From The Horse’s Mouth: Ashutosh Shah

When it comes to market profiling, scalping, trading based on price based studies and momentum trading, Ashutosh Shah is no stranger. He is an Options Buyer who believes in timing the market with trades lasting from less than 10 seconds to a few hours. From starting his journey in 2016 to developing custom strategies to managing his portfolios to sharing his secrets, Ashu bares it all for our readers.

So without further ado,

Tell us a little bit about yourself

So my name is Ashutosh Shah. I am an Intraday trader and a Scalper. I trade based on price action and Market profile studies. I also run cash stocks based momentum portfolio.

How did you start your investing/trading journey – like what got you to the markets?

I started my stock market journey in 2016 when the market started rising, and I used to buy stocks on my broker's recommendation. They used to go up 1-2% up the very next day, so it was like free money for me, and I got hooked towards it. Then demonetization happened, and my portfolio went 30-40% down in a matter of days, that's when I realised all that glitters is not gold and I started working towards my own studies. Initially, I was into fundamental investing as I thought prices move based on fundamental triggers. That bubble busted in 2018 when all of my stocks posted the highest profits and stock prices were falling 10%. Then I realised there is more to the picture and I started learning and practising Price Based Studies. Currently, all my trades and investments are based on Price Based Studies. I came across market profiling towards the mid of 2018, and I became fascinated with it. I have been learning it since then and practising it. I came across momentum investing in the early half of 2019, and after much reading about it and backtesting, I have made my own system and deployed my funds into it. It is performing good but still needs a lot of improvement.

Your personal trading checklist

For me, I do my everyday homework for my intraday trading. There I find out levels, demand/supply zones. What auction tried to achieve that day, What it failed to achieve, what's the context going on, any anomalies, possible scenarios for next day, what I am going to play for the next day etc. These levels help to remain calm in the chaos.

In my momentum portfolio, I manage it weekly basis and complete rules are defined and coded, so I run it every
Saturday and get the stocks for my rebalancing.

Favourite books

My favourite books are by Mind over Markets and Markets in Profile both by Dalton

Your hobbies

I like to watch movies and web series in my free time. I play badminton twice a week and try to be regular at the gym.

How many stocks do you trade and how do you manage to track them during the live market?

I have difficulties in managing different stocks, so I stick with only NIFTY, BANKNIFTY and Reliance, primarily, sticking to BANKNIFTY. That's the only script I am comfortable trading with. I remember every level and understand the movement of bank nifty in and out. So focusing on one script helps.

How many days do you trade in a month?

I trade for about 3-4 days a week and 3 weeks a month. So that's 12-15 sessions a month out of 20-22 trading sessions.

How did you make your first million in the Stock Market doing trading?

Well, I have made several million rupees in the market but yet to achieve my first million Dollars. My first million rupees in a month was made during election month. It was an extraordinary month for me. I like high volatile environments.

What are your biggest regrets, and what do you consider your biggest mistakes while trading/investing?

I don't have any regrets in life. I have made many mistakes, though. Some of the errors are common, like focusing on others research more than my own. Not following proper setups or rules for trading, Not cutting losses, Hope trades and revenge trades etc. I am working on them now and try to minimise the emotional part from my trading.

How do you increase your market knowledge?

To increase my knowledge, I like to read books, watch dalton and FT71 youtube videos, listen to podcasts like Chat with traders. Also, I like to surf the old charts to understand what happened in the past. I love to talk to people, so I learn a lot from chatting with them.

Tell us more about your trading setup, and can you elaborate on your strategies.

I run two portfolio

1st is my intraday trading using a market profile that's discretionary. I use different trade locations for my entry and exit. Have written a tweet thread about it. On the indicator side, I use only vwap, and I use Market profile, volume profile and Orderflow for all of my analysis. I also use time component in trading and have defined time to enter and exit based on day type.

2nd is my momentum portfolio, where I have defined rules. I use absolute and relative momentum on different timeframes and go for stocks near 52wk high. I use the relative strength of the market with a few of my studies to define my cash allocation %. Defining the cash percentage helps me to be underinvested during non-trending and bearish market and fully invested to leveraged in bull markets.

Any example in your trading where patience has paid off for you.

In trading, I don't believe in patience for a trade but rather patience in following your system or defined rules. There were drawdowns and losing streaks, November being my worst month, where I was on the wrong side of every trade. Had faith in my system, took a break and came back strongly in December. So the cycle continues, the point is to follow what one is following patiently.

If not a trader, what would you have done?

If I had not become a trader, then I might have worked in my father's shop. We have a family business, so that's the last resort :).

Noteworthy Threads by Ashu

Master Thread

Basic concepts of #MP #AMT

Successful Trading Mindset

Basics of Future & Options Trading

Trade locations

Balance and Imbalance in terms of Market Profile

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