Story of a Successful Options Trader: Sivakumar

Story of a Successful Options Trader: Sivakumar

If you make money as soon as you come into the world of trading, then you are wrong.
Know the story of a successful trader. Shivkumar Jayachandran has also done thousands of trades.
Where he was loss. But they did not give up. Keep correcting mistakes and making new strategies.

interview with Sivakumar Jayachandran- 

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Q: From hotel management to late shift in BPO, to trading options in the market, how did all this happen?

Q: Describe your trading journey?

Q: How many trading accounts do you use?

Q: How does your trading strategy work?

Q: Your basic strategy?

Q: Your Opinion's best time for scaling For Beginners?

Sivakumar Jayachandran is known for high-speed trading. In a day, 90 percent of the trades are completed in less than two minutes.
He graduated hotel management from the best institute in the country, after graduation, Shiva joined the BPO industry where he was an employee. Later, he started his own BPO firm. Four years after successfully running the company, Shiva sold his startup and immersed himself in the market.

After losing money regularly on consecutive trades, Shivakumar decided to learn trading tricks. Today he not only does business on his own, but he has also trained many traders. The fire of entrepreneurship keeps on burning in Siva as he contemplates starting a businessman's factory.

interview with Sivakumar Jayachandran

He talks about his business strategy, his journey to become a successful businessman and his goals.

From hotel management to late shift in BPO, to trading options in the market, how did all this happen?

When I chose hotel management as my career path, trading was nowhere in my scheme of things. After my graduation from one of the top hotel management colleges, I was placed with the Radisson Taj Coromandel. Although the money was good, there were no family problems in life. Weekends and public holidays were mostly working. This was not how I wanted to spend the rest of my life. My father paid for my course, which I earned in a year, and saved some amount even beyond that. I was having trouble keeping up with the hectic lifestyle and decided to leave the hotel industry without knowing what I did next.

I decided to go into some other profession and contacted a friend who was working for a healthcare BPO and asked him if I could get a job at his company. He arranged a meeting, but the manager there said that I was very qualified for the job and that my final salary and allowances were too high for the level at which I would work. They feared that I would quit my job after learning from them.

When I exited that interview, there was another BPO next door. I asked my friend about it and he told me that it was run by the brother of the promoter of his company. I decided to give it a shot there, but again the same suspicion arose. I told the HR person there - Sugandha - to give me a chance. For some reason, he believed in me and allowed me to appear for written exams, group discussions, and interviews, which I made clear.

That evening, I came out of the office with an offer of Rs 2,500 a month, a fraction of the Rs 40,000 a month that I was earning while I was in the hotel industry.

I worked hard on learning the job and wanted to succeed here to avoid going back to the hotel industry. I was confirmed before my probation period and promoted in three months. It was here that I met my wife.

In three years, I got a job offer in Bangalore. Both my wife and I received job offers as 16th and 17th employees here. After the initial problem, I managed to prove myself by successfully implementing and scaling the Bank of America account, which became our company's largest customer. I was soon leading a team of 200 people.

Later I moved to a new company in Mumbai on twice the salary. But we both missed Bangalore and wanted to go back to the city.

One evening I called a friend of mine, who was also from the BPO industry and as we were chatting, we talked about starting our venture. He said it was a thought worth exploring and talked to some other friends. Within minutes, we were calling a conference discussing threadbare on business opportunities. We shared roles where I had to take care of operations, while others did marketing, client relations, HP, and IT. An investor found an IT guy.

By the next morning, I had a business plan ready, which was circulated amongst themselves and presented to our investors. The investor only asked the question, how much money we needed. We told him 'between Rs 50 lakh and Rs 2 crore.' The investor pumped in Rs 2 crore as soon as the formation and bank-related formalities were completed.

A friend started pitching in the US and, in 30 days, was our first customer. We rented a 50 seater office space in a prime location in Bengaluru. Within three months, we had made a maximum profit and in two years we were working with 200 employees and in four years 800 - that was until 2015.

In 2015, we received an offer from a large company to buy outside. With Donald Trump as President of the United States and his practices, we thought it might be harder to do business with our American customers and decided to move forward. During this period, we succeeded in quadrupling our investor money over four years after paying him a dividend equal to his capital.

Describe your trading journey?

I was introduced to trading by the same friend with whom I started BPO. The idea was to start a secondary source of income. I had some savings of about 10 lakh rupees, out of which I tried to trade with 2 lakh rupees. In those days, I did 2-3 percent a month. Those initial successes resulted in a capital increase of Rs 5 lakh and then the entire savings of Rs 10 lakh was put into the market. As usually happens, the biggest hit comes when you have the most capital in the market.

I had my money in DLF, Suzlon, and all such stocks which were witness to maximum erosion. The biggest regret is the position of 1,000 shares in Bajaj Finance, which was then trading at Rs 220-230. My portfolio of Rs 10 lakh has come down to Rs 1 lakh. I decided to stop investing in the market.

When I moved to Mumbai, I tried to test the water again. Earlier, my approach was situational. Now I plan to test intra-day trading as my office starts at 3.00 pm because our clients were in the US. I had enough time to try this form of trading.

Previously, trading was based on tips. But after losing money again, I decided to learn to trade. If there was a way traders were constantly making money, I wanted to learn it. I decided to focus on a few stocks, a proper trading plan, and only one instrument to trade.

Nifty and Bank Nifty were natural options as they were the most liquid, although Nifty options were more liquid then. The instrument chosen was the option. But instead of following the tradition of being an option seller, I decided to become a buyer of options.

I slowly began to choose and understand the terms. Seeing them working in the market helped my understanding.

I started with open interest and saw how it works and how prices react based on open interest levels. Then I looked at the chart and combined them with open interest to see how the two connected and behaved with each other.

The candlestick pattern came next. This helped clear the smog in understanding the markets. Earlier, it was all about gut feeling, but now I had the tools in my hand to guide my business. In addition, I tested what I learned on a very small amount, which helped me to read.

Results came slowly but surely. My learning phase was in 2013-14. I had a breakout phase in 2015 and 2016 profitably.

I understood that there would be stages in trading. Not all trades will be profitable, and that life and markets will fluctuate. My confidence started going up with each trade and I started increasing my level. By 2017 I covered my losses and made some money.

By this time, I was only focusing on options and trading in short timeframes. I formalized my rules for entry, exit and money management. Money management rules helped me increase my trading bets in a winning streak and cut it when I was not doing well.

Now I use the gain of the previous day as the stop loss of the day. After the first few trades are profitable, I use them as a stop loss for the remainder of the day. This helps me mentally, because I do business with the belief that I will not lose my capital. I reset my risk capital every week. I started the week with 1 lakh rupees, which I

How many trading accounts do you use?

Another thing that helps improve my trading bets is multiple accounts. I started trading in an account but realized that it was bad as far as money management was concerned because I was tempted to average my trades and lose a large part of my capital. In addition, having an account with a different broker helped when some brokers had connectivity issues during the day.

How does your trading strategy work?

 I should mention here that I am a scalar - my trade lasts between 30 seconds and 10 minutes. About 90 percent of my trades are completed in 2 minutes. I trade and put options in Bank Nifty calls for a long time.

I start the day at around 08:30 by logging into all accounts and opening my chart and the indicators I use.

I then check that the Dow futures are not currently and they have not closed the previous day. Most traders close to see the previous day's closing trade. I like to see the Dow Futures 24-hour market.

A few weeks ago, the Dow closed at a loss of 500 points on the previous day, with the SGX Nifty, also trading lower. But by 9 am Indian time, the Dow Futures market had made up most of the losses. Indian markets opened 20–30 points lower, but rose 100 points shortly thereafter. I made a good profit that day only by watching the Dow Futures.

When the market opens at 09:15, I wait for the first 15-30 seconds to prepare myself for where it is and whether it suits my base. My initial trading relies on the previous day and pre-opening data.

I look for signs of the direction one is expected to take by looking at the open interest data in the market. Based on my belief and clarity of data points, I place my order. If it is high, I trade 500 quantities, but if confidence is low and the signals are blurred, I only replace 100 quantities.

My Basic Strategy-

There are some indicators on my chart. On the price chart, I have overlays of PSAR (parabolic - stop and reverse), Supertrend and VWAP (volume-weighted average value). I also add an indicator RSI (relative power and index). I use RSI for my exit. Since I trade on a three-minute chart, I use an RSI value of over 70 to cut my position and if it touches 80 or more, I'm out.

On a separate Excel sheet, I monitor inherent volatility and open interest. I will also add the put-call ratio to this sheet. Currently, I am manually adding data to Excel sheets, but soon I will automate them.

To me, open interest is God. If the open interest of an option is increasing with a significant increase in value, the option is giving a bullish signal; But, if open interest is rising and prices are going down, then this is a sign of a slowdown.

The first thing I am looking for is open interest positions and then chart indicators such as PSAR, Supertrend and VWAP. Only when the price outstrips all VWAP and Supertrend, PSAR and IVs support a fast trade, I'll go longer on the option. I would need a higher volume on the breakout bar to support my business.

There is no more frequent volatility when the market gives this opportunity, offering me a good entry and exit. The strikes I trade are usually in-money (ITM) or at-the-money (ATM). When the price runs out of VWAP, there is usually a 30-40 point attack in the option I trade in. In futures, it usually corresponds to a move of 80–100 points.

Since I trade in large quantities, there is a limit to buy and sell for my entries and exits. If data and charts are helpful, I would buy the option in the 20-point range. Say, if it's trading at 200, I'll buy it for 180, my hard stop with 150. But if the data or chart ever changes during my buying period, I will exit my business. If the price goes up after my first purchase, I will keep buying it till 220.

I do pyramiding downward as well as upside-down of my business, but only until all the terms indicate a purchase. When the price is decreasing after my entry of one lot at 200, my second purchase at 190 will be two lots and 180 will be four lots. Likewise, when it gets higher, I will buy two lots at 210 and four at 220.

When the price goes above my purchase price, I will find out my profit. I usually get out in a few minutes with a gain of 10-20 points.

I don't normally chase a business if it has gone too fast because I believe if you missed the bus, another one is coming; There is no point in repenting and risking risk by pursuing business.

In my opinion best time for scaling-

the best time for scaling is between 09:15 am to 10.00 am and 1:30 pm to 3:00 pm, however, I would look at the market like an eagle for an opportunity