Trade Your Way to Profits in this Volatile Market

Jun 18, 2020

Vijay Bhambwani, Editor, Fast Profits Daily

There is a saying on Wall Street. Trading profits are the most difficult, easy money profits you will ever make. Every trader knows that trading profits are not very easy to come by.

The increased volatility you have seen of late only adds to the stress that a trader experiences. The threat perception to your capital and the kind of hit that you can take to your trading account is not funny.

Yet we traders don't really have a choice. We must put food on the table 365 days a year for our families.

This video is about this critical aspect of trading. How do you handle the kind of volatility that you are experiencing right now in the financial markets and what should you do to profit from it?

Let me know your thoughts on the video.

Hi, this is Vijay Bhambwani and I'm recording this video still from my residence. This video is about critical aspect of the market. It's about a critical aspect of trading. How do you handle the kind of volatility that you are experiencing right now in the financial markets and what should you do to basically handle this kind of volatility.

There is a saying on Wall Street. Trading profits are the most difficult, easy money profits you will ever make. Everybody other than a trader knows that trading profits are not very easy to come by. Ask my wife, and she probably tell you that this guy has the easiest job in the world. He's fooling around on the keyboard and the mouse and out comes money from the computer.

Believe me it's not half that simple and increased volatility of the type that you have seen of late only adds to the stress that a trader experiences. The threat perception to your capital. The kind of hit that you can take to your trading account is not even funny and yet we traders don't really have a choice. We must put food on the table 365 days a year for our family. So withdrawing from trading or shunning the markets and running away from it is not going to help.

I'm not saying that you should trade even when there are no signals. Not at all. You must trade only when you're set ups. Justify it but trade. You will have to. Now you see, there are two ways you can actually make money. Let's split this down to two goals.

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I as a family of six me, my wife, my two super senior citizen parents and my two kids, hypothetically, would need about Rs 1 lakh among to survive. That means I must make Rs 1 lakh in 20 trading sessions, which boils down to approximately Rs 5,000 a day. Which means that after cutting in profits and losses on some days, I must, on an average make 5,000 bucks a day.

There might be some days where I don't trade. If I don't trade on day one because there is no set up, on the next day, I must make 10,000. That's all fair, which is easier than trying to make Rs 1 lakh on one day itself. Now that's a near impossibility unless you have a huge capital account but believe me, the pressure will be immense.

So now that we know that we must, on an average make 5,000 bucks a day, there are two ways you can go about making 5,000 bucks a day. Either buy 5,000 shares. Wait a for a buck and square up your transaction. You got your five thousand. Or you buy 500 shares. Wait for a Rs 10 move. There, you got 5,000 bucks.

Now the trick is in knowing as a trader, what kind of a market you're actually trading through right now. Currently, the kind of volatility that we're seeing, I would be a fairly certain when I say that intraday volatility has at least doubled as compared to what it was in February. So as we speak in June, the volatility or the intraday ranges both for the indices and for many frontline, almost a majority of frontline counters, is actually double.

So in this kind of a market where trading ranges are far bigger, it makes more sense to buy 500 shares, wait for Rs 10. Make 5,000 bucks. That kind of a strategy. I'm not talking of absolutely 500. You could basically do two 50s. You could do 1,000. You might even want to square up the transaction in Rs 5 and try and again. Do that again for another Rs 5 on 2,250 shares of 500 shares or whatever.

What I am telling you is that in the current market where the ranges are widening, the risk to your capital is far bigger. So play on small exposure and play for a bigger price movements. This is the single most protection that you can employ to protect your trading account.

I am assuming, of course, that you are right in the beginning of the day when you have decided what you want to buy or sell. At least the direction must be right. If the market is going to go up and you short, nothing can help you, not even small exposure. You will just wind up making a small loss, that's it. But the direction in which you must trade must be right. Otherwise you're going to lose money.

The other thing that have would suggest you do is enforce that your stop losses are predetermined and adhered to very, very diligently. You miss manage your stop loss, and you simply wind up setting yourself back by a couple of weeks. It's very difficult to build back a trading account, which has suffered a deep decline or a deep loss. Your capital is a holy cow. Try not to sacrifice it because it's your freedom to trade. No capital, no trading. It's as simple as that.

Should you actually freeze over with panic like a deer in the headlines of a moving automobile on the highway? Hey, absolutely not. Absolutely not. If you try to move out of the markets, do remember what I have often quoted in my other videos. Ships are safest in the harbour, but that's not what they are for. Well, traders are meant to trade. In times like these basically see to it that your capital protection, your capital preservation, your damage control and financial systems management is absolutely, absolutely disciplined.

As long as you stick to these rules, I think you're gonna be just fine. This volatility will not last forever because these kind of range expansions historically have seen a cool off sooner rather than later. We will be back to normal times again. That's when you can revert back to 5,000 shares for a Re 1 profit.

I will be making a video on this as soon as the market tone and tenor changes I will update you. On that promising note I bid adieu to you from this video. I will be back again in my next. If you're watching this video on YouTube, please do not forget to click like on this video. In the comment section, do let me know what you think about this video and what else you would want me to record in my future videos.

Also, don't forget to refer your family and friends to watch these videos and help me spread the cult of knowledge based investments. Vijay Bhambwani signing off for now. Take very good care of yourself, your trades, your investments, and your health.

Thank you for watching.

Stay safe!

Warm regards,

Vijay L Bhambwani
Vijay L Bhambwani
Editor, Fast Profits Daily
Equitymaster Agora Research Private Limited (Research Analyst)

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2 Responses to "Trade Your Way to Profits in this Volatile Market"

T K Kuruvilla

Jun 18, 2020

Very very usefull

Like (1)

Amrutlal Chhaganlal Shoemaker

Jun 18, 2020

09724331904 pls give me a Intraday equity stock .Fast profit profoliyo.

Like (1)
  
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