Thread : From +5% to -1% for April.. Mistakes made & lessons learnt🧵
1) I was up 5% on capital for April till 2nd week but in last week went from +5% to -1%
So what went wrong, what mistakes I did & the lesson learnt !
#trading
1) I was up 5% on capital for April till 2nd week but in last week went from +5% to -1%
So what went wrong, what mistakes I did & the lesson learnt !
#trading
2) I was having a great month & that made me more complacement as I made around 24% returns in last 4 months
As Paul Tudor Jone says
“My biggest losses have always come after I have had a great period & I started to think that I knew something”
As Paul Tudor Jone says
“My biggest losses have always come after I have had a great period & I started to think that I knew something”
3) So what went wrong ?
Tuesday :
BNF crossed 37000 & I sold 36500 put as per my system
But BNF reversed in last 30 mins & my otm stop (36000) got triggered.
I exited hedge as I thought this is just a pullback but BnF kept tanking & lost around 2% on capital on Tue
Tuesday :
BNF crossed 37000 & I sold 36500 put as per my system
But BNF reversed in last 30 mins & my otm stop (36000) got triggered.
I exited hedge as I thought this is just a pullback but BnF kept tanking & lost around 2% on capital on Tue
4) Wednesday
I carried overnight bearish trade for wed as system gave a sell
But as BNF fell in last 30 mins the weighted avg was 300 points higher & as result calls also closed higher.
37000 CE LTP was 182 but closing was 286
This meant another 1% loss due to carrying
I carried overnight bearish trade for wed as system gave a sell
But as BNF fell in last 30 mins the weighted avg was 300 points higher & as result calls also closed higher.
37000 CE LTP was 182 but closing was 286
This meant another 1% loss due to carrying
5) Thu
Thu as premiums were low I was trading the next expiry (monthly) & had around 20000 qty
There was no decay & after 3 pm next expiry premiums started to spike & BNF showed good momentum.
So I converted my strangle into a debit spread
Check my logic for carrying in img
Thu as premiums were low I was trading the next expiry (monthly) & had around 20000 qty
There was no decay & after 3 pm next expiry premiums started to spike & BNF showed good momentum.
So I converted my strangle into a debit spread
Check my logic for carrying in img
6) Friday
I had carried a bullish position & market opened with a unexpected gapdown. This resulted in around 2% loss at open
I booked the entire loss & traded skewed negative delta strangles as per system
But in the downmove puts spiked more resulting in a spike in premiums
I had carried a bullish position & market opened with a unexpected gapdown. This resulted in around 2% loss at open
I booked the entire loss & traded skewed negative delta strangles as per system
But in the downmove puts spiked more resulting in a spike in premiums
7) I was already down 2% for Friday due to gapdown & again intraday spike added to the loss.
At 3 pm, I closed everything & booked around 3% loss for Friday. As ICICI bank results were there, I wanted to take a fresh view on Monday
At 3 pm, I closed everything & booked around 3% loss for Friday. As ICICI bank results were there, I wanted to take a fresh view on Monday
8) Mistakes & Lessons
a) I got a bit complacent after a winning streak. On Tue, I could have exited at a minor loss if took SL earlier
b) There was no need to carry overnight for wed when I knew that weighted avg closing would be against me.
a) I got a bit complacent after a winning streak. On Tue, I could have exited at a minor loss if took SL earlier
b) There was no need to carry overnight for wed when I knew that weighted avg closing would be against me.
8
c) Carrying a bigger qty debit spread overnight for Friday was a mistake. I was expecting a gapup but carried more quantity overnight.
I generally avoid carrying overnight but may be due to loss for last 3 days, I took the risk in hope of a gapup.
c) Carrying a bigger qty debit spread overnight for Friday was a mistake. I was expecting a gapup but carried more quantity overnight.
I generally avoid carrying overnight but may be due to loss for last 3 days, I took the risk in hope of a gapup.
9) As they say :
“A smooth sea never made a skilled sailor.”
Similarily,
Easy and calm markets will never make you a great trader !
“A smooth sea never made a skilled sailor.”
Similarily,
Easy and calm markets will never make you a great trader !
10) Experiencing volatile markets,
-Handling large directional moves, -Going through a drawdown &
-Bouncing back to hit a new equity high.
All of the above are important to build your psychology & character as a trader & help you scaleup !
-Handling large directional moves, -Going through a drawdown &
-Bouncing back to hit a new equity high.
All of the above are important to build your psychology & character as a trader & help you scaleup !
11) I go thru atleast 1 drawdown > 5% every year.
Drawdowns are inevitable for a trader.
Anyone telling you otherwise is lying or selling dreams!
Life of a trader is not as rosy as it looks on social media !
You can learn strategies but psychology is built over time!
Drawdowns are inevitable for a trader.
Anyone telling you otherwise is lying or selling dreams!
Life of a trader is not as rosy as it looks on social media !
You can learn strategies but psychology is built over time!
12) You have to live through drawdowns as a trader. That’s the hard truth !
No matter how sure you are about a trade. Market can suprise you ;)
We can only manage risk & follow our systems.
Never take markets lightly & never make a loss so big that it affects you emotionally
No matter how sure you are about a trade. Market can suprise you ;)
We can only manage risk & follow our systems.
Never take markets lightly & never make a loss so big that it affects you emotionally
13) We as traders get complacement when we are on a winning streak & my largest losses have come after my largest winning streaks
Lesson :
Never get complacement & always remember that market is supreme🙏
So stay humble always !
Lesson :
Never get complacement & always remember that market is supreme🙏
So stay humble always !
14) I have also written about my largest losses & the reason for the drawdown.
Was it my fault ?
Did Market conditions change?
How I felt during the drawdown ?
What could I have done better ?
Lesson :
All this gives you the confidence to sail your next drawdown smoothly
Was it my fault ?
Did Market conditions change?
How I felt during the drawdown ?
What could I have done better ?
Lesson :
All this gives you the confidence to sail your next drawdown smoothly
15) Reason for this thread :
-No one talks about drawdown but it’s a part of traders life
-Always manage risk & Follow your systems
-Don’t be afraid of losses & drawdown as no system can make money all the time
Goodluck on your Trading Journey !
-End
-No one talks about drawdown but it’s a part of traders life
-Always manage risk & Follow your systems
-Don’t be afraid of losses & drawdown as no system can make money all the time
Goodluck on your Trading Journey !
-End
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