Personal project on trading with Mum's money.


Sucker who trade 103: Personal Project On Trading


I started a personal project when I took a career break for my studies. I took some money from my mum promising her 10% returns by the end of the year (yeah, that’s a risky bet) and made a stock and derivatives portfolio. First, I was confused about how to invest this money, do swing trading, derivatives trading, or commodity trading. I tried everything and lost 10% of the principal amount quickly. That was a setback given my career of setbacks in trading. I analyzed where I went wrong. The first thing I was not focused. I was changing countries then. I was trading between changing countries and career profiles. 

 

Second, I didn’t pay attention to detail. I didn’t realize how much charges I was paying to the broker for my trade. As per my experience, a broker can make a lot of money from client trades. Irrespective of whether you lose or win broker charges plus government taxes are always going to be there. We never look at them till the portfolio starts bleeding. 

 

That was the starting point for me. After losing money constantly in Feb and March I stopped trading in March and wait for my setup to come in. I am good on the buy side psychologically. I just waited. I was observing markets every day, following chart movements. The temptation of getting into the ring was tempting but somehow, I knew how much I can lose if I don’t wait or take a break from trading. 

 

By March end, markets have their triggers in place. There were some government plans, and a decisive reversal was apparent. A trader knows in the guts when their setup has arrived. I started trading actively on my mum's money in April 2023. I didn’t have focus earlier but over time it came. 

 

My first target was to secure the capital I have lost plus the interest I had promised to my mum at the end of the year. The experiential kick of trading in real and meaningful money is something which one can’t experience in virtual trading. The tides turned for me. Earlier I was confused. I should go for swing trading, long-term investing, derivatives trading, etc. My portfolio itself gave answers over time. The answer was simple, recover the losses, earn the interest promised and don’t lose Mum's money. Losing Mum's money will put my inheritance in jeopardy. 

 

By the end of June, my portfolio is on 24% returns on the principal amount. I recovered losses and recovered interest to be paid to Mum plus some extra. My next target is to make my mum's capital safe. 

 

Never be confused about your strategies. Your portfolio is like a living organism. It will tell you what it needs. Just stay truly connected with it silencing all the noise you can. But there are a lot of black holes in these returns. I feel I could have done better. My weaknesses and no proper hedging strategies are still playing a good part in my losing money. 

 

But there is a positive start somewhere. I don’t believe in long-term investing. I believe in money compounding.

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