What I Learnt After Losing 10 Lakhs | Volatility Drag
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- เผยแพร่เมื่อ 18 ม.ค. 2024
- Consider your Trading system gives 40% returns with 10% drawdown,if you double the risk, does it give 80% returns with 20% DD? No! I learnt it after losing my money. Let me tell you what it is. Don't do the mistake I did.
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eye opening information for those who are in a myth to earn big using huge leverage. Thank you Kiru. Such analysis helps small retailers trade with caution and avoid huge losses and account blowups. pls share more such content.
Well said!!!
Excellent calculation sir, I never seen this calculation ❤
This is a really good metric to look after whenever we are defining a system.
Very informatic and we learned new things also. Thank you sir :)
Kiru, Thanks Nice video as always. Compounding of DD. If combined with the aspect on the position sizing that I have seen in your other videos would one realize how much they are willing to risk to make that rupee. Greed vs fear can only be managed with right position sizing and where one is there in their financial journey.
Spectacular!!!
Thanks for your valuable guidelines Sir
exactly this is what happening to me. maybe i should reduce my position size. thank you Kiru anna.
same senario happened with me in last month I never seen this calculation Excellent Eye-opening
Excellent Eye-opening Video Kiru!. 👍
Thanks!
Indeed it's a good illustration. Thanks for that. But this illustration uses a pattern of transaction with profit n losses year by year with a defined percentage. If there is some1 who takes 3x or 4x leverage n continue to make profit with an acceptable percent, what would be the effect of the volatility drag? Do we need to use the volatility drag aspect based on case by case right ? I do admit leverage is not good, but intend to understand the volatility drag in a better manner.
Best video till date on this channel.
Awesome explanation and excellent video as always Kiruba.
Lots of love and keep educating us. ❤
Thank you so much 😀
Hi Kiru Ji,
One question, over leveraging may not be a good idea. But scaling up of the trading capital must be there otherwise, we might take a long time to accumulate the wealth. Hence, what is your advice for scaling up of capital ?
Can we increase the leverage only to the extent of ploughed back profit?
An eye opener. Thanks
thanks for sharing your journey
Very informative and useful.. 🙏👍
Amazing... Couldn't believe but it is true...
Great information!!!
Love u bro , this is a most important thing too us ❤🎉🎉🎉😢😢😢
Excellent insights🎉
Very informative...thank you
Useful information. Thanks, man.
Glad it was helpful!
Woww. Great content.
Do you do option trading?
What is the capital that you used? For each trade or the entire trade?
Very Informative sir .But generally drawdown as per yearly means that drawdown gets covered & we may come up flat or minimal profits .This seems to be loss years in between. But if we consider all these years as months we can understand in a better way .And one more thing is every one think drawdown is some thing we get after earning some profits but it may come in the beginning itself .Then it will be much more painful .
Great information ❤
what about 24 WED 2024 results not given is it heavy down?
sir one doubt??...volatility drag occurs for compunding only right?...even if i took leverage (say 3x) ,if i do it with same 5L capital all the yearsi can achieve 75%,225%,300% right?
Excellent sir❤
Thanks for making this video. Just wanted to understand the reason behind using a 50% probability of winning every year which has resulted in winning in one and losing in next. But i do agree that leverage is a double edged sword that looks great prima-facie but may have hidden surprises underneath
No, it’s about the yearly returns, it’s about the serious of outcome of a trade that can end in disastrous result if trading leverage is increased
is there any last 1 year results of your bots ? if yes ?where to check it?
Great vid. Keep making this type vid. According to your current 1× leverage, how much capital is required to trade 1 lot BNF. Nifty and finnifty? Please make Excel for your viewer. it is so helpful for us to decide our position size according to capital. Thanks
Sure will post about a position size video later on
Thank you 👍🎉
It would be great if you could show a real-time example of 1x, as you told in the video. without example not able understand 100% on what you explained on the video..!!
Thank you... help full information...have 1 question.
1.I have started trading with 2 lots in ATS bot with 5lac capital is it appropriate position sizing?
Please answer.. thank you in advance
3 L is sufficient enough to trade 2 lots. 2L for taking orders for 2 lots and 1L ( practically it won't go above 50k but keeping 1 L is super safe) towards potential draw down.
This is enlightening
Super educational
How to calculate vol drag?
Thank you 🙏 …
Very informative
An interesting concept to think over..
But it has 2 grey spots.
1. You have considered each year will have drawdown of certain% in your account which may not be the case ideally.. In that case the 3x account can beat others with huge margin.
2. What is the 3x leverage can be just 1x for a person with higher capital.. So how do u explain this there?
3. The real question then comes is.. So should we not scale up?
How do you take leverage on positional derivative trading ? I thought sebi cancelled it
I think by going for OTM it gives 3times profit and 3times loss compared to ITM.. He is using leverage as term for that.. Not the actual leverage that broker provides for intraday..
excellent
Kiru Bhai Correct me if I am wrong.
The video content is only applicable if we decrease our lot/quantity during DD right?
Solution
1) Before scaling, do the math and forecast the worst case % of drawdown of our system.
2) So, Total capital = Cap for order punching + Cap for DD handling.
So in this case even in the worst scenario we will lose our capital allocated for handling DD.
With balance cap we can punch same quantities without decrease position sizing.
In this way we can recover DD.
By taking highly leveraged positions the losses become too high when things go wrong. So, you are then forced to reduce the position size for further trades. If you don't use leverage then it should be easier to maintain a steady position size and then gradually scale up (without leverage) as the profits grow.
Very helpful
Glad to hear that
So keeping same trading capital over a time would be better
Valuable
Design proper diversification so we are in profit annually,if losses will increase so will profits.
Why are you calling buying hedges as leverage? That's your starting capital
U said why not double our capital , here when u double the capital the risk shall remain the same.
If capital was 5lakh and risk was -15% then when the capital is doubled to 10lakh the risk shall remain -15% only. This is where Risk management applies.
Yes, if one increases the position through leverage without increasing the capital, it happens
Have u created all these Excel sheets 😮😮
👍👍
Yes I have
My picks for next 3 months period are INJ and FIL. But also, guys do not miss Xeventy presale, is almost over.
You increase the capital after currently you faced drawdown face.... You capital improvements in wrong time..... You improve the capital in drawdown face ❤correct way
Worth Varma.. worthhuu
Excellent Sir
Do not underestimate the power of getting in early. If you are not in Xeventy now, you are lagging behind.
Mathematically misleading. The base of % calculation is where we are mistaking.
who is giving 4x leverage now
What a great time to be in crypto! Projects like Xeventy will make millionaires in the bull run.
Dont let your trades square off
This calculation is wrong. You have taken 5 lakh as initial base for all the calculations. But for 3x leverage, initial base should be 20 lakh and for 4x it should be 25 lakh and then calculate the returns.
You aren’t increasing the capital, you are increasing the leverage.
@@SquareOff but after increasing the leverage, you must calculate returns on the leverage also. But you have considered only 5 lakh in all examples. M i missing something?
Just one assumption that is overlooked is that you have assumed the entire gains made in the previous year is used as initial capital for next year. Thus the huge drawdowns, capital allocation and tranching is key
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