RupeeCase
Education . Stop discipline . 2 of 3
One year on a normal mid-cap. Nothing went wrong
Anatomy of a year. Five drawdowns that all recovered. Five stops that would have triggered.
A trailing 10 pct stop on a normal NIFTY 50 mid-cap name across a full calendar year. Each fall recovered. Each stop fired. The investor who held kept the position. The investor with the stop paid round-trip costs and bought back higher.
Sample year . peak to trough moves of 10 pct or more
Episode
Trigger
Drawdown
Recovery
1
Sector rotation out of staples
11.2 pct
19 days
2
Brent spike . margin worry
13.6 pct
42 days
3
Quarterly results miss vs estimate
10.4 pct
22 days
4
FII month-end de-risk
12.1 pct
28 days
5
Index rebalance noise
10.8 pct
31 days
What the round trips cost
Single exit and rebuy
0.30 pct
STT 0.10 sell side . brokerage and exchange . bid-ask slip on rebuy. Conservative.
Five round trips per year
1.50 pct
Pure friction. Before any timing miss on the rebuy. Compounded over 10 years . meaningful.
What the math says
Normal weather looks like a crash to a stop set in feeling. Five times a year the position pretends to die. Five times a year it gets back up.