A Trader Should do Nothing


A common theme I have seen while studying rich traders and I have experienced in my own trading is that more trading is not necessarily the path to making more money. ” Great traders tend to be patient and pick their trades carefully.“Some will go long periods of time without even making a trade waiting for the environment to become more conducive to their method. Others will not trade until their specific set up is in place. Some only trade break outs and others wait to buy at support but these are the things that give them the edge and makes them successful: patience, focus, discipline, and only taking trades when the odds are in their favor.

Ten Times When A Trader Should do Nothing

  1. When you are confused and don’t know what to do, do nothing.
  2. There are no set ups on your watch list, then don’t trade.
  3. You are a trend trader and there is no trend to trade.
  4. The market is extremely volatile due to headline risk.
  5. You want to make an option trade but the options are illiquid with a huge bid ask spread.
  6. If you are trying to trade supply and demand but the government keeps interfering with your market, pick a different market.
  7. Your stock reports earnings the next day and you expect a powerful move but it could easily go either way, wait until after earnings to trade.
  8. You are a momentum trader but their is not momentum, then wait.
  9. You play the long side only and the market is in a correction or a bear market, wait for a new trend to the upside.
  10. If you are not at your best mentally and emotionally then don’t trade until you are.

Relationship Manager


In this article, we will discuss “Relationship managers”. I got an interesting comment about “Relationship Managers” on my Facebook wall from Prasad when we were discussing about recent HDFC Life offering on 100% Free Financial Planning through snapdeal. Here is Prasad’s sharing on his relationship manager and what happened with him.

I am totally disappointed with HDFC Bank, every time my RM calls, he wants me to sell an insurance plan. If i tell him that I have other commitments at this point of time, he tells me he can get me a credit card if I don’t have one and use it to buy the insurance plan… It can’t go down more ! Had so much respect to this bank. But the concept of RMs is the most misleading thing !

Focus on this comment and re-focus on one sentence – “he tells me he can get me a credit card if I don’t have one and use it to buy the insurance plan”. What does it say ? What comes to your mind when you read this ? It shows that there is extreme focus on performance, there is extreme pressure on meeting targets on relationship managers. Their jobs are at stake at times and there is a do or die situation.

What are Relationship Managers ?

Relationship Managers are generally assigned to a customer who have more money and resources than others, who has more longer term relationship with Banks, you are told that you will be taken special care by this relationship manager, at times you can directly talk to him for any issues. All the people having more than a certain net-worth or salary are assigned relationship managers.

You are told that he is suppose to help you out whenever you want and he will be available to you all the times when you need him. However, relationship managers are generally MBA Marketing guys , who are hired to take the sales go up, they are responsible to bring business by hook or by crook. The worst part of relationship managers is that their attiration rate is so high, that by the time you figure out that you 90% mis-bought and were 10% miss old a financial product, the relationship manager is not working in the same company anymore, he has moved to another job now.

I read this funny incident on Mayur’s article comment section where Sahid is sharing something about customer care people lie

Recently got a call from Kotak Mahindra bank regarding some bullshit insurance policy. Usually whenever marketing calls comes to my mobile, I used to say “sorry, Not interested”. But this time I decided to elaborate why I am not interested by telling a lie. All I told was “Actually I was interested in this product and had fixed appointment with your relationship manager on last Friday. But he didn’t come. So not interested.” The marketing guy replied that he will check back. After two or three minutes I got a call from them again. “Sir we are extremely sorry. We called that relationship manager. He was not able to come to you because he met with an accident that day. Shall he come today?”

What a relationship manager knows about you ?

A relationship manager knows how much money do you have in your bank account, he knows for how long it is lying there. He knows the recent credit and recent debit from your bank account. He can figure out that one of your FD maturity and is now “available” for massacre. He can then call you or meet you and show you an amazing product , if you want to invest and “if you have any money” . Obviously he knows you are sitting on a 10 lac cash right now. He is innocent, he is just telling you about something FYI, after all thats his job!

Remember, If a relationship manager recommends you some product and if you manage to make good returns or it turns out to be a good thing for you, it’s mostly accidental! So now, if you are an HNI or if you are going to get a relationship manager from your bank , broker or whatever it is, just make sure you know that it’s most probably going to add to your headache. He will keep on pushing you, convince you about opportunities and prove to you how your money is getting wasted sitting at your bank account. I remember a comment made by Subra on one of his article  on relationship managers and doctors.

Joints Accounts-Nominations-Will, Best Use of It?

There are 3 ways one can pass on his wealth to someone – joint accounts, nominations and Will. A lot of people do not know which one is more powerful than other and when to use which one. Today let’s discuss a few points about joint accounts, nominations and will and some scenarios which will make them clear. Also, below is a good video on Wills in case you want to watch.


3 mistakes which investors make

1. Not understanding what a joint account means

If you want to make sure that after your death, your wife operates the account and should be the sole owner of the account then don’t just make her the nominee, better make her a joint account holder in the bank account itself. If you choose “either or survivor” mode, she will be able to transact and do things along with you. But if you want to make sure that she can only operate and take charge once you are not around, then choose “former or survivor” mode, so she will not be able to transact and own anything till you are alive, but once you are no more, she just becomes the owner, without any hassles. This is a better way to give control to someone after your death and more powerful and simple than making a WILL or leaving it on the mercy of fate. You can make some person joint holder in bank accounts, mutual funds, FD’s or real estate properties.

2. Forgetting about old joint holders

A lot of people have joint accounts with their father, mother, brother etc etc years back, but now they want to pass on their wealth to their children/wife on their death, so they put their names in Nominee and also write a WILL (for full proof documentation), but once they die, the nomination and WILL be of no use, because the bank account is not dormant, it’s still alive with a legitimate owner and that will be the person who was the joint owner. You might have opened that bank account long back before marriage with your brother or father as joint holder and now forgot about this, but they are the next legitimate owner of the bank account (or anything else). Note that nominations are useful to pass on the control only when no one is to claim it and WILL are to transfer the rights to someone after the owner is dead, but in case a joint account is there, the control can be passed only on the death of both the holders, not just the primary or secondary holder.

3. Not changing Old nominations and WILL

A lot of people do not change the nominations of their bank accounts, mutual funds, life insurance policies due to laziness, someone else is on the nominee list, but they want to transfer the asset to someone else. A lot of people think that making a WILL is the final solution, but in real life, there can be complications. What if the nominee and the person mentioned in a WILL are different ? The nominee can take out the cash from bank or do some transaction ? Then the legal owner will have to run from pillers to post to claim that money back and do all the legal work. See this classic issue on forgetting about the WILL.

Hi, I am facing a big issue… My husband had written a WILL long back stating that all the wealth should go to his brother after his death, but this happened years back, when we were having a lot of issues in marriage and fights, but after that everything was fine and things were on track. But seems like my husband never wrote another WILL after that and didn’t change the WILL. He died recently in an accident and now his brother has claimed all our property and bank balance because of that WILL. What can I do ?

Truly speaking, This lady cant do anything… her husband was ignorant about these things and now she will pay for his mistakes !

Some best practices:

If you are 100% sure that your wealth should go to some specific person, always have a joint account with that person with you as primary person.

Make sure your nominee should be the same person you want to pass on some policy proceeds or property, It does not make sense to say in WILL that your wealth should go to A , but in nominee the name mentioned is B.

If you have opened any accounts/properties/mutual funds/policies long back, it’s a good idea to revisit it and see that the nominee name is appearing and is consistent with what you want it to be.

Joint Accounts, Nomination and Wills are all ways to pass on your wealth to someone else once you die, so it is very important that you structure these in the best possible manner. Have consistency in all these 3 things. If you pass on your money to a person better open account or buy the asset along as joint owner, make sure you put his name as nominee and also make sure that the WILL is written with clear directions.

Trading Plan Template


Trading Plan Template

One of many initial things starting traders are informed to do will be create a trading system that will spell away a trading scheme along with a checklist of rules to adhere to in applying that scheme. The particular problem with that information would be that starting traders don’t truly have trading experience, and therefore are destroyed when trying to create a trading system with their trading.

Another issue with Stock trading plan would be that novices are instructed to deal with their plans as gospel and they are informed to not vary from them. This prevents traders from adapting their tips and rules to enhance their show, an important move in every trader’s discovering curve.

Instead of the stiff document to be created early on in your trading profession and never to be changed, you will want to rather see your trading system as a residing and respiration group of guidelines, capable to be changed as you gain trading experience. This short article will teach you how to create a trading system that will guide your trading efforts without stunting your progress.

The 7-Point for Sample Trading Plan
In making your trading system, here are the items you will want to include:

1. Markets – What markets will you focus on? Be as certain as possible – if you’re trading stocks, what kinds of stocks will you focus on?

2. Timeframe – How long will you hold your positions for? Will you be a day trader concentrating on investments lasting a limited moments, or maybe a swing trader keeping investments for several days?

3. Time Period – What times of your day will you trade? You have outside tasks that stop you from trading an whole trading day. Pick which times of your day ideal match your fashion.

4. Trading Design – How might you characterize your trading fashion? Possibly you’re a momentum trader concentrating on trending stocks? Or you focus inside of a certain sector? Again, this can and will change as you gain experience and read from your outcomes.

5. Possibility Administration Rules – This is certainly an completely essential and quite often forgotten component of the trading system. How will you regulate your possibility, both on a per-trade basis and overall? You need to possess a “avoid trading” point and is a fixed dollar amount that will force you to avoid trading if you’re down by that much.

6. Coach – Who do you follow and understand from as a instructor? Trying to educate yourself on trading all by yourself is not just lonely, but ridiculous as it ignores the hard-earned wisdom of different traders. You can easily either repeat the errors of alternative experts and hope to eventually read the classes and techniques that they’ve discovered, or you can easily just read from effective traders and bypass those initial frustrations.

7. Discovering Process – How will you construction your discovering process as a trader? What steps will you take to ensure you’re constantly acquiring better? How will you construction your trading record?

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What is Intraday Trading?

What You Need To Know About” Intraday Trading

One of the fast growing trends in the stock trading arena these days is day trading. Today, more and more people are getting into this drift due to the many promises of making fast and easy money on their minds. However, what a lot of people fail to realize is that the buy fast and sell fast strategy of day trading may not always turn out as a very wise tactic to adopt in the stocks game.

Day trading can be a bit of a gamble and traders remain divided on the issue on whether or not this serves much purpose to the stock exchange industry.

Still, what most people could agree on is the fact that day trading is certainly not for everyone, and that it can involve huge risks. And so, before you immerse yourself in day trading, be sure that you get your facts straightened out.

  • What Is Intraday Trading?

Day trading is the buying and selling of securities for a certain stock within a single day. The main goal of those who practice this type of trade is basically to be able to profit from the difference between prices for buying and selling.

This type of trading serves two very critical functions in the industry. First, it keeps the markets efficiently running because of arbitrage as stock exchange basically thrives on buy and sell activities. Another function for this is that it usually provides so much liquidity in the stock market.

  • What Makes Day Trading Risky?

Although day trading may sound quite appealing at first, be warned that up to this day, the profit potential of this type of trading is still under debate among investors and brokers. And if you are new to the trading game, it is not advisable for you to gamble your investment as you may end up losing substantial amounts of money.

Although day trading is not necessarily illegal nor is it unethical, most would agree that it is risky because principles of this trade are based on the “fast and easy money” mentality, and therefore, day traders rely on making profit by rapidly buying and selling stocks in a single day as their stocks continue to rise and fall in value.

Of course, the chances relied upon are not quite dependable and choosing to do business this way seems more of a gamble than a sure way to gain money. Most financial advisors may discourage people from entering this type of trading, with the argument that most of the time, rewards do not justify the risks involved.

Apart from this, many parties capitalize on much of the confusion behind the controversies on day trading and create multiple Internet scams. And since most investors in these type of trades do not actually have a lot of money and may use borrowed money to buy stocks, this can be very dangerous.

The bottom line is, most financial experts would argue that most successful companies have grown not because of day trading, but through more traditional means.

If you were currently not very familiar with the stock market game, then it would be wise for you to stay away from day trading. Take in mind that the best way to earn profit may be through the long process and hard work, and taking shortcuts may certainly involve much more risks than you may want to bargain with.