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Daure, who has worked as a technical director in films, however found it easy to relate to charts, colours, movements and forms on his trading terminal given his background in creative arts. After years of practice, the graduate of National Institute of Design (NID), Ahmedabad, is now a successful Nifty Bank option buyer. As a scalper, his script is simple – shut down the system after making 1% return on any given day, barring the Thursday expiries.
Edited excerpts from an interview:
The two worlds of arts and stock markets are poles apart. How did you find your forte in trading?
As an arts student, I was looking for some extra pocket money. My interest in the stock market developed after attending a workshop by Ashish Kelkar. Later on, Sivakumar Jayachandran taught me the techniques of scalping. I made a lot of money till 2016 but the next 3 years were very bad. I went back to basics and stuck to the 1% rule and things changed.
As I am an artist, I do not understand data very quickly but I can understand charts, colors, movements and forms. As I was technically good, I understood the data but it was taking 5 minutes to decipher the whole thing. But in scalping, you need to decide within a second.
Then I started taking trades as per the charts only. I made sure that I limited myself to 1% return in a day. My entry and exit points are fixed. People ask me how you manage to be in green every day. I tell them that I shut my system whenever I turn green.
I have been training other new traders also and most of them make money every day. I tell them to shut the system once they have made that 1% return. If you keep seeing multiple opportunities on the screen, then you will be tempted to keep trading. We don’t have to stay there for the entire day. All we need is 3 minutes.
What is your trading strategy as a Nifty Bank scalper?
We focus on ‘In The Money’ option (ITM). When the market moves a little bit in your favour, ‘In The Money’ option premium runs immediately and so you get the premium. In the case of reversal, it doesn’t degrade immediately but ‘Out of the Money’ gets degraded.
There is so much data involved and so I look less at the data and more at the charts. If I see formations happening in the charts clearly, then I take a trade.
People like us are indicator traders. We also study volumes.
A movement of 10-12 points in the premium happens 200 times in a day. All we need to do is to find that one moment of trade where we can make 1%.
Is it really that easy to make 1% return in a day as a scalper?
Greed and fear are the biggest obstacles on the path. It is important to understand your own behavioural psychology to be able to succeed.
In scalping, you also need a lot of muscle memory to make quick trades. If you have not trained your hand, you can’t do scalping. As an exercise, I tell my students to make buy and sell orders once the market is closed. All orders will obviously get rejected but it will help build muscle memory.
What is the kind of strategy you adopt on Thursday expiries?
On Thursdays, I take the hero or zero trade. So either my money will double or I will lose everything. At 2:30 pm, there are chances of a gamma movement. We take that gamble trade. There is a 50:50 chance of winning but our strategy gives us an extra 1% edge. We have doubled our money most of the time.
Just like how you started trading for some extra money several years ago, a lot of youngsters today are doing the same thing. Some of them are even playing with fire by betting a large part of their savings. What would be your advice to them?
If you are into scalping, you need a minimum of Rs 1.5 lakh but you should have a second income. Trading is only for those people who have excess money lying around. One should bet only that part of the money which you don’t need to run the house. Scalping is like doing a PhD in the market.
One should treat the money in the demat account as just a number. It is money only when it is transferred to the bank account.
(Disclaimer: The Economic Times doesn’t endorse any product or service that may be offered by the expert. Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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