Wednesday, December 19, 2012

2 trades eating all the profits

Stock market is a profession where you would be learning a lesson on daily basis. I guess this is one of the reasons why I'm staying humble in my life. For the first 15 days, I made 25% gains on my capital. I took one big position and from then I was not able to manage it. Just imagine two trades wiping out your 25% gains. This is one of the biggest blunders I’ve committed in my trading. Couldn’t digest what I’ve done with the trades. I know that I should cut my losses. I guess I should go back to school and learn how to maintain discipline in my trading.


Never take a position that is not possible to manage.

Always think negative once you take your position. 

I’ll explain both these lessons. Managing a position is important in stock market. One should have reasonable control over position. We should make sure that we shouldn’t afford to lose more than 2% of the capital (Total Capital). In my case I was just complacent ( 25% profits in less than 15 days) and took a position that instantly became out of my control and didn’t had the common sense to book the loss once I saw the weakness in the particular position.
If you didn’t have the inclination to book loss then you’re preparing for the disaster. This is one of the biggest lessons I learnt in this month. I have taken a vow not to do these kinds of trades in my life time and I believe I wouldn’t do that in my trading.
It is important to develop negative thinking in trading. I know I would receive some rants, but let me explain the thesis behind this thinking. If a trade goes according to our plan then there is no problem for us to make money in the markets. Only when it goes against us, we should have a strategy to manage it and comes out with minimum loss. I’d recommend traders to always think negative about their positions and dig deep into the negativity to find solution for the problem. I didn’t have this negativity and as a result I’ve given up all my profits I made in just couple of trades. It’s a pain and I’m feeling like an Ass****!

Friday, October 26, 2012


One of the sucker stories in my trading career (My job at Muscat, where I managed $25 Million and supported almost $600 Million). If someone speaks with me, they wouldn't believe that I've made such a pathetic trade in my life. But that’s the beauty of stock markets. You never know until someone really discloses their real position. Here it is –Enjoy
I guess I took a large position in Ultra short. Ultra short on basket of ETFs – I’ll name them – SKF, SDS, DXD, SMN and that’s it. Before going into story I just want to explain why this would become a loss making trade even before taking a position.
All these Ultra shorts are completely asymmetrical trade and it’s identical to buying deep out of money calls in which call price remain same despite rise in the prices of shares. If markets go down, all these ETFs would go up twice and vice versa. If markets go up it surprisingly goes down too much and it was not at all designed properly by the issuers.
I’d rather prefer to short than going long on these kinds of instruments. Well, now coming into the point.
I took total of almost $700,000 position (Managed $25Million) in the mentioned ETFs. My superior (Manager) is completely against shorting the market ( Well he is actually an Ultra bull who completely missed 2008 downturn as well 2009 raise of the markets) and he was rightly critical about my trade. In couple of day, position was up by 5% and he asked me to book the profits (He was right, but I didn’t do that). I kept that position and eventually went on to keep and saw my position value bleeding by more than 30% in couple of months.
In the mean time, I was right in my short call of EUR/USD at 1.51 and rightly predicted the problems of Europe and asked him to take position in couple of structured instruments (Please check for the meaning of structured instruments). He didn’t took that because I got wrong in Ultra shorts and he took some position which he didn’t disclose properly ( He is one of the worst person to work and that is the reason why I left the job, despite performing reasonably well and I’ll put that in a separate write up) and he didn’t took the position. In January 2010, problem in Greece happened and markets sold off and my ETFs got into the place where I bought before couple of months (Break Even point in simple English).
From November and December I asked him to take lot of positions in stocks which he took but didn’t disclose properly to me. I asked him to take position in Apple around$200, Amazon around $100, basket of Agricultural stocks (I clearly predicted Terra as a takeover candidate and it was taken over by CF industries in the month of Jan, 2010) and other possible takeover targets and other stocks. He took that but he didn’t disclose me properly. He screwed me right and left for my ultra short position and he keep on saying that till I put my papers (I made huge money on McDonalds, and almost all Agri stocks, Broadcom, Amazon, and most importantly in Apple for my organization) from the organization.
I was carrying the position for another 4 months and there comes May 2010. I was seeing few erratic movements in the market and I predicted a knee jerk reaction (didn’t discussed within organization but to my close friend) in the markets. Charts also seem to validate that event. There is a technical analyst in our organization and I discussed with him and sent a write up asking him to take further position in that for a short time.
On that day he simply blow down my confidence (Despite that I was confident) by filthy words and he was not interested to add any positions. D-day came and Dow crashed 1000 points (Flash Crash), but nothing happened in my account.


1.     Don’t make asymmetrical bet without understanding the underlying instruments
2.     Always use stop loss irrespective of your confidence in a particular trade
3.     If you get opportunity to minimize the loss and get out of the trade, use that opportunity and exit from the trade.
4.     Don’t let your manager to talk about other trades that are no way related to new bets you are making for the organization. Say FUCK OFF in his face, if not it would affect your performance.
5.     Ask for transparency in the bets you’re making for the organization. Ask for complete P&L with your manager (Don’t adjust with him in this regard. I did that, but eventually I thought enough is enough and quit the company).
6.     Don’t work under Lucky Fool (My manager is a lucky fool than intelligent loser).
7.     If you didn't follow the above six lessons, your bonuses and performances would be swallowed by your so called Manager whose primary aim is to screw his subordinates and put the trades in his own name and make money only for him.

Note: I felt deep pain while writing about this particular incident. I dreamt of conquering world with the job I got in Muscat. I really thought I could do lot of things and make money for myself and my organization. I really worked very hard and made lots of money (This Ultra short is the only losing trade- This is the real truth and I could give references) for my organization. Despite my hard work, I've been literally screwed by my filthy manager who cheated everyone who worked for him. I’ve lot of failures in my life and I’m planned to pen down everything in this blog. I believe that this one is failure in a victory. Yeh, I made money for my organization, but not recognized by the members of family office and  on top of that my performance bonus got swallowed by my manager. 

Thursday, October 25, 2012

How I lose 90000 bucks in Unitech

Unitech is one of the biggest losses in my life that really devastated me in 2006. I believe I lost almost 90000 (89500 is the exact amount) in that trade. My broker was Kotak Securities. I still remember that day. I was at Chennai. I bought 500 shares while Unitech traded after split and bonuses and was around 350 bucks. On that day it went to upper freeze, got released and was trading down a percentage point. I bought 500 shares at that time and at lower freeze I bought 300 shares (Don’t show a fucking urge to average your losers-Important lesson). I owned almost 800 shares. From that day Unitech continuously opened at lower freeze and it continued for almost a week and Unitech was trading around 180 bucks while I returned back to my home town to pay my margin of more than lakh and half to my broker. They thought I ran after that day (I remember a guy who got abscond after losing 5 lakhs in 2006 crash). Luckily for them, I’m a decent guy who really wants to pay the dues and continue to pay tuition fees to the market to make a career in stock markets. Despite paying one and half lakhs I was in debit and pressure was made to cut the portion of the shares to pay for them. If you are real loser you would blame Kotak securities, but I still remember of not making any complaints against them for their pressure (Even today I couldn’t believe that I showed that kind of maturity despite doing sucking trade) to pay their margins. I asked their permission for 3 more days and they gave me that and eventually booked my losses at 215(215-220). A week after booking my losses Unitech was added in futures and from there it started to rally and it eventually crossed than my buying price of 350. What an irony? I lost 90000 bucks in that trade.

1.    Have an idea on stock which you want to buy. Idea doesn’t necessarily mean knowing all the fundamental stuff and technical stuff. Idea means atleast a price movement of the stock.
2.    Don’t rush to catch the so called momentum stock. You know what was in my mind. I thought Unitech would continue to put more upper freezes and I planned to sell after 3-4 upper freezes by making a leveraged bet. Even now I can’t stop laughing about my idea of entering into that trade.
3.    Don’t make leveraged bets without knowing stuff (Even now I make leveraged bets).
4.    Don’t blame your broker or dealer for your sucking trade (Candidly speaking this is one of the thing that I’ve never done  in my entire career). I have seen people doing this and I really feel sorry for those dealers.
5.    Don’t bet on your own imagination. This is one of the worst things you could do in stock markets.
6.    Don’t predict on direction of the stock. If someone says that they are making predictions on stocks, be wary to work with them.
7.    If you are operating in Indian markets, try to put stop losses on momentum stocks that are having price limits (stocks that are not in futures) in trading.

Wednesday, October 24, 2012

Blogging helps to learn

I'm not proficient in English. Despite this problem, I'm trying to blog about my experiences in my career as a trader. I'm planned to update my blog on continuous basis. If there are any readers they would definitely be entertained to read about my failures that are really laughable for experienced one in markets. I believe I'd be able to bring entertainment value for learned gentleman who read my writing(If at all if someone really read my blog). I believe that blogging would help me to learn more about trading. In order to learn more I've planned to update my blog on weekly basis. I'm going to write my spectacularly wrong trade on Unitech which was made in 2006 that helped me to lose 90000 bucks.

Tuesday, August 28, 2012

I've got a good news for me

With the help of my friend, I'd be able to manage money for funds (I'm currently doing for US markets, but got chance in Indian markets) to invest in Indian Markets. I have got some tight agreement to sign that gives guarantee on investments. I've to accept to that agreement since I'm a starter and there is no other way for me than accepting to this agreement. I've got so many strategies and I've infact followed all those strategies now for the accounts of my friend (which is around Rs.4Lakhs). Most importantly I've made profits using those strategies. I made some calculations and come out with the possible profits and chances of losses and how to minimize those and come out with profits. I have agreed for 12% guaranteed return to my investors. It doesn't matter whether I make or lose money I'm suppose to return 12% to my investors. I did that and I might be signing contract within a fortnight with pool of investors. If possible, I'd probably scan those agreements and display it in this blog(with the permission of those investors, if not permitted not possible).  I guess this would be a start for me in India. I'm also speaking with few investors. Let me see who would bet on me. I'm a starter and don't have much credibility to show it to my investors. Let's see how things move from here.

Sunday, June 24, 2012

Trading is not easy

Last week is really really hectic. I've been reading, reading and reading lots and lots of things. I learned that Trading is not that fucking easy. I thought that intelligence could work in markets and I've been proved dead wrong. I've to caution everyone about trading. If you're an IIM  or Harvard MBA or from Wharton School of Business there is a huge possibility that you could lose lot of money in trading. There is no doubt that you'd definitely be smarter than others. Unfortunately Markets doesn't care a shit about you. That's the beauty of markets. If you ever think that having an MBA from premium school matters in trading, then you'd lose more since your ego would makes you to lose lot more than mediocre traders (like me). I don't have intelligence to have boat load of egos with me. Atleast this could be helpful for me to cut my losses, since I won't be having problem to admit that I'm wrong. But wait, have I done that in my trading. Honestly no! I've waited waited and waited to see some of my stocks going below 30%-50% of my initial buying price. I've to admit that I'm a complete asshole in managing egos. Now after so many tuition fees ( Losses in stocks) I've somehow ( that's true, still not completely) adjusted and cut my losses within 5%. This is really working. I've been saved by big fall. This is true. A trader who takes early losses would sustain for long period of time. I'm amazed when I saw this working for me. I don't care for others. I'm talking only from my point of view. Cutting losses earlier is really really working for me. Now I'm trying to become a trend follower. Initially I was laughing about others who speak about technical analysis (Still I don't believe in lot of technical analysts,since most of them are big failure) and trend following. I learned in a hard way from my own experience. Trend following really works. For that you should concentrate only on fucking price and not about other opinions. Another important thing is shedding ego. This is not taught at B-schools and at least world is not flat as thought by IIMers, Harvards of this world. In Trading everything is same, it would remain same for years to come. Everyone are equal. You could be a drop out, An MBA from world class B-School or a PhD in Quantum Physics,but markets doesn't care a shit about who you're and what is your qualification. It would continuously do what it wants to do irrespective of your opinions. Trading is not easy. Will be continued...., 

Saturday, June 9, 2012

What is my credibility?

Credibility is most important for anyone to give advise in stock markets. Anyone can write about anything about stock markets. At end of the day is the person qualified enough to give the suggestions or advise is what a wise man think about the suggestions he read from the sources.

What is my credibility?

I started my trading in the year 2006. BSE crashes 1000 points in the first month of my trading history. I witnessed 1000 points collapse in my first month of my trading career. I didn't lose money because I didn't had any positions.

2006 is losing year. I lost 7 lakh rupees in that year. My most unforgettable loss is Unitech. I lost around Rs.60000 in that trade. I'll write this in another post.

2007 is my 2nd year of my career. I lost 6 lakhs in that year. I clearly predicted financial crisis, but was bit earlier to short the market. I took lots of put options and eventually lost lots and lots of money.

2008 is my 3rd year of my career. I made huge bucks in that year by simply shorting the markets. September and October are important months of the year that gave me huge bucks and I covered all my previous losses (13 Lakhs in 2 years) and was infact in profits in my career as a trader.

2009 is a block buster year for me. I simply watched Nifty rallying from 2500 levels to 3000 without doing single trade. I was preparing for May election trade. I made trade of my life and made a blockbuster return in a single week ( bought a house on the trade without any loan) . After that I went overseas to manage money for a family office.

2010 is no trade year.

2011 lost almost 5 lakhs (Despite this 5 lakhs loss, I'm still in huge profits in my trading career) in trading. I lost almost 2-3 lakhs by shorting Gold.

2012 - No trade . I'm yet to trade because I've invested my money in Real estate. The trades which I've mentioned this year are all done for my clients (All are friends) and I've not made any personal trade for my account.

If I look into my history I've to admit that I don't have any fucking credibility to give suggestions or advise to anyone in trading. I'm not giving it to anyone. I knew that I'm unfit to advise but I'm fit to learn lot of things in trading. I've read more than 25 books in this year alone and all are real gems.

Examples : Jack Schwagger - Stock Market Wizards
Buffettology, How to be a stock market genius and so many books on trading. I'm still planned to read lots and lots of books.

Hope I'd be able to learn and become qualified to help others ( I don't like giving advise, because I know that I'm unfit) in trading. 

Make no Mistake - I don't have Credibility!

Tuesday, May 22, 2012

Shankar Sharma Used Media to exit his holdings

Shankar Sharma is one of the famed broker of First Global who has various predictions that made him an iconoclastic or celebrity among informed traders. He rightly predicted New Highs of 2008, and again the crash of 2008 , Sell call on PSU Banks and you name it he has done most of the things correctly.

Jan 13, 2011 Interview on Market Correction

Markets could fall by 10-20% in 2011: Shankar Sharma

Recently he (January) appeared in Television channels and made a propaganda that Indian Markets could go new highs and INR could come around 45 bucks against USD and he added that India Macro is great. I'm one  of the guy who believed his words, but fortunately I didn't invested in Markets. I'd say that its purely because of luck that I didn't entered the markets because the investment which I intends to invest is (currently) locked in Real Estate ( Thankfully with nice profits- Again Lucky than my intelligence).

This is Recent Interview with ET: 

Shankar's big call of INR Appreciation - Jan 22, 2012

Shankar Sharma's big call for 2012: A strong rupee, 45-46 to dollar

Indian GDP outpacing Chinese GDP - Feb 27, 2012

This is the stunner

If Shankar Sharma believe that markets are going to go for new high why in this world he should unnecessarily concentrate on new biz that would take time to become profitable. This could be tricky question or else it could be unrealistic question, but Shankar needs to answer this question to all his viewers.

Well, my key take away is IN STOCK MARKETS EVERYONE HAVE VESTED INTERESTS. There is no room for sentiments. Markets are meant only to make money and we should never, never believe in the words of anyone irrespective of his/her credibility.

I've not lost money in the markets. But I've been blinded (I've to admit this) by the views of this guy whom I'd great respect. Here is the guy who said that markets would go new high, but is winding up the business and getting hell out from the markets and he still believes that listeners should believe his words.


Monday, April 23, 2012


My position in REC is vindicated. I know, I know what was your thinking. This is suppose to be a blog about mistake and how come I'm writing about winning position. Yeah, there is a glitch in this. I didn't took huge position in REC and my profits are not that big. This is one of the biggest mistake I've made. Despite seeing the momentum I didn't bet big and eventually end up making only small profits. This is not accepted and its poor trading strategy.

Tuesday, February 28, 2012

I missed blockbuster Nifty Rally

Haha, Another biggest mistake. I missed blockbuster Nifty rally. I was actually long Nifty around 4590 and booked my profits at 4710 and waited for a pull back. Again I entered Nifty at 4895 with hedged position and booked my profits and covered my shorts in call option and eventually lost money because of hedged position. Again at 5300 I enter into nifty with a bang by buying call options of SBI, Axis Bank and ICICI Bank. I was holding big long position in PFC and REC. I prematurely booked profit and wasted the opportunity and in that process I almost lost making more than 3 Lakhs (Actually made a small profit of 50k, but it simply compensated my earlier hedged losses that I made by writing call options). I believe that this rally clearly has legs and I personally believe that Nifty could make New High. Let me see whether I could make profits. I'm long in few positions that are very high beta names which I've never gone before in my life. Those are infrastructure names and I'm really afraid to hold it but still holding it in a belief that I could erase all my previous mistakes. Let's see what happens?