Meet our first trader, Rahul. Rahul focuses on day trading the Nifty Futures. Over the past six months, he’s been striving for consistent success in his trading endeavors. Unfortunately, his journey hasn’t unfolded as smoothly as he hoped. However, it’s not due to a lack of effective trading methods. Rather, Rahul’s primary challenge lies in managing his emotions and consistently making decisions that serve his best interests.
Right from the start, Rahul was brimming with confidence about his prospects in day trading the Nifty. His confidence stemmed from his prior success in another venture. As the owner of a retail printing company, Rahul had honed the art of making sound business decisions, leading his company to prosperity. Rarely did he stumble into significant mistakes that jeopardized the business. Over his nine-year tenure, he prided himself on maintaining a big-picture perspective and keeping the business on an upward trajectory. Even when faced with challenges, Rahul demonstrated a knack for swiftly resolving crises and often turned them into opportunities.
Given his track record of shrewd decision-making, Rahul was convinced he could seamlessly transition his skills into trading. Thus, when a tempting offer to buy his printing company came his way, he saw it as a sign to make a change. While he cherished the autonomy and success of running his own business, the relentless demands had taken a toll on his personal life. Working upwards of 65-70 hours per week left little room for quality time with his family, making the decision to sell a relatively straightforward one.
Additionally, Rahul was eager to explore a new venture. He had immersed himself in learning about commodity trading, devouring books and magazines to deepen his understanding. With confidence, he believed he could apply his proven business acumen to trading commodities from the comfort of his home, affording him more time with his loved ones. However, as Rahul soon discovered, the reality of trading would prove to be a humbling experience.
The second trader in our story is Ranjan . Ranjan also wanted to day trade the Nifty Futures. His background is a little different than Rahul’s . Ranjan has spent the last four years working at Brokerage where the Nifty Futures are traded by many of clients . But Ranjan was not a trader, He had basically job was to put in buy and sell orders for customers using when they used to call, From the first day Ranjanhad started working at the Brokerage House , he had always wanted to be a trader.
Ranjan spent as much time as possible trying to learn how people made money in trading . He was sure there had to be some very specific techniques only the real successful people were using. He certainly knew, like everybody else, that 80-90% of the people lost money trading. He was determined to learn what he needed to know so he could be successful when he started trading. He wanted to start trading as soon as possible.
Ranjan made a point of trying to meet as many successful traders as he could. He thought if he could figure out exactly what the successful traders were doing, he could model his own trading off of them. He spent every free moment talking to the various traders that he’d met and tried to find out the secrets of their success.
He learned a lot. He learned all kinds of different technical methods that the traders used. Ranjan had never traded a futures contract in his life. But the more he talked to different traders, the more his confidence grew. He was sure with the experience he was getting he would surely be a successful off-the-floor trader.
But he still needed one more important lesson
Rahul Trading Journey
Rahul began trading. He started with 250,000 in his account and decided he would only trade one contract at a time until he was sure he had the hang of things. Things actually started
off fairly well for Rahul . His first trade made 160 points (8000 before commission charges). Obviously, Rahul felt very good about his start. Unfortunately, things went downhill from there.
On his next four trades, he lost on all four. The problem was that Rahul had good profits on two of those four trades, but he failed to take them because he would look for a lot more than
the market was offering. So, in his first week, instead of making a small profit or breaking even with the four trades, he ended up losing the original 8000 and even another 1,2000 more. This
was very frustrating and confusing to Rahul .
He obviously needed to do a lot better if he was going to be successful in this business. But not to worry, it was only the first week. He certainly didn’t make a fortune his first week in the printing business. The next week started basically the same as the first. His first trade (on Monday) was another nice winner of 140 points (7000), but the downhill slide started again. Rahul did his next trade on Tuesday of that week. He got in and the market went his way about 120 points. Rahul knew if he could make 200 points on this trade, he could get back to even. So that is what he decided to look for in this trade. He put an order to get him out of the market with a 200-point profit. The problem is the market only went 150 points his way and Rahul did not trail his stop order to lock in a profit or at least move his stop to break-even. He really wanted to get that 200-point profit so he could be even, but the market came all the way back and not only took away the 150 points in profit it was offering, but also took away the amount he was originally risking when the market hit his stop order. Rahul ended up losing 4000 on this trade.
Now Rahul was very frustrated. Sitting at his desk, he considered throwing his empty ceramic coffee cup across the room at the wall. Luckily he resisted doing this as the thought of
getting the broom and dustpan to pick up broken glass didn’t seem like it would fix his losing trades. Nevertheless, Rahul was extremely frustrated and needed to come up with a way to fix
things.
Rahul thought about the difficult time he was having. He needed to come up with a way to get better results. He thought that maybe the indicators and methods he was using were the
problem. Rahul decided to find some new methods to trade with. He bought various books and courses on how to trade. Each time he went through these materials, he was sure
he would start having better results. The ideas and examples seemed to make a lot of sense to Him. Rahul decided to use some of these new methods in his trading and get rid of the old
methods he was using. He was sure it was the techniques he was using that were causing him to lose money. Unfortunately, it was not his methods that were causing his losses.
Rahul had lost over 70,000. His broker had forced him to get out of a position that was over 1000 points against him. Rahul wanted to stay in the position overnight to
see if it would recover. Rahul swore at his broker before he hung up on him. This time Rahul did throw his coffee cup across the room. It shattered against the bookcase and made a deafening
crash. His wife ran into his office to see what was wrong.
“What happened?” she asked, “What was that noise?” Rahul didn’t need to answer as she looked over at the bookcase and saw all the broken glass on the floor. She told Rahul she would
get the broom.
“JUST LEAVE IT!!!!” Rahul snapped at his wife. He couldn’t remember ever using a tone like that with the woman he planned on spending the rest of his life with. Without uttering
another word, she walked out of his office. Ten minutes ago, Rahul thought he couldn’t ever feel worse than he felt at that time. Now he felt worse.
Ranjan Trading Journey
“One of the most important things you can do is to set a daily, weekly, and monthly goal for yourself.” The way to be successful is to have measurable goals for yourself.
You must see yourself very clearly as a successful trader. If you can’t see yourself in your mind’s eye as a success, there is no chance you will become successful.”
Get the book Psycho- Cybernetics, it will tell you everything you need to know about visualizing your success. It’s the same method professional athletes use, but it’s really no different in our business. To be a successful trader, you must see yourself as a successful trader, even if it’s not true yet.”
Ranjan was getting above advices from one of the most successful traders he knew.
Ranjan continued to talk to as many successful traders as he could. They all seemed to say the same things. Goal setting was extremely important. Just trying to make money each day
(without a goal) was a road to failure. It seemed like almost every trader Ranjan talked with really stressed the daily goal setting idea. In fact, it seemed the more successful the trader the more they stressed goal setting. Ranjan made a strong mental note that if he were to be successful, he would need to have very specific goals as to how much he wanted to make each day, as well as how much he was willing to lose.
Ranjan learned the different visualization techniques and began to use them on a daily basis. Even though he had yet to start trading, through his visualizations, he had already started to see himself (in his mind’s eye) as a successful off-the-floor trader. This would play a big part of why Ranjan would become successful
Rahjan had opened a trading account and, continued to visualize himself reaching his daily, weekly, and monthly goals. In his mind’s eye, he kept
seeing himself finding opportunities in the market and taking advantage of them. He kept seeing himself trailing his stop orders to lock in profits and avoid having winning trades turn into losers. He kept seeing these images in his mind until they became crystal clear. He visualized his equity continuing to rise in his account. Not at lightening speed, but more at a slow steady rate. He felt if he could just get himself to make $250 each day, it would be a great way to start.
Ranjan began trading on Monday. He had his goal in mind. He had spent a lot of time over the last couple of months visualizing what he would do and how he would react in as many
possible situations as he could. In fact, he saw these things in his mind so often that he felt like they had actually happened for real. That really gave Ranjan a lot of confidence. Even though
he’d not ever traded before, he felt like he had traded thousands of times. It showed in his results.
Rahul’ very first day was a success. He’d made only one trade and made 2750. He considered trading more, but then remembered that his goal was to try and
make 2500 a day, and doing another trade could make him more money, but it could also cost him the money he’d already made. He decided to just paper trade the rest of the day and keep his attained goal intact.
One of the most important lessons Rahul had learned was the reason people were successful in this business was because they were able to find the ability to act in their own best interest. He knew that hoping and praying the market would move in a certain direction certainly had no bearing on whether the market actually did move in that direction. No, the thing that made people successful at trading was when they did what was in their best interest to get winning trades and avoid losing trades (or at least to keep the losing trades small).
For instance, Rahul may have wanted to make 250 points on his next trade, but if most the market is offering at the time is only 150 points, then it’s obvious no matter how much you want 250 points in this trade, the most you can possibly attain is 150 points (and probably not even that much). You can ’t force the market to do something. You can’t control the market to
do what you want. So you must control yourself to do what is in your best interest.
Because of Rahul’s exposure to so many traders who understood that idea, it wasn’t very difficult for him to act that way too. It wasn’t easy, but it was probably easier for him than it
would be for most others. Because of that fact, Rahul’s trading did very well over the next several weeks. He consistently made between 10000-14000 a week for his first month.
Sure, just like anybody, Rahul had some losing trades and made some mistakes. When Rahul did have a losing trade, he would visualize in his mind what he could have done
differently to make the trade a success or to make the loss even less. He would see in his mind what he should do the next time the situation presents itself. He would do this with his winning
trades also. He would think of ways he could have managed the trade better, and then see that picture in his mind over and over again.
Consistently doing these things helped Rahul to make over 150,000 in his first six months of trading. He kept his goal clearly in mind and did what was in his best interest to keep moving
towards the goal.
Did it work perfectly? No, but it worked well enough to get him on pace to making the same amount of money he was making at his old job. But now he was doing it the
way he wanted to do it, by trading for a living from home.
Rahul was not as lucky as Ranjan . He was not exposed to people who could teach him the lessons that Ranjan had learned. Because of that, Rahul decided that trading was not going to work out for him. He’s now back at the printing business again. He still dreams of trading. He probably could be successful at it if he only learned to act in his own best interest. But he never did.