Sourabh Sisodiya,CFA Profile picture
Sep 30, 2021 14 tweets 6 min read Read on X
Trading Mistakes & Lessons Learnt 🧵

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
2) In 2017, I analysed all my trades and saw that I have majorly lost in stock futures and profits came only via index trading.

I accepted that I am not great at stock trading & been trading index only majorly since then & have never missed a day trading BankNifty
3) I decided to adjust all of my past losses to 1 % of capital to see the effect of capping the downside.

I would have had a gain of more than 230 % if I had capped losses at 1% of cap.

Lesson: Keep losses per trade less than 1% of capital no matter what !
4) While trading index options, I lost sometimes due to IV rise,flash crash, and option freezes.

Lesson: Never take markets lightly & Always keep protective stops in the system (and not in your mind) to keep loss in control in case of blackswan.
5) Being an option seller, I have a tendency to manage my position by rolling up/converting to calendar etc.

So many times I have wasted 1 or 2 weeks just to close a loss making trade at cost😢

Lesson: I do manage now but exit as soon sold options become ITM or 2 x in value.
6) “Option sellers eat like a chicken but shit like an elephant”

So always always manage risk especially while selling options.

Eg. Corporate tax rate cut day, demontisation, surgical strike, 2020 fall etc were brutal moves & if not managed properly can take years of profits.
7) I used to carry naked far otm puts overnight position on largecap stocks thinking I was safe but on 18th Aug 2017 Infy was down 13% as CEO resigned.
Luckily I had only 1 lot but learnt a good lesson

Lesson : Always hedge your overnight position
8) From the lesson learnt from INFY trade I got saved later in my career

I had a position in Yesbank but it opened 10% gapdown next day but I got saved as position was completely hedged.

Lesson: Learn from your mistakes,note them in journal & never repeat it again!
9) If possible also write about your biggest losses and how you felt that time so that you make sure you never go thru that emotional pain again by repeating earlier mistakes.
10) I committed the same mistakes for years.
Inspite of knowing that I shouldn’t commit them.
Bcz we as humans tend behave in a certain manner everytime.

So , it’s best to keep your lessons/mistakes hand written in front of you and read everyday before trading.
11) We as traders get complacement when we are on a winning streak & my largest losses have come after my largest winning streaks

Lesson :
Never get complacement & always remember that market is supreme🙏
So stay humble always !
12) I have also written about my largest losses & the reason for the drawdown.

Was it my fault ?
Did Market conditions change?
How I felt during the drawdown ?
What could I have done better ?

Lesson :
All this gives you the confidence to sail your next drawdown smoothly.
13) I think the key component in trading success is stock selection and limited focus.

-Select any 1 liquid instrument and analyse it’s historical behaviour in detail and build a rule based strategy around it.
-Stick to your strategy and never miss a trade in it.
14) Know all major levels, how the instrument moves generally & behaviour of that particular stock.
- Generate additional insights & incorporate the feedback & insights back in to your trading strategy.
- This sheer focus will give you the results you have been craving for.

End

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A Brutal Day in the History of Sensex 0 DTE😳

Option selling is getting tougher by the day.

No matter where you set your stop loss, it feels like it's destined to get hit. And if you don’t set one? You could blow up your account in minutes.

Let’s dive into what happened on September 20, 2024 and ways to survive such days(Thread)Image
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But that was just the beginning.
The market then staged an incredible rally, surging over 1,300 points from the day's low to hit a high of 84,515 and again fell 1200 points to 83300 and again rallied to 84600

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A 20x move in a single day!

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May 6, 2022
Thread : Days to Remember🧵

1) I saw few tweets saying that this is the most difficult market ever.

As a trader, we have signed up for these risks & All we can do is be prepared & manage them

Lets have a look at days when markets action was crazier than current times !
2) 18th may 2009

Markets opened at 9:55 AM as this was the market opening time at that time
Nifty immediately hit an 20 % upper circuit at 10.01 am and the markets froze.
So markets were open only for 6 minutes.

3) 24th Aug 2015 (Vega Risk)

On 24th August 2015, the Indian markets declined close to 5.92%.

Nifty around 490 points but something unusual happened on that day.

Far otm Call options shot up inspite of such a huge fall😲

Vix shot up 64%.
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