Mitesh Thacker, 40, needs no introduction to traders and investors who follow technical charts very closely. A trader by profession and a photographer by hobby, this Mumbai-based chartist knows how to spot the winning trade almost every time.
His love affair with trendlines started when he was doing his MBA which drew him closer to the stock market and made him develop a technical approach to trading and investing.
Thankfully, luck has been on his side but he does not ignore the importance of knowledge in trading. A successful trader will keep his emotions under control despite market fluctuations and trade with strict discipline.
Mitesh made his first investment call in the year 1999 when he purchased Lupin and ITI. The general market conditions were quite bullish and both these stocks turned out to be multibaggers.
His top bets in the current markets based on long term charts are Bata India, Reliance Industries, TATA Global Beverage, Jubilant FoodWorks, Wipro, M&M Financial, PTC India and Titan Company Ltd. These stocks could turn out to be a gold mine in the long term.
Here is the excerpt from his interview with Kshitij Anand of Moneycontrol:
What is your trading style?
I am what you can call as a pure trader. I don't do investments. Over the years, my trading style has also changed and now it is more of using trend following rather than predicting.
Having worked on multiple indicators and done exhaustive back testing with them, I now use approximately 5-6 trading set ups. These trading set ups have over the years given me 65-75 percent accuracy of identifying trends in stocks and indices.
The best part is that the trades which don’t work out the result on an average of 4-5 percent of loss on the exposure undertaken while those which work in favour end up offering rewards closer to 12 – 18 percent.
How can traders achieve their crorepati dream?
Find me a trader who doesn't want to be a crorepati. For one let me say this emphatically that it is entirely possible – 100 percent. It is possible for even someone without much trading history.
It requires some good and sound technical knowledge, and it requires some different set of skills. Knowledge plays a big part and luck is involved heavily too.
It plays the kicker, sometimes luck works as a factor which just gives your returns an extra fillip and at times it works on the opposite side.
My advice to traders is that if you have sound system and maintain good discipline, luck tends to even out over a large number of trades that one will end up doing.
So, I hardly worry about the luck factor as in my trading history. On numerous occasions I have made more money than I thought and at times have lost money when I thought the money is in my bag.
What works more than luck and is equally important to knowledge in trading is control over emotions. And there every person is different. And it takes a long time to do well on this aspect of trading.
If somebody wants to reach the amount of Rs 1 crore in a period of let’s say 10 years. The seed capital today would be Rs 10 lakhs. This means we are looking at a compounding at a rate between 25 - 30 percent....and remember trading profits are taxable so this means post tax returns of 25 - 30 percent on an average.
I believe this can be achieved. In fact as recently as April 2017, I have started a separate trading account, where I hope to achieve or beat these numbers.
In my opinion what works for Fundamental investors is that in their overall diversified portfolio few stocks would compound multiple times. What works for leverage traders is that trading allows participation on the short side too.
Is technical trading catching up in India?
You will be surprised that the average age of people who come to us are either skewed towards 30 years who want to get into trading as a regular activity (or a second income generator for them).
People who are around 55 - 60 years of age want to test waters before jumping as a full-fledged trader post retirement.
The biggest change over the years is that people are now willing to pay for quality education or learning. There is eagerness to learn and willingness to test themselves in live market conditions.
Also, with modes of communication getting easier and faster, students who attend our courses not only benefit from our side as we share ideas with them on social messaging applications, students are encouraged to actively contribute and share their ideas too.
Where do you see markets in next 10 years?
Being a follower, I do not spend my energy on forecasting too much but I would still believe that targets of 30,000 would be far-fetched level for the Nifty, though I would be extremely happy and hopefully very rich if that was to happen.
Since markets will have up years and down years, I believe that we shall have more of up years in the coming decade but would still tone down expectations. Technically, I believe we will make many higher highs in coming few years and yes 22000 - 25000 is fully possible.
Who is your trading guru?
I still carry a lot of learning from Shankar Sharma of Firstglobal, having seen him trade from close quarters and then traded for him in Indian and international markets.
Him apart, Trading is less of following a personality and more of following systems which work with reasonable probability.
Any incident which caught your attention:
There are many incidents. To be honest, every trader who has been in market for some time will have truckloads of memories to share.
On the 1st of March 2016, we got multiple reversal signals on Nifty just after the Union Budget and after markets had corrected to 6,900. I was carrying 9 long leveraged trading positions.
I typically prefer 5-6 positions sometimes 7-8. Among those positions, I was long position on SBI March Futures and out of those 9 stocks, 8 stocks were up anywhere between 3 - 5 percent while SBI was up only 1 percent.
At 3.20 PM, I thought may be something is wrong with SBI and while charts were bullish. I decided to drop the position on an extremely bullish day. Next day morning, before market opened, RBI governor Rajan made some announcement and stock opened 6 percent higher and ended the day 12 percent higher at Rs 181 as compared to previous close of Rs 162.
Any books that you like?
I have lost some enthusiasm for reading. But, I love to read mild fiction. In the past, I have read a lot of books written by Jeffrey Archer / Ayn Rand / Mario Puzo / Chetan Bhagat and the entire Sherlock Holmes series which I have read multiple times.
The book which I have gifted the most to my friends and students is "Reminiscences of a stock operator" by Edwin Leferve. My sincere advise to anyone who wants to be in trading, this book is a must read.
Disclosure: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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