How to get rich trading (without getting lucky)
Complete beginner’s guide to wealth of Rs 10 Cr in 10 years
Step 1: start trading live
No amount of back-test, studies or indicators can substitute training your mind with screen time
As a beginner, In live trading, you will make losses almost everyday
If you can’t follow these rules, this document is not for you
Start with trading capital of Rs 1 lakhs
Max loss per trade 0.25%, i.e. 250 Rs
Max loss for the day, 1%, i.e. Rs 1000
Max 6 trades in a day
But just like any start up, trading is also about making it through initial gruelling constraints of life
You will also learn, how to turn these adverse rules to your advantage
Think about it, you will be do all kinds of instruments, just that PNL will not be roller coaster ride or exciting like a casino
Do any kind of trade, your mind takes you to, except blind tips from tv of TG
Trend-following, option selling or buying, all kinds.
But above conditions of capital 1 lakhs, max loss per trade 250 Rs, can't emphasise enough
Its non-negotiable, IRON clad
how market behaved, what was new that you learned, you have to write everyday for 1 hr.
Again cant emphasis enough how non-negotiable this is.
You should not blindly trust anyone in your journey, but here I am asking you to take a leap of faith
In one year, you will be ready with one
system/method/algo or discretionary method like price action or indicator, which will be steady,
will suit your temperament and your inner voice will ask you to focus on this one set up
Everyone who tries 1000 trades with limited loss will discover one good system.
No seminar or software or anything paid needed.
In your 1 year, 1000 trades, your accuracy will be around 25% and you will almost always be under drawdown
that’s expected from a beginner.
You will get very good psychological conditioning on drawdown
You might have winning streak and you might be profitable as well,
but here we are talking about trading with-out extraordinary talent or luck
As 10 yrs, 10 Cr is audacious goal, so you have to give everything you have got
It helps if you have another job. Much needed psychological comfort
If you don’t have another job, you have to have “multiple sources of income”
Goal, Rs 10 lakhs of trading capital you have to earn in one year.
Looks difficult, but if you plan and execute, from youtube content to affiliate marketing, so many ways to side business
But you cant trade with borrowed capital,
so you have to earn your initial kitty
Again, cant emphasise enough,
this entire plan cant work on borrowed capital. Entire psychology changes and plan doesn’t work
After one year, you have 1 solid method /system /algo or discretionary method and Rs 10 lakhs of your hard earned money
Now, new rules
You have to stick to this one set up/algo method for next 4 years which you have discovered
Now the discipline is to stick to your initial chosen set up for next 4 yrs without trying anything new or exciting
mastering one set up, ironing out all exceptional cases, making super money on easy cases takes lot of experience on single set up.
Focus at this stage is paramount
1-2 yrs are so easy that one makes
unbelievable money, market just favours that set up.
e.g. 2020, it was set up for trend following.
in next 4 years, one year, you will make unbelievable money
and that will be the story in your moneycontrol interview
You have to increase risk to this level, unless you bet big, u don’t win big
In this phase, on simple set ups, 100% returns are very common
50-60% returns are average
As you are on winning streak, you cant take out money from your trading account
That SUV you wanted to buy, has to wait. Higher the capital, better for psychology and compounding
That’s why I emphasised on many sources of income earlier
Assuming an average returns of 70-80% per years for 4 years, you will grow account from 10 lakhs to 1 Cr in 4 years.
Now you have traded for 5 years total and have a trading capital of 1 Cr.
Actually, path is easier from here.
As you are handling this kind of money for the first time, any double digit DD will destabilize you
So non correlated strategies will help
Only thing you have to consciously decide here is, press the risk accelerator to 2%, don’t be intimidated by big PNL swings and no less than 2% on a trade
That 50% per annum compounded will take you from 1 Cr to 10 Cr
Now you are free to take out money from your trading account.
More from Trading
(A long thread)
First, let's be clear that negotiating a deal in 9 months, against the odds, and in the middle of a pandemic, is an achievement. It's too easy to underestimate the difficulty of negotiating over the screen for 4 months, from Mar-June, and under enormous pressure. /2
Both @DavidGHFrost & @MichelBarnier and their teams, deserve a lot of credit for sticking up with it in hard circumstances, often with lacking political clarity, & high stakes.
This shouldn't preclude us, or MPs and MEPs, from looking critically at the deal on the table. /3
That we have a deal is a result of the UK & EU having found a way to protect their core defensive interests.
From the EU's view, integrity of the single market is preserved with level-playing field obligations which go virtually beyond any other 3rd-country (even the Swiss). /4
For its part, the UK has negotiated down EU ask on dynamic alignment on state aid; eliminated any references to EU law; removed any role for the ECJ (NB not in the whole future relationship, due to EU law in NI Protocol); and preserved its right to control access to waters. /5
There are four major players in the industry: Hedge funds, prime brokers, the DTCC, and the SEC.
Hedge funds and the SEC you know of, but the DTCC and prime brokers are important.
Prime brokers are relatively simple - they’re brokers that can clear their own transactions by way of moving actual shares between their clients.
The big prime brokers are ones you’ve heard of - Goldman Sachs, Morgan Stanley, Bear Stearns, Citigroup, etc. - big, big companies.
These prime brokers in turn collectively own the Depository Trust Clearing Corp - DTCC.
The DTCC is an almost impenetrable, behemoth corporation that clears near a billion shares a day and accounts for a vast majority of the clearing house activity in the US market. This is the corporation that ACTUALLY holds physical shares - all your “shares” are on their books
The DTCC is (this will be important later) nearly impossible to get information out of, and it takes an act of Congress or a subpoena to get them to talk on anything.
What is scaling in - out?
1. Scaling in is adding on to the positions when they move in our favor (Pyramiding).
2. Scaling - out is exiting the portion of the position when the trade moves in our favor.
I have explained about pyramiding in previous tweets.
// Why use scaling out instead of exiting all position at once ?
When you are using ALL - out method where you exit positions at once, mostly you use wider Trail SL as you want to capture big moves and exit all when trail sl hits.
The problem with this method is that either you make too big or many times your medium size winners turns out to become Scratch trades.
So, when we use the scaling out method, we are trying to capture most of our medium size trades , so that they do not turn into scratch trades.
// How to use scaling out method -
Say we have to got a signal to enter in a trade, and we have to buy 1200 qty according to our Position sizing.
So, we have to divide this 1200 qty into parts, how much? It depends on you.
We can divide into 3 parts, each part 400 qty.
$ROKU could be producing original content. There was a recent job opening for a Lead Production Attorney to work on its slate of original content. Work involves "drafting agreements to hire writers, actors, directors + individual producers". Quibi might not have been an 1-off.
If that isn’t enough, $ROKU is also hiring a ‘Business Affair Lead’ for their ‘Original Programming Business’ to negotiate agreements related to the development, sale and production of episodic/feature length programming. Experience in tv/film production required. 🤔
If $ROKU is producing originals, then some of their moves in the past year start to make a lot of sense: releasing app versions of the Roku Channel, getting the Roku Channel inside Fire TV/Samsung TV and acquiring the license rights from Quibi. They could have set the foundation.
$ROKU is also looking for a ‘Director of Programming’ to help identify ways to "expand its global programming offering into new video and non-video experiences within The Roku Channel". Such as sports, esports, fitness as well as content from digital creators + social videos.
Holy grail- A strategy Which can make money all the time.
After going through two phases of a traders journey, the initial success phase, and Only why do i get loss phase, Traders enter the third phase -
THE SEARCH FOR THE HOLY GRAIL PHASE.
This phase has no limits, It can end in 1 month and it may not end till lifetime.
What exactly is this phase?
When a trader covers all the basics, they know how to lower their losses, they know the power of risk management.
And few of them may even develop their edges and systems over time.
But after some time, they feel that they are doing something wrong and there is more to trading than what they know.
THEN COMES THE HOLY GRAIL PART-
Few of them start to Read more books about trading,finding articles about “How to win 100% of the time” and listening to Youtube videos of few big traders who make big in trading.
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Seek wealth, not money or status. Wealth is having assets that earn while you sleep. Money is how we transfer time and wealth. Status is your place in the social hierarchy.
Understand that ethical wealth creation is possible. If you secretly despise wealth, it will elude you.
Ignore people playing status games. They gain status by attacking people playing wealth creation games.
You’re not going to get rich renting out your time. You must own equity - a piece of a business - to gain your financial freedom.
Thread ahead. It's gonna be a long one so buckle up or mute accordingly.
2/ First - etymology of the hashtag (as I understand it). @stevieboebi posted a video about how after years of misdiagnosis, dismissiveness and all the all too familiar to many of us experiences with doctors, she finally got a dx. (Note no
3/ At the very end of a *12 minute* video she makes a statement of support to people who have had or are having similar experiences struggling to get diagnosed and treatment. Doctors are dickheads were three words in a TWELVE MINUTE video.
4/ In response someone (not sure if they are a doctor or med student or what) said they are "personally offended" by those three words (and apparently missed entire point of video). @stevieboebi replied.
YEAH WELL SORRY FOR YOU but we are told to trust doctors fully and that HURTS PEOPLE because doctors have biases and they are wrong just like the rest of us humans. And me learning that helped me tell my doctors off and demand to be treated differently and led to my diagnosis.— Stevie \U0001f52e (@stevieboebi) October 22, 2018
5/ At some point @crippledscholar tweeted.
Like, a pretty narrow slice of feminists actually endorse and support corporate feminism, they’re just white, nondisabled, straight, cis, and noisy so their voices have a bigger reach.
So if your impression is that ‘feminism’ gave her a ‘free pass’ maybe you should question your overall impression of feminism rather than continuing to centre a handful of people as ‘thought leaders’ or whatever.
Critics within feminism have been doing this work for a long time and have been getting shat on it for about as long and I'm tired of seeing them erased. But what do I know — I am, after all, not a feminist.
But I WILL say, from my not-a-feminist perspective, that people who aren’t feminists who are criticising feminism should maybe understand the movement more deeply beyond a handful of high profile celebrity feminists.