Today I traded HDFC stock at Rs. 1787 and bought only ten of it knowing how bad the market is. So even if the market falls, I felt the worst case scenario would be a fall of Rs. 50 so the net loss would accumulate to Rs.500 for the day, which is fine, considering the hits I had received before. That is the worst case scenario that I was expecting, so you don't expect it to happen immediately. But it happened. The moment I bought it, it came down to Rs.1760. I was waiting for it to rise to 1780 levels so I can square off with Rs 60 - 70 loss. It was traded around 1760 price for 10 minutes and has gone down to Rs. 1740 after a while. Because it exceeded my worst case scenario levels, I bought 30 more at that price, to bring down the overall price of 40 (30 + initial 10) stock to Rs. 1760. So, if the stock goes to 1780 levels I would be having a profit of 40 x 20 = Rs.800.
Now what do I see next ? The market was around -300 points deficit but this stock has plummeted to Rs. 1723, which means I am facing a loss of Rs.37 x 40 = 1480. That really rattled me. The pain, moments after you see your stock going down to unexpected levels, is excruciating. What can you do? Pray God to see the market up, atleast as close to the price that you've bought so you can escape with minimum loss. Making profit is out of the window now. I am playing for safety here.
So when the price has reached to 1740 and 1745 levels I made a quick move to sell the 40 stock that I have for the day. So a loss of 15 x 40 = Rs. 600 is what I've made and went for lunch. When I come back after lunch, I see the same stock going to Rs. 1850 and then surge rapidly by every 10 rupees to reach a high of Rs. 1922. Had I kept my stock and sold it at 1920 rate, I would have made a profit of 160 x 40 = Rs.4,800 flat. That would have half achieved my target for Diwali. As I type and see the market, the same stock has again come down to Rs. 1790. Now you see a pattern? I bought 10 stock at 1787, bought 30 more at 1745. Seen the price dropping to 1722 (day's low) - 1745(sold) - 1760(bought) - 1787 (initial level) - 1860(after lunch) - 1880 - 1890(rapid rise in seconds) - 1922(day's high) - 1790(as I blog). That is called Volatility.
"By screaming in here I thought I could get rid of the glum expression on my face when everyone is excited to go home for the break. Losing three days on a streak is one reason why I am not all that excited to go home. Ofcourse the countenance and the attitude totally changes when I reach home".
I wished I could make it big one day in stocks in the Diwali week and buy a mobile phone from the profit and proudly wave it to my Dad. It never happened. It's