Trader Turned 85l Into 25cr Using Systematic Trading Mr Shyam

TITLE: How this Trader Turned ₹85L Into ₹2.5Cr Using Systematic Trading !! #Face2Face with Mr. Shyam CHANNEL: Learn Stock Market 1M+ DATE: 2026-04-17 ---TRANSCRIPT--- Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

I made some 60% return on my capital which is something I’ve never done so far. Right now it’s 3:20 p.m. The market is open. Is your positions there? Are you trading? Yeah. Yeah. Actually uh trades are happening as we speak. That’s why I can see your trades. Some of them are in SEX natural gas. Yeah. Looks like you are a multiasset trader, huh? Yeah. Exactly. Lovely. And this is total PL. You can see the number is fluctuating. It’s 22 lakh something. Exactly. Exactly. Is this a PL for today? I’ll I’ll I’ll show them a simple uh back testing of uh you know a 15-minute opening range breakout with some rules. So back testing is manual and then you do some front test like do you do paper trading or you want to put some money? No, I I’ll put money actually. Do you believe in paper trading? Next to most important thing is the push in size. How you can push in size? Let’s say you have five lakhs capital when we go live. That is a time when market will not give you money for that strategy because the market environment is not supportive. How do you deal with that? Nowadays I’m I’m I’m playing around AI to see what else we can do, how we can utilize AI. Now, what are the tools you use? Hello everyone, welcome to another face toface trading. Yes, today is another day for trading and today I have another trader who has started from here and now reached here and aspired to be go here. Right? Someone who has done some other business uh or other occupation got exit got money and thought trading is a great occupation to win got into trading started with discretionary trading but now a systematic trader not necessarily an algo trader a systematic trader and by the way I’m sure you guys have observing that for the last couple of days I’ve been focusing a lot on systematic trading algo trading rule-based trading because I think in today’s world where noise is of paramount. You can’t do anything about it. Mr. Trump is making sure that there is enough noise in our life. The only way to survive in market is to create a 100% ruledriven trading because discretionary is getting tougher by day. And today we have the trader who will tell us how he evolved from discretionary trading to systematic trading. All right. So let’s welcome our face toface guest for today Sham. Hello Sham, welcome. Hello. Thank you for the opportunity. I’m really excited to be part of the uh face to face. Thank you so much for traveling all the way. I think you’re coming from Kolbat. So Kimur to Kolkata. Thank you so much for traveling for this one. So Sham um right now it’s 3:20 p.m. The market is open. Is your positions there? Are you trading? Yeah. Yeah, actually uh trades are happening as we speak. Um so as I open there are some trades happening. Okay. So I can see your trades. Some of them are in Sensex natural gas. Yeah. Sensex nifty. So you look to be crude oil looks like you are a multiasset trader huh? Yeah exactly. Lovely. Lovely. And this is total PL. I can see the number is fluctuating. It’s 22 lakh something. Exactly. Exactly. Is this a PL for today? Uh yeah, I I mostly I do positional uh so the trades have been happening for quite some time now. Okay. Uh so today with uh this news coming out, I think I got some exit. So I’m just sitting on a profit has been there for quite some time. But are you a speculator? Do you speculate your trades? No. No. So everything is rule based. Um so as we just I opened the window, the trade was happening. I automated everything. Okay. Um so uh I don’t everything is systematic. I don’t even mind uh what what if you ask me I don’t know what what trades are going on right now. My goodness. I don’t even know because I I run multiassets. Uh so many trades are happening as we speak. I don’t even know if you ask me whether I’m long or short. I will not even know. I need to go look at my system to see whether I’m I’m long or super. And how many systems are running right now currently? So I think we are running around 10 to 15 systems multiassets. Uh okay okay so uh there will be commodities there will be options futures okay very interesting so let me know more about you first that how did it all start where what’s your background how did you get into it um so I uh I I’m from IT background uh in IT I was into marketing so 2010 till 2016 17 I’ve been working and I was trying something in markets like if I can make something some money out of market I thought genuinely it is a you know it’s a side side business it’s kind of when I started working I had this mentality like my work anyone can do so I’ve done my MBA I’m working and I thought like maybe someone who is coming in fresh they can do my work why why do I need to be there okay that question was there always in my mind so I was I keep on uh you know genuinely searching for something which I thought okay maybe it’ll be helpful for me if something happens So I uh uh trading was something I very uh it’s I thought it’s easy like lucrative like you put money you just make money. I kept trying multiple times again and again but I I was a failure actually I didn’t make money at all. Um so 201617 what I did again I started publishing charts in trading view. Okay. So trading view at the time you if you publish that you’ll be this top author like you can be a top author. I was keep on publishing and uh I was one of the top 10 authors at the time in trading view because I was very very um you know uh consistent like every day I’ll go look at charts I used to publish charts but I couldn’t trade somehow uh I couldn’t trade at all like I’ll get lot of messages in trading view saying hey this was superb but I I I was not trading actually like uh so um uh so in 2018 um Uh what happened like I I I was part I joined a startup actually 2015 16 17 I joined a startup at the time what happened that that startup bug basically you know you be part of this founders you know from working to seeing someone um that that passionate you know doing something I thought okay after this I should also do something like that I should be doing something on my own I should not be uh working anywhere uh so I was a part of company called cloud sharing so what happened is 2019 Um we got exit actually before co um so we got acquired by Cisco. I had a little bit ease up in the company and um I had some uh dips because of trading. I lost some money took dips. So I closed all the dips and 2019 uh what um I had money but I had this fear of trading. Okay. At the time I was searching what to do, what to do, what to do. I went attended couple of uh seminars and what happened? I got that idea of systematic trading is the best way for me to do because um because I’m consistently publishing charts. I’m doing everything but I’m not profitable. Somewhere or other deep down there is some problem with me. Not because of technical analysis, not because of it’s psychologically there is some uh fear, blame all this thing which um once I start once I understood okay system trading is the way to go. I understood okay this will eliminate all this thing. M uh so what happened um so 2020 I I sat that co time everyone were at home what I did I I I manually started back testing lot of ideas and that time okay when I saw 10 years of data I got super confident like I tested 10 years manually like you mark every highs and lows manually for every year I’ll mark and then I’ll back test then next year I’ll fully I I’ll sit for like four five hours mark everything and then I’ll go back and then I’ll test back testing manually. Manually generally back testing is automated. No. Yeah. So I was doing it manually. Uh so this is again another misconception right when people talk about systematic trading they think uh it is only automated they can do they can back test only automated right but um some simple rules can be back tested at the time trading view was not there uh like in trading view that I I couldn’t able to fetch 10 years of data so I used to bought ami broker I bought data and then using ami broker I was back testing but right now I think trading view has enough data we can back test in trading views so when I manually back tested it one thing what happened is I got confident okay like 10 years it has worked what is the probability of this not working this year okay let’s say one year it is not working again it has to bounce back next year it is to work so there is some sort of a confident that came for me saying that okay uh with regards to uh from discretionary if I move into systematic trading I genuinely felt that I I have some chance here in this market because there’s so much noise for me especially what happened is so I used to blame myself. So whatever happens with the market like if I lose I’ll blame myself. If I make money I I’ll think oh it’s going up I could have hold it even then I will blame. So the blame somewhere that that is what more than fear that blame was somewhere deep down that is what pulling me down which I didn’t understand at all. Um since I started systematic trading what happened is I don’t do anything. Yeah. If money if market gives me money it’s my system. Yeah. markets takes money out of it’s my system I so I don’t take anything to my head basically so that changed the uh the narrative which runs in my mind basically absolutely so once that narrative changed that’s when I thought okay so since u I quit I thought I I was keep on telling that I’m going to do something on my own I genuinely felt okay I can do trading even though a lot of people said no it’s not you cannot do it um but somewhere deep down I felt like um this during this 2018 19 time I started visualizing myself as a as if I’m a full-time trader like I have monitors at the time I didn’t I didn’t know about systematic trading but at the time I was publishing charts and trading still I was a failure but somewhat once I started doing that deep down I started believing that once the I understood um that systematic trading is the best way for me to go for my psychology okay I thought okay um um uh so that that from there on once I see the data uh once I I got so much confident and 2021 I jumped in full-time uh since our company got acquired by Cisco I had the 6 months of uh pay I had uh money also for me to run my family but again I took that jump there I thought okay I need to do full-time so I could have since I’m coming out of a exit from a company that two we we got a very good getting acquired by Cisco uh is not easy and I was one of the early employee okay uh so I thought okay um um what I’ll do if I do something I do full wholearted okay if I fail let me fail I just want to do because I’ve never done anything I’ve always be working I’ve never done something on my own so I thought okay let me do something uh wholeheartedly I’ll focus only on trading I know I have something I found out something okay I know it’s going to work out let me only focus on this I will not do anything I’ll not do any other work and I was the only earning member uh in my home okay so um my my parents my wife everyone Everyone was thinking okay will this work will this work um but when initially when I started trading um my wife used to uh punch me orders I used to call her like hey trade is coming here can you take I I I even thought her whatever I was doing and I will call her I’ll be out somewhere I’ll call her hey can you take a trade here can you take so she was helping me out for the first two months 2021 first to two months I made some 60% return on my capital which is something I have never done so far that gave me confident at the Then I pumped in a little bit more capital at the time. Initially I started with lesser capital. Then what happened? I I pumped in uh a little bit more money uh into the account. Uh 2 years everything was super I was doing everything. 2022 uh was a little bit difficult actually as a year there were a lot of gaps was a little bit difficult. So I had a let’s say I have a capital of uh uh for me to run my family. I have one and a half years of capital. What is happening is whatever the profit I’m making that yearly expenses is eating away and my capital is staying uh as it is but my uh uh my expenses are taking away all the profits like say I make 20% 30% whatever I’m making it’s going and my account is not growing there is I feel like 2 years I’ve been trading and my account is assets and there is no moment at all because you are paying enough brokerage charges yeah everything on top of it I’m I’m withdrawing it for my personal expense also because I don’t have any other income source of income. Okay. So at the time um I wanted uh some sort of a support and I went to my father. Okay. We had only one house like which we have given it for rent. Okay. Um I think no one will do this. I went to my father. I told my father saying that um see I I’ve been doing something for last 2 years. I’ve been running. We are making money but with this capital I cannot sustain. Probably one bad year will wipe me out. Basically like good years are fine. One bad year I I I I 2022 gave me my thought that maybe you should have five expo x of your yearly expense as your capital at least for you to run uh if you want to run full-time. Yeah. Um so I went to my father I told him like um we have one house why don’t you sell the house support me so that u we can be a little bit more comfortable than what we are right now and my father uh said okay it’s I’m the only son so he told me that okay uh take it my mother and my wife was little bit uh say you will not they were thinking relative terms like we will not get a place here again you’ll not get it back all these things was there but my father uh said okay okay okay and I sold uh my property uh July 2023 I I sold my property I started with around 80 85 lakhs capital right now I have around 2.5 so I’ I’ve scaled uh my account from 80 in another last in 3 years and um without my family wherever I am right now is like impossible right like if you terms in terms of lifestyle in terms of everything has uh changed And since I am getting I got that initial capital I got more confident like I build my own uh system now like have my own platform to execute my trades I don’t I don’t manually trade nowadays initially I started manually for 2 three years I was doing manually but once I thought okay I’m going to scale my capital is increasing I was very serious about it uh so I have a tech team uh we uh we have four five members we are working together wow so uh building strategies is um so I I was lucky like everywhere what happened like some things like I don’t know tech I’m not a tech person I have a automation tool for me alone okay okay so um selling a property father selling a property and giving it so somewhere deep down uh when uh you want something in life nature has a weird way of uh you know supporting uh each uh step you know absolutely uh it comes u so everywhere where even the tech team like I used to say I’ll automate I’ll automate since I started uh the uh systematic trading but um I I don’t know like even now if I go to Excel if you want me to put some formula I I I don’t do I I go to Google geminy to generate it right nice me doing a having a tech team running something uh fully automated right now uh is something amazing and right now purely my money works for me nice I I don’t do anything everything is automated from starting from execution to journaling everything is automated. My work is to manage the risk. I know I have the data I have I we we test anything from 5 years to 10 years of data. Okay. So since we have data we are very confident about the so we execution happens automatically. Journaling happens automatically. My way is to manage the risk in the course. So if I can manage the risk things will automatically uh will be uh taken care. So that’s what I’m doing right now. Sham your introduction has lot of learnings and I’m so happy that you have opened yourself so well in the initial introduction and people who have not paid attention his introduction please hear him again there are some amazing nudgets the wisdoms power wisdoms he has given and the one which I really loved what you said is because of systematic trading I don’t doubt myself anymore that is most amazing Okay. Otherwise stock market is the uh is the epidome of regret. Yeah. You make money you regret. You don’t make money you regret. But when you have system which is doing the work for you automatically your regret goes away and then your doubt towards yourself goes away. So fantastic guys good learning all of you. Please start building your own process otherwise it’s going to be very tough especially in AI world. If you don’t have process, AI knows who is doing random stuff and AI knows how to take money from random people. Ch. So let’s get into this journey of you have a beautiful presentation made for us. So let’s get into this beautiful journey of understanding how you from mind to machine how that transition took place. Yes. Yes. I thought um when uh when I want to come here and speak I want to just share my journey how I transformed from a discretionary to a systematic trader. Okay. So what I’m going to do is why why I moved from a discretionary to a systematic trader. Okay. Okay. So there is like if you look at in trading the biggest enemy is your brain. As I said for me it was like the blame. what what I think what goes into my mind right so how discretionary and mechanical uh differs right if you look at a simple thing a decision making okay let’s say I have a fight with my wife that day how I make decisions will be completely depend upon what happened that day okay whereas if you look at here as a mechanical trader I don’t it’s everything is set like I don’t need to uh um everything is Right? I just need to follow the process whatever the rules are. If you look at consistency also if you are discretionary one day you will trade one day you will not trade 2 days you will not you will skip you will think that market is going to go up or this is not the market for me to trade because you are taking the decision. But here it’s same thing you’re going to do. If that happens you’re going to repeat it again and again again and again. the consistency of how you execute something is very very high with a um a systematic trading compared to a um discretionary trading. Y again this confidence again like what happens is we normally trade with a recency bias when initially if you look at for me it will look like a head and shoulder pattern for someone it will be like a triangle pattern. So what happens is we feel that okay this is what is happening and we take decisions in uh discretionary trading but here we go with the data like you have historical data of every year you have made money you have that historical data to back you up again stress level as I said like when you start blaming yourself something very simple which I experienced um the stress levels will be very very high you will not know you will you don’t know like you will react to people that is which is not needed. But here the stress level because you’re you’re uh standing out from the decision making like you are not making the decision the system is making the decision that helps you to uh you know control uh your uh stress again reaction to loss like profit also somewhat okay we have booked a profit we’ll be happy discretionarily but if you lose definitely there are there are times like if you lose you’ll definitely blame you will go into that cycle it’ll be very difficult for you to come out of that but here exist outcome. Let’s say one year I have made 15% return. Average I have made 25% return. Next year it will give 40% for me to compensate for that uh uh uh negative year or or a little bit lesser returns. So this is a very very big eye opener for me. When I started trading, initially I thought okay it’ll be difficult. Even systematic trading will be very difficult but once you come into the flow only challenge in systematic trading is whatever the uh rules you have you have to follow it. Unless you follow it it will also become a discretionary and in systematic trading whatever do in your personal life like you have to be very disciplined basically you cannot even deviate 0.01 01 your personal life how you how you you lead your personal life will reflect in systematic trading. Yeah. Moving to systematic trading definitely will help you uh in the emotional uh thinking like how how you emotionally react to uh things. Next when we talk about systematic trading everyone thinks about automation. We can back test only using coding Python. But if you look at me when I started even now I manually back test because manually back testing helps you um to see going through that ups and down emotionally as well like so if uh what I thought is maybe I’ll I’ll I’ll show them a simple uh back testing of uh you know a 15-minute opening range breakout with some rules. Okay. Um, so I’ll I’ll go to uh Trading View. Mhm. Okay. So, this is a 5 minutes charts of Bank Nifty. Okay. The green line is a 15-minut range basically 15-minut range high and low. Okay. So, I am I am at April 1st, 2025. Okay. So I I come to the 1st of April and I see that okay I have a entry at if you look at the first 15 minute high it is 51,800. Okay. Okay. So what I do is I will go to an Excel sheet. Mhm. I will go enter the price of 51,800. Okay. Okay. So normally we go see where we get an entry and then we enter. Let’s say what is the rule? Okay. The rule is first um the high of the first 15 minutes break you take a entry and the low is the stop loss. Okay. If a low hits you take a shot. Okay. So this is a rule which will not change every day. Whenever it happens we going to uh keep doing it. So here what happened? We got an entry and then what happens is it goes hits our stop loss which is 51,538. Okay, you go just type it here 51,500 at what date you exited, what time, what is your initial stop loss, how many points you lost. Okay, gross points. Again, when you capture, it’s better you capture the net points also. Net points is basically all this cost liage when you start execution you you’ll you’ll you’ll face all this. Okay. Okay. So, you add some let’s say 10 to 20 points as a as a cost. Then what happened once see our rule is if if the first high breaks you go long with a day low stop loss if the day low breaks you go short basically that’s the rule okay what happened is low is our stop and reverse basically when a when a day low hits you go take a short trade so what we do we go we capture that entry price time exit price and how much points we made cumulatively how many points we have made so like that what we can do is we can just go day by day. Okay, next day if you look at um on 2nd April also we have got a break of opening range and we would have exited at 315 because our stop loss is not got hit. Okay, we would have exited at 3:15. If you just keep doing it day in day out, let’s say manually you go through you let’s say you do it for an year, you have one year of data. Yeah, I can show you uh a list of years which I have back. This is one of my uh previous strategy. Okay. Okay. If you look at from 2011 I I have back tested uh till 2025. Oh, manually going through each candle by candle. Okay. So by doing this what you have is you get so much data like how many how much points I’m risking, how many uh points I’m capturing, how many uh average, how many points I’m getting, what is the risk everything. So if you look at on a yearly basis if you go you will get every month what is the uh what is the points I have captured you have this data basically this gives you this confident of executing this day in day out what I have got here by just by doing it is I know that last 10 years I have made profit I’m just going to keep doing it again and again. So if you do this automatically the back testing then obviously the automated back testing will have its limitation. Yes, it will capture the price where actual trade may not happen. Uh but when you are looking at graph and candle etc. Technically that is also you are looking at historical data and try to do back testing right. So you’re not looking at trading terminal you’re looking at chart. Yes correct. So how will how is the result very different from manual versus the automated back testing. So see for you to back test it automatically you should have already formed the rules. So how I do how I do it is see as you start testing so uh what I do is I take different quarters basically let’s say I go to 2014 I take one quarter 2017 I’ll take one quarter I’ll take different different quarters and I back test idea basically okay then what will happen is you will see that okay maybe stop and reverse is not working you don’t do stop and reverse maybe you have to do it only previous day high above the previous day high only I’ll take so these sort of thought process will come only if you manually back test. If you if you start back testing it in a in an automated fashion okay u you you will not see the charts you will not go through the uh chart emotionally also. I understand but manual back testing will have limitation right now if suppose I have done X parameter as a back test you know I want to change the parameter then the manual back testing will involve me yeah you you have to do it but systematic back testing uh just these are softares now so you just have to change you can still do but anyone who starts systematic trading I would suggest them to do this manually so that they get that conviction why we are doing it first of all right see just um if you if you give it to a software it will just throw show you uh uh numbers basically you don’t know whether is it real or how it will work when you exeute it’s a good idea to use software get some numbers and then also do manual back testing just to confirm you see you can you can do it see I got comfortable doing it manually okay I got I’m very comfortable doing it manually it’s a timeconuming process and as a trader I feel we have to put that effort for us to get it okay even if you let’s say you hire a coder to do this even then you have to build those ideas okay for you to uh you give the uh a tech person to uh you know um back test it. Okay. Got it. So you also do front testing. Yeah. Okay. Yeah. So back testing is manual and then you do some testing like do you do paper trading or you want to put some money? No, I I’ll put money actually. Do you believe in paper trading? Um no actually because there is no emotion in paper trading. Uh okay. I I’ll at least do one one lot. Yeah. That that doesn’t matter actually. it will be very insignificant for you and you will know how it works. Basically why I do that is to check um how much slippage is happening what is the cost that is coming like to back test this to real how much we are capturing let’s say we run it for 3 months we’ll get that idea so basically we do that only for that other than that even now even I do manual uh um um like we we do coded back testing as well but a concept which when we build as a concept initially right now for two to three years we we manually back test. I manually back test because I want to see I want to feel for the I had I need to have that feel for the strategy. Yeah. Even now I manually uh I I I back test with my code but what I do is for for two to three years I I I back test it manually still for me to get an idea and trading is all about psychology. Unless you back test it manually you will not know whether are you in for the strategy or not. M even though you see numbers it will it will be easy like when you see numbers when when let’s say we coded we back tested the data comes when you see the data it will be super for you but when you start doing it in a live market you will feel somewhat disconnect with it when you test manually at least for right now I do at least 2 to 3 years even now I do I have a tech team we back test it but still I manually back test because for me to get the feel for the strategy whether I’m I’m in for the strategy whether can you do it or not no I totally understand I am also believer of manual back testing and manual front testing. So I totally agree that to get conviction in your model, you need to do it manually. Systematic at times gives a false hope, false number and when you go live, you see that oh this is not really what I am was told. So that it’s okay. Fair enough. You can continue the presentation. Yeah. Yeah. I I just showed like a simple way like not only this anything if you can come up with rules any any rules which you can build a moving average crossover a DC breakout or whatever it is if you can come up with some rules which you can back test manually and you can again next step is execution. Execution also you can do it manually like how we are back testing it. You can manually execute it. Once when we when we back test it, what we going to do is we going to go capture the data in an Excel sheet. Okay. Like every trade each trade uh everything will be captured in the uh uh Excel. So what it’s going to give us, it’s going to throw us some numbers. Okay. uh once you back test it next very important thing is how you uh you know how you analyze those numbers that comes out of it. What is important if as a trader what once I do a back test what I look into okay initially before starting this systematic trading um uh I was thinking that win rate is everything okay if uh if you ask me even know if you ask any trader if you ask me 75% win rate or 30% win rate people will just pick 75 75% correct they don’t even understand other numbers that is involved okay this is one of the strategies which I am doing if you look in this strategy um a total of 44 trades in a year. I’ve got a total of 44 trades. Overall, I have done around 1,00 points. Okay. If you look at the win rate is only 38%. My goodness. Only 38%. But in 38% what matters is what is my riskreward. For example, for a um in 38% trade I’m going to make 3 rupees. M balance 62% trade I’m going to lose one rupee net to net if you see I’m I’m going to be profitable at the end of the day but what I don’t know is when I’m going to get this u three-hour trade when I’m going to get this 1 hour trade which I don’t know it is completely uh random right so here along with that something which we capture is the max draw down let’s say you start a strategy what is the maximum draw down a strategy can Let’s say you buy a stock for 100 rupees from 100 rupees it goes to 25 rupees and then comes back to 100 rupees. any system will go through this like how a stock moves um I would I would even say that any system you start is like a equity which you invest on right you just put it at 100 rupees you don’t know once you put that 100 rupees into a stock you don’t know whether it will go to 75 and then come back to 150 or 100 it can stay under the weather for some time and then go it can go to thousand also like we don’t know so like that what we can uh if you look at any system any strategy you start it’s like equity which you are investing money into and in that these are the parameters we which we look into like what is the max draw down how much riskreward even I I I even now I’m running a strategy which has 18% win rate okay still it is profitable year to year right that if you look at that is what important see these are some things which people uh don’t give importance to actually like they they just randomly think this will work and they uh just go implement it implement any strategies Yeah. Okay. So once okay you you build a strategy. Okay. Next next what you do how how can I next most important thing is the push and size. How you can push in size? Let’s say you have five lakhs capital. How you can push in size? Initially if you look at uh we spoke about the draw down. Okay. What is the maximum draw down? Let’s say you are doing a nifty on that strategy you have a 600 points draw down. Okay. If this is the case, let’s say there is two methods which you can do. One is a fixed risk which is fixed fractional model where you risk 1% 2% of the capital. Okay. Okay. Another is a fixed rupee model for anyone to start with. I would say that fixed rupee model is better. Fixed rupee model is let’s say you have 700 points draw that means you are doing a 65 65 into let’s say 1,000 65 into,000 you need to have 65,000 that is historically last 10 years you had a max draw down of,000 points in nifty that means what you can do is you can keep 2x of it basically 65 + 65 1 lakh 30 plus 2,000 the margin if you include it four lakh so for four lakhs what you can do you can do one lot you can keep doing one lot okay you can keep doing one lot Okay. If for a smaller accounts, this is the better way and it it will it will help them to be consistent like you don’t need to change anything at all actually like you just do one lot. You keep doing one lot till you reach X amount or okay for you to let’s say you start 4 lakh 40,000 is needed till your account becomes 8.8 you’ll continue to do one lot once you hit 8.8 8 lakhs you’ll increase it to two lakhs for example but in the fixed fraction model what you will do is you’ll risk 1% let’s say 4 lakh 40 you will risk 44,000 1% of your capital anyone to start with initially I was doing fixed rye model I was doing it for almost 3 years I was just doing only this because it was very easy for me when you are doing it manually you know that I need to do one lot or two lots I you uh so you there is the the tendency of doing any mistakes eggs is very very less. It’s easy to uh do it. Okay. So if you look at pushions raising is um if you ask me once you have a strategy I think pushions raising is 80%. Strategy is only 20%. When you look at the it is the other way around. People think about if I have strategy I’ll make money. If I have that strategy I’ll make money. It’s not the case. Once you have the strategy then only you’ll know that how important is portion size. If you can manage your risk right because in in in trading managing your risk is very very important and if you manage your risk you can be you know you can sustain in the market basically for that portion sizing is very very important. So there are these two models whichever people want they can they can explore about it and then once you’ve done the pushion sizing okay let’s say you have been trading for a year what how how you can compound okay when you when you talk about compounding what you can do let’s say you have one strategy you have built already one strategy you you made two or three lakhs profit you can just reinvest into the same strategy again and Again like whatever money you make you just put it into that strategy itself. You just keep compounding. It is like a basically a vertical compounding anyone I was doing vertical compounding for initial 2 three years. I was just doing only vertical compounding because it was easy like my full focus was only to trade systematically without deviation. I was doing vertical compounding. Once your account grows a little bit higher at the time what it it’s it’s better to go into a horizontal compounding where once you make profit here you take that and you put it into another new strategy. You you will keep building your strategies you will go you’ll grow horizontally rather than vertically. By doing this your risk automatically uh goes down and if you look at the riskreward it will automatically uh gets managed in the horizontal compounding. M basically it’s like use use your own like the profit money into diversifying into you’re doing a new business basically any new strategy that comes in is a new business line for us. So ideally uh if I’m making money from one strategy ideally I should use the same money to deploy in the same strategy right then only power of compounding will work in my favor. Exactly. But when you say that you take money out from that strategy and deploy in some other strategy or some other uh asset class some other asset class some other strategy also see what is happening here when you compound vertically the everything is same like draw down let’s say that that strategy has a 20% draw down the 20% draw down will happen at the same time initially to start with it is fine you can you can you can manual it but as your as you scale as your capital grows It’ll be very difficult because at at one time you’ll be in a 20% draw down whereas if you diversify what will happen is instead of 20% let’s say you’ll be in 10% draw down because there are some other strategy that is chipping in for this. So but then your return will also go down. Return return will also go down. See as a trader as returns will take care of itself if you manage the risk. Okay. So uh as you grow as you uh the managing the risk is important returns will take care of itself. So let’s say maybe probably what will happen is my my draw down from 20% goes to 10%. Okay. Uh okay and my return let’s say 40% goes to 30%. But if you look at I’m saving the 10% draw down. The draw down when you when you when you save instead of losing money to the market when when if you can restrict your draw down obviously the compounding impact will be much more higher that will compensate for this uh this smaller compounding what we are talking about. Got it. Fair point. Yeah. So to to become a systematic trader what is needed like you need a solid plan and back tested data right as when you start doing systematic trading what it is is like you work off the market during market you don’t have any work you during market our work is to execute the uh trades after market what we do we back test you think about what we can do but once you start doing a strategy you just keep doing it again and again again and again and think in sample sizes because it is like over a long run let’s say I do something for next 3 years as per data you have back tested it if you have a positive expectancy that’s going to replicate that maybe when you start let’s say you started April 2025 you would have gone through a tough time you don’t think that okay this this strategy will not work it’s not the case like market depending upon the market you will you cannot pick it basically. But as a systematic trader, you know, last 10 years, 5 years, you have made money. Your your system has given money. Your work is to just don’t think about anything. Just keep execution, right? Think in terms of law of large numbers. Think in case of like executing it for next one year, two years. Sham, there is a problem uh with this and please explain me. There are a lot of people face this problem that we have done back testing be it manual or I mean automated whatever and when we go down when we go live that is a time when market will not give you money for that strategy because the market environment is not supportive like we said April 25 onwards market has been crazily bad okay you obviously start questioning the strategy yes correct and the conviction to continue in a strategy when the draw down is the first thing which you have seen. You know if you have made money and there is draw down you are still in a mindset which is comfortable but you started and you have seen the draw down which is actually an ideal thing to do. You know when you see draw down immediately that means the upside is quite visible right correct but mentally you are in distress right that oh I just invested and I lost 10% capital how do you deal with that? So this is where the back testing data helps you actually like what normally see I I I also go through this. Okay. What I do is I go back to the data. Okay. So you go back to the drawing board look at what has happened. Have you seen this draw down? Yes. One thing I’m very very sure about in the back tested result. One thing that’s going to go up is draw down. See let’s say your returns goes up. You don’t need to plan for that. You don’t need to even think about it. But let’s say last year I I’m in a 10% draw down. Let’s say next year there is highly possible I can go into 15% broad it’s possible it can happen if it’s not next year it’s going to happen 5 years later let’s say I start a strategy right now I get a new data basically that is something which has not ever happened before okay our the the thought process which will go through my mind is last 10 years it has given money okay let’s say this year it doesn’t give money one year okay what is the probability of the next year also it doesn’t give okay let’s say that probability happen then I’ll think about okay maybe I’ll keep the system. Okay. But if a system let’s say you you have tested it for 10 years and it has worked the 10 years you have seen all cycles. You have seen all cycles. So it should work it it it it can never be without working for 2 years or 3 years continuously. Okay. that too if you’re doing something price action based yeah uh this time based sell uh selling all this thing I’m not talking about but especially this price action based whatever you built if it has worked last 10 years it will definitely work for next 10 years probably one year it you might face some hiccups okay if that is the case you should be prepared to uh you know go back to the drawing board think about okay it has worked it will work we maybe probably we are going through a tough time okay okay sure so patience Yeah. Patience. Yeah. Um so yeah. So if you look at for uh being a systematic trader, you know, it’s it’s it’s the goal is to be very very Yeah. You don’t have anything to do. You just sit like I’ve automated everything right now. If you see, I just sit I I think about uh I I I I try to not think about market like I I’ll think about what else I can do. Okay. So when you start as a systematic trader initially it will be very very boring because you’ll be looking at the chart you will be waiting for the entry sometimes you the entries will be missed by five points you’ll be still waiting because you have to enter the stop loss so so initially when you are moving discretionally you’ll have all this like is coming to support it’s going to go up like you’ll put the order all this thing will be there but with the systematic you have to be patiently waiting key in the order you’ll not know when it’s going to trigger you have to Be very very uh patient and executing the plan is important. Being consistent like it will be boring. You have to execute your plan to the tea. You should not deviate. Superb. Um how is a typical day of a systematic trader like you? What time do you get a what do you do? Full day what do you do? Evening what do you do? So um I I wake up in the morning. I’m a morning person. Like most of the ideas strategy testing whatever I do I I’ll do it in the morning. So probably it’ll get over by 8 8:30. Uh then uh at 9 market opens sometimes. Now I I I open the market to see what is happening. Then I I’ll play video games actually. I I’ll I’ll not I’ll be consciously want not want to see the market. Nice. Um so if there is some error something we have a mechanism for us to get a message. So we’ll get a message. So the time if we need to intervene we’ll go intervene otherwise evenings I’ll go to gym. Okay. Saturday Sunday I go play cricket. So I’m I I’m uh I play we go play ball crickets. Both days I’ll be very busy. Saturday Sunday I’ll be occupied but um weekdays um actually weekdays I don’t have any work. Even journaling I’ve automated. Um uh my work is at the end of maybe at 5:00 6:00 you’ll see the journal has been updated what has happened. Um that’s it. Nowadays I’m I’m I’m playing around AI to see what else we can do, how we can utilize AI. So some sort of effort is going there. But other than that um truly my money is working for me like I don’t do anything uh for for making money. Whatever I do, I follow the process uh and uh it helps me to make money and I am uh I own the whole time like my my time is mine. I can do whatever I want. Execution will happen. as we even started the interview trades were happening like whatever now right now commodity trades will be happening. Oh yeah. So uh whatever we do trades will be uh I have a uh tech I have a automation engine which will take care of everything. Super 1150 trades will be happening. What are the tools you use? So we have we have built everything on our own like we have used Yeah. Python we have built it we are using Python. Uh and from and data where do you take data from foresting? uh back testing right we use uh trading view and we have got data from GDL GDF for me manually I use uh trading view but we we have bought data from GD and you are connected with all the brokers through their API yeah yeah how’s the experience of broker API see more I I would I’ve been using Zerodha I’ve got I’m whatever it is Zeroda is the best we got used with Zerodha other brokers I I felt a little bit but I think now all the brokers are providing a very good Yeah, to AP I think from initially it was from broker angle right the if you look at you should have a subbroker through them they were they were driving the orders right now if a broker doesn’t have an API I don’t think so the order they will get the enough order and they should have a it’s like a front-end tool right without that u I don’t think so any broker can sustain all the APIs are very good right now okay so if someone has to start this journey of systematic trading. So what would be the uh you know three steps? Put effort. Yeah. Initially you have to put effort like what’s the step like? What’s the first step of the effort? First step take nifty or bank nifty index. Index is uh pretty easy. We have data for last 10 15 years. You just put effort manually back test. Anyone who want to start I would definitely say manually back test. Don’t do any sort of uh automation back test. It will not give you confident manually back test. Start taking one lot of trade. Even five hours you five years you have back tested it. Just start with one lot. See how consistent you are for next 3 to 6 months. Your goal is to not to deviate. So let’s say I take nifty. Mhm. As an instrument and I have a nifty in front of my trading view. Okay. Now what do I do? Sorry. I have nifty in my trading view. Now what do I do? Uh I need some thought right. Okay. Then let me try this. So yeah. So like how I said OB. So this is OB which you said 15 minutes high right. Why why do I start with this? Why not something else? You can start with anything. So how do I know what should I start with? So that’s where you know you have to start exploring the price action based indicators like okay so you you should start exploring price action basically. See this ORB is price action like you don’t use any indicator like I I would suggest open high low close okay using open high low close if you can build something around it like ORB or Denain channel which is again it’s based on the previous 20 days high low okay so anything with regards to price action it’ll be easily you can back test it won’t use any indicator or nothing sure so uh sorry I’m interrupting the mind no I’m actually giving very actionable steps to people correct correct So trading view uh open the chart of nifty which candle chart or bar chart candle candlestick chart. So candlestick chart and start observing it. Yeah. Observing it. When you start observing it, start observing it. You’ll start your mind will start figure out a pattern. Exactly. Right. And then you create a model around that pattern. Yes. Maybe the model is already available in market like OBC or pivot or any kind of thing because ultimately someone has visualized these things and created a indicator or a pattern around that visualization and then start back testing. How many how many days of back testing? 30 days. So you no actually I would say that you have to back test at least minimum two to three years. Two to three years but that is on a daily chart. daily chart and if I’m using intraday yeah intraday chart whatever see depending upon what time frame you’re going to do let’s say you want to do daily okay you can still go back test five six years daily the number of frequency of trades will be very less if you’re going to do intraday obviously it’s going to be a little bit timeconuming you don’t you’re not going to do positional it’s intraday again um next let’s say you do 30 minutes 1 hour depending upon how much the the number of trades will go up and down okay but anyone who is doing I I would say the sweet spot is somewhere between 15 to 1 hour. Okay. Okay. Okay. Anyone who want to do 15 minutes to 1 hour, 1 hour. Okay. Um uh basic uh this price action based like in trading view I think there is this play play button you can go back and you can just play. If you can just sit and see what is happening. If you observe you will you will you will identify yourself what what how it is happening. Yeah. Okay. So once you do that you build it then what you can do is you can just start taking one one lot to see how comfortable you are. Okay because only when you start executing it psychologically you will know whether you are comfortable with this or not. That’s so valid. I want to share with you something. Uh so when I was building the trading desk uh in my firm uh you know my training module was that I used to recruit a fresher 16 17 18 year old jab and I used to give them the trading terminal price not the charter because I think when someone is starting don’t look at the chart look at the price okay and that person used to look at the price for how many days you know for 2 years 2 years for 2 years that person was only looking at the price nothing else chart also nothing else and there was such a strong uh pattern recognition done by these people now all of them are traded in my firm because that’s how we we we started our training module now the world has changed now we don’t do that anymore now technical and chart is quite relevant but it took them one and a half two years to actually see the pattern in any price action and then It inculcated lot of patience because market is all about patience right and in said six months you start feeling like oh I’m successful now I can do it and you start the trading you will never succeed what we realize that until you get so frustrated so irritatingly excited to trade in the market you actually won’t succeed so on an average we used to give them two years to get extreme extremely optimistically frustrated to start the trade and then the person used to trade it was a wonderful trade but the problem is these days people don’t have time. Yeah. They want it to be happening uh they want this to happen in 5 days or 10 days. Exactly. What is your experience? How many years it a trader will take to become a successfully consistent trader? So if you ask me at least 3 to 5 years is needed. And one more thing in trading what they think is they can just start. They just come I’ll start trading I’ll make money. Actually there is lot of homework has to be done like you put that one two years of effort back testing it will take time actually when I talk about manual backing people think oh like it takes so much time actually like manually typing it doing it but that homework is needed for you to make money in the market like if you are not doing the uh homework I think uh you cannot be successful right any business you start first you will put some effort to build that business right you will you will try to at least understand that business only in trading See tomorrow you have 10,000 you can open trading account and then you can just come and you can trade there is no restriction right so you have to put that effort that 3 to 5 years is minimum for you to uh you know be at least consistent in what you’re doing and effort homework that homework is needed do you recommend people to start with discretionary for some time and then move to systematic so for me I would say that uh discretionary is psychologically a training um when when you have data to back what you’re doing. Why don’t you start with systematic trading? Uh for me, if you say discretionary trading is sure, you’re going to lose money. Why do you want to lose money and then come back to make money as a systematic trader rather when you start itself? If you can start with a systematic trader where you have to put some homework to do uh what what we have to do in the live market. So for me I would say systematic trading start with systematic trading because there are a lot of option available with a right now even back testing can be done using a using AI. Yeah. So definitely that is a good start. Great. So guys uh uh I’ve been saying this for many months now. Please get into systematic trading rule-based trading if you really want to sustain in this complex new world of financial market. Then Sham is a life example from nowhere to somewhere to now eventually going to somewhere. Just a disclaimer, I have no commercial relationship with Sham. Um he’s a great guy doing good work. So we don’t share any uh monetary consideration between each other. Uh he is a trader and uh he manages his money, his family’s money. Uh I’m not sure whether he has any service or anything. He may have service in future. I have no idea. My role is to just get the best knowledge from the best person which I’m doing. Thank you so much Sham for doing this. It was really good, exciting and there are a lot of things which I it was a revision for me also. Thank you. Thank you. Thank you so much for making me come here. I have seen a lot of videos of yours and I got inspiration there to hear. I think it’s like for me it is like really exciting uh day and I want to uh thank few people uh in my life. my father, my wife and um my whole my whole team and all my mentors who have helped me to be uh here where I am right now. I want to thank everyone. Um I have so much gratitude for all of them. I am where I am today is because of them. I want to take this opportunity to thank all of them. Lovely, lovely. That’s a a that’s a symbol of a nice person. So, thank you so much and we’ll meet soon. We’ll stay in touch. Thank you. Thank you. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.