Transcription
[Music] [Preview of the podcast]
Hello friends, I am Vijay Thakkar and welcome you all to our new episode of podcast. And today's guest is Parag ji. Welcome Parag sir.
Thank you, thank you so much. Sir met me at an event, and I told him, 'You're doing such great work, so please share your method with us as well.' And on a personal level, I do not know much about him. Today, along with you guys, I will also see about the history of Sir, how he started in the market and we will see how you work because you have told me once that your method and mine are the same. But you look at it in a slightly different way. Correct. Right.
So sir, please tell me how you came into the market and whether you had already thought that you have to come into the market or how you started this?
So, basically I did not ever think that I would come into the market like this. Basically, my dad was a sub-broker and he was already in the stock market since 1983 and he also had his own investments and also managed for his clients. We also had clients. So my journey started in the stock market from 1999 when I passed 12th. Generally, in a typical household, it is like you start assisting your dad, so from there my journey started in the stock market as a dealer. Basically, I just used to get calls from clients and I used to punch deals. That was my first interaction with the stock market. After that, I finished B.Com and then my journey in the stock market progressed as a jobber. So basically, a jobber is such a person that he gets away with a trade at a very low spread. Well, now as HFT has become, in today's times, high-frequency trades, in those times we used to do manually.
So how did you used to do of jobbing? How is it that you have two terminals, one is NSE and one is BSE. There are order punches in BSE. I understood. Earlier, first reaction used to come in NSE, and in BSE, we used to take its trades simultaneously. For example: If I say, if Maruti increases by Rs. 2 on NSE, then later it will increase by Rs. 2 on BSE as well. That fraction-of-a-second trade is what we used to do as jobbers. And earlier it used to happen that in NSE the price is different, in BSE also, there is a slight difference. We used to take that as an advantage. There were two categories: Jobbers and Arbitrageurs. Arbitrageur used to purchase in one exchange and sell in the other exchange. Jobbers, our trades used to happen on one exchange itself. Yes, I mean, you had understood the problem. We used to exploit the problem of price lack. So my journey started from there and I did jobber, jobbing work for three-four years. Also made good money and then I was not enjoying it that much. I was not getting any work satisfaction. After 3:30 pm, I was getting very tired. After that, I thought about all this and then life took such a turn that my dad's health also started deteriorating, so I stopped jobbing and came completely with my dad. From there my journey started in terms of investing. Then we started interacting with the clients more. I, in person. Then when we interact with clients, we have to give them some data points also. So, at that time, as a habit that, it's available at such a price to book, it seems cheap, only then such interactions were there, so it continued like that for a few years after that came 'The Great Crash of 2008'.
Well, you are talking about this now, before 2008. Before 2008. See, from 1999-2004 I used to do jobbing, from 2004 to 2008, I was with my dad. Yes. In 2008, this crash came. Oh. And in 2008, I was doing a course on Commodity Markets in Welingkars. We had a guest lecture in it of Technical Analysis. I got the idea from there that it is like learning. I mean, the first thought that comes in my mind about technicals, I think more or less everyone has the same opinion, it is very easy, anyone can do it. So, let's learn this. So my first thought was that it seems very simple, just by looking at candles, you can do it like this, then money is made, so I found it very easy. That was my first interaction with Technical Analysis. So, my journey started as a Technical Analyst from 2008. And I did Technical Analysis from 2008 to 2014. First I learned, then I understood what I learned, after that I understood and corrected the mistakes, after that I refined the process a little more. So till 2014, I was like that. Unfortunately, in 2014 I lost my Dad. Oh. Sorry, in 2013, I lost my Dad and then I had to wind up my business of sub-broking. And then I started my journey as a Research Analyst.
Okay, so now you are a Research Analyst?
I am a full-fledged Research Analyst. So in 2013, I took the job of Research Analyst. After that, I studied CFA. I cleared my CFA. Oh wow. Then I went in the research analyst field.
So sir, how many years have you been in the market?
I am saying right from 2001. It means almost 24 years. It's been two decades. In that, I saw the 1999 Kargil War. I saw the crash of 2008, sorry, after that, I saw the dot-com bubble burst in 2000. After that, I saw the crash of 2008. After that, 2014-2016, which was mid-cap and small-cap correction, I saw that. Saw 2020 Covid and now at 2024.
So Sir, today I am sitting in front of such a person. I really did not know this sir, I thought you would have 7-10 years of experience but I mean you have seen so many big crashes. So sir, again this is a slightly different question which is always in my mind. I have seen it on a personal level. I am in the market since 2011 and you can say that even after 2011, there were a lot of small crashes. Correct. In fact, the impact of demonetization was also a bad impact but at that time, my money was not that much involved in the markets, so I was not able to understand that crash. That is, that crash came and then maybe within 3-6 months, the market also got better. You can say that my actual involvement happened during Covid. Because before Covid, my small proportion of wealth had gone into equity and the fall that I saw, I felt that I would be destroyed. Destroyed in the sense that my wealth had halved. So you Sir, having seen so many crashes, do you think there is one thing that we should always keep in mind in a crash? Because no one knows before the crash that a crash is going to come, that we will sell all our stocks and come into cash. I think many people are not in cash. Yes, they are not. Even the smartest of the guys. You understand one thing, that is what we feel. Say for example: Rakesh Jhunjhunwala ji. He is a veteran of the stock market but even if he wanted to, he could not cash out the entire amount. Even if he knew that a crash was coming, one thing is certain that no one knows the behavior of the market. Okay? Right. Only you can prepare yourself. Right now, you are asking me a question, how to deal with the market crash. Yes. It is right. I would like to go one step back from that. Okay. That if you look at my journey. You will see, it is a journey with less time frame than a day trader. Yes, in fact, what you were telling me a little while ago is a different level of work which is an investment prospect and you have done jobbing. I have started from jobbing. I did that which was my fastest trade, Vijay Bhai, I still know it. My fastest trade was seven seconds in and out. In seven seconds, that trade of mine was completed and today I am at the stage I don't even see anything before 3 years.
So I also want to ask you that how this drastic change came in your life and after this change did your life improve or got worse in terms of mentally and wealth wise also?
See, for every trader, investor or entity, this decision has to be taken by him/herself. Correct. That whether I am made for this kind of trading or not. There are some people who are made only for day trading. That is different DNA. That's a completely different breed now. Yes. There are some people who do only long-term investing. There are two types in investing. One is value investing, which will wait till the end to buy at its own price. The other is momentum investing. Yes, who will buy expensive and sell it expensive. Correct, it's like that. So every trader or entity has their own journey. So my journey evolved as I told you. I started with jobbing and then I moved on to clientele. Then I did momentum investing, then I did proper investing, then I realized that yes, the combo of momentum investing and long-term investing are suitable for me.
But sir, how many years it took to know this?
You count it from 2000 till 2017. It means it took 16-17 years to figure out, what not to do and what is perfect for me. Yes. And what you found out is perfect for you, and to become an expert, you cannot call it an expert, but it also takes time to do further research, yes, it is not so that in 2017 you got to know that investing and momentum investing is perfect for me. And you were profitable from 2018. No, absolutely not. Because first you have to unlearn what you have learned earlier, yes, and then you have to learn something new. And to learn something new, it took another 4-8 years. You can say like this that as long as we are alive, we will keep learning. That we are still learning.
And Sir, why am I asking you this? I am telling you right now, we just talked off camera earlier, this happened with me too. That earlier in 2009-2011, beginning of 2011, i.e., till the end of 2010, I was working as a salesman in Motilal Oswal. After that, I made broking business sub-broking in 2011. I was also a sub-broker and we still have our sub-broking ship. And there I tried multiple things because when you go to the market, you get everything. One who does options, expiry etc. If you remember, earlier it used to be that if you buy a lot at expiry and the market expires, after that it used to be settled at the cash price, correct. And it used to be square off, but what is it now is that you get delivery now. So I had a person who used to trade inside this also, only after 3:25 he used to buy a current expiry shares which is going to expire in 5 minutes and he used to see whose price in equity is higher, then ultimately if he bought it at Rs. 300 and it closed at Rs. 305, then according to Rs. 305, he will get a profit of Rs. 5 in closing. Correct. There were such traders too and in my life too, from 2011 to 2016, I did not understand what to do and now slowly and gradually you can say that, that fog is moving away from our eyes and mind and I too am slowly moving towards a bigger time frame. So it seems to me that the experience of a real learner will be like this, sir.
The journey is the same for everyone. Even if you take someone, if someone enters the market in today's era, then there is no issue of time frame. Now you have futures, options, weekly options, monthly options, stock options and plus there is investing and traditional methods are there. That too to figure out, one has to pass oneself through that journey, one has to do it, only then you reach a point where you think that yes, I am mentally very stable in this job and I am enjoying it. You should not feel stressed in doing this, you should have fun. Exactly.
So sir, now let us fast forward your 20-21 years of experience and let us talk about today's Parag. So what does today's Parag do, sir, how does he see the market?
So first of all, let me tell you that right now I am a research analyst. Work for a buy side. I work as a research analyst on the derivative side. There's a company Swan Investment. Okay. So the entire journey, we will discuss in that. There have been three to four phases in it where I say that there comes a turning point in life. Yes, or there is some step-up learning. Yes. There was one when I got introduced to technical analysis. Correct. That was a stepping stone in itself. Yes. Then there comes a journey of mine where candlesticks, everybody starts with candlesticks because predominantly we have been taught that technical analyst means candlesticks and there is nothing else. Even though there are many others in technical analysis. Then that one was to practice candlesticks. Beyond that, a whole lot of time was spent in understanding how to refine it properly. After that, another stepping stone of mine came when I associated with Definedge and Prashant Bhai with Point and Figure charting technique. That was another stepping stone in my life. Point and Figure has its own unique beauty which attracted me towards itself. And now mine today's research, you will not believe, I have taken some properties of Point and Figure, we have taken some properties of candlesticks and merged them and have created our own method. Oh wow.
So sir, what is this method and yours, if you can tell me the complete process. That what is your stock selection method, how do you plan to trade in it later and your complete execution plan. If you can tell then please tell sir.
Okay, so basically there are three pillars. One is relative strength, second is market breadth and third is your stock selection. Okay. That means you have these three stages. My entire strategy is based on these three pillars. Now, before I go into the strategy, let me give you a brief introduction to the viewers. Because Point and Figure is also involved in this. I guess many people will not understand Point and Figure, so I will explain it on the basis of breadth. Now, there are many methods in the market to calculate breadth. You can also take advanced decline. Okay. Each has its own advantages and disadvantages. Now understand what is a disadvantage in advanced decline. Understand that a stock is 5 paisa down than yesterday's close. 5 paisa down. So that will come into decline. Correct. Correct, that is its normal formula, it will work according to that. That is one of its disadvantages. Say for example, now let us take our second one that the percentage of stocks above certain moving average. That is also a different approach of breadth. Say 50-day moving average or 20-day moving average. So what is the disadvantage in this? For me, 20 days works, for you, for 15 days works. I have not yet realized that there are many stocks like this, they respect different moving averages. Exactly. Now, one advantage in Point and Figure is that its plotting, either according to the price, either the stock is in the column X or it is in the column O. There is no third possibility. So, the breadth that I see is that when I scan, when I get the number of breadth, that is, how many stocks are in column of X and how many are in column of O. So now what is this column of X and O? Right now, we will go into it. Like how is it in candlestick, it is plotted according to time. Right. Candle is time. Yes, it means one happened today, one happened yesterday, or hourly or weekly means you go in whatever time frame you want. It is all time dependent. Point and Figure is independent of time, it is only price dependent. Okay. So there is no time. That price dependent also you have to fix that how much price dependency that X or O should be plotted. Say for example, let me tell you that for me, 1% move is insignificant. I consider only the move above 3% as significant. Then you can keep such a calculation in the Point and Figure that if that stock goes above or below 3% then only you will see it in the column of X. Or else it won't be plotted. Okay. It means that firstly a stock went to Rs 103 from Rs 100, then one X was formed. Yes. And then it will be Rs 106 from Rs 103, then another X will be formed. 3% From 103. Little above of Rs 106, 106.20. I mean, to explain, I'm taking the round figure, correct. Then one more will be formed. Even if it comes to Rs 105.99, then also that X won't be plotted. Whereas in candlestick, it will be made. So basically, in a way, the small candles are formed, like Doji types, they completely eliminate those. Meaning you are saying here, those indecisive candles, sometimes even one-day long candle is made. We call it boring candles. So, at that time our mind becomes a little like, hey, what do I have to do now, nothing is happening now. So this noise will probably be eliminated. Yes, yes, yes. So the picture of breadth that I see becomes very clear to me. Say for example, I run breadth of 1%. 1% breadth means it will give me the figure that what percentage of stocks are in column of X. Now you back calculate a bit. If it is in the column of X, that means it is bullish. It is up by 1%. Either it is 1% up or if it is not in the column of O, it means it is bullish. So that becomes one of the criteria. Say for example, now the market breadth was 60, two days ago, that means 60% of the stocks are bullish in column of X. After 2 days, if I say you that breadth became 70 from 60. That means Market went up. So even if I don't ask you about the market. Yes, like what happened to Nifty? Even if I don't ask you what happened in the market, even then in a way I can guess that the market will be good because the number of stocks has increased. Exactly, so it gives me a picture of what is internally happening in the market. Okay. I mean, I have just understood that here instead of seeing how many stocks are up or down, you are directly looking at the percentage and in a way you get an idea whether your market is up or down. Exactly. Now let me give you a scenario. Your market is going up and this breadth, it is coming down slowly. It can also mean that the market is moving only the index but not the stocks are moving. Then in the market at the moment, it seems as if there is no strength in the market or as it is said RSI Divergence, this is the divergence of breadth. Yes, it means from here onwards we have to be alert. That RSI Divergence is only with itself. Yes, the divergence of breadth is with the market. This is my main, doctor checkup if you say. If you think of this, now you are speaking. So I am thinking like this, understand that when the market is bearish and at the bottom you have got this divergence, then sir, you can get a tremendous opportunity. Yes, 100%. Even on top also, we can be a little alert. Yes, definitely. For this, I said, this is my main indicator. Okay, this lets me know the breadth of the market and to a very large extent in my experience, the big crashes that happen. You can alert yourself from this breadth indicator. We can understand it. It will alert you. Action is always based on price, so this is one parameter. Let us come to the other parameters. Relative strength. What is relative strength? Basically, it is a comparison of stock movement of A with stock movement of B or either index or stock movement of B. We can say that there are 10 horses. Yes, which is 10 stocks for us. Which is the fastest horse among them? Yes, you can tell it that his relative strength is the strongest. Perfect. And in that, we can see numbers. Now I will give you a simple example. If I say that Reliance is 5% up. Then with what should I compare it? Exactly. If I tell you that Reliance is 5% up and Nifty is half percent down. Then I can say that Reliance is strong comparatively to Nifty. Exactly. If I say Reliance is 5% up, Infosys is 20% up. Then Infosys is more strong. Meaning, relative strength, it is written in the name itself that relatively it is stronger than that. Exactly. Now, as a trader, you think about it. If you incorporate this in the market, I will talk about only for long-only traders, okay, let's not go into short. If you are a long-only investor, portfolio manager or trader, then if you incorporate relative strength in your analysis, then you have a good probability that there will be winners. Yes, that means most of the strength stocks will be there in your portfolio. Correct. Right now, that strength comes anyway. The market is down 2%. My stock is 1% down. Even then it is strong. Exactly, even that down can be managed. I have understood, right. And the third one will talk about. I have seen your strategy. Well. You focus on multi-year breakouts. Even your is longer time horizon. Yes. Let's combine it a little with relative strength analysis. Well, my strategy is also the same, more or less, but let's twist it a little and you will get a completely different perspective. Okay. This the same multi-year breakout if I tell you to look at the relative strength. Then yes, you can say that sometimes I have more number of stocks, it will reduce according to the relative strength and my decision-making will become a little easy, whereas right now I take it as per my experience. Perfect. Let's add one more in this. Say for example: Let me tell you that this stock is at 52-week high. That means it is strong, good bullish trend. And if I tell you that its ratio with Nifty 50 or Nifty Midcap is also at a 52-week high. What is this? Now we talked about relative strength. Yes. Yes, if you plot relative strength in the form of price, it comes as a ratio chart. Okay. So basically, if I tell you, Reliance is at 52-week high and its ratio with Nifty 50 is also at a 52-week high. So meaning double confirmation? It means that if Nifty 50 increased at x%, then Reliance has done better than that. Then only its ratio has increased. Right. So in that context, my entire strategy is based on that. Now let us see. I am very excited because of what you said that there is a concept of relative strength in it. So what happens sir, sometimes even I make mistakes because I directly follow the multi-year breakouts. Correct, but out of 10, you will not say that 10 out of 10 stocks will work. Out of 10, five-six will work, but they will give you good risk to reward. But if I come to know that the chances of getting success of five out of 10, this one is more, so my confidence will be more, my capital allocation will be accordingly and a little better concentrated portfolio will be formed. Okay. If we take a holistic picture of all this, yes, yes, then you will get a little idea that when your breadth is increasing, yes, okay, and you are also getting 52-week high on the ratio, your stocks are also in momentum. This is a phase of the market. The market itself is in a bull phase. From 2022 to 2023, we saw mid-caps, whatever happened, if you put your finger on any stock, it will work. What happened in 2024? There was a lot of problem. Yes, the market was very volatile. The market was also volatile, so breadth in a way will give you an alert. Yes, if you are moving on the basis of relative strength. That's right, yes, and you are getting breakouts. In that stock, typically when the it becomes stock-specific market, then this strategy comes in handy. You said it very well because in the recent three months, many of my stop losses have been hit. They have been hit, okay. And many people also started asking me, Sir, does your method work also? I laugh a little and say, okay brother, this is a phase. Every company also has such a phase when she is in a little problem. Why not Reliance itself had a phase? It didn't do anything till 9 years, it was in consolidation. But again, same thing, we learn from bad times and apply it in good times. So this is what you are saying, sir, it makes very sense, that will be more useful for me. Then we will also see that strategy in this. And secondly, whenever we are talking about the declining phase, say for example, the market itself is in the corrective mode, so one thing is your breadth will also not give a signal, plus to you, which is 52-week high on the ratio chart, may start getting less. Correct, so automatically long-only traders, less opportunity will only come. And according to me, whenever in the declining market, if you get any ratio at 52-week high and any stock comes then it will become dangerous. Then yes, then understand that there is definitely something in this stock. Yes, it means in such a phase. It is the test of time, right. So I have been practicing this strategy for the last three-four years. I will tell you on the basis of that. So now if we move on to the strategy. Yes. So this is a scanner. So what we are going to do now is our stock selection criteria. Yes, and what is this software, where are you doing it? So this is what I am using, TradePoint. Which is again by Definedge. This is again Prashant sir's company, Definedge, who has developed this software. Okay. So this is your paid subscription. Yes, it is a paid subscription. And is it available for free? It is available for free, but you will not be able to use all the features in it. If you want to use all the features, then you will have to go for paid subscription. Okay. So, we scan all the stocks. I have taken NSE_EOD. You scan 5000 stocks of market? Scan it all. OK. No one should be left out. Let's discuss a bit about what should be kept in the denominator. Should it be Nifty 50 or Nifty Midcap, Nifty Small Cap or Micro Cap? Okay. Selection of this also do on relative strength. Okay. Say for example, let me tell you that right now mid and small cap are outperforming Nifty. So you take that as its denominator because we are comparing our stock with whatever is trending the most in the market. Okay. And if your stock is beating it, then that means something or the other is going right for that stock. Okay. Then we do that. But how will we know that right now it is performing in the market? Yes, then that too, you can either see it visually, okay, or do a performance table. Let us understand that since the correction of Nifty happened, let us first plot the chart of Nifty. Yes. Let us go to the weekly chart. Okay, this was an important top. Yes, when did it form? In September, because only after that making money became less frequent. So from here you can plot the performance table, which index gave you what percentage of return. Okay. So say for example, this is our 16th December. Yes, sorry, this is not 16th December, it will be September. Yes, it is 23rd September. So say for example, we run a performance table and in this we will do NSE all index. We took all sectors. OK, we change it to 23rd September. It was Monday, 23rd September. Let's take 18-19. OK, that means right now we are scanning here that from this date till today, yes, which sector has fallen more and which sector has fallen less. The one which has fallen less and moved more, it is basically in strength. Yes, if you sort it, so IT was the best. Well, that means from that time till now, IT is the strongest. IT till now is positive at 4%. Yes, that means comparative condition has deteriorated for everyone. Right now the Nifty 50 you are seeing is at negative 7%. Now you have to select the denominator. Correct. You have got a Nifty 50. We got this 7%. 7% but if in mid-cap I tell you that only 4% has fallen, then it is better, a little better than Nifty. Then what will be your denominator? The one who is doing better. Nifty Midcap will automatically become your denominator. And in this one minute, which one is second, sir? Second is this, this is another new index Nifty Digital. That too, in my opinion, is a part of IT. It has more mid and small-cap and micro-cap IT stocks. And what is worst in this? I mean, I am just asking like this. The worst is Energy. Energy and Oil and Gas. Energy, Oil and Gas both are drawn down at 14-15%. So in this, we got this Nifty 50's -7%. Now say for example, we would have run the same thing at indices level, you got the flavor of a sector, the best was IT and the worst was Energy, Oil and Gas. Rest all were above and below that. This is your analysis done. Now this is your analysis of Nifty here, right now which index. So basically, if you look here, then Nifty 500, which is a broad parameter, it has given a negative return of only 6.43. Which means it is slightly better than Nifty. If we come to mid and small cap, Nifty Midcap is down only by 3.8%, so 4% alpha came there itself. So, now when we scan in the denominator for relative strength, my denominator will be Mid Small 400. Right. And sir, in this case, why can't you take the strongest one in the denominator? Which is the strongest sector? First, let's see that. Yes, this dividend point is such that according to Nifty 50 dividend, whose dividend yield is more, that is 20% and then IT. You can take IT also, but will you be able to compare mid-cap pharma stocks with IT? Meaning, you are saying that if we take the mid-cap sector, then multiple stocks will come. If we take the IT one, then No, no. You are comparing the entire universe. Yes, you cannot compare everything with IT because some things of IT are different. Correct. Depending on that, I just choose which index or which sector, either mid-cap better or micro-cap better. I have to take a benchmark. Okay. IT can be your benchmark with regard to IT stocks. Correct, understood. So there is a Mid Small 400 index and which has a combination of Midcap 150 and Smallcap 250. Yes, so it is sufficient for us. So we got our benchmark. So now we will put it in the denominator as Nifty Mid Small 400. In this, we will put the strategy 52-week high, 52 weeks high on the ratio chart. Okay, whose relative strength is also 52-week high. Okay, then you will get automatically such stocks. Okay, I will run it. Now, all the stocks that will come in it, say for example, this is 361. Okay, so price of 361 divided by price Mid Small 400, it is at a 52-week high. Okay. That means 361 is doing better than Mid Small 400. Now this is your universe ready. You make a group for this. By the way, we are running this scan, we are doing it today, today the date is 21st December and we are doing this around 12:00 o'clock. That is, I am telling you this because when will we post this video, then you can see further. Okay, this your group formed. Now you have got a universe, which is on the basis of relative strength, you got a universe in all these stocks, now you run any of your strategies on this universe. Yes, that means if you are a swing trader, then use swing trading strategy in it. If you do multi-year breakout like me, then find an opportunity, which stock is doing multi-year breakout? There is a possibility that it can start from here. Yes, yes, and in all possibilities, which is this 52-week high stocks which are hitting 52-week high on relative strength, then in all probability the underline of these stocks will also be somewhere at multi-year high, at least at 52-week high because that is why this has come on the scanner, at least it will be at 52-week high. Correct. So now we study one after the other, what is the pattern forming in the stock. I am opening a chart like this, anyone. We have saved this group here. 361 is the first stock. Okay, and which time frame is this? I have taken the weekly time frame. Okay, and Sir, this the green line and... This are moving averages. Which one is this? One is 50 and another is 200. And what is the other one below volume? This is RSI. Okay, normal, standard candlestick chart. And nothing special in it. So, if we look at the monthly chart, it is strong on monthly time frame also, at all-time high. It is strong on weekly time frame also, okay. Suppose if you incorporate your own strategy in it. Sir, I have a swing trading method. Yes, it is based on the basis that you should do swing trading in the stocks which have strong momentum. Now I'll give you a suggestion in this. Yes, you add a concept of relative strength to it. Yes, and then we will make a separate podcast in which we will only review how was your performance after this. Okay, no, because that strategy is dependent on this thing only that your stock selection should be right. Correct, meaning I will tell you what is the concept. Another concept has emerged from one of my concepts, for example, I'm entering in any multi-year stock. When I am entering the stock, that is my short-term investment. Correct, I take the delivery once and then I wait for the target or stop loss patiently. Then suppose that it is going to go from Rs 100 to Rs 200. I know this during analysis. Then what option do we have that we take it and sit down and then after many years I realized this thing that it does not go straight from Rs 100 to 200, it will move like this, it will consolidate and then it will move again. I thought that I take it on monthly, weekly basis, I observe its pattern on daily time frame, then I saw it moves up, then come back down, then again it breaks the previous high, then it goes up. So I made a swing trading method inside it. That the stocks I already have, I can do swing trade in that too. Correct, but when does this swing trading not work? Because sometimes the stock goes from strong to weak side, then your trade starts failing. And it is very important to understand that for how long will you continue to swing trade in this stock. We came to know that the stock was strong at one time and you were trading, then it is getting weak, but now you are still trading. Then now you will say that this method does not work. Exactly. So the time has come at that time you have to change the stock, not the method. Then this is the problem. I think this relative strength will solve your problem. Yes, perfect. Till when, what should you stay in that relative strength will tell. Say for example, if you had a stock like ABB, you got a multi-year breakout. Yes, it has been going on since 1600, on and on. It went to 8000-9000. Now after 8000, ABB, if you see, it has come in the declining phase. Sir, let me say one point. There were many phases in 1600 to 8000 also. Suppose it would have gone out for two months and would have come back inside. If you come to know at the time when it goes out for two months, that for 2-5 months at least not to touch it right now, then when you have to touch it, when it comes back, then touch it. Exactly, this is a very correct thing. The relative strength solves this and gives it to you. Yes, because now when I saw the list of names, so I said, this is of my use, that is why I told you that I have such a method. Correct, so this is the concept we are discussing. I want to tell you the viewer that, you see this that combined experience of 28 years is speaking. Yes, I understood, I can see that sir. What is that, what is that, this is not a cooked thing, you will get it right through the process. Correct. And you also notice one thing, instead of teaching you, I am learning more myself because when I am seeing the solution to my problem, then I am also getting ideas in my mind that hey, we can do this, we can do that. In fact, the interaction that took place in Decma, the event where we met, our first interaction and first sentence, I said it. I said my name later, I said that I also do the same. I remember. We should connect. Yes, yes, and in this way, look, I mean, I was connected with Sir for two months that sir come, so when sir got time, sir came. But it is also a good thing that sir came and sir is sharing his things with us. And let me tell you one thing, like I am trying to create a community of my own where good people like Parag Sir, Prashant Sir, when you eat, drink, sit with such people, then you will also gain little intelligence of them and with that intelligence you can do a lot in your life. This is my intention, of this podcast 'Masters in One'. A while ago sir was asking me how many podcasts do you make? Sir, I make very few, but I make them only with such people who are genuinely talented and do the work. Exactly. Which stock is this? It's the same? It is something AMJ Land. I don't know what it is. See, but it came in the scanner. Yes, if we look at it now, we will do a little backward analysis of it. Here, this was a multi-year breakout. Yes, with very good volumes. Look, a tower has stood there. Yes. Volumes were good. Good breakout came, there was a retest, then again. And this retest also, I think it happened in November when the market was bad. Yes, it happened in October, 14th October. Yes, in October the whole market was red. Yes, even now you see this has not gone below the level of breakout. Right. Then you should see this stock. According to me, if you decrease it further, then this is its lifetime high. So the one coming in 52-week high ratio could have come somewhere firstly in the lifetime high. Correct. Anantraj is another stock. Look at its journey, it's completely parabolic. Yes, correct, and still strong momentum. Yes, same thing, consolidated a bit and again set out on its journey. Correct. This is Avalon. This is a very good chart. This, in fact, as a disclaimer, I would like to say that this is a part of my study. Okay, so this breakout was a very significant breakout. It is visible, sir. I generally say this King Candle, when such a breakout occurs. Correct. Price and volume, everything is high. Birla Money. Here too, if you look, it is a flag breakout. Which stock is this? GVT&D. Okay. This flag. Such a big rally, then consolidation. I have noticed one thing, sir, the strong stocks tend to move, consolidate and then move and then consolidate. Some's consolidation looks different and some's consolidation is different, but for the sake of name, they do consolidate for time. Yes, as AMJ Land and in its consolidation, there is a difference. AMJ Land consolidated in price and consolidated in time. And this consolidated in price. This didn't happen. It got consolidated in time itself. So sir, after getting this list, what is our next approach? Your math. My next approach is that this same list which I am showing you in the candlesticks, I look this at Point and Figure chart. Okay, so we will see that also and I will give you some actionable ideas also. So the same list, I will also open the Point and Figure chart and let us explain the chart a little bit. We will also do this. The motive for telling this in candlesticks first was that first you should understand how this concept is visible in candlesticks. This is what a Point and Figure chart looks like. Okay. Now in this, I will explain 3-4 parameters to you a bit. Okay. There is one in this, the box size which I have defined at 1%. The box size means that an X will be formed when the price moves up at 1%. Perfect, yes. The second one is reversal box size. Meaning, when will it go from X to O? I had defined that 3. Okay. Meaning, you had said now that if the stock goes up by 1%, then X will be formed. One box will be formed. Correct. But if it has to shift to O, which you call reversal box, then it will have to come down to 3 from top to bottom. It will have to fall more than 3%, then it will shift to O. And in this only vertical and in the same way. Only vertical plotting happens, okay. Correct. So you have defined X and O. And then next O is formed. After that, the second O below will be formed when it falls back 1% and the new X will be formed when it moves 3%. Perfect. Okay. Now look at this. From 1018 to 1241, only X has been plotted. Yes, continuously. So what does this mean? It means there hasn't been any 3% correction yet. Correct. So in my method, stop loss becomes very big of 20%. So. I will ignore it. Now let's go to the other stock, this AMJ Land. Okay, so look here, so many X were formed here. Then a small retracement came, then again X came which broke its previous swing high. So this concept is called Double Top Buy. Yeah. Correct. Now this breakout came, then it again went to column of O. So it will again come in my buying list, if it breaks its previous swing high then. Then again Double Top Buy will happen. Yes, then I will take entry in it. Now this level also tells P&F in advance. Its swing high was 72.14. So you keep alert from before. Correct. Then now it will go above 72.14. So it will be qualified in this. So sir, how can we analyze the time frame in this? In P&F? Yes. In P&F, there is no time. Yes, no time. Actually, you had said that here it is only the price. So it means if I take this trade, then how will I be able to judge whether I am taking this on the analysis of one week or one month or year? Good point. The box size that we define. Yes. Then your 1% box size means that you are looking at a weekly or fortnightly chart. Okay, so your time frame is defined accordingly. If we look at very short term, then you can also make it short term, at 0.25% at 0.1%, then that is your very short term. Okay. I see a little medium to long term. What should it be according to my style? According to your style, your box size should be 1% and 3% and 5%. No, 1% means for plotting new box size? Yes. And what would be 3%? 3% also the same thing. I gave you three box sizes. Well, that means I have to check all the three box sizes first to see which is perfect for me, 1%, 3% or 5%. Correct. Now to simplify it further, I will ask you a question. You tell me your latest stock, whether it is within the last week or within 10-15 days or a month. You know, it is GICRE. Okay, GICRE, because we talked about it a while ago. Correct. And the second one is Jubilant Ingrevia. Okay, we will also see that. This is the chart of GICRE, this is at 1%. Okay, right now there is no time element in it, below. So how will we know? Wait a minute, I will remove this little bit. Yes, the additional things I'll remove all and just put a moving average in it. Which one is it, sir? It is basically like in candlestick, 20-day moving average. So this plots moving average from columns. So I am plotting moving average with regards to 10 columns. Meaning, column of 10%? No, no, not 10%. The average of previous 10 columns. Okay, got it. Yes, now this is the chart you are showing me is the 1% box size. This is the chart of 1% box size. This is the breakout. This is your breakout. Yes. Now this is the same thing, the same thing if I show you at 3%. Yes, this 3%. Then also the breakout is clearly visible, but what is the difference? The number of columns has reduced and this chart has become a little clearer and clearer. Right, this is exactly you shifting from weekly to monthly chart. Well, right now we are looking at the monthly chart in a way and it is also visible like monthly.
means the number is less than it also seems that. Now you do it at 5%, sir. This is at 5%, oh this is like quarterly chart. So, tell me one thing now, we have kept the box size at 5%, then what will be the reversal box size in this? At 15%. So, what will be its ratio? That is, if we have kept it at 1%, then why are we keeping the reversal at 3%? It is compulsory.
No, you can change it according to you. No, like you just told me to make one box, I have kept three reversal box sizes. It does not mean that there should always be three.
Yes, meaning why I am asking this question, you know because I will practice this thing, so suppose that right now I am checking on 5%. Correct. Then you said 15 in reversal, it means that when that stock will fall down 15% from the top, then my new column of O will be formed. But you have done it * 3 in short 1 * 3 then 3 came. 3 * 3 if you do it then maybe you will get 9. So, how did you bring this combination? That's my question.
Yes, let me ask you something. After how much percent drawdown, do you feel that no, I should review this stock back? In the way I do entry. Earlier I used to make a lot of mistakes, I used to stop 20-25% but now I feel that if a stock is breaking out on monthly-weekly basis, then I would try to take risk as much as possible of 10-11%. Let's take the risk of 10% in it.
Yes, your risk at 10% has been defined by you. Yes. So if you are opening the point and figure chart of 3%, the reversal box size in it is 3%, then it at 9% will tell you in a column of O, meaning my risk has become 9%, it has become 9%. If you are looking 5%, then make the reversal box size 2. Double it, make it 10? No, now the reversal box size is 3. Yes. If you make it two then again your risk is at 10%. Yes, means 5 * 2. I understood.
Now let's see this. If we do it at 2%, then this is the chart that came. Meaning this is what you are saying that there is a reversal box size, its concept is on your risk. Yes, how to see the drawdown, meaning which point you have to be alert, it means it has nothing to do with the method. No, no, it is completely free. But an ideal combination, what will you say? 3% is good, three box size is decent. Meaning if you are keeping box size one then multiply 3 is good of reversal box size. Got it, okay sir.
This is done like this, so in the candlestick, I have to compress and decompress and do all that. This point and figure removes it for me. So sir, now in this entry, exit, etc. We will also do that, so coming to this first, okay, now in this you asked me about entry, exit, stop loss, yes, okay. So entry, I told you this. Which is the previous high, it will go above it. What was the name of the stock? This is AMJ land, which came on our 52 week high. Yes, AMJ Land. It is on AMJ land, so I know the entry of this, when we have to do. This entry is fixed once. Your stop loss will also be fixed. Okay, this is the beauty of point and figure.
How? How many boxes are formed here? Now, I think there are 5, yes and what box size we are seeing? 1%. So what's your risk? 5%. Okay, meaning you are saying that this column of O the bottom of this is our stop loss. Meaning in a way if it's a candle then low of the candle. So you calculated that earlier. Now, suppose the strategy that you are running, you say that in any swing trade, if the loss is less than 7% stop loss, then only I will take that trade. So, this is qualified. If you wake up tomorrow and suppose the price goes below. Then the risk will increase, the risk will increase, if it does not come in your risk parameter then ignore it, okay, that means here I am understanding one thing, totally everything is dependent on the price, yes, all your calculation, yes. And the thing is that when I am taking a trade, my entry is defined, my stop loss is defined, how much of my money will be lost, that is also defined by me, so I have already defined all these things, after that my entry is done.
And how will you calculate the target in this? Very simple, how do you calculate the target of the flag? According to its range. The height of your pole you later plot on the cloth and its extension comes, yes, similarly, this is your target. So what you have marked. Basically this is the column. Before this the column of X was. What will you call all this column? In candlestick, if a big candle comes whose open and high is same, close and high is same, we call it Bullish Marubozu. In this we define that if in a stock more than 15 columns of X is there. Yes. That is called as Anchor Column. Well, now I have understood what is called Anchor Column. So that is Anchor Column. Remember we Anchor Column a lot. Tell me again sir. What is this Anchor Column? So in any stock or in any underline, yes. there are 15 boxes of X or O. More than that. 15 or more than 15. Then it is called anchor column. If it is of X's then it is bullish anchor column. If the column is O, then it is a bearish anchor column. Then what have we done with the anchor column? So this is the range of the anchor column, basically, we have plotted it above. Meaning suppose that if it is 15, then we have plotted it above 15%. Something like that. So these are two points visible here sir. So this is 1:1 and this is 1:2. Okay, got it, now I am slowly understanding your chart.
So sir, now I want to see your latest one, if you can show it, have you planned something recently. If you want to see the latest trade, we will see from this, one has come in this only. Not this, this one. What is this? Avalon. Okay. Now let me tell this one did a double top breakout here. Correct. Okay, so you tell me where my entry would have been? This in the green line. This one? Yes, means this the recent one. This one right? Yes, green line. This is a second entry. Okay, so first entry? So my first entry would have come in here only. Yes, yes and you did not take the first entry because the risk to reward was a little higher. Correct. What is my risk here? If I take it at 763 then my stop loss comes to 543, which is too far. And here you took because that column of O was small then your stop loss became small. Correct. The stop loss was of 3%. And you took an entry there. Now this setup is being made again in this entry also.
So Sir, if we go to see actually, the target of the first entry you had taken was also not completed and you have to come back with another entry, in a way 1:1 target hasn't achieved yet. It's not done yet. And sir this percentage of X box size what is it? It's 1%. And reversal box size is 3%. So approximately how long do these trades of ours last? See it depends on the phase of the market. Yes, obviously if the market is bad. So yes, I have seen that from 2022 to 2024, i.e. start of 24, such days have come, Vijay Bhai, in two days, my target has been achieved of 20%. Right, that happens. Those are the phases of the market. And if the market is bad, then it takes some time. Usually the trades I take are all swing trades, so the minimum time frame is 20 days. The maximum is about two and a half months. Okay, that means if the market face gets spoiled then it goes on for a long time. Yes. Okay. Something else sir. As much as I. If you play on this 1% per box size then you in 20 days you will do in and out both. Either your target has been reached or it could have gone to O, or else your stop loss will remain intact, more or less 20 days.
Sir, in this you have not even seen the chart of Nifty, you have looked at anything, you just looked at the downside percentage of Nifty and you put it in relative strength, you did breadth analysis, you found the number of stocks, some of those stocks will probably be traded in the future, some may be traded now. Well, you have planned then it seems to me that this method will not take even half an hour of your day for you. Yes, once your process is set, yes. So analysis and all doesn't take much time. But to develop this process it took me a lot of time. So, similarly, this is basically a cartrade. Now I will give you another example. Cartrade, yes, and sir, I saw this stock yesterday, it breaking the high of its IPO listing day. Yes. Listing Day High, Listing week High. This is its listing. Because I had put the alert for this, yesterday I think at the closing time its alert rang. Yes, now you will see this also qualifies. Yes, exactly this is Double Top Buy. It's Double Top buy. How much is your risk? Only 4%. And this is in a way multi year breakout. The time duration is small but still it is in a way. So yes, it is not a his mistake the he has listed. And that too in such a bad market. These are the stocks are available in it. Vijay Bhai, now look at this, this is KEC, this is a very good trade, if we go to plan, you just look at the trend of the stock. Yes, it is going on continuously. Even in this continuation, we are getting a continuation pattern. What is your risk in this? 5%. Your breakout level that is 1242, the stock closed yesterday at 1237. You write your trade today itself. So if it closes above 1242, then this trade can be made. In a way, it is also an anchor column. Yes, then its target will also be set. This same came here also, so its target is achieved now. Correct. If I show you the time, so basically it took a little more time because the market phase was bad in the middle, so this was the breakout that came in September 2024 and what was achieved right now was December 2024. So in a way 2 months, sometimes three months. If the market phase is bad. Correct.
Now let's see the same chart on the candlestick, the picture will be a little better and clear. Yes, a little different. That will be how it looks in the candlestick and how it looks in this. So you know the flag and pole pattern. Yes. Something like that it will open. Before opening the chart, I tell the pattern. And in the candlestick, Sir, Buy is not formed yet. This will be formed, this will be formed. Yes, but I am saying that in the Point and Figure it has been formed. No, that is also not formed yet, in that Double top has not come. Obviously there is still a little money left. Correct. Right. So in this candlesticks, if you catch the high right, then a breakout of 1276 comes. Yes, I just saw, you have drawn the line at close. Correct, if we hold at close, then this was the previous close. So sir. This close was of 1242. And this is the breakout of your point and figure. So sir, tell me one thing, many times I have thought that sometimes I make the mistake holding high. When we mark resistance, should we hold high to mark resistance or should we close? High should be taken. If we are looking at the candlestick, this is a drawback in the point and figure. When we compare the point and figure and the candlestick. See no method or charting technique is full proof. Sir life itself is not full proof so what will we talk about. So, this is the advantage of the candlestick which gives you the advantage of high, you already know the resistance that if I see this candle. So I know that after going to 1300, the stock came back down, it was rejected and this did not happen once, it happened twice. Okay, so I know somewhere that 1300 is a stiff resistance. Which I am not able to see in point and figure, right now. There its strength, it has gone into negativity. Exactly. At present, the strength of point and figure is that it ignores such small candles. So it became positive for it. Yes, it means in short term there is no good or bad thing. What do you understand, what are you comfortable with you can work with it. I took what I like from both the places. Yes. I like the time element of the candlestick very much, so I picked it up and put it in the point and figure. How did you put it? . Same like you prepare multi year breakout. Well, it means that you have increased the percentage. Correct. When will I get a multi-year breakout? When a huge column of X is formed which will engulf many of its previous candle. Sir, tell any example. Because I want to understand this very interestingly. That how else can I make my method better. Let's take a small example. Let's take a small example, I told you about Avalon, okay, it was a very big column X. See how many column of X it engulfed. Okay, I understand, it means in a way, there was a multi-year breakout in the Point & Figure. Yes. Yes, there will be no time in this. There will be no time in this. I was asking after how many years did it happen? Yes, there is a provision in the software to see that. No, now you do one thing sir. Show me in candlestick. I'll show you. And what was its level. When this red line ever did a breakout? Take it 700. Okay. On which time frame do you want to see? Weekly. Oh. So this is at Rs 700, so what is this line red line here? It is 732 because I have taken the high, yes and there it was 700 because I had taken a close, that I understood. Then let's take the close. Then that will become the complete range. This is coming at 694, but sir, you notice one thing, there is no big difference in both the chartings. It will not happen, yes, it will not happen, because I will tell you what is the common element? Price. That's it. One takes time and another does not consider time, but price is taken by both and that is the base of the entire technical analysis. After how many years did this breakout happen? Sir, it was listed in May 2023. It did not come in my watch list, I think it was my mistake, Nifty 500. And this is 4th November 2024. It is giving breakout in November when the market condition was bad. Yes, and in fact last week it also made a new high when our market has fallen 5%. That's why Sir, call it either Momentum Investing or Momentum Trading, I like it, I enjoy it because a lot of people say that, Sir, when will your method work and when will it not work? Hey brother, this method is such that even in a bad market, it will definitely give you one or two strong stocks. Yes. Because it is said that even in every bad market, one sector is bullish. See, let me tell you now, I am telling it from a little experience. Yes, when there is a correction in every market, yes, and this has been mentioned very beautifully by Prashant Bhai in his book, I would like to quote him because I have read it from his book and realized. We often don't realize. If I ask you, tell me one sector which has run consistently from 2022 to 2024. Whenever the market has run. It has run consistently from 2022 to 2024. Till now. Yes, I don't have this in my mind. I didn't even noticed this. See the Nifty realty. Yes, from 600 to I think 1500. Don't take the level, you just see the phases. Whenever the market moved, out of Nifty Real Estate, you will definitely see a breakout in one or two stocks. After Covid, let's take that, your Covid memory will be very strong. It's very strong. Okay, because it is a natural psychology. Yes, when you go through a trauma, it remains in your memory and becomes very fixed in your mind. In Covid, I will ask you every time, your Covid answer will come perfectly. The biggest Covid sector's rally came? It came only in real estate. It came in real estate, IT, pharma. Pharma was left out later. Pharma went on for maximum 2 years. Later, the stock came back down. It came down. What happened in IT also? It came down. Mid and small cap, IT? It moved Sir. But it was very selective sir. It is still going on, Coforge even now it is hitting 52 week high. KPIT KPIT didn't hit high. But Coforge is still hitting 52 week high. Yes, yes Persistent is still hitting 52 week high and there was one more stock L&T and Mindtree hit it but now it got corrected in the last two-three days and IT was running. Consistently, similar you have real estate, you have just seen this Anantraj Anantraj came from real estate. Hey DLF I think it went to 200% from there sir. Yes. And if we see the monthly chart of DLF now then it is going in a big consolidation. For the last 11 months, not about DLF, not about DLF, I am talking about Nifty Realty, yes, it is also consolidating and that too in one is consolidating near the resistance after a long time. Yes, what you are trying to say to me is this. This is. Perfect. This is what you are trying to say, and look at this, it was something around ₹ 600, okay, this is what you are trying to say me. Yes. Let me show you one more thing. This is we are plotting the nifty realty with Nifty 50 okay. Monthly timeframe. What did we do in this exactly. So basically this chart is that is the price of Nifty Realty divided by Nifty 50. Okay. A chart is made of this okay so when this chart goes up that means Nifty Realty is doing better than Nifty 50 okay we are again doing this on relative strength. Yes, what I want to tell you is that if you only look at the relative strength of the price action you are seeing, then you do not even need to look at the price. Now here again it is visible that the realty is again outperforming Nifty. It is doing again. Means you are confirming the alert I have kept in DLF. Once sir you see DLF chart in point and figure. The chart is good, I have seen it. I have kept its alert in Rs 900 and you see this, what you just told me, what were you saying, multiple anchor is breaking it, so which level is coming in it? In mine it is coming in 958. Okay, the level that you have kept would probably be this one. This is the level of 939-940. So I have actually kept 900 in the line chart. Correct. The level of the next swing break out is 894 half. The two lines I have plotted will be its all time high. Yes yes, it is perfect. You are right. Okay. What's my next swing breakout is above of 894.5. And swing breakout is there in DLF. Now a lot of people will think that DLF is so cheap, why should I take it at the top, because I have to take it at the top because the momentum will start later, you see it has been consolidating for the last many months. Yes, it is in consolidating from March 2024, so it is also possible that it may consolidate for another six months, yes, as much as it consolidate, the better. Yes, we have to enter the game after the consolidation is over, so obviously we have to buy a little more expensive. So this is the thing. If we look at the relative strength, let me throw you a separate question. Yes. Sector wise analysis. Okay. So, which sector do you think will come to 52 week high? Now I think IT will come to 52 week high. Yes, IT has come but that is after yesterday's price action it has little dip. It was IT, correct. Right. There is a pharma, a good setup is going on, I was just going to tell you that after that second is pharma, correct, yes After that, there is a consumer durable index, it hit an all time high, correct. Index, although it's been launched new one and a half years ago, but that also hit new high. So what I mean to say is that with this relative strength, you have come to those pockets where there is maximum money flow and the game is all about it. Yes. Where the money goes. That's where you have to make your trades. Relative Strength will tell you where the money is going and Point and Figure or 52 Week high or whatever it is, will tell you where the momentum is, just go into the field with these two weapons. Master these two - relative strength and momentum. The momentum need not be for me, it is 52 week high. For you, it is 52 week high. For someone else, maybe swing high. That you have to see according to your own. But if you have mastered these two concepts, then .. now point and figure I'm saying Vijay Bhai, how many charts do I see in a day, how much do you think, how many charts do I see? 500-600 Easily, yes I don't sleep every night until I have seen all the charts of F&O universe on relative strength as well as stand alone charts. Only then you will know what is going on in the market right now. And my grip has become such that at 2:00 in the night if you wake me up and ask me what pattern is being made in DLF, then I will tell you in my sleep that this this pattern is in the box size. Obviously sir, this is our business, so we have to take care it. It is not that today I woke up and let's do something. In candlestick I felt that there was a slight drawback that I was not able to memorize it. In point and figure, I got that clarity. Correct. No sir, I enjoyed it a lot and I want to say one thing to everyone, you will have to watch this video in a little more detail, you will have to watch it calmly because only a real passionate person can understand the things Sir said in this video. Like you watch in this video, many times I was asking my personal doubts and sir, this podcast is completely different, every time I ask a question from the perspective of an audience to our guest and this time it happened that I was asking you my own questions but still I feel that my questions will be questions of a trader because I am also a trader and I am also an investor. 100%. So I wish you would have enjoyed watching this video, see, our intention is not this at all that we will tell you the point and figure. We tell you that you come to the point and figure. You can do what sir told in candlestick also. 100% this can be done in trading view also. Yes and you only have to find relative strength That which stock is strong right now, after that whatever is your method like Sir said that once we get the names, you had said in the beginning that brother, we got the names of so many stocks, then those stock later whatever method you have, you have to trade accordingly, like I told you that sir, I will include it in my list in swing trading. So that's the thing. So sir, I enjoyed it a lot sir and I wish you would have enjoyed it too. 100% Because sir generally don't go in such podcasts. There is nothing like that. No, this is what happens to me, Sir, to bring the genuine people, but I will tell you the truth, genuine people do not come on social media much. According to that, I am a little shy. Yes, but how was your experience today, sir? It was very good. Did you have any problem sir? No, not at all. It was wonderful. Yes. It was wonderful. It was fun sir and sir, I have a question from every guest that if any person wants to become full time trader. Can he become? If so, can it be made then what should they pay attention to? Like, you have been in the market for more than two decades, then you can answer this question well. See 100% you can become a full time trader. Becoming a full time trader is not a big deal but I would like to add one more thing to it. Don't become a full time trader. You become a disciplined trader. You should have a trading plan. Ok, full time trader, what is it? Later, if you become a disciplined trader, then later you do your job and do trading, you can still do well. Because sir after Covid, many young people have this in their mind. That we leave the job, do full time trading. But where did they discipline? Today, how can you talk about your strategy with such conviction, or how can I talk about my relative strength with such conviction and ease? It's because that conviction is within me. I have seen this, I have been practicing for five years, it has been going on for 5 years. In a way it is your penance that has been done for so many years and today you are getting its fruits. Exactly. So, more than that, more than concentrating on full time trading. Concentrate on how to become a discipline trader, take a pen and paper, sit quietly for a day and list down what my rules will be. Yes, I feel like no one thinks about it. See trading and technical analysis are very different. And sir, full time trader day don't do trading full day. Mine, in fact my work starts after 4:00 in the evening. I was just thinking that I too don't do any trading throughout the day and sometimes my trades are like this for two months I have to wait when it will move so I'll enter in it. We are like tigers. Have you ever seen a tiger he keeps stocking his prey. I have seen in National Geographic. Yes, he keeps stalking. I am basically a very big wildlife enthusiast. For this I am taking his example and he waits for a perfect opportunity and then he goes and pounces and in that too it is a very similar anecdote you know what is his strike rate of Tiger. Do you know? 100% It is 30-40%. Maximum times it fails. Even after doing so much he fails? Yes, same is the case with trading. Right, yes, you have said this point very right that many people ask sir what is the accuracy of your strategy, so I think accuracy does not matter, what matters is how much money you earn after getting right and how much money you lose when you go wrong. This is also a quote from some brother. I can't remember that brother's name and this is also a quote. I really remember such names. This quote is that the meaning of real trading is not trading or taking trade, it is waiting, waiting, waiting for right opportunity. I think, I did not say that quote correctly but this quote is there. Actually the quote is:' This money is not made in buying and selling. Money is made in waiting.' Right, the quote like this, right. What is it my knowledge taken from everywhere in a staggered way. No, no what you are saying is relatable. It is not easy to wait for 2 years, the multi-year breakout that you see. Sir, when I came to know about this six years ago, and Let me tell you, first of all, what was my trade Reliance on 2017. After the breakout of 9 years and you believe what it did then, you know, after giving the breakout, it was consolidating for two months, it was a little higher but it was consolidating, that time is such a time, when it seems that man, this is all nonsense, I have made a mistake, this is not working and after that sir look at that stock, I think it has given bonus once or twice, yes how much I think if I am not mistaken in a year. It has doubled and he had also retested in Covid, but again the same thing which you just said about conviction. I didn't had that conviction long back. Otherwise you think India's biggest company had given the opportunity to double the money there. Sir, it's a large cap I could have deployed my 50% capital there. Yes. Sir I'm getting goosebumps when I'm saying this. Because at that time I was digging this method, trying to understand it and at that time the target was coming to me, I was abusing myself that are you insane, this 700 stock can't be 1200, 1300 and that too Reliance? Who will believe sir? Even then Reliance was high weightage, even today it is high weightage. Yes and today when I look at the stock and try to understand it, I feel like oh man, it will definitely come to this much. You said that the secret of every trader who will qualify is whether he will become a big trader or not. It's secret is in position sizing, now you told how much you lose. I forgot to ask you this question. Position sizing is also a very important point. Should you keep 20 stocks in the account? Should you keep 10 or 5? See it becomes a bit subjective. Because the nature of each one is different, the risk taking capacity of each is different, the capital of each one is different, we compartmentalize it a little, if you consider that there is a new trader, then to test his knowledge, he has to keep his stop loss a little bigger. 10% Stop loss if you keep. Say for example. And you have a Rs 10 lakh capital, your stop loss is 10%, then how many stocks will you keep in the capital of Rs 10 lakh? it As per my stop loss. Okay, but since you are a newcomer keep only seven stocks. Okay. If in seven stocks your 10% gets hit in a single day then you still have a little money left to think and start again. The same thing if someone is intermediate then he can go with all 10 because he has seen the process that if suppose the type of Covid crash has come in the market. then all my stop losses will be saved in a single day. I will give this 10 lakhs, it will not be even 10 lakhs, I will leave after giving 10 lakhs. If there is any season trader, okay where I am saying, season trader in the sense, trader above 5-7 years of experience, who has seen a cycle, seen one cycle, seen two cycles, well. According to me, then it becomes a different bold game, all together. Then you know that your research is so solid, then your conviction automatically tell you the capital allocation. If I tell you it is DLF, now let's take today's example. We did relative strength, breadth, everything was done. On relative strength if suppose Nifty Real estate index is running above 52 week high, hits fresh high and then you get a stock like DLF and you are one season trader then your Capital allocation will be different. Correct because at that time, what will you do by buying 100 shares or 200 shares? Exactly. By the way, I say that in the stock market, you should do the work that your address should be changed and a little on the upper side, not on the lower side, this is line actually works both side. The address can be changed at both the places but it is one and sir there is capacity in the market, to change the address at both the top and bottom places. 100%. It's right sir, I enjoyed with you, I wish Thank you so much for calling me. It's a pleasure. You must have also enjoyed. Yes. And see I will say this again that if after watching this podcast you are feeling like, hey man, what was going on and what was not going on, then I am saying that, this can only be understood by someone who has gained some experience in the market, and the problems they were facing—actually, we’ve provided the solutions to those problems in this podcast. So if you liked this podcast then do like and share it. Sir are you available on any social media channel whether Twitter or anywhere? I'm on Twitter but not so active. So can I add your Twitter ID in the description? Yes, please. So, if you have any question so I'll mention Sir's Twitter ID below. I'm on Telegram also, I'll give that also. So you can ask Sir your question related to your doubt. Yes. That Sir, if any stock's relative strength is looking good right now, please let me know. See you will trade once or twice by taking tip from someone and can make money also. But you think if that person dies than what? You will stop getting tips then it is better that you learn from that person that brother this is so. The question should be process related. Yes correct. You ask process related question to me ask any time. Just imagine that you will start saying to the person that you are learning from, Sir, just look at this stock, this stock is looking good and that person should say, Oh yes, I was not even paying attention then you should understand that you have learned well and if you have learned it once, then you can further refine that thing throughout your life and can deep dive into it and go into details. So I wish you enjoyed it. Actually, one thing I would like to say frankly, I do not do many podcasts etc., I watch your podcasts also, I came here with a very different mindset, after preparing the entire presentation, I said, I will show this presentation in PPT etc. We did not show the PPT. We did not even open the PPT. Yes, sir, is there something left in the PPT? Nothing. It was a very open and candid discussion. I liked it a lot. I enjoyed it. Yes, actually, Sir had prepared a PPT and I also forgot that we have to tell that PPT, but see, this is the same thing, I don't prepare any script, nor do I tell my guest, so I wish you would have enjoyed. If you like then please like, share and subscribe. If you want to watch such knowledgeable videos on our channel then keep us subscribed and press the notification bell so that you will get the next video notification to you. And if you are a serious learner then only subscribe to our channel because we do not provide tips here. Thank you sir, thank you very much. Thank you so much Vijay Bhai for calling me. Yes, Thank you. [Music]