Welcome to my StockTrading Notes #drumrolls# 🙂
The idea for this blog stemmed in October 2018, when I stepped into the 4th decade of my existence. I have this habit of falling into an introspective mode to reflect on the year that has gone by and plan for the coming year during the week of my birthday. This time around, the reality of getting into my 30s gave me a bigger canvas to do the same for a larger life goal.
The whole point was to arrive at an answer to the question:
“What do I want to achieve in the next ten years, outside of my current reality?”
Answering this question helped me narrow down my goals for the next decade to the below:
- Learn more about stock trading
- Learn to Play Guitar and be a part of a band
- Pick up Japanese Language
So here I begin with a little step towards my first goal – Learning to trade in the Stock Market!
So you might wonder why stock trading?
Although I had an entire paper on ‘Capital Markets’ during my graduation and many my friends were actively investing in the stock market during our Post Graduation in Management, I was always averse to the idea of fiddling with the stock market.
It was predominantly due to years of lousy repute from people who had “burned their fingers, hands, and a whole lot of other body parts.”
What changed for me then?
My real fascination with the stock market began in April 2017 when Arun, a very dear friend of mine suggested to me and another dear friend of ours Vineeth, about entering stock trading together. He put in a strong argument against dismissing something without trying, which was a fair point.
My skepticism persisted, but then I wanted to give it a shot none the less as then, I was really on the lookout to getting some additional income.
So, as the first step, we got ourselves a DMAT account. Arun already had one and Vineeth, and I headed to the same service provider. No much research there, which was one of the first mistakes in a series of big and small ones 😛
The second step was to decide on the seed capital!
Being my cautious self, I decided to invest INR 20K. My logic was that it was an amount I could afford to lose as cost of learning even if I end up wiping out my account. (In the hindsight, I was grossly undercapitalized for any serious trading. I will elaborate on this in one of the future posts)
With money in the account, our next step was to identify the ‘right.’ On the day of opening our DMAT account, the service provider had mentioned a stock called “Vakrangee,” in which he had high hopes. I liked the sound of the stock, and that along with the fact that I liked the guy who was sounding it off, led me to my first investment of INR 10K.
With another INR 10K in my kitty, I promptly went to a popular online stock news site, which I am not going to name, but gave an impression that they had pretty good control on the domain 😛
One of their in-house articles recommended a stock called Indo Count Industries Limited (ICIL), substantiated with high-funda jargons which sounded impressively legit, was enough to nudge me towards putting in the rest of the INR 10K.
I was very aware that I was not sure about what I was doing, but the idea was to jump in and see how it goes from there.
Well, both my trades went in two different extremes.
I had an incredible run with Vakrangee, with it being on steroids for the next six months. Rising to INR 520+ after a bonus issue from my initial price point of INR 180, showing me paper profits of close to 3x till market closed on 26th January 2018.
The week beginning on 29th January 2018, marked the end of the great run. Vakrangee lost out on the majority of its gains made in the past two years, in a matter of 4-5 days.
I did eventually manage to make about 70% profit on my total investment, which was considerably lower than what it could have been if I had employed trailing stop loss.
However, I was also lucky to get out, as, on the days following my exit, there were lakhs and lakhs of pending sell orders, which never got executed because of a lack of buyers.
It was nothing short of a blood bath, and the current scene is Vakrangee trading at about INR 39!
ICIL, on the other hand, had no plans of doing any favor on me. It started falling the day I picked it up, at INR 204, which was incidentally very close to an all-time high of INR 210. In about 15-20 days, it was down to INR 164.
During this, my feelings swung between helplessness and hopefulness every time it went down and then came back up (even by a bit). I also committed the cardinal sin of adding to my position size on a falling stock – hoping it will recover enough to get me to break even.
However, it never recovered enough.
It kept plummeting before I eventually accepted it was a lost cause and exited at INR 101. ICIL is currently trading at about INR 58.
Between May 2017 and January 2018, I took about 20-25 trades other than these two, almost tripling my capital. Some were positional. Some were intra-day. Most were break even or minor profits, but the few that ran into losses burned through my money like it was no one else’s business easily offsetting what I made otherwise.
After squaring off Vakrangee on 30th January 2018, I took a break from trading. It was partially because I understood I was ill-prepared (both technically and emotionally) for the giant beast that Market is and partially because I was getting hitched and needed to play safe with my funds.
In the eight months of trading and a subsequent 11 months of taking a complete break, watching the market, listening to experts, and reading up books, two things got through my stubborn, naive skull.
- One can’t jump in and make money in the Stock Market without preparing for it. Educate yourself or quit. So learn and keep learning.
- Don’t rely on anyone but yourself because no one is going to protect your money in the market. So chuck anything that looks, even remotely, looks like a shortcut or an easy path.
Looking back, I couldn’t have chosen two better stocks to begin my tryst with trading.
It showed me the potentials and the pitfalls, but more importantly, it got me hooked.
It made me want to learn and figure out what is needed to succeed in the market, and that is why WE are here!
Blogging it is just a means of motivating myself to be more consistent with my efforts and also to get a few more hooked the way I got hooked. However, that said, I understand that everyone has their journey, and the success of this blog will depend upon how I can logically thread the concepts together. Hence, the first few posts are going to be for a limited circle to take their feedback before opening this out to a broader audience group.
In my next post, I will talk about a book that will guide my trading philosophy shortly – a book that I completed in about 3 hours straight and left a significant mark on me.
So until then, Cheers