The Truth About Stock Strategies Shared on Live TV !! #Face2Face with Mitessh Thakkar

Investment insecurities market are subject to market risks.

Read all the related documents carefully before investing.

I can give you 5-10 stocks, their long term charts are good.

Do you still believe that there is an operator in every stock?

Sometimes I close a trade at 1.20 and then I cry because it has gone to 1.100.

Wow! Let me show you an example.

But sir, how can this RSI go up so fast?

The next leg of up move will come.

It will most likely overshoot its targets.

It will also come fast.

Because it doesn't work with big waves.

But sir, is your exit still a discussion?

The stock I am looking at right now is of this type.

But the stock I am looking at right now is of this type.

Friends, trading is an occupation.

The more systematic, the more process-oriented, the better.

Right? You must have heard this from everyone.

I also say the same.

But if a little bit of humanity, a gut, a feeling is put into it, then it becomes a welcome to sleep.

That is why AI may not be able to capture trading completely.

Maybe.

Okay.

The people who are connected to me face to face today, they come on TV, are regular, give views of their stocks.

Many people like them.

They are sensible.

They are soft.

Their name is Mitesh Thakkar.

You must have seen him in CNBC.

I think he is logical.

I think he is saying his thing behind some process of thinking.

So I did a recording with him today.

And I tried to understand his process.

What does he do?

How does he take out the stock?

So he told me his process face to face.

He told me the system.

And he provided us with a lot of good knowledge.

Which is very relevant knowledge for us to become a trader.

So are you connected to me for the first time?

First time, right?

Almost 50% of the people who are connected to me, who watch my videos, they have not subscribed.

So you subscribe to this channel.

Because in the next one hour, you are going to get a lot of deep knowledge from Mitesh Thakkar.

So let's welcome Mitesh Thakkar.

Hello Mitesh Bhai.

Welcome to face to face.

My pleasure.

Such exciting.

You know, in media, in TV, a lot of analysts come.

Everyone has their own opinions.

There is a style of talking, analyzing, communicating with people.

I like you a lot.

Very kind of you to say so.

Just try to be honest and down to earth.

Sir, what happens on TV is that judgment is found very quickly.

From what is an analyst to what is an analyst.

The difference is sometimes found in 15 minutes.

I actually have to spend a little more time with you on this.

But I will talk to you later.

Because the pressure of coming on TV, saying anything there.

Millions of people are listening to you.

Maybe they are putting their money on it too.

They trust you.

So how do you deal with this stress, this pressure, this responsibility?

I will talk to you later.

First, about you, your journey.

How did it all start?

You had already decided to come to Share Bazaar.

Or were you doing something else?

To be very honest, when I did my MBA and passed out, and when jobs were coming on campus, it was like, whatever job I get, I will take it.

Because this is 1999 I am talking about.

The year after the UTI scam, if you remember.

And our placements were a little late.

Because at that time, companies were coming less in finance.

And I got a job in a debt market company.

And during their presentation, they had covered that we also have a stock market desk where we do technicals.

And while doing MBA, technical analysis was not there in the 90s.

In any college curriculum.

So I found out what this is.

When the pre-placement talk was over, after that the interviews started, so before that I went to the library.

And I told our professor there, sir, help me out.

I need these books on this subject.

3-4 books, I have to read something quickly.

And I thought it was a very interesting thing.

There was one more thing.

We had a professor who used to teach us derivatives.

So he was also a member of the advisory committee which was going to bring derivatives in India at that time.

So I told him that if futures options are going to come and all this is going to happen in India, maybe 5-10 years, I don't know when it will happen.

So something like technicals, which focuses on short-term, will become a very interesting subject and no one does it.

So then the interview happened, then the job happened.

I got a job in a debt market.

It was one of the highest paying jobs on the campus.

I said, sir, if you give me in debt, I have less interest.

If you give me in technicals, I would be more interested.

Then they called me for a second round of interview in Bombay and luckily it all went through.

And then I had the opportunity to work with some very interesting people.

I worked with Shankar Sharma for about a year and a half in First Global.

Which was a software bear market of 2000.

There was a little brand equity there, so Kotak gave me a good salary and tempted me.

And then I joined Kotak for about 5-5.5 years.

After that, Edelweiss.

And in 2008, Vivek bhai, I felt that the market was very bad.

If you remember, when the housing crisis happened, after that Nifty was about half, it had fallen more than that.

And at that time I had a feeling that if I wanted to start something of my own, then this is the time around the bottom.

It will be the best time.

At that time, I took a call and set up my own trading desk, advisory desk, training, trading advisory, I used to do everything together.

Some months went very bad because clients were not interested in equities.

But eventually slowly built up.

Then I started getting calls from the media.

Earlier also I used to come from the media.

When I was in Kotak and Edelweiss, they said that you should join us.

So that you will have a dedicated audience and dedicated shows.

So that journey started and it has been going on for 15-16 years.

Lovely, superb.

So before MBA, did you ever think about the share market?

No.

You are from Indore.

Yes.

So generally there is a different culture there.

There is a lot of business mindset.

But there is not much of a direct culture of the share market.

But trading is very good there.

Commodities trading and all these things used to go on very well.

Earlier there was an exchange of commodities called NBOT.

Here there used to be trading of soya.

So my father was interested in soya.

So I had that idea of trading but not of the share market.

I remember one thing from my school days.

At the time of Harshad Mehta's Teji, there used to be a traffic jam in front of MP Stock Exchange.

We used to leave from there.

I used to say that I don't know who are these people, why are they shouting on the road.

I didn't understand.

But I had that much exposure.

Okay.

So during MBA, you got kind of an interest that you should try in the share market.

You should make a career.

As I told you, when we were studying about derivatives, and at that time there were not many derivatives courses in many colleges.

Yes.

Just like our professor who was in the advisory committee of NSE.

So when I got exposure, I came to know that something new is going to happen in India in financial markets.

And fortunately I performed well in that course.

There was a natural alignment towards finance.

People say Gujarati.

You know Gujarati and Marwari.

There is an automatic alignment.

So when that company came, I applied in that way.

Right.

So now I come to that question.

Because you said that you have been associated with the media for many years.

So how do you combat that stress of responsibility of communicating anything in media?

See, actually the best thing is that I am not facing anyone.

It's a faceless industry.

Okay.

And after spending many years, you also realize that the stock market is a place.

And when I used to do my trainings, Vivek bhai, there was a saying which I used to repeat again and again.

That this is such a place where even if God trades, maybe 8 out of 10 times it will be right.

Yes.

So a person may be right 5 or 6 times.

Right.

So I applied the same principle on myself.

I said that I should give a good call and do good deeds.

Then the result is not in my hands.

Because it is not generally there in the market.

Any short-term noise can affect your call.

Sometimes intraday volatility can affect your call.

So all those things happen.

And then you realize that the idea is not that who made how much money in this call, who lost.

Because some calls obviously go wrong despite being given on the media channel.

But overall if you are doing it for a year, then is your performance good?

And I would like to add one thing here.

In between, I shifted to ETNow for 2-3 years after CNBC.

And there I met a gentleman who told me to join us.

We are going to do something big in ETNow.

So he said that we have recorded every call of your 5 years.

And we have chosen you on the basis of performance that you should join us.

So obviously he is also seeing that it is not that all the calls are going right.

But broadly if you are doing good, then you will leave people with good taste.

Okay.

And in this journey of yours, you have seen a lot of retail investors getting made, getting spoiled.

I think you have seen more of them getting spoiled.

So what are the core mistakes that a retail investor makes?

Irrespective of whether the market is giving money at that time or not.

Or whether you have accuracy or not.

Mistakes are there.

It happens.

Sir, there is a book by Jesse Livermore.

Reminiscence of a Stock Operator.

I think you must have read it.

Definitely it can't be.

And in that he has said a statement.

The mistake family is so large.

That if you don't make this one, you will make the other one.

There can be 10,000 mistakes.

But I think the repetitive mistakes.

In that there is one thing.

that preparation before the trade is missing.

Listening to that on TV, I mean I come on TV, but typically that recommendation is right for you or not, people don't know, but they get into it that if he has said it, chances will come.

You go to social gatherings, parties, people meet.

Tell me one stock that will double.

I said if I knew only one stock, then why would I talk to you.

The reality is that I can give you 5-10 stocks, their long-term charts are good.

Which one will double, even I don't know that much.

First of all, realize that we live in a world of probabilities.

So, one is preparation.

The second thing that you know is to become an investor from a trader.

Because you can't take an exit.

People have a lot of trouble in booking losses.

And more than ego, it is that money is going away.

But I tell people in this way that you understand that it is a business.

If you are running a shop, then you will buy things, make something and then sell it.

Or if you take it straight and sell it, then there will be a cost for every business.

So your loss making trades are your cost.

If you want to do a business without cost, then it is not possible.

So don't do this.

So taking a loss is a preparation.

These are two common mistakes.

And the biggest mistake I have seen is this.

Right.

And what is one thing for which you get the most blame?

What are you doing?

My money is spent because of you.

I am sure you are receiving all those things also, right?

When you meet people often.

Yes, I do.

So you have to give some message to people.

I have a funny reply to this and a serious reply also.

I will give a funny reply.

And we have a good bond in college friends.

So we go on trips together.

So last time some college people caught me and said that you will have to tell the stock.

And this was in September-October when the market last time peaked at 26,000.

So they made me say it.

I also gave the stock.

Then after some time the stock fell by 50 because it was a mint cap stock.

We went this year.

So when we met again, I said that it has been so many years.

I advised so many people.

Some made money, some lost.

I think it is your karma.

Because I do my work the way I do.

Right.

But apart from that, I think there is a pressure when you recommend someone.

So I tell him that wherever you go, whoever is in this business, who is doing a little forecasting type, even fundamental research, when they come from the company and make their own, don't judge him on one call.

You see 8-10-15 calls with him and see if your money is being made overall.

Because one call, as I said, if I knew that this call was going to be doubled, then I would not have been sitting on the yacht in Hawaii and trading.

Why would I talk to you?

Right.

So I think that's a very practical way of looking at it.

Right.

But yes, that pressure used to be there earlier.

Now I know that something will go wrong, something will go right.

As a trader also you learn and adapt and grow.

As a mentor, as an advisor also, you have to say that sir, I will go wrong.

That's where your honesty gets reflected on your face.

That's why you are honest.

You talk to everyone the same way.

Sir, I try.

Yes, you can try.

Sir, there are a lot of things which I want to discuss with you.

And we will discuss a lot of charts today.

Because today I told you that no agenda, just chat discussion.

The more I will talk to you about charts, the more people will understand.

What is a good accuracy percentage as per you?

If you are right, then you are right for the market.

Sir, one thing is that this is only a one-sided view.

Okay.

Along with accuracy, you also bring risk reward.

I think it is written in many books that there are people who will trade with a risk reward ratio of 1 is to 2.

And they are happy with the accuracy of 1 is to 2.

Broadly, your money is made.

But over, you know, over, now I have been charting for about 26-27 years.

I think that 55-60% overall accuracy is a good accuracy, which is what humans should strive for.

Okay.

In bull markets, it goes up to 80-85%.

And in bad markets, it goes up to 40-45%.

But on average, if you are right for 55-60 times, then you are doing good.

With a reward ratio of 1 is to 2, you are doing phenomenal.

Okay.

And if you can beat that sometimes, that's amazing.

I don't beat it.

55-60% is what I think I am delivering over a number of years.

Okay. Interesting.

So, even if the percentage is less, there is no need to take stress.

If the risk reward is favorable, then that is what you should aspire for.

Vivek bhai, I would like to add something here.

There is a gap strategy.

If we have time, we will discuss it today.

Yes.

About breakout gaps.

Its accuracy ratio is less than 50%.

Meaning, if you take 100 trades, then you have to lose money 50 times or more.

But if you look at its risk reward ratio, then I have seen 1 out of 3, 1 out of 5, and 1 out of 100.

Meaning, I have seen the risk rewards of 1 is to 100.

Sir, we will hear about it.

Let's discuss that first.

Later, if we get time or not.

So, let us see the screen.

And what is the strategy?

Sir, you understand the gap that the highs and lows of 2 price bars are not overlapping.

Meaning, the trading window is ahead.

For example, one day the stock opened at 100, closed at 102, and opened at 103 the next day.

And the level of 102 did not touch.

So, there is a gap of 1 rupee.

So, I did some research on this.

I made some indicators of my own.

And according to that, I identified a breakout gap, which occurs after a long decline or rally.

And when the gap is in the opposite direction, then it can bring a trend reversal.

And for this, I made a personalized indicator.

I have a lot of work on personal indicators.

Because this habit was given to me by Shankar.

He will go to the US, bring a book and say, read it and tell me what to do with it.

So, I read it on a lot of indicators.

We traded it ourselves.

So, I will share this with you.

Sir, I will put the screen in front of you.

This is the daily chart.

And this is the strategy for the daily chart.

I am plotting a simple moving average here.

21-day exponential average.

Let's display this in white so that its visibility on the chart will be good.

This is 21-day exponential average.

Now I am plotting RSI by going above it.

Relative strength index.

So, instead of plotting RSI on price,

I am plotting RSI on moving average.

So, I am changing the input to 21-day average.

Now, the parameters that I have chosen, after some testing and all, we do back-testing and all.

I have taken 10-day RSI.

I have defined overbought levels as 90 and oversold levels as 10.

I have added this.

This is the latest that we traded last time.

You will see this.

So, if you can see the RSI value here, it is 99.76.

So, it is a different RSI because it is plotted on average.

So, it goes up to 100 and 0.

It is not beyond the formula.

So, that is the case.

So, the broad idea is that we have defined overbought levels at 90 and oversold levels at 10.

If your RSI is below 10 and you get an upward gap, then it can be a break-away gap, which will reverse the trend and define it completely.

Or on the contrary, if your RSI is above 90 and there is a gap at the bottom, then it can be a reversal gap or a break-out gap.

Sir, I have a question.

I will ask in between.

Please don't mind.

Of course.

What is the logic behind this 21-period moving average RSI?

Sir, initially, I was working on RSI.

In RSI, we were looking for extreme overbought or extreme oversold readings.

So, it does not come on the price.

It does not go above 70-80.

Then we started plotting it on the moving average.

Actually, you can say that by experimenting, it got fitting.

Yes, it got fitting.

Plus, I am seeing that this RSI is very smooth.

Yes, it is very smooth.

Is it because of moving average?

Yes, yes.

It got smoothing.

Very smoothing.

The data of the price has been smoothed.

The indicator has been put on it, which is even smoother.

It is double smoothing.

So, you will see here.

I have put a chart of BSE.

Here you will see that on 3rd October, the value of RSI is showing 1.65.

And the high of that day is showing 2,099.9 or something.

Right? Yes.

I am not wearing glasses, but 2,099.9 is the high.

This is 3rd October.

Correct? Okay.

And here you can see a small line in between.

Because the opening of the next day is 2,103.

So, there is a gap of 4 points.

Okay.

So, RSI is oversold.

The gap has come up.

This means that there can be a breakout gap.

I don't know if it has happened or not, but it can happen.

Yes.

So, the condition is simple.

You take a trade here.

Your stop loss is of gap filling.

This means that the gap should not be filled.

So, your stop loss is of 5 rupees.

But you must not have spotted it in the morning, obviously.

Assume that you spotted it at 2130.

Okay.

So, you spotted it above 30 rupees.

Okay.

So, your stop loss is of 33 points.

Okay.

Because you don't understand at 9.15.

Sometimes you understand, because we live on TV.

So, we have to know that the stock is gapping up.

And I know that RSI is below 10.

Yes.

So, it happens because of doing it for years.

But assuming that a normal person does not know.

And it opened at 2130.

So, your stop loss is over.

If it goes below tomorrow's high, then the gap will be filled.

So, yesterday's high was 2,099.

So, you took a stop loss of 30-31 points.

Okay.

Now, look at this.

The rally that has come.

Till the time it was above the 21-day average, it was at 2750.

So, the 21-day stock has increased by 6.5 rupees.

At a stop loss of 30 rupees.

Its accuracy is only less than 50%.

Okay.

But you will see the risk reward.

Great.

So, 1 divided by 20, 1 divided by 15, 1 divided by 30, 40, 50.

I have closed the trade at 1 divided by 20 many times.

And then I have cried because 1 divided by 100 has also happened.

Wow.

I will show you an example here.

This is a very old example, sir.

If it is okay to put.

Yes, yes.

Please, sir.

As many charts as possible, sir.

This is a chart of L&T Finance.

Yes.

And I remember this because it had a double combination.

The monthly charge was positive.

And see this.

Hmm.

This is RSI 3.16 if you can see on the screen.

Price was high of 74.

Next day morning it opened 74.33.

There is a gap of 30 paise.

Sir, when it closed for 21 days for the first time, then its price was 113 rupees.

So, 40 rupees has increased by 30 paise.

And I sold it for 6 rupees.

I got 20 paise, a lot of money.

You know you are one of the geniuses.

You are not going to stop me. It happens.

But sir, is your exit still a discussion?

Sir, it should be done logically below the 21-day average.

But what happens is that when you took a stop, actually it was not 30 paise.

When I identified the trade, it was 50-60 paise at that time.

But by putting a risk of 60 paise, you had multiple futures and option lots.

And you have already got 6 rupees in the money.

So, it is booked in greed and fear.

I mean, I also make mistakes.

I am sure people do.

I haven't had a perfect trade execution till date.

But we captured a good part on the risk-reward equation.

I am personally happy.

Though, I have had examples.

As I said, after selling, the stock kept increasing.

But ideally, there will be an exit in this.

If it is closed below 21.

If it is closed for a day, then exit.

That's enough, sir.

Or fill the gap.

If there is a gap filling, then it is a stop-loss.

So, the idea is that its accuracy comes at 50%.

Sometimes, the gap of nifty opens up for 50 minutes.

The gap of 2-3 rupees opens up.

It fills up immediately.

So, at 50%, you are losing 2-3 rupees.

But your trade will continue.

One trade will be equal to 25 trades.

Got it.

So, that is the idea.

But, sir, how do you identify it so quickly?

Because you have already experienced it.

No, no, sir.

We put a simple query here.

Okay.

We put an event selector.

And put it in the event.

Open gap up.

And bearish open gap down.

That's it.

As soon as the risk came, go and see the RSI.

It was above 90.

It was below 10.

That's our job.

Sir, these days, the software has greatly improved our trading.

That's right.

Which software is this?

This is Iris.

Spider software.

Spider.

We have been using it for years.

But, nowadays, everyone has gone into trading.

There, such queries are not easily made.

They are not made.

There are more indicators.

But, queries are not easily made.

Secondly, there is no grouping.

For example, here, my main trading universe is of NSE F&O.

I went to G and selected it in the group.

Exchange defined NSE.

NSE F&O stocks.

And I can just scan next, next, next, next, next, next.

As I just scanned here.

So, this.

Sorry.

You will see this here.

A stock called Adani Green came here.

I don't know whether this is a breakaway gap or not.

Maybe this is not.

Otherwise, I will show you an example of Nuvo.

Yes, this is on 80.

So, it doesn't come in the rules.

But, Nuvo.

Sorry.

This is.

Nuvama Wealth, I think.

Yes.

Nuvama, I think.

Yes, sir.

See, this is a very similar setup here as well.

You can see this RSI of 6.

And, this gap came here.

And, this is a gap of 30-35 points.

And, if you see, this stock of 6,400 has gone up to 7,300 in just a few days.

So, the idea is that you capture a fast movement.

You capture a good movement on a very small stop loss.

And, it's a good setup.

I mean, if you are at 45% accuracy, then I will be happy with it.

Yes.

Generally, the thought of gap up and gap down is that this is a gap.

It will come to fill.

So, we hold this as negative.

True.

But, you have given it the opposite.

This is the opposite.

So, if the gap is filled, then take a small trade, take a small stop loss and exit.

But, in that, there is a condition of RSI.

And, this means that you have been working on indicators for many years.

You are modifying.

So, sometimes things fall into your grasp.

So, sir, whatever idea you are generating for yourself, for your clients, whatever you say on TV.

This is not the only setup that you are generating.

Are you more of a visual analyst?

That you look at the chart and you get a feeling from inside that this is looking good.

I am totally a visual analyst.

Okay, you are a visual analyst.

So, I take training.

Sometimes people learn and go.

People code it.

But, I have not reached that level yet.

Maybe it is just discretionary.

Because, when I am scanning the charts, and as soon as I zoom it down, then I will see all four charts intraday, daily, weekly, monthly on the screen.

Okay.

So, sometimes there is a breakout on daily, but there is a weekly resistance or monthly resistance.

So, it should not be missed.

That's why I do it by hand.

Some people have mechanized it and they are doing very well.

But, I still have that old school habit.

Okay.

So, once you have this whole process, you do it.

In the stock universe, in all these four frameworks.

Yesterday, I gave you a trading call on money control.

To buy the put option of Bajaj Finster.

Okay.

So, normally, I scan here.

I took this.

G, NECF endoscope.

I started scanning here.

Next, next, next, next.

I come to Bajaj Finster quickly.

Okay, your template is the same.

RSI, you are using that.

Yes, I am using MSID.

MSID is also there below.

Now, I have removed it to upload.

Okay, okay.

See this, Bajaj Finster.

While scanning, I saw that it is giving breakdown from triangle.

Okay.

Now, this is the chart of yesterday.

I think this is the chart of Tuesday.

Yes.

Otherwise, the data has not been uploaded yet.

Yes.

Because I was on leave today.

Yes, yes.

But, when this came, then I gave a call that there is a breakdown.

The price should fall.

Good time to buy put options.

So, there was some put option of 2020.

Around 20 rupees.

Yes.

I bought it from a stop loss of 14 to 14.5 rupees.

There is a person in my office who does it.

Yes.

I gave him a target of 30 to 35.

So, I think today there is a profit book of 28 to 30 rupees.

So, it is very simple.

Sir, you don't have to think much.

It is a simple pattern.

Sir, it won't be that simple.

This is it, sir.

You have seen a simple pattern.

This is a breakdown.

A few days before this, I had this.

But, why this stock, sir?

There will be another stock.

No, sir.

In which there is a pattern, there is clarity.

Okay.

This is geofinancial.

I gave a breakdown from the same pattern, contracting pattern.

So, it happened there.

So, what is your favorite pattern?

Do you think this pattern is the best?

It is very good for me.

Sir, there is nothing favorite.

With this, if you want to say one thing, then I will see what is the position of long-term charts.

Okay. Okay.

Vivek bhai, how is it?

I think, although I don't do elite wave, but I understand one concept that where there will be a big wave, there will be a small wave.

So, if the breakout is coming up on the daily chart, the big wave is positive at that time.

So, typically, the next leg of up move will not only go to its target, but it will also

overshoot and come fast.

Because it is going with the big wave.

Okay.

Can you give some examples, sir?

Yes, sir.

As I told you about L&T Finance.

See this.

So, I pick up the same gap of L&T Finance, which I picked up so many years ago.

Now, there is a breakout gap in two places, if you see.

Okay.

But on this gap, the gap below, we did not have the clarity of the monthly charts.

But on the other gap, this is the gap of January 17.

Yes.

This is the gap around December 16, January 17.

Yes.

Here, I will show you the monthly charts of L&T Finance at the same time.

Okay.

Okay.

Here it is.

If you see this, there are two averages on the monthly chart, which define the monthly trend.

There is a monthly MSE.

Now, after going till here, it came down, took support on the monthly averages, and this is the chart of December 16.

Okay.

And it gave a breakout gap on the monthly average.

Okay.

So, there is a lot of conviction here.

That your long-term trend is good.

There has been a correction in the long-term trend.

You have to take support on the stock averages.

And from there, you have to make a breakout reversal pattern, which is only 30%.

And that is why it increased by 40%.

And I also hoped that it would increase by 10-15 rupees.

Still, my position was so big that I booked it at 6 rupees.

But just saying that logically, you had the understanding that it is coming in sync with the monthly charts.

The stock that I am looking at right now is of this type.

And there was a policy reversal resistance in it.

But the stock that I am looking at right now is Delivery.

Okay.

So, now I will take an example of it.

Delivery.

Sir, if you see Delivery, it was a monthly resistance of around 4.70.

It has gone till there.

It has come down.

It is rotating near the monthly average here.

So, there has been a correction of 2 months in this.

Which average is this, sir?

This is the monthly 5.13 exponential average.

Okay.

It has given a pullback of 2 months.

And I chart this daily.

So, now you will see that the daily RSI has come to 2.

There has been a correction of 2 months on the support of the monthly average.

If it rotates from the gap, then this will be my big trade.

This is the way I will keep a note.

In the morning, I keep my diary with me.

I write on it.

From that, I get 10-15-20 stocks where I have to focus more.

Okay.

In March 25, when Nifty's bottom became around 21, there were a lot of stocks.

And sir, I have seen this.

When in F&O stocks, if the gap comes up from the bottom in 30-40-50 stocks, then sometimes it becomes the signal of the market bottom.

And if you look at Nifty, the last 26-year top that it made,

I will take you here.

Now that gap has filled up.

It is not showing on the screen.

But if I can zoom it, look at this.

So, this is on Nifty.

Sir, you can see its RSI value on the screen.

It is 98.9.

And the gap is down below.

And that day, I was with some friends in Indore.

So, I said that there is a breakdown gap.

This can be a problematic scene.

And the market was in a lot of rally.

And there was a lot of frenzy.

I mean, we observe those things.

There is no indicator for it.

But people understand it by talking.

So, this breakdown gap, sir, is actually a gap of 50-60 points.

But it eventually triggered a correction of 5000 points.

So, this is a very strong setup.

Again, accuracy sometimes is low.

So, I am showing you good examples.

But the idea is that good ones are very good.

So, even if you are getting small luck, you don't care for them.

Sorry.

I have never taken gap-up-gap-down so seriously, sir.

I have 20 years of experience in marketing.

I am sure.

I followed you for quite some time.

I used to think that gap-up-gap-down is done.

What is there in it?

But the perspective that you gave me today, that's the beauty of face-to-face.

Every video I also learn.

I will put it in my model in some way.

But RSI is also very good setup, sir.

You can see it.

You have experience, right?

Yes.

It will get stuck in the eye.

Then you will start doing research on it. I think whoever I have told this to, they have done that.

Right, right sir.

They have used it in some way or the other.

So apart from this setup, when you do stock screening on a daily basis, how many charts do you screen on a daily basis?

Sir, my main universe is F&O.

F&O.

You will see calls on TV as well.

In all of them, I scan 3-4 times a day.

So you know the trend of every stock?

It literally stays in the back of the mind.

Do you also believe that there is an operator in every stock?

And they run the stock.

Sir, at one time, I used to believe this.

But in the last 10-15 years, the way the market has grown up, there is not a single operator.

I don't know about cartel, but there is not a single operator.

Because I have seen Himachal Futures Deepali Teji as well.

Then I used to know that it is running from 2-3 places.

And you also used to get information.

I used to sit in the office of First Global.

So I used to know.

I have also seen the time of Ketan Parikh.

DSQ Software, Pentafor, etc.

I don't know how many names there were.

Yes, we know about Calcutta.

Since 2008, when the next leg of move started, the market structure has also changed in such a way that now there is not a single operator.

That is my feeling.

Again, I am not very sure.

It can be in small stocks.

But now there is not a single operator in big stocks.

But do you also have a view that stock futures are manipulative?

That is, it can be manipulated.

How easy is it to manipulate liquid stocks?

There are two things in it.

One is that we have just seen Jane Street.

Clear cut manipulation is also happening in the index.

Talking about stock futures, it is also happening in the index.

That is one thing.

The second thing that I feel after seeing the screen for 2-3 years is that we are fighting against machines now.

Now we are not fighting against humans.

Now we are fighting against machines.

If there is a gap of Rs.

5-7 in the stock, in the bid and ask, you see, it happens in iShare etc.

Because the value is so high.

You place an order, your 5 paise goes up immediately.

You change the order, then 5 paise goes up immediately.

No man can do this.

So it is very clearly a machine which has been given instruction that you will be the best buyer.

Right.

Which means that sir, what is happening eventually, the trading cost is increasing.

Then I have to hit the order by marketing many times.

Right.

And you get hit on both sides.

So yes, manipulation in the sense that maybe not exactly the price manipulation but in the form of a trader, the manipulation of entry and exit,

I feel I can catch it on the screen.

That this is a problem.

You are fighting against a machine.

Right.

Which is difficult.

Machine is creating a very mirage kind of a market for us.

That man,

I can see the price, but actually there is no price.

That price is created by the machine.

Machine is not created, but the machine is beating your order.

Machine is beating its order.

They have faster access to the exchange.

So they will obviously do that.

So how does a retail, just by looking at the screen, identify that this chart structure is not right.

I will not trade on this.

Because from somewhere, there should be a feeling from within that this is not fun to see.

Let's leave this.

Although it is opportunity, but chart is.

So give me a few pointers by which we decide that we will not trade on this.

So, honestly, I have few negative pointers.

One is, where there is very little liquidity, you have to avoid that spot.

Because the cost of entry and exit increases.

And if retail is doing 1-2 lots, maybe it is manageable.

But somebody who is doing 10-15-20 lots or more, they have a clear problem with that.

That's one.

The second is, as I said, when I study the charts,

I try to have a long-term trend with me.

The trades I get at that time are more profitable.

If there is a little less or more liquidity,

I manage it.

And that is not a problem.

Because, if you see, for example, let me put up a chart of Honeywell Automation.

I did a very good trade on this.

On this monthly chart, someone again made a triangle-like pattern and gave a breakout upward.

So, until the reversal did not start from here, and after that it came in the daily cell that it did not come in the buy, but whenever I used to get a pattern or signal in the daily or 2-40-minute-4-hour chart,

I used to enter it.

This is a liquid chart.

But still,

I used to work on it because I used to think that retail will be less in it.

Automatically, you know, retail does not come in the 50-year-old stock anyway.

So, I worked in such stocks.

But yes, because the basic filter is that you will try and pick a stock in which your big trend is with you.

So, these problems are negated to a great extent.

Okay.

Do you also look at fundamentals a bit?

Anything a little bit?

For example, we are looking at the chart in the stock.

Along with that, back of the mind, we also verify the fundamentals that the fundamentals of the stock are fine.

See, fundamentals have an idea.

Because you have been in the market for so many years and it is also discussed on TV.

So, you listen to it.

You have a lot of analysts who come on TV and talk about fundamentals of stocks.

So, you listen to them too.

But when hitting a trade,

I would say very less.

Because I am not becoming an investor there.

So, clearly, I am taking a trading position.

Let me rephrase this question.

Do you use any fundamental parameter to scan stocks?

That, from the category of stocks, where fundamentally, the thing is going well, and the price action is favorable there, then I will work.

Is there anything like this in your model?

Vivek Bhai, actually, I have used it in the sense that

I did one trade after the fall of 2008.

Okay.

I tried it, but I was not that successful in it.

After 2008, when the REC fell, at that time, it was around 58 rupees.

6-7% dividend was led by it.

Because at that time, the market was very shaken.

So, it was around 58 rupees.

And, I think, the PE of the stock will be around 4 or 5.

So, at that time,

I had left the capital.

I took 15 shares, thinking that these are not for children, but for grandchildren.

So, it went to 94, then 94, 105, stayed for 2 months, and I sold it tired.

Because it is not in nature, to hold for so long.

If the stock stays for 2 months for 10 rupees, then I feel something is going wrong.

The trading mentality somehow overrules that.

So, I have done it.

But, at the same time, when it came fast, at that time, there were big breakouts in PFC and REC.

So, I used to do a segment on CNBC with Nimesh, where we used to discuss on long-term charts.

So, I will show you the chart of PFC.

So, see this.

Sorry, I think the channel is a little crooked.

I think, after the adjustment of the dividend, it started changing.

This is the monthly chart of PFC.

Wow! Beautiful!

Now, it was giving a big breakout.

And, if you see, the price of the breakout was 100 rupees.

At that time, it was 150 rupees.

Now, due to some corporate adjustment, it has adjusted.

So, it was 150 rupees.

And, when it was giving a breakout at 150 rupees, its PE was 2.5 rupees.

2.5.

You can just go and check.

This is in February, 2023.

So, here, I covered it again.

So, here, I saw the fundamentals.

So, I said, if this fundamental stock is giving such a good breakout, then something big is happening.

What I also realized, that is because of one mistake, you get a big breakout.

Now, let me tell you, this is in 2001.

I had just joined Kotak from the first level.

And, at that time,

Bajaj Auto was around 240-250 rupees.

Yes.

And, Rahul Bajaj did a buyback of around 350 rupees.

And, I was a new MBA, you know, like, in full enthusiasm, playing with Shankar.

I thought, he is a strange man.

He is giving more than 40% of the market.

Why?

I didn't pay any attention.

Then, after some time, after 6-8 months,

Bajaj Auto launched.

First Pulsar.

We changed from Bajaj Auto from a scooter company to a motorcycle company.

Now, from that Bajaj,

Bajaj Finance,

Bajaj Finstuff, means, every company that has come out of that Bajaj Auto, its market cap, the market cap at that time is 100 times higher.

Right.

So, good promoter buying, good stock.

Now, I will give you another example, which I did not miss, but partly captured.

Was when,

Mukesh Ambani bought Reliance's stock.

Yes.

And, 6 months after that,

Jio's cash break came.

So, in Reliance, you will see, this is the bottom of 2008, after the fall.

Yes.

After that, if you remember, the stock did not do anything for 8-9 years.

Means, it was one of the most underperforming index stocks.

And, here, these bottoms were made around 2015.

Here, Jio's buyback came.

I think, that 2% open market buyback was done because already buying 2% of Reliance was itself big.

But, 6-8 months after that,

Jio's cash break came.

This breakout came and, sorry, 250, then 250, then went to 1500.

So, that is something, you know, fundamentally, if I get these things, then I am very happy.

So, you keep watching insider deals?

Yes.

Means, it comes on TV.

You can't miss this.

Okay.

If such a big company's promoter is buying his stock, then it comes on TV.

So, it got registered in your mind that he bought it.

So, when the breakout comes, you know,

I missed Bajaj Auto once, out of which,

I am telling you, all the stocks are 100% there.

So, next time, you should not repeat this mistake.

So, if someone is starting his journey of technical research from here, then how should he start?

Step by step.

First, I will say that, do a good training or study yourself or do whatever you can.

And, after that, a phase will come where you, 3-6 months, you should not have too much exposure.

But, you keep training and make a journal of it.

I mean,

I had kept a journal for many years that I used to see that when I traded with this indicator, then, first, what was my risk reward and profit loss?

Second, what was my mental state at that time?

With time, what happens is, you work more on some indicators.

Like, I work on RSI,

MSD and moving averages only.

And, then, you realize that if this is working for you, then, you can do it. So, expand it further. If you don't want to do it, and there are people who have come to me for training programs.

I am teaching the same to the person next to me, but he is not doing it for this.

Then I politely tell him, sir, you don't come in this genuinely.

This is not your field.

If someone takes a portfolio approach, because most of the retail have portfolio approach.

They don't look at each and every stock.

They will work actively in 10, 12, 15 stocks.

So, what should be the ideal structure?

That you should have your own universe of stock.

And in that, you should exit the entry so that you stay focused.

Or scan and go to the stock that we typically use in the format.

How should a starter do it?

I take it in two ways, sir.

One is that there is a trading portfolio.

So, when I say portfolio approach,

I say that you consider your margin amount in the form of a portfolio.

So, your position sizing is like this.

Suppose I have a stock of 100 rupees, on that I have taken a stock loss of 5 rupees.

And suppose, for example, I have a portfolio of 50 lakhs.

So, start with some rules saying that

I will not let any position in my portfolio damage more than 1%.

If I had a stock loss of 5 rupees, I would have taken 10,000 shares.

Sometimes it happens that the stock loss hits 6 rupees because the gap has been drawn from the market draw.

Sometimes it happens at 3, 4, whatever it is.

But the idea is that, you know, have that portfolio approach in the sense that you make this rule that how much you want to lose in your portfolio in one trade.

Start with that.

Two, how much you want to diversify in one portfolio, which you were saying, how many positions you can keep.

So, that all depends a lot individually.

Like I have seen, when I trade F&O,

the moment I get past beyond 7-8 open positions,

I start getting fidgety.

I mean, I know that if there are 7-8 positions, then I myself feel that it is happening a little too much because you have multiple lots everywhere.

And then you are aggressive on everywhere.

So, I have seen that some people manage 10-12, some people get stuck on 5-6, I get stuck on 7-8.

So, that is something which you will again discover yourself as you start doing it.

And the retail approach, which you are saying, that you have taken 15-20 stocks, that you have taken 5 stocks, 10 stocks,

I am strongly against that.

Because, sir, if you will stay so diversified, then where you should get the gain of concentrated movement, you will not get that.

Got it.

For example, I just gave you an example of a gap of BSE.

So, I know that if in BSE,

I am getting 30-25-30 rupees from the stop-loss in the gap,

then if I want to lose 50,000 rupees, then I can go and take 2,000 shares.

So, I should take 2,000 shares.

Those 2,000 shares become big for retail.

But my risk is the same of 50,000 rupees.

But when that stock increases to 500 rupees, then its returns are big.

So, there are times when I have broken my rules and I have gone more aggressive than I should have.

But then again, I know that I am going to take such a loss.

And I also tell traders that when you take a position,

then after 10-15 minutes of taking it, there is a slight disconnect.

And assume in your mind that you have taken this loss.

Okay.

Just imagine that, for example,

I am in a position right now.

I have bought some put options of a stock.

Those are January put options.

So, I have written that my entire premium has become zero.

Hmm.

I have gone through. I have taken that pain.

Now, nothing can be worse than this.

Now, whatever will happen will be good.

And if by luck, the stock goes with me, then I will be able to ride it more because the loss has already happened.

Whatever was happening, it has gone.

So, imagine that you have taken that loss as one approach.

Don't diversify too much as two approach.

You will have to know the exact point yourself while doing it.

And how much loss you have to take in every stock in the portfolio, that rule should be there.

Because you are working concentratedly, so you should know that here.

There is a story of 2008.

There was a stock called Arenal.

I am sure you remember that.

When that fall came, when that fall started, then some of my friends called me.

It is the position of Arenal.

At that time, the lot size was something like 15,700-1800.

So, the price was around 250-255.

I said, see, if it goes, then leave it.

I have made 260 paise, but there is a loss of 6 lakhs on 221 paise.

I did not book that.

Then I booked a loss of 16 lakhs on 125 paise.

That's all.

So, this was actually my question to you that

it is very difficult for a retailer to book a loss.

And when he feels that the market has become dicey,

I don't know how it is behaving.

So, is it a good idea to be in cash and keep patience?

Because there is a position in cash, right?

Or you say, no, should I hold on to it?

No, no, there is a position in cash, I agree.

But, so, the idea is that when you get a good trade, you will try and make a good trade out of it.

Right? You have done that, but as I said, then you put it in the portfolio approach that I have to take this much loss on this position.

I don't want to bet more than 1% of my portfolio on any stock.

I can buy more quantity, but the overall loss, if my stop loss hits, then it should be 1%.

So, that will help you define the quantity.

If I have taken a stop loss of 10 rupees, then I have to buy 5,000 shares, then I can have a loss of 50,000.

Then believe that you have taken that.

Then you are through with that.

But how many people have that, you know, discipline?

It doesn't happen, sir.

Ultimately, there is a very big rule of the dealer there that if you tell the dealer to keep it, he will lose 100 lakhs on his own.

Because to do it yourself and to press the button is a very difficult job.

Sir, look, when I was telling you, all of these are glittering, you know, when people tell me that tell me a stock or tell me something, so that I can make money.

So, and again, this is from the same book,

Jesse Livermore has written in Reminiscence that people don't even want you to give them ideas to make money.

They just want that there is money on the table, you pick it up.

That doesn't happen.

If you come into the market, you will realize that it is not…

Sir, one more quote that I have used in a lot of my favorite trading, you must have also used it once, is that trading is the hardest way to make easy money.

I mean, people think it is a very easy job.

And I see it on social media these days, people are telling 90% accuracy, 80-90%.

But if the money was that easy,

then everyone would be doing this and selling this.

Right.

And I still don't understand why 90% accuracy is selling its course.

But that is the reality of life.

So, it's very difficult actually.

This is very mental, very difficult.

Sir, this is the book that I am telling you.

And because I have had 25-26 years of trading experience,

there was a time when you will trade bad.

As a trader, you will have bad phases.

You know that you are not making money, you have a lot of control.

Then I used to go and read that book,

I used to underline it.

So, after a while, I realized that I had underlined about 80% of the book.

And that doesn't happen.

Yeah.

But yes, that journey has to be difficult.

The good thing in this is that if you are in the bull market in life, then if you get a good start, then it becomes capital.

But realize, if you are a little interested in the chart, in theory, if you go back and see, then there is a big correction of every bull market.

And therefore, make sure that you save that by following the simple rules.

That I have to bet at one place and I have a portfolio of 3-4 places.

So, it's great because if you take 10 trades like this, then your annual return is done.

Which is what people strive for.

And it's never linear.

I mean, I also manage my own money.

So, there have been, like after COVID, when I left the market after the bottom of the month, then I got 80% returns in that year.

But there have been years when I earned 10 rupees.

I have worked hard for a whole year.

I have run the business, but there was no growth.

You go through the phases, that is fine.

You can compare yourself with benchmark Nifty, you can compare yourself with mutual funds.

But yes, the first thing is not to drown.

Don't wipe out.

And learn to believe that losses will be part of the business.

Because there is no business in the world, in which you get money without spending.

People think there is trading, but we all know better.

And there are people to prove that.

Absolutely.

Great, fantastic, Mitesh Bhai.

It was a lot of fun.

Thank you so much.

It was equally a pleasure being here.

I think the kind of learning my audience have received

reinforces that it is a thing which needs a lot of conviction, a lot of learning and right learning.

Actually, it is very important.

Because learning is available everywhere these days.

But it is very important to know who to take it from and how to take it.

You continue to do good work on TV and everywhere.

And our best wishes are with you.

Thank you.

That's great, Mitesh Bhai.

Thank you.

My pleasure.