Comment on Mr Consistent returning incredible returns

Madan commented on 16 Jan 2014, 01:41 PM


1. If trading capital is X, NF = 0.4X, BNF = 0.6X

2. 1.5L is ok for BNF. Let me make it little bit clear. Lets say i have 3 L in my account. I trade 1 lot of NF and 1 lot of BNF. Not 2 lots of NF and BNF. I don’t trade 1 lot of NF and BNF simultaneously per 1.5 lac. I am just extremely careful with my trading capital and i refrain from putting myself to extreme seesaw in both my equity curve and psychology. For me, emotional wealth is more important than money wealth.

3. BNF is a beast by itself. It casually moves 50-60 points in few seconds. I was watching it for a while before i started trading it. I don’t believe in DEMO trading as it is useful only to understand the execution software. So, i traded BNF with 20% of what my size would have been and moved to 60% size in 1 month, and 100% size in 2 months.

It requires a trader to be extremely nimble to trade BNF. Compare to NF, BNF is also less liquid. So, slippages are huge in runaway markets and when the order does not get filled, it puts us in peril as we would get into the mental battle of whether we should wait for the market to come to our price or get the order filled in CMP. I guess, the decision making capability gets matured with experience.

Hope it helps.

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