Monthly Archives: July 2016


How can I successfully earn money by trading options of NIFTY?

My answer to How can I successfully earn money by trading options of NIFTY?

Answer by Ruchir Gupta:

You need to find some one who has done it in the past, and who can guide you. As you know stock market is risky and option trading is riskier. I only Trade in Positional Nifty and Stock Options, I know the Intraday Methods as well but I save my Time for Analyzing , Researching and Training as I become tired if do Intraday and same I recommend to others, keep away from Intraday. Still if you want follow step in this answer, I gave few days back. What is the best strategy for nifty option trading? What I am going to write has many trading lessons for positional trading, so read it carefully

There are many many factors you need to learn about.

  • Options Expiry: Options have a expiry period, so if the Nifty is not trading In-The-Money , your option may expire worthless. In such cases if you know that 500 points movement you seek may take 20 days, while current expiry only left with 10 days, go and trade in the next month contract.
  • Trade the Cycle: Nifty options trading cant be done every time. Means there are times when you should be aware that a Trade-able Cycle will be due after may be 7 days, dont take any position till that time. And when time comes trade the Cycle. I have shown Cycles in the below Daily Chart of Nifty, which are some what very similar in duration.
  • Sit aside when there is no trend: As per Gann Methods the tops are rarely spiky meaning that there is a distribution phase on the tops and a lot of sideways movement takes place. So you should be aware on Tops that you are not stuck on sideways movement.
  • 60–70% times market is sideways: you need to understand that Nifty is in sideways trend for 60–70% times. So you will have to be disciplined when trading in Nifty options on the Buy side (I am assuming you are talking about earning by buying the options and not selling, coz option selling requires capital like 10 Lacks minimum.)
  • Cycle Identification: Very Simple and Effective Method. This is a real example of Nifty Check on the Nifty charts. If the market is in Bearish mode. I mean if the high made is lower than the previous high and Nifty Starts moving down breaks the previous low, this means the trend is down. Now measure the low to low number of days, suppose its 20, again measure low to low its 25, you have catched the rhythm or vibration of this cycle. You know now that there is a high probability for nifty to make a next low between 20–25 days. look to cover your shorts in this area. Same thing could be done for high to high.
  • Nifty and Planets: Try to learn about the Planet Combinations which are cause of change in trend in Nifty. This may help you to prepare in advance and take position in advance. If you want you can click on this link to know more about Planetary Cycles in Nifty.
  • Know yourself: Ask yourself that, How much time you could dedicate to Trading? I will tell you fast decisions are usually wrong decisions. I know my temperament and hence I take time to think about a trade many days in advance before making a trade. the ticks of up and down are very addictive and people waste their entire day in front of terminal and end of day not able to take home any profits.

How can I successfully earn money by trading options of NIFTY?


What are the first steps to invest in the Indian stock market?

My answer to What are the first steps to invest in the Indian stock market?

Answer by Ruchir Gupta:

Everybody else might be able to guide you for the first steps, while I dont know if any one else will share what I am going to share, this should be the critical part before you think of investing in any stock.

Be aware of your broker:

  • Go to market as an investor, in case you visit broker office regularly he will try to engage you in intraday and short term trading be aware of it. Never ever buy on Broker recommendation get the ability to identify good stocks your self.

Behave like a stingy fellow:

  • Hesitate to spend money for any stock you are paying, if you bargain for everything else in life then why not for stocks. In the first few months spend time on learning about identifying good stocks.

How to Identify good stocks:

  • Prospectus of top performing mutual funds: See the top performing mutual fund prospectus, the stock held by them, their yearly returns and performance , this could give you the idea where you should invest your money. Old funds are better as they have a more historical data
  • Promoters Holding and Honesty: Good Companies will also be majorly owned by their promoters (as owner why will some one sell his company to outsiders if its making good profit and has enough potential?) Good companies share profits with their share holders in the form of Dividends and Bonus.
  • Numerology: Use simple numerology to know if the stock selected will suit you (in case I write an article on this subject I will update the link here, I am yet testing this on my trades)
  • Check the historical charts: check the historical charts of the stocks. In case you are from India then look and HDFC Bank, Kotak Mahindra Bank, Ajanta Pharma, Eicher Motars, Maruti, Bajaj Auto, M&M. All these stocks go up in 45 degree angle and even in case of any corrections fall less than the market
  • Look for consistent companies: dont invest in companies which report losses or their profit falls dramatically, instead look for companies posting profits on a consistent basis. the Stock price of such companies also become less volatile.
  • Keep away from Debt Companies: Keep away from the companies that have heavy debt or expensive debt (debt taken at higher rate of interest) in their balance sheet. These companies will be paying most of their profits to debtors and then what ever will be left after will be shared with share holders. Many a times nothing is left and shareholders receive their part of losses and hence stock price declines further. Eg: Reliance Communication and all other Anil Ambani Stocks
  • Past performance gives faith: The stocks which have performed it the past will continue to perform, don’t buy cheap stocks because of lesser price

Key Planet and other cycles:

Money Management

  • 70% or more of your saving should have to in safe assets like Fixed Deposits, Bonds, Gilts. After doing that saving only you should turn towards Stocks.
  • Always keep a idle cash 30-40% to buy bargain stocks
  • Divide your money in to different stocks to diversify company risk
  • Divide your money into different sectors to diversify sector risk
  • Fix an a equal amount to invest each month, don’t change that figure.
  • Wait for the right time with cash in hand
  • Only invest the money which you will not need for next 20 years. Minimum investment criteria should be atleast 7 years.

What are the first steps to invest in the Indian stock market?


Technical Analysis: What indicator works best for you and why? (equities, not real time)

My answer to Technical Analysis: What indicator works best for you and why? (equities, not real time)

Answer by Ruchir Gupta:

I dont know under which category should this be method be classified. However, this has been working Superb for me. And I use them for Positional Trading.

Certainly it is not Technical Analysis, however it is a great tool for making money in any Indices, Stocks, Currencies, Commodities. The Method is Astronomy, used by many Profitable Traders (including WD GANN: A legend in the field of Trading who used Astro and Planet movement for Prediction) but its yet under cover and not known to general public.

There many techniques like:

  1. Planetary Ingress, that is when a planet enters in new house: watch in this Image, Gann had marked the times of Planet Ingress is this chart.

2. Planet conjunctions, oppositions (180), square (90), Trines (120): Seen that many a times these aspects of two planets separate by a particular degrees produce some magnetic energy to flow from one place to another which disturbs the regular trend and hence a reversal in a stock, commodity, currency is made

3.Planet Retrograde and planet again Turning Direct: As each planet has its own magnetic field and it stays at one place (or moves slowly) when becomes retrograde then also stocks have been seen to got reversed. For Eg: watch Saturn retrograde and your major stocks and indices, you will find a correlation.

4. Solar and Lunar Eclipse: They also have been seen cause market reversals. I have back-tested these techniques so I know that they work, in case you are seeking to go ahead and test them let me know.

Technical Analysis: What indicator works best for you and why? (equities, not real time)


Is there any scientifically valid way to distinguish non-random stock price movement from random noise?

My answer to Is there any scientifically valid way to distinguish non-random stock price movement from random noise?

Answer by Ruchir Gupta:

Yes, there is a scientific valid way, however first you need to understand why it is scientifically valid.

Reason is a lot of people dont believe in Astrology and that is fine as I have also been a not believer, however I was able to make room for understanding that Astronomy is scientific and reason was simple that there is a gravitational pull of all these planets which hold them together hanging in the space and this gravitational pull or Magnetic Current also influences Human mind, influences the weather on earth, alters tides and currents and brings natural calamities.

I am just giving you a hint go and test that when Saturn Retrogrades* what happens in the Global Equity Indices, it could be S&P, Nasdaq, TASI, FTSE, DAX or even currencies. Saturn Retrograde often correlates with fall in major Equity Indices. If you are backtest and see the correlation you will be amazed. This is just one phenomenon. There are many more. If feel excited after testing the results with Saturn, test for other planets are well.

Retrograde Motion: This is referred as when a planet starts appearing to move backwards when viewed from earth.

Is there any scientifically valid way to distinguish non-random stock price movement from random noise?


What makes the price of gold fall?

My answer to What makes the price of gold fall?

Answer by Ruchir Gupta:

  1. Many People may say that Golds Prices Fall when Stock markets rise.
  2. Some will Talk about Demand and Supply.
  3. Some refer it as a fear indicator so, if fear rises amongst the equity market Gold prices rise and if all things and global events are doing well, in other words no fear then Gold prices fall.

While, the fact is that the prices of all the stocks and commodities including Gold are governed by Planets and cluster of stars known as Zodiacs. I am not talking about Astrology but Astronomy. Which is just simple a method by which a reversal could be predicted by knowing which planets to look at. I have tested these Methods myself and predicted market and stocks reversals in advance many times using these methods.

You may understand very simply that Sun causes day and night, our body cycles and body clocks are tuned with sun. Photosynthesis in plants is dependent on SUN. So we can say that is there is no SUN then there will be no life. We have to accept that SUN has some powers and so have all the other planets got. If we could look market is this manner and understand the magnetic currents and energy flows of these planets then we may find a method which could be used to predict the Reversals in the Gold or any other trading commodity.

What makes the price of gold fall?


If stock price movement is random, how can technical analysis help in providing profits from trading?

My answer to If stock price movement is random, how can technical analysis help in providing profits from trading?

Answer by Ruchir Gupta:

The stock prices are not random and they are being governed by the planetary movement. WD Gann who was the Richest Trader in 1930–50s used Planets and Astro effects for predicting the moves in the market. I was fortunate to learn his methods and I have tested that these methods work by myself.

The Price movement may be random, if the stock is less traded or has low volumes of trading. Even with in the Randomness of the stock price there is a pattern and if this pattern could be identified, some serious money could be made. Elliott wave is one such study, which adjusts these patterns and fits them to predict the bigger picture.

Also, I must say some thing that Technical Analysis alone is not sufficient you need to mix it with proper money management to gain profits from trading. People sometimes very good in Technical Analysis might fail if their money management is not good. So Technical Analysis can tell that this stock is about to reverse but booking profit at proper levels is necessary which comes with money management. Also, every Technical Analysis method is 100% and this drawback could only be handled with money management.

If stock price movement is random, how can technical analysis help in providing profits from trading?


What are some of the better methods used to predict movement for forex?

My answer to What are some of the better methods used to predict movement for forex?

Answer by Ruchir Gupta:

One of the methods which could be used to predict movement in Forex or stocks or commodities is Gann Astro Methods. Every pair has its own set of planets majorly influencing the movement of the particular currency pair. If you are able to catch it you can start predicting the moves.

Elliott Waves is also one such tool where the prediction could be made on any Forex or stock or commodity.

And if you learn to use both together then you can start doing miracles in the market.

I my self have been using Gann Astro Methods to predict stock movements in Indian Markets and I have full faith in these methods.

What are some of the better methods used to predict movement for forex?


Is there a way to get information by email on IPO Initial Public issue shares in india?

My answer to Is there a way to get information by email on IPO Initial Public issue shares in india?

Answer by Ruchir Gupta:

Yes surely, If you own a D-mat Account your Broker Generally Informs you in advance either via personal communication or the Brokerage house sends mass email to all its clients.

For this you may ask your other friends, If their Brokerage Company mails the upcoming IPO information to them or you can yourself esquire from different brokerage houses if they mail this information.

As a confirmation you can ask them to show you the past emails.

Is there a way to get information by email on IPO Initial Public issue shares in india?


How much I will lose if I forgot to buy back 100 shares of binani industries which I shorted?

My answer to How much I will lose if I forgot to buy back 100 shares of binani industries which I shorted?

Answer by Ruchir Gupta:

If the stock be covered at lower prices at the time of auction then you may infact gain.

Also, Stock Exchange imposes some penalty if shares are shorted this way, which is very nominal as it is obvious the quantity you traded was very small.

As an alternate step you may buy Binani Industry Shares 100 quantities and square off when the auction is done (as in auction which is around 1–2 pm, stock exchange will buy back your shares)

You can also consult your broker for exact date and time when auction will take place.

How much I will lose if I forgot to buy back 100 shares of binani industries which I shorted?


Is someone else getting poorer when I make money?

My answer to Is someone else getting poorer when I make money?

Answer by Ruchir Gupta:

Really, a sensible and thought provoking question, I also had a same question many years and it got stuck into my mind and I kept thinking about when ever I was free.

The crisp answer is “NO”. No one is getting poor, if you are making money. I will explain you a third component which is Nature or Universe which is balancing everything.

Example 1: Trees are coming from nowhere: Suppose you plant 100 trees on a farming land for selling the wood in future. Trees after 10 years are ready to be sold. You sold them, got money generated simply from the air. You did not do any thing except planting them and giving water in few initial months. (so in this case money is not coming from people, it is coming from Nature and your hard work)

Now the person who has bought wood from you will recycle it , make furniture, doors, windows etc and or may sell it further.

Think about Abundance: We are thinking in terms of scarcity most of the time while we should think of abundance. If one truck of Uranium (or some other Mineral/Metal) bought from moon would be sufficient to fulfill the requirements of US for one full year, But we are fighting for limited resources.

Example 2: Consulting services offered by you are being generated from your mind and they are benefiting people so they are paying and your knowledge is adding value in their carrier. So this money is coming coz of mutually beneficial relationship.

Under this Example let us take different cases:

Case 1: You tried to help and the person got benefited. In other words Doctor operated the patient, did the surgery and operation was a success. Both Party are beneficiary. Doctor gets fees and Patient life is saved. Will you not feel good and accept the fees as a doctor?

Case 2: As always you tried to help but the client or patient did not benefited. In other words doctor tried to save the operation but the patient died. Now in this case doctor is a beneficiary, while patient has lost life as well as money. However does this means Doctor should not receive the fees?

Example 3: You sold goods/ service to other people and they further sold it at profit and the chain continued. So no one became poor. By the way the goods you sold were perishable and they got damaged at one person’s ware house after changing hands from two suppliers. Whose Fault? This person surely will get poorer. Should you regret?

Example 4: You sold a Gun to a Eskimo, he will gain from it by hunting, you gave a nice thing in nice hands, but if you sold a nice painting to Eskimo what will he do from it? This will surely make him poor.

It requires a lot of introspection on what we are doing and for what purpose we are doing it and does it makes us satisfied or it increases worry inside of us after we do it. The real key lies in what we feel inside after we do that action.

Is someone else getting poorer when I make money?