I started my journey 5 years back in stock market and I had my ups and downs. Like, most people I was also trying to find the holy grail but the truth is there is no holy grail.
First year
I came to know about the biggest and successful investor of market "Warren Buffet". He uses a fundamental approach for investing. Started using his philosophy of value investing using p/e ratio and read books from Benjamin Graham. Made some wrong calls as I was trying to catch the bottom and didn't use a stop loss as I was doing a value investing.
Then, started reading the books on how to read the balance sheet of a company. This also didn't help as there were a lot of companies and how many balance sheets can I read and I couldn't make much sense or fruitful decision out of it.
I think as a retail Investor it's hard to do "value investing" as you need to look at lot of factors. But, some people are still making money using this approach and I am not denying that.
"If you had spent Rs 55,000 to buy a Royal Enfield motorcycle in 2001, you would now have an old, rugged bike. But if you had invested the same Rs 55,000 in shares (at Rs 17.50 per share) of Eicher Motors, the company that makes Enfield bikes, your investment will be worth Rs 6 crore now."
Many companies like Asian Paints, Maruti, Tata Motors, Tech companies, Pharma companies would have made the money for you and they can still make.
Second year
Came to hear about Technical analysis i.e. reading from the chart and joined some forums like babypips, elitetrader, traderslaboratory and traderji etc. I started learning about support and resistance, bullish patterns, bearish patterns, trend lines and these things were making sense, I also read from the books like Steve Nisson candlesticks and tried to read Albrooks books and his lectures but couldn't understand. But, these things were just making sense and not money.
So, I went to the next stage of technical analysis and started learning about indicators stochastics, RSI, williams etc. They sometimes worked and sometimes they didn't. After that, I started mixing multiple indicators as I thought it if two indicators will agree on the same thing, then it's a high probabilty trade. But, that failed as the indicators were showing the similar characteristics. Started learning about EMA crossover, Bollinger bands, ichimoku trading, cowbunga trading system and a lot more systems and applied them over the charts. Now, everything was visible on the chart just not the candles. That also didn't work out. I also went through a lot of methods mentioned on forums with which people were making money.
So, finally I thought market is not for me as almost 95% of the traders lose money and I am one of those. I went onto made some investment in mutual funds which are giving me good returns today.
Third Year
Started focusing on my career and didn't look much into markets, I was making investment through mutual funds only.
Fourth Year
Totally out of touch.
Current Year
Came back in Feb. Made some investment in stocks which were really down and made some money. Started reading about technical analysis again and still I was not successful. I thought the problem was not with the strategy and it was with my psychology. So, I started reading about it but that also didn't help as the problem lied with the trading methods I was using and they didn't had an edge and I didn't back test them properly. Started going through the threads again of traderji, got some hard-copy of threads and I tried to see where would I trade and compared with them. I gave some serious thoughts to risk management and money management. Well, not much to money management as I am trading with a low capital.
I went back to indicators again but left them within a week as they didn't work out for me. Stochastics is still there but I just use them for looking divergence.
Now, I look at pure price action and also a 21 EMA/SMA is there on my chart. I go with the trend and things are making more sense to me now than my initial years. I sit with patience now and only takes the trade which gives me a good risk reward ratio as I believe on low risk reward the market won't move in that direction as smart player will not take that trade.
We need not only learn but we need to apply it too.
I feel like I am on to something good now and I can make money. May be again, I am still in one of the phases of learning. I am also learning to invest in fundamentally sound midcap companies these days.
Learning to trade is a hard process as you have to go through a lot of failures. You need to practice only one thing in market and become master of that. As Bruce Lee said "I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times." We need to practice only one trading style and follow that but first you have to find out what suits you which can you practice 10,000 times.
Thankfully, I played with small money in my initial stages, I will increase the capital once I see consistency in my profits. I hope I will be successful one day.
First year
I came to know about the biggest and successful investor of market "Warren Buffet". He uses a fundamental approach for investing. Started using his philosophy of value investing using p/e ratio and read books from Benjamin Graham. Made some wrong calls as I was trying to catch the bottom and didn't use a stop loss as I was doing a value investing.
Then, started reading the books on how to read the balance sheet of a company. This also didn't help as there were a lot of companies and how many balance sheets can I read and I couldn't make much sense or fruitful decision out of it.
I think as a retail Investor it's hard to do "value investing" as you need to look at lot of factors. But, some people are still making money using this approach and I am not denying that.
"If you had spent Rs 55,000 to buy a Royal Enfield motorcycle in 2001, you would now have an old, rugged bike. But if you had invested the same Rs 55,000 in shares (at Rs 17.50 per share) of Eicher Motors, the company that makes Enfield bikes, your investment will be worth Rs 6 crore now."
Many companies like Asian Paints, Maruti, Tata Motors, Tech companies, Pharma companies would have made the money for you and they can still make.
Second year
Came to hear about Technical analysis i.e. reading from the chart and joined some forums like babypips, elitetrader, traderslaboratory and traderji etc. I started learning about support and resistance, bullish patterns, bearish patterns, trend lines and these things were making sense, I also read from the books like Steve Nisson candlesticks and tried to read Albrooks books and his lectures but couldn't understand. But, these things were just making sense and not money.
So, I went to the next stage of technical analysis and started learning about indicators stochastics, RSI, williams etc. They sometimes worked and sometimes they didn't. After that, I started mixing multiple indicators as I thought it if two indicators will agree on the same thing, then it's a high probabilty trade. But, that failed as the indicators were showing the similar characteristics. Started learning about EMA crossover, Bollinger bands, ichimoku trading, cowbunga trading system and a lot more systems and applied them over the charts. Now, everything was visible on the chart just not the candles. That also didn't work out. I also went through a lot of methods mentioned on forums with which people were making money.
So, finally I thought market is not for me as almost 95% of the traders lose money and I am one of those. I went onto made some investment in mutual funds which are giving me good returns today.
Third Year
Started focusing on my career and didn't look much into markets, I was making investment through mutual funds only.
Fourth Year
Totally out of touch.
Current Year
Came back in Feb. Made some investment in stocks which were really down and made some money. Started reading about technical analysis again and still I was not successful. I thought the problem was not with the strategy and it was with my psychology. So, I started reading about it but that also didn't help as the problem lied with the trading methods I was using and they didn't had an edge and I didn't back test them properly. Started going through the threads again of traderji, got some hard-copy of threads and I tried to see where would I trade and compared with them. I gave some serious thoughts to risk management and money management. Well, not much to money management as I am trading with a low capital.
I went back to indicators again but left them within a week as they didn't work out for me. Stochastics is still there but I just use them for looking divergence.
Now, I look at pure price action and also a 21 EMA/SMA is there on my chart. I go with the trend and things are making more sense to me now than my initial years. I sit with patience now and only takes the trade which gives me a good risk reward ratio as I believe on low risk reward the market won't move in that direction as smart player will not take that trade.
We need not only learn but we need to apply it too.
I feel like I am on to something good now and I can make money. May be again, I am still in one of the phases of learning. I am also learning to invest in fundamentally sound midcap companies these days.
Learning to trade is a hard process as you have to go through a lot of failures. You need to practice only one thing in market and become master of that. As Bruce Lee said "I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times." We need to practice only one trading style and follow that but first you have to find out what suits you which can you practice 10,000 times.
Thankfully, I played with small money in my initial stages, I will increase the capital once I see consistency in my profits. I hope I will be successful one day.
