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Chanakyaneeti Quantified

Chanakyaneeti

Expedient Consultants are Pioneers in application of Chanakyaneeti in Business (Visit www.chanakyaneeti.com). We have been providing Consultancy on the basis of Chanakyaneeti since 2004. Continuing with the same, we are now designing Power Packed Strategies in Options for Customized Segments. Details are available in the Blog below. 

Chanakyaneeti Quantified

Understanding the Limitations of Stop Loss

Many learned analysts suggest Stop Loss as a tool to limit your losses. Let’s do a reality check for positions carried forward to the next day. As you would know, Stop Loss orders get cancelled at the end of the day, and fresh orders have to be placed for the next day. Let’s assume that a trader was having 1 Lot (1200 shares) of Open Position of Infosys Futures at the end of trading day of October 18, 2019. Infosys Closed at 760 on Friday, October 18th, 2019. He would have paid a margin close to around 2.5 lacs. Market opened on Tuesday, October 22nd, and opening price of Infosys was 684. But that was the highest price with razor thin volumes, and stock fell further. It made a low of 633.05 on that day, and closed at 634.

Following is the reality check:

  1. If you had put a fresh Stop Loss order for October 22nd for less than 10 % Loss, it wouldn’t have triggered (not executed). So, the minimum loss of 10%, i.e. Rs 76 (Closing 760-684 Opening) of the Trader would have been 1200 x 76= Rs 91200, i.e. 36.48% of his invested capital.
  2. Even for fresh Stop Loss orders of more than 10% loss, only those Stop Loss orders get executed which match with the Buy Orders at a given price, and which are placed earlier in priority. With most of big traders and institutions using sophisticated Software, it becomes a lost game for small traders. Thus, Stop Loss for many orders above 10% loss may not have triggered, and they would have automatically converted into Limit Orders.
  3. Brokers place automated Market orders if Loss of their clients exceeds a certain limit. So, if the small trader had not deposited more money with the Broker in time, his position would have automatically squared off at Market Rate. This also is one of the the reasons for Straight Line falls or Stock Crashes.

So, as clear from the above argument, Stop Loss may be a good theoretical concept, but reality is different, especially for those who carry their trades overnight. Even in the day Stop Loss Orders, with Software changing the Buy or Sell orders in a flash, your Stop Loss May not get triggered, even if it falls or rises above your Stop Loss Price. If sufficient Counter Orders are not there in the system, your Stop Loss order may get converted into Limit Order, thus depriving you of the chance to limit your Loss. The solution is to place Stop Loss Trigger Price in a wider range so that there is a sufficient probability of your Stop loss order being executed. There are many more angles to Stop Loss, and I'll discuss then in my future posts. 

© Kujnish Vashisht, Expedient Consultants, 91-9779883347, expedient33@gmail.com.

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Chanakya's Can't Go Wrong Strategy

Pleased to Introduce Can't Go Wrong Strategy, our next in Chanakyaneeti series (Options). As the name suggests, this strategy is designed to take care of both Bullish/ Bearish Markets, and both Low Volatility and high Volatility situations. Money can be made in downward direction, upward direction as well as even if the market doesn't move. Market will always remain dynamic and will keep reacting to downward or upward cues. This strategy gives the trader confidence to face all kinds of situations. Spirit of the strategy remains the same but tactics can change depending upon situations. This strategy is available to our HNI followers under our strict supervision. Gains will depend upon the movement of the market and can be unlimited. Since it is a highly hedged strategy, losses are limited. Even if the market doesn't move a inch, gains can be around 36 to 50% in a year. This is a perfect strategy for uncertain times. 

161.2% on Friday the 13th

Pleased to announce Chanakya’s Give or Take Strategy for Wealth and Prosperity (Options Segment) on Friday the 13th (Considered Unlucky Worldwide). Net Annualized Returns 161.2%. Yes you Read it Right. Net Annualized returns of 161.2%, more than 3 times our previous strategy.  Like our other strategies, this is also a Standardized strategy, and works in both rising and falling markets. .  Unique feature of this strategy is that it may work even if the market doesn’t move. Launching it at present only for our HNI Clients.  Deliberately launching this on Friday the 13th which is considered unlucky. I am a firm believer that if your product is strong, it is going to do well irrespective of Good or Bad Mahurat. Years ago, my first trade in Stock Market was during Shraadh period which is considered inauspicious.  Among my various professional roles, the one in Stock Market has been most profitable and satisfying. The message I want to put across is that we should draw a clear line between Religion and superstition.  If you work hard and design a strong product, God is with you and any time is good time to launch your product. Keep visiting our blog www.sharepundit.com

Chanakya's Knowledge Sutra

An Important note for our Followers. Many questioned us today on Why not traditional Chanakya's Reverse Gear? Why May Twist? Chanakya had different solutions for different situations. Stock Market is extremely Dynamic where Situation can change even in 10 Minutes? So how to Standardize trades in Dynamic Market? Answer is to apply a combination of Strategies at a particular time with high probability of net positive result at Optimum Cost. We have already explained in detail about this to Students taking regular course on Options from us. Passive Participants may continue with traditional Reverse Gear Strategy. 

Update for taking Positions in Chanakya's Reverse Gear Strategy

Take Positions in Chanakya's Reverse Gear Strategy, but with Chanakya's May Twist. Buy May Options, and Sell June Options. Strike Price is 7700

Update for taking Positions in Chanakya's Reverse Gear Strategy

Take Positions in Chanakya's Reverse Gear Strategy, but with Chanakya's May Twist. Buy May Options, and Sell June Options. Strike Price is 7700

Caution on Chanakya's Reverse Gear Strategy

Caution advised against taking positions in Chanakya's Reverse Gear Strategy today. Parameters are loaded against making profits from this Strategy in May Series. Please wait for our updates in coming days before taking any Position. 

April Performance of Chanakya's Reverse Gear Strategy

There was a nominal loss of around Rs 2000/lot (after presumptive Brokerage and Taxes) in April Series. If you are a passive trader, no need to worry. As would be clear from the Calculation sheet we sent to you for previous 3 years, this strategy makes nominal losses whenever expiry takes place around the starting point. This strategy makes good gains when market makes a big move. There was a very nominal loss (Rs 637.5 before Brokerage) on yesterday's closing. However today, market moved towards the starting point. Can one make a better use of this strategy to make regular gains? Answer is Yes. One can use this strategy in combination with neutral strategies which make gains when starting and expiry points are almost the same. However, when to enter these neutral strategies, in what proportion, and at what cost? We cover these aspects in our regular course on options. 

Strike Price for April 16

For all those who took trade yesterday as per " Chanakya's Reverse Gear Strategy for Smooth Forward Drive" please note that reference point for April Series is 7800. 

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