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Finkarma
@finkarmaIN 3 years, 6 months ago 555 views

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THREAD: SAVE YOUR TAX ON TRADING INCOME

Investors and traders want to make big money in the stock market. But what about paying taxes. All of them would like to save some chips.

In this thread, you will learn a few smart ways to save on your taxes

1. Set-Off Your Losses

Losses from speculative trading can be set off against speculative gains made during a year.

You can carry forward these losses for 4 years.

These losses can’t be set off against non-speculative trading income.

Losses from Short Term Non-Speculative trading can be set off against STCG as well as LTCG for the same year.

However, losses from Long Term trading can be set off against LTCG only.

An investor can carry forward such losses for a period of 8 years.

2. Plough Back Your Profits

Exemption on LTCG of up to 1 lac. So, you can plough back these gains to increase your capital.

Example ~

Investment = 5 lacs
Time period = 1 year
Profit = 1 lac

Book this profit after one year and re-invest after a few days.

No tax liability for this 1 lac but this time your new capital invested will be 6 lacs.

Finkarma
@finkarmaIN

IRON CONDOR (IC)

If Short Strangle’s margin and unlimited loss potential is too much for you then the Iron Condor option strategy could be a perfect fit for you. It's not as complex as it sounds

A thread 🧵

#options #trading

1/ Big Brother of Short Strangle (SS)

I am sure you read our previous thread on SS where you sell slightly OTM options in a sideways market.

To create an IC

Create an SS first

Buy the next OTM CE

Buy the next OTM PE

Let’s clear with an example

Ex.

If Nifty is trading at 16300 and you expect it to trade in a narrow range of 200 points till expiry then

Sell 16400CE

Sell 16200PE

This is SS, right?

Now Buy 16500CE

Buy 16100 PE

That is IC

All strikes should belong to the same underlying, have the same number of lots, and same expiration

2/ The Credit Part – Max Profit

Finkarma
@finkarmaIN

10 threads that will teach you more than any Course on Trading🧵

1/ Lies that you've been told about trading.

From:

Which are the biggest lies told by well meaning people in trading?

I will list the ones I heard and believed initially, which was detrimental to my progress

Lets do this and you add one LIE u heard many times

First

1. Its impossible to make money in intra-day trading

+
— Anandable Conservative Trader (@AnandableAnand) December 29, 2021

2/ Pitfalls that every discretionary trader faces, and how to overcome them.

From: @KillerTrader_

What are the pitfalls I faced as a discretionary trader and how I overcame them:

A thread \U0001f9f5#StockMarketindia
— Killer Trader \U0001f4c9\U0001f4c8 (@KillerTrader_) October 10, 2021

3/ The only trading psychology post you need to read.

From: @indian_quant

The only trading psychology post you need to read:
===========

This guy gets appreciation and possibly makes money only after he reaches from one point to another.

But if his entire focus is on :
1. Not falling down the rope.
2. Keeps on thinking to reach the other end
..contd pic.twitter.com/YQCEnnU7iR
— Indian Quant \U0001f1ee\U0001f1f3 (@indian_quant) October 28, 2021

4/ A thread on Trading mistakes.

It's inevitable that you will make a lot of mistakes in your trading career, what's truly important is if you learn from those mistakes or keep repeating them.

From:

Trading Mistakes & Lessons Learnt \U0001f9f5

1) I always keep my mistakes & lessons learnt in front of my screen while trading.
Bcz we as traders tend to commit the same mistakes everytime.

So seeing your learnt lessons everyday ensures that you avoid them.

#trading #mistakes pic.twitter.com/4MYFlCS9Hi
— Sourabh Sisodiya, CFA (@sourabhsiso19) September 30, 2021

Finkarma
@finkarmaIN

Short Strangle

Net credit with a sideways stance

A thread 🧵

#options #trading

1/ Short Strangles

As the name suggests, you need to sell options in this strategy

It involves 2 legs:

Short OTM CE

Short OTM PE

2/ Stance

You expect the market to trade within a narrow range. A narrow range means low volatility and hence lowering option premium due to theta decay

3/ Net Credit Strategy

Shorting options means that you will receive premium

Ex Nifty spot 16200

To create Short Strangle

Short 16300CE @92

Short 16100PE @132

Total premium received = 92 + 132 = 224

4/ Maximum Profit

The max profit is the premium received at entering the strategy, possible when the market expires within or at the selected strikes

In the Ex, expiry at or between 16100 or 16300, means options go worthless due to theta decay and you receive 224 points per lot

Finkarma
@finkarmaIN

Almost every trader uses moving averages, but most of them do not know how to use them properly.

In below article, we will be covering some important ways in which you can use moving averages to enhance your trading.

https://t.co/mo73RAVvWB

More from Stockslearnings

Indrazith Shantharaj
@indraziths

4 factors to measure the performance of a trading system:

1 - Accuracy
There is no such thing as 90% Accuracy without compromising on other factors (like profit factor, etc)

Fact - A good trading system will have only 35-60% accuracy without compromising other factors.

(1/n)

2 - Profit Factor (PF)

It is similar to risk-reward. It is derived using the below formula:

Profit Factor = Total Profit by winning trades / Total loss by losing trades

Fact - A trading system above 1.2 PF is good if it scores well with other factors.

(2/n)

3 - Maximum Drawdown

The maximum drawdown also plays a vital role psychologically while picking a trading system.

Fact - Maximum Drawdown in any trading system should not exceed 20%. I suggest picking only the techniques which have less than 10% maximum drawdown.

(3/n)

4 - Maximum Consecutive Losers

We all feel bad even if we lose only Rs.1,000 in a trade. Because it is not only about the money, it is emotionally difficult to accept the failure.

Fact - A good trading system will have less than 15 consecutive losing trades.

(4/n)

TRADE LIKE CRAZY

10 Profitable Intraday Trading Systems, which are backtested against 10-years of Banknifty Historical Data!

(n/n)
https://t.co/BuUie17Ish

Kirtan A Shah
@KirtanShahCFP

Should you add more in Equity or redeem right now?

A thread 🧵to guide retail on why & what should they do at these historic market highs.

Do ‘re-tweet’ and help us educate more retail investors (1/n)

#investing #StockMarket

Some investors feel that markets are trading at a PE of 27 vs 10 years historical average of 20 and a market-cap to GDP of 105 vs historical average of 79 and hence markets look expensive (2/n)

But, in such crazy liquidity driven markets, prices can move much ahead of the fundamentals & suddenly we start hearing commentaries of how the market is pricing in the earnings of FY 22 & 23 to justify the rally

If you r new to fundamentals, 👇 can help

Market PE at 40 and yet the market is not falling, why? Getting asked this question multiple times. Here's a thread covering \u2018very basic\u2019 premier on valuation for my retail investor friends.

Do hit the \u2018re-tweet\u2019 and help us educate more investors (1/n) pic.twitter.com/8oCkBmmOXY
— Kirtan A Shah (@KirtanShahCFP) January 14, 2021

Results for Q4 have come out very well but that is also because of the lower base effect of the last year.

Over the last many years, markets have corrected 10-15% each calendar year. Can it happen this year as well? Can very much and that can be a great entry point. Why? (4/n)

There are a lot of over hangs in the near term,
-Crude going up
-$ index moving up
-Inflation moving up
-COVID uncertainties
All of the above are –ve for markets & liquidity on the other side driving markets up, its impossible to judge the near term movement of the markets (5/n)

Shalini Chaudhary
@shaliniitomar

T-1 Psychology behind the formation of a candle - personally I feel that if one is aware of psychology behind the formation of candle than chart starts talking to you. So, here I am starting my journey of 🧵 with how actually candles form. Small but important for beginners 👇

Hammer - formed at the end of downtrend, opened sellers pushed the prices down, buyers came & pushed the prices up & close the candle above the OP. Shadow formed twice of body. Also observed at trend line & support zone. 👇

Shooting Star - formed at the end of uptrend, opened buyers pushed the price up, sellers came & pushed the price down and make candle close below the OP. Both hammer & shooting star should always be traded with the confirmation from next candle. 👇

Bullish Engulfing- formed after a downtrend. Price opened below the previous candle, buyers came and form a big green candle above the previous candle high if both candles merge can form a hammer. 👇

Bearish Engulfing- formed after a uptrend. Price opened above the previous candle, sellers came & form a big red candle below the low of previous candle. Merging of both form a shooting star. 👇

ishmohit
@ishmohit1

Read and retweet. One of thr best investors in India who has made multibaggers from various sectors such as seeds, Financials, Auto Ancs, Real estate, Chemicals, Pharma,Technical textiles, Animal health etc. Uniquest and most realistic+diverse approach in my view @SamitVartak

Compelled to take down notes from this very interesting talk by @SamitVartak and share with the Investing community. Was introduced to this gentleman by @ishmohit1 - Thanks !!https://t.co/bCfjfNBWO1

Highly recommended to watch it.

\u267b\ufe0fRetweet to if you find my notes useful https://t.co/3zZ9qCf90z pic.twitter.com/LGjoJDaJsT
— Mouzam (@mmali09) July 18, 2021