“Genius is the one who can stay calm when things are falling apart” – Albert Einstein

3 min read

Einstein was right on the money !!

But the question is, how many are able to remain calm especially in trading when things get a bit berserk ?

What can give you confidence in such times ??

  1. Knowing that you have adopted a successful system that has been trading well over a decade
  2.  Knowing that markets are a mix of trending and non trending phases
  3. Knowing that your system ensure you are positioned RIGHT in size.

“Strategy per se is not so important, the discipline to follow it diligently with proper risk management is” 

Let us look at the journey of 5 lac invested into our options buying model (Bank Nifty) in the year 2019. 

As you can clearly see, the journey isn’t quite straight forward. 5 lac to 13.5 lac looks easy on paper. But the journey is quite hard fought.

The task on hand is super SIMPLE but not EASY

To stick to the system and follow it in a disciplined manner.

The challenges:

  • Was it easy to watch your capital erode by 13% right at the start in Jan and Feb ?
  • Was it easy to watch your capital getting wiped out by 22% in a matter of 40 days between July and August ?
  • Could you stay calm watching your capital slowly erode away by 35% over 90 days , between September and December 2019 ? 

The answer to all the above three questions may not be a big “NO” but it surely is a crazy tough task to hold on to your emotions going through these phases. 

Over time you practice practice and practice…you get better…and better and better.

Nobody can achieve it overnight.

As you can clearly see from the chart above, the model was in a drawdown for most part of the year

There is an extremely high possibility of having to deal with choppy markets for most part of the year. 

Most certainly at the end of a choppy market, a trend arises and we hope that our system will pounce on it and generate returns far greater than the losses incurred during drawdown phases. 

Every year will have these two phases alternating. Sitting through the entire year, diligently following the model with precise risk management should effectively give you a solid understanding of both the markets and the STAIRS system that has been supremely navigating and maneuvering through several trends and choppy markets to create stellar returns since 2012. The returns and the corresponding drawdowns are depicted in the image below for both Nifty and Bank Nifty. 

Nifty | STAIRS Futures Model 1 | Returns vs Drawdowns | 2012 to 2020

Bank Nifty | STAIRS Futures Model 1 | Returns vs Drawdowns | 2012 to 2020

Watch this webinar – https://www.youtube.com/watch?v=BNMYCpccKuw&t=2588s & Join our FREE telegram group to know more about STAIRS. You can use STAIRS as a stand alone trading guide or as a hedge to your portfolio. You can use options or futures as a vehicle to navigate the journey. This strategy runs on a hourly look into the markets so you need to spend just a few mins per day to run this.

If you wish to subscribe to STAIRS, kindly do so at – https://www.stairs2profits.com

Please send in all your questions to alok@weekendinvesting.com 

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November 27, 2020 by Weekend Investing

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    “Genius is the one who can stay calm when things are falling apart” – Albert Einstein