The 'Resilient' Indian Trader
The trading landscape in India has seen a remarkable transformation in the past three years. New traders have entered the markets, showing the same passion of old and unwavering determination, giving it their all. While their zeal for analysis, quest for self-improvement, and sheer determination, are all commendable, there’s no denying the challenges they need to deal with in their trading life, on a daily basis. But the Indian trader's resilience often leads them to accept these inconveniences as an inevitable part of their journey. What’s worse? The Indian options trader is often taken for granted under the guise of the grit (s)he shows.
Trading has changed massively from the bustling trading rings to the era of call-and-trade and eventually the electronic era. To begin with, brokers have done a great job building web platforms for retail traders. But it's been a decade and the innovation graph is starting to become flat.
In today's scenario, the majority of Indian traders have transitioned to mobile trading or part-time trading. However, most brokers have simply adapted their web platforms onto your 6-inch mobile screens, only to ensure that if you're on the go, you have access to their trading platforms. The result? Subpar user experiences, poorly designed platforms, the hassle of navigating through several screens for a single trade, and the inconvenience of juggling various apps for accessing essential data alongside executing orders.
The outcome of it all is obvious. The resilient Indian retail trader loses time every step of the way in his or her trading journey, losing crucial points along the way, while options prices move at breakneck speed.
The Bigger Problem
Well, the real problem runs deeper than minor inconveniences. These inconveniences lead to a more profound problem that has silently plagued Indian options traders for years. A problem that options traders live with on a daily basis, and have reluctantly accepted, believing it's unsolvable. Yes, I’m talking about human slippage. No, not Slippage, Human Slippage
Human slippage is the result of the time lost between making the decision to take a trade and actually placing that trade. Imagine this: you're using two mobile phones – one displaying your chart and the other your watchlist. You identify the perfect trade setup, decide to buy an ATM call trading at Rs. 100, but your journey from chart to watchlist to option chain, and finally the order form, costs you precious seconds. By the time you are about to place your trade, the price has already jumped to Rs. 105.
Don’t you relate to this scenario?
The time lost in navigating between various screens from your chart to order execution is not just a minor discomfort. It’s costing you essential points, and unfortunately the damage isn't limited to just losing a few points.
Human slippage adds up, and the money lost daily can be staggering. Even a loss of 5 points per trade, assuming you execute just one lot, accumulates to Rs. 250 daily, or approximately Rs. 5,500 in a month.
The Deeper Impact of Human Slippage
Now, let’s get back to the example where price touched Rs. 105. There are three possible scenarios that may unfold thereafter:
Scenario 1:
You take an entry at Rs. 105. Price moves in your favor; you see Rs. 115 and decide to exit. But the exit takes place at 112. Well, that’s great because you just pocketed 7 points. But what the 8 points you lost to human slippage?
Scenario 2:
You hesitate to enter at Rs. 105, still anchored to the initial price of Rs. 100 in your head. Letting a profitable opportunity pass you by, while you sit on the sidelines calculating the profit you would have made. In fact, you deserved to make.
Scenario 3:
You enter at Rs. 105, the price drops to 103, 102, and you eventually exit with a 3-point loss. The real frustration sets in if you exited early and watched the price reverse in your favor.
This, traders, is what human slippage does to your trading. It loses you money, loses your composure, and messes up your P&L every day. In the world of trading, where every rupee counts, this 'slippage' is not just a minor inconvenience – it's a formidable concern that deserves your attention and action.
After all, why should the daily journey of traders be tainted with such discomfort? Why should you deal with it simply because brokers didn’t care enough to solve their pain?
As we explore and investigate this further, we'll delve into how Punch as an options trading platform has solved for the problem of human slippage, and how you can overcome this problem, that no one's talking about, when you're trading on your mobile screen.
