All I Need – Is One Look In Your Eyes…

All I need is the rhythm divine
Lost in the music
Your heart will be mine
All I need is to look in your eyes
Viva la musica
Say you’ll be mine


With due respect to Enrique Iglesias, to whom the above lyrics belong, he’s not the only one. 

We all need motivation. 

Many of us are self-motivated. 

What drives us from within?

A goal.

Sometimes, we stolper. Our drive takes a hit. Self-motivation dips. 

Reasons could be many. Sheer exhaustion, repeated failure, being a square box in a round hole for far too long, what have you and blah blah blah. 

We’re not bothered about the reason here. We’re bothered about the fact. Sometimes, we get demotivated. We stop performing. 

Who needs to step in here?

Our closest ones.

Yeah, they live closest to us, and if they possess an iota of sensitivity, well, they should sense our emotional graph going down. 

Mostly, they do. And, upon recognition, they step in. We feel wanted, loved, and our motivational levels start to go up again. 

Sometimes, our closest one is not sensitive enough, for whatever reason.

Maybe we’re too “strong” to let it show. Maybe our closest one has other, bigger issues to deal with. Whatever. That’s not the important rumination.

What’s the important question here?

Yes, how do we get it back? Without a hand to hold. This one’s big. 

No hand to hold – whoahh – it’s tough. 

Is there a way out?

Do we change our closest one?

Is it that simple?

Sometimes, children are in the equation. Changing isn’t an option we’re discussing here. 

Firstly, we need to shut down on this one want from our closest one. 

Ok, now what?

Motivations’s got to come – from within. It’s a funny thing. It just does. Wait for it. To come from within. 

It needs a catalyst – an event – a trigger – the crossing of an activation barrier – something like that. 

Wait for the catalyst to occur and have effect. 

What do you do meanwhile?

Other things. 

Chant. Meditate. Travel. Play with your child. Take up a temporary assignment elsewhere. Do stuff. Life’s big. So many things are happening. Do something – else.

The catalyst occurs. 

Motivation starts to ooze. 

You’re back in business. 

You didn’t break your sacred environment. 

Maybe your closest one will realise, and will be sensitive next time.

On the other hand, maybe he or she won’t. 

Does it bother you now? You’ve discovered a way out after all.

It probably pinches just a bit. 

Let it. Things could have been much, much worse, which they’re not, so count your blessings, and just let it flow. 

🙂

Loneliness of the Successful Investor

Walked alone?

No?

Please try.

Success needs original ideas. Original ideas need solitude.

Successful investors walk alone.

Sometimes, they’re lonely.

Investing is more about sitting than action.

Sitting around inactively breeds loneliness.

The antidote is activity – other activity. Not market-related.

Successful investors do other stuff to tackle this loneliness.

Buffett plays poker.

Branson is breaking into some virgin territory or the other.

Gates is busy souping up his home.

Trump trumps.

Jindal plays polo.

Mallya’s sole focus has been other stuff, so much so, that he’s become unsuccessful.

Mahindra loves to tweet.

Tata walks his dog.

Sachin watches Wimbledon live.

Mr. Bean is seen on the F1 circuit.

You get the gist.

These people follow one or more “other” activity / activities so passionately, that they forget about their main activity for a while.

Their system recuperates. Time is bridged to the next instance of main-frame action. While traversing this bridge, body, mind and soul have recuperated. System is fresh, ready and waiting for new action.

When you’re walking alone next time, you’ll be able to deal easily with any loneliness on the path.

One might make moderate returns, investing with the masses.

To outperform, though, one needs to walk alone.

The successful investor realizes that he can’t get out of this one.

Therefore, the successful investor creates a way to still come out winning.

This is human capital at peak performance!

What’s the Intrinsic Value of Inflation – FOR YOU?

Pundits taught about Inflation.

It ate into you.

Did it discriminate?

Nope?

Did life discriminate?

Or was it your Karma?

So you made it to HNI, without perhaps knowing what HNI stands for.

You’re a high networth investor, bully for you.

Here’s a secret. You’re not really bothered too much about Inflation.

What?

Yeah. Don’t bother too much about it. 

Why?

It’s eating into you, given, right. 

By default, you need to look into something that’s eating into you, right?

Well, right, and then, well, wrong. 

You had a hawk-eye on inflation till you made it to HNI. Well done, correct approach.

Now, you’re gonna just use your energies for other purposes, for example for asset allocation, fund-parking patience, opportunity scouting, due diligence – to name just a few avenues. 

Why aren’t you using even a minuscule portion of your energies to bother about the effects of inflation?

Well, simply because it’s not worth the effort – FOR YOU – now that you’re an HNI. 

Sure, inflation will eat into you. However, the way you handle your surplus funds will defeat its effects and then some, many times over. Use your energies to maximise this particular truth. 

What makes you an HNI? Surplus funds to invest, right?

Surplus sits. 

It waits for opportunities. 

An entry at an opportune moment gives maximum returns.

You’ve sifted through the Ponzis. You’ve isolated multi-bagger investments. You’re waiting for the right entry. 

Meanwhile, old Infleee is eating a few droplets of your wad. Let it. Focus on what we’ve discussed. A multi-bagger investment entered into at the sweet-spot could well make ten times of what old Infleee eats up. 

Go for it. 

Hanging On to a Structure

How does one build a wall?

Brick upon brick, right?

One doesn’t usually take out the brick two layers below to use elsewhere. Common-sense. 

Why should it be any different while building a rock-solid portfolio?

Well, it’s not. 

Those who feel it is will soon realise… that it’s not.

You set up an investment.

You then see it through to its logical conclusion. 

You don’t let it go in between… …unless we’re talking about a life and death situation.

Apart from this one caveat, you just don’t let the investment go. You see it through… to its logical conclusion. Period. 

Meanwhile, other opportunities arise. 

You are tempted to get into them. That’s what opportunities are for. 

Now you need to be creative. 

You’re not letting one structure go for the sake of creating another. 

You are going to keep the former and create the latter. 

How?

Dig into your reserves.

How were the reserves created?

They were created by former structures that were seen through to their logical conclusion. These contributed along their paths and upon their culmination. 

Reserves not enough?

Borrow agains a former structure. 

Don’t borrow big. Borrowed amount should not be big enough to harm the former structure, but big enough to couple with your reserves and see your new structure through. 

Still not enough? Requirement for new structure not being met?

Let the new structure go. 

Opportunities keep coming and going. No one’s got a copyright on opportunities. 

Save up for the next one. 

Brick by brick, remember. Without sacrificing the bricks below. 

🙂

The Thin Line

Have you met the thin line…

…  between ambition and greed?

You see it. You want to cross it without wanting to cross it.

What stops you?

A deadly sin is… deadly. If you’re sensitive enough, you do fear the effects of a deadly sin.

Greed can ruin. It has the capacity to upset an apple-cart.

Sometimes you want something that extra much.

Ambition turns into over-ambition.

You get your something.

You’re a go-getter.

You become over-confident.

You forget your basics.

Next few times around, you cross the thin line repeatedly. The high is addictive. Soon, you’re crossing…

… without even knowing.

Yeah, the vicious cycle outlined above has made you insensitive. You’ve stepped over, don’t even know it, and on you’re going. You’re blinded by greed.

It’s not happened overnight. First the thin line beckoned you to come back. Your over-ambition spurred you on a few steps more. A few more steps wouldn’t harm, right?

Wrong.

You’re not sensitive anymore. You’ve lost normal vision. You’re greedy for your goal. You’re not sticking to your basic tenets. You’re not playing safe anymore. You’ve started to even play with your safety moat, in order to achieve an even bigger goal.

You’ve set yourself up to fall… big.

If you do, I hope for two things.

First up, I hope you don’t fall too big, and that you can get up again.

Second, I hope that this fall is your last one, and that it has made you sensitive again.

Sensitive?

Towards what?

Yeah, sensitive towards the thin line.

The Price of Value-Addition

Does value-addition carry a price-tag?

You bet.

What, you thought you could add value… for free?

Naehhhh.

Good things in life generally don’t come for free.

One doesn’t value the best of things that are free. One treats them cheaply… because they’re free.

In the marketplace, free-kinda stuff always comes with a catch, or a trap.

Ponzis use high-return free money ad-tags to lure pig-investors.

I generally steer clear of free-kinda stuff, anywhere and anyhow in life.

Don’t be afraid to pay (well) for value-addition.

By adding value, you’re doing yourself a huge favour. You’re creating an asset that will generate towards your corpus on auto-pilot. Why should something like this be coming for free?

In fact, why should something like this not be appropriately expensive?

I Don’t Want the Cancer

Are you hurt?

A.

Do you want the cancer?

B.

I do get hurt. Yeah, things hurt me. I’m an emotionally penetrable human being.

Fine. That’s me.

What I definitely don’t want is option B.

Who wants option B?

Can’t think of anyone.

Who gets option B?

Many.

But who?

Those who can’t forget the hurt. Yeah, people who’re unable to move on.

To forget the hurt and move on, simultaneously saving ourselves from the cancer, we need to forgive.

Someone’s misbehaved. Hurt you. Are you going to ruin your future days? No.

Forgive. Forget. Move on.

Just remove the mould in which cancer can potentially set in.

What makes you think it’s different in the markets?

A loss is a hurt.

Need I say more?

You can do the math.

A Secret Ingredient for Equity-People

Racking your brain about how to make Equity work?

Don’t.

Two words work here. 

Be passive. 

Learn to sit. 

Let’s say you’ve gotten all your basics right.

Company is great. Management is sound. Multiple is low. Debt is nil. Model looks promising. Yield is note-worthy. Technicals allow entry, blah blah blah…

Then what?

Yeah, be still. Learn to sit. 

What are the prequisites for sitting?

You need to not need the stash you’ve put in, at least for a long while. 

You also need to get your investment out of your primary focus. 

For that, your day needs to be full…of other main-frame activities. 

Make Equity a bonus for yourself, not a main-course. That’s how it’ll work for you. That’s the secret ingredient. 

How to… … is stated above.

Why to? Aha.

For it to work, fine, but why the sleeping partner approach?

Human capital needs time to show results. 

That’s why you’re in Equity, right, for human capital? The rest is ordinary stuff, but human capital is irreplaceable. Human capital works around inflation. One doesn’t need to say anything more. 

You’ve got your work all cut out.

Get going, what are you waiting for? 

Finding Structure Within

You are you. He is he. She is she. I am I. It is it. 

Even if the above is the only thing that you carry home from this space, you’re done already. 

Move on then, with your life, because you’ve understood something big. 

If not, do please read on. 

You are not I. I am not you. He is not she. She is not he. That’s it. 

Here’s the next biggie.

Those who come into funds need to know how to manage them. Period. 

Do what you want. Run umpteen miles. Put up a million facades. Muster up all the drama you’re capable of. After that you’ll come to this conclusion …

 … that nobody else is more capable of managing your funds than you yourself. 

Why?

Because you are you. You know yourself best. A third party is firstly (realistically) not bothered about knowing you, and secondly is only capable of seeping into a minuscule portion of you, if he or she makes the effort. Forget about third parties. 

So you realize you need to manage your own funds, what then?

Jump into the water.

While your corpus is small, make mistakes. Learn from them. That’s college. Tuition fees.

Recognize your strengths. Play to them. Pulverize your weaknesses after identifying them.

Then come the structures, from within. These are your structures. They’ll come from inside of you. 

There’s you, and there’s the battle-field. The two are face to face. It’s a do or die situation. You go into reflex-action mode. Your systems start to function at full capacity. That’s when structures emerge.

Yeah, structures need an activation barrier to emerge. 

There’s a protective structure. It’s your protective structure. It guides you to build your moat. It protects your family. 

Then there’s your post-protection bulk-game structure. It guides you towards building up your innings without the worries of basic bread and butter. 

Lastly, there’s your multiplication structure. It chalks out high-reward-high-risk strategies, tweaks them towards maximum possible safety, and tells you where to put that minute percentage of your corpus with the intent of achieving extra-ordinary gains. 

Allow such structures to emerge. Embrace them. Innovate. Improvise. Achieve. Educate.

Go for the jugular. 

Who are You?

Who am I?

Do I know?

Am I trying to know?

Is this an important question for me?

What’s my path?

Where am I on this path?

What are my basic goals in life?

What are my weaknesses?

What am I doing to make these my strengths?

What motivates me to perform?

Does my environment enhance my performance?

Or does it hamper me?

If it does, what am I doing about it?

Am I tweaking my environment?

Yeah, am I manipulative enough?

Am I content with the hampering?

Why should I be content with the hampering?

Because it makes me grow, as in evolve?

Maybe.

Who are you?

What are your defining questions?

How do you unravel?

Ultimately, what is your risk profile?

Who are you… sure… very valid question.

Why?

It’s the basic precursor question with regard to another important question.

Who are you as far as finance is concerned?

In the field of finance, you need to know your risk-profile, and you need to have a defined meta-game-plan.

Defined as per who you are.

Uniquely, for yourself.

Bye 🙂

The Line of Least Resistance

We stand on the shoulders of giants.

I’m not guilty about using their work and ideas.

Firstly, obviously, I’m going to quote them. Then, I plan to achieve something new, whilst standing on their shoulders. Those will be my two pennies, and feel free, people, to use my two pennies copiously.

The phrase “line of least resistance” was first coined by none other than Mr. Jesse Livermore. He lost a fortune finding it, then won a fortune following it, and again lost a lot of money at times when he ignored his own discovery.

Pioneers have it tough.

Carving out a new path is perilous, to say the least.

So, what is the line of least resistance?

Imagine yourself to be poking and shoving around, looking for a clear path in the dark. Something gives. You push further, and discover that you can easily traverse the path that emerges, without stumbling. For a while.

Let’s just remain there.

You are travelling along seamlessly on this path you’ve discovered after poking and shoving around.

Freeze.

Now imagine the price of an underlying. Any underlying, that tends to trend. GBP vs USD would be a great example.

Price pokes and shoves (at resistance), as it tries to break out.

Once it has broken out, you need to understand why it has broken out.

It is not encountering enough resistance to make it stop.

It’ll keep moving along this line of least resistance, till there develops sufficient new resistance that is enough to make price stop, or even reverse.

That’s a price move. You want to be part of it. Thus, you look for it. The pokes and the shoves are your entry tries. One of your entries will chance upon the line of least resistance. You’ll experience a clear move, which you’re a part of. The move will continue till resistance builds up again.

The idea, obviously, is to stay with the move to make up for failed entries and then some.

You stay in the trade till there is enough resistance to make the underlying reverse more than your threshold.

That would be your trigger stop.

When a concept is broken down to its absolute basics, it becomes easy to understand.

Dealing with “Situation Change”

When does a situation change?

For example, one could move on to a new field in finance.

Or, a particular goal could have been achieved. Now, one’s approach is supposed to incorporate predefined changes for financial strategy post goal-accomplishment.

Family dynamics could be responsible for situation changes too.

Sure, health. Never underestimate the power of health. It can make you, and it can break you.

Emotion. Fell in love? Going crazy? Outbursts? Hot flashes? Preggers?

Logistics? Moving? New girl-friend in New York?

Night duty?

Looking after your parents in their old age?

Wife wants to party all the time? Lack of sleep?

Promotion? Demotion? Fired? Jobless? Suddenly self-employed?

Gone single? Date-circuit? Got married? Had a kid?

Situation changes come to all. Not once, but many times in life.

Why are we talking about them?

They have an effect on our financial strategy. That’s suffices.

I’ll tell you how I deal with situation change. You can then BODMAS your way to your own approach, using my approach as a broad outline.

My first approach is to put on auto-pilot as many of my financial activity as possible. Going paper-less helps. Trusted auto-bill-pay channels are assets. Fixed-income generators with auto annual-alerts give financial security with zero involvement. SIPs and dividend pay-ins are further examples of having gone auto.

Then I look at what is left. What has not yet gone on auto-pilot? Can it? Ever? If there’s a chance, I go for it. For example, I’m currently developing a software robot to automate my forex trading.

Lastly, I size up what is not pushable into auto-mode. Do I want to keep it? Can I do without it? Weigh, weigh, weigh, scrap A, scrap B, C is something I just have to do, manually, period, so keep C. Eventually, C, G, P, X and Z are five manual financial activities I keep, having scrapped the others (that refused to go on auto) out of my life, since I didn’t consider them burningly essential. C, G, P, X and Z are the ones that’ll weigh me down when my situation changes. I’ve kept them on doable levels. Some are on semi-auto but do require manual intervention. The others are fully manual.

My situation changes.

My auto-pilot activities continue their smooth run. They are my assets, my stars.

P, X and Z are on semi-auto. I barely gather the energy to look into their manual aspects, just about managing to keep them going with reasonable results.

C and G are bogging me down. Can’t keep up. No energy. No motivation. Situation change has drained me. Relentlessly, I try. C has turned a loser. Beginning to feel sick. I shut down C. Losses.

G is sucking me out. Emotionally. It’s a winner, though. Can’t keep up. Can I turn it into semi-auto? It required constant monitoring till it started winning big. I’ll still need to feed in my stop daily. That’s the manual part. I stop looking at G. Problem with equity orders is that your stop has little technical value overnight. A new day requires renewed stop-considerations. Ok, five minutes daily for G. Open terminal, set trigger-stop 9.99% below opening price, close terminal, don’t look left or right, done.

Phew.

Save health. Don’t fall sick.

If sick, rest.

Recuperate.

Regain health.

Get used to new situation.

Normalize.

Gear up for next situation change, whatever it is, whenever it comes.

Gear up now.

The Cycle of Flow

Life is riddled with cycles.

Words flow. Then they stop. Lulls can be long.

Doesn’t bother me anymore.

I know that when the flow starts, I’ll be there, milking it completely. You’ve seen me do it. I’ve been amazed myself by the sheer force of flow.

I’m happiest in full flow. At this time, I don’t believe in containment.

Lulls are good too. They happen for a reason. Especially if your situation changes. Your system is busy getting accustomed to the new situation. It is accumulating and assimilating. Respect its silence. Conserve your energy. Let it do its work. Don’t try to get busy just for the sake of feeling busy. You don’t have to prove anything to anyone. This is your unique game. No one else is playing your particular game. Wait for your system to finish assimilating. Let it use whatever energy is available. You don’t waste this energy.

At some stage, your system will be ready to disseminate.

It’ll give signs.

Flow will ignite.

Words will emerge.

Many of us block at this stage.

We’re afraid of embarrassment. We don’t want to look silly. We hate awkward situations.

Fine. Block. Fall sick. Your wish. Blocked flow turns toxic inside.

Why do you behave like an unevolved j#ck@#s?

The human being has come to evolve. Devolution is not your purpose. Evolution is.

If you wish to evolve, don’t block.

Just like you respected the silence…

… now, respect the flow.

Can I Really Really Really Do Without Fundamentals?

I like to trade without a bias. 

Lack of bias means freedom… 

… freedom to think independently…

… not falling prey to another person’s opinion…

… which then allows you to listen to your system…

… trade identification…

…setup demarcation…

…trigger-entry…

…trade triggered…

…trade management…

… trigger-exit…

… exited.

That’s it, move on to the next trade. 

News gives me a bias. 

No news. 

You know what else gives me a bias?

Fundamentals. 

I don’t wish to look at fundamentals. 

If my eyes are seeing a setup in the EuroDollar, I would like to take it without the nagging thought of “what will happen if Scotland says NO or YES”.

I don’t want to care about inflation numbers, or job figures, or industrial output or what have you. 

I mean…can I just …do it?

Meaning, can I just do away with fundamentals, and focus on technicals only, which is my area of specialization?

Sometimes, I get a little unsure. 

I start looking around. 

How are others doing it? The experts, that is. 

My uncertainty gets fanned a little more, when I see experts not really ignoring fundamentals, even though they might be specialized in technicals. Hmmmm. I’m still not happy looking into fundamentals. I mean, why should I take time-out from my strong suit, and devote it to my very weak suit?

No, I decide. I’m really not going to look at fundamentals. 

What’s the worst that could happen?

Let me just see if the worst that could happen is bearable.

Ok…I ID a trade…demarcate a setup…and the trade goes against me because of the announcement of some number in the afternoon. People looking at fundamentals would have waited for the announcement of the number and then traded. Fine. 

In the world of trading, it is always good to have the worst-case scenario unwrapped and right before your eyes to see what it really means. 

You know, I can take this. 

Would you like to know why?

Firstly, I would like you to understand that we are looking at large sample-sizes here. Any sensible reasoning would only apply to large sample-sizes. 

Over the long run, and over many, many trades, Mrs.Market will go either way after an announcement of a fundamental number with a chance of roughly 50:50. 

If this is true, it is very good news for me, good enough to just kick fundamentals out of the equation. 

At times, the market reacts as per the crowd’s anticipation. 

At other times, it reacts in the opposite fashion. 

I assume that the ratio of the above two directions taken by Mrs. Market over a very large sample-size would be 50:50.

I think my assumption is correct. I don’t want to go through the labour of proving it mathematically. 

Ok, let’s assume that my assumption is correct. I then kick fundamentals, and go about my work while relying on my strong-suit, i.e. technicals. This trajectory will very probably have a happy ending. 

Now let’s assume that my assumption is wrong. 

What saves my day?

Technicals. 

Technicals very often give setups that factor in crowd behaviour and crowd anticipation of market direction. 

Technical setups get one into the build-up to an announcement. 

More often than not, one is already in the trade, in the correct direction, enjoying the build-up to an announcement without even knowing that the announcement is coming, if one is not following fundamentals. 

Technicals can actually do this for you. I’ve seen them do it. I mean, the GBPUSD has been giving short setups during the entire 1000 pip run-down recently. To have availed such a setup, people haven’t needed to know that a referendum is coming. All they’ve needed to do is to take the trade once they see the setup. 

Actually, that’s it. I don’t need more.  

I don’t need to reason anymore with myself. Everything is here. 

I think I can let go of fundamentals safely.

Even this trajectory should have a happy ending.

Happy Fourth Birthday, Magic Bull !!

I believe in birthdays…

…and Magic Bull turns four today… 🙂 🙂 … .

When I die…

… this writing will live on. 

I won’t be taking my forex with me. Nor will I be carrying any equities. My soul will carry the satisfaction, though, of having created Magic Bull.

I love to write. 

It gives me a high. A huge kick. 

I feel totally free. Complete freedom. Have you experienced such freedom?

No shackles. 

I like to break barriers with my writing. 

I’ve reached people. Inside. People start to think whey they read this stuff. 

This is earning. For me. 

ANYWAYS, just as a breakout underlying breaks away into new highs, shattering all resistance in the process, in the same manner, words have just been overflowing over the past few months, after more than half a year of absolute dryness…

… such are words. 

However, by now, I’ve learnt enough to give them the respect that is due when they come. 

When words start flowing, there’s just one rule that applies. LET THEM FLOW. 

I don’t care how embarrassing that might be. 

What is embarrassment when the same words can bring about vital change? I really don’t care about the embarrassment. 

I decided long ago to make my tenure count. 

Contact with me is going to make an impact on you. Words are my medium. Without giving you an energy boost, I remain unfulfilled.

Why? 

Everybody has a purpose in life. 

Mine’s to make changes with the sheer force of my words. 

You have your purpose. 

I have mine. 

With Magic Bull, I fulfil my purpose of existing.  

With due respect, have you fulfilled yours? 

And, with due respect, have you even recognized yours?

Food for thought. 

🙂

Harnessing FD-Power within your Meta-Game

Everyone’s heard of fixed deposits (FDs). 

Are they so non-lucrative?

I believe that in some countries, you need to pay the bank to hold a fixed deposit for you. 

Why does our system shun savings? 

What are savings, actually?

On-call cash. Ready for you when an opportunity arises. 

That’s exactly it. The system doesn’t want you to have ready cash when an opportunity is there. 

Why?

Because finance people have already dibsed on your cash. They want it when opportunity is there. The cash should be available to their institution, not to you.

That’s why, your bankers generally try and get you to commit whatever spare cash floats in your account. They try for commitment towards non-access for a specific period of time.

I don’t know how things are in other parts of the world, but in India, a fixed deposit is still considered ready cash, because one can nullify one’s FD online, in a few seconds. Some banks charge a penalty for such nullification, but this penalty is charged on the interest generated, not on the principal. Therefore, in India, you have access to at least your FD principal (plus a part of the interest generated) when you really need it, all within a few seconds. 

What’s the meta-game here?

You “lock” your money in an FD for one year, for example. Let’s suppose that within that one year, no opportunity arises for you. You cash out with full interest. In India, as of now, if you’re in the top taxation bracket, and are a senior citizen, you’re still left with a return of between 6.6%-6.8% after tax, whereby we are not looking at the effects of inflation here, to keep the example simple, though I know, that we must look at inflation too. We’ll go into inflation some other day. 

Meanwhile, your FD has been on call, for you. Let’s assume that a lucrative investment opportunity does arise within the year, and your break your FD after 6 months, reducing earned interest to 4% annualised from 9.5-9.75% p.a. However, your investment yields you 20% after tax, because it was made at the most opportune moment.

You do the math.

Do you see the inherent power of ready money?

Your FD has thus worked for you in multiple ways. 

It has worked as an interest-generator, yielding a small return. Simultaneously, it has worked as ready cash, on-call in case of opportunity. Should the opportunity arise, and if the investment that follows works out well, a handsome return could be made. It’s all should/could/would in a meta-game. 

There is yet another way FDs are used. I use them this way. 

FDs are a safety-net. They allow you to take high risks elsewhere. You lose the fear of high risk once you know that your family is secured through your safety-net. In a safety-net, sums are large enough and deposits are regular enough to discount (actually effectively / realistically nullify) the power of inflation. With the haven of a safety-net going for your family, you can enter high-risk arenas fearlessly. Fearlessness is a perquisite to do well in high-risk arenas. If you’re afraid of loss, don’t enter such areas. Safety-nets make you lose your fear of loss elsewhere. 

People – SAVE! 

Create FDs. Don’t listen to your bankers. Commit your money to an uncompromisable lock-in only if you’re convinced that the investment is safe and really worth the lock-in for you. Harness the power of the FD for yourself. A safety-net of FDs is the first step towards the formulation of a profitable meta-game.

Did you also know that when you create an FD, the money used to create the FD doesn’t show up as ready cash in your account. Bank accounts with large amounts of ready cash over long periods of time are like red flags which online fraudsters look for. Creation of FDs gives extra online safety to your money. 

ONLY you are responsible for your money.

Start looking after it. 

Start making it grow.

Start saving. 

NOW.

Dealing with Noise…the Old-Fashioned Way

There’s a sure-shot way to deal with noise…

…just shut your ears. 

Yeah, the best ideas in the world are – simple. 

Let’s not complicate things, ok?

So, what kinda noise are we talking about here?

We’re not talking about audio, you got that right…!

The concept is related, though. 

If you’re charting, you’ve dealt with noise. 

Yeah, we’re talking about minute to minute, hour to hour or day to day fluctuations in a chart of any underlying.

Markets fluctuate. 

While discussing noise, we are pointing towards relatively small fluctuations which generally don’t affect the long-term trend. 

However, noise has the capability of deceiving our minds into believing that the long-term trend is turning, or is over. 

Don’t let noise fool you.

When has the long-term trend changed?

When the chart proves it to you through pre-defined fashion. That’s it. You don’t let noise to get you to believe that the long-term trend has changed, or is changing. Ever. 

You believe your chart. 

Moving averages crossing over? Support broken? Resistance pierced? Trend-line shattered? ADX below 15? Fine, fine, FINE.

Take your pick. You have many avenues giving decent signals that the long-term trend has changed or is changing. 

How about eyeballing? Works for some. Like I said, let’s keep this simple. 

So let’s get noise out of the way. 

Random numbers generate trends – you knew that, right?

You don’t need more. 

Once you’ve identified a trend, that’s your cue to latch on to it. 

We’re not talking about predicting here. We don’t need to predict. We just need to identify a trend, and latch on. That’s all. No predictions. Not required. 

From this point on, two things can happen.

Further random numbers deepen the trend you’ve latched on to. You make money. Good. 

Or, the next set of random numbers make your trade go against you, and your stop gets hit. 

If your stop is getting hit, please let it get hit. Even that qualifies as a good trade. 

You move on to the next trade setup, without even blinking. 

What you’re not doing is letting noise throw you out of the trade by deceiving your mind. 

So, here’s what you do. 

You’ve id’d your trend. You’ve latched on. Your stop is in place. Now, don’t look at your trade. 

Till when?

That’s your call. 

Don’t look at your trade till you’ve decided not to look at it. For the day-trader, this could be a couple of hours. For the positional trader, it could be days, or weeks. 

By not looking, you won’t let noise deceive you. 

If the trend doesn’t deepen, or goes against you, you lose the risked small amount. 

Just remember one thing. 

A loss has immense informational value. It teaches you about market behaviour patterns. It also highlights your trading errors. Many times, losses occur without any mistakes made by you. 

That’s the nature of trading. 

Ultimately, if the trend deepens, you’ll have made good money, and can then further manage your trade after the stipulated period of not looking.

This is the sweet spot.

This is where you want to be, again, and again and again.

Sitting on a large profit gives you room to play for more profit by lifting your stop and your target simultaneously.

To reach this sweet spot again, and again and again, you have to position yourself out there and appropriately, again, and again and again. 

This is also the nature of trading.

Wishing you happy and lucrative trading!

🙂

Charting Charting Charting

Why don’t you just…

… trade what you see?

Trade the chart, dammit.

Not the level.

Not the expectancy of a turnaround.

And, although I still do this because it gives me a kick, why do we even trade corrections?

Why can’t we just trade the sheer chart?

Every chart is either going up, down or nowhere.

So it’s pretty obvio, that the first step would be to…

… to what?

… to decide where the chart is going.

Again, it should be pretty obvio, that if a chart is going nowhere, then you are doing… what?

Are you trading such a chart?

NO!

Wait for such a chart to break out in one particular direction.

Wait for the LTT to turn in this direction.

Then trade this chart. Not before.

Yeah, LTT stands for long-term trend.

Yeah, we’ve befriended the LTT so much, that we have an abbreviation going for it…

Once you’ve sorted out the direction, look for an entry setup.

Be patient.

If the entry setup hasn’t formed yet, wait for it. If you can’t stop your twiddling fingers from doing something, feed in a trigger entry in case of a hypothetical setup formation within the next few hours / days, if your trading station allows this.

There’s no up or down anymore, to be honest. You are going where the chart is going, period.

You are also not asking the stooopidest question of them all…

… you guessed it… “Did the sensory index go up, or down?”

Just forget about the sensory index, ok?

I mean, we’re so done with sensory indices in this space.

Why?

DLF could tank 20 bucks on a day the Sensex goes up. Dow Jones could be down 50 points, but Pfizer could just spring into a stellar upwards move. Why should we have lost the short-side opportunity that DLF hypothetically gave, or the long-side opportunity that Pfizer could present, for example? We will do exactly that, i.e. lose the opportunity, if our focus is on the sensory index.

Focus on the underlying.

To be more precise, focus on the chart of the underlying.

Happy trading.

🙂

If it Fits You…

… then nothing else matters.

Who told you that finance is a one-size-fits-all game?

Actually, the truth is very far away.

Truth is truth.

It doesn’t matter how much you twist it, or bury it or whatever.

It eventually emerges, unchanged, unscathed, true.

And the winds here are talking about unique sizing for each market player.

Yeah, only a unique fit is going to fulfill your own market play.

It will look silly to others.

People will laugh.

Doesn’t matter.

It fits you.

You’ve found your fit. That alone is invaluable. People undergo decades of struggle looking for theirs. Many don’t find it.

What is that state of being, when you know that you’ve found your fit?

Satisfaction.

You’re not jumping.

Not edgy.

Not looking further.

Looking for extra time, to develop and enhance what you’ve found.

You’re at peace.

You’re happy sitting.

Small things count big in the markets.

Moving away from the Greeks

I’ve never been to Greece.

I have nothing against people from Greece.

I don’t like Greeks, though.

Yeah, I’m an options player.

The Greeks I don’t like are options Greeks, he he he…!

What, you thought I didn’t like actual Greeks?

Come on, I’m sure I’ll love Greece and actual Greeks!

When you don’t like something, you can try to go around it.

I don’t need options Greeks to play options. I’ve found a way around the Greeks.

I’m sure others have discovered this too, because truth is truth.

Let me tell you about it.

You’re buying in the direction of the long-term trend.

You’re buying (calls / puts) after a significant correction / rally level has been hit.

You’re buying post a small move in the direction of the long-term trend, after the correction / rally level has been hit.

You’re buying out of the money to compound the cheapness.

You’re buying with breathing space on your side, so that the trade has enough time to pan out in your favour.

You’re not booking without a very solid reason, once the trade is running in your favour.

You’re trying to book (deep) in the money.

You must, must, must let your profits run as long as you can. This is the toughest part, but also the most essential one.

That’s all.

No Greeks.

Just common sense.