Meet Navin Sood – chartist, Nifty trader, car parts manufacturer

Navin Sood

It's early in the morning. Navin Sood is sifting through reams of price data that will help him in taking positional trades in India's most popular index – the Nifty – and a handful of stock futures.

Sood, 69, listens with rapt attention to Virendra Kumar's morning commentary on Nifty's options statistics and nods in agreement when Kumar -- an anchor on CNBC Awaaz – talks about how derivatives positions are stacked in favour of the bears on Dalal Street.

Kumar's 3-4 minute monologue is the only bit of television  Sood catches in a very busy and extremely profitable trading regime. He is not your run-of-the-mill trader. Despite being a late entrant in the business of charts, the deep-pocketed Sood has a formidable reputation in the world of short-term trades. And he is unique.

``I look only at the chart I trade. I do only chart-based trading. I don't look at the Dow (Index), I don't even care or know when macro data or companies' earnings are declared,'' Sood explains to Moneycontrol at his lavish office on the outskirts of Delhi. ``If the chart doesn't agree, I don't trade. For me, my chart is the final decision maker.''

Sood is among the growing band of immensely wealthy traders who have benefitted hugely from the market over the past 15 years. He is also a very successful businessman, employing more than 5,000 staff at six manufacturing units in Haryana and Gujarat.

Sood makes steel parts for two of the largest Japanese car makers and deploys a substantial part of his business earnings in trading futures and in passive investing.

Sood's trading style is frugal but extremely rewarding. He trades five instruments only -- Nifty, Reliance Industries, ICICI Bank, Tata Consultancy and Maruti. Nifty trades are settled intra-day mostly, while those in stock futures often last 2-3 days. He declines to mention position sizes but those close to him vouch for the size and consistency of profitable trades.

``God has been kind,'' is all that silver-haired Sood says.

Punishing routine 

Running a full-time, very active and deeply funded trading setup alongside a roaring business is in itself a challenging task, but Sood pulls it off.

He follows a punishing, time-bound routine for trades. About 4 hours -- divided equally between evening and the next morning -- are spent on figuring out positions for the next day.

He maintains well-equipped trading setups at his residence and at his main factory at Faridabad, where 2 aides help with executing trades and reading charts. They keep him informed about profit/loss via the telephone even as Sood navigates his business amid growing demand for ancillaries.

Initially, Sood depended heavily on brokers and other market participants for stock tips and that led to a period of net losses. Soon, he realised that his hard-won business surpluses were getting drained. It is then that charts and software came into his life and Sood decided to be “very objective” about stop losses. This was also a period of a global bear market due to the financial meltdown in 2007-09. Sood's biggest learning was the necessity of a stop loss (SL) in every trade and that the SL had to be synced up as profit rose.

Sood follows the ladder approach to stop losses. He books his first lot of profit at 1.5-times the SL, then another lot at 2x. Subsequently, the SL is raised to entry price and the third lot is allowed to run. Original stop losses are placed in accordance with charts. A `lot' necessarily doesn't mean quantity defined by `lot sizes' in FnO futures.

Being a mechanical engineer by training, Sood deep-dives into charts with the passion of an 18-year-old. His favourite software are just two -- the immensely expensive ESignal and the sublime Japanese art of Points & Figures (P&F).

“I consciously stay away from news, television and papers. I try to keep a distance from anything that might affect my trading psyche," Sood adds.

His multi-screen setups are popular across trader communities and Sood's chart reading remains the byword across the country's growing band of technical enthusiasts.

What's best about Sood is that he doesn't rest on his laurels and invests very heavily in learning. Sood travels extensively to attend a minimum of 12 seminars each year. His passion for learning newer, better techniques is matched only by his generosity in sharing that practical knowledge.

Trading as a hobby 

Sood entered the markets in 2007 after his business started generating cash surpluses. At 54, he went through all the pains associated with stock tips, a roaring bear market and mistimed, loss-making trades. Soon, he bumped into technical charts and that started a lifelong passion for trading. It took Sood about 5 years to master the screens and then there was no looking back.

He keeps it simple.

Sood is an avid reader of Options chains, Open Interest and has on his fingertips all data on the five instruments he trades. Days, weeks, months and years of chart reading gives Sood a practised eye on P&F's anchor columns, trendline breakouts and long-term supports. Being a vendor to the Japanese, Sood has a special fondness for candlesticks, Renko charts and indicators such as Ichimoku, a technical analysis method.

“Often, the charts speak to you. All that you have to do is to keep looking at them regularly."

Sood learns every day. He travels extensively to meet younger traders -- some of them in late 20s -- in far-off cities. He regularly attends trader events in all major metros and hosts his own bi-annual event in Faridabad, where master traders from all parts of India gather and deliver tals. Sood's WhatsApp group is an envious place to be -- you will find at least the top 10 traders there -- many of them working far away from the limelight.

Multi-baggers 

Sood is assisted by his daughters -- Tulika and Rohini -- in trades and in daily business. They manage the passive end of wealth generation by deploying about 70 percent trading surpluses in select multi-baggers such as Asian Paints, Dabur, Kansai Nerolac and Relaxo.

Notably, these stocks were selected on the basis of long-term P&F charts. They religiously purchase every medium-term dip in such shares. The remaining 30 percent is deployed in strong midcaps where Sood holds a single-digit percentage equity capital that builds “substantial profits,” he adds.

The three are now busy in planning to set up a family office to manage this wealth but the primary objective remains the shorter-term variant of the great game.

“We will increase both the quantity and the number of trades," Sood says. `Trading is and always will be my first love."

Apart from the charts, Sood is extremely fond of expensive watches. He also tinkers with old cars and bikes – owning 12 antique four-wheelers and two-wheelers.

Being an old-world Punjabi in Delhi, Sood’s hospitality and his bar are often at the centre of great conversations and parties. The family also runs two schools.

“We need to give back to the community. The markets have been very kind,” he says.