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Manas runs a restaurant in Saket, Delhi which he co-owns with his sister,
practices boxing, kickboxing, and other martial arts to keep himself busy
and travels around the world every three months. He still nds time to be
active on the social media, posts each and every trade on his very active
Twitter account @iManasArora and answers trader queries.
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Also, it was probably the lure of working from anywhere around the world
that kept Manas glued to trading. He is now living his dream, traveling,
running a business and of course trading.
In an interview with Moneycontrol, Manas speaks about his adventure of
becoming a trader, his trading strategy and his new quest to train
wannabe traders.
More than the broking business I was really hooked to the price
movement and the money-making opportunities it presented. I started
digging in on the subject and read up on what makes the market move
and how to make money from it. This led me to the subject of technical
analysis and I started practicing it.
In those days the main social networking forum was Orkut. I used to post
my recommendations on Orkut. Within a few months, there were over a
1,000 followers who were appreciating my calls. I decided to monetise on
it and started charging a nominal amount for the calls.
But then I realized it is not easy. You get pulled up for every call that did
not do well. Since the renewals were not coming and the unreasonable
pressure from clients on every call being a winner, I decided to trade on
my own.
I thought that rather than helping others to make money I should trade
on my own. I shut down my broking business, pulled out all my savings,
borrowed some money and started my trading account with a capital of
Rs 50 lakh. By the end of the year, Rs 22 lakh was left of it.
I went back to reading and scanned the net in search of answers. On the
internet, I bumped into a genius trader Mark Minervini’s work. I went
through his book ‘Trade like a stock market wizard’ which was the
turning point in my trading life.
Once I got my act in place, recovery was fast. I managed to post a 120
percent in the next 11 months. I still trade on the same strategy and same
risk management and have managed to take my trading book to eight
gures.
Say if a stock has gone to 100 and then corrected to 80, the next level it
touches is 90 and then 85 after which it has to touch 87. This is a stock
which goes into my next basket which I call the 'ready to take action'
stocks. After three contractions in price, I am ready to strike at the
breakout.
I have a standard stop loss of 7 percent from my entry price. This level
has been arrived based on my experience. I have noticed that a strong
stock does not go below the 7 percent mark.
I look for companies which have a low oat as they give a good trending
move. A turnaround company which has moved from losses to pro t or
those which have a strong sales and pro t growth generally show up in
this list. I normally do not look at fundamentals but if these criteria are
ful lled I increase my position.
If a stock has moved up really fast, say 50 percent in 3-4 days I will exit it.
But if it is moving slowly I will look for re-entry. Normally I get a chance
to add 3-4 times in a good trending stock. In the case of a very good
trending stock, I get a chance to add up to 6 times.
Q: How do you exit from these trending trades, and do you take re-
entries in these stocks if it again shows up on your scanner?
After the initial setback in my trading career, I take my stop losses very
seriously. In fact, in my of ce, I have stuck up a sign which says ‘Don’t
believe your stocks; believe your stops.’
A: Only 3-4 trades out of 10 are winners for me. But my average win is
three times my loss. So basically I only need a few stocks to come out as
winners. In fact, one good trade takes care of all the losses and the
remaining add to my capital.
Q: With 3-4 winners out of 10, how do you a handle losing streaks?
By the start of next month I have already cooled down and since I have
lost only ve percent I know that it needs only one pro table trade to take
care of this loss.
Q: You have been giving training to some traders, can you tell us
something about it.
A: I have given one-to-one training to eight traders, who are all fulltime
pro table traders, even in this market.
Very recently I did a webinar, since it was a paid webinar I was expecting
around 10-15 traders to participate, but I managed to get an audience of
264, many of whom have now signed up for a one-on-one session for
which I have assigned one hour every weekend for 10 weeks.