Kumar jay

“WITH RIGHT
MINDSET ,ONE CAN
NEVER LOSE MONEY IN
THE STOCK MARKET”
My Mentor – “ M.R Edward ’’
Perception of stock market before this webinar –” full of regrets , stress and losses”
How many people make money in the stock market?

 Handful of trader’s make money in the stock

market.
 90 % of the trader’s lose entire trading
capital in the first 90 days.
 Most of the trader’s don’t come back to the
market as they feel betrayed and revenged
by the stock market.
 A few come back to the market, just to lose
their money again.
How to these 90 percent trader’s
trade?
 As per the information given by various
broker’s , 4 out of 5 trades taken by retail
trader’s are profitable.
 Can you believe that despite have a
impressive strike rate of 80 percent , 99
percent trader’s lose money in the stock
market.
 Can anyone tell me why are the retail trader’s
losing money in the stock market ?
Trading book of a retail trader.

 The trading book of a retail trader on a capital

of rs 1,00,000 -
Trades taken Profit / loss.
1) reliance + 1000
2) Yes bank + 250
3) Hdfc bank + 800
4) Indusind bank + 1200
5) Ibulhousing finance - 45,000
TOTAl - 41,750
Small profits , BIG LOSSES
 Just imagine the emotional situation of a trader who
made various small profitable trades in several months
but just one bad trade wipes out his entire profit.
 Ask any stock market trader , he will tell you that he
lost all his money in one bad trade.
 And after such a loss , a trader never return’s to the
stock market.
 And if he doesn’t learn from his previous mistake then
he will come back in the stock market just to lose more
money.
When you lose money just because of one bad trade
What does it tell you about human
behaviour
 As humans ,we hate losing money much
more than we love making money.( that’s
why we book small small profits , but hate to
accept any sort of loss)
 We don’t like to be wrong , we never accept
our mistakes
 Umeed /hope– This is a disaster in
trading.And not just trading in every aspect
of life.( product , machinery , love )
A funny example of umeed
Best book on trading psychology and
mindset.
Do you want to enter the 1 % club of profitable successful trader’s ?

 Successful trading is recipe of three ingredient’s.

1. 40 percent is mind set and emotional
intelligence.
2. Another 40 percent is Risk management and
money management
3. The remaining 20 percent is technical analysis /
market study.

Note – “ If you understand the above, you’ll never

make a loss in stock market “
” you can never lose money in the stock market “

 Why do I say that we can never lose money in the stock

market , since I just said that one can never avoid losses
in trading.
 Well trading is just like a cricket match , it is not
necessary that every player should play well , what is
matters is that we should win the game. Just one player
can win the game for us.
 Ask sachin , what is closer to his heart ?
 Similarly in trading , you have to come out in profits
collectively over several trades ,say for example 20
trades.
RISK MANAGEMENT -“I don’t see market’s , I see risks , rewards,
opportunities and consistent money’’

 What is risk management ?

 Risk management simple refers to assesing
opportunities with regards to the risk in the underlying
asset.
 In simple trading language it means “ kya aap decision
lene se pehle uska risk nikal rahe ho “
 Don’t you think we ignore this in our daily business
also ? Just ask yourself why did you lose big in a
particular business and you’ll know that you never
assesssed the risk in that particular business , you just
followed the crowd.
How retail trader’s enter the market.
WARREN BUFFET - “ rick comes from not knowing what you’re doing”

 If you know your risk , then you can be super

relaxed in the chaos of stock market.
Risk management.

 Risk management is made up of two things

 risk to reward – “ It refers to how much risk
you’re willing to take to earn profit “ – in saral
langauage – “ aap rs1 kamaney ke liye kitna risk
le rahe ho “
 Probability – “ probability is usually represented
in percentage “. In simple language – what are
the chances that virat kohli will score a hundred
after having scored a 50 ??
Understanding risk management and probability with the example of coin toss

 There can be only two outcomes from tossing

a coin –
 Heads or,
 Tails
The probability of heads and tails is 50 percent
each.

Outcome of toss Win/lose

heads profit
Tails loss
Final result if you toss the coin
10 times ?
 How much are you willing to lose if you’re
asked to bet on a coin ?
 now you know that your chance of winning
are 50 percent and you’re told that for every
heads you get rs 100 , and for tails you lose rs
100. So what would be the net result ?
Result of coin toss with a 50/50 probability.

result times reward/loss total

heads 5 100 500
tails 5 -100 -500
net breakeven.
Trading outcome is just similar to coin
toss.
 When you buy a stock , only two things can happen
either the prices will go up or it will go down. The
inherent nature gives it a 5o/50 chances
(probability) of going up or going down.
 Since a beginner doesn’t have an edge or any idea
about technical analysis (the third pillar of
successful trading ) , his chances of making profit
or loss are 50/50.
 Technically speaking , right now all of you can
trade in the stock market without losing money.
Your trading result over your next 10
trades.
 Probability – 50 %
 Number of trades – 10.
 Result is as below.

Trades No of trades Amount per Total result

trade
Profit trades 5 + 1,000 +5,000
Loss trades 5 -1,000 -5,000
Total trades 10 total Breakeven.
Are we serious ? We won’t make a loss now ?

 Yes , you’ll not make a loss in the stock market

if you take a trade with a risk to reward of 1:1
I.E your risk shouldn’t be more than your
reward/profit you’re expecting in a trade
 .Then there’s no way you can make loss in the
stock market.
 Congratulations , now you’re in among the
few trader’s in the stock market that don’t
lose money in the stock market.
 A big round of applause for yourself.
Live Market session on
WEDNESDAY
 We will do a live session on the coming
working day.
 I’ll trade whatever you say on my
account( nifty 50)
 We will take have a random distribution of
trade
 We will start the live session at 10:30 AM or
after 12:30 ( we will update the timing )
Now it’s time to become profitable in the stock market.

 How can we consistently make money in the

stock market?
 you have to increase your chances of winning
to more than 50 percent.
 To increase your winning chances by more
than 50 percent , all you need is an edge.
 And that edge is “ Understanding the broder
trend of the Market “
Your PNL after learning technical analysis( Price action).

 Let’s take the previous example of 10 trades

again.however since this time you have an
edge in the market , your success ratio is 70%.
That is , you’ll be right 7 out of 10 times.
You’re trading on a capital of rs 1,00,000.
Trades Number of Amount per total
trades trade
Profit trades 7 +1000 7000
Loss trades 3 -1000 -3000
Total trades 10 Net result +4000
You’re Not starting from ZERO
When you know money making is Simple in stock market
 CONCLUSION

 The risk to reward should always be more than 1:1

 You don’t have to make profit in this trade , but you
want to come out profitable over many trades.
 You lose only when you take uncalculated risk
 You can never lose money in the stock market if you
take calculated risk.
 With few simple Price action setup’s , I can make
consistent tension free money in the stock market.
 Don’t risk more than 2 percent each day.