02/07/2026
Why NEPSE Demands a Different Trading Approach Than the US Market
Opportunity Scarcity Changes Everything
Unlike the US market, NEPSE offers far fewer opportunities. That changes everything about how you need to operate. If you miss a move, it's gone — you have to be proactive, or you end up just watching stocks rise without you. In the US, opportunities come and go quickly, but they also come back quickly. That makes FOMO much easier to manage — you just focus on executing your plan and trust the process. A win rate of 15%, 20%, even 25% works perfectly fine there, as long as you're taking enough trades with positive expectancy — volume and risk-reward compensate for a low win rate.
In Nepal, you don't have that luxury. Because you can't take as many trades — the opportunities simply aren't there as often — your equity curve compounds much more slowly. That's exactly why you have to be extremely watchful. You cannot afford to miss a big swing when it comes, because there won't be another one right behind it. Missing one significant move doesn't just cost you a trade — it meaningfully drags down your CAGR.
T+2 Settlement Forces a Different Trade Selection Mindset
This also means the entire approach to trade selection has to shift. Since NEPSE operates on T+2 settlement, capital gets tied up for days at a time, which further limits how many trades you can realistically cycle through. Combined with the scarcity of setups, this means you have to target fewer trades, but with much higher profit expectations per trade — think 60%, 70%, 80%, even 100–150% per position, rather than the smaller, frequent wins that work in a faster, more liquid market like the US.
Realistic Return Expectations
Annual growth rates like 500%, which are occasionally seen in the US market, aren't realistic in Nepal — not even in a best-case scenario, as far as I can tell. I actually ran the numbers on an ideal-case scenario once, though I don't recall the exact figure now.
What is genuinely achievable in Nepal is a CAGR in the 50–120% range — but only with proper identification of leading stocks. It requires real skill in spotting the right names, not just riding the general market. This kind of CAGR is realistic over a 5–7 year period. If market liquidity increases as the years pass, that window can extend to 10 years or more. But as time goes on, maintaining that CAGR becomes harder simply because of portfolio size — the bigger your capital base, the harder it is to keep deploying it at the same rate of return.
Why Progressive Exposure Beats Full-Size Entries in Nepal
Given all of this, a progressive exposure approach — building into a position gradually, then exiting all at once — tends to work better in the Nepali market. A Martin Luk–style approach, where you enter the full position at once, isn't as viable here, mainly because of that same core issue: opportunities are too scarce, and capital too constrained by settlement cycles, to justify committing full size upfront the way you could in a market with continuous, recurring setups.
