ETMarkets Trade Talk: This 3rd generation Marwadi trader tells how to cope with market loss

NEW DELHI: Making money in the stock market is not an easy business. Yet, Jyoti Budhia, a third-generation Marwadi trader says she “didn’t find much difficulty” trying to master this difficult skill, thanks to the support from experienced brokers – her parents and grandparents. She is quick to add that the tough times she did face, only made her stronger.

Budhia, Director, BK Training, kicked off her stock market journey “officially” as soon as she turned 18. “When I crossed 18, I was desperate to accompany my father to the Bombay Stock Exchange Ring (outcry system or pit), officially. Till then, I was only allowed on Diwali day as family members of brokers were allowed only for Mahurat sauda (trading). From that day I, never looked back,” Budhia says.

The best time, she claims, was during the “ring time” as it taught her about life, attitude after earnings, disciplines, and understanding of sentiments of people and markets, in particular.

But the stock market journey is never one way. Her first loss left Budhia depressed and in tears. But she says reconsidering was never an option for her, and she instead learned a few rules to help her cope with a stock market loss.

In this candid conversation with ETMarkets.com, Budhia shares how she made it to Dalal Street defying societal pressure, her rulebook for trading and how she manages to cope with trading losses and some advice for the next generation of traders. Edited excerpts:

You broke a very common bias in our society; how difficult was it? Did you face resistance from your family?

My family was very supportive as I am a third-generation trader. But being a girl from the Marwadi community, I had to face a lot of taunts from society but thanks to my parents, I fought against everything.

Can you tell us about your journey to becoming a trader?

Since my childhood (approx age 12), I used to do back office work like physical share transfer and preparing bills (I used to boast to my friends that I do papa’s office work, and it was fun for me). While doing this all, the day came when I crossed 18 and I was desperate to officially accompany my father to the Bombay stock exchange Ring (Out cry system/pit). Till then, I was only allowed on Diwali day as family members of brokers were allowed only on the day of Diwali during Mahurat sauda (trading).

From that day I never looked back.

I faced tough times but they made me stronger. I didn’t find much difficulty because I had the backing of experienced Brokers, my parents and my grandparents. Every time I made losses – it gave me a new experience and even profits taught me how to trade. This same learning process is now a part of my life.

You are an inspiration to a lot of women traders as well as investors. Any experience which you fondly remember while interacting with clients or students?
I keep on getting good and high motivating feedback but many come with an intention that they can learn trading in one or two days, and leave the job and start earning more than their job. When I reject their offer, they try to search some other places for training that can teach them some tricks. The few most interesting people I met were those who just joined training so they can take my advice and start trading and recover their fees. They don’t understand that knowledge and practice are the keys to success and it is a slow process that cannot happen overnight. I have also seen people taking training with many trainers and then comparing and even arguing. Every trainer has their own style as per his/her own trading and the way they are making money. It is very difficult to input everyone’s style and reach some sort of a holy grail of trading.

When did you start your journey in the stock market?
I was born and brought up in the stock market culture. I carried almost 2 generations of knowledge with me, and I started at an early stage where it was more of an excitement than taking it as a career. Later, this excitement got converted into a career. The best time I had was during the Ring time where I learned so much about life, attitude after earnings, disciplines, and understanding of sentiments of people and markets, in particular, from big brokers.

When you got your first drawdown – did you think of reconsidering your decision? What was the learning?
The day I saw my first drawdown, I was depressed and in tears; reconsidering was not an option as I had the backing of experienced people who mentored me and made me strong enough. These are the following points I still remember:

1) Don’t try to recover, as you are not a recovery agent. Start earning again with knowledge and discipline so that this loss becomes negligible
2) Start learning technical analysis you will learn faster
3) Always remember to put stop to your losses or else it can put a FULL STOP to your life
4) Whenever you are in a big loss or big profits then take a break from the market. Too much of anything is not good.

What strategies are you using when it comes to picking stocks?
I use some important candlestick patterns at support/resistance (these can be found by using lines, chart patterns, and moving averages) along with RSI (my favourite oscillator) for stocks investments or trading. For long-term investments, I find multibaggers using technical analysis and then use the stock SIP method (systematic investment plan) from some portions of profits earned in that month. I study build-up data of futures and options, option chains, and volatility for trading derivatives. All my futures trade will be hedged and I am more of the buyer of an option, still, I prefer trading spreads.

How is your experience interacting with the younger lot? Any big differences you see in Robinhood Traders?
Younger lot reminds me of my start of the career — the same josh, aggressiveness, always in search of the holy grail, and trying to innovate something called jackpot trades. Now, the same thing the younger lot is doing on algo platforms. Free brokerage is an attraction but, in that case, the brokers’ service gets compromised.

Do you have any rulebook when it comes to trading?
My Rule book is simple and is as follows:

1) First decide on stop-loss before taking a trade
2) Risk-Reward should be in favour
3) Loss should be so small that it should not hurt my pocket
4) Emergency exit points to be taken care of
5) I don’t do average or repair at any stage. I cut with the loss and exit
6) I don’t run behind the stock if the opportunity is missed, another is waiting for me
7) Love money not the stock
8) Keep trading simple, don’t complicate it
9) Trade as per study and keep an eye on the study to understand the continuation or failure of the study
10) Analyse my trades every month with study to learn from my own mistakes

What would be your advice to the new investors – how to navigate from a loss-making position?
1) Be stable, calm, and cool while trading
2) Do a minimum of 15 minutes of meditation every day
3) Take stop-loss only for the amount the pocket allows
4) Don’t get carried away with the herd mentality
5) Concentrate on what you have studied
6) Loss and profits are part of the business, so one should not get excited about either of them
7) Always believe that the market is THE BOSS and you have to listen to the boss because the BOSS is always RIGHT
8) Rome was not built in a day – the same way wealth cannot be built in a day but can be destroyed within minutes or seconds
9) Markets are there from eras and will remain there forever and every day is a new day of opportunities
10) For those who want to quit their job and enter the stock market, especially for them – a job gives them security for the 1st of every month where you can pay all your bills easily, so don’t even think to quit the job till you satisfactorily start earning consistently at least 3 times more than your job for minimum 12 months. Your family should not suffer due to your excitement.

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