“When money making becomes boring in the stock market, that’s when you make money.”
Vishal Malkan is the founder of Malkansview Training Institute Private Limited. His wife, Meghana Malkan comes from a corporate background and is a lawyer but decided to migrate into the world of the stock market along with her husband.
Together, they set up their training institute, Malkansview, to empower people from various backgrounds and professions. Malkansview has trained thousands and helped them take control of their financial future.
In today’s blog, Vishal and Meghana Malkan share an educational guide to the stock market for every beginner. Learn the basics of how to become a skilled trader and invest in stocks with the right knowledge and information.
Mr. and Mrs. Malkan have been very experienced in the world of the stock market, in the world of making money through the stock market.
In today’s blog, the power couple is training you, the beginner in the stock market, the
college student, the young professional who wants to expand their skill set.
I’m sure that this couple’s experiences and knowledge will get transferred to your mind and you’ll enhance your skills.
Vishal Malkan is regarded as one of the best stock trading and personal development trainers in the world. He began this quest at the age of 16, and he went through the ups and downs of the stock market before becoming a successful trader.
He learned many theories, tactics, and concepts during the course of his 26-year trading career, only to realize that it didn’t have to be this complicated.
He has made it his mission to help the average individual understand and trade the stock market using strategies that are so simple that even a 10-year-old child can comprehend them.
Talking about his journey, Mr. Malkan says, “I started my journey into stock trading at a very early age. I was 16, just out of college. In fact, before that, when I was in eighth grade and during my summer break, I used to go to my dad’s textile business office. Everybody there was talking about the stock market because that was the period when the Harshad Mehta Scam happened in 1993 and since then I was fascinated so much by the number game and the whole up and down of ACC and Reliance shares.I decided I wanted to be a stock trader at that age only.
After my 10th standard, I told my dad I wanted to be a stock trader and of course he disagreed. But I took admission to a college which was next to the Bombay Stock Exchange. I was more into the stock market less into college and since then I learned these tricks about markets. I used to write the prices – open, high-low, close. That was the raw form of technical analysis.
By the time I was 20, I made 20 lakh rupees by just trading. I thought I’m a genius and I’m going to make crores of rupees and later realized that it was just a bull market and it was my luck. Then the market crashed in the dot-com bubble ( A stock market bubble caused by excessive speculation of Internet-related companies in the late 1990s) and I lost money.
Then, I realized I need to learn.
There are two parts to trading, one is fundamental analysis and the other is technical analysis. I
joined a finance MBA and started learning technicals from books and seminars and that’s when my real interest started. So between 2004 – 2007, I almost read like 400 books on stock
market trading and investing. My first success came in trading when the market crashed in 2008 and I was able to predict that. I did not lose money in that crash and I realized that I can pass on this 12 -13 years of knowledge. That’s when we started our institute.”
Meghana Malkan, a trading and performance coach, had all of her preconceptions about the markets shattered. She effectively transitioned from a legal background to the stock market, although it was a culture shock for her.
In her search for the trader within herself, she discovered that having the appropriate mindset is more important than anything else when it comes to trading success. Her strength as a coach is in assisting aspiring traders in reaching their full potential in both stock trading and life.
She added, “I have studied law. I did my company secretaryship and while I was working with United Breweries Group in 2007, the proposal for marriage came in and they were family friends. So my parents were very keen.But as soon as I got to know he’s a trader I thought I don’t want to get married to a gambler. That is how it all started.
Though he had an MBA in finance and he was doing well, he was ultimately trading and I was someone who had never traded. I was someone who didn’t even know what a stock market was. After months of meeting each other, he convinced me on how trading is not that bad and that he is not a gambler.
Then we got married and then I took a three-month break. During that time, I used to see him read charts and do some kind of analysis and I used to tease him that what are you reading, what are you studying and he said to me, “Why don’t you learn what I’m doing, at least you get to know what I’m doing.” That’s how I got started. I did a basic program on technical analysis and that intrigued me further. I said this is something that is making a lot of sense and it’s not a gamble after all. Then I studied more and did the advanced course. So, after that, I resigned. I took all my money savings and started trading. My journey was also filled with lots of ups and downs but one thing in stark contrast to his journey was that he was there to guide me.
What I realized was, I can make the same amount of money, maybe more but I didn’t have to work full-time, I could work at my own pace, and could also travel.
If someone like me, with completely no background can trade then I’m sure a lot of others could do it as well.”
BREAKDOWN OF THE SCIENCE OF TRADING
According to Mr. and Mrs. Malkan, there are 2 kinds of sciences. One is fundamental analysis and the other is technical analysis.
Fundamental analysis is about the balance sheets, ratios, what the company and the management are doing. Now, this is something which only a person who has some financial background can do.
The other part of the science is called technical analysis which is studying the charts.
It is very simple and does not require a prior background.
In technical analysis, when the stock market goes up or down you don’t look at why it is happening because there can be a thousand reasons for it. If you just look at the graph and the stock prices are going then, there must be something good about it.
So, if the lines are going up, you buy, if the lines are going down, you sell. It’s that simple. It sometimes looks very simple to be true but then we have done it for so many years and I think it is the best way to learn markets.
Nowadays, the world is so fast. The markets are so volatile. The definition of the long term that existed earlier is gone. The definition of long term has come to 12 months as you don’t know what’s happening after 12 months because of the dynamics of technology, the dynamics of the world.
The company which was doing well 12 months back will not be there after 12 months and the only way to do short-term analysis is technical analysis.
WHY HOLDING A SHARE IS NOT PROFITABLE ANYMORE
A lot of people have this mindset, especially people who don’t know much about the stock market that they will just hang on to the shares of a particular company. But this practice is not very useful and profitable anymore.
Adding to this, Mr. Malkan says, “A good company is the one which makes you money.
For example, Reliance, the most popular company, was not performing at all between 2008 to 2016. For eight years, it gave zero returns on the stock but we say, ”Okay, it’s a good company so I’ll hold on to it.” But within those eight years if someone would have bought some other stocks which had gone up, it would have made that person profitable.
So you have to know the science of it otherwise you are stuck with the wrong stock and you will think the markets are going all-time high and my stock is not going up.”
Furthermore, Mrs. Malkan says, “People get married to stocks, they cannot sell their reliance.
Then irrespective of whether the stock is giving you a return or not, you’re stuck with the stock. You feel good that you’re owning it but in reality, it’s not generating any value for you.”
ANALOGY OF CRICKET
One strong analogy about how you need to treat the stock market.
Trading needs to be played like a test match and not T20.
The best test cricketer in India is Rahul Dravid. He stands on the pitch, he doesn’t lose the wickets. The idea is that most people that come to the stock market want to make money immediately. But you need to stay on the pitch for some time, gauge the pitch, gauge the bowler, gauge the runs and then you make runs slowly and steadily like a test match. Then you will survive. So our wickets are our capital. Before you learn the magic of trading, you have to protect your capital.
HOW TO INVEST
As stated by Mr. and Mrs. Malkan, the process of investment or trading can be broken down into 4 simple steps.
THE TOOLS – There are certain tools like a candlestick, patterns, RSI indicators, and momentum. These are the tools that tell you whether the stock is strong or weak or it’s going sideways.
THE TRADE- The trading system is like a process. Process implies that, if this happens we buy, if this happens we sell. When you have a systematic approach you are not taking any decisions on instinct. If you have the same process in the stock market it becomes boring and when money-making becomes boring in the stock market that’s when you make money. But most people come to the stock market for the thrill element when things are uncertain. However, if you are following a process then you know either you’ll make this much money or you’ll lose this much money. Once you learn that then it’s just a normal day like any other business.
THE RISK MANAGEMENT – Before you enter any trade which is maybe long-term, short-term, medium-term, or day trading, you need to know how much money you can lose.
That’s the only thing which you can control in the market. You can’t control what others are doing, the profit, movement of the market. When you book a loss you are protecting your wicket.
When you book a loss, basically you are mentally taking a defeat and people don’t take defeat. Because since childhood we have been taught that you have to stick to it and you have to hope for the best. Then the price falls even more and then people try to average out. (to produce a result that is even and balanced when looked at over a period of time)
That’s how most long-term investors are produced in the market.
If you had booked your loss, you have saved your capital and could have gone to the next trade and made a profit.
Therefore, risk management means that before taking any single trade you need to know the risk.
THE EMOTIONS MANAGEMENT – The fourth and last part is emotions management. Firstly one should have the belief that they can do it, then only it will happen. After that, they should be consistent and put in the hard work. They should be stoic and not take any wins or defeats personally.
TURNING 10K INTO 1 CRORE
Talking about a college student who only has Rs. 10,000 right now and turning that into 1 Crore.
He says, “Ten thousand to one crore is a long journey but it’s possible. It’s possible with the right mindset, strategy, and right implementation of the strategy. The implementation part is where most people fumble like everybody knows how to lose weight but most people can’t do it.”
You have to be disciplined, determined, and consistent, then only you can do it
If you want to build a career in finance, the first thing required is education. You need to spend one to two years learning it.
Then slowly and steadily enter the market with say Rs 10000. You can buy stocks or invest in mutual funds.”
If you’ve got to learn about the stock market in detail don’t try learning it just off of the internet, try learning it from the experts of that world.
That’s what this conversation was for me, a personal learning experience about the stock market.
Things I picked up from this insightful conversation :
- Both of them have lived through some intense scams.
- They are made for each other. They have amazing compatibility and it is very inspiring.
- Anyone can learn to trade, you do not need to have a specific background to trade.
- Trading is not gambling. There’s a science to the madness.
- Initially, you put in a lot of work to study, learn, do courses and become very equipped.
- When you’re beginning to trade, reduce your risk by portfolio diversification.
- When you are starting, don’t look at making money. Look towards making mistakes and learning from those mistakes quickly.
- To learn about the stock market you need a long learning curve that includes experience, reading and mentorship.
- Give yourself some time to do all this and don’t be in a hurry.
- Last but not least, believe in yourself.