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- Jesus answered, "The scripture says 'Man shall not live by bread alone, but by every word that proceeds from the mouth of God'."

8 Jun 2018

SHARE MARKET--What are some interesting stock market profit/loss stories?

Rs 2,34,000 loss in one day.
My stock was trading at around Rs 17.85 at 11:45 am when I bought it and sold it around 2:30 PM at Rs 15.50. I was doing intraday trading at 10 times margin capital with me. I had bought 100000 shares. Where did I go wrong?
1) I chose stock that was being traded at a very low volume.
2) The quantity of shares I bought was way too high for that stock with that low volume.
3) I had got enough time to do square off but over-optimism led me down.
4) I chose wrong stock having low value.
5) I didn't care about its sector. Whether it was an automobile or IT or manufacturing sector, that was area of my least concern. 
6) Lack of knowledge in trading.

This loss was equivalent to my 6 months salary that time. My eyes became teary and heart beat almost stopped. After that, I stopped doing real trading and started to read and analyse stocks extensively. I started trading again after 7 months and not only recovered my loss in about 4 months but earned a lot more money after that. Most of the weeks, I would make profit 4 days and loss on only one day. I don't trade anymore because of my demanding job.
Strategy I opted to make money:
(You can say it's kind of Jugaad strategy but it served the purpose)

·         I began with delivery trading as the risk is much low compared to intraday trading. But the rate of earning money is very slow in delivery trading, so I shifted to intraday trading once again after earning sufficient capital. An average trader who trades alone at home without any external information has to rely solely upon luck. Company's financial performance sheets/information are not much beneficial to him.
·         After analyzing stocks for about 7 months, I started to predict the movement of stock by +/- Re1 only for the stocks ranging between Rs 100-300 and +/- Rs 2 for shares having value between Rs 600-900. But I was more confident about my prediction for shares in former case, I started trading 1500/1000 shares of them. This way I controlled my greed and earned on an average Rs 4000-5000 per day. My portfolio consisted of shares ranging between Rs100-300 only and thus, I was able to focus on limited number of stocks.
·         Many websites/trading platforms have information on hourly/half-hourly/time based top losers and gainers. I would pick the stock(from top 3) with medium to high volume from that list having value in my specified range and analyse its graph. Obviously, its graph will look like a vertical line either going up or down. Now, here is the trick. In most of the cases, if the volume is sufficiently high, the price will follow the same pattern. Means, if the price is going up, it will keep going up atleast for a few more seconds. I think the reason behind this is that the price is going up for a particular reason like something good might have happened in the company and more and more people are buying it. So, there will be a very little chance that the price of the stock will fall immediately. Hence, don't try to use sell before buy option in a hope that it will fall down (remember, you need only +/-Re 1 or Rs 2 change in value??). Similar will be the case with top losers.
·         I started using 2 trading platforms and traded only those shares which were very volatile. On one platform, I would use "buy before sell" option and on the other "sell before buy" option simultaneously at the same price on two different browsers and then immediately square off the one which would make loss. I would make a little loss on one and high profit on the other. Mostly, such volatile shares have high value. Since, my capital was low, I traded stocks having value between Rs 900-Rs 1800. I earned a lot of money this way. Remember, this will work best only with the volatile stocks.
·         Best time to do intraday trading is before 9:50 am. Because, this is the only time when stocks show wild variations. Look at Sensex/Nifty and then your stock and trade immediately. If possible square it off before 10 am. I used to earn Rs 1000-2000 before 10 am.
·         See which sector is going up. If your stock is listed in Sensex or Nifty, co-plot the graph of Sensex/Nifty with your stock, you will get an idea whether your stock will go up or down or remain neutral.
·         In all the above 5 points, I was concerned with only +/- Re 1 or Rs 2 change in value. My trading quantity took care of my profits. Generally, 1000/1500 shares per trade is enough to earn a decent money without risking much.
·         Always trade only those stocks which are being traded at a high volume because it will be easier to get out of the trade early without bearing much loss.
·         Never go against the market.
·         It is not necessary to trade everyday. If you feel like you are confident enough or your prediction is most likely to give you good results, only then trade. There were days when I was in full mood to trade but didn't trade only because I was not sure of the market.
·         Set a particular profit target and it should not be much high.
·         I don't know why people say that Stop Loss option saves you. Because most of the time, the stock gets traded at stop loss value and jumps again. So, it's up to you. I never used Stop Loss.
·         Always keep an eye on US/Japanese/Chinese/Hong Kong stock market (NYSE/NASDAQ/NIKKEI/SSE/SEHK) a night before. It will give you an idea of the performance of a particular sector. I don't know the reason behind it, but I got benefited mostly from NASDAQ.

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