Failure, success, failure, success… that’s how the cycle continues, be it with your life or even more so, with trading. Although you might stumble, it is necessary to evaluate, improve, innovate and move ahead.
Today, a successful professional with only 4 years of trading experience, Vijayakumar has learned by practice and leveraged his knowledge. His is a story of never giving up, and keep going ahead attitude. He is an individual, who overcame all the challenges his life threw at him, and even when he shares his story, he does it with pride and a smile.
We present to you his story!
Hi Vijay, can you tell us about yourself?
Hi everyone! I’m M. Vijayakumar Mylsami. I’m very interested in stock markets and numbers, and I have a strong habit of reading every day. I’ve had an on-off stint with the markets for quite some time now, and I’m glad to have the opportunity to share my experience with you. I have done Engineering in Biotechnology from Madurai. I belong to a middle-class family, where my father would earn an ordinary salary to run the household, working in Shakti Sugars, Tamil Nadu, India.
Quizzing is a sort of hidden talent of mine that not many know of. I was in Business Quiz during my college years, participating in Tata Crucible, which was an amazing experience of applying our wits and knowledge against time.
Can you describe your trading journey?
I originally aspired to become a Doctor, but due to some circumstances, I took the next best booming stream that I wanted to get into, and that was biotechnology. I was interested in research as well. But, my life witnessed an incredible turn of events as I went ahead in my career.
And lo and behold! In a few years, I was an IT professional moving towards the Finance domain. I pushed forward, wanting to work in banking and financial companies. Even though it wasn’t working out, I took it positively, realizing that I should keep moving on.
Don’t take negative happenings into your mind - that’s how my approach towards life is, and that’s my theory in life.
The markets offered tremendous learning - it was astonishing to see that this is what the markets could also be. This was learning at the beginning of my investment career.
All those years spent learning and finding out my true calling, I don’t take it as a loss. I consider it as the fees paid for learning, as you would pay to a school or a college. I don’t regret that.
Today, I’m able to gain consistent profits, and moreover, I’m happy.
I now understand Risk Management, Trading Strategies, what the market can do and what it cannot do.
Today, I love being in the Finance industry. Even if you take my software career in the last 10 years, I have been associated with either Bank or with Financial Services companies. I don’t touch upon any other industry. I like being in the Banking industry being able to grasp and truly appreciate the things.
In 2009, when I was pursuing PG, there was an article in Outlook Business magazine Mumbai-Pune, that spoke about a lady from Vanguard and another guy from the USA who had started algo trading. That was when I came to know about Algorithmic Trading.
I had thought I would fit in if I put efforts for learning Python in the next one year, and that I could enter the EPAT course by QuantInsti.
When did you realize the need to improve and build your skills for trading in the markets?
During my 2007-2008 trading hiatus, I came across Warren Buffet’s autobiography, which led me to read more about him in articles, newspapers and magazines. It was very interesting that a guy could earn so much in the market.
It was then that I decided that I wanted to get into the domain of Finance, do a Post Graduation. Then I got into PSGIM.
Inspired, I started trading without any knowledge (not a wise move) and burnt my investment a couple of times, but it was a tremendous learning curve for me.
My first run was in 2008: When I started with trading, it wasn’t a good experience in the beginning - I had a couple of down times and ran low on my account, that led to me stopping trading for 8 months.
But I did not give up. Instead, I was determined to win and started reading a lot of books in the next 8 months. Started reading more books on derivatives and fundamental analysis as I thought trading was not the path for me.
After this, I revised my approach and practised in the market, and started investing in companies like Britannia, Treehouse Education, MT Educare, and had a run of ups and downs, faced some downfalls, but received some pretty sweet returns as well.
My actual journey can be said to have started in the markets since 2009 when I was doing my post-graduation in the PSG Institute of Management in Coimbatore, India.
During my second run from 2010: I would hold stocks for 2 years in case of good performance and then make a decision on when to exit the market.
In my third run in 2013: I yielded some pretty good returns from Priya Cement, Real estate companies like Godrej Properties, and consumer companies like Heritage Foods. This was when I thought that I was ready to get back into trading again, but alas! I lost again.
My fourth run: Investing 600k, and losing 70k. It was then that I stopped it.
Experience counts - and these were very valuable lessons. I didn’t want to face the same fate. I wanted to improve and evolve my trading.
But since I was missing the guidance or mentoring, even that did not yield consistent performance or results so I kept working on it. This led me to realise that to get into algo trading and understanding the nuances, I would need to learn from people who have understood this domain in and out. Thus, my quest led me to QuantInsti.
Could you share your experience with Options trading?
I have been very interested in Options. And I trade only in options since last one year.
During my fifth run - from 2018 Aug.: I have had only 2 months of drawdown - March 2018 and Aug 2019 which is fine for me. The drawbacks haven’t been a pinch on my pocket, amassing to a mere 0.5% to 1%. Although my returns have also not been great. I have been making between 3% to 5% per month so far, from Aug onwards using options.
With the help of lectures at QuantInsti, especially the ones by Nitin and Rajib gave really good insights on how trading is conducted. A couple of calls with them helped me a lot in understanding what strategies can be deployed so that I could benefit consistently, etc.
I have created an account in IIFL exclusively for Options trading since then and have been trading.
QuantInsti is helping me a lot. It has provided me with the confidence that now I can even leave my job and start trading for a living.
How has your experience with Python been?
Although I’m not proficient with Python or very technically sound, I have very good knowledge of products such as Derivatives, etc.
What I was trying to do in Python - using the Upstox API, wherein we get LIVE Market Data, we are trying to connect all the option into a web application where I can view the option sensitivities, the volatility smiles - sort of a dashboard - my very own application. I have been working on this. And would be completing that soon.
I did not have any previous knowledge of Python previously and I started without it.
But today, I’m able to model certain stat models like ADF test, Z value, and some of the ML algos like training the data for regression, which I’m working on parallelly.
Right now I have designed 2 strategies based on the historical data, which I would be deploying very soon in Nov or Dec this year. In the last 2 months, I’ve been working consistently on this even on weekends, since I understand Python.
I hope to create many more on my own in the upcoming year - a confidence that I’ve got after joining QuantInsti. Not sure how other institutes help, but QuantInsti been benevolently helping me without any second thought. I send a query in the morning and have an answer by the evening. That’s how they are helping me in my trading career.
I’d especially like to mention Rajib and Nitin (inputs on values helped me in my trading career) and Vivek (mentor for Python), Jay (helping me with implementing strategies), Deepa from Alumni Cell (for prompt revert and resolution of my queries).
What keeps you going?
First - my love for the domain! I love being in the Finance industry.
I still read business magazines, and I’m interested in the upcoming technologies in the domain of Finance. Currently, I’m reading ‘The (Mis)Behaviour of Markets: A Fractal View of Risk, Ruin and Reward’, by Benoit B. Mandelbrot, Richard L. Hudson.
Ed Thorpe has inspired me a lot. His interviews were amazing, his knowledge on Kelly’s formula, probability and much more has inspired me - it was quite interesting how he consistently gained 20% every year.
These are all the things that I like - to trade and to invest. It motivates me everyday, waking up, reading a lot of things and trying even new things.
I don’t try to waste my time even now. I keep watching the videos at QuantInsti. The more I watch, the more I learn.
What do you think has changed in the Markets over the years?
Volatility and the use of Technology in the Markets.
Technology - like algorithmic trading which has grown in leaps and bounds.
Back when I started trading there was around 5% - 10% of algo trading volume, but now everyone is practising it. A very big and very welcoming change that I can see.
If machines can predict, the people having the trading experience and expertise in the market
Initially, when I started trading back in 2008-2009, I would practise Systematic trading, and I would be worried about my trades, awake or asleep - a mental pressure. But today, once the system says that the volatility is high, one needs to sell the options, as the premium shoots up.
Since I now know the range based on the Standard Deviation per day per week, and once the range is crossed, I realise my risk level has just increased and my trade is not in good shape. I realise my mistake and that it would be the right time to come out of the trade. So yes, I’m able to sleep soundly because of a Safe Risk Management system.
I have developed much more confidence in trading and using Risk Management. And I’m happy that I haven’t lost my capital since Aug 2018.
I don’t look at Profits, I look at protecting my Capital - That’s my Mantra.
Even if I’m not making money, I’m happy. But I won’t lose my Capital.
What are your thoughts on NLP and Sentiment Analysis?
Currently I’m not using NLP in my trading practices but I have been doing it to add value for a client of ours - Commonwealth Bank of Australia - I’m providing the NPS (Net Promoter Score) that banks are using globally, so based on text, blog, and Scrappy and other libraries of Python, - I use it to give a value proposal to them.
The next is NLP that - I’m planning to use in the market. I’m taking baby steps as I have not yet reached that level. First I wanted to learn the projects and everything else and then I am planning to move on to the NLP side.
Do’s and Don'ts for aspiring Traders. Any words of advice?
I don’t think I have reached that level that I may advise, but to suggest I’d recommend:
- Following sound risk management - very very important. It is the foremost thing one needs to look at and learn
- Have product knowledge like options, futures
- How products are getting assigned during expiry date.
For Point no. 3 - This information is very essential because a lot of people are now into selling, it is sold like anything. If you follow the media, you’ll see that people are promoting selling options. Options selling needs more understanding of options, knowledge of options and settlement and a sound risk management system.
Risk Management is very important in trading.
Thank you very much for sharing your story with us, Vijay, we hope your story inspires countless individuals. We wish you lots of success for your journey ahead!
Unleash your aspirations to learn about Algorithmic Trading, keep moving, learning, growing, and never give up. Equip yourself with the necessary skill-set and knowledge required to excel in this field. Let our Executive Programme in Algorithmic Trading (EPAT) be your guide. Learn more about it here.Disclaimer: In order to assist individuals who are considering pursuing a career in algorithmic and quantitative trading, this case study has been collated based on the personal experiences of a student or alumni from QuantInsti’s EPAT® programme. Case studies are for illustrative purposes only and are not meant to be used for investment purposes. The results achieved post completion of the EPAT® programme may not be uniform for all individuals.