Even best of the seasoned traders crack under pressure

1. They start doubting their strategies and even trading as a profession

2. They are tempted to tweak their system or approach

3. They think market has changed forever

+
4. They do stupid mistakes while knowing fully well how stupid it is

They have many months of ever increasing Drawdown

So if it happens with you

You are not alone or incompetent
Forgive yourself, stop blaming your self and bounce back quickly by

Being patient with Drawdown

Its part of a trader's life, no one has ever escaped it

Its too naive to think trading account as fixed deposit where it will grow every month

Stop comparing with others as their
Strategy might be best for this kind of market, your time will come

Stop comparing as their risk appetite might be much higher.
A small story abt losses

In 2011, in my company, our bond desk, all five traders started making losses, every thing that could go wrong, went wrong, they took corrective steps and market became v shaped and then W shaped.

They hit dealer level stop loss, desk level stop loss
And then MD level stop loss was hit

Trading was halted on the desk for months, they used to come to office, drink coffee and go home

But the story is about, no one was fired, as in professional world, it's assumed that once in a while shit-hits-the-fan kind of loss will happen
And people and organizations are prepared for that.

So embrace losses and time Drawdown as u embrace unbelievable lucky streak.

Markets are like that, trading is like that.

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More from @AnandableAnand

9 Oct
Gratitude

A thread ;)

My mother cooks delicious food, just like everyone's mom

(Taste being a learned behavior)

+
So. Once when I was small kid, came back from hostel and late at night

I asked my mom to cook my favorite chilli paneer and fried rice among many things

She prepared it all and it was almost mid night and I was the only one there to eat food,

Like a hungry bear, I ate it all
And didn't say a word, was going to sleep,

My mom meekly asked me how was the food and if I liked it

I said it was "ok"

My mom gave me a lecture which I never forgot in life

She told me, whenever someone does something for u, never take it for granted, a little praise
Read 9 tweets
9 Oct
Most people have their 80-90% net worth tied up in real estate/gold or in their job

but they are overly worried about stock market

Because trading/investing addresses universal human instinct of gambling

identify and address that

Its a two part problem

+
Part 1:

If u are overly worried about a tiny part of your net worth, open positions or losses, its because of ego and gambling instincts,

you dont want to come out as a loser in any endeavour,
Thats why many losers pray and promise that once they recover the losses they will quit trading

A constant verbal and written reminder and talking to someone close to u like parents/spouses about it is the only way out
Read 6 tweets
9 Oct
Festival Special #brotip

If you like a girl in your classroom/office/dandiya/ganpati

go talk to her

Literally, she is waiting for you to talk to her.

And take her phone number in the first meeting itself,

there might not be a second meeting without a phone number

+
A beautiful girl, well dressed, is not waiting for the most handsome guy,

She is waiting for just average decent guy who can make a great conversation, and she knows that she has to talk to u to know if u are decent and/or can make a good conversation

+
so its all about breaking the ice, starting a conversation and not abt you being handsome and staring at her from a distance and secretly praying that she will come and talk to u ;)
Read 4 tweets
22 Sep
Managing long term portfolio

With very little efforts you can beat any mutual fund while being buy only long term investors,

First, why many mutual funds underperform the index on a long term average

1. they have to keep cash for redemptions, which gives little returns

+
2. They have to pay overheads like salaries, office expenses, sales and marketing expenses which is around 5-6% of the AUM they handle

smaller the MF, higher will be such % but bigger MFs have different problem
3. When market falls rapidly, like march 2020, they see huge redemptions as everyone wants to be out before others

So literally they are forced to sell their long term holdings because of short term market shake outs
Read 23 tweets
20 Sep
China’s credit market: as crisis unfolds #Evergrande

From 2008 onwards, to match projected GDP numbers of 10%,

china made 300 cities which are loosely called ghost cities of china

Video of Al Jazeera Is from 2009,

This growth of GDP was fuelled buy Chinese PSUs and state govts taking loans to complete these projects

These loans were short tenor loans with frequent refinancing. This was done to keep a tight control over their finances and operations without letting the credit risk spread
Later majority of these corporations floated bonds which also had implicit (important word) guarantee by the CCP (party)

Most such investments in a command economy are not productive, but who cares till GDP numbers look good and outside investors are in awe.
Read 20 tweets
20 Sep
I think both #nifty and #banknifty have made short term TOP

I see 15% correction from here from trading point of view

Long term view (2 yrs) is super bullish (just to avoid confusion)

Unless some short covering comes in last hour, I will go with simple Buy PE in both indices
As said above, going home with simple ATM weekly Put buy on both the indices

expecting a good gap down tomorrow
Squared off all index positions. Will wait for day low to be broken. Then will take a call. Today short covering might not come, it's going to be sell on rise for intraday
Read 4 tweets

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