Thread by @pawanaroraleo

We have heard enough profit stories, let me tell my 80% Draw down story.

I was flying high of my early success in 2013 to 2016,
was published in Zerodha (400% in 3 months), Hindu Business Line article, On air with @AnilSinghvi_ for ITL return of 127 % in a single day.

contd..

I went from my initial X capital to 10X capital in 3 years, was going ruthlessly with the compounding and increasing my position size like crazy. But then law of averages caught up, Since i play swing overnight Nifty, there came the Brexit, 350 points gap down happened.

contd..

Being SAR Trader, I reversed the position to Short at opening, but nifty reversed on the same day, so my SAR hit me doubled that day,Lost almost 500 points m2m in a day, I used to trade one lot for 1.5 Lakh that time, so with one lot it was loss of 45k , 25% DD in a single day.

And I had yet to pay the income tax for FY 2016 too, which was the best year, and just a month prior I bought SUV too, With all those liabilities, capital came down to 5X from peak of 10X
Once you have that kind of DD in ur capital, its very difficult to trade the reduced size.

But i persisted and was kind of breakeven for few months until Demonitization hit me again in Nov 2016 :),Nifty gapped down 450 points,Squared off in panic,though it came up later but lost good sum of money again in a single day.
I seriously started doubting my skills and trading

With such big DDs, we tend to do many mistakes too, I overrode system, avoided few trades which could have made some money.

I was making losses but Personal expanses could not be stopped, so capital was coming down pretty fast... thought to have some alternative business.

contd

Within few months, I could built one subscription based business(Not related to Trading) and today my personal expanses are well taken care of with that business, given employment to 10 people with 1500 happy customers.
Trading mindset helped pretty much in setting up business.

So FY 2017 was a big negative year, FY 2018 was kind of breakeven as I was more focused on my alternative business but was still trading everyday,kept spending for personal expanses and Capital reduced to 2X (Peak was 10X in May 2016).

But persistance paid off and now i pulled my capital from 2X to 20X , I am not compounding ruthlessly now , reduced leverage and am trading one lot per 3 Lakh now.

what could not kill u makes u stronger. And today i have all those experiences under my belt.

I could survive of that kind of DD due to God's Grace and my persistance. but slight change of things and I could have left trading for ever.
My learnings
1)Do not do compounding ruthlessly, Keep withdrawing profits out.
2)Keep a check on your leverage, consider the worst case.

3) Be humble, Do not fly high, You never know what is in store next.
4) Have an alternative income source, but should not be related to trading.

Thanks for reading ....