“bhaav bhagwan, volume pehlwaan”
The above tagline aptly suits this interview.
Chintan Sir has over 15 years of experience in the stock markets. His philosophy that “Trading is for Profit & Loss, Investing is for Balance Sheet” has truly given me a new perspective on both investing and trading.
In this candid interview, Sir tells us about his journey, his checklist, his process, trading setup and much much more.
I am truly honoured to have him with us.
So, without further ado,
Tell us a little bit about yourself
I love stock picking as much as I love trading during the day. I am a post-graduate in Finance from the Birla Institute of Management Technology. I have experience of 15+ years in the stock market. Most of the initial time I used to manage own funds and very recently I have started managing clients funds as. I am a SEBI Registered Research Analyst.
I strongly believe, “Trading is for Profit & Loss, Investing is for Balance Sheet” and for this purpose, I am ready to play multiple roles.
My learning especially Risk Management got stronger only with few market crashes. We always play around the probabilities and that’s why my interest in number crunching grew. When I started, the data sources and software was a huge limitation unlike now.
While I was managing own funds I was also involved in a wholesale Agri trading business which helped me strive and also learn the intricacies of the stock market.
How did you start your investing/trading journey – like what got you to the markets?
It’s a very interesting beginning – my dad’s acquittance owned a public limited company. And he was extremely revered in our community. I was 17 then and did not have a Demat account. I was very confident to invest after reading a few reports and talking to a few people. Usually, at that age, no one takes you seriously. And it’s during that time I told my dad to by the stock name Marg Ltd.
Surprisingly he took me seriously out of all and that generated a return of over 75% in a very short while. This was the turning point for me nevertheless my pocket money did not increase though. But it had created a very meaningful impact.
Few years passed by my interest had not faded though. But what I had started as investing but now I was more passionate about trading.
This is when the real struggle started.
What looked really easy and simple after tasting the success had become a challenge. Initial few years I continuously lost in trading. The simple rule that I followed saved me, “when your loss exceeds more than 40% of your capital stop everything”. The capital I lost in trading I gained back by investing this is what kept me going.
Your personal trading checklist?
- Initially trade in stocks which are not in news.
- My trading strategy should be able to handle 20 continuous losing trades and still keep me going.
- Risk Management is Simple. I should not lose everything in a few trades.
- Money Management is I should have money for my next trade.
- The strategy will matter only as much importance we give. I stopped looking for holy grail trading long time back.
- I always trade probabilities.
- The Intelligent Investor by Benjamin Graham
- Beating the Street by Peter Lynch
- Irrational Exuberance by Robert J. Shiller
- Common Stocks and Uncommon Profits by Philip Arthur Fisher
- Poor Charlie’s Almanack by Charlie Munger
- Good to Great: Why Some Companies Make the Leap…and Others Don’t Book by James C. Collins
- Mastering the Market Cycle: Getting the Odds on Your Side by Howard S. Marks
- The Checklist Manifesto: How to Get Things Right by Atul Gawande
I could keep going on but the above-mentioned books are a must-read.
- Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications Book by John J. Murphy
- Trend Following: Learn to Make Millions in Up or Down Markets Michael Covel
- The Options Playbook Book by Brian Overby
- The Bible of Options Strategies: The Definitive Guide for Practical Trading Strategies
Initially, trading books gave me ideas to get started but my mentors who worked on me the whole credit should go to them. I have had many mentors who are still guiding me.
I loved to play the piano rather I am qualified 4th Grade by Trinity of Music, London. Apart from that, regular hiking, backpacking and camping.
When do you sell a stock? What criteria do you use while doing stock selection?
In trading either when target or stop loss is triggered. In investing when stocks don’t perform as expected. When it comes to investing I look at the business and not the stock price.
How many days do you trade in a month?
Only when Opportunities arise.
How did you make your first million in the Stock Market doing trading?
It is said your first million is the toughest. I guess the only thing that worked for me is perseverance. There is a very thin line of difference between perseverance and slacking.
What are your biggest regrets and what do you consider your biggest mistakes while trading/investing?
Not being prepared enough before entering the stock market for trading as well as investing. Especially for trading thinking that I don’t need a mentor and undermining what a mentor can do to your trading.
What life lessons have you learnt till now from your experiences as a Professional Trader?
Quantitative trading consists of trading strategies based on quantitative analysis, which rely on mathematical computations and number crunching to identify trading opportunities. Price and volume are two of the more common data inputs used in quantitative analysis as the main inputs to mathematical models.
“bhav bhagvanvolume pehlwan”
Who are your role models?
Warren Buffet, Peter Lynch, Paul Tudor Jones, Jesse Livermore.
How do you increase your market knowledge?
Books and Talking to fellow Investor Trader
Tell us more about your trading setup and can you elaborate on your strategies.
Positional Trading using oscillators and price action. Short Term trading using Moving Average combined with Price Action and VCP.
It’s tough to explain the entire strategy.
But I use moving averages as support and Resistance and Price Action and VCP for Entry.
Any example in your trading where patience has paid off for you.
In Trading, everything happens fast just like how Rakesh Jhunjhuwala said,
“ Trading is all about le dhan dhan de dhan dan”
If not a trader, what would you have done?
I would have been a Retailer and Wholesaler.
The above is for educational and informational purposes only. It is not an endorsement or a stock recommendation. The author may be holding the securities mentioned above. Do your independent and thorough research before investing.