morning thoughts...

Why do people lose money in the market? Some reasons:

1. They go overboard in Futures & Options (F&O) by creating huge positions, which largely results in losses.

2. Investment calls are converted into trading calls, that too by taking big positions in F&O. By doing this, one can hardly make money.

3. Some members are seen buying huge quantity of Options, presuming that they are safe. This is a myth and sometimes true , need is perfect timing with low premium calls and exit

4. Due to gap up and gap down opening, ID trading potentials are seen very low in this market. Still, we see many of the traders playing ID only, by which, it is difficult to make money, in our opinion.

5. Even for investors, they seem to have limited time horizon, during which, one gets caught at the end of their time horizon. So, if you are a ST investor look for time horizon of 1-3 months for a gain of 5-10% and exit in this period, without waiting till end of your time horizon. No one can time the market!

6. Traders and investors are generally seen chasing momentum and buying stock after it has seen big run up at the upper levels, or seen selling the stock after it has corrected and get caught at the wrong end.

7. Pure technical view can never work in this market, as technical experts only extrapolate the present trend. They see bullish trend for a rising stock and vice-versa.

8. Improper allocation of funds is seen to be landing investors in losses. One must allocate over 50% of the investible funds in blue chip or frontline stocks, while 30% in mid cap and 10% in small cap. Infact, we see investors selling TCSs of the world and buying the likes of Roltas in the respective sector. This imbalances the quality allocationwithin the portfolio.

9. In a bull market, traders start expecting 10 to 20% return in a week or a month, which is not possible, as it happens only with a few stocks. So, set reasonable expectation of 3 to 5% as a trader in a month.

10. Investors become greedy and are not able to sell a rising stock and get fearful and not able to hold a falling stock, without considering its fundamentals. Also, everybody wants to buy in upper circuit (UC) and wants to sell in lower circuit (LC). One must control this instinct.

Habit of rolling over trading position beyond one series is seen suicidal and loss making. Still, we see traders doing this for months at end. Also, sectoral indices need to have positional view, with position in small lots, if money is to be made. No sector or entire market can remain bearish or bullish for the whole F&O series

Yesterday's calls sent

Double bumper Maruti 3700 ca - buy at cmp 35 sl 26 targets 70 - holding

Jackpot Cairn india - buy at cmp 245 sl 237 tar 265 - hit sl

Fii Axis bank - buy at cmp 578 sl 572 tar 610 

Itc - buy at cmp 353 sl 351 tar 360 - booked at 359

Dlf - buy at cmp 155 sl 154 tar 159 - booked at 158

Advance nifty - booked at 8900 - long from 8650

Jspl - sell at cmp 158 sl 159 tar 155 - hit sl

Convert 10k into 30k Tech mahindra 2900 ca - buy at cmp 5 sl 3 targets 15 - holding