to reach cost-free-ness.

Cost-free-ness is a state of mind.

Also, it is a function of parameters prevailing.

As a result of internal synthesis, we know in our mind when it’s time for cost-free-ness creation.

Once cost-free-ness is created, we move on to the next play with the same objective.

Next up, we have quantum of cost-free-ness created, per capita time.

Higher the quantum, in lesser time, why, that’s optimal.

Again big beta.

Without big beta, there’s not much chance of achieving large quantum in less time.

How do we exploit big beta to attain objective?

Get in on huge margin of safety. Get principal out when exuberance prevails. Scrips being played are those of which you are convinced. Meaning, that you are mentally in sync with very long-term holds of cost-free-ness created in these scrips.

Also…

…as a general game-enhancing practice…

…get in and out with multi-day or multi-month triggers. Don’t look at the markets while they’re on. Take emotion out of play. Nil market forces out of your equation.

Here one sees, how, amongst other factors, a big beta allows one to generate long-term wealth through cost-free-ness while…

…acting on one’s own terms.

Hack

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Farm-land?

Own it?

Yes?

If so, you can avail an overdraft on your fixed deposits, having to pay low interest.

Why?

Government allows farmers to take crop-loans.

If you own farm-land, well, you are a farmer.

Even if you don’t use the facility to buy crops, you can still use it…

… for whatever.

Perk.

Government sops it to farmers and you get roped in as an accidental farmer.

G(ood) f(or) y(ou). Yeah, gfy.

Why overdraft?

So that a fixed deposit doesn’t need to be broken prematurely.

Why the trouble?

Let’s say you need trade money to be in a trade for a few days, but the bulk of your liquidity is working elsewhere. However, in good times, you have created fixed deposits, which add to your liquidity at regular intervals. When your liquidity runs out for a few days, you think of breaking an FD to replenish it, but this incurs a penalty.

Suggested hack keeps everything intact.

You utilize the created liquidity, let’s say for a month.

Meanwhile, your income pipeline generates new income. You use this to keep nullifying parts of the loan. Let’s say in 40 days you have nullified the loan, and your positional trade, for which you took the loan, is still on. You are charged low interest on the loan taken for 40 days. Now the loan is nullified. Position is on and yielding. All equations solved. Net net something created out of …

…s omething that was already utilized elsewhere.

It doesn’t necessarily turn out so good all the time with a position, though.

If it’s losing, you are suffering positional loss and interest payment loss simultaneously. That’s the downside.

This hack is worthy, nevertheless.

Interest charged on 40 days is a small figure, typically less than a percent. A positional trade in profit can well give 15%+ in that period.

So, hack stands.

All you need to do is to see if the hack fits you.

Process

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In the markets…

… actions are decisions.

No decision taken means no action.

Well, no action is also an action.

Ok.

However…

… eventually …

… to generate wealth …

… or income …

… we are confronted with decisions.

I’m not afraid to act, upon seeing a confluence of supportive indications.

If I were afraid to act, well, I could have just sheer chosen another line, but would have been confronted with the same deficiency, there too.

Acting upon enhanced win probability should do away with any fear.

However, there’s always that thing before trigger-press.

What if I’m wrong?

Let’s not be afraid of being wrong.

We’ll take our stop and then we’re done with this action, now looking at implementing another action.

Our ability to take the decision for this other action, and for all future actions should remain intact.

How do we ensure that?

When we’re wrong, let’s be wrong small.

Then let’s move on to whatever new action is coming our way.

If we let ourselves be wrong big, that, my friends, is crippling.

Let’s not cripple ourselves.

Crippling does away with the capability to act further.

Now, decisions are a fry cry.

The day becomes heavy.

Nights …

… well …

… sleepless.

That’s not going to happen to us.

Why?

As traders, will do everything in our capability to stop a big loss from happening.

How?

Losses are small in the beginning.

Let’s define their limit.

If you want to take it trade by trade, fine. Each trade has its own dynamics. However, small nature of stop remains common. Define what is small for you.

How?

My formula – anything that stops the day from becoming heavy and the night from becoming sleepless. For me, that’s small. You decide your formula. Whatever works for you, take it.

This is called process.

We follow process.

We don’t focus on profit and loss.

We focus on process.

We want to get our process correct, day in, day out, forever.

Losses will follow. They will be taken small.

Profits will follow. We will allow these to become big. Though that is a difficult one, we will need to learn to, because without this one thing working for us, we won’t be long-term profitable.

Here’s a formula regarding letting profits run.

After a profit has touched 3 x your stop, allow 50% breathing space. If this is squeezed completely, exit with small profit. If underlying inches higher, inch your stop upwards, always allowing for breathing space. At 4 x you can allow 40% breathing space, at 5x 30%. Etc. Make your own formula that allows profits to burgeon.

Wishing you lucrative trading and ample wealth creation!

🙂

Approach

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Markets speak.

Can we hear them?

Do we know their language?

We are not born knowing their language.

We learn.

Their’s is not a normal language.

It keeps changing…

…till it’s similar to the past…

…and then it changes again…

…to throw us off-track.

We need to keep adapting.

Every corner could be a new one, with a new sign.

Feel the challenge?

The thrill upon attempting to decipher?

Do you feel fulfilled?

Well, if yes, then you’ve met your calling.

Congratulations.

Now sustain.

Play out your full market journey. Enjoy it. Win.

How?

Since every corner could be a new one, every corner needs to be approached with a what-if-plan.

Simultaneously, one is on the lookout for signs.

What signs?

Similarities, in patterns, psychology, chronology, feel, levels, anything.

Have you seen this before?

What happened last time?

Approach with multiple scenario what-if.

What if you haven’t seen current signs on offer?

Carve out the situation.

Create scenarios.

Build a what if for each scenario.

Approach.

Notice something?

Whether one has seen something before, or not, the approach is basically the same.

Great.

We’ll not bother with getting spooked out.

We just keep tapping the markets, armed with a play-out strategy for each unfolding scenario.

Our approach is designed such that we sustain till the end of our market journey and beyond.

We keep intact our health, family life, and our corpus.

We keep sharpening our edge, and keep attempting lucrative reward risk scenarios.

We learn to take our stop.

We learn to let runners run till logical exits appear.

We learn to establish and enjoy a life beyond markets.

Wishing all market success and happiness.

🙂