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Why Strategy ?

  • Most of the people start trading in FNO with less capital say Rs. 1 Lac or 2 Lac and the result is Loosing of capital. The question is Why this happens ?? The first thing is that FNO is developed for hedging risk not what a normal retail trader does. The margin required to trade is very less say Rs. 60k to 80 k (Brokers provides intra-day exposure say 10x 14x n all) This leverage increases unnecessary risk and the person who is having less capital end up with losses because of non-management of capital.
  • Now again, If you are taking stock future positional trade suppose you are paying full margin for 1 Lot (Say up to 1.5 lac) and taking overnight position IF big Gap UP or GAP Down happens against your direction you will end up with huge losses. Instead of earning 8k to 15k expected profit you will have to pay 10 Lac or 12 Lac.
  • Most of the people think to become milliner overnight. Many of the people following free telegram channels to earn money in stock futures, index options etc. But the thing is that these people generate commissions on brokerages from your trades and even if you earn or lose they get commissions.
  • Many of the people going through many websites paying advisory fees, coaching fees at various places but still never reached They pay 5k to one website again after 2 months 10k to another website again after 2-3 months 20k to another website along with the capital loss of more than 4-5 Lac because of following bad advisory; to a solid conclusion everybody is thinking to get something better at less price.
  • Lets See an example if I have 500 clients I will say to 250 people BUY and to remaining 250 people SELL. One one side hits SL another side reached TARGET. This is how going on !! In reality, No advisory is bad as per above example but no body understands it.

"Strategy is Logic to Build a Plan


  • So if you have capital but no skill—the result is ‘loss of capital’. Slowly but steadily you lose whatever capital you can afford to lose every month. As long as you do not realize this fact, upgrade skills, and fill the knowledge gaps — the results will be the same.


  • Many come across people who say I have lost ‘this much’ so far because of lack of experience or any reason. The point is even if you give them capital afresh, forget about profits they will not be able to protect this fresh capital also despite having experience now!!


  • So it all boils down to only one point: Whether you have a Strategy, Skill or a comprehensive trading plan to make consistent profits and justify the time spent on the stock market.


  • Strategy takes care of this. It is like a Train put on a Track



  • When we are talking in terms of Statistics and Probability. The strategy must take care for 1 Sigma for options premium to decay i.e. limit of (-2 to 2) by taking into account the normal distribution and with use of Monte carlo Simulations we always try to optimise payoff.


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