DISCIPLINE

TRADING SYSTEM
TREND FOLLOWING FOCUS ON ABSOLUTE YIELD
Trend Follo ing or "Be on The Right ide is a trading system based on the
principal of price analysis. Trend Following tries to take advantage of long, medium
or short-term moves of the market. Smart trader takes advantage of these market
trends by observing the current direction & using this to decide whether to buy or
sell.
The objective of Trend Following is to produce absolute yields irrespective of bullish
or bearish market condition.
The success of trading system works on following principles :
1.
2.
3.
4.

Strict Money & Risk Management

Riding the Trend & No Prediction
Emotionless Mechanical Execution
Discipline & Consistency to follow the System

Some of the characteristics of the Trend following system are:

1.
2.
3.

The Big money of letting positive trade run.

Proven scientific approach to trading backed by Backtesting.
One may suffer temporary drawdown in case Sideways market (means no
directional trend).

Based on above principles, we can assist you to trade in the direction of the trend in
a pre-defined asset class.

BMA WEALTH CREATORS LIMITED.

Corporate Office Address: Viswakarma II,29-5A,Dr.Ambeddkar Sarani, ,Topsia Road,Kolkata-700046
Regd. Office Address: 14/1,Paul Mansion, Ist Floor,6 Bishop Lefroy Road, Kolkata-700020
SEBI Registration Nos: NSE- INF231233132 , INE231233132 , INB231233132 / BSE- INB011233138 , INF011233138

DISCIPLINE TRADING SYSTEM

FREQUENTLY ASKED
QUESTIONS [FAQs]
PART 1 GENERAL QUESTIONER
ABOUT TREND FOLLOWING
What is Trend following?
Trend following or "Be on the right side is a Trading strategy based on the Pri e analysis of the
asset class. Trend following is a trading strategy which tries to take advantage of long, medium or
short-term moves that seem to play out in various markets. Smart trader tries and takes
advantage of these market trends by observing the current direction and using this to decide
whether to buy or sell.

Trend following is all about mathematical odd in your side. It is all about finding a consistent edge
with no guess, hunches or Prediction
What is the basic Principal of trend following?
We elie e in Plan your trade & trade your plan & follo follo ing prin ipals - :
1. Proper Money & Risk Management
2. Trend is your friend
3. Emotionless Execution
4. Discipline & consistency to follow the above

What are the asset classes?

Asset Class are Equity index and stock Future, Commodity future, currency future or any other
derivative asset class.
But, presently, we can assist you to executive your trend in Nifty & Bank Nifty. Plan to introduce
other asset class in later stage.
Who should follow trend following ?
1. Client is having money but no time
2. Those who want to make money in bull & bear market.
3. Portfolio investor who is willing to hedge his risk & also wants to participate in market rally.
And it is not for
1. Those who wants to earn money instantly
2. Person who believe in prediction
3. Day-trader

DISCIPLINE TRADING SYSTEM

How trend following score over fundamental & technical ?
There is a difference. Trend follower have rule which is tested & does not believe in prediction.
Parameter

Technical (Discretionary)

Trend Following

Price, vol. & Indicators

Yes
No
Yes
partly yes

Fundamental
Balance sheet& many
more
Yes
No
Yes
Yes

Based on
Prediction of price
Back testing
Target
Emotion
Proven Consistence &
track record
Rules

No
Complex

No
Complex

Yes
Simple

Price
No
Yes
No
No

When trend following works?

It works best in the trending market. The investment objective is to make money from up & down
market. But it does not work well in sideways market.
Will too many trend followers make strategies less profitable?
The profitability of Trend following will decline only when human greed, fear and hope
disappeared. Like in 2008, Trend follower makes fortune.

How risky is trend following?

Life is risky. One can have car accident while cross the street. But if you have concrete plan, risk
can be manageable.
What is money Management?
Money management, or position sizing, is critical component of trend following trading success.
It accesses the
1. Risk per trade
2. How much quantity to trade on how-much amount by accessing the risk per trade.
Is Leverage used in trend following?
All great trade following traders use leverage. It is a tool to be used correctly. But trend following
is not about using reckless leverage. It follows its money management & prudent risk
management principal.
If trend following works so well, why strategy is used by so few participant?
We feel that 1. India presently, is a trader & investor driven market & there is a absence of tactical product.
2. Secondly, people want to rather rear prediction backed by great fundamental analysis and
projection. This stories appeal to investors more than a statement saying to just follow the
trend
Can Trend following be applied to day trading?
No.

DISCIPLINE TRADING SYSTEM

PART 2 - BMA SYSTEM
What is the successes ratio of you trend following?
The trading system accuracy is currently less than 40%. It means that out of 100 trades only 40
trades are profitable.
Then how does your wealth is created?
It created with discipline and proper money management to catch those 40% of Winning Trades
and Exiting properly at Stop Loss Hits.
It is Short Term or medium term strategy.
The trend following principal can be applied to any timeframe be it short or long term. But, we
following medium term trend following strategy to catch the primary and intermediately trend of
the market
What are the maximum continuous losses the trading system can yield?
Since 2002 after back testing with our data it is inferred that till to date 7 consecutive losses had
occurred
What is the investment required?
The minimum investment required is 1,50,000 ( One lacs & Fifty thousands) for Nifty and 1,50,000
( One lacs & Fifty thousands) for bank nifty.
Can fund manager use his discretion?
No, Fund manager cannot use his discretion. Incase of high impact events, we will apply set of
predefined mechanical rules. High impact events are like Election result, budget , RBI policy or any
other very high global events.
When can I withdraw my money? What it the ideal time to give before I can expect return
There is no exit rule & the money is lying with your ledger only. You may withdraw any point of
time. But, would like you to keep you money for atleast for 6 month
Is it market linked? Can stock market performance have any impact?
No. You will be able to make money in both UP & DOWN market. But incase of sideways or
choppy market, you may see loss. It is better to go for both Nifty and banknifty.
Why it is advice to trade nifty & bank Nifty?
Diversification which you need the most
System faces drawdown from time to time. Studies have shown that, if you diversify this with
Banknifty, the drawdown reduces considerably.
What is the brokerage charged?
The minimum brokerage will be charged as 0.05% for both buy and sell transaction.

DISCIPLINE TRADING SYSTEM

PART 2 - BMA SYSTEM
Is capital is safe?
Capital is not guaranteed. We are assisting you to learn trade following & can also help you to
assist to put trade as per trend following mechanism.
Why so much margin?
As a money management rules, we kept almost 5 times of margin required. It will ensure that we
are remain in the game (market) in a time that when system faces drawdown due to sideways
market.
Is Stock Margin allowed?
Yes. You can given 50% as cash margin and 50% as stock margin (after appropriate haircut)
Is this account different from Normal BMA account?
No. It is like normal account & you will get all the information like ledger, stock, position , SMS ,
ECN etc.

BMA WEALTH CREATORS LIMITED.

Corporate Office Address: Viswakarma II,29-5A,Dr.Ambeddkar Sarani, ,Topsia Road,Kolkata-700046
Regd. Office Address: 14/1,Paul Mansion, Ist Floor,6 Bishop Lefroy Road, Kolkata-700020
SEBI Registration Nos: NSE- INF231233132 , INE231233132 , INB231233132 / BSE- INB011233138 , INF011233138