Get Started With My Cash Calendar

Hi, this is Vijay Bhambwani and in this video I'm gonna do a post-mortem of how we did some things, something as amazing as having a track record of 12 months of consecutive winning trades.

This is not about boasting. This is not about bragging, but I am going to dissect the trades and see what really happened out there to give us this kind of a success and what we can do in the future to ensure that this track record is maintained.

So I hope you're enjoying your trading so far and you also learned a lot about what the markets can teach you in terms of statistical analysis from what I post on Equitymaster's Telegram channel every evening post market. If you haven't already joined that telegram channel and would strongly urge you to do so immediately, it goes by the handle Equitymaster Official.

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So one of the first things that a successful trader does is maintain a trade log or a trade journal. I maintain my trade log in an electronic format in Microsoft Excel because it allows me to toggle a lot of data and make comparisons both linear and oblique.

So when I was sitting down with my Equitymaster team and sitting at my end and analysing what we did, why we did, and how we could do even better, the one thing that struck us from the trade log was that when we started out in the month of April 2019, we had a sort of okay start.

But thereafter, right till the month from May 2019 to August 2019, we had a mediocre performance, and we ran up losses.

From September 2019 to September 2020, call it what you will all in a milk run, call it a dream run, call it boundary after boundary, call it what you will, we had a winning streak. I am quite willing, as a matter of fact, more than willing to admit that luck also played its part. It cannot be sheer intelligence that a trader makes no losses in 12 months. It is also partly due to luck and the gods of the markets were kind to me.

But the one thing that struck out and in the trade log, by the way in the trade log I also write the reason why the trade was entered. The kind of detail that we go into the trade log is amazing. It's simplicity by itself but the details, even if you were to pick up this trade log and check back your trades 20 years ago, it brings back to life all the memories as to why and what you did, what you did, what went into the trade.

So the thing that struck me the most was that from May 2019 August 2019, we actually went against the cyclicality of the market. You see each commodity, currency, equity derivative, script that is traded on the exchanges, has it have its timetable and when you play at the proper time, in the proper counter and in the proper quantity with damage control or financial capital management techniques, the probability of you going right is extremely high.

Unfortunately, we or I, the buck stops here, I took a few liberties between May to August 2019, with that calendar, with the cyclicality, and we lost money. By end of August, I was myself getting quite perturbed about what my subscribers would be thinking of me as a trader.

The feedback, of course, was to a very large extent, unhappy and we were burning the candle on both ends to see what we can do to improve. Sometimes success comes from adhering to the simplest of rules.

So we basically went back to this calendar and saw to it that from September 2019 onwards there was no trade that was being taken, which was against the grain of the cyclicality and this cyclical schedule I call my clash calendar. I sought a way that the trades were in the direction of where my cash calendar was indicating.

Does it mean that you miss out a few trades? Yes. If you miss out on few trades, what have you missed? You have missed making a profit but if you take a trade at the wrong time, what happens? You raise the probability of a loss.

Which is why, in the recent past it would appear to a couple of my subscribers that I have deliberately missed out on a couple of trades but it was a deliberate give it a miss action. It did not go with the cash calendar.

For example, natural gas. The ideal time to get into it, provided the time and the price are correct is around Christmas. Any trade you take before that could prove to be premature. For example, any trade you taken industrial metals in the winter could be premature. Summer is a better time to big exposure to industrial metals.

If you been an Equitymaster subscriber of either the Fast Profits Report or the Weekly Cash Alerts, you would have received a Fast Profits Blueprint. Now, this blueprint breaks the year into 12 the months and tells you which commodity is tradeable or best traded in which month.

I call this my cash calendar. When I trade, I take into account a lot of other things like screen reading, technical analysis, statistical analysis we follow my own in house, the statistical model, a very small portion of which, as an output turned out, in graphs, charts, and tables is put out on Equitymaster's Telegram channel, which is why I suggest you join this channel.

So that learning from this video is not about I told you so. It's not about bragging. It's not about boasting or counting my brownie points, but the point I want to share with you is get organised, write your trade log and see to it that the cyclicality of each and every counter that you trade is being followed to a T.

Now this cash calendar can actually make all the difference to you. Just do a simple exercise in basic maths. What if you were to increase your profitability 0.01% day after day, day after day, day after day? What would be the net worth after more than 220 or 230 trading sessions that are present in a year? How much profit would you made over the previous years as compared to your own profits or the profits of the next guy?

So improving small bids at a time but consistently using the simplest of tools like the cash calendar can ensure that your profitability is consistent.

Second, the second lesson to be learned from this video is no matter how big the losses are, I ran up some pretty big losses between May to August 2019. By 31st March 2020, I had reported a 42.95% net profit on capitol deployed in all the trades.

So the second lesson is no matter how big is your loss in trading it can be recovered, provided you do the right thing, at the right time, and in the right trade bet size.

All is not all is not lost, even if you have born pulverising losses. If the market can take away huge amounts of money, it can also give you huge amounts of money back in equally short periods of time provided you know what to do and when.

This is my 360 degree world view of the market. This is what I call a behavioural approach to the markets and it is based entirely on my cash calendar.

On this optimistic note that you can and do have an excellent future trading the markets for a living, I bid goodbye to you in this video not before reminding you to click like on this video and subscribe to my YouTube channel if you already haven't done so. Click on the bell icon so you get alerts for future videos. In the comments section, do let me know what you think about this video and what you would want me to record in my next.

Also help me reach out to fellow like-minded traders looking out for a 360 degree world view and a balanced approach to the markets by referring my videos to your family and friends.

Do take very good care of yourself, your health, your family, your friends, and investments and trades. Have a very, very profitable day ahead. Vijay Bhambwani signing off for now. Thank you for watching me.