Sie sind auf Seite 1von 418

Thread Title

29 June 2015
12:38 PM

To be a trader - 20 years' journey from novice to pro novice

To be a Trader-20yrs Page 1

P A R T -- 1 Introduction
02 July 2015
02:42 PM
THE THREAD WILL BE COLLECTION ON VARIOUS THREAD -IDEA - REFLECTION AS I HAVE SEEN IN INDIAN MARKET.
1ST PART: SOLILOQUY-here i express my past in the context of trading

2ND PART : AS I SEE IMPORTANCE FROM OTHERS' VIEW WHICH HELP ME TO BECOME A BETTER TRADER - here i express from good traders of Traderji
3RD PART : SYSTEM BUILD UP & APPLICATION- its really enjoyable.

To be a Trader-20yrs Page 2

SOLILOQUY-here i express my past in the context of trading


04 July 2015
10:28 AM

CAN ONE LEARN TRADE ?


YES, journey path is difficult..
you reqd aim...solo journey...many a comes, many goes out....u must continue
..
HOW?
AIM FIRST...
TIME MANAGEMENT...
DESIRE TO LEARN
PATIENCE
OBSERVATION..
PRACTICE THE PHILOSOPHY..WHAT I LEARN THIS WEEK

CAN U ELABORATE??
EASY MAN!!........journey path is painful...l with more than10yr experience knew it
yes..min time reqd 10 yr..[ask any PRO with consistent 50% return for 5yr.if u have doubt]
long drawn goal .. business visualisation concept..
desire to learn...
never aim money...[greed will definitely ruin you]
a balance speed of 2hr a day..+3hr weekly analysis .what i learn this week
discipline not only imp.. but to be followed..
you have to read..
you have to practice..
you have to analyse
yes its a game of hard work..
lucky if u get a good teacher../mentor..
it definitely save time of 5yr...
but he should not be an well wisher.., instead a hardcore pro..
teaching trading../ analysis of situation must be his job..
can evaluate u.. must suggest real medicine not crocin..

so r u ready to learn further?


[i definitely would not have tried , if i know still i have to continue..alas.. i am a chess veteran. and do project in real job..urcertainity..
opponents move variation part of my life]
trading must be treated as business ..not hobby
its the dream .. supplier of new fool..
all mf r waiting../.
you must know how to handle business venture...dream vs. REALITY
MUST KNOW A/C...
PROFIT/LOSS..
WHAT MAKES A BUSINESS CLICK?
BREAK EVEN ANALYSIS
A-B-C ANALYSIS..
SWOT...[FOR YOU]
DETERMINATION & PERSEVERENCE..come back next day attitude
till i remember my start of trading..
1990..91 invest .. good company ..REASON after iran-iraq. war market must move up..PREMISES..threat perception over..money flow
in..[iwas 3yr served govt..officer in ministry+ seen father do business..2yr past experience as works manager.... i laugh at myself..seeing
the audacity..
yes i made money..not knowing but simply being lucky..
luck of monmohan singh giving exellent budget..
luck of A BUBBLE called harsad mehta...
i made 5 times then .. cashing ..let another..5times drained..
by continue holding....
so far public euphoria contd you can make..MONEY
any body ...
no invest ...again 1997..attempt made ..lost 40000/

To be a Trader-20yrs Page 3

now the gambler...2000..again see..bottom fishing...


hoho..all u know..i shot my own leg..
NOW COME THE GREAT CHANGE OF MY TRADE CAREER...in a discussion
my friends confide.. a game called DAY TRADE..DABBA]..
THEY LOST.. 3PETI .7 PETI EACH..
AFTER ALL I PLAY CHESS & BRIDGE [PLAYER..of B grade]....
shall i not join to show my intellect..my fighting spirit..
to outwit broker...
LITTLE.. DID I KNOW I AM ACCEPTING challange of life time..
step 1..study financial statementof friend's a/c...
reason of loss..
step 2... a game plan preparation..
a simple high volaility stock play plan..
contrarian.....study yesterday high /low..actual market hr[ i dont have computer then]...NEXT DAY .. SELL AROUND YESTERDAY
HIGH...
PROFIT TARGET...1%..
OR.. BUY AROUND LOW OF YESTRDAY...PROFIT TARGET 1% UP...
IT IS NOT EASY...
so dabba owners is unhappy.. chap is young.. the new boy is earning...
yes,,,HIS DAY SHALLCOME...
THIS COCKY FOOL[i am]...OPENS A POSITION ON INFOSYS...
DT..AFGAN WAR STARTS,...A SHORT POSION ON INFO..300
...AND I ,MR FOOL WENT TO PLAY CHESS TOURNAMENT AT AHMEDABAD...
RESULT OUT I TELEPHONE...2HR. AFTERWINNING MATCH..
BUER CERCUIT....
SO HOPE AND PRAY GOD..
...ALOSS OF 400X300= 120000..
AFTR ALL DABBA...APPEAL TO HIM 1LAH.. SETTLED..
my 60000 profit gone ...40000paid..
ok
to start again to play...i shall deposit 1 lakh...
this time i [a bigger fool]...i rule only to play before screen..
no going out...
only on night shift/ off day...
no loss/profit holding
psychologically it takes 2months to come out...

but watch tv patty..price quote.....


seen on off day..wipro and dr reddy....
2x5.5hr...2months...
no play...
analysis....how day after day....
plan to move ...vs ACTUAL
yes ...real life note...
i am lucky ....family gone home....
weekly profit target...5000/...
lucky to be market...IN RANGE BOUND WHERE THIS STRATEGY WORKED..
COURSEY...WIPRO..I GOT BACK45 000 IN A MONTH
SO I AM HOOKED
SO FAMILY CAME BACK ...ALSO MY RATIONALITY...

A 40000..SALARY..TRY TO GET 50000...RISK TO LOSE..30000..THAT MY LOSS LIMIT...BETTER PLAN...


DO SERVICE...
PLAN RETURN OF 20000/MONTH...DEFINITELY I MAY GET 10000/
STYLE SHORT TERM TRADE...
DIRECTION BUY ..
STOP 6%
PROFIT TARGET...10%...OTHER HALF 20.25%
YES...BY FOLLOWING THIS SIMPLE TECHNIQUE..
I RUN FAMILY..AV.20000/MONTH..

To be a Trader-20yrs Page 4

no i am not good trader,,,simply..market.. favours me..i am simply lucky


so further.. i plan to learn...
magazine..capital market..
site . angel
www. moneycontrol.com
member equitymaster.com
they for info...
any spl. course...cbot..
trading market...
trend-dynamics..
i attend...no i dont spend money a single...i UTILISE
MY PROFIT GENERATION IN IMPROVING MY SKILL...
nobody suits trading..its not natural...its WAR,..MUST KNOW ART OF SURVIVAL first..
best single book to learn ..phantom of pit...
you have to be a learning m/c..
have to digest... then only u can trade
a journey path....
GO IN A BROKER'S OFFICE...SEE WINNING TRADER..
SEE FOOLS ARE BEHAVING..WHO CAN HOLD WINNING TRADE..
observer makes a speculator...
timing..
i laugh one ...you r wrong...
i laugh again..
cotd..8 trade loss..IT PROVE BREAK OUT NO MORE WORKING...
I HAVE SWITCHED TO BUY AT DOUBLE PULLBACK...
YES IT WORKING IN PRESENT MARKET..
do fundamental analysiswork?
yes its the FATHER..GIVES US NAME..
moneyflow...companys vision...balance sheet..
its postmortem of fundamental...
ORDER BOOK..IS KEY..
DO TA WORK??
YES DEFINITELY..ITS MOTHER...WITHOUT TA NO TRADER CAN BORN...
YES IN THE AGE TEST.TUBE...inside info trader r test tube baby..
company director buy in dummy reletive....
a financier may back him...

SO A BABY TRADER IS BORN AFTER CONCEIVE[ TA+FA]


BABY'S GROWTH DEPENDS ON ENVIRONMENT[mastery over investment psychology...
money management is SCHOOLING'....
PROFIT'LOSS.... IN BOARD EXAM...IS SCORE..
let us join class..
a]fundamental
b]ta
c] trading psychology..
other extra curriculum...
software knowledge
time mangement
survival skill
view to stay neutral..
risk taking capacity
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,
my trading fulcrum..Investment........... trading..............gambling
accuracy . 30...50%..................... . 60%
my feed : boring.. enjoystressful
return 100%................... 20% .30%
money breakup 20 %.................... 70% .10%
stop 30%................... 8% .3%
this system works for me....
av after tax annual return 18%..very poor..
but i dont loss much..
profit30-drawdown12=18
To be a Trader-20yrs Page 5

profit30-drawdown12=18
while day trade..max 2position
short term... max 3 position
long term trade... 12max...50% of short profit book . residue bconvert to long hold...
mostly emotional trade are wrong..80% wrong. holding stop me good return
cool brain risky trade r however 70% right..
now i am planning to switch low risk trade
Investment trade gambling[day play]
read 3 value...
pl CLEARLY DISTINGUISH 3 ROLE
SELF SABOTAGE .. CAN HAPPEN ANY TIME...
further i start my journey...
TRADE ELEMENT...
1] STUDY MARKET...CONSIDER GLOBAL VILLAGE CONCEPT...
WHERE INDIA IS SUPERIOR...
EXPORT..OF SERVICE.. SOME CHEAP MEDICINE...AUTO ANCILLIARY
JEWELLARY EXPORT
U IDENTIFY ..BEFORE..OTHERS...DEFINITELY MAKE MONEY...
2]MONEY FLOW CONCEPT..
WHETHER FURTHER MONEY SHALL COME INDIAN STOCK MARKET..
PRESENTLY YES..
can indian product its cheapness..be maintained..
do fii money shall continue to pour....
failure of PREMISE must be checked,,FROM INFO ONLY...
4]uncertain factor
global and local
IMPACT STUDY MUST BE READY ATLEAST IN MIND
this is i call visualisation..
so that u can act when it happen...
5]MICRO VIEW...
INDIVIDUAL STORY OF ANY COMPANY..
6] WHAT MAY HAPPEN TO MARKET...AS PER BIG ANALYSIST
MIND IT ITS AN OPENION , NEVER TRUE ...
A FAILED TRADER.. ANALYST IS BORN...
7] CHECK PRICE...ITS SUPREME...ALL IFS & BUTS COME LATER...
so ta is helpful isnt???
forget pattern , follow what price is telling...
it shall move up or down..
use ma..ma.x as hints..
depending upon.. your time frame.. uplimit...price target
down limit .. loss pt...
now observe PRICE...WHO IS WILLING BULL OR BEAR...
join the winner..
trend is nothing but strengh in direction..
[ i am lucky, my wife is helpful to teach .i know mood swing..]
yes the REVERSE CAN HAPPEN ANY TIME..
[ I AM LUCKY..MY BOSS Mr Berma knew share,,trade..understand time management..single direction minded..go and get it..always
ready for worst case scenario..a man who executed and guide 20 projects..
flexibility..calmness. puzzlesolving..direction orientation..natural]
7]now comes entry..here the puzzle starts..
breakout..
pullback
retracement..
oversold condition..
as per me...all of them given SUCCESS to me..at partcular time..
definitely failed in different market condition..
YES THE VARIABLE.. MARKET..CONDITION..STRATEGY CHANGE ACCORDINGLY..
STUDY NEWS FLOW,,ITS REACTION ..DEFINITELY ..U CAN TELL HOW
PRICE SHALL BEHAVE..
if wrong ..stoploss is there to safe guard..
8] my strength..academic knowledge of statistics..+ operation research
study and play chess..as amateur32yr..
work as driller..project executor..
9] nonfinance background..poor knowledge.in basic computer..
THIS 2 R MY WEAKNESS..
DIARY WRITING A MUST FOR ANY TRADER..HERE I LAG.
To be a Trader-20yrs Page 6

DIARY WRITING A MUST FOR ANY TRADER..HERE I LAG.


I CAN NOT..[HI I WORK 12HR ADAY..5 DAYS WEEK..]
+ PERSUE..TRADING HOBBY..
so i suggest weekly once writing,..
but ,u pro write daily..my advise to all ..newbees..
now u must experiment..as amateur.. min. 3 entry and exit style...
as pro as much as u can...
more than 30 stock system i personally tested..
std software../ can do it...
for conceptual development bill william MUST...
LISTEN TO RAKESH JUNJUNWALA...
ANY PRO CAN TEACH U..,provided u honestly know your strength and weakness..
hard part is TO MODIFY ..YOU..YOUR HABIT..
earlier u start is better..
trading plan..
recently.. many a teach it..
money management..u can learn it..
when to pyramid ..when to fold..
PRACTICE THEM IN REAL TIME IS DIFFICULT..
I CONFESS INTRADAY I NEVER DO IT RIGHTLY..
IN WEEKLY SIGNAL BASE ENTRY..I DO OCCATIONAL RIGHT
NEWS STUDY..
by far capitalmarket.com..best..
opinion and info use .. moneycontrol.com
equitymaster ok..
i am told motilal excellent..by i dont know..
ask any fund manager..
learn how they make opinion..its not the opinion BUT PROCESS OF MAKING IT..HERE LIES KEY..
last but not the least..
never feel stress..[in profit or loss live as stoic]
SO NOW U R ATRADER..
-----------------some good reference
...............................
indian industrial growth..2002-12
finacial relation..bond &market..
business-standard enews letter..
capitalideasonline.com.
any fund manager talk show..
read.. their view not their prediction on MARKET..
I TELL YOU ... DONT follow ... THEIR ACCURACY LEVEL OF HARDLY 30%
LESS THAN HEAD /TAIL TOSS
YES I MEET THEM PERSONALLY...AROUND 6 OF THEM..
VERY SMALL SAMPLE..BUT CONCLUSIVE[atleast for me]
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,
those who enjoy trading/ hobby pl read...
=========================================

To be a Trader-20yrs Page 7

FINANCIAL RISK/ TRADING


04 July 2015
10:31 AM

FINANCIAL RISK/ TRADING


AN INTRODUCTION TO THE PSYCHOLOGY OF TRADING AND BEHAVIORIAL FINANCE
author..mike elvin...
Trading on the stock exchange is all about playing against the mind of the masses. The big guys and operators successfully wi ll beat your mind
by making you think, think and think. Is the right time to get in, will the market fall, and so many times people have asked me when the BIG
correction is going to come?
Many people have gone short in this Bull Run and felt the heat. 'Go short' that is what your mind will tell you when the NIFT Y makes 3% over
2-4 days.
There are many traders who suffer from this mental gridlock. Chances are that you are one of them. Human beings excel at patt ern recognition
but when coupled with risking money, they fail miserably. Fear or greed gets in their way of thinking. It is your ability to recognize charts,
without needing conviction from another trader or CNBC that will separate you from the rest.
Predicting is a curse that is thrust on a trader, because normal thinking tells you that to make money you have to be able to predict a movement in
a certain direction.
..
This is where you take out the emotion and thinking from trading. Use the best charting software and setup a tri -state signaling system that
should tell you when to long, short or be out of the markets. It doesnt matter if you following a trend trading system or a breakout system. You
will be probably fit into one of these categories of a trend trader or a breakout trader. It is for you to choose. U can mast er both. Once the
decision-making is handled by emotionless software, which work tirelessly for you, most of your time you can spend on money and risk
management. Stop thinking about whether the buy/sell signal is valid or not. Just make sure that the difference between entry point and the stop
loss is acceptable by your risk management system. Focus most of your on capital management. Things will become easier for yo u. Stick with
your system and dont keep changing it. Do as many as a test you would like before applying it to your trading style.
You will still not be successful if you dont develop a good profit taking mechanism. You or your system be may be very good at generating
70% perfect buy or sell signals, but unless a good stop loss and profit taking strategy is not is place you will be out of th e game maybe not soon
enough but later. A sloppy stop loss is all that is needed to make things go against you accumulation. On the other hand your impatience will not
let your ride the full Monty. There is no way to tell if this is a top or a bottom if you have made it on the right side of t he trend. The best way is to
change the stop loss of your first lot above your or below your entry point using time as a parameter. The rest you can exit when your decision
system tell you to. The more time you allow your trade to flow more are the chances that it makes you a good bundle.
You will perfect your system by surviving in the market. Taking a small hit today is the best strategy. Learn and device your risk and money
management techniques and leave alone making entry decisions, because there is no perfect signaling system and there will not be one. There are
plenty of tools available out there that can do better than you. Making money in our markets or for that in any conventional market is the art of
capital and risk management.
Remember -Neal Hughes is basically daytrader trading 60minute and 5 minute time frames etc. Now What about using his tactics on a long term
basis specially when you trade long term on darvas box theory momentum trading?
The concept can still be applied. but you need to look at breakouts on weekly charts of the stock in question and then drop d own to daily chart to
implement pullback buying as delineated in the examples.
------------------------------------------------------------------If you want perfect trades, perfect your trading plan. Neal Hughes -"FibMaster

ANY TRADER MUST SEE THESE Q ..ANSWERED..
How to know where to put your stop loss and when to move it
Learn the key to understanding & applying volume
How really understanding volume can deliver larger profits
Which indicators work best
How to properly combine indicators for outstanding reliability
Charting mistakes that can cause you to miss some of the best trades
Advanced support and resistance techniques
How to keep from getting whipsawed out of a trade
Stocks you should avoid like the plague
How to profit no matter which direction the market is going
The best way to stay in a profitable trade (swings & trends)
The logistics of opening and closing trades
The Achilles Heel of traders, "Money Management" including;
How improper capitalization can sink your ship
Proper position sizing
To be a Trader-20yrs Page 8

Proper position sizing


How to get the most out of your brokerage account
How record keeping can increase your profits
Demonstrates how simple successful trading can be
How the understanding of an indicator can produce superior profits
..
Expected or unexpected eventualities though unpleasant happen at times even with all the forces trying to prevent it. With in creasing stress
between Left and UPA, a trouble in the government cannot be ruled out entirely at the present time. This probability led me t o put this thread
here. Market reacts to this kind of stuff sharply and then recover in a short timeframe (according to a study on rediff.com w hich I could not
locate now, average time of recovery to previous levels in US market is around 4 days... hope my memory is not very bad). Now when it
happens, this, though unfortunate an event, gives opportunity to capitalize intraday or in short term. That was the good part of a bad thing. Now
the bad part of the same bad thing is that just at that right moment, our emotions take control and decision -making capability is smashed. We are
confused and in yo-yo situation, shall we sell, shall we buy. If we can develop a rule (intraday as well as delivery) for these eventualities, t hen
that would make up for our decreased insight during such time.
I would request readers to put their valuable opinion and share experiences, especially senior members who have huge collecti on of such
experiences.
BOULDER, Colo. (CBS.MW) -- Most traders experience a rite of passage and baptism by fire during the first few months after opening up a
trading account; emotional mismanagement combined with a general sense of complete and utter confusion as a stock appears to trade in a
manner opposite of what they would think in light of the fundamental research.
A perfect example: Taser International (TASR: news, chart, profile).
Even if you are completely new to the world of trading or investing, there is a good chance that this developer and manufactu rer of less-lethal
self-defense devices has entered your trading universe. The real question is, "How can a trader effectively filter out the noise a nd look at TASR
shares objectively?"
Do not buy TASR! Why? Well, for one, prisoner-rights group Amnesty International said stun guns are needlessly deadly and more testing is
needed. A red flag. Moreover, many articles and reports have surfaced, especially in the New York Times, raising questions ab out safety and
adding to the specter of debilitating lawsuits in the future.
In addition, it has been said that corporate insiders have sold 1.3 million shares, worth roughly $68.4 million, and this cou pled with over 50
deaths associated with these "less-lethal" guns must have bullish traders running to the hills. Additionally, quarter -to-quarter sales growth has
fallen from 24 percent to 16 percent in the third quarter. Do not buy!
If these reasons were not enough, consider that as of November 15th there were over 15.9 million shares short; thus making it clear many traders
are in fact betting prices will fall. How can they be wrong?
This should be a proverbial slam dunk for bears; however, I feel it only makes prudent sense to explore another angle on TASR before coming to
a decision. In fact, most true trading professionals only look at an objective, pragmatic analysis of the market, by studying supply and demand on
a chart -- Technical Analysis (TA). Almost all the aforementioned information was simply subjective "news" that elicits emotions that ru n
contrary to profitable thought. Do you remember when the bad news about Enron hit the marketplace? Trust me, it wasn't near t he top and only a
clear knowledge of charts patterns would have given a trader a "real" read of emotions.
Technical analysis paints the psychological picture from A to Z, and if a stock is in an uptrend in spite of a negatively spu n fundamental story,
technicians can easily look past the fundamental theme because they are comfortable with certain chart patterns that they hav e seen over time
that allow them to define risk vs. reward and make clear what the path of least resistance is.
In the short-term, which is less influenced by the fundamental company performance, money flow and psychology are the underlying factors t hat
technicians can use to get a sense where the money is going and what current psychology is. They may soon become more favorab le to accepting
the risk of an upside move vs. a downside slide. With that said, before we submit orders to go short TASR, let's explore the technicals.
As of this writing TASR is currently trading above its 10-, 20-, 50-,100- and 200-day moving averages (DMA). With the 50 DMA rising, a
technician can conclude that shares have been traversing higher and that the path of least resistance is higher. Additionally , these moving
averages are all pointed higher and they are aligned in such a way that the 10 DMA is above the 20 DMA and the 20 DMA is abov e the 50
DMA, and the 50 above the 100, and so on. Alignment in this fashion is bullish and reinforces the objectiveness of the trend -- bullish. What is
more relevant to a trader, a bad news story or price action? Emotional traders generally follow the former.
Continuing on, there was a failed attempt in early November to take out the yearly highs of $32.08 and during the last month shares have been
creating a symmetrical triangle and appear poised to breakout higher. Of course, who will fuel the demand? Well, for one, tra ders that have been
selling TASR short (borrowing shares with an obligation to deliver shares back to the brokerage house, and a trader is forced to cover -- "called
away" -- if the lender wants the shares back) may all rush in to cover at once if the primary trend continues.
Simplicity is the market's greatest disguise. Traders turn on the TV, gulp five cups of espresso, and then sometimes trade ba sed upon information
that most traders have fully dissected hours, sometimes days, ago. I have found that taking the subjectiveness out of the equ ation and using
technical analysis can turn the opaque into the transparent. As the saying goes, "Trade what you observe, not what you believ e." I observe price
action in TASR as bullish and giving an antithesis reaction to recent fundamental negativity. And the best part of all is tha t, as a trader, I can
limit my bullish risk via stop loss order and, if triggered, listen to the market. Of course, odds are I am right. Buy TASR.
DAVID NASAR

There is nothing better than the experience and knowledge one can gain from real trading with one's own money
Well, I am a daytrader and daytrader by choice as well as compulsion.Though I have yet to achieve significant profits in this arena, I could not
resist myself from writing over here.
Well, day-trading is certainly not a lottery, it involves an armour of skills, tools and most importantly their application. Indicators --Yes, they do
work but you need to keep your stop-loss pretty tight. One always need to trade in multiple time frames. Following a stock --Good till it's giving
you profits, but till the time daytrading comes handy to you --it's better to avoid changing directions, may hit you hard. One should only change
direction when the trend has reversed completely.
Again, in day-trading, if the trader has failed to catch a break-out in the very early stage, he should stay away otherwise he may end up
buying/selling in overbought/oversold territory.
News is one area, a day-trader has to be very alert about. But one caveat is--Don't take action on TV/website news--They flash only when the
action has taken place, One must watch the technical indicators after hearing the news and act. Rather one classical wisdom i s--" Buy on Rumor
To be a Trader-20yrs Page 9

action has taken place, One must watch the technical indicators after hearing the news and act. Rather one classical wisdom i s--" Buy on Rumor
and sell on News".
Yes, the traditional methods do fail in day-trading or sometimes one is never able to catch the moving fishes. The charting softwares need to be
replaced by or assisted by some new breed of softwares which alert the users on parameters like volume break -outs, market makers' moves,
Range-bound moves,etc. I am compling a list of items I would like in my software and perhaps 5 yrs down the line, my friends on the forum can
use it. :-)
And finally, yes there are traders who are well-off after being fully engaged in day-trading.
Regarding, the brokers making money from jobbing and day-trading ---- They have a methodology which works for them only is doing what
they have been doing for ages--- Playing the spreads. They are still applying the art learned during the historical period of Pit -trading to their
benefit. However, it can't work for a trader 'coz of brokerage cost involved. Even the brokers are finding it difficult to su stain the spread play due
to increasing transaction costs like stamp duty and STT. And yes, they do overtrade -- A broker will do 400 transactions per day playing the
spread but he will never wait for technicals to tell him that the trend is still intact, resistance is at so -n-so level, till the time, market is above so
and so level, it's just a correction. He will book loss (a small one), will ride the pullback (make some money over there) an d will jump the wagon
once again, the trend resumes. And when it comes to returns, if transaction costs are met while playing the spread game, Retu rn on
Investment(ROI) is more than what all the other kind of traders/investors can dream about only.
Generally most of the people jump the gun, before they can dump the gun. I mean, we just rush ourselves into trading, hardly few people resolve
why they are entering into this market and for what purpose.
1. We need to make sure whether we are an investor, trader or a mix of both
2. Based on what we decide, we need to make a strategy.
3. I say, banks give you 10% interest, even at the end of the year you make 20 -30% profit in the market it is much more than that. for ex: last
year august i bought Infosys @ 1450 and now the C.M.P is around 2600. A cool appreciation of close to 45%. No Technicals here , just invest in
sound companies(Blue Chips) and forget, they will reap you profits in lots over a period of time. Unfortunately, to cover my lossess in day
trading, I have to close my positions @ 2000 itself.
4. Day trading is very risky and so too F&O. Its not a child's play and often if caught on a wrong side, you are out of busin ess.
5. For a peaceful trading, i feel positioning trading is the best, but be alert all the time.
6. I have sufferred sleepless nights because of the lossess i incurred in day trading and F&O. I have the confidence to recov er, as any bad things
just take a minute but for a good thing whole life is not sufficient.
7.Its upto a person to decide, whether to sit and watch or commit a suicide.
At present I am developing the right attitude for Trading and evolving my strategy of how to remain in the business.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Hi friends,
When we discuss position trading versus day trading let us not forget they are 2 sides of the same coin. The only difference is the risk/reward.
The basics of the game remain the same. What do we need to have a trade?
1) Entry point
2) Stop loss
3) Exit
In other words a trading system. If we have the above we have a trade.
Further markets cannot be predicted in any time frame and we should not even attempt to do so.
Markets can only do 3 things namely:go up, go down, and remain where they are, and since what the markets do is beyond our co ntrol we can
only control our reaction to what the markets do?
If you are ready with your reaction to the above you are ready to trade.
I would sum it all up to say "A good trader is a good trader in any time frame" and the vice versa also holds true.
One of the biggest mistakes most traders make is that they are too concerned with what the market might do.
To be successful in trading you need only be concerned with what the market is doing!
__________________Knowing how to approach and play the game of trading well will only take you part way to ultimate success.
I have always wondered why there are no graphs for FIIS/mutualfunds investments since they are reputed to drive the markets. If volume
precedes price, they precede volume,do't they? There has to be a graph plot on them to enable us to know what they are plotti ng in the market:Swami Vivekanand, He who is overcautious falls into dangers at every step; he who is afraid of losing honor and respect get s only disgrace; he
who is always afraid of loss always loses
This is an extract from the speaking tree of the spiritual columns of the times of India(4/4/2004). It further elaborates on how India lost the
Bangalore test because of an overcautious approach.
Applied to the stockmarket, this is the paralysis due to analysis syndrome. Whether it is technical or fundamental analysis, the stockmarket
presents a mass of information to deal with and unless one learns to be lean and mean and takes quick decisive action, succes s is not possible.
Over information is bound to be a liability. Swami Vivekanands last line in the para above also literally applies to the sto ck market. Why be
afraid of loss when we have strict stop losses
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
For selecting any stock, there must have been a premise as to why the stock was purchased. This premise varies from person to person and from
time to time.
My premise for holding this stock may differ from your premise and hence, a conclusion cannot be reached.
Since you are a newbie to trading, allow me to make 1 fact clear. You will hear a lot of noise on buy this and buy that...sel l this and sell that but
very few of these call givers actually disclose why they are giving the call to buy or sell. People who make money do it sile ntly.
It's your money which is at stake and do you not think you should have a clear picture of your objectives and constraints tha n allowing others to
do the same? It is only homework which matters a lot. Make the purpose of your trading clear and also put down in writing the maximum loss
you can bear in worse case situations for each security...stick to it in case of adversities... use a stop loss.
hope you understand that some traders in this forum are system followers.
I'm no expert but I do wish to disclose my viewpoint.
There is a difference between the following:
1) Losing, and losing on a consistent basis
2) Building your own trading system and choosing other's systems
3) Using a trend follower and a zig zag indicator.
-->The trades disappeared because the trading system you used had a zig zag indicator.
To be a Trader-20yrs Page 10

-->The trades disappeared because the trading system you used had a zig zag indicator.
--> Why don't you stick onto a few selected securities? The chances of losing in a consistent basis is relatively low...if not, impossible. You can
diversify this list as you become more experienced.
--> No one likes to disclose their trading system/trades. It isn't nice to ask them that.
Your feelings have an immediate impact on your account equity. You may have a brilliant trading system, but if you feel frigh tened, arrogant, or
upset, your account is sure to suffer. When you recognize that a gamblers high or fears is clouding your mind, stop trading. Your success or
failure as a trader depends on controlling your emotions.
When you trade, you compete against the sharpest minds in the world. The field on which you compete has been slanted to ensur e your failure. If
you allow your emotions to interfere with your trading, the battle is over.
You are responsible for every trade that you make. A trade begins when you decide to enter the market and ends only when you decide to take
your self out. Having a good trading system is not enough. Most traders with good systems wash out of the markets because psy chologically they
are not prepared to win.
.
Trading Tips-Remember that there is always another trader on the other side of the trade doing the exact opposite that you are doing. Only one of you can be
right.
- Waiting around for the perfect trade or the perfect opportunity will guarantee that you never trade stocks.
- Trading stocks is about probabilities, NEVER certainties. You are not smart enough to predict, with consistency, what will co me next.
- Conventional wisdom is usually wrong. Trade against the crowd, not with them.
- Money, trade, and self management has always been and will always be the holy grail to trading stocks.
hmmmm.........the question you need to find the answer to is:Can it be done?If Everest has been scaled before,even once,one c annot say that it
cannot be done......one can surely say that he/she cannot do it,but not the other way around.If even one person can make mone y from the markets
using TA,if even one person could consistently pull money out of the markets,then it can be done.
So,my friend,if you really wish to succeed at this(that's step no 1 actually,do you really have that burning desire to succee d and make the
necessary sacrifices)........if you therefore wish to succeed,you have to take all the blame for it.Every time you lose becau se you didn't adhere to
your rules,the blame is not the market's,not this forum's,not your wife's,not TA's or FA's.......yours and yours alone.Go bac k to your methods,your
money management disciplines,your entry and exit criteria,your mind,your health......somewhere,there's a problem that you nee d to look into and
rectify.
Been there,done that,my friend........ I can understand the frustration and agony.But don't allow your mind to settle for pet ty excuses.......take all
the blame and look into what needs to be rectified.
And,as for people successfully making money out of TA.......There are many in this forum itself who are doing it.And as said before,if one
person can do it,it can be done.
Whether you want to make the necessary sacrifices and undergo all the pain required is another question.

There are old traders and there are bold traders, but no old and bold traders.(Old is gold here, it seems)
Failed Traders know the price of everything and value of nothing,
Short term transactions frequently act as invisible foot, kicking society in the shin.
Timing is vital. It is much more important to buy cheap than to sell dear.
Behave according to what is rational rather than what is fashionable.
People tend to overreact to bad news and react slowly to good news.
Nobody gets market timing right even half the time.
When the gap between perception and reality is maximum, price is the best.
Stock will move above or below its business value depending more on emotions than economics.
When the degree of consensus was the greatest, the extent of error was the most pronounced.
One of the hardest things to imagine is that you are not smarter than average.
Group consensus can be so powerful that it erases critical past experience and common sense.
Passion is more powerful than brain power.
Disregard majority opinion; it is probably wrong.
THIS R QUOTE FROM MOTILAL ABOUT TRADING
ON INVESTING
Be greedy when others are fearful and be fearful, when others are greedy.
Four most dangerous words in investing- It is different this time
Great (Idea+Manager+Price)= Great investment results.
True investors realize that get rich quick usually means get poor quicker
Savings will not make you rich, only canny investments do that.
Wealth creation is the art of buying a rupee for 40 paise.
Own not the most, but the best.
Investing without research is like playing pocker without looking at the cards.
It is optimism that is the enemy of the rational buyer.
To be a Trader-20yrs Page 11

It is optimism that is the enemy of the rational buyer.


The definition of a great company is one that will remain great for many, many years.
Focus on return on equity, not on earning per share.
Business growth per se tells little about value.
The secret of long-term investment success is benign neglect. Dont try too hard. Much success can be attributed in inactivity.
Value of analysis diminishes, as element of chance increases.
The time to get interested in a stock is when no one else is.
An investors worst enemy is not the stock market but his own emotions.
There is no formula to figure out the intrinsic value of a stock. You have to know the business.
Temperament costs investors more than ignorance
In Investment, understanding is more important than information
MOTILAL

Managing risks is in many ways the foundation of the entire process. Managing risk comes down to two things. First is how you are going to
place your stops. That goes back to cutting your losses short. Consider trading as a business venture. Managing risk means re cognizing what the
costs of trading are. Make a comprehensive plan. Winning traders always treat their trading like a game, but they also look a t the whole thing as
a money-making business. GLEN RING
Most aspiring traders underestimate the time, work, and money required to become successful. To succeed as a trader, one need s complete
commitment. Just as in any entrepreneurial venture, you must have a solid business plan, adequate financing, and a willingnes s to work long
hours. Those seeking shortcuts are doomed to failure. And even if you do everything right, you should still expect to, lose m oney during the first
five years losses that I view as tuition payments to be made to the school of trading. These are cold, hard facts that many would -be traders
prefer not to hear or believe, but ignoring them doesnt change the reality. MARK D COOK
Consistent success is difficult to achieve because the trading environment differs in almost every way from the environment i n which we live our
everyday lives. For example, in our everyday lives our fears help us avoid unpleasant or painful experiences. In the trading environment, fear
colors our perception of market information thereby influencing our actions. As incredible it may sound, fear of making a mis take, losing money
or missing an opportunity, will actually cause us to create the very experiences we are trying to avoid. Consistency as a tra der does not depend
upon your knowledge of market behaviour, but rather upon a very unique mind -set. MARK DOUGLAS
We know that the random element in the market represents at least 40 to 60 percent activity. Therefore, its not logical to l ook at every tick or to
think that every tick or every chart formation has meaning. They dont. There are too many traders trying to look at the mark ets from too
stringent an analytical viewpoint. Most of what happens in the markets is meaningless. Why try to interpret every little move ment, every little
reversal, every little tick? In trying to do too much, theyre actually paying too much attention to the market. You have to keep a distance from
the market. Only then will you have the psychological resources to let your profits ride. You wont be looking at every tick and interpreting it in
a fearful way. JAKE BERNSTEIN
The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of p ouring milk
into your mouth.
The markets offer many opportunities to self destruct without a safety net. Every trader tries to hit others. Every trader g ets hit by others. The
trading highway is littered with wrecks. Trading is the most dangerous human endeavour, short of war .
Trading is a minus sum game. Winners receive less than the losers lose because the industry drains money from the market. Be tter than average
is not good enough. You have to be head and shoulders above the crowd to win a minus sum game
All losers knocked out of the game by a string of losses or a singly abysmally made trade. No matter how a good his system i s, a streak of bad
trades is sure to put the loser out of business.
A professional trader cannot afford illusions.
Some people have been critical of my criticizing seminars in the earlier post. Well, in my view seminar may be good to finetu ne if you already
have good professional trading experience or you are an engineer with good spatial intelligence and programming background. A s can be seen
above one cannot afford not being thorough.Now I want to mention a constructive alternative in a new software I discovered.
It would not be out of place to mention here that Ashish who despite all his intelligence and all those promotions had to be trained in practical
accounts both by me and the accountant since he had no exposure to that. Some of the mistakes he was making were in the natur e of A small
spark catches a big fire A small leak can sink a big ship and could have cost him his job. So no matter what the qualific ations and
intelligence, there are some things only practical experience under the right mentor can teach.
The Stocks and commodities people sent me a sample( their August2004) issue. In that issue, one MBA from Harvard who gave up his real
estate business to become a very successful options trader says, If someone wants to be successful, they should follow someb ody else who has
done the same thing. If I am trading, I must find somebody who is good at it. If I want to become a restaurant manager, I nee d to find somebody
whos done it before and done it well. . This new software is very effective for that. It seems like a pygmy compared to Me tastock/
Tradestation but from learning and economics point of view is a giant which I why I had to give so many examples above.
The Seminar people are competent and knowledgeable but to transfer that knowledge to a rookie is a different ballgame altoget her. I seem to
To be a Trader-20yrs Page 12

The Seminar people are competent and knowledgeable but to transfer that knowledge to a rookie is a different ballgame altoget her. I seem to
have bumped into a good alternative.
Before I mention it, I would like to say that when you learn to know how to drive a car, all you have to know is the basic fu nctions of what
clutch, accelerator, brake, gear etc is and start driving. Otherwise with something like free knowledge on the internet avail able, if you get too lost
into theory and start reading about cars, you may end up more confused. Technical analysis is very dangerous that way with th e multiplicity of
websites and indicators available which do not always indicate what they are supposed to indicate .
Market Facilitation Index comes pretty close.It was developed by Bill Williams of trading chaos.Along with the paint bar stud ies of fake,squat
etc they actually make a very good indicator though not a perfect one.A few of the useful one I find[cv]
All indicators have their own weakness and strength. Generally a complete trading system compromises of a set of indicators.
As I like to trade trends and in the direction of trends I think the single most robust and important indicator for me is the "moving average"! It
helps me to visually identify trends at a single glance.
-traderji
THE TAPE READER
The Tape Reader, on the other hand, from his perch at the ticker, enjoys a bird's eye view of the whole field. When serious w eakness develops in
any quarter, he is quick to note, weigh and act.
Another advantage in favor of the Tape Reader: The tape tells the news minutes, hours and days before the news tickers, or ne wspapers, and
before it can become gossip. Everything, from a foreign war to the passing of a dividend; from a Supreme Court decision to th e ravages of the
boll-weevil is reflected primarily upon the tape.
The insider who knows a dividend is to be jumped from 6 percent to 10 percent shows his hand on the tape when he starts to ac cumulate the
stock, and the investor with 100 shares to sell makes his fractional impress upon the market price.
The market is like a slowly revolving wheel: Whether the wheel will continue to revolve in the same direction, stand still or reverse depends
entirely upon the forces which come in contact with its hub and tread. Even when the contact is broken, and nothing remains t o affect its course,
the wheel retains a certain impulse from the most recent dominating force, and revolves until it comes to a standstill or is subjected to other
influences.
The element of manipulation need not discourage any one. Manipulators are giant traders, wearing seven -leagued boots. The trained ear can
detect the steady "clump, clump," as they progress, and the footprints are recognized in the fluctuations and the quantities of stock appearing on
the tape. Little fellows are at liberty to tiptoe wherever the footprints lead, but they must be careful that the giants do n ot turn quickly.
The Tape Reader has many advantages over the long swing operator. He never ventures far from the shore; that is, he plays wit h a close stop,
never laying himself open to a large loss. Accidents or catastrophes cannot seriously injure him because he can reverse his p osition in an instant,
and follow the newly-formed stream from source to mouth. As his position on either the long or short side is confirmed and emphasized, he
increases his line, thus following up the advantage gained."
This is the objective of the Tape Reader - to make an average profit. In a month's operations he may make $4,000 and lose $3,000 - a net profit of
$1,000 to show for his work. If he can keep this average up, trading in 100 -share lots, throughout a year, he has only to increase his unit to 200,
300, and 500 shares or more, and the results will be tremendous.
The amount of capital or the size of the order is of secondary importance to this question: Can you trade in and out of all k inds of markets and
show an average profit over losses, commissions, etc.? If so, you are proficient in the art. If you can trade with only a sma ll average loss per day,
or come out even, you are rapidly getting there.
A Tape Reader abhors information and follows a definite and thoroughly tested plan, which, after months and years of practice , becomes second
nature to him. His mind forms habits which operate automatically in guiding his market ventures.
Long practice will make the Tape Reader just as proficient in forecasting stock market events, but his intuition will be rein forced by logic,
reason, and analysis.
Here we find the characteristics which distinguish the Tape Reader from the Scalper. The latter is essentially one who tries to grab a point or two
profit "without rhyme or reason" - he don't care how, so long as he gets it. A Scalper will trade on a tip, a look, a guess, a hearsay, on what he
thinks or what a friend of a friend of Morgan's says.
The Tape Reader evolves himself into an automaton which takes note of a situation, weighs it, decides upon a course and gives an order. There is
no quickening of the pulse, no nerves, no hopes or fears. The result produces neither.
He must study the various swings and know where the market and the various stocks stand: must recognize the inherent weakness or strength in
prices; understand the basis or logic of movements. He should recognize the turning points of the market; see in his mind's e ye what is happening
on the floor. He must have the nerve to stand a series of losses: persistence to keep him at the work during adverse periods; self-control to avoid
overtrading; a phlegmatic disposition to ballast and balance him at all times.
For perfect concentration as a protection from the tips, gossip and other influences which abound in a broker's office, he sh ould, if possible,
seclude himself. A small room with a ticker, a desk and private telephone connection with his broker's office are all the fac ilities required. The
work requires such delicate balance of the faculties that the slightest influence either way may throw the result against the trader. He may say:
"Nothing influences me," but unconsciously it does affect his judgment to know that another man is bearish at a point when he thinks stocks
should be bought. The mere thought, "He may be right," has a deterrent influence upon him; he hesitates; the opportunity is l ost. No matter how
the market goes from that point, he has missed a cog and his mental machinery is thrown out of gear."

Having thus described our ideal Tape Reader in a general way, let us inquire into some of the requisite qualifications.
First, he must be absolutely self-reliant. A dependent person, whose judgment hangs upon that of others, will find himself swayed by a thousand
outside influences. At critical points his judgment will be useless. He must be able to say: "The facts are these; the result ing indications are these;
therefore I will do thus and so."
To be a Trader-20yrs Page 13

therefore I will do thus and so."


Next, he must be familiar with the technicalities of the market, so that every little incident affecting prices will be given due weight. He should
know the history, earnings and financial condition of the companies in whose stock he is trading; the ways of the manipulator s; the different
kinds of markets; be able to measure the effect of news and rumors; know when and in what stocks it is best to trade; measure the forces behind
them; know when to cut a loss and take a profit. Silence, therefore, is a much -needed lubricant to the Tape Readers mind.
The advisability of having even a news ticker in the room is a subject for discussion. The tape tells the present and future of the market. On the
other hand, the news ticker records what has happened. It announces the cause for the effect which has already been more or l ess felt in the
market.
Money is made in Tape Reading by anticipating what is coming - not by waiting till it happens and going with the crowd.
The effect of news is an entirely different proposition. Considerable light is thrown on the technical strength or weakness o f the market and
special stocks by their action in the face of important news. For the moment it seems to us that a news ticker might be admit ted to the sanctum,
provided its whispering are given only the weight to which they are entitled.
To evolve a practical method - one which any trader may use in his daily operations and which those with varying proficiency in the art of Tape
Reading will find of value of assistance - such is the task we have set before us in this series.--Clif Droke
Strictly defined, tape reading is the practice of interpreting price -to-volume configurations of listed securities on the various stock exchanges.
Since trading volume is an extremely important (and frequently overlooked) element of stock trading, a major premise of tape reading is that
buying and selling interest can most readily be identified and measured by looking at a stock's volume at any given time in r elation to its trading
range. In classical tape reading, price and volume are given equal weighting and each element can never be analyzed without t he other.
An old Wall Street axiom, which you are no doubt familiar with, is that "the tape tells all." It simply means that any availa ble information that
will have an impact on the outlook for stocks, and for the economy as a whole, will be reflected in advance in the tape. This is because the people
who have the greatest insight into "inside events" are sure to try to profit from their advanced knowledge by buying or selli ng stocks before such
information trickles down to the public. By the time news of an important financial or political event reaches the trading pu blic, the insiders who
are savvy to the ways of the market, have already taken their profits, leaving the public holding the "bag." Most of us will never have the
advantage of being insiders; however, with a firm knowledge of tape reading this isn't necessary to profit from the market. I n fact, being able to
read the tape means that you can trade right along with the insiders and participate in big moves before the trading public c atches wind of what is
going on. In order to provide you with a better idea of the basics of tape reading, we have excerpted below several paragraph s from the all-time
classic book on tape reading, "Studies in Tape Reading," written in 1910 by Richard D. Wyckoff. Don't let the date discourage you from reading
it - it is just as timely today as it was nearly 100 years ago:
The science of determining from the tape the immediate trend of prices.
It is a method of forecasting, from what appears on the tape now, what is likely to appear in the future.
Tape Reading is rapid-fire horse sense. Its object is to determine whether stocks are being accumulated or distributed, marked up or down, or
whether they are neglected by the large interests. The Tape Reader aims to make deductions from each succeeding transaction - every shift of the
market kaleidoscope to grasp a new situation, force it, lightning-like, through the weighing machine of the brain, and to reach a decision which
can be acted with coolness and precision.
It is gauging the momentary supply and demand in particular stocks and in the whole market, comparing the forces behind each and their
relationship, each to the other and to all.
The Tape Reader is like the manager of a department store; into his office are poured hundreds of reports of sales made by th e various
departments. He notes the general trend of business, whether demand is heavy or light throughout the store, but lends special attention to the
lines in which demand is abnormally strong or weak. When he finds difficulty in keeping his shelves full in a certain departm ent, he instructs his
buyers, and they increase their buying orders; when certain goods do not move he knows there is little demand (market) for th em; therefore, he
lowers his prices as an inducement to possible purchases.
A floor trader who stands in one crowd all day is like the buyer for one department - he sees more quickly than anyone else the demand for that
class of goods, but has no way of comparing it to that prevailing in other parts of the store.
He may be trading on the long side of Union Pacific, which has a strong upward trend, when suddenly a break in another stock will demoralize
the market in Union Pacific, and he will be forced to compete with others who have stocks to sell.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Five minute bar charts are used by day traders, hourly or daily by swing traders, weekly charts by investors."
How exactly does the investor use the weekly chart? Should he see that the price is above the 30 week moving average or great er than 200DMA
in the daily chart? What else should he see? Any oscillator? Looking at it one way, investing is nothing but trading on prima ry, isn't it?
"Monthly and weekly charts are chiefly used for determining important support and resistance levels and making long -term trends" How exactly
does one use them?
During intra-day trading, I learnt that one is supposed to use end of day charts to mark support and resistance and see whether or not the y are
penetrated during the day.
Simmilarly are the supports and resistances marked on weekly charts monitored non a daily basis for end of day trading -whether they are
penetrated or not?

Monthly charts are strictly for primary trend I suppose but they seem quite useless for end of day trading.
The significance of the weekly and/or monthly charts are important when one wants to trade in the direction of the primary tr end.
You can read more on Multiple Time Frame
__________________The same idea applies if you are trading any security on a daily basis, in which case, the weekly bars will be the basis for
the trend as well as the important support and resistance points
To be a Trader-20yrs Page 14

the trend as well as the important support and resistance points


What does the word daily imply here- end of day or intraday. I would presume end of day. In Intra day I was taught to use end of day resistances
and supports and see whether the intra day priced crossed them or not?
How does Technical analysis help an investor when one says that "fundamentals tell you what to buy and technicals when to buy .and sell? I
know about the price being greater or less than the 200 moving average.Can you add to that ? If one had a delivery of a few s tocks, what all one
should see?
TREND is the single most important factor to watch out for. If the trend is UP one can go long or hold on to their long posit ions. Once the trend
turns down one should be out of their long positions and go short.
Trading with the trend is hard to do because a logical give-up exit point will be farther away, potentially causing a larger loss if you are wrong.
This is a good example of why so few traders are successful. They can't bring themselves to trade in a psychologically diffic ult way.
When you trade in the direction of a trend, you are truly following the markets rather than predicting them. Most unsuccessfu l traders spend their
entire careers looking for better ways to predict the markets.
Basically you see a higher market time frame( say end of day supports and resistances) and see whether they are penetrated or not in intra-day,
isn't it? Similarly weekly Supports and resistances are penetrated end of day or not?
Please be specific on how an investor can use Technical analysis
It is much easier to see the major trend using weekly data, find the short -term direction on daily data, and time your entry using hourly bar
When the weekly trend is up, daily declines point to buying opportunities. When weekly trend is down, daily rallies point to shorting
opportunities.
The problem with daily charts if u r trading intraday is that u get to look too far back.With weekly one it gets prehistoric i feel.
Lets look at an example
If say I have a system for daily bars and i use a trailing stop to lock in the profits after say 3% of opposite move.If the m arket moves higher then
our trailing stop moves higher.This sounds good theoretically but this stop mechanism needs to know what occurred first the high or the low of
the day; did the market open and then move higher and pull our trailing stop up and then move down and stop us out? Or did th e market first
move down and stop us out and then move up and make new highs? This type of information cannot be discerned from a daily bar.
The point i am trying to make is that daily and weekly charts give u a very unrealistic feel while trading intraday.Ofcourse they r useful to
determine long term trend and key levels but they have serious limitations.
Also many people overlook the importance of intraday historical data.Fibonacci traders know this well while drawing retraceme nt levels.The
retracement levels are completely different when drawn on different time frames.
I figured out a year ago that systems backtested,optimized and curve fitted on daily bars look very rosy and show excellent p erformance but
when they are tested on intraday bars which is when u actually trade the performance deteriorates considerably.It was very pa inful to watch all
the work go down the drain.
Weekly charts are useful and u will also see that many indicators actually show good performance in them but for intraday tra ders like me they
dont offer much.If u r a investor then weekly charts are definitely for u but not otherwise .So what is the right time frame for you? Well, it all
depends on your personality.
You have to feel comfortable with the time frame you are trading in. You have to feel at home with that time frame. There is always a degree of
pressure when you trade because there is the real potential for loss or gain and that will effect you to some degree. You sho uld however not feel
that the reason you are feeling pressure or frustration is because things are happening so fast that you find it difficult to make decisions or so
slowly that you get frustrated.
The question is if you could make the same amount of money trading any time frame which time frame would you choose. You will of course
have to take into consideration that the time frame you choose does generate enough trading opportunities for you to be happy with the results.
It is also worth noting that if your trading is going well and you are profitable then don't even think about changing time f rames. As the saying
goes ''if it ain't broke don't fix it.''
When you do eventually find the time frame you are happy with you can then start looking at multiple time frames to help your analysis of the
market.
It is much easier to see the major trend using daily data, find the short -term direction on hourly data, and time your entry using five or ten minute
bar. Hope this is corrrect. I have not done much day trading.
When the daily trend is up, hourly declines point to buying opportunities. When daily trend is down, hourly rallies point to shorting
opportunities.
What about position trading. Monthly charts are too long term? Isn't swing trading a kind of postion trading only although th ere are three main
categories-day,swing and position.
normally i operate based on trend positions. s1, s2, previous closing, current opening, r1,r2. I found the first one hour eit her the graph zooms up
and comes down or declines and rises. around 12.30 or so the real trend starts. by1.45 the picture becomes clear. definitely by 2.50pm you can
see what is going to happen. either r2 is crossed or s2 is over. this is the time to make quick money. for example yesterday (16th nov) around
2.50pm i noticed hsbc moving up and up and up. around 3.20 fell a little bit.
When deciding on a trade or investment, be it short, intermediate or long term, multiple time frame analysis can help clear t he noise and offer a
balanced view. Multiple time frame analysis!?! It sounds complicated and fancy, but it simply refers to the same chart with m ore than one time
compression (e.g. daily or weekly). When both the weekly and the daily charts are in harmony, the chances of success can be g reatly enhanced.
The essence of the strategy is easy: Use the higher time frame price activity to define the tradable trend as well as potenti al support and resistance
levels.
Markets exist in several time frames simultaneously. They exist on a 10 minute chart, an hourly chart, a daily chart, a weekl y chart, and any other
chart. Traders often feel confused when they look at charts in different time frames and they see the markets going in severa l directions at once.
The market may look for a buy on a daily chart and a sell on the weekly chart, and vice versa. The signals in different time frames of the same
market often contradict one another. Which of them will you follow? Most traders pick one time frame and close their eyes to others until a
sudden move outside of their time frame hits them.
Daily charts are great, but participants can get caught up in the move of the moment. Even though daily charts can contain ra ndom movements,
they do have their strengths. Once an underlying trend is identified, daily charts can be useful to pick entry and exit point s. On the other hand,
weekly charts filter out the random movements and can help identify the stronger under currents that are driving the price.
The same idea applies if you are trading any security on a daily basis, in which case, the weekly bars will be the basis for the trend as well as the
important support and resistance points. That is the foundation of multiple time frame trading. Besides the effectiveness of using a method based
on a multiple time frame approach, another advantage is the method need not be complicated. A trader can make his or her meth od as simple or
To be a Trader-20yrs Page 15

on a multiple time frame approach, another advantage is the method need not be complicated. A trader can make his or her meth od as simple or
as complicated as desired. For me, though, the simpler the application, the better the results.
The proper way to analyze any market is to analyze it in at least two or three time frames. If you analyze daily charts, you must first examine the
weekly charts and so on. This search for greater perspective is one of the key principles of the Traders Edge Trading System.
Look at the daily chart of HFCL below. What does it tell you. Most traders would say that it is just the beginning of another uptrend. Well, most
traders are not successful! To be successful in trading any market, one has to first examine the trend on a higher time frame .
.
RECENTLY I FACE TRADING CATASTROPHY...not by trading BUT by holding losers..buy and is hold dead man....so like phoenix..i sh all
comeback.
Reason ..cockiness...[as usual play of bridge & chess]...ya.. i can not handle...so the ship ruins with captain...STOP IS FOR SISSIES...any
rational individual must stop self sabotage first,....before..he thinks to be a trader

so i open my material ...start copy paste...


Before you make any commitment to begin or even to continue trading , we believe you must
honestly ask yourself; "Is stock trading for me?"
Many programs will tell you any one can make money on thebstock market and I guess technically they are right. But the realit y is, for most,
failure is inevitable.
You see, the major limits to your success are placed there by you. As we have pointed out, trading is a mindgame. So to a lar ge extent your
success is controlled by your beliefs and actions.
We want to examine this issue in some detail because,
although at the moment you may be skeptical, it really is the key to your success or failure.
Apart from inadequate capital and poor money management,
novice traders usually fail DUE TO
1]lack of commitment
2]lack of knowledge
3]self-limiting beliefs
4]ego
5]poor state of mind
6]lack of focus
7]undisciplined
8]no strategy
9]failure to accept responsibility
10]lack of perseverance.
Traders who don't address these issues will not survive.
And the statistics show this to be true
Many novice traders get frustrated when they don't havebinstant success. Without real commitment they will not do what is nec essary to achieve
success.
Lack of knowledge, which is a major cause of failure, is a result of an individual's attitude. How
anyone thinks they can enter the stock market without training amazes us. Yet it happens all the time. People who accept that golf lessons are
necessary before they head
out onto the course will start trading with little or no knowledge
Most novice traders fail to appreciate the level of skill needed to trade successfully. They have no system and resort to gue ssing or the use of tips
from friends. They are effectively gambling, not trading.
At the same time, too much information can lead to overload and inaction. It is far better to narrow your focus and concentra te on just a portion
of the market.
Beliefs -Traders who do not have a positive belief system or cannot reconcile their beliefs to the actions of the market do not surviv e.Self-doubt
will destroy you as a trader. In particular,
it is critical that you do not tie your self-worth to your actions in the market. Despite the emotional attachment that you might feel, you must
accept that whether one of your trades proves to be profitable or not, it is not a reflection of your value as a person.
Your success or failure in the market depends on your thoughts and feelings.
Don't tie your self-worth to any individual trade
Remember that you always have a choice in the stock market.
Ego- Ego is one of the greatest enemies to stock market success.
Your ego needs to win all the time and wants to win now,
if not sooner. It can't stand being wrong. And so it rationalizes events and denies reality.
You must be able to perceive the market how it is, not how you want to believe it is. But it is difficult to clearly see pric e action if your ego is in
the way.
Ego makes us take small profits but large losses. It argues that even a small profit is a win. But a loss hurts and instead o f accepting a small loss
we try and get it back.
Men in particular are prone to say, "I'm going to make
back that 10000/- loss, no matter how long it takes!"
Ego makes us sell stocks that go up and keep the ones that go down. If a stock price increases there is immediate gratificati on in being right so
taking quick profits feels good. And we won't sell the bad ones because we have then made a loss
Do you see the logic here?
We tell ourselves that we haven't made a loss until we sell. So if we don't sell, we can't make a loss!
State of Mind- The stock market is an unusual environment.
It is a pressure cooker type atmosphere for those unfamiliar with it and it can generate emotional and
irrational behavior.
The market is a large group of people trading their perceptions. Throw lots of money into the equation and it is not surprisi ng how emotionally
charged an environment it can be. The power of group psychology and the mob mentality ensures that irrational action is commo nplace.
To be a Trader-20yrs Page 16

charged an environment it can be. The power of group psychology and the mob mentality ensures that irrational action is commo nplace.
At a personal level, fear and greed are the primary emotions at work. And stress and anxiety are common issues that need to b e dealt with.
Probably the strongest mindset with novice traders (and many who have traded for a long time) is the fear of failure - the fear of loss
Fear blinds us to opportunity. Greed blinds us to danger.
Have a healthy regard for the market but don't be intimidated or fearful. Find a balance between confidence and respect.
Everyone is afraid. It is how you respond to that fear that determines whether you succeed.
If there was one topic that we would stress above most others it is focus.
The ability to concentrate on the present moment to the exclusion of other distractions is vital when you are trading. And on e of the great things
about focus is that fear and anxiety actually disappear when you are concentrating on the task at hand.
Traders who don't learn how to focus will be continually distracted and will find it hard to make decisions. To trade well yo u must learn to stay
in the present moment.
Focus eliminates fear.
Discipline is so important in trading. You need it to do the things that you have to do, even when you
might not want to. Such things as analysis; risk control;money management and record keeping. All are critical and all requir e discipline.
Discipline is also necessary to maintain focus and to follow your trading system. Most importantly, it is critical when you s uffer a string of
losses. As it is discipline that will get you back on the horse
The vast majority of traders lose money not because of their trading strategy but because of their lack
of discipline. There are no rules in the market.
You have to develop your own. And then follow them.
Strategy- You need to find a trading system that works but,
more importantly, one that you trust and are comfortable with. You then have to apply it and this is where discipline comes i n.
But the truth is that most novice traders concentrate on this subject and particularly entry signals, far too much.
The reality is that good risk and money management backed by a supportive belief system is far more important.
Don't get us wrong. Having a valid trading system is critical to your success. Just don't fall into the common trap of thinki ng that it is all you
need.
Your state of mind is more important to your success than your trading system
It is you, not your system that will determine your success.
Responsibility -Your trading success is in your hands. It is your responsibility, no-one else's.
Traders who don't accept this will fail. Because they will always be blaming someone or something for their mistakes and neve r learning from
them
You are responsible for your success. No one else.
Perseverance Without action, knowledge is useless. Massive action is the key to real success.
Many traders begin with great enthusiasm but become easily
disillusioned. Perseverance is required to get beyond this stage and to start to reap the rewards.
---------------------------------------------------------------------------------------------------------------------------please understand, owning stock is risky. Holding onto a stock can be a very risky strategy.
Stock prices can move quickly and substantially to the downside and can catch you out if you're not careful.
In fact the value of a stock can drop to zero! For example, remember Enron?
And whilst stop losses can help protect you, they are not foolproof. So the only way to really limit your risk is to buy a ve ry cheap stock (so that it can't fall very
far).
But these are generally poor trading candidates because they are erratic and have low liquidity.
So if you don't buy cheap stock, owning shares is also quite expensive. You have to outlay lakhs of rupees to hold a reasonab le amount. And so your
involvement in the market may be quite limited.
In addition, stock often doesn't move all that much. A good trade might give you a 20% return. And this might take several mo nths. Given that some trades are
going to
go against you, this doesn't provide
...............................
And finally, trading stock is limited. Most people are only happy to trade stocks that are moving up. Short selling (selling stocks that you expect to go down) is a
risky strategy and is a bit cumbersome. And sideways markets cannot be traded.
So is there a better way?
Leverage - you can profit from a large amount of stock for only small outlay.
2. Limited Risk - When you buy an option you know exactly
how much you are risking and it is only a fraction of the cost of the actual share price. Great news I'm sure you will agree?
Entry Doesn't Matter.
Trade entry is not the most critical step in your trading plan.
Studies have indicated that random selection of trades matched with strict money management can be quite successful.
Now, this is not to suggest that you shouldn't stack the odds further in your favor by careful trade selection. Just realize that it is not the most important step.
So choose a system or a combination of systems that appeals to you and that you are comfortable with. And refine it over time as you gain experience.
We have a strong preference, based on our experience. So we would
suggest that you give it consideration. But then add to it or substitute with your own preference.
Market Cycles- Markets tend to move in cycles. The problem is identifying clearly what the time frame for these is and at what stage the mar ket is in the shortterm.
W D Gann and Elliot Wave are the two main examples of cycle predicting systems. You can find many proponents of both together with books and software in a
quick search of the internet.
Many traders are obsessive about market time cycles. We don't have the patience for this. Whilst we are sure cycles exist and there have been some significant
predictions over the years, from a day to day trading perspective, we believe they are pretty worthless.
We have looked at the work of WD Gann but could never get interested in the complexity of his theories. He divided trends and time into eighths,
with special importance placed on three-eighths (38%); 50% and five-eighths (62%).
He also used various angles on charts and the squaring of price and time
to predict future price levels. Many of his theories are intricate and open to interpretation.
Wave theory stems from the work of RN Elliot who in turn was influenced by the Dow Theory.
Elliot believed that markets had well-defined waves that can be used to predict price movement.
It is based on repetitive wave patterns and the Fibonacci ratio. This approach permits traders to assess where the market is currently in comparison to the
overall predicted market movement.
For example, retracement levels are set at 38% and 62%. They can also be
used as target levels for potential reversals. Interestingly these percentages match Gann's analysis. And for that reason alo ne they are worthy of consideration.
But whilst this is a fascinating area, our suggestion to the novice trader is to forget about them for the moment. Just conce ntrate on understanding price action

To be a Trader-20yrs Page 17

But whilst this is a fascinating area, our suggestion to the novice trader is to forget about them for the moment. Just conce ntrate on understanding price action
until you feel the need to expand your
Focus.Market cycles are very complex and of little value as a predictive tool.
Novice traders should ignore them
News -Some traders rely on news events to select stocks. They look for significant announcements that they believe will affect eith er the whole market or a
particular sector or stock.
The basic problem with this approach is that the market generally anticipates rather than reacts to news. By this we mean tha t the stock market is always
looking forward and trying to predict what is going to happen. And so the market has already factored the news into the curre nt price of the stock.
By the time the news is released the smart money has already moved on.
The other fact to realize is that news usually causes only one movement of price. If this occurs before the actual news annou ncement, as a result of rumors and
expectations, then it is unlikely to be repeated after the announcement.
Stated in another way, the actual news event is of little importance.
It is how the market anticipates or reacts to the event that matters and that we can't know.
We therefore have no way of determining what influence news might have or whether it is already priced into the stock. In add ition, news is not detailed enough
for short term trading.
SO Never make a trading decision based solely on news.
But there are some instances when news can have a significant and
immediate impact on the stock market. This is because the news events were not anticipated.
Catastrophic news events are significant because they are unpredictable and they affect sentiment.
Because these sort of news events cannot be anticipated, the market has
an immediate reaction. And whilst the direction of the move can often
be predicted, the extent of the move is very difficult to estimate.
So they are not particularly useful as a trading tool. But if you are in a trade they are important signals for you to take a ppropriate action.
But if cycles and news are not of much use, what can we use to narrow down our trading selections? Traders generally use one of the techniques
known as fundamental or technical analysis or a combination of the two
Fundamental analysis is a method of analyzing a stock through primary economic data.
The analysis includes the study of the general economy; the industry - sector in question and information about the company itself. It requires an assessment of
the financial and physical factors that may affect a company's performance.
This information is analyzed and compared with the sectors performance
and then a decision is made about whether the company's stock price indicates it is over or undervalued.If this sounds like a convoluted process it is.
And whilst computer programs can simplify the analysis process, it is still a subjective analysis in many ways. And the selec tion of criteria is in many ways quite
arbitrary.
But more importantly, it is not a particularly accurate measure of a stocks price movement, particularly in the short term. T he implication is that price reflects
the fundamental value of a company. This is simply not true! Stock prices often have no relationship to a
company's fundamental economic data.
And the best example of this is the dot.com boom. During this time many company's stock price bore no resemblance to the fund amental value of the stock or
to its future earning potential.
And the reason for this is that stock prices reflect sentiment not economic theory. Traders don't always act rationally and i t is people that cause prices to move,
not theoretical models.

So whilst fundamental analysis may provide a theoretical stock value


it is the sentiment of the market participants that sets the actual price
So even though a fundamental analysis of prices may prove accurate in
the long term, the current price is a reflection of the current view of all the people trading the stock. They may or may not change their minds over time to more
closely match the theoretical price. But at
the moment their view is different.
We don't know if the markets view will ever match the theoretical price.
And guess what it doesn't matter because all we can do is trade the actual, current price.
The truth is that the stock market does not respond to news or economic factors in a predictable manner. If fundamental analy sis were able to predict price
movements then every piece of news or information about a company would be reflected in it stock price.
The reality is that economic news announced in any one week hardly ever
changes the long-term trend and it seldom helps toward knowing what to
buy or sell or when to do it.
A use for fundamental analysis.
Despite its limitations, you should not ignore fundamentals completely.

Some fundamental data does have a direct impact on the market. For
example, an interest rate increase will usually have a negative impact
whilst an increase in the rate of employment will typically cause the
market to rally, at least for the short term.
It is also important to realize that fundamental analysis is still
relied on by most institutional investors and brokers. You can therefore
gain a better understanding of how the market may react by reviewing fundamental data.

But from our perspective, the most useful application of fundamental analysis is as a filtering device.
We use it to narrow down the stocks that we consider for further Consideration.
Fundamental analysis is of limited use to a trader and should never be used for timing trades.
Technical analysis is the interpretation of price action through the use of charts and indicators calculated from the base st ock price information.
Whilst fundamental analysis seeks to understand the reasons for
stock prices going up or down, technical analysis doesn't care why
price is moving. It just wants to understand the actual movement.
So rather than using a filter of financial analysis to review a
company's stock price, technical analysis studies a stock's price
movement directly.
We believe that virtually all you need to know is in the price action and represented on the price chart. Technical analysis operates on the theory that price
reflects all known factors
affecting supply and demand at that time.

To be a Trader-20yrs Page 18

affecting supply and demand at that time.


We have made the point before that people make and move markets,
not balance sheets. So the price action of a particular stock reflects the combined view of all those trading it.
Charting price action tells us what has happened in the past and
as the past tends to repeat itself it can give us an indication of what might happen in the future
In fact, we find that technical analysis is the most powerful tool in our trading plan. And because of this, technical analys is provides the framework for a
systematic approach to trading.
More importantly, it gives us the confidence to make our trading decisions. And both these aspects are critical for success.A nd as distinct from fundamental
analysis, technical analysis
provides precise mechanisms for trade entry and exit. So we want to suggest to you that the best strategy for determining the timing of your trades is technical
analysis.
The only technique for timing trading decisions is technical analysis
In summary, of the four analysis techniques, our strongly preferred strategy is technical analysis.
Whilst certainly not foolproof, technical analysis is a valuable
tool in our trading and is particularly useful over the short -term.
But also learn how stocks react to news events and understand
some of their fundamentals. You will then be way ahead of
those traders who limit themselves to only one method.
.
If u cant find a suitable trade now, either your strategy is not right or u r in the wrong instrument..or something is happen ing in the mkt that u cannot
comprehend.

--------------------------------------------------------------------------------------------------------------

To be a Trader-20yrs Page 19

Books/Areas to Study
04 July 2015
10:33 AM

trading psychology
........................
1. van tharp
2. dr elder
3. ari kiev
4. phantom of pit
trading phiosophy
they are works of trader
....................................
1. gann
2. linda
3. larry williams
4. bill williams
5. levermore
6. niederhoffer victor
7. soros
8. j ross
some technical related writing/context
1.
2.
3.
4.

candlestick
elliot wave
momentum theory
profit magic of stock transaction timing

system design
....................
1. way to trade
2. tusher chande
3. p. kaufman
4. j katz
applied theme
.......................
1. contrarian thinking
2. fibonacci
3. a-b-c pattern
4. stop loss
5. daytraders bible
6. trading on probability
7. portfolio management
subjective trading
.........................
swing trading ...landry
bary rudd
encyclopedia of chart pattern
tony crabel works
4 biggest mistake
trading in the zone

.as analysis of my trade/success and failure clearly of shows thought process r
right......also sanguinity of price analysis.+ imp of money flow factor.......+ marketing
style of broking house
To be a Trader-20yrs Page 20

style of broking house


Conviction of a trader.....is a two way sword.
swot + trade diary[reason behind a trade both entry and exit]....develops a trader.
Trend and trend termination r most imp concept.....for applying ta.
in random trade.....survival skill must get highest priority
.....personally for f&o.....i have - return
swing style ..av +;position trade......++; as i have strong oilfield background....
so its market proven me right[lucky i should say]
so i decide to improve my fundamental ....go back to advance financial
management....so to learn the technique of my enemy trade warriors[fund
manager].....may take 2yr
.....so things go alright as a pro in market in 2010
-----------------------------------------------------------------------------------

To be a Trader-20yrs Page 21

Trade Element - SOFTWARE


04 July 2015
10:34 AM

I CHOOSE..METASTOCK...OLD PRO KNOW..IT CAME .. 1993..DALAL ST. ADVERTISE


SUGGEST THAT...
IN 2002...I TOOK IT...in understanding it atleast levelbasic..
1yr..then the data vendor...
in2003..i went to play some tournament..SEE AD..
MEET VIRATECH...THOSE DAYS.. MR MOHINDER..ALSO
GIVE SOME GUEST LECTURE...@IIM-C....SO UNDERSTOOD
.. ANOTHER AD....ALBATROSOFTINDIA.COM...PREPARE DATA..
FOR CALCUTTA STOCK EXCHANGE..CHARGE.. 5000/....
SO I TOOK FROM THEM...MAINLY..AS HE GAVE ME XEROX
OF META..7... 500PAGE BOOK..
SO AS THE TIME ..I GOT AV 20000/ MONTH..RETURN..
I AM FOOL.. AS SIGNAL GENERATE..I ENTRY . NEXT DAY..
USING SOME COMMON SENSE...MARKET IS SILLY
SO FAR GREATER FOOL PRESENT I ALWAYS CAN MAKE MONEY..
ACTUALLY..MARKET..IN BULL MODE..BUY AND HOLD SOME..
LUCK IS CORRECT WORD..
DONALD CASSIDY VIEW. BASIC ON CHART PATTERN..
AND IT IS SELL THAT COUNTS..
THIS ARE... HELPFUL.. ATLEAST TO ME...
EQUIS.COM..READ METASTOCK TUTORIAL & FORMULA..JOURNEY
TO NEXT STEP....THOSE WHO HAVE..TRY HIS HAND ON META PROGRAMME...THE
STAGE I HAVE GONE..
THOSE WHO R INTERESTED...PL. REFER...META-FORMULA.COM
THEIR VIDEO IS GOOD..PRIMER HELPS...
IN METASTOCK SITE...SOME PROGRAMMING R REALLY GOOD I CHECKED..
BUT THIS JOY FULL JOURNEY..I ENJOY..[I CREATE IT PHENOMENA]..
THEN COMES.. MY FIRST..DEBACLE..MINOR FALL . PRESSURE HIGH...HEAD
INJURY. .DEC'2003..AFTER..SCAN..AMNESIA..YES I AM BED RESTED..15DAY..
I KNEW I HAVE TO GIVE UP DREAM RUN .. PROFIT MAKING VENTURES../CHESS ..
BRIDGE..
STILL I HATE..HATE..THAT DAY..[i cry .. tear comes now, hey..i am an emotional fool..
in actual life..]
50% sell in one go of holding...9/10...january'04..
signal is coming...[ask any metastock trader..he has seen it]..
so by 14th january.. i seat on cash...
AGAIN MAY BE LUCKY....BY MEDICAL ADVICE..I CAN NOT TAKE LOAD..
SO I START SELLING..LEARN WHEN TO GET OUT..
RATIONAL BLOCKADE..OF MARKET MOVE UP.NOT WITH ME..
ATLEAST NOT THEN ..NOT NOW...
IF PRICE MOVE I HAVE TO ENTER..IF ITS TOPPING I HAVE TO GO HOME..
PLAY IS OVER...FORGET IF & BUT.. TAKE REST..
I READ NEWS PAPER...BUT I STRICTLY FOLLOW..NO TRADE.,no invest
.. ya.. i predict...i talk ..just nostalgia..no chess..no bridge..no stock..
election result..2004 May.. all trade veteran know..its an oppurtunity..
july budget.. another oppurtunity..all gone.. [ yes i am not to give stress to
brain..only..learn my job...transfer to Newbombay...in may..phone connection coming
only.. 27.11.04...discipline by accident..]
so comes phone .internet..my data still life..on holiday i go to internet cafe to see..
December takes time to study..to recollect..some useful thing.....
target plan ..30000/ month.. entry.. exit..21days swing..
stop.. 6%...style small-term position play..
ya,,i achieved..art of being lucky..[coursey fii money flow..cram concept]
so i bought data again ..chart guru..29.1.05..1yr..5000/...again short term
play.. but profitability coming down...[actually market condition changing]

To be a Trader-20yrs Page 22

my job is complex..new place..new idea..i have to..learn..OFFICE WORK FIRST..


IN GEN. SHIFT YOU CANT SEEN SCREEN ..HOW I VISUALISE TRADE THEN..SO I HAVE
GIVE UP THE SKILL OF READING ORDER..BULL/ BEAR WHO..
IS WINNING..ITS IPKF..IN SRILANKA FIGHTING AGAINST LTTE..STRICT RESTRICTED
SHOOTING ONLY ALLOWED..
office rule ..trade site forbidden[i use pib]...
i sort out..in angel i have an a/c...i activate ..deposit 5lak..
[that help to get better status..]..talk to their branch..twice i come in
and talk with..bm...+ bala..[dealing hand]..BALA.. NICE FELLOW..LEFT AFTER ,I TELL
SIMPLY FOLLOW PRICE..GAVE ME 1ST CUSTOMER PRIVILEDGE
..ATTEND MY PHONE AND ORDER IMMIDIATELY..
VOLUME STUDY TECHNIQUE..BUY ORDER/ SELL ORDER..
WHICH SIDE NEW ORDER IS COMING...
IN RETURN I TEACH HIM ITS VALUE ..VALUE OF PRICE BALANCE..
[naturally he is a call giver in kotak{last known whereabout}]
he helped again to day trade..i study eod ..know potential..
enter early..he considers 'RISKY'..BUT MAINTAINS..ROLE OF EXECUTION..
sell value zone...given ...and i have to tell 80% of time he execute in higher zone...
so far so good..i enter 5 call max..in his good faith...
alas he left.. angel.. so also my luck...
luckily..internet offer has come..18/5/05/..i have mtnl 399 broadband with me..i
activate...pib..branchmanager is very help ful...activate..give...call trade ..as wish...
smooth..... lucklady smile..
crookedly...power generation stop 8..10-30am..navimumbaikar knows..
.[ recently i bought.apc...to solve this ragging]
draconian rule of indiabulls..from march'o6...voice mail system..no trade...
new recruted.. foolest..data entry operator..
no day trading is possible..at least for me...
u require..good rm..[not a profit generator.but LOGICALLY WHO CAN THINK ,
MATURE..UNDERSTAND RISK..NOT A RUMOR SPREAD..unfortunately
its rare breed now..]
a good dealer..like bala..[understanding..of price..skill to execute.calling back
customer..telling what he wants.. matter of fact...]
may be new breed..moth -investor..wants an opinion even from..
rm/dealer...high demand pull up dealer..to rm..rm to bm...
vaccum should be filled up ..new entrant...i say just in capable..
callcenter. boys...not suit trading arena..nse exam pass must be made compulsory..[its
my personal openion.nobody has to agree]
SOFTWARE.../
i have seen omnitrader...its good..so for those who have emotional problem..
its a computer gen .. signal low risk idea..work metastock data format..
around 20 predefined.. callgen . are there..computor does every thing..
i use eod...albatrosoftware.com..calcutta..nirvana system originator..ed
its game mode is excellent...you move 1day price & play..
on actual price..it plays...show your euity curve..
takes atleast 6month to understand it..those who believe in control
emotinal entry/ exit..is must...
for game go iitm.com..it preach money management..
bill williams software..also.genarate..good chaos theory..
will discontinue soon[ based on chaos..i dont recommend]
but u can plug in with meta..
those who believe in pattern..its repeatative occurance..pattern plug-in murphy..ok...
but before you use..actual failure of pattern 52%..
CONTEXT..IS MORE IMP...
THIS SOFTWARE.EXPLORE & TELL ..STD TRIANGLE..DOUBLE TOP/BOTTOM
HEAD &SHOULDER...OUT OF NSE SCAN AND TELL U IN 2MIN..
in actual trading failure of pattern gives me more money...
wedge play and buy at pull back is safer.
those who firmly believe in pattern..i remind pattern smasher..introduced india..by
To be a Trader-20yrs Page 23

those who firmly believe in pattern..i remind pattern smasher..introduced india..by


viratechindia..how many r actually sold..they still may have copy...
its function is based on some bull pattern..
some bear pattern.. SCAN TOTAL FOLDER..
GIVE U RESULT & ITS STATISTICAL SIGNIFICANCE
FORWARD TESTING FACILITY...AS IF PREDICTING WHAT MAY HAPPEN IF
SAME CONDITION EXISTS...
nice for an experimental trader...
now comes dt dynamic trading cncept...
yes i like..price-time-event..concept..
presently i am working....at least it shall take 6 months
it uses concept of elliot..+reversal..+ gann swing..
more over it has some buildin set up...scan report...
no other software..ad jet.../ ami broker...i have not seen them...
MT-PREDICTOR...
IT HAS DIRECT RISK REWARD ANALYSIS TOOL...i am asking if any body
seen it.. only software i hear ..may be..useful in india...

To be a Trader-20yrs Page 24

Using Fundamental Analysis


04 July 2015
10:34 AM

Using fundamental analysis,,,


.............................
many excellent research report r available...
et.. research report good...
motilal excellent...
share khan..angel...ok
indiainfo...good..
hdfc/ilf&s..ok..
equitymaster..good...
MUST REMEMBER...ANALYST HAS LONG TERM VIEW..
MANY FUND HAS OWN REPORT..THEY R EXCELLENT..I AM NOT SEEN THEM
WITHIN 1MONTH OF PUBLICATION..
THEY BUY FIRST..THEN PUT BUY CALL..PUBLISH...
SAFE ...you doubt me...check fund buy report..
dt of publish of REPORT
dt of report..publish to newspaper..
public buying ..
ref use..nseindia.com..volume study of those day..
delivery%..
VISUALISE..A BLIND EVEN CAN SEE...
READ NEWS PAPER..PARTICULARLY..ORDER POSITION..
News Play
....................
Result Session...
See Last 1yr..4 Qu...compare..what Is Expected... Now Get Some One What Is
Background...20%..av,..already Discounted..
Unexpected Good..buy...
Very Bad Result..but Price Not Falling
Buy Slowly...
All Other Case..use Result Publication To Get Out...
OTHER NEWS
...................
MUMBAI FLOOD..MARKETNOT FALLING...I BUY..
TRAIN BLAST...NO PANIC FALL..., AGAIN I BUY
MARKET TELLING ME NOT TO FALL..I SELL HALF...
HEY,,50% pofit booking i feel..ok..less risk..

some more thought


........................
mark crisp..swing plug in ..very cheap
backtested...but actual market.. not clicked in india...
ECONOMICTIMES..HIGH VOLUME..LIST..
FOR DAY TRADE ONLY..PLAY AGRESSIVELY IN MARKET ..1/2% PROFIT..
ONLY SUITABLE FOR DEALER..
FOR RM ONLY...AFTER RESULT OUT..PLAY IN DIRCTION OF PRICE,,
PROVIDED NEW ORDERS [VOLUME]..R COMING..
YOU PLAY MARKET..ITS AMOMENTUM PLAY..
XXX NOT SUITABLE FOR AMATEUR...

To be a Trader-20yrs Page 25

CAN I BE AN INVESTOR
................................
ONLY INSIDENT...I TELL..AKSHARDHAM BLAST...ITS JUST AFTER BUDGET...
I SEE VOLATILITY...I WAS @MADRAS..CHESS TOURNAMENT..
... I RETURN HOME...[GUJARAT]...1 WEEK STUDY PANICK...
MY REPORT...LAST 6MONTH..TOUR..MUMBAI..SOME PEOPLE INTEREST
ONLY..GUJARAT..30-40% STILL PLAY STOCK..NO OLD CRAZY..
CALCUTTA..LEAST BOTHER..
DELHI STOCK EXCHANGE..BROKING SHOP THOUGHT ..NO FUTURE..
DEHRADOON..AM I MAD??I ASK STOCK..
I ASK A SHOP OWNER..[ SUBBROKER..HE USING HALF SHOP FOR ..XEROX...]..'NO
HOPE'..
I TALK MY SENIOR..HE SAID ITS BEST TIME..contrarian..
no more..people listen his tips...
haha...yes....i bought 10lak..holding L&T..RELIANCE..SATYAM..
SBI..NATH SEED..PENTA..POLARIS...MODERN DARLING
ANSAL PROPERTY..BILT..CENTURY..
GAIL ..
YES I DOUBLED..ANY OF YOU COULD MADE 10 TIMES....
by the way i buy...simple reason...
if so less interest in india...when money...comes..
market...must move up...
this time i am not lucky...my conviction ...
yes a fellow traveller knows better..
though he dont know RULES OF GAME...
ANOTHER REMINISCENSE
.....................................
JULY2005..I GOT A CALL TO PLAY...
I REACH DERHADOON.. I REACHED11PM..
GOT A PARTNER....
LUCKY A FORCED BACHELOR...
WE PLAY DIFFER IN EVERY RESPECT...
BUT HE ACCOMODATE ME..HE WANTS WIN...
THATS THE EASIEST THING ..I PLAY BRIDGE...
A KNOWN CARD ADDICT...
IN COLLEGE JOKES IN DEATH BED I PLAY CARD..
EVEN AFTER SEVERE BRAIN PROBLEM . I DONT COUNT CARD..
I SIMPLY PLAY TO WIN..WE SELECT...
NEXT A TOURNAMENT...IN UP...
AGAIN WE WON AN EVENT...
IN ANOTHER EVENT...I CUT ..NO COMMENTS...
SOME GOOD PLAYERS COMMENTED..I HAVE TALENT...
i say NO...i learn it in 1970..stay with it astime passes..
played state.. selection in 1984..[ofcourse lost..but no tournament fear..]...so a 30 yr
veteren not make silly mistake..
this gave me joy..in critical moment.. subconscously i play well
it is the tuning..around 20 trophy in bridge career...
i feel the void again in mind again...in january'06..i dare..
to sit in an i q. test.....yes no more..intelligent...135 .ok...
what it tells
.........................
1] experience counts..
2] have patience...
3] in effort if no gap exists..[strong base]......success must come back..
4]u have some +pt..use killing instinct...
5]no ifs & but in competition..
To be a Trader-20yrs Page 26

5]no ifs & but in competition..


transfer one field success to another..
..
FOR making money
............................
know who u r...
how much time u can spend on u..
can u learn to write to u...practice...
your short term plan your long view...they must not foul...
[here i see many failure]..
any pro who can help..search him/her..
or believe single solo journey like this fool
DONT give money to mutual fund/ if big amount give pms..
if finance line/ a half pro..
follow journey path..
yes, 1990...8000.....experiment...
1991.........20000/. further.. i add
1992.........20000/..
1993.......i encash..........2 lakh...
1994.54......holding value 2 lakh ....vanishes...
never in life i believe i buy & hold..
1997 experiment...fail
2000 experiment fail

2001-02 come back as day trader..


make money...shear luck
2002..03 trade...diciplined to earn..
2003.... encash investment[ now i understand value of holding]
run family from trading@20000/month
2004 i stay out on medical advice...
2005 i play...any fool. provided dont short'..can earn
2006 win some..loss some.. fig wise nomore..small investor..
%wise.. return..18..
learning volatility..
practice mm
2007.. i found too risky...occational entry & quick exit..
recent play..cmc..eil...bel agro dutch..ongc
present play...arvind..dlink bpcl
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Here I am writing
.
Trade element.
1] you..swot ..time to learn..your natural patiencetime u have..
BELIVE IN REALITY ,NO WISHFUL THINKING
2] marketyour believe on market
your ta tool mastery
your fa tool mastery
info network
3] fund to learn and experiment..
play less analysis more..use diary..
many help available @traderji.com
To be a Trader-20yrs Page 27

many help available @traderji.com


4] PSYCHOLOGY
readbook of dr elder..
market wizard series
mark doglous
ari kiev
Livermore

5] personality& trade analysis


dr van tharp
dr bill William
larry William
Linda
Mark boucher
Dave landy
RAKESH JUNJUNWALA
6] trade system design
..
Bernstein
Kaufman
Tusher chande..
Martin pring
Technical trade system
Instant profit
7] individual choice
bird watching in lions country
phantom of pit
personal softwaremetastock & omnitrader
8] trading styleits an individual choice
9] recent experiment.
Dynamic trading..and trend dynamics
10] encyclopedia of chart pattern
candle stick chart study
11] most useful concept
..
money management
risk control
12] yet to learn

volatility
optimum stop.
FUTURE DREAM
..
A PROFESSIONAL TRADER AFTER 3 YR

EXPERIMENTAL TA..
1] TREND AND NON TREND BOTH EXIST IN MARKET
To be a Trader-20yrs Page 28

1] TREND AND NON TREND BOTH EXIST IN MARKET


2] RANDOM NESS HAS ITS ROLE
ITS AFTER BREAKING OF RANDOMNESS TREND STARTS
WHEN TREND TERMINATESITS DIFFICULT TO PREDICT
3] PRICE PREDICTION AND STOP GIVES OBJECTIVITY
HOWEVER.. BASED ON WHAT PRICE TELLING U MUST EXECUTE
CONTROL OVER MIND MOST IMP.
4] SCANNING TOOLPORTFOLIO CONCEPT HELPFUL
hope u enjoy this view..
this view r personal and suits me
--------------------------------------------------------------------------------------

To be a Trader-20yrs Page 29

What may work in indian stock market


04 July 2015
10:35 AM

What may work in indian stock market


.................................................. ...
1] tipstars days r over..stock stars DAYS r coming
2] definitely VOLATILITY play [prepare a tool/plan to use it...i try to learn now,till date failed]
3] result play...try to know estimate before hand....compare its surprise factor
4] rumor play...who is sponsoring...operator..behind any game...
mind is its RUMOR..
5]buy at pullback
6]longterm contrarian view...what goes up must come down..
7]fund flow...fii..rbi policy
8]YOUR CONFIDENCE..FLEXIBILITY..EXECUTION SKILL

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
While surfing the net, i found this interesting article .
1. Trade for success, not for money.
Your motivation should be first and foremost to make a well-executed trade. If money alone is your motivation you will severely limit your chance of
success. Why? Because focusing on money will raise all kinds of emotional issues, from fear to greed. It will make you afraid of losses to the point that you
will abandon your discipline. It will tempt you to trade too often, too large and with too much risk. Whereas if you focus on making solid, well-executed
trades - even if the result is a losing trade that you exit quickly - you will reinforce your discipline and increase your trading potential.
2. Discipline is the one quality that all traders must possess above all others.
The ability to master your mind, your body and your emotions is the key to trading. The disciplined trader - regardless of profit or loss - comes back to
trade another day. A great intellect, the ability to take on risk, or even a sense that you're somehow 'lucky' mean nothing without discipline. For a trader,
discipline means the ability to devise a trading plan, execute according to that plan, and to never deviate from that plan.
3. Know yourself.
Do you break out in a cold sweat at the mere thought of risking something - such as your own capital? Do you think of trading like 'gambling,' a long shot
to make a million? Or can you handle risk in a disciplined fashion, knowing how much is 'too much' for both your capital and your constitution?
Trading is not for everyone. If risk makes you ill, on the one hand, or if taking a risk brings out the recklessness in you, then trading is probably not for
you. But if you can handle risk with discipline, then perhaps you can find a vocation or avocation as a trader. Only you can answer that question.

4. Lose your ego.


No matter how much success you enjoy as a trader, you'll never outsmart the market. If you think you can, you're in for a very humbling experience. The
market rules, always, and for everyone.
You need to silence your ego in order to listen to the market, to follow what your technical analysis is indicating - and not what your intellect (and your ego)
think should happen. To trade effectively, you need to put yourself aside. At the same time, you cannot be so emotionally fragile that unprofitable trades
shatter your confidence. Don't be crushed by the market, but don't ever think you've mastered it, either.
5. There's no such thing as hoping, wishing or praying.
I've seen too many traders staring panic-stricken at the computer screen and begging the market to move their way. Why? Because they have lost their
discipline and allowed what was a small loss to turn into a much bigger one. They keep hanging on, hoping, wishing and praying for things to turn around.
The reality is on the screen. When the market hits your stop-loss level (the price at which you'll cut your losses at a pre-determined level), get out.
6. Let your profits run and cut your losses quickly.
When the market goes against you and you hit your pre-determined stop, exit the trade. Period. Exit when the loss is a small one. Then reevaluate your
strategy and execute a new trade. Keeping your losses small will keep you in the game. Profits take care of themselves, as long as you execute according
to your plan. When you place a trade, know in advance where you'll exit for a profit. When the market reaches that level, exit the position. If your technical
analysis tells you the market still has some room to move, then scale out of the position. But execute according to your plan. Remember, you'll never go
broke taking a profit.
7. Know when to trade and when to wait.
Trade when your analysis, your system and your strategy say that you have a buy or sell to execute. If the market doesn't have a clear direction, then wait
on the sidelines until it does. Keep your mind on the market, but keep your money out of it.
. Love your losers like you love your winners.
Losing trades will be your best teachers. When you have a losing trade, it's because of some flaw in your analysis or your judgment. Or perhaps the market
simply didn't do what you thought it would. When you have a losing trade, something is out of sync with the market. Examine what went wrong objectively - then adjust your thinking, if necessary, and enter the trade again.
9. After three losing trades in a row, take a break.
This is not the time to take on more risk, but rather to become extremely disciplined. Sit on the sidelines for a while. Watch the market. Clear your head.
Re-evaluate your strategy, and then put on another trade. Losses can shake your confidence and tempt you to become emotional (fear/greed) But if you
take a break, you can gather your wits and regain your composure more quickly than if you become very emotional and angry at yourself and the market.
10. The unbreakable rule.
You can break a rule and get away with it once in a while. But one day, the rules will break you. If you continually violate these 'commandments' of trading,
you will eventually pay for it with your profits. That's the unbreakable rule. If you have trouble with any of them, come back and read this one. Then read it
again.
,,,,,,,,,,,,,,,,,,,,,,,,,,,
1. Loss of opportunity is preferable to loss of capital.

To be a Trader-20yrs Page 30

1. Loss of opportunity is preferable to loss of capital.


There was a time when I felt it was my duty to be personally involved in every wrinkle of the S&P. I've traded this market since it's inception in 82. It took
quite a while for me to realise that picking safe, readable, and high probability winning trades was the way to go.
2. Use Logical Profit Objectives for all positions.
The concept of using and executing LPOs is one of the most important I know of. It keeps your percentage of winning trades high and gets you back to the
computer the next day. Everyone enjoys a pay day. With the correct concepts this is something you can do.
3. Place your Logical Profit Objectives in the market ahead of time. Markets are squirrelly animals. If you know how to calculate your profit objectives, get
them in the market ahead of market action. If you wait for the alert to go off, hoping to capture more, it's likely the market will move away from your exit
before you have time to execute your order.
4. Enter markets on retracements.
Don't buy new highs or sell new lows. Wait for themarket to come to you. Precalculate your entries and be patient. If you miss the move another bus will
come by shortly.
5. Above all, follow your trading plan
Having a clearly defined trading plan is the single most important aspect of profitable speculation. Never trade without one and once you have it, following
it is more important than any single profit or loss.
6. Trade quietly.
With the exception of a mentor, tell no one about your positions, profits, or losses. Especially those close to you, like your wife, husband, or friends. This
self-gratification process or sharing process puts you under psychological pressure to win on every trade and can be a primary reason for failure to follow
your plan.
7. Don't carry a sizeable position while traveling.
It will catch you!! The laptop won't work. The hotel internet connection will break. The cell phone battery will run out. The plane won't land! I know you'll
try it anyway. It's good for the markets, we need to spread the money around a bit.

8. 'You are only one trade away from humility.'


For over 15 years this tattered hand-written sign, scrawled with bold black strokes with a magic marker, has hung over my trading table. A swelled head
does not belong on a trader's shoulders.
9. Add to your knowledge before attempting to add to your wallet.
this is good rule,
a person if plans to come to stock market...
must decide first...what to choose...a pro's path..
an amateur's approach of part time...
NONE OF THEM ARE EASY...........
after development of your interest in market..u must check whether u suit here or not.....
pentagonal peg and 5sided hole...an easy ? quick check up pt...
1]your risk profile...market risk concept
2]your fund...your plan increase it ..proper utilisation of fund,when to sit idle....when to play aggressive
3]your knowledge bank...steadily u have to increase..judicious use of it
4] understanding market shalloffer oppurtunity...patience and discipline your two weapon
5] a stable analysis power , when to play PREDICTABILITY when to use RANDOMNESS.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
SO SKELITON IS FORMED....
now other thing r easy...[patience man , still u reqd. some yr]
next step...
open your past trade report........
on what condition u trade right..
on what time u have best profit utilisation
day...high low range..
week ..5 day high low
3week 15 day high low..
2month 40day high low....
.....................this way it can go on.
BASIC IDEA IS YOUR PROFIT/ HIGH..LOW..OF THAT TIME FRAME
THIS IS YOUR EFFICIENCY....[ SHOULD BE >30%]

IF BELOW 30, ENJOY AMATEUR STATUS..NEVER DREAM BIG...


now check wrong part of trade...
how far its for silly reason...
i]like believing infallibility..of an indicator...
ii] sudden lack of concentration on OTHER PRIORITY of life
can u eliminate? Create condition of when NOT TO TRADE...

SO u r developing an approach..
stick with your winning habit...
throwing out..unproductive one...
NOW COME OPTIMISATION OF YOUR APPROACH
AT WHAT PREMISES U TRADE BETTER...
AT WHAT STOP LOSS STYLE...STOP % ..YOUR OVERALL RETURN IS GOOD

To be a Trader-20yrs Page 31

AT WHAT STOP LOSS STYLE...STOP % ..YOUR OVERALL RETURN IS GOOD


SIMPLY STICK ON IT....
this process take atleast 1yr
now comes imp aspect of trading
...............................................
its not trading but timemanagement..and stress control
your daily routine...
how far u r discipline ..in personal life..
how far u can take stress...know your elasticity band
your time management skill...alotted time for study
study market...
analysis for trade...
scanning of idea. based on news...
stock scanning based on chart..
plan of action what other trader may plan ..how far they follow u after entry..
what r DANGER ALERM signal?

here actually pro beats amateur easily


pro sees reality..amateur eyes mostly with spec of greed/fear/hope..
pro study 3-4 hr... amateur hardly 2hr
pro watches market, improving would have,could have..for 6hr a day..
amateur..some phone call, others version..some momentary snap decision...
no man its one sided Brasil-india football match ...only watchable when..foolish young pro vs..exprienced visionary amateur..
back to time...for an amateur..two hr per day+ 3hr on holiday...
time utilisation of 2hr...
what your favourite indicator telling
what close price indicating..
any particular sector has any new fundamental improvement..
sudden volume surge why??
so 2 hr is over....
but pro... he studies -NOW CREATE A SUITABLE PLAN TO EARN MONEY..
A WINNING STRATEGY...AND ITS TACTICAL IMPLEMENTATION
DURING MARKET HR FOR NEXT DAY....
for amateur...week end study..must...
to study new implementable idea..
bill analysis..why u enter and exit a particular trade...
how u would have used your money management technique..to make more profit...
i definitely suggest NEVER TO USE MARGIN in 1st 3 yr of trading..
a simple idea..use 50% money idle..add aggressively on winner only.

To be a Trader-20yrs Page 32

Stock Scan Model


04 July 2015
10:36 AM

stock scan model


.........................
volume + price increment...definitely good model
for momentum player..aggressive style..
for swing trader.. swing indicator better..
keep an eye on nifty..and fii money flow..
rbi policy..
result out play plan must be planned in detail before it comes..
so that u can execute..as and when necessary depending upon your risk appetite..
all of us know..exit is imp ......
i personally feel implementation of exit must be studied in detail..
its just like postmortem...atleast 1month..after..day trade...
3month after swing trade
in a cool brain no distorted vision...u can judge your trade strength
REGARDING INVESTMENT CONCEPT..
..................................................
CNBC-TV18..HAVE DONE EXCELLENT CD COMPILATION..
JUST FOLOW IT..[U MUST BUY]

SYUDYING YOUR MISTAKE


........................................
its another imp place for self improvement...
FORTUNATELY..MANY CLASSICS R AVAILABLE
JUST READ THEM....
SEARCH HOW MANY MISTAKE U FOLLOW now...
just try LEVEL BEST to eliminate them...ONE AT A TIME...
IF ITS MORE THAN 5, SIMPLY TURN BACK FROM INVEST & TRADE ARENA...
consider GRAPES R SOUR...
BELIEVE ME IT SHALL SAVE YOUR TIME & LIFE...
in personal journey i have seen around 300 old experimental veteran
ask any failed attempt..ias candidate...if he ever open his/her heart..
...........u shall understand[ i have my part]
Element of trading
............................
background: trading must be treated as business. risk capital +time +attitude
to learn and do necessary behavior modification
1. risk management and survival first..since trading works in unpredictive arena ..how u handle loss is very imp.Small loss should never allowed to
turn big..however price fluctuation zone should be taken care of ..so optimum stop
2.right attitude...let profit run..benign neglect ..book partial profit
sar..if market turns opposite
3. add winners ..is most difficult to implement..not possible in daytrade or short term
4. advance concept..play aggressive with winner ..higher fund allocation..hence keep fund idle for suitable oppurtunity..
modified view..contrarian buy at temporary low of market
5. since most of things r subjective..emotional control is supreme priority..
development of entry / exit ..a system is a method to do so..
purpose of it to stop emotional burning and +expectency..hence if u prepare it ..follow it strictly..
6.system may have subjective part..lower the time , more mechanical it should be ..for day / short term price study governs.
indicator / backtesting help suitable confidence..to implement..
7. stock selection and timing other 2 critical element.

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
as trading game is search of oppurtunity/ against risk of ruin..balance plays the pivot..balance in life..balance with low risk with high reward ..
time management..as well as write own trade performance..
u must know what works in market...
unfortunately it different time frame criteria changes.
ime element...
it takes time to understand..realisation of capability ..dream vs. reality
patience to bloom oppurtunity[let profit run]

time to observe[search mode] and right time to implement[execution]


but we forget TIME TO LEARN..
DIFFICULT ONE.. time to check own performance[what i am]

To be a Trader-20yrs Page 33

Time Frame
04 July 2015
10:36 AM

TIME FRAME
..............
tree must be seen before branch...bigger picture must be taken first.
economy/world view/political position ..ofcourse..fii cash flow at present
...understand my view..its not bullish/bearish ..nor goal..
upbeat on economy..
funding
stability or continuity...this 3 element only....
for fii cash flow...a comparative base 10 days ago[2week]
this is only tool i use for fundamental element.
what way they r related with timeframe?
..............
they decide whether to continue or quit .
act aggressively or play defensively..without this, time element can not exist.
if all of them r favourable .. then take trade .
in cross current. .for shorter time frame..be ultra cautious.
If it is unfathomable..hold cash.
all negative, play short on nifty..
.
so time to act has been decided..
only timeframe that suits u. where u can think/visualise .
visualise what may happen .....that is happening later..
can u execute ?another critical question!
if not, place order on phone..allow others to place order..
let other may see the screen.
but decision making process should not be fought with internal dilemma.
its a known fact in chess..half hr chess is better than 5min..1 hr rapid is better .2hr is further better..classic chess brings out of a champ...
definitely time to think improve quality...quality of selection and timing...

and see the ploy/decoy..so called news trap and marketing/gimic...


foolish greedy bull trap...
fortunately u , trader has another weapon..time out....stop loss
we chess player fight ..fight to save ..hope for opponent mistake...
better is quit...accept loss.. no hope..use TIME....time to find oppurtunity
write lesson learnt...
time to search opportunity plays heavily in trading...however for exit more mechanical approach is helpful.
in chess u write . then u play on board...
same way u write a plan ...see price confirmation then place order.

hence choice of a higher time frame necessary to act...


for daytrade..eod data ..decision making + hr signal good...
for intraday...software..higher high break on smaller time [ 3min/5min] +increment in momentum / volume surge..with small target execution is key
for short term trader eod + week base signal ...
position trader [ cold blooder murderer to rob ur money]..plays with subjective judgement..allows profit run..use break out/ pull back as necessary
..applies suitable tactics as when necessary...simply get out when wrong[infact they use time stop from hara-kiri]...experience...chain to get info..
professional friend and leverage..all tools r used...
yet sometimes they lose..when they are NOT ready change...with blockade
market directional view
hence depending upon actual you...can choose any time frame ..with greater accuracy level...another higher time frame for clarity of thought..
however check performance..take membership..a performer in that time frame...to minimise scanning time...performance analysis..execution idea must
if u know math/ computer/ have time ..software...day trade is best..
av with experience...short term...as oppurtunity exists
good knowledge/part time ..view on life..ready to work hard..wait for oppurtunity...try to be a position trader...use weekly chart..10day cycle...

To be a Trader-20yrs Page 34

Basic Psychology
04 July 2015
10:37 AM

BASIC PSYCHOLOGY

There are 3 most factors that effect a Investor or a Trader in the Markets.
Of them are Greed, Fear and Hope. I will list a brief description of each of the below.
Greed: taking the meaning from Webster's (noun)
1. Excessive desire to acquire or possess more (esp material wealth) than one needs or deserves.
2. Reprehensible acquisitiveness; insatiable desire for wealth (personified as one of the deadly sins).
Greed always says, wait a little more so that the holding will rise and can make more Money.
Fear: taking the meaning from Webster's (verb, felt more appropriate)
1. Be afraid or feel anxious or apprehensive about a possible or probable situation or event (example: If I dont enter this stock now, I will loose on it).
Hope: from Webste'rs (verb, best suited for Markets)
1. Be optimistic; be full of hope; have hopes; "I am still hoping that all will turn out well".
2. Intend with some possibility of fulfilment; "I hope to have finished this work by tomorrow evening".
Well holding a loosing position even if it down to 20-30% ? This is Hope, that make you feel that the stock will go up and you can recover your losses.

No one can shy away or exempted from these 3 factors when involved in the Markets. Let it be those FII's, Fund Managers or our new breed of Tech Savvy
Brokers, Professional Traders or the Retail Investors.
When this thought comes that, which breed of Traders/Investors get killed or maimed in a Steep Correction? The answer was simple, 90% of the time, the
retail investors followed by Professional Traders, Mutual Funds (unless, they have a really Bad Manager like me ) and very minismal are the FII's.
Why so the retail investors get killed, when the same GFH Factor governs one and all? Well, the answer is simple, if you understand the markets very well
and for the laymen it goes this way.
The simple difference between Life and Death in the Stock Market is controlling the GHF Factor. The less the GFH Factor, the more the Survival here.

That is the reason, why the FII's, Mutual Fund Manager and Professional Traders survive here more than retail investors. Since they know how to control
their GFH Factors.
Variably or Invariably why others can control their GFH factor and why not the retail? at the end all are human beings! The thing is there are checks and
balances in terms of methodologies to control the GFH for the Big Guys, there is no one to control a retail as he his a Boss for himself. Thats how the self
destruction starts.
The 3'Ms: The 3'M ( Mind, Money & Methodologies) will help you control the GFH Factor. I am lifting this straight way from Alexander Elder's book (Trading
for A Living & Welcome Into My Trading Room).
1. Control the Mind and overcoming the emtions ( GFH Factor).
2. Protect your Money( maximize profits and cut losses by Proper Entry and Exit Plans)
3. using Methodologies ( Pyramiding, Reverse-Scale Techniques, Stop Losses)
Also, these days Trading Systems are available for dirt cheap. If you want to make money, be ready to spend money to get your proper setup.

Like
1. For a swing or short-term trader, a EOD Charting Software is more than Enough
2. For a Day-Trader, access to Real-Time data is crucial, even a 5 min delay can kill you.

I may have presented this not in a orderly fashion, but most of them I learnt some myself, some reading books and some from the Traderji forum.
Step One: Unconscious Incompetence.

This is the first step you take when starting to look into trading. you know that its a good way of making money cos you've heard so many things about it
and heard of so many millionaires.Unfortunately, just like when you first desire to drive a car you think it will be easy - after all, how hard can it be?? - price
either moves up or down - what's the big secret to that then - lets get cracking!
unfortunately, just as when you first take your place in front of a steering wheel you find very quickly that you haven't got the first clue about what you're
trying to do. you take lots of trades and lots of risks. when you enter a trade it turns against you so you reverse and it turns again .. and again, and again.
you try to turn around your losses by doubling up every time you trade - sometimes you'll get away with it but more often than not you will come away
scathed and bruised
Well this is stage one - you are totally oblivious to your incompetence at trading.Stage one can last for a week or two of trading but the market is usually
swift and you move onto stage two.
Stage Two - Conscious Incompetence

Stage two is where you realise that there is more work involved in this and that you might actually have to work a few things out.
you consciously realise that you are an incompetent trader - you don't have the skills or the insight to turn a regular profit.
During this phase you will buy systems and e-books galore, read websites based everywhere from Russia to the Ukraine. and begin your search for the holy
grail.

During this time you will be a system whore - you will flick from method to method day by day and week by week never sticking with one long enough to
actually see if it does work. every time you came upon a new indicator you'll be ecstatic that this is the one that will make all the difference.
To be a Trader-20yrs Page 35

actually see if it does work. every time you came upon a new indicator you'll be ecstatic that this is the one that will make all the difference.

you will test out automated systems on Autotraders, you'll play with moving averages, Fibonacci lines, support & resistance, Pivots, Fractals, Divergence,
DMI, ADX, and a hundred other things all in the vein hope that your 'magic system' starts today.
you'll be a top and bottom picker, trying to find the exact point of reversal with your indicators and you'll find yourself chasing losing trades and even
adding to them cos you are so sure you are right.
You'll go into the live chat room and see other traders making pips and you want to know why it's not you - you'll ask a million questions, some of which are
so dumb that looking back you feel a bit silly. You'll then reach the point where you think all the ones who are calling pips after pips are liars - they cant be
making that amount cos you've studied and you don't make that, you know as much as they do and they must be lying. but they're in there day after day
and their account just grows whilst yours falls.
You will be like a teenager - the traders that make money will freely give you advice but you're stubborn and think that you know best - you take no notice
and over leverage your account even though everyone says you are mad to - but you know better.
you'll consider following the calls that others make but even then it wont work so you try paying for signals from someone else - they don't work for you
either.

This phase can last ages and ages - in fact in reality it can last well over a year - My own period lasted about 18 months.
Eventually you do begin to come out of this phase. You've probably committed more time and money than you ever thought you would, lost 2 or 3 loaded
accounts and all but given up maybe 3 or 4 times.
Then comes stage 3
Stage 3 - The Eureka Moment

Towards the end of stage two you begin to realise that it's not the system that is making the difference.
you realise that its actually possible to make money with a simple moving average and nothing else IF you can get your head and money management right
You start to read books on the psychology of trading and identify with the characters portrayed in those books.
Finally comes the eureka moment.

The eureka moment causes a new connection to be made in your brain.


you suddenly realise that neither you, nor anyone else can accurately predict what the market will do in the next ten seconds
and you define your risk threshold.
You start to take every trade that your 'edge' shows has a good probability of winning with.
when the trade turns bad you don't get angry or even because you know in your head that as you couldn't possibly predict it it isn't your fault - as soon as
you realise that the trade is bad you close it . The next trade will have higher odds of success cos you know your simple system works.

You have realised in an instant that the trading game is about one thing - consistency of your 'edge' and your discipline to take all the trades no matter
what.
You learn about proper money management and leverage - risk of account etc etc - and this time it actually soaks in and you think back to those who
advised the same thing a year ago with a smile
you weren't ready then, but you are now.
The eureka moment came the moment that you truly accepted that you cannot predict the market.

Then comes stage four


Stage 4 - Conscious Competence
Ok, now you are making trades whenever your system tells you to.
you take losses just as easily as you take wins

you now let your winners run to their conclusion fully accepting the risk and knowing that your system makes more money than it loses and when you're on
a loser you close it swiftly with little pain to your account
You are now at a point where you break even most of the time - day in day out, you will have weeks where you make 100 pips and weeks where you lose
100 pips - generally you are breaking even and not losing money.
you are now conscious of the fact that you are making calls that are generally good and you are getting respect from other traders as you chat the day
away.
You still have to work at it and think about your trades but as this continues you begin to make more money than you lose consistently.

you'll start the day on a 20 pip win, take a 35 pip loss and have no feelings that you've given those pips back because you know that it will come back
again.
you will now begin to make consistent pips week in and week out 25 pips one week, 50 the next and so on.
this lasts about 6 months
then comes Stage Five

To be a Trader-20yrs Page 36

Stage Five - Unconscious Competence


Now were cooking - just like driving a car, every day you get in your seat and trade - you do everything now on an unconscious level.
you are running on autopilot. You start to pick the really big trades and getting 100 pips in a day is becoming quite normal to you.

This is trading utopia - you have mastered your emotions and you are now a trader with a rapidly growing account.
you're a star in the trading chat room and people listen to what you say. you recognise yourself in their questions from about two years ago.
you pass on your advice but you know most of it is futile cos they're teenagers - some of them will get to where you are - some will do it fast and others will
be slower - literally dozens and dozens will never get past stage two but a few will.
Trading is no longer exciting - in fact it's probably boring you to bits - like everything in life when you get good at it or do it for your job - it gets boring you're doing your job and that's that.
You can now say with your head held high "I'm a trader"

To be a Trader-20yrs Page 37

Take Control
04 July 2015
10:37 AM

"Take control! Make money quickly and safely by doing what others don't.
Ever tried using the 'buy and hold' strategy? You have!
Are you a millionaire yet? Perhaps not!Why Buy and Hold Doesn't Work.
At this point we need to make a clear distinction.
In this course we are talking about stock market trading not stock market investing. The fundamental difference is the time frame and the degree of active
involvement.
The investor's approach is generally long term and they are prepared to hold onto stock despite short-term reversals.
A trader on the other hand is someone who buys and sells stocks and derivatives on a regular basis with the aim of profiting from short-term price
movements.
Their perspective is short to medium term and they are concerned about the opportunity cost involved in having their funds tied up in stocks that aren't
performing.
They also use different types of strategies so have greater flexibility. Both approaches can be successful.
Our point of view is that trading provides greater opportunity for profit and ironically greater risk control. One aspect of a typical investor's approach is the
strategy -known as buy and hold.
Essentially this involves holding onto stocks through thick and thin on the basis that over the long haul they are expected to increase in value.
This approach has two fundamental problems.
The first is that stocks move both up and down.
If you simply buy stocks you can only profit if they increase in value.
Successful traders have strategies to trade both sides
of the market. So whether prices rise or fall, they can make a profit.
More fundamentally, if you simply hold onto stocks,
there is no guarantee they will increase in value.
No matter how long you hold onto them. Even if you
choose so called good stocks this is no promise of
success. Indeed, this approach can be very dangerous,
even devastating.
Lots of investors lost an awful lot of money on these
stocks and others like them. You can see that simply
holding onto stocks can be very risky.
But we will show you how, if you know what you are
doing, trading can be a relatively low risk approach.
So how did buy and hold become such an unquestioned
piece of received wisdom? Like just about any strategy,
it worked when the market was going up.
Stocks rose for such a long time that the buy and hold
concept seemed flawless. But Stock prices can and do drop suddenly.
Buy and hold is really just buy and hope.
So stock market trading is our preferred strategy and
the one we will explain in this course.

But there are two key issues you need to appreciate


about this approach.
The first one is time.
Trading is more active than investing and so requires a
greater time commitment.
Depending on your style of trading this can vary from
a few hours a week to several hours a day. And some
strategies require you to be involved in the market
when it is open, whilst other methods can be managed
out of hours.
Our course covers a range of trading systems that can
suit your time frame.
The other issue is your mental attitude.
Trading requires a different mindset to investing.

To be a Trader-20yrs Page 38

It is not a set and forget approach.


You need to actively manage your trades and be
prepared to act quickly when the situation changes.
there
are only four analysis techniques for selecting stock to trade.
1]Market Cycles
2]News
3]Fundamental Analysis
4]Technical Analysis

And you may also remember that of these four techniques we prefer technical analysis.
As distinct from fundamental analysis, technical analysis
provides precise mechanisms for trade entry and exit.
And the critical decision we need to make on daily basis
is which stocks do we choose to trade and when is the
right time to get in.
So we want to suggest to you that the best strategy for
determining the timing of your trades is technical analysis.
What do we use in our technical analysis that works so
well for us?
Our trading system can be defined as simply:
Three Simple Strategies
Three Simple Setups
Three Simple Triggers.
These things help you to do the following activities which
will be the core of your system.

1. select the stock


2. time the entry
3. manage the trade
4. time the exit.
Selecting the stock involves the following criteria:
1.
2.
3.
4.
5.

mid-cap or blue chip stocks only


optionable stocks only
price between $10 and $60 ($10 to $35 in Australia)
daily volume above one million
medium to high volatility (preferably high)

This last point regarding volatility is crucial.


We love volatility...for being on the right side of
moving markets is what makes us money.
A stagnant market means there's no opportunity for us
to make money.
[this is an australian guide]NOT RIGHT IN INDIAN CONTEXT..
we will outline in clear simple
terms exactly what strategies you need to use to
get started making profits for yourself.
We then show you exactly what Setups you need to look
for to decide what to trade.
We then give you the exact triggers you need to
use to time your entry and exit in order to protect your
capital and make profits.
That is what people have found so useful with our system.
They can protect that crucial capital that we all work
so hard to accumulate and yet still be in a winning
position
to capitalise on winning trades.
Here just a few of our rules you must follow to be
successful.
Only trade with money you can afford to lose.
Never trade with borrowed money.
Only trade when you are in the right physical and mental
state.
Only place a trade if you are at least 80% confident.
Do not trade without a stop loss.
Place your stop loss at the same time you place your trade.
Don't enter the market until you get a clear signal.
You need at least three setups and three triggers before
entering a trade

To be a Trader-20yrs Page 39

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,
never ever introduction to get highest priority..hence openion always comes last....this order should never be broken[if u want to money out of market]
bullish view.....how far market can go up ..at what time limit..
an analyst writes tcs price target 1650..it means 1sigma.66% chance of reaching tcs 1650 within a yr of time..if present condition [linear interpolation]
prevails
if he writes conservative target 1600...itmeans 95%[2sigma]
chance of achieving that target within a yr
now again on new quarterly result out/review of company this may be edited depending on prevailing market condition
however conviction is rare in analyst ..to put big money...WHY?
HE KNOWS THE RISK/ASSUMPTION..which rarely get published..
the trick of management ...promotion sell
sentiment change..alternate scenario..how far market can fall?
at what duration it shall continue...nobody knows..but fibonacci definitely helps the trader..where is support...commit little money..commit and see
price reversing ..hey u get it right..buy more now!
hence market movement offers enough oppurtunity to active observer
methodical man can make money out of it

To be a Trader-20yrs Page 40

The 24 Most Important Rules Of Trading


04 July 2015
10:38 AM

1.
2.
3.
4.
5.
6.
7.

Always Cut your losses and let your profits run. Take small losses and large wins.
Once you have defined the trend, trade only in that direction.
Always have a game plane. Never enter a trade unless you know where you should get in and where you should get out.
Always use a protective stop to limit your losses.
Be patient. Wait for the right opportunities. Don't just trade for the sake of trading.
If the reason you entered the trade is no longer there, get out.
Do your homework. By the time you enter a trade you should already know what you are going to do and what you expect from the trade. Placing a
trade should be the easiest part of trading. If you are still trying to work things out when you enter the trade you are not ready for that trade.
8. If your method of trading is working, don't change it.
9. The market is never too high to buy or to low to sell.
10. Every trader has losses, don't let your losses get to you psychologically.
11. There is no such thing as an indicator that is a 100% right all the time. Use common sense along with your method of trading. If your indicators are
telling you one thing but the market is obviously doing something else, listen to the market.
12. The market is always right.
13. Use money management in your trading.
14. Only trade markets you are sufficiently capitalized for.
15. Never trade with money you cannot afford to lose.
16. Be disciplined.
17. If you hit your target profit, take it. Don't get greedy and hope that you will make more.
18. Don't try and regain all your losses in one trade.
19. Don't blindly follow someone else's recommendations. Do your own homework.
20. If it's not going well, take a break for a few days or weeks. Make sure you are in the right psychological frame of mind before you start trading again.
21. Don't trade to many markets. It's better to be an expert in one market than a novice in many.
22. Never meet a margin call. If you have a margin call it means something went wrong with your trade.
23. By the time everyone knows it's a bull or bear market, it's probably to late.
24. Loses in trading have no bearing on you as a person
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,
after this test u have to ...say yes,to ALL
....OR MODIFY YOU...
GIVE TIME IT MAY BE SOME YR, or simply quit...
indian defence dont take THOSE who not fit their criteria
so now comes your journey as trading cadet
u r lucky, if u r in trading industry.., U can make all experiment in others money
sharpening your skill without self injury. commited money here and there
a good senior . can help you a lot......
or join a correspondence course. like me test your idea on market.
..
market shall teach u by PROFIT /loss ..how far u learnt.
EVALUATE IN YOUR DIARY AND YOUR FEELING /HOW FAR u have modify your poor habit..
some exceptional HELP U MAY GET....OTHERS FROM TOP ,READILY GIVE ADVISE, if they think u have capability...in a puzzle..[i do ubt after reading this 90%
loss of episode in traderji forum..an MP CHAP STORY].
I want you to clearly realize one thing:
In all my years of performance consulting, I have NEVER seen a person in any field (athletic or business) who had a negative attitude AND ended up being
successful.
We Have Choices
Everything we do involves making choices. As human beings, we have the freedom and ability to choose. Some things are easier to choose than others
because they involve less effort, energy or resources; but easy choices are rarely the right choices. For example, if you wan t to get yourself into better
physical shape then when your alarm goes off at 5:00am, you have a choice:
* Get up and go to the gym or
* Hit the snooze button and stay in bed for another 45 minutes
Hmm, which is the "easier" choice? And which do think is the right choice? Exactly!
Now, as traders, you sometimes make good trades or trading decisions and end up with a bad P & L. Once again, you have a choi ce:
* Lose your focus by getting mad at the market, ruminating, beating yourself up or
* Shift your attention to the PROCESS (things you CAN control) and re-establish your belief in your skills/talent/data points

Which is "easier" and which is the right choice?


What We Can Control
Elements outside of our control, are just that - OUTSIDE of our control and therefore, there is little point in wasting emotional capital on them. Trust me, I
know how "easy" it is to get caught up in the noise - especially when times get tough - but you have to understand that it serves no positive value to you or
you or your trading.
If the referee makes a bad call you can be angry for a few seconds, but GET OVER IT and MOVE ON. Why? Because the ref's call is OUT OF YOUR CONTROL.
Moving forward, I challenge you to start making the harder, right choices and use your emotional capital to focus on the PROC ESS and things that are WITHIN
your control.
Keep your eye on the ball and your head in the game!
Trading for a living requires a lot of discipline. It also requires a lot of streets smart if you trade discretionarily. One thing that many beginners missed is a
basic concept of having multiple setups learned and practiced correctly.
Many beginners misunderstand that they can master a single setup and then can trade for a living. That is not likely the case . For each specific setup, you
need to spend time to understand its reasoning behind, learn the chart pattern available in historical charts, and then pract ice in real-time or at least using
simulation so that you know how to handle the setup in all possible situations.
stop loss is where u stop before losses stop u from trading ever (not a wise crack, think about it)...now modify this...
stop loss is at a % loss of my capital (on one trade or out of your total capital) where I stop before losses stop me from tr ading ever (becomes so big that it
takes away a big chunk of your capital).
elder says 2% max on individual trade and 6% of ur capital in a month...there is a beautiful thread here on stop loss...searc h it

To be a Trader-20yrs Page 41

elder says 2% max on individual trade and 6% of ur capital in a month...there is a beautiful thread here on stop loss...searc h it
-- coursey : many a good trader OF TRADERJI.COM

To be a Trader-20yrs Page 42

Check Usefulness
04 July 2015
10:40 AM

Here is copy paste -check usefulness of them


.................................................. .................................
1. Never risk more than 10% of your trading capital in a single trade.
2. Always use stop loss orders.( Here you should know your loss you can give in a situation where the trade starts going against you.)
3. Never do overtrading.
4. Never let a profit run into a loss.
5. Don't enter a trade if you are unsure of the trend.
6. When in doubt, get out, and don't get in when in doubt.
7. Never limit your orders. Trade at the markets.
8. Extra monies from successful trades should be placed in a separate account.
9. Never trade to scalp a profit.
10. Never average
11. Never get out of the market because you have lost patience, or get in because you are anxiously waiting.
12. Avoid taking small profits and large losses.
13. Never cancel a stop loss after you have placed it.
14. Avoid getting in and out of the market too soon.
15. Be willing to make money from both sides of the market.
16. Never buy or sell just because the price is low or high.
17. Never hedge a losing position.
18. Never change your position without a good reason.
19. Avoid trading after long periods of success or failure.
20. Don't try to guess tops or bottoms.
21. Don't follow a blind man's advice.
22. Avoid getting in wrong and out wrong; or getting in right and out wrong. This is making a double mistake.
23. When you lose don't blame it on luck.
24. One of the primary reasons individual traders fail is an inability to act freely and decisively.
25. Freedom in action comes about when fear has been minimized. Trading small and diversifying neutralizes fear . Decisiveness in action
comes from clarity.
26. Clarity is achieved through an understanding of natural laws and the resulting probabilities.

To be a Trader-20yrs Page 43

TRADE theme...DAYTRADE VS SWINGTRADE VS POSITION


TRADE
04 July 2015
10:42 AM
DAYTRADE..i treat as gambling..
totally unsuitable for amateur...
pro...can do..suits DEALER..RM..as its their job to watch
call helps..provided u understand reason of call
personally u should know call giver....u execute ...
as per luck and survival skill u make money...
DAYTRADERS BIBLE..
DAY TRADING UNIVERSITY... HELP FUL

INVIDUAL SENSE .. OF BULLPOWER ..BEAR POWER..MUST..


PIVOT PT CALCULATION ..
ANOTHER IMP CONCEPT..JUDGE THE DAY..
UPDAY BUY FIRST,SELL LATER
DOWNDAY SELL FIRST, BUY LATER
NO TREND DAY OBSERVE..
VOLATILE DAY USE YESTERDAY MEDIAN VALUE..
BUY 2% BELOW
SELL 2% ABOVE..
STUDY NIFTY AND NIFTY FUTURE....ORDER POSITION
TO JUDGE WHAT WHAT DAY IT IS...
SWING TRADE.......
nobody join in this type of trade...
with 3yr trade experience...guidance by ..senior u can...

its not at all a trade...basically judicious use of day trade and position trade...
book loss early being ..daytrader..
hold the winner...like position trader...
y have to face highest level of stress during this style..as its discretionary.
computerised signal helps..
min 2 time frame concept..useful
conflicting signal exists ..study them ...
use..1hr breakout as entry...
any momentum tool ...helpful
position trading
................................
its possible to learn ..if u have done investment before...
holding period is key..
stop..for save from rainy day..
trend concept...very useful//
fundamental idea help..
ma x..dual or band..sector strength useful..
weekly chart..good..
concept learning for free...www.ino.com
part time play..possible..
in metastock aroon helps..
for pro scan tool must...
by the way if u enjoy WINNING TRADE IN MIND...
AGGRESSIVELY DREAMER...

DONT JOIN IN all 3 VENTURE......observe other in brokers office.


some testing idea..........Some idea of trade science.
you have to work on them to use effectively.
1]market model is like river.trend model+ cycle mode
mabasically lagging. Ema improves
MOMENTUM. ..it helps to define turning pt with divergence study
I] continues.rare..
Ii]step up may seen
Iii] jerk element.normally seen in volatile Indian market..
5 bar momentum. Has shown some predictiveness
COMPLEX VARIABLE
..
measuring cycle period..phase..

NOISE[RANDOMNESS]

sinewave
trendline [instantaneous ]

To be a Trader-20yrs Page 44

remember market mode = trend + cycle

DESIGN AUTO SYSTEM [MECHANICAL ]


1]MONEY MANAGEMENT STOP
2] GROSS PROFIT { COMMISION + TAX} = NET PROFIT
3]LARGEST LOSS.AV. LOSS
4]LARGEST PROFIT AV PROFIT..
5] NO OF WINNING CALL
THIS U HAVE TO TAKE FROM PAST
NEXT ELEMENTS
LOGIC OR PREMISES
FILTER [ FINITE CONCEPT]WORK IN A RESTRICTION
Improvement from lagging indicatorTO ZERO LAG INDICATOR
ZEMA = EMA + MOMENTUM
ADAPTIVE MAWORKS IN NOISY MARKET
MESA + ADAPTIVE MA = MAMA
Simple signalema up as filter..
15 ema/ 18 emagood
CONCEPT OF MARKET SPECTRA/MESA
..

trend

detrend

Reverse trend

Phase change.forward shiftoptimization of this develop predictive mode


Detrend +45 degree
It Help advance study
Dema ,smoothening ema..throw out error of ma..
Visualization by technical indicator helps
Or u may study independently TREND MODECYCLE MODE..
AT WHAT LEVEL MARKET/INDIVIDUAL STOCK @ PRESENT
RSI..STOCKASTIC.HELPS TO INTERPRET FURTHER[ provided u know how to use them on case basis]
Refsystem element and modern ta..
As traders, we not only have to develop technical trading skills but also the emotional skills to trade successfully.
Emotional skills help the trader get through equity draw-down periods and multiple, consecutive trading losses that ALL trading systems experience if
traded long enough. These tough events in trading will test the emotional fortitude of any trader.

This is where confidence in your tested trading system and trading with money you can afford to risk will play an important role. If the trader did not test
his or her trading system, how do you think that trader will feel after four consecutive losses totaling approximately 8 percent of the trading accounts
equity?
Now, compound this with the fact that it is not money this trader can afford to lose. And, compound this again if the person is day trading and losing 8
percent in one day! And, the 8 percent assumes that you are controlling your risk so that each loss is only a net maximum of 2 percent per loss.

Now, after all this, do you think the trader will feel anxiety and stress? I think so! Do you think that stress will create a good environment for successful
trading? I think not! Do you think the trader will be afraid of taking another trade for fear of another possible loss? Perhaps it might because this kind of
stress can cause the trader to -second guess him or herself and the trading system, whatever it is. Traders who trade with confidence will keep trading
and not -second guess themselves OR their trading system.
As a trader you want to eliminate any and all emotions while trading. This even includes emotions generated by having too many market opinions.
Emotions never help the trader! Keep emotions in your personal life and away from your trading life.
The best way to keep emotions in check is by creating a stress-free trading environment where you accept equity draw-down periods and can keep
trading through them in a stress-free state. You do this by testing your trading system or approach.

To be a Trader-20yrs Page 45

In my opinion, the best testing method is to -paper trade for a long enough time that you come to know the best, and the worst, that your trading
system produces. Paper trading (again, in my opinion) is better than computer back testing because it represents how YOU are actually trading the
system or approach. Yet, it is in a stress-free environment because no real money is being used.
I always tell traders, that, if they are not profitable in paper trading, they will not be profitable trading with real money. In other words, they are not
ready to actually trade! It is far better to know that you are not yet ready then to jump in head first and lose your shirt!
So, the first step in getting a handle on your emotions is to create a stress-free trading environment that provides a solid foundation for you to apply your
trading skills and, then, access how you are doing. If youre the one creating your stressful trading environment, you are short-changing yourself before
you ever even start actually trading

To be a Trader-20yrs Page 46

About Volume and Stock Markets


04 July 2015
10:42 AM

About Volume and Stock Markets


Stock Volume is the daily number of shares of a security that change hands between a buyer and a seller.
It is simply the amount of shares that trade hands from sellers to buyers as a measure of activity. If a buyer of a stock purchases 100 shares from a seller
then the volume for that period increases by 100 shares based on that transaction.
Volume is an important indicator in technical analysis as it used to measure the worth of a market move. If the markets have made strong price move either
up or down the perceived strength of that move depends on the volume for that period. The higher the volume during that price move the more significant
the move.
Volume is a trader's best friend. Few technical indicators give the experienced trader a better feel for the minds of his fellow traders and investors. The
heights of their greed, the depths of their fear, the loudness of their panic, and quietude of their ambivalence. All of these emotional states are seen with
volume.
Volume also shows us the footprints of big money, and unlike footprints in the sand, these footprints are there for all to see...and long after the fact. More
immediate and less ambiguous than any complex indicator, volume pinpoints extreme tops and bottoms -or the areas of them- with amazing accuracy.
Additionally, unlike many indicators, volume is applicable to every timeframe. How can this be? Simple. Volume is simply a measure of sentiment, of human
nature. And fortunately for us, human nature is the one ever-present constant of the stock market. Never forget that fact. Once you have your own emotions
under control as a trader, knowledge of this profound fact will guide you ever after as reliably as the Northern Star guides a lone sailor across a vast sea.
Why is volume a trader's best friend ?
Volume offers a complete picture of the market.
Volume can help determine the health of an existing trend.
Specialty volume for indexes and volume-based technical analysis are very good indicators for predicting index shifts.
Volume is the indication of supply and demand. It's defined as the number of units traded during a time period. This number is significant in that it supports
the prevailing price trend.
The technical analysis of volume is a basic yet very important element of market timing strategy. Volume provides clues as to the intensity of a given price
movement.
Minute-by-minute trading volume shows the reversal points of the market, and therefore when to buy and sell!
Currently when a change in sentiment occurs in the market, most people dont find out until it is too late. This can be costly to an investor. Trading volume
offers investors an invaluable tool to know when and where a change in sentiment is going to occur, and act accordingly.
Intraday volume helps you see where a stock is being repeatedly bought as it dips. Likewise, towards the end of a rally, a wide volume spike often signals
that the move is at an end, at least short-term. If you weren't aware of it before, you should be starting to see why volume is a trader's best friend.

To be a Trader-20yrs Page 47

1ST STEP WHEN U START


04 July 2015
10:43 AM

1ST STEP WHEN U START


......................................

.
All the knowledge in the world will not amount to anything without action.
And unless and until you take action you will also never know whether you can do something
The first step is critical.
You may know everything there is to know about parachuting but unless you take that first step, you will never experience what it means to
be a parachutist.

In the same way you could read every book and attend every course on trading and paper trade for years, but until you step into the market
you will never become a trader.
And until you take that step you will never make a dime.Knowledge alone is not enough. Massive action is necessary for success.
One of the most significant dangers for novice traders is procrastination.
The stock market is an endless source of information.
And there are huge numbers of people offering conflicting advice.
It is easy to fall into the trap of too much thinking and too much analysis that just leads to confusion. Or of wanting everything to be
absolutely perfect before placing a trade.
The only way to learn how to trade is to do it.
The reality in the market, as in most areas of life, is that you can never know all there is to know. You
just have to take educated action. And then see what results you get. Fine tune and try again.
If you wait until all conditions are perfect before you trade, you'll never trade
Do not wait; the time will never be "just right".
you have analysed the trade according to our easy to follow rules and it fits the criteria, then you have
already done all the hard stuff.
It's time to place the order.But What if I Lose on My First Trade? "

If this happens to you, and let's face it, it is quite possible, what do you do?
Well, we would never tell you what to do with your money.
But we can however share with you what we do when we lose.

When we have a losing trade, we go back to the Rules and almost always there is something there we missed or did wrong.
Other times, it is just the market and there really is nothing we can do.
Losing is part of trading. And you must learn to accept it as just an aspect of the game. Because trading is just probabilities.
Like us, you will lose. No question about it.
But what matters is that when you win you win more than when you lose.
The proportion of wins is not what is important. It is the size of your wins compared to your losses.
However, if we lose three trades in a row we stop and take a break from trading for a few days.
Some common mistakes that you might be making if you have a losing trade are listed below.
Avoid the 10 Most Common Mistakes!
You can avoid the most common option trading mistakes if you follow these guidelines:
1. don't limit your strategy to calls - buy puts also and overcome the bullish bias
2. correctly determine the trend - up for calls, down for puts; sideways for covered calls from stocks.
3. buy enough time - at least 3- 4weeks, exit with 1 weeks to expiration
4. don't underestimate the effect of volatility
5. don't over commit your funds - you can lose 100%, so limit your exposure.
6. don't put all your eggs in one basket - diversify over several stocks and use both calls and puts never try and strike it rich from one
trade
7. don't trade without first determining a target profit and exit point
8. don't use market orders and don't trade at opening or closing time
9. consider the next expiration month if you can't find a suitable trade in the current month.
10. Underwrite call / put when u understand , in present scenario move is unsustainable ie. NO WAY further strength is no more ,
divergence exists and becoming strong.
It is wise to remember the following issues when trading options.
1. they have their own risk/reward
2. time depleting asset
3. higher leverage
4. less liquidity
5. can have wide bid/ask spread
6. slippage in fast markets
To be a Trader-20yrs Page 48

6. slippage in fast markets


Options Benefits
1. they are cheap to buy
2. flexibility - can trade both up and down trends
3. versatile strategies
4. limited risk - can't lose more than you have put in
5. leverage
6. can use them to hedge
7. limits number of stocks to review
8. can generate good cashflow
9. puts have less risk than short selling.
With covered calls there are a couple of particular problems to avoid:
1] don't become overextended on margin
2] if the stock price drops beyond your stop loss, exit your position and sell the stock.
Placing the order is the easy bit, you've already done the hard work in selecting the options and analysing the trade, now place yourself in a
position to reap the reward. Place the order.

If you only paper trade, you won't experience the emotional ups and downs that you will go through once you have REAL money at stake.
It is only then, that YOU begin to see how you trade.
It is only then, that YOU begin to handle stress to make money.
We are all different and you need to see how you react when you're winning and losing to see what sort of trader you are and where you can
improve on how much money you can take from the market.
These are insights gained as a trader and we are happy to share them with you. Some of the topics that will be covered are:
Picking your indicators
Trading psychology
Achieving maximum leverage
How we learn new trading skills
Recognizing a trading "Bubble"
Using probabilities to maximize your return
How to use multiple time frames
Pre and Post Trading Checklists
Pulling the trigger on your trades
Using Support and Resistance
How to evaluate a trading system
Psychological Keys to Success

To be a Trader-20yrs Page 49

Mass Psychology moves the market:


04 July 2015
10:43 AM

Mass Psychology moves the market: Life is 90% mental and 10% physical.

Financial markets are the same, driven totally by human emotion. To be a successful trader, it is necessary to have a fundame ntal understanding that mass
psychology of fear and greed is the biggest single factor you must understand if you expect to trade profitably on a consiste nt basis.
This emotional and psychological ingredient has absolutely nothing to do with the state of the economy, but it does have an o verwhelming effect on the
movement of the market.
The first rule is that rumors are the prime movers of the market. It's important to realize how quickly speculation of upcomi ng events can change the
character of the current trend. Just the mention of inflation causes investors to rush for the exits in order to dump their h oldings.
This fear causes a general market decline long before the economy changes. The market anticipates the movement of the economy and shows us in advance
what we can expect with regard to corporate health, unemployment, interest rates and other financial trends. A crash in the m arket is usually caused by
psychological, not economic factors.
One of the biggest problems most traders have is expecting too much from themselves initially. Setting outrageous goals is mo re harmfull than anything you
can do. Trying to make $1 million on a $10,000 account in a year does nothing more that show you are in the clutches of greed and denial.
We recommend you start out trading 1 contract until you have confidence in your rules based system. You should develop the se lf discipline to trade until
you reach a net two points for the day then stop. This approach will develop confidence in your system, give you some profit every day and teach you how to
recognize your signals. Later you can trade larger, but initially you must learn the discipline and patience to only take the high probability signals outlined in
our course.
The problems you face when not being realistic include:

Not believing you can lose


Over trading

Taking too much risk for your account size


Expecting every trade to be a winner .

To be a Trader-20yrs Page 50

Things that can help you become realistic include:


04 July 2015
10:44 AM

Things that can help you become realistic include:


Look for small consistent returns. Our goal is to hit singles and doubles not home runs.
Know you market and the average point per each move.

Practice with a Sim-broker against the real market for three weeks and keep a detailed log and chart of each trade
Treat your trading like a business and include all the income and expenses so you can evaluate the true potential of your app roach
Want to be a Millionaire Quickly? Use Maximum Leverage
Do you want to be a millionaire but don"t know how to get there? One thing all successful and profitable entrepreneurs, real estate investors and traders
use is Leverage! Maximum Leverage is the key to all great fortunes. With leverage, you can move toward your goals many times faster than without
leverage.
Futures trading allows you take advantage of positive leverage, but it's important to protect yourself against negative lever age at the same time.
How many of these leverage principles are you using?
Other people's money
Other people's experience
Other people's ideas
Other people's time
Other people's work
There are five methods to gain leverage

1]Find a Mentor who can provide Perspective, Patience and Proficiency


2]Maximize the use of tools and new skills provided by experts
3]Systematize your approach to everything by using checklists
4]Develop a Mastermind Team of like minded people who can contribute new ideas and optimize your approach.
5]Build a Support Network that will help maintain your positive attitude and support your goals.
If you are not using the five leverage principals listed above, the first thing to do is take a full personal inventory. Afte r you have set your goals in the area
that you intend to pursue, begin by eliminating everything that does not materially or psychologically contribute to the achi evement of that goal. This will
give you additional time and "clean out your closet" so you have eliminated most major distractions.

Next, add all five methods for gaining leverage. Finding a mentor will be the most challenging, and the most rewarding. You m ay find one by attending
seminars or taking courses from experts in your field. Remember that this has to be a two way street so that the mentor recei ves equal value in return for
helping you. Your Mastermind group may provide the support that your require.
Finally, setting up a systematic approach to increasing your knowledge base, daily schedule and practice sessions will reap b enefits far beyond the time you
invest.
Most importantly, you must start immediately.
DO IT NOW! DO IT REGULARLY! AND DO IT WITH INTENSITY!
How We Learn New Skills ?
The problem for most people who have traded for any period of time is that the losses they took learning to trade are a huge mental handicap to their future
success. If you could erase memories of these losses from your subconscious and act on what you have learned since beginning a study program, trading
would be much easier.
One of the most important concepts we have ever come across is the concept of "How We Learn New Skills".
Learning can be described as a four step process that will be covered here in a systematic approach. You can think of the pro cess as a ladder and may want
to invert the following explanations so you can visualize the process (Stage 1 is the first step of the ladder).
Unconscious Incompetence: You Don't Know What You Don't Know! Your first attempts at trading fail. It looked so easy!
Conscious Incompetence: You Know That You Don't Know! The search for the Holy Grail of Trading begins. That mechanical system that looked too good to
be true failed. So did the newsletter and the chat room. Then you begin to learn for yourself.
Conscious Competence: You Know That You Know! You finally learn an approach well enough to make some money.
Unconscious Competence: You Don't Know That You Know! You are "trading in the zone" and do it automatically and effortlessly.
Clearly your goal is to create the shortcuts you need to get to stages three and four as quickly as possible. Here are severa l tips that helped us solidify our
"vision" in how to execute our trading approach.
Your mind can be programmed to "hard wire" action patterns through repetition, if that repetition is consistent. For example, if you keep your charting
program set constantly to the same colors, same indicators and same setup, you will have much more consistent success than if you change things
constantly (the programming has to start over)
It may take up to 50,000 repetitions to totally automate a response. Think this is a lot? Don't be discouraged. Think of prof essional athletes and their
practice routine. You can also look at other routines in your own life to see how you made the transition to step four in any of your competencies.
Using a SimBroker and monitoring your progress on win -loss ratios, profitability and consistency is one way to solidify recognition and action using your
signals.

To be a Trader-20yrs Page 51

signals.
Practicing good money management in this practice session will help you automate your own system. When you do finally trade w ith your own funds, you
will have mastered and automated two thirds of the equation. Your final goal will be to master your emotions.

To be a Trader-20yrs Page 52

How to Recognize a Bubble


04 July 2015
10:44 AM

How to Recognize a Bubble


"Bubbles are invisible to those inside the bubbles" and we have been through one of the biggest economic bubble in history, but none of us saw it because we
were inside that bubble. After the "Tech Wreck" of 2000 and other chaotic events, it's important to be aware of "Bubbles" and the "Stage of the Bubble" in
order to get on the right side of the equation and to profit.
Previous Bubbles have included:
The Japanese "Take Over the World" Bubble of the late 1980's
The Asian Currency Bubble of the mid 1990's
The Internet/High Tech Bubble of the late 1990's
The Residential Real Estate Bubble of 2000-2004
The coming Inflationary Bubble caused by the U.S. Government's attempt to mitigate the effects of the crash of these Bubbles and 9/11.
How Bubbles Grow: 12 Easy Steps

A believable concept offers a revolutionary and unlimited path to growth.


Surplus of funds and lack of opportunities lead to buying or investing in anything available.

An idea is complex and cannot be totally explained or related to an investor.


The crowd imitates the leader. All Aboard! Even the gardener has a tip!?

Prices fluctuate from traditional level to overvalued level, THEN to all new ground and all time highs.
New levels are sanctioned by experts. "We are in a new Paradigm!"

Fear of missing the boat takes over. Cloning of the idea occurs as many new overvalued competitors enter the market.
Lending practices are eased. Money flows like water to anything or anyone with a new idea.

Cult figures emerge for the new paradigm. The media promotes lifestyles, not substance.
The Bubble lasts longer than expected. Critics are dismissed. The last suckers are sucked in.

Fraud emerges as partly responsible for the bubble as the first cracks show in the bubble
Finally, everyone has a reason why it cannot continue. But nobody dumps, and all hold onto their profits. No new buyers. Market stalls.
How a Bubble Bursts

A continued new supply of lower priced offerings occurs from rising prices. New IPO"s get bigger and bigger .
There is a rise in interest costs. The Government declares "Excessive Exuberance" and tightens credit too quickly.
Prices collapse and everyone heads for the exits at the same time. With no more buyers, prices hit free fall.
Fraud is uncovered in many diverse industries, and in monitoring and auditing agencies. This leads to more selling.
Governments intervene and give investors time to get out before the real decline.

Rules to Live By to be a master


Do not extrapolate the future from the present.
Trends continue for a long time (2-5 years) and then suddenly reverse chaotically. Witness the Tech Bubble.
Intermittent secondary corrections occur at Fibonacci Levels of 38%, 50% and 62% that result in classic Bull or Bear Traps.
Bottom picking begins several different times, trying to restart the Bubble, but to no avail. Massive losses occur to professionals trying to manipulate the
markets.
Finally, everyone recognizes that "Trends go further than you expect, and last longer than expected." Everyone gives up and sells.
As the volume of the decline decreases, a slow recovery begins.
How to Use this Information

Whenever you are involved in owning, investing or trading anything, review these macro-economic lessons. They may save you TONS of money and make you
a TON of money in the long run.
All stocks, commodities, technologies, currencies and real estate are subject to local, national and international Bubble Behavior. Whenever you hear the
phrase "you can"t lose on this...." Remember to start running the other direction.
Probability of Success
The probability of your success in any particular trade or series of trades is dependent on how you use your charting program and technical indicators.
Understanding what your indicators are telling you is another key point. Study the formulas and compare the differences between MACD, CCI and a Stochastic
indicators of the same length. Look at them visually as well as mathematically. Visually look at the differences between a normal, exponential, smoothed and
weighted indicator.
Study until you know what each indicator is telling you.
One interesting concept is to actually calculate a few bars of these indicators from actual data in order to really understand what the indicator is doing and how
it reacts to gaps, low volatility and regular price swings. Be sure to run the calculation until you lose a big bar as well. This skewing factor will let you know
why many people distrust indicators. They do not understand the limitations of indicators in certain volatile market conditio ns.
Indicators are derivatives or second tiered smoothing of price action. Inherently, all indicators are lagging in one way or another. It is important to understand
how they relate to price, potential future movement of price and how they are affected by past price spikes.
We tend to trade by watching only our indicators. Watching price only,(if u r new) you can become hypnotized by the noise and miss the real moves. We
consider the following four points whenever we are about to make a trade.
The number of indicators moving or about to move in your direction.
The angle and rate of change of these indicators.
The position of the indicators above or below 50% or the 20/80% level for oscillators.
The likelihood of continuation based on approaching Support and Resistance, length of previous move and the time of day.
If we see three indicators moving in our direction, we just say to ourselves "1, 2, 3, Go". It is as simple as that

To be a Trader-20yrs Page 53

Pre and Post Trading Checklists


04 July 2015
11:41 AM

One of the most important things you can do to improve your trading is to develop specific patterns of behavior. If you have ever watched a
professional golfer get ready to hit a shot or pro basketball player take a free throw, you will see they have a very defined ritual or pattern they follow
each and every time.
Since your goal is to be successful on every trade, profitable every day, month and year, you will need to develop routines used by professionals to
ensure maximum consistency and success.

Develop Pre Trading Checklists, a Daily Schedule and System Setup (including disaster plans) and Post Trading Day review checklists.
Also snap pictures of your charts at the time of your trades for both entries and exits. You can then review and annotate the m with how and why you
took the trade and the exit. This is an excellent learning tool that will significantly improve our trading.
Once we decided to get serious about trading we established these rituals and keep them religiously. We measure our success on how well we follow our
system and our trading signals. You will need a programmed Excel spreadsheet for a trading logs to help you monitor your progress as well as some
way to compare various trading approaches for profitability, win-loss ratios, draw-downs and stop loss comparisons.
Note: You can use our measuring tools or develop your own. We provide bonus spread sheets to assist you in developing your own expectancy ratio
Are You Having Trouble Pulling the Trigger?
If so, ask yourself: How Do You Handle Fear and Greed?
When you've conquered fear and greed, you can "pull the trigger" with confidence.
Four things about fear.
First, a definition. Fear is the unreasonable assumption that an outcome of any action will be negative. And greed is just the flip side of the same coin.
It is fear of success, not failure!
You can overcome fear and greed by becoming familiar and confident with just the understanding of what is causing you this fe ar. Analyze all the issues
and see how you feel before, during and after an event.
Fear can be overcome by understanding the basis of the fear, but better yet the lack of understanding is caused by your lack of confidence in your
system. You get confused. That is easy to do because all trading programs, gurus, time frames, etc. will give you conflicting signals. Until your
conscious mind and your subconscious mind agree on your approach, you will not trust the signals you see, and either hesitate, jump to soon, or freeze
totally. This is caused by the uncertainty you feel.
No one can predict the future. You can only intelligently guess with some level of probability that a certain outcome will occur. Since trading the eMini is
really trading the psychology of thousands of traders from around the world, it's important to understand that that psychology goes through fairly
predictable patterns.
Patterns
Patterns such as Fibonacci retracements occur very often because of fear and greed. Smart people know that and fade those retracements, which is why
the Pesavento Patterns we talk about work. After trading and reevaluating certain patterns, we have discovered two very high probability trades and we
have developed the patience and discipline to trade them.
We compare trading signals from four different trading system approaches to show you how similar they are to one another. We prove that the key to
any trading success is based more on mental control and money management than trading signals
you can literally walk by the computer, see whether to be long, short or out. Take a trade, if appropriate, and exit on the next signal with a 2.3 point
average profit Finally, when you begin to get results with 70% win loss ratios on the real charts but are still not using you r own money, it is time to go
for it with real money on a small account. As you get more confidence, you can grow both your trade size and your accounts by using Dual time frame
trading system.

To be a Trader-20yrs Page 54

Best time for buy..or sell


04 July 2015
11:41 AM

Best time for buy..or sell


first half hr of day opposite.. to gen market sentiment...as published in news paper...u can always..since u can view..how fool/ greedy can REACT....
and last hr..for swingstyle...BTST
but not applicable to novice...
..
Price only...to trade....is the best form of trade...its formless trading
normally..few can follow ..with discipline...
price roc...crossing an price 10dayma ROC ..derivative is good...
however...aroon continuation..validity of strength helps...
.
Reason #1: Lack of a clear cut Trading Plan
Along with under-capitalization this probably ranks as the
#1 reason traders fail. Beginning (and some more experienced) traders will frequently be swayed by intraday news and price action.
They may have started the day with a clear plan for the day, but when the bell rings and the market starts they lose focus and become mesmerized by the
next tick as the price action unfolds, alternately looking to buy or sell every couple of ticks/minutes and getting whipped all over the place.
A trading plan should give one criteria to measure trend against and determine a direction to trade. Once the direction has been decided the picture is
significantly clearer as one side of the market has been taken out of consideration and one is free to focus on locating low risk opportunities to enter in the
direction of the trend.
The plan should address such things as:
- Criteria for Trend determination
- Criteria for recognizing Entry opportunities
- Risk Management / Stop placement
- Trade Management (i.e. how to determine when a trade isn't working
- Profit objectives
- Exit strategies
Reason #2: Overtrading - Trading round the clock
__________________________________________________ ________
The aforementioned lack of a trading plan coupled with Todays lightning fast executions available through electronic trading as well as the extended opening
hours for electronic trading get a number of traders in trouble.
When they see all the price movement and translate it into rupee terms it is very easy to become impatient waiting for good trading opportunities.
One may get caught up in the minute to minute fluctuations to the point where he loses sight of the overall picture and starts buying and selling every couple
of minutes
(yes I do it occasionally & extremely exhausting) to grab a couple of ticks, just because the
trading software is so responsive and the fills so fast that he thinks he can get away with it.
We are so used to getting paid for our time in the real world (i.e by the hour) that it is difficult to sit in
front of the screen patiently waiting for a trading opportunity (that may or may not present itself for
another hour or two).
Seeing all this fluctuation the trader is tempted to "hurry up and make some money" and take a couple of quick trades to get paid for his time while waiting
for the next trade that qualifies under his trading plan, however illogical that may sound.
Clearly, if the trader knew this type of trading to be profitable, based on his research, he should
incorporate it into his trading plan.
BUT The very fact that it is not part of the plan should eliminate such trades from consideration, as it is easy to get bored and impatient and hard to resist
forcing things when the next trade is but a mouseclick .
NOW we will explore how certain limiting beliefs can affect your trading results and development as
a trader.
Limiting Belief #1: Belief in Mechanical Systems
(THE best system, best hardware,best software, best data etc).
__________________________________________________ ________
It never ceases to amaze us how people believe the process
of trading can be automated and all they have to do is
find a system that works - then they can kick back on the
beach with a pina colada in hand, call their trades in on
the cellphone and sit back to collect the cheques.
To these individuals life becomes a never-ending search for the "holy grail" of trading. They burn the midnight oil looking for the ultimate oscillator that will
make them rich, sweating over the cleanest source of data, which type of data is better, continuous or back-adjusted,
looking for the best trading execution platform, the best charting software etc
In our observation these people are so wrapped up in the mechanics and intellectual exercise of trading that they never learn how markets actually work, i.e.
that markets
are driven by fear and greed and emotional crowd behavior and that price behavior cannot be reduced to a mathematical algorithm.
These individuals might have been around the markets for a long time and claim several years experience, but in fact they've only had the same 1 year of
experience several
times over, because they never learned from their experience and kept on making the same mistakes.
While there are a handful of commercially available
mechanical systems that have decent track records and show
profitability over time the reality is that those systems
are what we call -psychologically untradable'.
What we mean by that is that they frequently have large
drawdowns and those drawdowns may last for months. Most
people are not prepared to stick with such a system
through the drawdown and will usually abandon it near the
bottom of the equity curve before the system "gets back in
sync" with the market and moves to new equity highs
The thing most people miss when evaluating these systems
is that they underestimate how hard it is to stick with a
system through a drawdown period.

To be a Trader-20yrs Page 55

system through a drawdown period.


It is easy when looking at a track record, one will
"experience" the drawdown in a matter of minutes intellectually acknowledging that there is a significant drawdown, but then the system invariably pulls out of it and winds up being profitable for the year.
There is a world of difference between accepting a
drawdown on an intellectual level and then experiencing
that drawdown daily over a period of several weeks or even
months on an emotional level, wondering every day whether
this time the system has finally had it and may never pull
out of the "nosedive".
__________________________________________________ ________
Limiting Belief #2: Belief that Losses can be Avoided .
__________________________________________________ _______
Refusal to accept the fact that losses are an integral part of the game and a belief that they can be avoided leads to strange behaviors. This belief leads to
-paralysis by analysis' and problems pulling the trigger.
Trading is a game of probabilities. At any point in time there is an X % chance that a move will take place as anticipated, this means that conversely there is a
(100%- X%) probability that it won't!
When implementing a trading strategy one should be cognizant of this fact and plan accordingly, i.e. not risk more than Y% of capital on any trading
idea/opportunity,
as there is always a certain probability that one is wrong.
Regardless of how good your method is, even if it can be demonstrated to have 99% winners, you will still lose ALL your capital IF you risk it all on every
single trade.(TNSN thread)
Another fact to keep in mind is that wins and losses are not evenly distributed and nicely packaged in a tidy series (for the previously mentioned 80% winning
system
that would mean a series of 80 wins, 20loss, 8win-2loss etc.). Even a 90% winning system will occasionally have several losses in a row.
This brings us back to the differences between accepting/understanding things on an intellectual level
vs. an emotional level.
While traders may understand intellectually that losses are a part of the game, they still want the particular trade they are in at any given point in time to be
a winner and are prepared to add to their position, move their stop as the market moves against them, or cancel it
altogether to help secure a positive outcome.
This behavior and belief leads to traders being forced to eventually take losses that are significantly bigger than allowed for in their trading plan.

LIMITING BELIEF #3: BELIEF THAT EVERY MOVE CAN BE PREDICTED / BELIEF IN MISSED OPPORTUNITIES
__________________________________________________ ________
Starting traders (and a number of experience ones :-)
spend a lot of time fretting over missed opportunities.
They play the "would'a, could'a, should'a, wish I had'a" game, kicking themselves over missing opportunities they believe they could have taken advantage of.
Aside from being demoralizing and damaging to the psyche this practice is an unproductive waste of time.
Frequently traders will also introduce as a reason for taking a trade, information that wasn't known at the time the move took place.
The fact of the matter is that trading is a game of probabilities and at any given point in time a move may happen out of nowhere that was totally
unforeseeable.
Some people have estimated that there are 10 no 50pt decent swings in NIFTYs in a week and that you are trading like a pro if you catch 3-4 of them.
In this respect trading is u may catch actual 5 move with 20 pt ie. Equivalent to 5x20=100 pt in week.
LIMITING BELIEF #4: BELIEF THAT MORE INFORMATION IS BETTER (ACTUALLY LEADS TO INFORMATION OVERLOAD / 'PARALYSIS BY ANALYSIS')
__________________________________________________ ________
Traders are inundated with confusing information and trading tips. It is everywhere, from the talking heads on CNBC, to the news headlines flashing across
the trading screen to the online chatrooms, newsletters, hotlines etc.
How does one go about making sense of it all? The short answer is: You don't need to make sense of it all to make money from price fluctuations in the
market!
All that is required is an understanding of crowd psychology and probabilities.
A number of traders believe they need to gather ALL the information AND understand it, because that's what we do in the real world when faced with a
decision.
Once the information is mastered the secret to successful trading will somehow be magically revealed.
Nothing could be further from the truth! No matter how much information you accumulate and go through you will NEVER have ALL the pieces to the puzzle
if you are waiting for that you will never make a trade.
What is needed therefore is to develop skills for decisionmaking under uncertainty, i.e.
a keen understanding of probabilities and the ability to assess
the risk involved and reward associated with different trade outcomes.
A losing trade does not mean the decision to enter it was wrong, it may have been, but it may also be a case of what is referred to in statistics as: "Good
decision, bad outcome", i.e the odds favored a particular move, but the move failed to materialize as expected.
The best advice for beginning traders is: Forget all the conflicting information being disseminated out there. All that is needed is a price chart.
Leave it to someone else to worry about all the news etc.
The market's collective assessment of that information is reflected in the price action.
The fact of the matter is that everyone has the same set of information to trade off of when it comes to prices and the individual trader will never have the
resources to secure better information faster than the large brokerage and proprietary trading houses.
All one needs to is to learn to recognize their "footprints" on the charts, as evidenced by chart patterns.
Conclusion : to succeed as a trader you must be willing to accept the following facts
and observations:

To be a Trader-20yrs Page 56

- You must learn to understand how markets work and what drives them. Trusting your hard-earned capital to a mechanical system is a recipe for disaster as
most traders do not possess the intestinal fortitude to stick with such systems through inevitable drawdown periods.
- You are never going to have all the information and will be forced to act on incomplete information
- Not every move can be predicted. There will be situations where your best laid plans are adversely
affected by random unforeseeable events. As a result losses are an unavoidable, integral part of trading.
Getting stopped out of a trade with a loss, contrary to popular belief, is a good thing (assuming you have a winning approach and solid trading plan) - It tells
you that your trade is not working and conserves your capital for later use when another (hopefully better) trading opportunity presents itself.
Am I committing any of these errors in my trading?
- just answer to U.

To be a Trader-20yrs Page 57

Misconception
04 July 2015
11:58 AM

Misconception #1: Under-Capitalization and Unrealistic Expectations


__________________________________________________ ________
Some of the most damaging misconceptions and limiting
beliefs are planted in would-be-traders heads to entice
them to enter the industry, before they ever execute their
first trade.
The biggest one, by far, is that trading is easy and that
people can make obscene amounts of money within days of
starting out on the tiniest amount of trading capital.
While it is certainly true that the markets offer
unlimited potential and everyone has heard stories of
traders borrowing a couple of grand on a credit card to
get started, who subsequently went on to parlay that
into a small fortune.
The reality is that trading requires time, preparation
and sufficient start-up capital.
Starting out with too little capital and unrealistic
expectations sets would-be-traders up for failure
and is damaging in a number of ways, for example:

a) People who start on a shoestring are forced to take


on too much risk, and have a significantly greater
risk of ruin than better capitalized traders.
Someone starting out with $3,000 in the E-mini S&P?s
will have to risk $150 to $600 pr. trade, or 5-20% of
their equity on each individual trade. As a result
they will be ?wiped out? if they have a handful of
losing trades in a row.
Contrast this with someone trading the same approach
on a $10,000 account. Each loss will represent a
significantly smaller percentage of equity and they
will be able to weather the inevitable drawdowns that
occur from time to time.
Regardless of the approach employed, one should have
sufficient capital to be able to withstand at least
10 losing trades in a row and still continue trading.

The smaller the percentage of equity risked pr. trade,


the smaller the risk of ruin will be.
Research has shown that ideally one should not risk
more than 1%-4% of equity pr. trade.
b) Unrealistic expectations cause traders to discount
the progress they are making and lead them to ?force?
things to bring about the desired result.
As an example:
If you believe you 'should' be making $1,000 pr. day
pr. contract in the S&P?s when daytrading and find
that you are ?only? up $300-$500 by Wednesday after
trading for 3 days you will be unhappy with your
results.
Instead of continuing to do what got you to that point
in the first place and winding up with perhaps
$800-$1,000 for the week you will start pressing,
pushing for trades, trying to make things happen,
taking questionable trades and giving back in the
process what you?d made to that point and wind up
maybe -$1,000 or more in the hole for the week!

To be a Trader-20yrs Page 58

maybe -$1,000 or more in the hole for the week!


In trading, as in any profession, it takes time to gain
sufficient proficiency and one must learn to crawl before
they can walk.
By being adequately capitalized and budgeting several
months to a year at a minimum to learn the basics of
this profession beginning traders give themselves the
best chance of succeeding.
__________________________________________________ ________
Misconception #2: Confusing Margin Requirements with
Capital Requirements
__________________________________________________ _______
One frequently hears starting traders talk about the
minimum margin requirements set by the futures exchanges
as sufficient capital needed to trade a particular
contract.
Beginning traders will also look to the margin
requirements as a way to determine which market to
trade, saying things such as "My account is so small I
can only ?afford? to trade Soybeans and Wheat, because
they are the only contracts with a small enough margin
requirement".
The fact is you can?t ?afford? to trade ANY market unless you have a winning approach!

If you don?t, you might as well hand over your money to


the nearest charity and save yourself the aggravation,
because you will lose it anyway!
Margin requirements are set to protect the integrity of
the marketplace, they are intended to make sure that
traders have sufficient capital on hand to meet their
obligations should the market move against their position.
They are calculated based on a specific formula that
takes into account the volatility of the market in
question.

Generally speaking, as a rule of thumb, they are approximately equivalent to the average 3 -day true
range of that market.
Margin requirements should NEVER be used to determine
the market, or number of contracts, to trade. Doing so leads one to risk too great a percentage of equity on any given positi on.
PROBLEM: A close cousin of un-realistic expectations is unwarranted over-confidence, inspired by a series of successes in trading.
This is something that frequently affects experienced traders after they have had a
good run in the markets.
They start feeling 'invincible', think they've got the 'market figured out' and
have a tendency to take greater risks than they should as a result (given their account size).
The market will invariably humble the over- confident trader and hand him devastating
losses, as he gets called on the excessive risk he has assumed through greater trading
size or the use of bigger stops (or even worse - the use of no stops).

To be a Trader-20yrs Page 59

Trading Tool
04 July 2015
11:59 AM

Trading tool...momentum
stock select...nse..scan by explorer...ready to move ..
pattern triangle ...continuation....i have bullish bias..
2nd one...at particular retrace...bullish engulf...
so this two condition...gives me candidate..ready to move up
..now @9-55...ready to enter.../max no 3 trade...
if any news +flash..enter aggressively...if published recommendation..
whether its a trap to book profit...[its normal]
trading amount 3 lakh..1each...
if after 15min price..1% up..enter...profit pt...3%....
always keep eye on nifty future...if sell order more...today is NOT YOUR DAY
.....this system has 70% success rate atleast for me..
i believe search of candidate..very imp...it takes me @2hr..after scan how it shall
behave next day...
various alternate scenario...entry / exit...
so now u all understand why it suit rm/dealer...they can unemotionally..
watch..ofcourse execute.. as confidently ...
if condition not suit to trade...they dont trade
..
on short term trade...
its basically retracement buy...on a paticular stock..whether present value justified ? i use fundamental input...if analyst has conflict..i consider
candidate is good one...
ma value 20 i use..also how stock behaved last 6month....
what ma x ..3/10 suggesting...i enter...
here i use good money management...trade amount 5 lakh...half idle

max put 50000, in a trade stop 4%...unfortunately accuracy..35-30% only..


so in a winning trade...i put 2lakh...after 5-8% price up..play for another..
4-5% profit...
i get out..from loser at stop...unfortunately ...recent switch down ward..
cost me good loss..as a part timer...gap down put me in puzzle...
result BIGGER LOSS
since..accuracy mine is poor..;.. i think to discard this...
as i am not master in volatility...present market condition...
.
fact is i am poor as short term trader...
why?...may be long days fundamental faith...
but worst one . holding loser..[use of hope]...
entry is definitely my strength...
but exit is poor...judgemental error comes from other commitment....
and its law of TRADE....ONLY WITH 100% COMMITMENT U HAVE CHANCE

To be a Trader-20yrs Page 60

To Trade Right
04 July 2015
12:00 PM

TO TRADE RIGHT..
.................................................. ................................................
SO AGAIN I COMMENT ON DAY TRADE....
why i guess successfully...natural flair of 30yr of chess play..alternate situation to act, use of survival instinct.....
but its stressful, i am older now,...may be new guys r faster,
good candidate for next day is my strength....
metastock explorer i use...
also omnitrader..which suggest some candidates....
so i use pib, ...entry technique .. x of buy at break out on particular pivot...
if volume..is good...so i commit bigger...
i dont mind to lose, as loss r less in number..so it has +expectancy..
if market condition unpredictive simply i dont trade...
it helps to me...as noise trading i understand...so break of pivot , moving
to higher zone ...easier and suit me in past...
as i believe daytrade is gambling,..so luck of right or wrong is always there
so i am ready for wrong, it prevents me let loss run...
as screening is done..i know what i am expected to do..
filter..+ bias of nifty...
any news publish creates criticality of trade...sudden surge of greedy fool
can send stock price any where..., last 6month behavior thats why i study on hourly chart..on particular surgeday..

its readyness to act..basically given me lots of right trade consistently


...............
i give more hints..x of 7 ema with closing price..
trigger... 8day ..william%r std signal
5day rsi strength increasing...
i assure u it gives money...those who doubt can back test it..
atleast condition fulfilled , given +move within next 2days
psychologically i find it very useful, as i am ready to lose ..i am nothing to loss..[hey i bet on bangladesh,against india..pun intended..]
i can avoid my weakzone..volatility

To be a Trader-20yrs Page 61

Investment vs trading
04 July 2015
12:00 PM

Investment vs trading
...................................
this is a controversial topic...still i decide to touch..investing..is putting money
for long term..strategic thought process is imp...consider any managing director..plans for expansion of his company..money arrangement and plan to
plough back.
..implementation of dream into reality..
constant watch to maintain target as per plan...is key...
Same thing , if u invest u have to check...
TRADING
.............
its a concept to buy low and sell high..
where the demand is EXPECTED TO build, buying candidate..
where further demand realisation is not possible ...SELL
SINCE expected materialisation is not possible[ on some cases]..
get out before other traders dump..
whichever path u look none is easy...
fortunately some torch bearer help in writing their journey in distinctive style
many a great name all of us can utter.., but its IMPOSSIBLE to follow them
why?..2 individual r not same...copying is not possible
can u be any of them?..no i assure u ..its an impossible event
CONDITION AND CONSTRAINT...CAN NOT BE REPEATED SAMEWAY..WITH SIMILAR VIEW AND LOGIC...
so what is your path and alternate view?
Amalgamate...

a basic std rate of return is possible...


money managers view is easy to implement...
investment view..PUT MONEY IN SUNRISE INDUSTRY. in india for indian company
Trading view.....based on some value analysis buy at oversold zone..and hope mean reversion shall bring u quick profit[ holding period 3-6month]
many traders may disagree...i say to them ..;'u r right, u do the same thing
in smaller timeframe..based on your superiority..so is ur RETURN'
NOW LOOK AT ALL GREAT DAY TRADER...they r mostly engineer..strong math logic...understand linear relationship..
with own developed one/ intraday plan ..with good signal generated..cont..
they can make money...regular basis...discipline and strict stop loss is mantra
experienced one with fund available...can do PLAY LEVERAGE

next..i say those who work in this field...they simply copy cat a winner ,
depending upon experience ..do a little, lose a little'
now..COMES THE FOOL, DREAMER...THEY NEVER UNDERSTAND HOW TOUGH ITS REALLY..[van tharp never made money by trading..though he trains
many
best of the best traders]
so first..check..do have the ELEMENT IN YOU..time to invest and learn
right attitude....TORTOISE WINS HERE..
TRADING ON PRICE HAS 3ELEMENT...
NOISE...TREND..SHOCK/EVENT
Noise..a price within +/- 3%[arbitary..as per my experience ]
its the time u should watch..
soon some big fund /syndicate starts buy or sell..with price change +/-change..defining an up or down trend accordingly...
its when more volume joins ..media writes..oppurtunity to make money for early entrants..when trend is no more moving up..[ p ut hope triangle pattern
shall show CONTINUATION]..ANOTHER RISKY ATTEMPT CAN BE MADE..
BUT WITH STRICT STOP...
hopelessly i dont know when profit book starts and price shall fall
many signal is used by many as per confidence level and experience..
but none can handle SHOCK/EVENT...
SINCE IT CHANGES INVESTORS SENTIMENT BY NEWCOMING OF BUY AND SELL ORDER...hence price study..aswell as order flow must be the tools in
your trading arsenal

2nd aim is study what others trader shall do ..on an event...


CAN U CREATE MONEY MAKING OPPURTUNITY OUT OF IT?
3rd factor...global money flow to india...

To be a Trader-20yrs Page 62

3rd factor...global money flow to india...


if fii is selling, YOU HAVE TO..
nobody can withstand flood, ...sell and go to hill station...

To be a Trader-20yrs Page 63

INDIAN STOCK MARKET


04 July 2015
12:01 PM

topic.. INDIAN STOCK MARKET


.................................................
1. FUNDAMENTAL
..........................
GROUP A AND SOME B1 ONLY...
LITERATURE..INDIAN INDUSTRY GROWTH 2002..2012
COMPANY ANALYSIS .. TOP DOWN AND BOTTOM UP APPROACH
SECTOR ANALYSIS
CAPITAL MARKET 500 COMPODIUM
LATEST RESULT..COMPARE QUARTERLY GROWTH
COMPANY .GOOD MANAGEMENT..ORDER POSITION
..................SUNRISE INDUSTRY..
GOVT FAVORISM..STORY FOR LONG RUN
MONOPOLISTIC VIEW
TECHNICAL
................
METASTOCK STUDY
INDICATOR STUDY
RESISTANCE SUPPORT .. PATTERN STUDY
GAP AND VOLUME SPIKE
TRADING MARKETS ...TOOLS
WHEN REVERSAL IS IMMINENT.. SIT ON CASH
MOMENTUM PLAY
DELIVERY IDEA
.....................
3.PSYCHOLOGICAL APPROACH
SUBJECTIVE BIAS..WHY MARKET WILL GO UP? WHEN IT WILL FALL?
FII FACTOR..GLOBAL FACTOR..OTHER WORLD STOCK EXCHANGE FACTOR
RESULT FACTOR... FEEL GOOD AND MEDIA HYPE
WHAT IS ACTUALLY STATE OF MARKET..WHAT TO BE IN NEAR FUTURE
4. TRADING
......................
DAY TRADE STYLE...SWING STYLE.. INTERMEDIATE TRADE STYLE
TRADE RULE 1 2 3
WHAT NOT
TO DO 1 2 3
HOW TO
TAKE ENTRY 1 2 3
PROFIT BOOKING
& STOP LOSS GUIDANCE 1 2 3
HOW TO ADD POSITION 1 2
CHECKING
RISK/ REWARD 1 2 3
DIARY
............
1. WRITE ANALYSIS OF ALL PAST TRADE
2. WHY PLANNING TO ENTER 'NEW' STOCK ...WRITTEN RULE
3. BEFORE BUY X CHECK ...DONT ALLOW TO BIG LOSS

To be a Trader-20yrs Page 64

..........................as i am novice in computer..


column name is given ..pl prepare suitable sheet..in excel .
trade sheet : create column
Heading
1 dt
2 name of stock
3 type of trade..buy/sell
4. trade set up condition..gap/ volume spike/support pt
result out/ commodity price up
5. entry condition ..pull back/ break out/ continuation
6. money alloted ..no of stock x price
7. style of trade ..day/ short term / inter mediate
8. present value of nifty
9. any hype at present...
10. stop loss
11. profit booking strategy ....1.................2
12. profit target.. p1............p2
13. additional buy strategy/ with reason
14. sell dt and NIFTY VALUE
15.
16.
17.
18.
19.
20.
21.
22.

sell quantity x sell price..


whether trade is profit...howmuch
whether trade is loss.. howmuch
have u followed stop and SAR. IF NOT WHY
reason of sell
cost of trade[ comission+ tax]
your net profit
your monthly rate of return..

2nd sheet ..monthly performance sheet


.................................................. ...
column description
1 month
2 total no of trade in month
3. no of winning trade
4. total amount of winning
5. no of lossing trade
6. total amount of losing
7. net profit/ loss in a month
8. is losing trade shown some pattern failure/
wrong assumption
9. av. win amount per trade per lakh
10. increase of your equity value..
11. percentage of wrong trade
12. risk amount in each trade. value ..in %
13. drawdown condition to quit
14. monthly yield compare to nifty yield in month

To be a Trader-20yrs Page 65

A STORY TO READ
04 July 2015
12:01 PM

A STORY TO READ
.........................
Whenever anyone comes to me for help in starting a trading career, one of the first things I recommend is organizing a busine ss plan. It provides direction
and helps novice traders start off with a systematic approach.
I suggest that new traders put their costs, their goals, and how they intend to achieve those goals, in writing. It's the sam e approach you'd follow for any
other business. They usually come back with a reasonable plan.
Say, for instance, you have $10,000 a month in expenses. To earn that amount you would need to net around 50 cents a day, tra ding 1,000 shares. So you
would start off learning an appropriate trading strategy and build up to that goal. It sounds simple enough, but the problem people quickly run into is that
this isn't exactly like any other business, is it?
Trading Without Goals
We live in a very goal-oriented society. Aristotle once said, "Man is a goal-seeking animal. His life only has meaning if he is reaching out and striving for his
goals." And I believe it's very important to have goals. They help keep us focused and motivated, giving us a sense of purpos e and direction.
But trading is a funny occupation. Many of the same things that create success in other endeavors will cause problems in your trading. And so it is with
goals. Trading goals can put you in a mindset that may very well act as a negative force on your trading.

.
One of the problems with setting trading goals is that too often, the goal is all we can think of. Albert Einstein once said, "The American lives even more for
his goals, for the future, than the European. Life for him is always becoming, never being." A lot of people look at this occ upation in terms of making money
and enjoying the freedom that trading affords, and they don't really have a love of trading for trading's sake. If you fail t o enjoy the process of striving
toward the goal, it will be difficult to reach that goal.
Another problem is that people always seem to set their trading goals too high. Your goal has to be reasonable for your skill level. Otherwise, you are setting
yourself up for a lot of frustration. Trading goals automatically add pressure -- and the higher the goal, the more pressure there is. The more pressure there
is, the more emotion you add to your trading. The more emotion you have, the more mistakes you will make.
There is an innate problem with setting up daily trading quotas as a goal. You can't force good trading setups. They either c ome to you or they don't. We are
entirely dependent on what the market offers us. That means some days you will meet your goal, and some days you will not. It is hoped that the good days
make up for the bad ones, but you have to come to terms with the inconsistency. If you try to force trades, you will invariab ly suffer an increase in stops
Slow and Steady
One thing that helps is making your hero the turtle instead of the hare. I see this time and time again in my trading room. W henever anyone makes a big,
impressive gain, that trader becomes the hero. Everyone tries to then emulate that trader's moves. Meanwhile, someone else wh o has been steadily racking
up one small gain after another goes almost unnoticed, when in reality, the steady, small, consistent trades are adding up to a lot more than the occasional
whopper.
Another thing that helps is breaking your goal up into steps. Rather than focusing on achieving that goal of 50 cents a day w ith 1,000 shares, start with 10
cents, then 20 cents, and build up gradually. Trade small shares to control your risk. Start with 100 shares, build up to 200 , then 500, increasing shares
only after you have achieved consistent profits. Take it one step at a time, and it might surprise you what you can achieve.
Last year, I took a backpacking trip into a wilderness area in Northern California. I am used to horse -packing, but I had offered to take my contractor on a
nice bow-hunting excursion for record class mule deer, so I decided to act as guide and backpack in. I tried my best to keep my pack l ight, but the gear we
needed that time of year during colder weather meant I had to haul 40 pounds.
Now I hadn't been backpacking in almost 40 years. So when I got out of the truck and looked up at the 3,000 -foot peak we intended to climb, all I could say
was, wow. Looking at our goal up there really put me in a state of despair. I kept looking up at the peak, then at my 40 -pound pack, then over at the happy
45-year-old "kid" next to me.
put the pack on and started off. About 50 feet down the trail, my legs and back started hurting. I must have grunted or somet hing because my friend asked,
"Ken, you OK?"
I said, "Sure. I am fine." But what I was really thinking was, "What have I done? I am not going to make this!" It reminded m e of what many new traders
say to me after two weeks of trying to learn.
So I decided I wasn't going to look at the peak. I resolved to simply look at the trail and take one step at a time. The trip wound up being a "one step at a
time" proposition. I was convinced I couldn't climb to the peak, but I could take one more step. And the funny thing is, I ma de it 12 miles! In fact, I could
have kept going, but my friend was pooped out.
So take your eyes off the peak. If you want to reach your trading goals, learn to enjoy the process and simply take your trad ing one step at a time.

To be a Trader-20yrs Page 66

TO BECOME A TRADER
04 July 2015
12:02 PM

following register/file u should open and write....this will definitely make u a trader..
sufficiently real earning potential..only patience reqd..
1.trading as a business
2.trading psychology
3.your psychology and you[real one]
4.your trading rule
5.different type of trade..swing..intermediate term ..day trade
[its not u have to do, but must know on what conditional fulfillment others r
trading.enter and exit]
6.longterm trade or investment
7.indian stock
8. factors which move price
9.fundamental analysis
10.market study
11.ta..indicator analysis..
12.chart pattern
13.money management/risk analysis
14.trade preparation..volume study..trade management..
15. software..metastock[u may prefer other]
16.short sell
17.diary ..trade analysis..
..................yes i have this 17 register till with me since last 13yr of successful trading

To be a Trader-20yrs Page 67

SIGNAL
04 July 2015
12:03 PM

topic : SIGNAL
.......................
WHAT IS SIGNAL?
AN APPROACH TO ACT BASED ON SOMETHING...
BEST ' SOMETHING' IS PRICE...
WORST ' SOMETHING' IS WHIMPS...
NEWS IS BASICALLY POOR GRADE...
SOMETHING JUDGEMENT ON LONG TERM EFFECT ..ALWAYS GOOD.
ONLY AFTER A LONG TIME STAYING IN MARKET DEVELOP 'FEEL'
OTHER WISE.. emotional decision r mostly promise -return
increament of eps is good...more is new order..
top or bottom guessing is dream...however they can be seen in left side of chart...in
coolhead..in a near by top..if price starts falling ..sell and get out
...justify later[ afterall u r trading with real money...not an analyst for tv-channel]...
same way watch for short term bottom..[ 3650..nifty future on 3/4/07 i dont miss...and
book profit today 3970]...
when no further fallnot coming . be ready for buy..
buy on first oppurtunity ..new order is coming nifty future..3rd april..next..
just watch..today dream run ended ..so i book profit...
do u think its a good trade ? no shear luck!..i simply can not put hope...
afterall i allow big drawdown 30% feb/march ..breaking all common sense
signalled i followed in this trade
1. media hype..market shall fall[ contrarian]
2. fii putting real money..
3. william% R starts moving up
stop if any,, 3600 or time stop 3day
.
......................
preview...before an insident u r taking a view..what may happen.
review....after an insident u analise.
proview..while insident is happening ..u r taking decision[pick among best
alternative]..acting in your best interest.
this PROVIEW is the aim of a successful trader.use preview.do review later...
follow proview to get money...avoid danger
do u find difficulty ? think of childhood..writing essay...introduction...
body[proview]...
conclusion[review]..
leading indicator must be used for preview..idea..fundamental estimate..
a trade plan...but on actual market ..only proview..lagging indicator on intraday chart
basis...observe and act....at 17-30hr.review of trade..
if u r like me..review in end of week.
hence as a complete trader..u must know range trading..trend trading
..also volatilityzone play [ i confess i dont know]
To be a Trader-20yrs Page 68

..also volatilityzone play [ i confess i dont know]


condition of market,.........
min 2 style..day / short term
swing/ positon
position/investment
min 2 style of entry...break out/ support buy/ pullback buy
exit in detail
..................
profitable exit/ target profit book/ 50% and let other half run
exit in loss..bulk sell/ stop execution/ time stop
observe in uncertainity...say today..bearish strength is high..but bulls small individual
traders give good fight..sufficient enough to come out of days low
definitely professionalbears can not rollon street smart bull. unless media prints bad
picture..[this dalal write/say anything for personal motive..just like publishing foetus
photo in 1st page.times of india..for publishity's sake]
ofcourse basic idea of company/sector u deal..fundamental conderation why price may
change?

a test of reasoning ..your logical trade..your write up.

To be a Trader-20yrs Page 69

Advance-decline
04 July 2015
12:04 PM

Advance-decline line is a good way to understand market sentiment.Refer www.icharts.in

No of stock to watch
.............................
4-5 min each chart...if u have 2 hr..20-25 stock
alternatively scanner helps to find particular conditional filter.
then watch them thoroughly for next day..hence more candidate for prelim.scan list..however nifty must be studied..
compare nifty with that stock..better strength in last 2day must
pl prepare the condition of filter carefully..u shall hit or miss because of this.
since result is imp.particularly this season..its a high risk style[i dont do now]..
...inside knowledge..a good analyst's prediction helps..but see call history..
rarely i see an accurate callgiver..check his assumption
capitalmarket.com is ok but too costly
can any house / broker give 70% rate success ..i doubt.. at present market.
rbi policy is imp now..economy/rain prediction shall show its headline..
personally price i like ..its naked truth..but in india so many funda-hype trader...i must see their view and conviction..its the subjective judgement when to
follow trend and when to be contrarian
however live with uncertainity. position management and risk control..can make u a trader..[do it in natural rythm]...i dont know ..i thought i can ..fact is
still i have to fine tune..to shy away...i believe in curse of GOD..WHO OPENS ARENA ..GREAT SECRET ..to those who dont deserve .
btw CHECK your ..ICANT GO WRONG ATTITUDE..otherwise big fall comes

conclusion :
1. trading is solo journey
2. lucky..if u get mentor, similar attitude friend.
3. journey path is difficult..and long..it takes time.
4. grail exists....its after long experiment u understand with ur natural rythm
of choosen trade style ..continueusly get money out of market/ other trader.
5. catastrophy may hit u. if u r cocky.[ always have stop]
6. uncertainity element exists in market.
7. learn from own experience....also from other successful one, but assimilate
8. use some system. lower the timeframe .more mechanical it should be.
9. for position trading ..alittle discreaton is must.
10. for long term ..economic view....contrarian thought process helps
11. for day trade..break out trade style+momentum works best
12. for swing..up........support buy attempt is better.
13. for short play..experience counts..how high is too high!on first oppurtunity of reversal ..sell short..when buying momentum again seen cover it.
14.its not market, its u. create trouble and loss for u. stop self sabotage
15.directional view u may have ,but price is supreme.
16. when u dont know, sit idle..watch ..learn.
17. for a good trader...flexible mind,discipline, execution skill is most imp
18. entry technique..any thing which u can do comfortably.
19. exit....at profit ..at small loss...2 case rules r different..mechanical approach is better.
20. holding..on profit..give more time....on small loss ..get out early
21. some fundamental concept..knowledge on sector..key element to affect on price ..u must have...it is life jacket.
22. fii moneyflow must be seen .so is political view.
23. ta is mother for a trader..so learn ..not to predict but to act.
24. money management is key..apply it.
25. read paper to see info ..see chart to check oppurtunity..u have to beat
other traders..no value to trade with odd against u
26.trend element gives money to trader. no body knows when it shall end.
27. live on reality. mastery over ..TIME.. very imp
28. trade analysis.is must and learn from post mortem..what not to do.
29. many a good ref. r given. for site and books.,try to be a thinking TRADER

To be a Trader-20yrs Page 70

RISK /REWARD BASIC


04 July 2015
12:04 PM

Most traders ignore reward/risk ratios, hoping that luck will save them when things start to go bad.

This is probably the main reason so many of them are destined to fail. It's really dumb when you think about it, because reward/risk is the easiest way to
get a definable edge on the market house.
The reward/risk equation builds a safety net around your open positions. It's designed to tell you how much can be won, or lost, on each trade you take.
The secondary purpose is to remove emotion so you can focus squarely on the cold, hard numbers.
Let's look at 15 ways that reward/risk will improve your trading performance.
1. Every setup carries a directional probability that reflects a specific pattern. Always execute positions in the highest-odds direction. Exit your trades when
a price fails to respond according to your expectations.
2. Every setup has a price level that violates the pattern. Only take trades where price needs to move a short distance to hit this "risk target." Look the
other way and find the "reward target" at the next support or resistance level. Trade positions with the highest reward target to risk target ratios.

3. Markets move in trend and countertrend waves. Many traders panic during countertrends and exit good positions out of fear. After every trend in your
favor, decide how much you're willing to give back when things turn against you.
4. What you don't see will hurt you. Back up and look for past highs and lows your trade must pass through to get to the reward target. Each price level will
present an obstacle that must be overcome.
5. Time impacts reward/risk as efficiently as price. Choose a holding period based on the distance from your entry to the reward target. Then use price and
time for stop-loss management. Also use time to exit trades even when price stops haven't been hit.
6. Forgo marginal positions and wait for the best opportunities. Prepare to experience long periods of boredom between frantic surges of concentration.
Expect to stand aside, wait and watch when the markets have nothing to offer.

7. Good setups come in various shades of gray. Analyze conflicting information and jump in when enough ducks line up in a row. Often the best thing to do
is calculate how much you'll lose if you're wrong, and then take the trade.
8. Careful stock selection controls risk better than any stop-loss system. Realize that standing aside requires as much deliberation as an entry or an exit,
and must be considered on every setup.
9. Every trader has a different risk tolerance. Follow your natural tendencies rather than chasing the crowd. If you can't sleep at night, you're trading over
your head and need to cut your risk.
10. Never enter a position without knowing the exit. Trading is never a buy-and-hold exercise. Define your exit price in advance, and then stick to it when
the stock gets there.
11. Information doesn't equal profit. Charts evolve slowly from one setup to the next. In between, they emit noise in which elements of risk and reward
conflict with each other.
12. Don't be fooled by beginner's luck. Trading longevity requires strict self-discipline. It's easy to make money for short periods of time. The markets will
take back every penny until you develop a sound risk-management plan.
13. Enter positions at low risk and exit them at high risk. This often parallels to buying at support and selling at resistance, but it can also be used to trade
momentum with safety and precision.
14. Look to exit in wild times in order to increase your reward. Wait for price acceleration and feed your position into the hungry hands of other traders just
as the price pushes into a high-risk zone.
15. Manage risk on both sides of the trade. Focus on optimizing entry and exit points and specialize in single, direct price waves. Remember that the
execution of low-risk entries into bad positions allows more flexibility than high-risk entries into good positions.
Do some research on the basis of EPS, PE and their competitors in the sector also company future plans and past growth. You will get fair idea about your
query.

To be a Trader-20yrs Page 71

MY SOLILOQUY - on trading system


04 July 2015
12:05 PM

So the topic starts


..........................
since after experiment , boys and men r apart..we can move further.
to see where we stand as a trader ..can we improve our trading ?
min 50 trading have been taken ..min 20 correct trade .
so the persons can understand trading is a search for oppurtunity.
losing trade may appear any time.
understand hot topic black swan.
concept of hunter and the hunted.
the basic of reward/ risk...when situation is out of hand
when trading is within comfort level.
hopefully have seen one 1bull-bear cycle..or as a pro 100% retracement and comeback.
philosophy of trade : market is war arena..ruthless fighter can only survive
: trading offers great no of oppurtunity to pick.A position
may be oppurtunity or a trouble[loss]...nobody knows
while picking,what it shall be.TIME will unfold..whether
it is profit making one or take money out of you.
corollary :do i know how to trade?if yes, how to do effectively
[trading performance]
specific method to be followed again and again[system]
system vs. individual psychology ----- TUNING
element : experience
market research and put data for validity
testing [ ofcourse u must have ability to test]
position management

if no system : poor trade result occurs with emotional trading.


when personal psychology not match with particular style
loss of oppurtunity[ missing oppurtunity due to fear]
wrong expectation
hence a system of timing must have 1. set up condition
2. entry
3. exit...profit target
4. risk analysis
5. exit ..contingency plan

1st principle
..................ABC
A ACTIVATION ...TRADE ENTRY
B BELIEF .. if trade continue as wishes ok.
C CONSEQUENCE , If price turn opposite get out
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,
2nd principle
....................SMART
S SPECIFIC GOAL
M MEASURABLE GOAL
A ATTAINABLE
R REALISTIC
T TIME TO REACH DEADLINE
SYSTEM :
..............
MECHANICAL TRADE SYSTEM MTS

DISCREATIONARY TRADE SYSTEM DTS


HYBRID SYSTEM...HTS
DIFFERENT CONDITION OF MARKET
..................................................
1. RANGE BOUND MARKET PLAY PLAN
2. TREND MARKET PLAY PLAN
3. MOMENTUM BASED BREAK OUT PLAY PLAN
4. -MOMENTUM / AT TOP QUICK SHORT PLAN

SYSTEM DESIGN
.....................
beginners bias : buy only ..one directional trade

To be a Trader-20yrs Page 72

condition : if nifty showing +bias..buy xyz stock


say today gtl ...@ 172...its moving further ++target175.
go back last week chart..it has given sufficient hints to move today / tomorrow...1130 move starts[ hope intraday players see it]
thursday and friday price hold ...fulfil my condition of trade
as a day trader 170 stop...target 175 achieved..
as a short term trader 165 stop...with 182..target...
so u understand why i a poor short term trader...before reaching of target more often than not it reaches my stop..so the los s in a/c
condition of short term entry is different than my momentum style..
so the confusion ...thats why i loss.
Fact is in short term with proper risk/reward no trade exist in gtl..
time extension linearly does not quantify a trade. it is a trap..hope factor
so for short term reversal at bottom or at 50% fibonacci level better alternative.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,
system design
....................
day trading , short term , position trade and investment..4 r different scenario . condition for success in each ..has some p eculiarity.

value investment [ works if u fit there.not suitable in present market]


...buy good stock with av p/e+ when price starts rising in weekly chart.
but for trading another concept..which shall give more score..consistent single
/2run by bangladesh against india..or wait and hit 4/6 run by bangladesh against south africa[ both match won by this novices ..against superior pro]
u
2
4
6

have to choose...1run day trade


run swing trade
run position trade
run multi bagger..nomore exists

[ if u r master trader,not a beginner like me,...try some portion of day winner to HOLD..SCORE 2RUN............another greedy [balanced greed ]
view...BOOK 50% PROFIT IN SWING TRADE..LET OTHER 50% TO RUN FOR FURTHER PROFIT
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,
day trading system
..........................
to quote cv ' master ur craft.practice and practice...ignore all others'
understand simplicity and toughness...in it.u have to understand how price reflect everything..suitable indicator..derivative from price ..to study and
maintain strength...and eye for order flow....
thats all...alas! one is sufficiently difficult...3 is awesome in real time.
thats why salute to cv!
u must have some method to understand price increament shall continue
and then another when price dilution coming.
[objectively a programmer can do,i am ignorant]3min/10min ma x...also 15min rsi has some use...big order coming in sell side has its impact.
whatever it may be , real time execution is key.alert helps.

To be a Trader-20yrs Page 73

High Probable Trade


04 July 2015
12:07 PM

high probable trade


............................
its the directional bias...where most waiting watchers r ready to join..
market buying r coming...big volume r increasing
concept is use momentum ...act now.
another concept a trend started yesterday 3pm..hence further steam left.
scan at night for candidate.
without any news. on real time..sudden volume surge..price is also moving up.
ACT NOW ..NO TIME TO THINK make money
note: this works i saw and made some lakhs.......... work in present market.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,
shortterm trade/ swing trade
............................................
here u must reqd eod . a software ..preferably some risk reward analysis
some low risk entry tactics and stop-umbrella to save from rain.
u have to define entry characteristic .
1. entry after break out over longterm resistance zone
2. after twice bounce in support ..price just starts moving up.
3. sector starts moving up..stock has good rel strength comparison within sector.
stop
......below 5% of last week low
if not 4% up move occurs within 5 trade days..use time stop
profit target 8-10% from entry..however after 5-6% price is NOT HOLDING
....get out with small profit...than turn profit into loss
for momentum base swing trade..refer david landry and crabel works
for system study see beyond ta..by tusher chande
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
next position trading
..............................
personally i decide only some shortterm winner to be extended for long.
and today bpcl, hpcl ,visual have given position buy signal.
its basically chart ..after trend change suggested entry at predetermined pt
for me some% up with volume increase...in metastock RSC EXPLORER candidate must be in upperside.
yes i use eye ball technique and pattern failure[ in h&s when instead of fall price starts move up and w.pattern price slowly starts moving..acceptance
of price]
my idea given money in past..i dont know whether shall it work now.
but i put real money
some other low risk idea r predefined omnitrader eod study.
support base has to be created..have u seen strong base support of rolta@78 -82 ..2 yr back...after crossing 100..it never look back.
another criteria...when nifty starts moving up again after retracement
enter good candidate[GAIL ]
third unexpected good result published and buy volume shows high demand.
most imp part of position trade is stock list...here u know from back ground move shall continue..further..as u try for bigge r profit ,failure rate is high.
hence u must have inbuild mmsystem to get out with small loss and addon winner....mark boucher course is very helpful.
say being in known field i must track some news on company..
also result out of infy ..how + affect midcap computer company..
as position trade is a judgement game..hit of the moment decision should NEVER be taken..infact temporary fall is a great buy oppurtunity
strength indicator on 2week chart basis [ ie converting data on 10day high -low-close basis available in metastock] is good way to see.

To be a Trader-20yrs Page 74

In Range bound market


04 July 2015
12:07 PM

in rangebound market...william%r at oversold zone good indicator


in trend market , i use aroon .
after long fall, weekly chart engulfing bull i use for entry+ bill williams chaos entry signal
.......for stop simple sar as available in metastock...apart form subjective pattern stop and time stop.
profit booking ...50% quick booking
if however quickly price moving up .instead of sell i buy double as its low risk trade[ in the language of traderji confirmat ion by price]
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,
-momentum short plan
.............................
this condition to be created by media..rumor of market shall goup ..vs pro have already sold..now some -divergence can be seen ...price slowly starts
falling..now tv must speak again and again ..threat percept...more sell order coming in nifty future...NOW ONLY THE TIME for short...hence its a short term
quick execution ..a bull market top trade ..with propaganda from media
otherwise harsh bad news....when most participant prefer to sit on cash[bulls r running away]
with hold ing stock its a conflicting trade..better sell holding first.
-----------------------------------------------for further study understand extended bullmarket and volatility condition
and see after quarterly result out how price is behaving

. assumption .....condition of trade....if it does not exist no trade


2. entry..particular signal
3. holding profit one...give time.
4. exit..with profit target
with loss.
5. contingency plan..to save skin.
6. write after complete..of trade what i learn ..implementation vs. reaction of me based on fact.
this all elements r clearly written ..what actually works.
OTHER ELEMENT
........................
u factor..how to be neutralised so that i can think right.before taking position i must have an openion but PRICE must confir m my openion otherwise i must
use stop and book loss to throw away openion.
.MARKET HAS TRENDINESS AND ALSO UNPREDICTABILITY ELEMENT. NEWS AFFECT MARKET [UNKNOWN EVENT]....MAJORITY TRIES TO GUESS WHAT
MAJORITY MAY DO , TAKING RISK OF PREDICTION BY PUTTING MONEY BUT READY TO RETREAT IF WRONG........PUT MORE MONEY WHEN RIGHT.
since u have asked i place my personal opinioned model
.................................................. ...........................
u have to work on prediction model in which chance of RIGHT/BEING WRONG has to evaluated.
a. company result..good business../..20% weightage
b. macro economy + moneyflow....40% weightage
c.sector business ..priority 20% weightage
d. other factor..operators game/random factor ..20% weightage
total 100%
ALWAYS TAKE CHANCE OF BEING WRONG 40%...SO THAT IF WRONG ...MUST BE PREPARED
by the chart , i SEE how others r viewing..ready with my move ..tv news guide me how fools shall behave,..many a time i am wr ong ..but i stick to it.
as trading is not a game of perfection , 50%accuracy sufficient.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,
here i write about a system..developed by jeff.
5 day momentum method
...................................
background : strong trending market
principle : pullback for fewdays and then again resume move
1-2-3-4 pattern [3day pullback]
pullback near 20dma and again moving up.
why? with this pullback ..mf and hni plan to enter.hence new moneyflow..
high momentum,high probability trade
scan.; 1.strong trending candidate
2. use oscillator ...watch pullback
3.trend reverse...now u enter.
indicator: adx..strength of direction
rel. strength ..ok
filter ; adx>30..+di>-di..di=demand index
rel strength..compare to other stock /nifty ..BETTER.
stokastic..%k<40 oversold indicator
set up
.......... BUY DAY. 1.TICK ABOVE YESTERDAYS HIGH.
2. OR NEXT DAY BUY ABOVE 3%UP
CONDITION : %K MUST BE MOVING UP
STOP : 1% BELOW LOW OF LAST DAY
OR 1.5 ATR BELOW FROM LOW OF TODAY
PATTERN LOOKS...1-2-3-4 ...4 IS INITIATING PT ABOVE 2.
PROFIT TARGET : 7% IN 3DAY
MAXM TIME 5DAY..OTHERWISE TIME STOP.
IF PROFIT OCCURS EARLIER THAN EXPECTED..ALLOW 50% HOLD TO RUN FOR TOTAL 10% PROFIT
strength of the system is % k must be allowed to move up..to be applied to bull market.

To be a Trader-20yrs Page 75

strength of the system is % k must be allowed to move up..to be applied to bull market.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
so it is trade universe.3terms i introduce...exhausive, exclusive and intersection ie. interrelation between 2 element.
EXHAUSIVE..U HAVE TO GO INTO DETAIL
EXCLUSIVE..NO RELATION EXISTS..INDEPENDENT ELEMENT
INRERSECTION;INTERRELATION BETWEEN 2 ELEMENT...INTERRELATIONSHIP BETN MARKET...INTERRELATIONSHIP BETN MANY COMPANY IN A
PARTICULAR SECTOR.
exhausive gives micro view.
so before reaching to become a master...one goes through various way to question and answer this 3 element...[may be in diffe rent name].he knows how
far he understands...his limit..so now practice on regular basis[system]
and follow it diligently[discipline]
so i use 3 statistical term....
now u see all good thread ..search mode..nothing but ..can be expansion of 3 idea.
any other idea....yes EXECUTION.I DONT UNDERSTAND AS SLIPPAGE A BAD ELEMENT..BUT CV OPENS MY EYE,...i miss 3trades for slippa ge in intraday.
also some profit booking idea in real sense...so the difference with beginner and pro clearer to me..its IMPLEMENTATION.

HENCE THIS KEY WORDS U THINK IN THE LIGHT OF IMPLEMENTATION BY U.


EVERYTHING U CAN VISUALISE...
----------------------------------------------------------

To be a Trader-20yrs Page 76

QUESTION TO PRO
04 July 2015
12:08 PM

1.
2.
3.
4.
5.
6.
7.
8.

why they r superior ?


what time frame they trade?
how far they r subjective in trading ?
what r the reason for their actual consistency ?
on what condition they dont trade ?
what is their contingency plan[enough is enough..now i am booking loss]
what self sabotage u find most difficult to overcome..yet how u have done it ?
do u think beginner trader[4yr amateur] can be like u oneday ?if yes. HOW!

Answer : Yes definetly


1. Understand maths behind indicators before u apply it to charts
2. Design a system and optimized it over instruments u prefer to trade and back test with tick data if possible
3. Foward test it for atleast 6 mo with vast range of instrument and compare with backtested performance
4. Dont belive any idiots who says market is predictable
5. Stick to system even if you see consecutive loosing trades but check you in range of expected drag down limits
6. Apply money managment principles
..
1. why they r superior ?
cos they dont follow others, dont believe what others say, but listen to everything and takes what matters (test, test, test. researching and testing is not the
holy grail, but if there is any path, this is it). do you know what will be the performance of a random entry system with different money management on any
instrument?

2. what time frame they trade?


anything that you can think of...
3. how far they r subjective in trading ?
cannot answer

4. what r the reason for their actual consistency ?


the same that goes for McGrath, tiger woods and federer.
5. on what condition they don't trade ?
many reasons...but how can i know all? got some from market wizard series.
6. what is their contingency plan[enough is enough..now i am booking loss]
depends on each trader, but they HAVE ONE and FOLLOW IT DILIGENTLY.
7. what self sabotage u find most difficult to overcome..yet how u have done it ?
predicting the market....mechanical system.

8. do u think beginner trader[4yr amateur] can be like u oneday ?if yes. HOW!
why do you want to be like me? then you will have to follow my style, which may not suit you. get what works for you. keep an open mind, but don't take
anything on face value. Read - Practice - Practice - Read. btw, no of years has nothing to do with success...or else all 15 yr traders will be millionaires
today...this is not time based promotion. u can be a very successful pro in 4 yrs too.

Trader2 : PROs would consider this as exposing their war chest... may reveal their stengths.... as well as the weakness.
In their view all others are enemies ( as CV had put it) because the money one makes from trading is the money somebody else will be losing.
This is a game where the losers play an important role.
Afterall this is their bread and butter .... so the human survival instinct comes into picture.... Though the fact may be a few hundreds in the forum knowing
your system would not make anybody a loser...there are millions playing te market.... Also knowing a system does not make a winner... the person executing
the system has a large role to play..
Also will a PRO really talk about the losses?? I doubt...I remember somebody telling us in the chat room that he has 90% winners !! 90% winners and he was
still working as a sub broker.... mmm... sub broker business was more profitable than trading with 90% success...
I myself am not a PRO. I have a good, satisfying and well paying job. But of course TA is a passion... almost bordering on obsession...
I do lot of study and experiment with lot of indicators ...but my positional trades are mainly based a few simple momentum based cranked up stuff
Ofcourse I do have my losers but overall it has been good. Also the absence of complusion to make money from trading has helped me to become better in
my trading .. I suppose..
TRADER 3

1. why they r superior ?


ans. they are superior by experience and rationality.THEY JUST HAVE BETTER CONTROL OVER THEIR EMOTIONS AND ARE DISCIPLINES.they have better
execution skill .
2. what time frame they trade?
ans. as they found which suit them with comfort and making money.
3. how far they r subjective in trading ?
ans. no subjectvity.as per system ..entry -exit condition r predefined.however
some sentimental condition r checked.
4. what r the reason for their actual consistency ?
ans.right plan and implementation.improving success rate.
5. on what condition they dont trade ?
ans. condition not suiting their plan. when r/r ratio not favourable.
6. what is their contingency plan[enough is enough..now i am booking loss]?
ans. inbuild in the system.[hence nothing to worry]

To be a Trader-20yrs Page 77

7. what self sabotage u find most difficult to overcome..yet how u have done it ?
ans.not following the plan.distract by others openion...soln . follow price in a disciplined way.
8. do u think beginner trader[4yr amateur] can be like u oneday ?if yes. HOW!
ans. yes . discipline and a solid implemention plan including slippage.understand market and good money management.[ignore media]

so we clearly see some difference betn pro and serious amateur.


no1. level of comfort and serenity.
no2. least subjective.
no3.worst scenario is already planned and mastery over implemention.
key word is discipline and practicing their tool.
so from beginner u r moving on top...here u atleast know how to survive..irrespective of market u can run ur family by winning against other traders.
........................
so u r developing trading philosophy...plan new arsenal...to fight better.
so in is trade universe.3terms i introduce...exhausive, exclusive and intersection ie. interrelation between 2 element.
EXHAUSIVE..U HAVE TO GO INTO DETAIL
EXCLUSIVE..NO RELATION EXISTS..INDEPENDENT ELEMENT
INRERSECTION;INTERRELATION BETWEEN 2 ELEMENT...INTERRELATIONSHIP BETN MARKET...INTERRELATIONSHIP BETN MANY COMPANY IN A PARTICULAR
SECTOR.
exhausive gives micro view.
so before reaching to become a master...one goes through various way to question and answer this 3 element...[may be in different name].he knows how far
he understands...his limit..so now practice on regular basis[system]
and follow it diligently[discipline]
so i use 3 statistical term....

now u see all good thread ..search mode..nothing but ..can be expansion of 3 idea.
any other idea....yes EXECUTION.I DONT UNDERSTAND AS SLIPPAGE A BAD ELEMENT..BUT CV OPENS MY EYE,...i miss 3trades for slippage in intraday.
also some profit booking idea in real sense...so the difference with beginner and pro clearer to me..its IMPLEMENTATION.

HENCE THIS KEY WORDS U THINK IN THE LIGHT OF IMPLEMENTATION BY U.


urther elaborating the tools
..............................................
for intraday..its nothing but orderflow....price higher high break out concept.
for eod....predefined scanner.[u have to decide what u want]
for shortterm...support buy..
oversold condition...now price just starts to reverse.
[ suitable indicator signal which u rely]
for position play...some news impact not yet discounted in price.
continuty of trend in price[ma based]
something to check strength.
IMP: MINIMISING SUBJECTIVITY AND MEDIA HULLABULLA..IS UR JOB.
NEVER BELIEVE IN VALUE BUY AS A TRADER.NEVER FORGET STOPLOSS
.
i dont know,whether i am right to write here....forbidden art of trading will be exposed here.many a pro r available here in this great forum...i request them to
make comments.
1. why they r superior ?
There is nobody superior or inferior as far as markets are concerned.......and the time you do feel that you are superior,that will be when the market cuts you
down to size.
Quote:
2. what time frame they trade?
Intradays and position trading.......love playing the weekly as well as the 5min charts.
Quote:
3. how far they r subjective in trading ?
Used to love words like "subjective","mystical","intuition" once upon a time.......nowadays,the attitude is more to objectification of the whole process.Do
whatever it takes,an automated system,or set points of entry,exit and the discipline to always follow the rules of your trading plan.Whatever........but one
cannot beat all this fear and greed and hope,by joining the crowd.One therefore stands aside,follows the rules,practically robotic,day after day.
Quote:
4. what r the reasons for their actual consistency ?
A trading plan of attack,and then the discipline to follow it to the tee.

Quote:
5. on what condition they dont trade ?
There are many,like achieving the targets and more for the month.Also not trading if taking a hit and a predefined percentage point is hit.Or if there is some
sort of family emergency......etc etc.
Of course,importantly,when I have a rip roaring,rollicking bullish 60min,I do NOT trade the 5min and stupidly go short.There is enough profits to be made just
following the trend of the 60min and trading the 5.
Quote:
6. what is their contingency plan[enough is enough..now i am booking loss
Hmm.......stop loss for every trade.Position sizing appropriately.Set Risk percent per trade.Monitoring average wins,losses,drawdowns......blah blahblah,think
that what everybody here already knows.

Quote:
7. what self sabotage u find most difficult to overcome..yet how u have done it ?
Anticipating a move before it happens,trying to get in even before your trading strategy says so.........got licked many times doing that.But not too much of a
problem these days .........now in only when the move happens.

To be a Trader-20yrs Page 78

Quote:
8. do u think beginner trader[4yr amateur] can be like u oneday ?if yes. HOW!
Any fool can be a trader,every beginner trader can one day become an experienced one.Every trader with a plan and strategy that works can make money off
the markets.Why then are 99% people failing at the markets?They go by what a newsletter,a self proclaimed guru,their broker,etc tells them to do.They go by
their gut feel,or their neighbour's gut feel.They believe that making money is an evil act.They believe that trading the markets is for spare change .They have
yet to educate themselves.They have no plan,no modus operandi,no strategy,no plan of attack...............
Approach trading like a business,have a business plan,a trading plan.We are in this to make money and lots of it,as in any business.But strangely,to make lots
of money,you have to shift the mind's focus from making money to putting in that perfect trade.Although it's one and the same,you have to maintain focus on
the trades.
Everything is cold,calculated strategy and then a disciplined implementation.We are in this to capitalise on other people's fear and other people's
greed.......and for that,your own mind cannot work in the process of fear and greed.It has to be quiet.In the present moment.Practically like meditation.
Can anybody and everybody do it?Of course,provided you do all what it takes to be a trader.But sadly,that will never be the case........99% will always
lose,not because it's difficult,but because these 99% will not approach it with a plan,with the required discipline.........That stat will always remain.
Can you be that 1%?Surely and definitely,provided you are willing to pay time and energy and focus to making yourself a great trader.

To be a Trader-20yrs Page 79

Trading Edge
04 July 2015
12:10 PM

shall i show a tool?let us come to the point.


In order to succeed at trading, you must have an edge. Your edge begins with the knowledge you gain through your research and testing that a particular price
pattern or market behavior offers a level of predictability and a risk to reward ratio that provides a consistently profitable outcome over time. Without it, one is
just "playing" the market in order to have something to talk about on message boards. To get it, you have to know exactly what you're looking for and what to
do with it once you've found it. This process is what the journal is all about.
The journal goes through several stages depending on where you are. Once you've decided where you want to concentrate your efforts (at this level, the
journal may resemble a diary), then you begin the process of developing a system (or method, strategy, procedure, whatever you want to call it). Here the
journal takes on a different character. Once you've developed a tentative/preliminary system, you begin testing/trading it, and the journal adopts a still
different character.

The first step is to decide what kind of trader you want to be.
* What do you want to accomplish with your trading? Is it recreational? Supplementary income? A part-time job? Do you want to make a living at it? Even the
greenest of the green knows whether or not he wants to make a living at it, trade only part time, trade for recreation, trade for the action, trade to have
something to talk about with other traders (for whatever reason), trade only long enough to earn money to do or buy X.
* Do you have any idea what sort of trading is most comfortable? Long or intermediate-term trading? Short-term trading? Day-trading? Trend-trading?
Scalping? (Note here that a short-term trader, for example, does not become a long-term trader just because his stop was hit and he didn't sell; a long-term
trader doesn't become a short-term trader because he chickened out and sold too soon. Each of these approaches are selected deliberately and for thoroughlyconsidered reasons.) How patient are you? How adventurous? Are you a leader or a follower (most people think they're leaders)?
The second step is to decide what you're going to trade and when you're going to trade it.

* Have you found an instrument -- futures, stocks, ETFs, bonds, options -- that provides you with the range and volatility you require but also the safety that
enables you to relax and trade in an objective and rational manner?
* Have you yet found a time (5m, hourly, weekly) or tick (1t, 200t) or volume (1K, 100K) interval that gives you enough trading opportunities but also gives
you enough time to think about what you're doing? If you want to limit your trading to the "morning", are you physically and psychologically prepared to trade
all day? If not, can you shrug off whatever opportunities you may miss by limiting the amount of time you spend trading?

The third step is to develop your system*.


A system consists of (a) a set of rules that you use to select profitable positions and (b) a set of rules that you use to manage the trade once you're in it.
(*Note: again, whether you call it a system, a method, a strategy, a plan, a scheme, an approach, a procedure, or a modus operandi is not as important as
sitting down and doing it.)
* Developing a system begins with deciding just what it is you're looking for. Therefore, begin by studying price movement in real time (or at the end of the
day through "replay", if your charting program offers it). By "study", I mean to observe it with intent, not just read about it or listen to somebody talk about it.
Note the conditions under which price rises, falls, drifts. Make every effort to avoid imposing your biases onto what you observe. You may see trading as a war,
a competition, a game, or a puzzle. You may think you're out to kill somebody, outwit somebody, or are out only to detect the flow and slip into it, riding the
waves as if you were sailing. None of this should be allowed to affect what you observe.
* Develop a set of preliminary hypotheses which exploit the profit opportunities presented by these movements, e.g. price began trending "here". Price broke
out "there". Price reversed "there". What can I do to take advantage of that? What do I have to look for?
* Decide what strategy will best take advantage of what you think you've found. Are you looking to catch a reversal in the hopes that it will become a trend? Or
are you looking to trade series of reversals within the day's or week's range? Or do you prefer to wait for a breakout and trade what may become a trend? Or
would you rather wait for a retracement in what may be shaping up to be a trend? Limit yourself to only one strategy at the beginning.

Carefully define the setup which implements this strategy, preferably using old charts (attempting to define the setup by studying realtime charts is inefficient
since you don't yet know what it is that you're looking for). This is called "backtesting". All else flows from this. Unless you know what you're looking for, you
cannot test it, much less screen for it. If you have not tested it, you have no idea of the probability of its success. With no idea of the probability of success, any
trades made are essentially guesses.
Therefore, focus on the setup. One setup. Determine its characteristics. Define it so specifically and so thoroughly that you can recognize it without any doubt
whatsoever in real time. Decide provisionally where best to enter, what the target ought to be, where the stop should be placed, and so on. Only after the setup
is defined and tested (and it can't, ipso facto, be tested until it's been defined) can one even begin to think about trading it with real money, much less trading
multiple setups. Attempting to shortcut this process merely expands the amount of time it will take to develop the necessary skills. Nothing is gained by
painting the house before scraping it, cleaning it, and priming it since you'll have to do it all over again sooner rather than later.

* Forward-test what you have so far, again using old charts, preferably replaying them (if replay is not available to you, then scroll through them, bar by bar).
In other words, "pre-test" the setup. Make whatever modifications are necessary to the setup, i.e., re-examine and re-define your strategy. Address risk
management, trade management, money management in further detail. Determine the ratio of winning trades to losing trades (you will, of course, have to
define "winner" and "loser", which is where risk management and trade management come in). Determine the ratio of profit to loss. Determine the maximum
loss. Determine the maximum number of consecutive losers.

Note that beginners often use "win/loss" to combine two separate considerations into one, and failing to keep them separate can create problems. One is
win:lose. The other is profit:loss. Between the two, the "lose" and the "loss" have two distinct meanings. Win:lose refers to the ratio of winning trades to losing
trades. Profit:loss means, expectedly, the ratio of profit to loss.
You'll read that the % of winners can be less than the % of losers as long as the winners are sufficiently profitable, one's management is superior, etc. And,
yes, theoretically, one can "win" less than 50% of the time if his profits sufficiently outweigh his losses. But if your real-time real-money test begins with a
string of the losses anticipated by your backtest, you'll be out of the game almost before it begins. In fact, one can be left high and dry even if his % of wins
outnumber his % of losses, as mentioned above, if there is insufficient control of the amount of loss OR if the losses occur in sufficiently high numbers at the
beginning of the trial.Then there are commissions and assorted trading costs to take into account, which is why traders who actually trade find that, without
size, all the postulations about percentage don't mean much in practice.
* Paper-trade this plan, in a simulated environment, as a semi-final test, until you are satisfied that it performs at least as well as it did during the previous
testing phase. This may take several months or more depending on how many trials you perform. If your plan is not consistently profitable, go back however
many steps are necessary to arrive at a potential solution. (See also Making High Probability Trades.)
* Trade the plan using real money in real time, spending only what is absolutely necessary on "tools" and trading the minimum number of shares, contracts,
etc., allowable. If your plan is not consistently profitable, go back .however many steps are necessary to arrive at a potential solution. Recalculate your win rate
and profit:loss ratio on a continuing basis.

To be a Trader-20yrs Page 80

and profit:loss ratio on a continuing basis.


* If your plan is consistently profitable in practice, increase your size to what is a comfortable level, maintaining a continuous loop of re-appraisal and reevaluation. When things come unglued, back up as far as necessary to regain your footing.

Novices rarely do any of this. They borrow something from somebody or somewhere and perhaps modify it somewhat, but they rarely go through the defining
and testing process themselves. Some just try whatever seems like a good idea and hope for the best.
If one has absolutely no idea where to begin, there is nothing wrong with using a canned strategy IF it is used only as a point of departure. In other words, the
canned strategy, regardless of what it is or what claims are made for it, still has to be tested, which often entails taking what is unexpectedly vague to begin
with and defining it to a level of specificity that enables the testing to take place (it should come as no surprise that those who do go through the process
succeed and those who don't, struggle, often to the point of being driven out of the market). Examples of canned strategies that are reasonably well-defined
include the Darvas Box, the Ross Hook, the Opening Range Breakout, O'Neil's Cup With Handle, Dunnigan's One-Way Formula. Some of these are more vague
than others and will require considerable work on definition before they can be tested. But they serve as points of departure
A journal should be more than just a trading log bought here, sold there, made this, lost that. It should be a record of your journey (that's why it's called a
"journal"). If done correctly, a journal will reveal patterns. Patterns of what you're doing right and what you're doing wrong and when and how often and under
what circumstances. Patterns of the behaviors of those who are trading your stock (bond, fund, option, whatever). Patterns of the market you're trading, of its
cycles, of its stages, of what works at some stages and in some cycles and not in others. It will reveal much regarding your trading. It will also reveal much
regarding your self.

Addressing the questions asked in Part One and defining and testing the setup are only the preliminaries. Eventually, one starts trading, if only on paper, and
that is where the journal can make the difference between success and failure.
A journal is not just a record. It is also a plan. Before the first trade is ever made, even if only on paper, prepare for the day. Note any events that you should
be aware of (reports, press releases, meetings, speeches, testimony, nuclear explosions, approaching meteors, etc). Write down reminders of any elements of
the trading plan that you're having trouble with and what you intend to do about them, e.g., dont take any trades anywhere but at support or resistance or
be wary of wide-range bars (this may be necessary as early as the afternoon of the first day).
Above all, record your justification for each and every trade. Record your thoughts before, during, and after the trade, written in real time* (your perception of
what looks to you like a potential setup will change substantially after the setup resolves itself, and when you ask, later, what the hell was I thinking?, your
record of your thoughts -- your "self-talk" -- will tell you, so that the next time, in real time, youll have a deeper and more rational perspective). This is more
than just the reason for the trade (It looked like it was going to go up). It is more than the rationalization (It was time for it to go up). It is more than the
mystic prompt ("I felt it was going to go up"). Its the justification for it, the explanation that one would provide to ones boss or client if he were trading for
someone else. If everyone wrote down the reasons behind and justifications for every trade, their learning curves would be accelerated dramatically.

*
At the end of the day, review your decisions. Did you make good trading decisions, i.e., did you follow your rules or not? If you followed your rules but made
one or more losing trades anyway, do any of your rules need to be re-examined? If you didnt follow one or more rules, which do you most often fail to follow?
Whats the problem? What did you say to yourself at the time? What do you need to work on the following day? Always, what could you have done differently to
improve the outcome? Can it be tested to find out if it's only an occasional anomaly or worth incorporating into the system?
And then you write down your detailed plan for the next day . . .
Everywhere there are people telling us that this path or that path is the one we should take. How are we to decide? Most of us end up stumbling along through
a trial and error exploration of various systems, methods, techniques, and whatnot. Some of us find something that works. A great many do not, and quit in
frustration, or broke. (John Forman)

Make journals a part of the daily routine Even if you dont trade on a particular day, it is valuable to review the days setups and behavior at key price levels.
Reviewing patterns on different time frames can also help traders internalize the context of the markets they are trading, as well as the interrelationships
among those markets. The French scientist Louis Pasteur observed that, in matters of observation, chance only favors prepared minds. Replaying market
days, reviewing your own performance, and identifying missed opportunities prepares you for future performance, as your increasing familiarity with trading
patterns sensitizes you to them in real time.
Incorporate specifics in your journals If I had to identify the single most common shortcoming among trading journals, it would be their absence of detail.
Entries such as, I lost my discipline; I have to be more patient, might be nice as post-it reminders, but are inadequate as journal entries. Journals need to
clearly state what happened, your assessment of why it happened, and the specific steps you intend to take to deal with the situation in the future. A good rule
is that anyone reading your journal should be able to identify and follow the exact same steps that you intend to take in the future. Your journal should be a
planning document, not a statement of intentions.
Wherever possible, review your journal entries with a valued colleague or mentor When I established a training program for new traders, one of my first steps
was to insist upon daily review of trading journals. This required me to create a trusting and constructive environment, so that traders would be honest in their
entries. Once that openness developed, the daily reviews became proactive planning sessions (usually shortly before the start of the trading day) that
addressed issues before they could damage the profit/loss statement. Even more important, the daily review created expectations of accountability, as traders
knew that my inevitable question would be, How did you do with your goals for the day
Use journals to review positive trading performance, as well as problems The number two shortcoming among journals is their focus on problems to the
exclusion of solutions. If journals become a mere recounting of ones flaws and inadequacies, traders will inevitably lose interest in them. Traders can learn as
much from what they do right as from their errors. My favorite instruction to new traders is to highlight in their journals one thing that they did right the
previous day that they want to replicate today and one thing that they could improve upon in todays trading. This forces traders to stay in touch with their
strengths, as well as their failings.

Each journal entry should include material about the markets and material about the trader It is not unusual for traders to emphasize one at the expense of
the other. The core concept I stress with traders is that of pattern recognition. Traders display patterns in their behaviors: some of these are positive; others
interfere with profitability. Markets enact their patterns as well; it is the trader who can see these as they emerge and act quickly that has the best chance of
long-term success. Including material about trading patterns and traders patterns makes the journal a learning tool about oneself and the markets.
Price ,displays a value perception in human mind,these individual perception translated in buy or sell orders ,exerts an inertia to price , to move
kinetically.Hence at SAME PRICE a buy & sell is simultaneously generated in 2 human mind .
yesits a two way percept..unfortunately various timeframe viewing by others with biased openion made it complex. next the fear if i wrong..dilemma
create situation an abrakidabra........ur vision /sense/price direction guidance
............with the help of experience can keep u in right track....analyst does the thing after..only a trader can move through by balance,indicator is nothing but
an approach to rationalise it.

To be a Trader-20yrs Page 81

Wrong Traders
04 July 2015
12:10 PM

wrong traders
....................
Poor money management
Trading against the trend
Over reliance on discretion for entries and exits
Failure to confirm trends and setups on longer timeframes
Poor use of stop loss orders (too close, or too far away) - placing them for the wrong
reasons
Overtrading
.............................
SOLUTION:Identify the trend, and trade with the trend
Confirm setups with multiple timeframes (5min, 30min, and daily for intra-day trading)
Keep a full record trades taken, MONEY won/lost, reasons for entering and exiting, and
thoughts
Keep small stakes for the time being, until consistent profits can be achieved
Avoidance of "gamble entries" and high risk trades
....................................
FOR HIGHER LEVEL
1. DEVELOPMENT OF A TRADING PHILOSOPHY
2.DEFENSIVE TRADING STYLE
3.DEFINE RISK AND YOUR RISK TOLERANCE LEVEL AND TIME FRAME U NORMALLY
TRADE RIGHT
4.PRINCIPLE VS ACTUAL TRADING RESULT
5.LOOK FOR THE SIGNIFICANT FACTOR ..HOW TO DO NEWS TRADING
6. CAN U LEVERAGE IN REAL SENSE? CONCEPT OF USE MORE MONEY TO
WINNER.......CONCEPT TO USE TIME BY TAKING PAID CALL...CONCEPT OF BACKTEST
TO USE TO WHAT WORKS IN PAST FOR CONFIDENCE BUILD UP
7. BELIEVE IN PROBALISTIC THEORY , YET A FEEL FOR PRICE...BUT CONTINUE TO
TRADE AND HOLD ONLY IN THE DIRECTION OF TRADE...KEEP FAITH AS PRICE IS
SUPREME.
.................
SO THE TOOL IS NOTHING BUT HIMSELF BY WHICH PLAYING IN HIS STRONG ZONE HE
CONSISTENTLY MAKES MONEY OUT OF MARKET [ANY INDICATOR OR INDICATORS
WHICH SIGNAL CONFIDENT RATIONALISED BUY AND SELL]HE KNOWS HOW TO
HANDLE SUBJECTIVITY..RUMOR...LOSS AND PROFIT...
PS. i have professional operational research background...presently given a complex risk
analysis for a project...so i have to move out before inauguration of my present
project.[ i believe in hard work philosophy....so the load comes to me ...its 14 month
project...real swot and actual implementation.i traded @2002-03 with earning 50000pmsalary cut 30000=20000pm...hence only swing trading possible.Offerred job 1yrback @
60000, but i decline.my long association with chess reflected .in last 4 yr of testing and
trading with real money...many a system checked based on metastock
/omnitrader....only some useful one in beginners term ...i write it in trading system of
beginner'
without mathematical jargon[ GOD knows how difficult to control my mathematical
inclination....regularly abused by GM[ a qualified engineer with versatile project depth,of
course an MBA...'who can follow this 3vector nonsense risk analysis and
profitability.......make it simple so CA can sanction
...give him only bep....+3month pert [OR term]...............i can take credit..
my boss never believes...i can write in plain and simple english.
traderji.com...an excellent forum for budding trader ....these are my 3 gold coins..
HOWEVER 1 HAS TO READ TO FIT JIGSAW PUZZLE...another hints read /use dynamic
trading ...use price , volume and time element.

To be a Trader-20yrs Page 82

LEARN FROM ANALOGY


04 July 2015
12:11 PM

Stock market chess


1.there is always a seller for a buyer.see otherside of story,..only one can be
right2.evaluate only what matter,nothing more3.chess in totality contain perfect info,
unfortunately market is not.4.decifer price, if nothing visible go with intuition[an
intellectual skill developed based on pattern study & problem solving skill5.play market
with a plan ,longterm or shortterm6.review constantly in eod and adjust accordingly.
Look at markets last day activity and last hr7. dont waste money[dont allow loss to
run]8.press winner when u have them9.winning reqd not only perfection from u,also
mistakes from others.10.when u have got early signal, buy.11.always give high priority
with nifty12.development of knowledge , time is money.13.dont try leverage if u cant
handle,use resource wisely14.trade studynever ignore mistake15. stay in your own
zone,stock selection16. fundamental contrarian, high level of vision Chess tells u to think
/not impulsiveCheck opponents pt of view.2.tactics is very imp[dont only
read]4.always see sacrifical trap and positional strategy5.3move attack vs. attack on
king .6.refer to move at hand and opponents last move7.never allow unnecessary pc
loss.8.know how to win wongame.9.play well also watch,opponent may give u
opportunity.10.take initiative.11.its the center.12.development of pc, it needs
purpose13.premature attack is costly.14.chess study..admit blunder and reason of
loss15.dont be flashy to win16.grand master break the rule as he sees better, others
understand it later.
Here i am trying to write a great discussion with arun k...it was 2003. [his father was
manager of indian bridge team]have u played bridge ?'...i asked. he smiled. he had
given a good lecture on indian economy..effect on suppose pn r banned..he was a part of
india shining slogun,....so i told him 'trading is nothing but a bridge competition. cards
come ..u have to play.partner is ur system ..u have to tune.play 2/3 yr of practice
deal..so with all/various conditions how to react ....is ready for u.opponents r other
participants in market...never allow to win.so at best..u can defend ..not to give extra
tricks.
but sometimes they overbid ..your hand suggest..something wrong..u got
oppurtunity..now double..and ;'score high'....BUY IN OVERSOLD MARKET..OR BOOK
PROFIT ..IN OVERVALUED MARKET.
u got a good hand..u have to play as declarer...thats the oppurtunity u must buy..but
ready for bad colour brake..by defender.try to score as best as possible with limiting
risk.
bidding system...a general trade governing rule by which u decide 'whether to play..or
its better to defend'
competitive selection trial..pairs event'...the game played with same card with
directional opponent..your score shall be 'comparatively better with others'.............IT IS
THE DAYTRADING..UR ULTIMATE SKILL WILL BE TESTED
UNLESS EXECUTION MASTER..AND GREAT SURVIVAL SKILL'DONT COME'...however its a
reality checking m/c to know where u stand in trading arena.
Ninety-nine percent of the people in the business are followers. Theyre not creative and
theyre not willing to rely upon themselves to make decisions, so they rely upon other
people. When the decision is right they take credit for it, and when its wrong they point
fingers at other people. And out of that one percent who do make their own decisions
and create their own tools, 99 percent of them are going to be wrong, so youve got
about one-tenth of one percent that are going to be right.The market is [full of
lemmings] :everyone feeding off one another, following the media, and following a
trend.
TRUE STENGTH...SEE THE BIGGER WAVE ..BEFORE ITS FORMING...
THE PROBABLE PT WHERE IT CAN FORM...
READY WITH MONEY TO TAKE POSITION..
ALTERNATE SCENARIO...[AS SUGGESTED BY GREAT CV]...KEEP EYE..JOIN WHERE AND
WHEN BIG WAVE IS FORMING...OTHERWISE SIT IDLE.
..

To be a Trader-20yrs Page 83

..
Why it is happening
when it is going to happen.
2)Exiting when you are not supposed to exit and entering when you are not required to
enter in a particular stock.
3)Counting on blessings and prayers if you are in this category believe me you trying to
jump from a hill without any safety rope
( Just imagine a million people entering into a trade and half of them praying for market
to go down a lil bit so that the short positions they have created they can exit in profit
and half of them praying to market to go up because of a long position they have
created they can exit. Imagine what God gonna think of these situation. He may say
you all gone crazy on the other place he might ask who the hell has told you to catch
the tail of a running elephant Don't put God in a confusion beacuse it was your mistake.
4) He calls this mistake illusion judgment: Spell bound with an imagination this stock is
bound to go up and it will go up and one still wait and wait suddenly the stock enters
into the red territory and one just stands there spell bound not believing not ready to
accept and still waiting . Thats a deadly mistake.

5)Not doing the homework and entering into the danger zone on some dump shot
recommendation and tips out of 10 dump shot 2 or 3 works and when rest 7 shots go
wrong on a particular day it takes out the entire effort of the previous week how sad.!!
I still remember there was ones a person called Jai Reddy this guy I saw him trading
daily one or two trades everyday and profit 10 to 20 K take home I said wow!! What a
man I once asked him he used to sit at brokers terminal all day.
How do you do it,
he said to me u trade I said yeah!! From where 'I said" online "he said: well dear
"internet I dont know" how to place a trade "I have a habit of coming everyday to this
dealer I just love the terminal you Know"..I said how he does it .well just ignored me
but I was after him everyday so one Saturday I caught him near a tea stall so requested
him and he gave me 5 rules to follow I just gave above
His words I still remember he used to say: Your mind is a chart and your memory is a
terminal and your strategy is your dealer who will push the target through
You can take those numbers home all you have to do is be quick and leave the greed
Every knew day has its own advantage after all its the eagle who grabs the pray even in
the blowing wind it keeps on flying eyes constant and focused thats what you need he
said. If your eyes are focused on a scrip everyday each passing day have patience
believe me It will give you the opportunity to grab itJust try it.
TRADING PERFORMANCE
.................................
VISUALISE..A chess player analyzing the board for the next move...
Trading as a Performance Activity.Humans choose when to take action and when to
refrain; they can select various courses of action on different occasions and can invent
new strategies when needed. performance is a function of the chosen actions of
performers, the correctness of those choices, and the skill with which the actions are
carried out. Activities that are performed well on a consistent basis require a high degree
of skill. A lucky outcome is exception.There are individuals who can be identified as
expert performers. With very rare exception, expert performers are ones who have
developed their talents over time. Most expert performers undergo specialized training
to cultivate their talents.
They require a specialized knowledge base. To perform well in a field, a person must
master the information and skills specific to that field.
Trading, as a performance activity, has much in common with chess. It is competitive,
To be a Trader-20yrs Page 84

Trading, as a performance activity, has much in common with chess. It is competitive,


requiring a high degree of concentration and strategy. It also features a limited number
of actions that, in combination, create a large array of possible strategies and actions.
This makes both activities easy to learn, but difficult to master. Chess can be played in
lightning fashion, with very little time between moves, or it can allow players many
minutes to plan movesor even days (postal chess). Trading can also be conducted on a
very short-term basis or can be planned and executed over hours or days. These
similarities make chess an excellent starting point for examining the performance
dynamics of trading, especially since chess is one of the performance fields most studied
by researchers.A well-replicated finding in chess research is that the memory processes
of experts are different from those of non-experts. One intriguing set of studies took
chessboard arrangements from a past tournament games and briefly showed them to
expert players and novices. Afterward, the expert chess players were able to recall the
positions of many more pieces than the novices. When the two groups were shown
chessboards with randomly arranged pieces, however, their recall of the positions of the
pieces was quite limited. The researchers conclusion was that experts do not have
better memories than non-experts; rather, they have better memories for meaningful
relationships among chess pieces. Instead of remembering where each individual piece
was on the board, the experts viewed the board as clusters of pieces and remembered
these. When the board was randomly arranged, there were no meaningful clusters of
pieces and the experts had no effective means for encoding their information.
How do expert chess players gain this ability to perceive meaningful patterns among
pieces? Because chess players are given ratings based upon their tournament play, it is
relatively easy to compare experts (masters and grandmasters) with less accomplished
players. When a variety of factors are incorporated into multiple regression equations to
predict chess ratings, two stand out as highly significant:The number of books owned
and The cumulative number of hours spent in practice correlation between the amount of
time spent in practice and current performance ratings was .60
it is necessary to understand what chess books are and how they are used. These texts
typically break the game down into components (opening, endgame, defenses, etc.) and
present historical games from tournaments, along with annotation from an expert
author. Readers do not merely skim over these games; they learn specific opening or
defensive sequences and then see how these were utilized in actual games. They
recreate those games on their own boards and carefully play through the positions, so
that they can see what the expert players saw. They also play through alternate
sequences to observe where these might lead.
Interestingly, chess experts do not have significantly more chess-playing experience
than non-experts. Rather, a higher percentage of the experience of experts is spent in
the systematic practice of various facets of the game. Non-experts tend to spend a
higher proportion of their time in games against similarly-skilled opponents. This
experience neither exposes the learner to the moves of experts, nor does it provide time
for a careful review of moves, exploration of alternate lines, etc. In the Charness work,
the correlation between solitary practice and chess ratings is almost twice as high as the
correlation between practice with others and ratings. This is because solitary practice
with chess books allows learners to obtain chess knowledge in context. Instead of
focusing on the moves of an opponent, learners encounteragain and againthose
meaningful configurations of pieces that appear in the games of experts
Because of this, chess students can create and play through almost any challenging
situation imaginable, drawing upon the accumulated wisdom of experts. Trading
possesses no such database. Trading books, unlike chess texts, are not annotated
compilations of the trading decisions of objectively rated experts. One cannot use trading
books to recreate trading sessions or to systematically explore trading decisions and
their alternatives.As a result, traders tend to spend little time in the systematic practice
that is the single greatest predictor of chess expertise.REMEMBER...In every
performance field, the development and maintenance of expertise requires a high ratio
of time spent in practice relative to time spent in actual performance.Athletes spend far
more time working out, practicing, and scrimmaging than actually playing in competitive
events.Only significant time spent in absorbing winning and losing chess enables players
to internalize the patterns of play that distinguish experts from non-experts. The trader
who spends more time to learn,observe and practice..definitely is superior.The expert
trader needs to be able to review and re-experience markets and systematically

To be a Trader-20yrs Page 85

trader needs to be able to review and re-experience markets and systematically


rehearse facets of trading performance: entering, managing, and exiting positions.Think
of each trading session as a chess game, and each game as a contest between two
expert players named Bull and Bear. Every short-term swing in the market is a move
by Bull or Bear that ultimately leads either to a victory for one of them or a draw. In
tracking the moves of Bull and Bear, we can pause the match at any point and observe
how each player exploits the weak moves of the other. With the aid of an electronic
database that collates similar trading sessions, we can even explore how alternate
moves by each side produce different outcomes. Moreover, we can play and replay the
games (and their similar variants), seeing if our simulated trading decisions accurately
reflect our reading of the strengths and weaknesses of the players positions.
How could we practice this?Programs that allow users to save and replay tick data are
especially valuable, as this creates a library of trading sessions akin to the collections of
chess games found in books... general rules and advice do not turn chess novices into
experts, and there is no reason to believe they will advance the performance curve for
traders. Knowledge and practiceand especially the direct experience of knowledge-inpracticeare the keys to the acquisition of expertise.so now we know why most socalled
traders fail.. they have failed to structure their learning to facilitate expertise.
they fail to put systematic work into performance....HENCE LEARN DYNAMIC TRADING
CONCEPT..AND IMPLEMENT IT.
u have played enough chess trap ..opponent understand your original intention later...so
u win by winning in thinking...planning..better than in higher time frame.
only idea to play to make money...wherever u buy u have to sell higher.
so when we buy ...hoping now it shall move up.suppose i play 10min. chess against u
[ur time limit 1hr]...still i shall win..as i have practiced it more than 6yr....so amateur
shall lose unless unless ..within 1st ten of a state..with rating higher than 2200.same
case in trade...i novice must lose against good pro SS ...as i fumble before entry...where
as u know actual move ....
bookish idea has given clearly by dr elder.BUT I BELIEVE ALL BIG MOVE MUST START
WITH SMALL ONE.....AFTER X...3-5% VALUE IT HAS SOME TENDENCY TO
CONTINUE...MANY A FAIL...THATS RANDOM MOVE...
so predictive resistance is a profit booking idea for support buyer...and x pt is nothing
but oppurtunity for break out player..
as a pro since u play both ...u know ...i am right...
however monumental works done by j m hurst........
also at www.ino.com....regarding which time frame to choose....for formless trading
Q.'when somebody goes against the trend on Daily charts, ie let us say the trend is up,
and you sell, will it not be a blunder? Remember, you are initiating a trade in the wrong
direction in the first place and then you hope to cover!?
ANSWER 'on purity basis against primary wave..intermediate term ..short move occurs
which utilise wisely by pro like u.so the person knows bothside of story...when to
feed ...when to ride.SIGNAL MUST LITTLE DIFFICULT TO EMPLOY...HOWEVER..those
who have seen enough[by staying in mumbai..nearby sea and financial capital can react
quickly enough to earn..
for fool like us ..its a losing game...winning little,lose more...out of frustation missing the
big oppurtunity.
basis of profit is how many fools r after u...the story of catching bear before it catches
u..suddenly gun found locked...its ur turn to run...hoping u run faster...and bear catch ur
friend who is not so expert in flying away...i see this analogy on regular basis on
tv...telling to HOLD..BY SUITED BOOTED PRO...SO THAT THEY CAN GET OUT...OR
SHORT WELL...
TRUE STENGTH...SEE THE BIGGER WAVE ..BEFORE ITS FORMING...

To be a Trader-20yrs Page 86

TRUE STENGTH...SEE THE BIGGER WAVE ..BEFORE ITS FORMING...


THE PROBABLE PT WHERE IT CAN FORM...
READY WITH MONEY TO TAKE POSITION..
ALTERNATE SCENARIO...[AS SUGGESTED BY GREAT CV]...KEEP EYE..JOIN WHERE AND
WHEN BIG WAVE IS FORMING...OTHERWISE SIT IDLE.
note: on a trade basically u r trading an openion [bullish or bearish] with
money......always ready to be wrong[being humbled by market]and occasionally u shall
be correct...but when right bet big,..BIG ENOUGH to run your family expediture on a
single trade. price confirmation is the only condition for holding a trade.

To be a Trader-20yrs Page 87

MENTORING
04 July 2015
12:11 PM

it is a process by which a more skilled /experienced person teaches/encourages/counsels


a less skilled /experienced one for promoting latters professional and personal
development in a friendly environment.
1]first understand what is going on
2]discussion is the method
3]relevency
4]learning a job/skill development
5]ready to change but how?
mission and strategic statement ....aim....strategy..to reach it.
strive for excellent concept
6] concept of VALUING.
.................
MENTEE'S AIM: SUPPORTIVE SELF DEVELOPMENT
relation depends on degree of trust and mutual regard
MENTOR HELPS TO MENTEE TO REALISE HIS POTENTIAL[ ACTUAL]
first aspire...then aspire to ACHIEVEMENT
PLAN:
GET A WHOLE PICTURE AND LEARNING ATTITUDE[ i know little , i must work hard to
learn & change myself]
....................
IDENTIFY MENTOR[confidene build up measure]
1] who shall take interest in my welfare and development
2] can he be role model?
3] can he be helpful to uncover my talent or ability, resolve difficult situation
4] aim to acquire new vision.
...........
some concept r useful
........................
concept of a manager....suppose to manage the situation both man and material to the
best of interest of organisation & situation
...
discussion type..open and close......
open ...ready to discuss anything
close..ready to discuss to sp. related topic ..as agreed
AFTER LEARNING MENTEE gets a new vision what is possible
then practice to apply
benefit to a mentor
.......................
something monitorily....but actually of trust/more fulfilled ..concept of purposeful
.....................
COACHING...SP. TIGHT FOCUSSED GOAL
TRAINING.......A REPEATATIVE CONCERN TO FOLLOW AFTER UNDERSTANDING....TO
DEVELOP SKILL
.....................
APPRAISAL......ITS A PAST OF FORMAL SYSTEM/INDIVIDUAL..TO EXPRESS ONE'S
STRENGTH AND WEAKNESS, MAY BE PERFORMANCE RELATED ,TO PROMOTE
OPPURTUNITY[ if wrong penalty]
it is also knowing 'matter of fact' ....regarding ones +/- pt
to improve performance
....................
notes taking is a good way to learn.......
progress and development
.....................................
step 1: getting started ................talk to other mentor/ talk to who has gone through it
reflect upon 'own experiment'

To be a Trader-20yrs Page 88

reflect upon 'own experiment'


step2:relevent job relaterd experience and skill[u have]
. interpersonel skill to learn and to deliver
a DESIRE ...
AN OPEN MIND FLEXIBLE ATTITUDE
..RECOGNISATION OF WHAT U WANT TO IMPROVE
..TIME AND WILLINGNESS TO CONTINUE
...DEVELOPMENT OF U VS. DEVELOPMENT OF OTHERS
..VALUE OF EXPERIENCE AND COOPERATION
.......................
STEP 3] AREAS OF DEVELOPMENT.
........A] UNDERRSTAND SYSTEM [MARKET]..HOW IT WORK
B] HOW CAN I BE FIT THERE
C]ACQUIRE OPEN FLEXIBLE ATTITUDE TO LEARNING/GOING THROUGH DIFFERENT
EXPERIENCE
D] UNDERSTAND DIFFERENT AND CONFLICTING IDEAS/ SITUATIONS
E] BE AWARE OF VESTED INTEREST
F] OVERCOME PERSONAL SETBACK HOW TO WIN OVER OBSTACLE
G]ACQUIRING SP SKILL
H]GAINING OF KNOWLEDGE AND CHECKING ITS RELEVENCY
I] PREPARE YOURSELF AS EXPERT[EXPERTISE IN ANYTHING]
J]ADJUST TO CHANGE
K] UNDERSTANDING VALUE IN THE CONTEXT OF SITUATION ...[VARIABLE TIMEFRAME
BY VARIOUS ONLOOKER...IN SHARE MARKET]
SOME GROUND RULE AND A MODEL
.................................................
1]ALWAYS ASSESS FIRST
2]A SCHEDULE TO WORK
3] A 'GROUND' TO WORK[ON WHICH] ...AND WHICH NEEDS FURTHER ATTENTION
4] RELATIONSHIP STUDY FOR EFFECTIVENESS.....ENHANCE ONES
KNOWLEDGE ....UNDERSTAND FILTRATION IN LEARNING/MATURING
.........FEEDBACK LOOP CHECK
..................I PROPOSE A 3 STEP MODEL
.................................................. ...........
1]EXPLORATION OF NEW IDEA
2]NEW UNDERSTANDING
3] PLANING UR ACTION
...........
this model pt i expand later
first step ...exploration of new idea
................................................
clarify what to learn
.............................
create a discussion mode friendly enough to encourage further exploration
.................................
be patient
...............
realise with time ...own answer..[resist temptation to tell others]
second step...new understanding
................................................
1.LISTEN....yet check and check any new idea if right
2. ask open question and discussion pl.
3.recognise individual strength/weakness
4.ESTABLISH PRIORITY
5. SHARE EXPERIENCE..[CASE STUDY METHOD]
6 BE FLEXIBLE..LEARN TO SEE FROM BACK..AS WELL AS FROM FUTURE
.......ENCOURAGE TO 'SEE' DIFFERENTLY...BUT QUICKLY LEARN WHAT IS
RELEVENT[WHAT ONLY CAN HAPPEN..SO THAT IRRELEVENT LOOSE PRIORITY]
7.REMEMBER AN WORD 'COMFORT'...LEARN AT OWN PACE
8. KEY WORD IS CONSOLIDATION...REFLECT BACK AND CLARIFY
9.NEED...GOAL AND ASPIRATION........WHAT IS TO LEARN FURTHER?
...........
NOTE..NEVER ALLOW POOR UNDERSTANDING...TAKE UR TIME...BUT UNDERSTAND
To be a Trader-20yrs Page 89

NOTE..NEVER ALLOW POOR UNDERSTANDING...TAKE UR TIME...BUT UNDERSTAND


THOROUGHLY....AS ACTION OUT OF WRONG/POOR UNDERSTANDING...SHALL BE VERY
COSTLY LATER
.........................
Third Step...action Plan
.........................................
1.examine Alternate Action And Its Consequence [risk/reward Analysis]
2.choose One Or Two Proper Action Plan...monitor Progress Of Event[price].....evaluate
Outcome[later..in Cool Brain]
3. Commitment Factor....[expect Many A Time U R Wrong]
4.evaluation Of Oppurtunity....believe/faith Factor How Far Helpful In This Particular
Occation
5.learning Cycle...think Of Experience.....what U Can Generalise From Experience? Apply
It........experience Loop
hope all those reading it , find enjoyable and thought provoking.....
but first question is why u need a mentor?.
..........................................
the answer is as mentee needs a support /trust...stress relieve mechanism
as trading is always an uncertain event....
who can be mentor?
....................
who has knowledge , experience and skill in related field............who has vast
experience of facing difficulty and yet to run smoothly[what to do now].ie. calibre to face
stress
HE MUST HAVE SKILL ...TO BE OPENMIND.+IVE OUTLOOK..GOOD LISTENER...to think
and feel how others plan to behave..
.................
hence check the fitting mentor and mentee...a concept i find useful ...
'pentagonal peg and 5sided hole'....a basic job fitting criteria used by professional
interview board
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Being A Mentee
........................
Accept Challenge ...ready To Learn Willingly And Highly Committed
...believe In Balanced Risk Approach...must Believe Learning Is A Continous
Process....achieving Progress Is Always Possible With Time
.............................
Expectation Of Mentee
...............
1.proper Guidance Yet Challenge To Perform
2. Enjoy Friendship And Support
3. Learn From Example
4. Learn From Mistake
5.take Wise Counsel/know To Listen
6. Self Aware
7.share Critical Knowledge
......................................
Wrong Mentee
..................
.believe In Gossip[enjoy Loose Talk]
..expect Immidiate Soln[answer To Problem..not Capable To Handle]
................................................
Conclusion
....................
A Mentee Require[need]........
1.a Critical Friend
2. A Confidant[some Sort Of Emotional Support]
3. A Source Of Knowledge
..................................
Matching Of Mentor And Mentee...

To be a Trader-20yrs Page 90

Matching Of Mentor And Mentee...


Learning And Development....do I Need Training?
............................
Time Management Issue [which I Dont Write Considering Boring To Readers]
.............recording Of What I Learn
..............priority Issue...seriousness
.................................................. ..
Tips For Learning To Trade
.........................................
1.avoid Being Judgemental.
2. Dont Expect To Get All Answer...be Clear About Expectation Vs. Bourdary[concept Of
Out Of Bounds For U]
3.stand Back From Issue[over Anxiety]..and See From Back [long Term View]
4.accept Challenge To Learn
5. Always Take A +ive View ...have Faith
6. Discuss Issue Openly And Monitor Own Progress.
.................................................. ..................................
market behaves as its suppose to behave. in india i find very poor knowledge on
trading...particularly to teach trading in real sense...hence i try to do a school concept
and later college one...as i am amateur...college course i can not guide nor write...hope
some good professional soul help shall come
waiting for a reply
collectively some great heart may also contribute...hey u have to give time -effort-for a
cause.
ok i am starting now.
school is of upto class 12...10 +2
...classes can be not a year in a sense,...may be 3month to someone...may be 3 yr to
other
class 1,2......10,...may be some of which u already know
...only structure wise differently represented
.................................................. ......................
individual ...student who is ready to learn
teacher...trade mentor.
they r many...successful trader...learned from hard knock from market...like me and still
learning...bookidea of some great trader
library...ur soft copy and hard copy
study and learning at own pace.
exam centre...market
pass and grade...money earning
performance evolution..trade journal
requirement : some other book ,reference, software, printing m/c.other dealer
most imp drawback ...time availability and hard work
plus pt/:crystal clear view
...............................
year...does not mean a course can not be learned within a month.
class 1
.............
what is stock market....financial system of a country....economy,business environment
of a country,moneyflow in a country
stability ..in political sense,..war ...flood/earthquake...acts of god...how behavior shown
in past
class 2
............
why one is trading in market?
stock trading system
f&o
...
loss aversion.
willingness to learn and test idea.....where i stand.
class3
...........
my plus pt.....my minus pt

To be a Trader-20yrs Page 91

how i become a trader?


what r the quality of a successful trader?
...........which i want to......how i shall myself to achieve it.....discipline and behavior
modification.
class 4
...........
order entry system,market order..stop order..limit order
margin
money management
probability of a direction
low risk trade.
concept of leverage
stop concept
derisk model
scan concept
.............................
class 5
..........
market condition,trade entry condition
style of trade,matching of trade style and money earning oppurtunity
importance of progressive stop ie. winning trade must not go to trade loss...worst case it
is no profit no loss
class 6
.........
loss due to miss , so miss factor must be considered in the part of trade...ie. efficiency of
execution
all bad situation and phenomena ...how to react in each of them
so confusion of deer..paralysis by shock ...is solved....so u can act now
NO MORE WHAT SHALL I DO NOW...AS U KNOW WHAT HAS TO BE DONE
class 7
...........
oppurtunity search..utilise oppurtunity[after grading it]...and encash as per situation
availability.
1st case...low risk trade
2nd case...short term trend trade
3rd case... small amount leverage high risk break out trade
last case... random trade
....
exit system
3different case...
1.for swing trade
2. for position trade
3.random trade
...remember all 3 r different.
class8
.........
fundamental of a stock
why a stock shall move up
why a sector will move up
relation of a business and profit
earning potential..and growth
what starts a business fullmoon ...glowing...now slow decay
...prepare this for every stock in ur list
class9
...........
technical analysis....
gap strategy
reversal strategy...oscillator play plan,divergence strategy
channel trade concept
To be a Trader-20yrs Page 92

channel trade concept


trend trade concept..ma,aroon...strength of a trend, directional biasness or continuation
class 10
...........
learning of software for trading
scanning system
risk reward analysis
advanced money management
which stock not to trade even after signal...and when not to trade
volatility tool analysis
volume price analysis
since u read so much now time to give exam....mind it its board exam ...check how
much u can apply in real market....time 6month...money 10% increase on a fixed
amount,say 2lakh..
so u pass..
all trade result to be analysed why taken and in writing...both entry and exit reason and
of position size..why not more or less?
how far luck helped u in that trade
how far trend strength is utilised?
do u believe in reversal...while holding trade
after hr analysis of ur mind on actual trade
.............................
so all trade r analized...balance after 6month suggest 10% increament in a/c..u pass
.................................................. ............................................
if failed, reason of failure....and in which zone
reread entire course and amalgamation
so u r in class xi....now
decide to study further in school[u may prefer to..go to earn from market....still i
suggest to study further ...knowledge helps
11thyear
...........
system design....where i have done better than other sucessful traders?
...prediction on market
...execution skill
...implementation of system[whatever u think]
...stoploss following...both protective and sar style
...mind control
note..here system design means tuning of system for actual profitability again to score
high[earn more]
class12
..........
which type of trade u r master??
alternatives r......
a. investment...contrarian call
b. investment by value approach
c.day trade
d. short term trade.....swing style momentum
e. swing style...reversal
f. position trade...support buy ...consolidation
g.position trade ..break out
...............
now only one out of this 7....to be choosen to trade/invest in life ....others r simply to be
erase out[forget]...the best one..u have now,...to conquer world
......create a boundary .........
a discipline..discipline..discipline[here i fail ]
.........only on that condition following /ocurring in market...i shall trade...otherwise no...
and a trade shall be taken...if it occurs...without fault
...this is my class 12..exam..light to see otherside of world.................tuning and more
return ...compare good with better trader...logically improve further..
...i try to learn from market...

To be a Trader-20yrs Page 93

...i try to learn from market...

To be a Trader-20yrs Page 94

Personal View
04 July 2015
12:13 PM

this is my personal view...i find useful...loose links r assemled to give some idea....
...........
1. MARKET...I VIEW IT WAR ARENA..RUTHLESS FIGHTER CAN ONLY SURVIVE.
MY SKILL...WEAPON...BROAD BASE KNOWLEDGE + ANALYSIS POWER
...MY WEAK PT..POOR EXECUTION SKILL & EMOTIONAL DOLDDRUM
SOLN..USE COMPUTER BASED SIGNAL
MERCYLESS STOP
WATCH MARKET BEFORE ENTRY.
2. CONDITION OF MARKET
.....................................
UP...DOWN ...VOLATILE...3DIFFERENT STRATEGIC PLAN ..THIS CASES...
4TH CASE IS UNPREDICTABLE...HERE I MUST NOT PARTICIPATE...WAIT AND WATCH

3. MONEYFLOW CONCEPT.......
FII AND MF...WHAT THEY R DOING...AFTERALL THEY R SMART MONEY
UNDERSTAND RISK INHERENT IN TRADING
GLOBAL VILLAGE CONCEPT..AND GLOBAL FUND PERSPECTIVE ABOUT INDIA
4. INDIA CONCEPT
........................
FINANCE MINISTRY...RBI POLICY...BUDGETARY ALLOCATION...WHERE AND WHAT GOVT...OFFICIALLY VS. ACTUALLY ENCOURAGING[NOT LIP SERVICE]
INTEREST RATE...AND ITS SIMPLE IMPLICATION..REFLECTION OF IT IN STOCK MARKET
5.QUARTERLY RESULT STUDY
..............................
GROWTH UP ..PROFITABILITY AND VISION OF MANAGEMENT
6...SECTOR CONCEPT STUDY...VERY USEFUL..
THOSE WHO KNOW METASTOCK...CAN STUDY RELATIVE SECTOR STRENGTH..TOOL TO EARN WITH EDGE...PARTICULARLY SECTOR LAGGARD R NOT TO
BE TRADED FOR SHORT TERM
.....WHILE LONG TIME INVESTMENT STYLE 9MONTH...HOLDING...THEY R WORTH TO BUY.
U SEE THE SAME SECTOR BAD FOR SHORT TERM IS GOOD FOR LONG..PROVIDED FUNDAMENTAL NOT BIG CHANGE...FOR MOMENTUM PLAYER ITS STRICT
NONO
ON THE CONTRARY...SHORT TERM MOMENTUM PLAYER...USE THIS REL STRENGTH COMPARING HOW BETTER STOCK IS FAIRING RELATIVE TO NIFTY.
another imp. list i find interlink of stock...sector
i find..vehicle..auto ancilliary..bearing
construction..cement/steel price..profitability of builder company[i do this activity,and rarely i good correct...market humbles me]
tourism;hotel..current laggard
computer growth..internet..peripherial sale...computer business model
pharma''..medicine research..hope to click
commodity based stock....with commodity price move up..profitability also..so shall stock price...here again i am a fool, metastock..and viratechindia..good
chart..rarely predictable.
.................................................. .........................

7. lists of good company...what i know...what they do...on what condition company profitability move up...its a key arsenal
company based risk...business risk of a company...those who dont know...use www.equitymaster.com
check company's and industry's business model
8.CONTRARIAN THOUGHT PROCESS...MORE A GUT FEEL...A SENSE...IT REQD LOT OF EXPERIENCE TO DEVELOP IT
9PSYCHOLOGICAL FACTOR ON MARKET
.................................................. ...
MARKET HAS TRENDINESS AND ALSO UNPREDICTABILITY ELEMENT. NEWS AFFECT MARKET[UNKNOWN EVENT]........MAJORITY TRY TO GUESS WHAT
MAJORITY MAY DO. I TAKE RISK OF PREDICTION BY PUTTING MONEY BUT READY TO RETREAT IF WRONG...WHICH HAPPENS MORE...AND PUT MORE
MONEY WHEN RIGHT...[AND GET A GOOD KICK NOW FROM MARKET..WITH 2000SIZE OF ONGC, DIRECTIONAL BIAS..950..BREAK OUT...A GREAT BULL
TRAP...A RETIRE HURT CONDITION FOR ME...MY 6TRADING PROFIT..TAKEN BY SINGLE LOSS]
............................
I HAVE TO WORK HARD AGAIN TO RECHECK MY PREDICTIVE MODEL....CHANCE OF BEING WRONG HAS TO BE EVALUATED
........COMPANY RESULT.....20
MACRO ECONOMY 20
MONEY FLOW 20
SECTOR BUSINESS/MONOPOLY ..20
OTHER FACTOR/RANDOM/OPERATORS GAME...20
..................TOTAL 100
CHANCE OF BEING WRONG....40%...WHAT TO DO IF WRONG...IMPLEMENTATION MUST
...............NOW THE TOUGHEST PART' I..' FACTOR...EMOTIONAL DECISION.BEFORE TAKING AN ENTRY I HAVE AN OPENION...BUT PRICE MUST CONFIRM
MY OPENION THEN ONLY I SHALL BUY....EVEN AFTER BUY ...WHILE HOLDING..IF ITS NOT BEHAVING AS EXPECTED...I MUST USE [TIME STOP]...BOOK
LOSS AND THROW AWAY OPENION...
THIS ESSENCE OF TRADING I FIND TOUGHEST TO IMPLEMENT...WHILE CONVERTING FROM INVESTOR TO A TRADER.
......SO I DO A LITTLE MODIFICATION...REENTRY AT LOWER PRICE[AN IMP SUPPORT LEVEL AND AGAIN TEST PRICE]

To be a Trader-20yrs Page 95

Some Finer Points


05 July 2015
10:37 AM

.....................
bill checking is must...on sevaral occation yearly 2/3...i find discrepency....as i find trading stressful...i must try level based to minimise it.FAMILY, OFFICE AND
MUST BE GIVEN DUE PRIORITY since i pick fundamental scanlist..hence ta is must for my buy and sell.
if psychological set up is bullish i do aggressive entry...and paid dearly many a times...
PATIENCE AND THOUGHTFULLNESS...EASIER TO SAY.....SO CONTINGENCY PLAN FOR WORST CASE SCENARIO....IS THE SURVIVAL PLAN
..........................
Find Support Based Buy In Normal Market...and Momentum Based Pullback Buy In Bullish Market Useful Entry Technique....ma X..identifying Pattern...r My Edge
......stop Loss ...execution Still Lot To Learn
Next Is What Maxm Help I Can Get From Others....and Leverage Skill
....another Typical Thing...i See Tv To Get Result Flash/news...never For Openion...hence I Alone Responsible For My Failure'....
n 9th august'2007...its a copy book case of down day...market open gap up...within 2 hr heavy sell coming...see nifty future intraday...then short is only
way...[get out first...if u r firm believer of bull]....ftse 14hr...opening and moving down...bad days ahead[atleast for tommorrow]..so those who short on good
low risk trade..get an oppurtunity of gap down today
.........ideal upday is just opposite...from opening down quick recovery comes...and then come short covering...close is >50 up nifty.....it has seen....many a time
in april..july this year
....idea is trade with bias...directional trade . bias from price...and money flow
-------------------------------------------------some scan list...which has shown higher strength...rsc type scanner.
if market move up...which one to move faster up...just compare...they r successful
....this is a good trade style to earn in this indian market.
on metastock based scanner...work on rsc...1week..up with base of nifty..u get the scan list
..hints..go to www.meta-formula.com
....hitendra vasudev...of stockmechanics.com recently advocating this technique.
also our www.tradersedgeindia.com publish a list regularly to trade on it...
it basically ...showing strength ...buy high ..sell higher...trade technique...with good +expectency...a short term trade style
...but unsuitable for timid heart.,support buyer
recent comment by saint...many a system exists...but u have to find what suits u
...is most appropriate
my recent talk with cv...proves to me why he is a gifted day trader...a total dedication..master in his craft....and Zero subjectivity.......high accuracy and
implementation technque...derisking in his way..a legendary day trader.
note:never try to copycat him...u have to a highly rated programmer first,an excellent system designer then for a couple of yr......later digest volatility..
to learn better trading joe ross idea r important......also famed writer dr. elder.
..................yes define a timeframe first...which one u like to trade...to derisk ie. set up condition...
and in which u sense risk..ur time to react..ie when u understand its time...i am right,now i am wrong.
tripple screen is a good idea to follow.
but stick only to a single timeframe...let me explain.
u think next week market shall move up?
why....what shall the rationality....the buy is coming.
so short term biasness is up.
now go to eod...shift to weekly data...very -/also monthly..negative.
so at every rise stiff resistance shall be faced.
now who shall win....bull or bear...i dont know....but creeping commitment i may start.
why because my defined bottom ...14300 is approaching
where i see top a linear top...16500 can possible .
so this r biasness...it means i shall take to good position on some predefined stock.
and then watch......at some particular price level 15700...how market shall behave...if i smell rat ,get out...coursey hints given by ss[sunil]....+ i have my exit
criteria.
but if on rare occasion it easily....x 15800.........i invest ......as sky may look clearer to me.
.........
why not daytrade then ?
...................................
because it takes my time...my time to earn,.....to ask or analyse easy...without in front of screen its difficult to trade.....more over shortterm volatility ...giving
conflicting signal.
................
why not swing trade then?
my accuracy is poor...no amount of knowlege...equity curve suggests poor return.
......
THATS WHY I AM RETURNING TO MY STRONG ZONE....POSITION TRADE.
I KNOW I HAVE OCCATIONAL DRAWDOWN...BUT MONEY MANAGEMENT GIVES BETTER RETURN.
SUPPORT BUY...BREAK OUT WITH MOMENTUM ...BOTH IS EASIER TO SEE.
MOST IMPORTANTLY I KNOW WHAT I AM DOING.
........
WILLIAM'S ACCUMULATION/DISTRIBUTION...AND MONEY FLOW...CLEARLY SHOW ON WEEKLY CHART WHAT MAY HAPPEN...
SO MY WEEKLY HOLIDAY CUT OF.....FOR A STUDENT OF MARKET.
......EXPERIMENT ON STRENGTH BY RSC TO BE SEEN....ALSO SWING PT @DYNAMIC TRADING SOFTWARE.
he always know what he is doing..........what market may do now
----------------------------------------------------------------------Resources
..................
Beyond Technical Analysis (Tushar S. Chande, PHD}
Bill Williams - Lit (New Trading Dimensions}
Book - Tom Williams Volume Spread Analysis
DYNAMIC TRADER GUIDE
Encyclopedia of Trading Strategies
Kuhn - Marder Intermediate-Term Momentum Trading Course
Momentum Investing By Ken Wolff
OmniTrader (Systems Manual)
Steve Nison Japanesse Candlestick Charting Techniques
The Daytraders Bible by Richard D. Wyckofff
The Four Biggest Mistakes in Futures Trading by Jay Kaeppel Book
Trading as a business
Willam J O'Neils How to Make Money in Stocks
.............................................
hope this will help in journey path of a discreationary trader
...........................
this every book has some uniqueness in it.for simplicity i write 2lines.
Beyond Technical Analysis (Tushar S. Chande, PHD}...a bible to understand system

To be a Trader-20yrs Page 96

Beyond Technical Analysis (Tushar S. Chande, PHD}...a bible to understand system


Bill Williams - Lit (New Trading Dimensions}... it gives new light on market and randomness
Book - Tom Williams Volume Spread Analysis..read it..u see..use of volume ..why?
DYNAMIC TRADER GUIDE ..understand judgement ..price time analysis
Encyclopedia of Trading Strategies ..idea what may suit u
Kuhn - Marder Intermediate-Term Momentum Trading Course ..a technique to trade
Momentum Investing By Ken Wolff ...same in depth..key theme of modern trade
OmniTrader (Systems Manual) ...background of comp.based trade with low risk
Steve Nison Japanesse Candlestick Charting Techniques ..a must
The Daytraders Bible by Richard D. Wyckofff ..how a real trader succeed in market
The Four Biggest Mistakes in Futures Trading by Jay Kaeppel Book ..teaches to keep a foot on brake always
Trading as a business ..a basic but imp concept..for all dreamer
Willam J O'Neils How to Make Money in Stocks ..why buy high,sell higher works..the useful concept of fundamental,stop,cup and handle
-----------------------------------------------------1. be an observer first
2. learn from own mistake and other mistake......imprint this in mind
3.correct knowledge and behavior modification.
4. preparation yourself thoroughly for entry and exit.....with some superlative idea....what goes up must come down[mean reversion]...it takes time to rise but
fall rate is quicker....
clock ..stands for timing....diary ..to write opinion and mistake study
5. behavior modification.....this unlearning process is key.......what works for u.
correct behave is....what to do under unexpected event......not emotional reaction.
6.share market is a loser's game....u must know to survive first.then learn probabilistic approach on right trade vs. learning trade[assuming loss]............add
position to winner immidiately...and cut loser earliest whole @ a chop ..
7.design everything to all unforseen scenario....so that u can act while they occur..as its a journey on unknown.....be ready where to exit and when....on what
condition........understand...rush problem of public.....in fear and in greed...always act before them.........must get out @ redoubtable top..........same
way.....wait for a minor confirmation @ intermediate bottom...then enter.but act swiftly
8. always say.....i am only responsible for my behavior modification,proper observation to trade and correct reaction[execute] to market.i must adapt with
market...not vice versa..otherwise sit idle...... i must understand bull trap...and check for it
i must think before i act/i execute a trade......[punch list]
9.sometimes i must look for reverse image[in chess terms look from otherside of board].....and plan for reversing the trade.[this is the toughest psychological
hurdle i find to overcome]
10.Initially i should take a small position.........must be swift to liquidate that one if sense....
market proves u wrong.
11. always use own signal only for entry..........but use market guidance to continue/exit/addition ......or even reverse position.
this slow behavior modification is to be practiced unless it became ur 2nd nature......this is right way to trade for intermediate term.
12.when u hold a position ,within a reasonable time [as per ur chosen validity period]....it is not confirming to prove correct........better get out.
.........................
this is for intermediate term future trade
------------------------------------------------------------------let me demystify a software .....adget for beginner
.................................................. ...................
software helps to enter/exit a trade based on some propriety tools.
1.elliot wave.......4level entry......defining presently..wave3.......so another uplevel exist
2.oscillator...ma x trend continuation....its divergence study
3. pti.....validity of a trade.........its a probabilistic tool.
4.displaced ma.....confirmation of a direction.......actual entry
regression channel .....another confirmation
5.fib.....a gen concept......retracement/profit target pt
6.xtl....basic price pattern biasedness
mob......support/resistance tool
ellipse ..when and where.....high probability of correction completing
...................
validity condition very simple ......implementable.

.for all trade learners,......read levermore and gann.....u shall learn speculation....
more imp....when not to speculate
---------------------------------------------------------------------those who have read......livermore and gann......can read joe ross....and way to trade'...by piper.
after proper swot[strength,weakness,oppurtunity,threat]
....................
hey if u r old guy like me........keep a fundamental hand.........
.'after i watch a chart.....and can not understand....what state it is...i should not trade...what is the value of studying ta then?price reflects everything.......
YES SEE THE CHART....SLEEP WITH IT
.......next learn software........here most of us lagging
ur idea can be implementable by trade signal.......not vice versa
concept of signal/entry /exit automised.
....personally here i defer....as i believe trend is random event
the software......one should take sufficient time to learn
.......learn scanner........% of accuracy......here computer help.
...........
now experiment.....which style and time frame u trade better........ur actual result.
stick to it.......with a defined stock list.......
......thats all my friend
btw.....avoid trap of call giver
-----------------------------------------------------------------------

To be a Trader-20yrs Page 97

Trade preparation.......psychology
05 July 2015
10:39 AM

its the toughest aspect of trading......not because of trade..but due to wrong understanding
....trading is not that tough ......if u have learned right step......but next to impossible....if u r av joe.....in life ..and follow crowd mentality....whether live in
urban/protected trade atmosphere.
.....let me clarify.
remember.....dancer's story ...of telegraph trade......he is cut off......so he gets what he wants to know.........and when he comes near by......lost all his
touches.....a rooky trader
.....again get out......atleast his break out style and quick loss booking and reentry has good follower.......in golden age.....in upcoming bullmarket
.................
so fact remains.......u have to independent........trial and tested method to fit u.....which must have +ive expectency
.....for day trading....i personally feel its easy......as u should trade based on software[most suicidal nature......you....is nomore available to damage u......
still u think u r the genius , know better than .....then go give patent of programming.....earn by selling it.
best of best......use some signal.....a biased directional play.....a validity of continuation...in big volume.....and earn by accuracy.
to reach that level trader practices day in day out .....system implementation/back testing
and..simple mm........definitely execution is highest
only part of psychology is ......stress within limit ......no more
..............
but when we move from day to shortterm.....we have a dilemma.....rationality of who can think/decide better.......computer or i.......with eod /weekly
signal....news flow money flow.....derisking.....and pet indicator......we create a hotchpotch.....dream with greed....
take a trade....if right....happy , superior ego.......if wrong .....frustration[blame game]....
forgetting....result is a probabilistic event..........a good trader knows this....so after trade handle trade better by watching it.......getting out with small
loss/run the profit one....
and a time[patience]..to resolve conflict on market...to be watched for,
.....to understand this......greed /fear/hope....must be replaced with....risk analysis and mm
if possible......chance of being right /wrong......here those who like us study probability/statistics......has some edge......but expectation trap......is quicksand
trouble in real scenario.
......so u vs. ur knowledge vs software vs indicator trap vs news trap vs ur decisionmaking skill............a psychological whirlpool is created.
here ta comes..helpful.....diary is a good tool.....case basis.....from past analysis study..how many times why u r right......how better u can fight on uncertain
terms
so u understand when u change from day to short term ......impact on psychological front
......now suppose u believe in core trading......
1] break out style
2] trend style ..continuation concept
........psychologically from study of past.......on what condition they have higher probability
......this likely event scenario......is mostly misunderstood by normal trader ,forget common mass....
luckily.....saint/traderji....try level best to teach core trading
.....the ground rule ta based/pattern .....must be followed with discipline
...................
3rd concept......reversal pt intermediate pivot .....i personally think ad get may help...also other software like dt/mtpredictor has same principle.......
basic is at 4....u buy......at 5 u sale.....but......subjectivity....part one must have that much experience to handle reversal/contrarian thought process
candle revesal @bottom and top ....definitely helpful.
......
but core of trading.......how much more u play......when u r right......a skill .....not yet to be taught.......as its self realisation[may be a mentor may help]

To be a Trader-20yrs Page 98

sucessful traders has 2 distinctive superiority


05 July 2015
10:40 AM

1]a particular time frame in which he shall play......and a definite style


2]predictive mode or reactive mode
.......
first thing......intraday......day.......short term.......intermediate......r known to everyone
also the style......break out.....pull back ...short at top.....bottom fishing....continuation with momentum.......r spl mention not reqd.......as already
systemised.....many a trader play
.....with definite.....derisk model which suits him
so timeframe.....style....derisk......this 3......creates a set....now compatibility
.....the word successful.......clearly tells........its already done....nofurther experiment pl
.......................................
2] predictive mode vs. reactive.......
elliot or wave.....count....it suggests........but price confirmation must.....otherwise...its russian roulette
in reactive case.....trader develops.......a mental state.....in which he follows....the event of market ....direction and st rength[trade what u see]
....all whipsaws r not to be attended........problem is nobody knows change is normally abrupt
....so some theory develops to watch one higher/one lower time frame.
..still randomness is a governing factor
......only with exceptional mental stability[example cv].....a person can be flexible like clay
....can react most of the time RIGHT
......for others.....a jone has to be created......on certain conditional fulfilment accept a trade......otherwise....REJECT THE OPPURTUNITY[considering
uncertainty]
.....THIS ATTUNEMENT I CALL PSYCHOLOGY OF SUCCESSFUL TRADER

To be a Trader-20yrs Page 99

stock scanning is a method to learn


05 July 2015
10:40 AM

stock scanning is a method to learn .....as software can help u[time management]
here again programmer r hundred step ahead
use any software.........to the best of its ability
...so now i start study on it......and volatility predictive model
.................................................. ......
amateur vs pro.......we start normally as foolest of them......with an aim to journey to be the best of them......so various level we cross.......with realisation is
our motto.
here....to become prudent ....we must minimise ....cost of learning.....learning by self mistake
the lucky one learns from reading books...and trading others money[fund manager].....so fine tuning is easier......so far they r adaptable,a nondisturbance
atmosphere.......and ready to learn from mistake.it normally takes 3yr to learn ....what he or she is doing..........rational ly on reasoning whether i earn by call
or by tips.....how far market helps me[luck factor].......predictable mode......or a successful reactionary trader.
the concept of ta/fa/psychology........how far his market reading is accurate........game of marketing in this field.
the game of common sense........uncanny ability to sense danger.......as well as oppurtunity
.....is he aim for.
next is execution.......it is the art[learn by practice.].......slippage factor.....missing oppurtunity or to chase price.... confirmation by price/trade volume.......as
well as keeping oneself under control while trading......a rational entry/exit technique......and apply it on case to case ba sis.......or like a robot....mechanical
trade.
third and last thing......@ which time frame ......he or she does better.....with proper temperament........for which one mus t experiment a lot with small
fund.....then compare....which mode best suited him for life......fitting
........another factor......market variable.......prepare for rainy day.....development of knowledge......another continuous evolutionary process.....shall hold him
for long term.
...................
so from where they start.......a college grad[mba].....a theory on business...implementation
money flow + what lures mass.
normally a strong fundaa background......supported by.....technical inquisitive mind/learners attitude......understanding of ta aspect of market produce them a
good trader.
.................................
otherside of story......dealer.....rm.....bm/subbroker....analyst...broker
dealer....entry person who make entry/sit backoffice
rm/bm...have experience of dealer.....now handle them.....intimate.client....to tell oppurtunity/danger....basically to trade generation for his broker
analyst.....have seen all .....a readyencyclopedia on market....can tell what if....but rarely make money out of it....better through.commission/call selling
broker.....trade commission....+ game play....cornering stock.....maintain min risk but arbitrage.......as well as trade trad e on large bulk......low risk
one....with big fall pt...buy and sell at top......believe in strength of inside info.
since they r senior most.......can understand a potential candidate.....both stock and a dealer/rm........to utilise it better.
.................................................. ...
normal aspirant must watch them......follow them.....to take this quality....use money management......+ info game.....with r esponsibility......to earn when
oppurtunity comes.
......otherwise be disciplined......to wait.
to sum up this thread
.................................................. .
1]mentor concept.......exploration of new idea/new understanding /action plan
2]why u need a mentor
3]stop self sabotage........implementation of stop...must
4]school concept to learn trade.....class 12 model
5]where i stand......a personal view given
1. MARKET...I VIEW IT WAR ARENA..RUTHLESS FIGHTER CAN ONLY SURVIVE.
MY SKILL...WEAPON...BROAD BASE KNOWLEDGE + ANALYSIS POWER
...MY WEAK PT..POOR EXECUTION SKILL & EMOTIONAL DOLDDRUM
SOLN..USE COMPUTER BASED SIGNAL
MERCYLESS STOP
WATCH MARKET BEFORE ENTRY.
2. CONDITION OF MARKET
.....................................
UP...DOWN ...VOLATILE...3DIFFERENT STRATEGIC PLAN ..THIS CASES...
4TH CASE IS UNPREDICTABLE...HERE I MUST NOT PARTICIPATE...WAIT AND WATCH
3. MONEYFLOW CONCEPT.......
FII AND MF...WHAT THEY R DOING...AFTERALL THEY R SMART MONEY
UNDERSTAND RISK INHERENT IN TRADING
GLOBAL VILLAGE CONCEPT..AND GLOBAL FUND PERSPECTIVE ABOUT INDIA
4. INDIA CONCEPT
........................
FINANCE MINISTRY...RBI POLICY...BUDGETARY ALLOCATION...WHERE AND WHAT GOVT...OFFICIALLY VS. ACTUALLY ENCOURAGING[NOT LIP SERVICE]
INTEREST RATE...AND ITS SIMPLE IMPLICATION..REFLECTION OF IT IN STOCK MARKET
5.QUARTERLY RESULT STUDY
..............................
GROWTH UP ..PROFITABILITY AND VISION OF MANAGEMENT
6...SECTOR CONCEPT STUDY...VERY USEFUL..
THOSE WHO KNOW METASTOCK...CAN STUDY RELATIVE SECTOR STRENGTH..TOOL TO EARN WITH EDGE...PARTICULARLY SECTOR LAGGARD R NOT TO BE
TRADED FOR SHORT TERM
.....WHILE LONG TIME INVESTMENT STYLE 9MONTH...HOLDING...THEY R WORTH TO BUY.
U SEE THE SAME SECTOR BAD FOR SHORT TERM IS GOOD FOR LONG..PROVIDED FUNDAMENTAL NOT BIG CHANGE...FOR MOMENTUM PLAYER ITS STRICT
NONO
ON THE CONTRARY...SHORT TERM MOMENTUM PLAYER...USE THIS REL STRENGTH COMPARING HOW BETTER STOCK IS FAIRING RELATIVE TO NIFTY
another imp. list i find interlink of stock...sector
i find..vehicle..auto ancilliary..bearing
construction..cement/steel price..profitability of builder company[i do this activity,and rarely i good correct...market humb les me]
tourism;hotel..current laggard
computer growth..internet..peripherial sale...computer business model
pharma''..medicine research..hope to click
commodity based stock....with commodity price move up..profitability also..so shall stock price...here again i am a fool, metastock..and viratechindia..good
chart..rarely predictable.
.................................................. .........................
7. lists of good company...what i know...what they do...on what condition company profitability move up...its a key arsenal
company based risk...business risk of a company...those who dont know...use www.equitymaster.com
check company's and industry's business model
8.CONTRARIAN THOUGHT PROCESS...MORE A GUT FEEL...A SENSE...IT REQD LOT OF EXPERIENCE TO DEVELOP IT
9PSYCHOLOGICAL FACTOR ON MARKET
.................................................. ...

To be a Trader-20yrs Page 100

.................................................. ...
MARKET HAS TRENDINESS AND ALSO UNPREDICTABILITY ELEMENT. NEWS AFFECT MARKET[UNKNOWN EVENT]........MAJORITY TRY TO GUESS WHAT
MAJORITY MAY DO. I TAKE RISK OF PREDICTION BY PUTTING MONEY BUT READY TO RETREAT IF WRONG...WHICH HAPPENS MORE...AND PUT MORE MONEY
WHEN RIGHT...[AND GET A GOOD KICK NOW FROM MARKET..WITH 2000SIZE OF ONGC, DIRECTIONAL BIAS..950..BREAK OUT...A GREAT BULL TRAP...A
RETIRE HURT CONDITION FOR ME...MY 6TRADING PROFIT..TAKEN BY SINGLE LOSS]
............................
I HAVE TO WORK HARD AGAIN TO RECHECK MY PREDICTIVE MODEL....CHANCE OF BEING WRONG HAS TO BE EVALUATED
........COMPANY RESULT.....20
MACRO ECONOMY 20
MONEY FLOW 20
SECTOR BUSINESS/MONOPOLY ..20
OTHER FACTOR/RANDOM/OPERATORS GAME...20
..................TOTAL 100
CHANCE OF BEING WRONG....40%...WHAT TO DO IF WRONG...IMPLEMENTATION MUST
...............NOW THE TOUGHEST PART' I..' FACTOR...EMOTIONAL DECISION.BEFORE TAKING AN ENTRY I HAVE AN OPENION...BUT PRICE MUST CONFIRM MY
OPENION THEN ONLY I SHALL BUY....EVEN AFTER BUY ...WHILE HOLDING..IF ITS NOT BEHAVING AS EXPECTED...I MUST USE [TIME STOP]...BOOK LOSS
AND THROW AWAY OPENION...
THIS ESSENCE OF TRADING I FIND TOUGHEST TO IMPLEMENT...WHILE CONVERTING FROM INVESTOR TO A TRADER.
......SO I DO A LITTLE MODIFICATION...REENTRY AT LOWER PRICE[AN IMP SUPPORT LEVEL AND AGAIN TEST PRICE]
SOME FINER PT
.....................
bill checking is must...on sevaral occation yearly 2/3...i find discrepency....as i find trading stressful...i must try level based to minimise it.FAMILY, OFFICE
AND MUST BE GIVEN DUE PRIORITY since i pick fundamental scanlist..hence ta is must for my buy and sell.
if psychological set up is bullish i do aggressive entry...and paid dearly many a times...
PATIENCE AND THOUGHTFULLNESS...EASIER TO SAY.....SO CONTINGENCY PLAN FOR WORST CASE SCENARIO....IS THE SURVIVAL PLAN
I Find Support Based Buy In Normal Market...and Momentum Based Pullback Buy In Bullish Market Useful Entry Technique....ma X..identifying Pattern...r My
Edge
......stop Loss ...execution Still Lot To Learn
Next Is What Maxm Help I Can Get From Others....and Leverage Skill
....another Typical Thing...i See Tv To Get Result Flash/news...never For Openion...hence I Alone Responsible For My Failure' ....
yes define a timeframe first...which one u like to trade...to derisk ie. set up condition...
and in which u sense risk..ur time to react..ie when u understand its time...i am right,now i am wrong.
tripple screen is a good idea to follow.
but stick only to a single timeframe...let me explain.
u think next week market shall move up?
why....what shall the rationality....the buy is coming.
so short term biasness is up.
now go to eod...shift to weekly data...very -/also monthly..negative.
so at every rise stiff resistance shall be faced.
now who shall win....bull or bear...i dont know....but creeping commitment i may start.
why because my defined bottom ...14300 is approaching
where i see top a linear top...16500 can possible .
so this r biasness...it means i shall take to good position on some predefined stock.
and then watch......at some particular price level 15700...how market shall behave...if i smell rat ,get out...coursey hints given by ss[sunil]....+ i have my exit
criteria.
but if on rare occasion it easily....x 15800.........i invest ......as sky may look clearer to me.
.........[published on 11th august,post 38 0f this thread]
WILLIAM'S ACCUMULATION/DISTRIBUTION...AND MONEY FLOW...CLEARLY SHOW ON WEEKLY CHART WHAT MAY HAPPEN...
SO MY WEEKLY HOLIDAY CUT OF.....FOR A STUDENT OF MARKET.
......EXPERIMENT ON STRENGTH BY RSC TO BE SEEN....ALSO SWING PT @DYNAMIC TRADING SOFTWARE.
................
6] various trade learning reference for one's growth as trader and a hints on adjet
7]avoid trap of callgiver
8]a conceptual view on fundamental and psychology.....trade preparation
sucessful traders has 2 distinctive superiority
1]a particular time frame in which he shall play......and a definite style
2]predictive mode or reactive mode
.......
first thing......intraday......day.......short term.......intermediate......r known to everyone
also the style......break out.....pull back ...short at top.....bottom fishing....continuation with momentum.......r spl ment ion not reqd.......as already
systemised.....many a trader play
.....with definite.....derisk model which suits him
so timeframe.....style....derisk......this 3......creates a set....now compatibility
.....the word successful.......clearly tells........its already done....nofurther experiment pl
.......................................
2] predictive mode vs. reactive.......
elliot or wave.....count....it suggests........but price confirmation must.....otherwise...its russian roulette
in reactive case.....trader develops.......a mental state.....in which he follows....the event of market ....direction and st rength[trade what u see]
....all whipsaws r not to be attended........problem is nobody knows change is normally abrupt
....so some theory develops to watch one higher/one lower time frame.
..still randomness is a governing factor
......only with exceptional mental stability[example cv].....a person can be flexible like clay
....can react most of the time RIGHT
......for others.....a jone has to be created......on certain conditional fulfilment accept a trade......otherwise....REJECT THE OPPURTUNITY[considering
uncertainity]
.....THIS ATTUNEMENT I CALL PSYCHOLOGY OF SUCCESSFUL TRADER
still i suggest diary writing.....take a print on entry and exit of chart....for future analysis of learning curve
.............

To be a Trader-20yrs Page 101

MY SOLILOQUY-AS STOCK TRADER


05 July 2015
10:45 AM

stock trading is a supplier of fool..to professional trader[to cut their pocket and earn]
this art can be studied......
this art can be practiced
...........
to become a successful trader ......u have to be like trader[pro].
understand few ..in real sense can do it
.................
one characteristic of good trader...they all learn in bear market...practice skill in upmove/gestation period.........and mak e money in bull market
............................
ofcourse there are specialist[superstar].....option trader/bear master/computered programmed scalp trader.
........let me explain it....superstar
.......option trader......study direction bias...at right moment take position
bear master...rarely trade,..but deadly accurate
computered programmed scalper...master to flow with direction validity[o.5hr ]
..............this 3superstar...r born out of successful trader...with lot of polish.
most fool try to learn or experiment in so called late phase of bull ..so they lose...
only some of them ready to study....reason of their failure.........
and some mad[like me].......consider market as a puzzle ......try to solve ......they know illusion...but they love them..get more and more
involved.....occasional money..occasional loss ..keep them in path.
suddenly they get twilight.......so they become earner to learn from market....on consistent basis.
they have openion..they have system.......but most importantly they interwin self and market
......they find out on a particular time frame they can guess better..with or without ta/with or without fa..but definitely u se some form of market
sentiment.....
now..when another element position size they master.......normally they earn well until ego catch them....mind it ..their sys tem not betray......its the self
sabotage,breaking own rule.....cause of fall.
a trader MUST DEFINE first......whether market is presently in trend......or tradezone.
..........
how to define it...........let us assume indian market......daily chart....for monday volatile.....
hourly chart...up bias.....but weekly chart ..negative .
.....hence.....2approach.....for safety watch only
for me......buy @low ..and sell @top...based on my tool william%r.....in14..hrly chart
..on those 2stock..which i consider candidate for monday.
remember play plan of tradezone......and in trend r entirely different
......even in down trend........restraint to aggressive trade.
.......think control of greed......and all precaution ......chance of wrong assumption..to be eliminated.....[ur trade can be wrong..but not ur assumption]
trend termination is an imp concept to learn.....
with poor experience......first time loser ......normally hold and while market fall....lose more...
with frustration learn value of stop....
in next short term bull cycle..play...and book profit early.....only to see great bull run..
later curse oneself for missing oppurtunity
....this is normal phenomena...[great mechanical traders must excuse me...because for them gamerule a little bit different]
.......so for all others future self development is necessary.
ie. how to put stop...and how to run profit trade....this concept for simplicity many a trader use...by using % stop..some by atr........i prefer sar...because of
limited time
though pattern break pt...and stop below that ......i find another good approach.
---------------------------------------------------------------------------------------

normally norms of 4quarter result.....help me to understand with fluctuation in 55ema..


particularly on result week.....expectation vs..realisation .....reflection of them on price...i find a main strength in stoc k trading.
yes i believe in news trading ...as it gives me money....i dont teach it as its too much subjective......still i provide 2hin ts[basically money making oppurtunity i
am supposed to give ]
all knows bell weather info result ....given good .....then price is not reacting properly....
so dont put much money in this sector
...if infy good/tcs good...also price moving up....buy immediate 2nd grade polaris / gtl...a short term low risk speculation style.
.........another case i mention....order book......recent publish[may be some month back..@220 -230 zone psl is getting good order.......from oilcompanies for
pipeline.....which definitely improve bottomline..stock at nearly yr high.......so buy ...at at near top..by understanding ne w accumulation is going on ......u
have to take entry to make money.
....if u watch minutely with volume spread/order flow/ money flow technique...[any one is sufficient]...u shall see price upw ards bias was shown then...220230....psl.
............................................
why i can not be a pure technical trader...?
because...fundamental value of a stock ...i believe is always reflected in price...
but if something hidden..........that gives me a low risk trade to earn money
.......by missing lot of oppurtunity...making mistake on regular basis av 8 -10 every yr...
i can say definitely the 'value'..is dynamic....never use concept of eyes of beholder'...that is fundamental reason of my wro ng trade.
....what is value...in simple term...the reflected marketsentiment...+ business model with company profitability as shown in price...which normally oscilate in
a band.
...here i put a simple model ....say price fluctuation within..+/ - 2.5% is random
crossing 3% above..>5%..definitely a trend......that is biasness towards a direction which can be traded profitably.
.......................
trend factor..random factor..newsflow[new event].....definitely coexist in market
..........depending upon u as market observer...consider which one is oppurtunity for u
...and when and risk....not suit u........so avoid
.............................
smaller timeframe u trade u have to be more mechanical.......
larger timeframe[at least 3month view]...improve accuracy[directional bias]
..............................
without trade management never trade.......otherwise u enjoy thrill on market..paying money
....winner trade..allow more time to run.
............with uncertainity watch.........never trade on call[ u can use call to find candidate..to save time...but due dil igence must]
......analyse past trade.
For Intra day- define the day first ........upday..down day ..uncertain day ..volatile day
expected range of the day
.....uncertain day i dont trade..only watch.
all other 3day i have technique......entry and exit technique
......eod study gives me strength list
so strong strength buy candidate for up day........
exhausted candidate for volatile day..

To be a Trader-20yrs Page 102

exhausted candidate for volatile day..


and poor strength for down day......
................
normally with good order flow i enter in stock......so radar ..air help me to boat smoothly
........................
for short term technique is entirely different...a support swing pt buy..
.ta helps timing. works on probabilistic model ....with experience one can learn.i start to learn in 1991...d.cassidy ....bas ic ta book.....use of volume/some
pattern it take me 2 yr to learn basic-some theory.
.....only paper cutting ......and capital market ta mag[long time stop publication]....r available in indian market......
only 2001.....computerised trade......availability of nse and pc........brought me again to old art.....mean while i face 2 q uack......who consider they know...i
part some money....only to know they r quack........this is the fact u face now......thats why u insist to learn from qualifi ed .
as bse...../nse use data in meta format.....this software..was in india from 1995......so i study this one....in my learning curve........again i repeat it takes
time [ afterall i am a parttime learner......not even a sharp college student]
....i face dilemma like u .......lucky to learn from www.tradingmarkets.com...and cbot
in 2002......but i try to learn trading.....useful part of ta.
concept of break out is imp......
concept of support buy r useful........
most imp is predict market danger zone
.............................
since u ask for hard core ta.......i shall stick to it.......which i learn later
....for qualification,......learn trend first......
defn of up/down......volatile.......
next distribution /accumulation
........this must be applied on nifty
........then study,..........fibonacci
then study pattern .....psychology behind each pattern
....imp one for actual trading.......triangle /flag./1-2-3
.......in bullish market ..cup and handle
...then learn bearish one.....h&s..2t/3t.........and what condition they fail
learn shorting,imminent reversal......oneday/ 2day sp. pattern bullish/bearish reversal based on candlestick
next solve.......gap up and gap down.......use it to judge strength of market....no other purpose.....till u grasp it fully.
...............................
after this u should u can look through indicator.....
use ma........dual ma.....experiment with many alternatve.......remember just basic......
smaller one cutting and move up.....shows upward bias.
take a suitable indicator....to gauge strength of market
........
when u know more study indicator, one overbought/oversold one .....i prefer william%r
use it in tradezone.......
next level .......is to define and predict........trend or non trend.........which as per me a trader must learn first......2 /3 tools available choose any one
....spend time on it........patience pays
..........now come developing a system based on technical.....ha ha..its ur job
btw....without divergence study do nothing
.........................
u think u know......but.....study another 2tool ...advance decline and new high/low data......
and raw moneyflow data...particularly fii/mf
..... next i try to throw some light on rsc......rel strength comparative.....
its a good tool ...first extensively advocated by mark boucher in his course....
its momentum tool.....strength of index vs a share.......a stock in a particular sector rank..
....i use it scanner..as suggested in www.meta-formula.com
.....it helps to find where the action is .......this is only ta......better use stop/mm.....otherwise...money comes and goes .
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
volatility........
to understand volatilty we start first range of a day......and gap concept.
reversal concept in price at top and at bottom.......
....yes i work on it......but predictively i am not sure.
....but i can say before reversal some ...peculiar phenomena observed...but that is case to case basis[on stock.....i can not generalise it]
....historical volatility.......and comparison of it in metasock......is a good tool....
as i firmly.......BELIEVE.....THIS SHALL WORK IN INDIAN MARKET FOR NEXT ATLEAST 5YR.
Read toby crabel and larry connors[tradingmarkets.com fame]
..
FOR BTST swing-use intraday strong reversal as entry........those who entered market and hold on friday..2 -3pm know......what i mean
......
how u can learn to do that...........observation......i have dt3/metastock.....with viratech eod.....so when i see 2005 -06.....and march'2007.......i
know ......how price behave before bottoming out in indian market ........so no doubt its a risky trade.....but worth to be t aken.
concept of copy book....buyday..hold....sell [today i shall].
......so hrly....chart has given clear signal......i only have follow it
...........................................
lot of backtesting gimmick i hear.......let me present a real one......simple but effective for short term/intermediate.
.......just see last 2yr data.....when the result out.....how it affect price,........for individual bse gr a stock......if f uture earning guidance given........how it
behaved...that week,....
if nothing given.......how it behaved.....price behavior with expectation.......
shock in both +/- direction.......later bounce back or distribution
.....its the real tool .....which gives predictive way to earn ......not very math oriented[alas i betray math enthuastic /OR STUDENT........no my friend........my
operation research knowledge no way helps me........infact it helps to lose money.....by creating a blockade of being right ' / a know better trap'........and still i
do my level best to unlearn it,......but in professional service game theory.....and PERT ...HELPS ME LOT..]
.......
THOSE WHO R CORE TA BELIEVER...... i suggest...use omnitrader in game mode. change 1bar @a time..see prediction........on any stock which u want to
play.....next bar to right comes...predict...again come next one......enjoy this paper trade/ur guessing.
for stock trading learner........i believe patience to learn ....spend time is very imp.
restraint has to be practiced. a concept of treating trade as business to put....by checking bill and fund flow.....how u can do more right trade,......
.......the concept of risk mangement and responsibility taking.
......then come knowledge ...ta/fa/psychology amalgamated
....after doing swot for self......study market reality
....and market is future oriented......moneyflow and volatility r two key factor......next 5yr atleast in indian market.....d o research on it[self study]
........how result vs expectation affects price.......
on what postulate u investrading...........if scenario change......get out first,think later.
if possible,learn market sentiment..........so that in a particular time frame.....u can enter near bottom....and exit near t op
......study past trade.
develop a derisk method if u want to earn from market in long term.......erase ur mistake pattern
.............
uncertain
........... more like distribution day......pro r slowly selling......we amateur r accumulating with bias of up trend may occ ur after some day.

To be a Trader-20yrs Page 103

........... more like distribution day......pro r slowly selling......we amateur r accumulating with bias of up trend may occ ur after some day.
basically low volatility on weekly chart......by atr or by comparison of volatility[historical] define it mathematically.
........volatile day......atr value is high......aprox....5stock [10% of nifty.....dance like any way.......intraday......wil liam%r....good....pivot buy of low .....sell @
resistance higher pivot excellently works.....example 1.10.o7......nifty
linda has done pioneer work on it........also volatility based day trader use them.
a trader must define what time frame........he shall trade.........a hints given regarding matching though i know my comments r controversial.
1] intraday..........a cool computer man with high speed calculation /software to use in analysis.......and high lebel adapta bility......preference to volatile stock
with break out
NO TO ALL NORMAL INVESTOR
2]one or two trade a day.......eod scanner biased guide....based on reversal.....with price confirmation.....suitable for exp erienced parttime trader.......with
strict stop.
UNSUITABLE WHO CAN NOT CALCULATE RISK FIRST
3]SHORT TIME TRADER........MOMENTUM BASED BREAKOUT PLAY....HOPING CONTINUITY FOR 1 -2 DAY.......APPLICABLE IN CURRENT MARKET[EUPHORIA
STATE IN MARKET]
4]swing......buy at bottom swing.......and hold.....saucer pattern in weekly chart
5]intermediate position player........when a stock is ready to move after consolidation
add position when proven winner..........suitable 10 yr experienced trader[saint,traderji]
.................
the comments r based on my all type of first hand trading with min 6month experiment in each case with a/c size of 1lakh to 5 lakh.......
with result based/run away/volatile/ bearish market.
so in trading, if for day......premarket analysis is biased to trade........now only if market opens and trade as expected .. ........then take position, otherwise no
trade.
which software u use , and signal on realtime basis is far superior way, provided u stick to discipline.
personally i trade what i know.my scan consist of known share [fundamentally i get/interpret info before others].
and 10%money i trade for experiment.
risk management idea i use.
regarding feel of pattern i consider myself lucky .......its complex .
for intraday........i dont see pattern .........only order flow at high price.
biasness of eod chart , for swing trading ........i am good at
.............
i am discreationary ........performance study on return i use .......stock ...gr.A.....i prefer.
omnitrader scanner saves my time
fundamental info ....by equitymaster/capitalmarket i use.
callgiver..........i dont trust
----------------------------------pro.mean while, what i earn from trading i spend 10 -20%consistently to learn better trading
and purchase books.........some of my notes i already write conclusively.recently i try again to learn fa.......by joining fi nancial mba.
however i find many a professional course taken .........r more helpful as a trader.......infact
my highest return days r.........1991-92.....a fool's paradise.presently i plan an experiment of 25 -30%return from market..on annual basis.
some course idea[not the free bees available].......i shall mention which may be helpful for different level learner
yr2002.........cbot course.......concept of market profile....trend non trend
yr2002-03.......tradingmarkets.com......swing trading and positional trading
2005...angel ta seminar
2005 ..swing trade...
2005...trend trade
2005...picking top and bottom
2005..metastock programming dvd
2005...dvd on day trading
2005....cd on swing by landry
2005..steve nison dvd on candlestick
2005....intraday tactics....jeff cooper
2005...trend-dynamics course 5 volume.......[best one i believe]
2005......cd from moneycontrol
2006.........ta cd and system design
2006....comment by larry williams
2006.....pattern trading plug in for metastock
2006.........mark boucher .....10week course
2007.......power trading concept......logical trade
2007 .......trading academy ...course for pro
2007......swing trading bill paolo
2007.......developing a trading strategy.......van tharp[old]
2007.......vasudev......trademechanics on relative strength
......................
apart from this many a free lecture........trade analysis
............
the last one i give .......today afternoon brief.i am commenting on them as i find personally useful.........yr wise when i h ave taken mentioned..............apart
from them numerous trial and error ......i go through .........r useless
.............some observation .....
i am a poor option/future trader..........-return
a developed sense on turning pt........
i someway follow rel strength comparison........though psychologically find dificulty in entering days high.......due to nume rous previous loss.
at swing pt reversal i can enter in known stock.
.......an entry of 5lakh value affect me........upto 3lakh good judgement observe.......
around 1lakh.........its easy to handle multi position
i hate leverage,also when stoploss hit........angry about me.
some of the books/free course/idea i find useful in someway or other........i shall mention
.................................................. .................................................. ......................
1. trend trading
2.4trading mistake in future market
3.chess and its concept
4.nlp concept
5.trading system
6.auction idea
7. strategy of a trade
8. turtle
9. jeff cooper
10. demark
11.linda
12.joe ross
13.ari kiev
14.gann
15.pristine.com

To be a Trader-20yrs Page 104

15.pristine.com
16.mentoring
17.core trading
18.effective day trading
19.short term trade
20.swing trade
21.ta
22.speculation
23.pattern
24.tony oz
25.learn flawless trading execution
26.dr bill william and chaos
27.probability
28.wyckoff
29.trading as a business
30.demand/supply
31.financial risk study
32. metastock
33.advance get
34.dynamic trading
35.omnitrader
36.fibonacci
37.candlestick
38.van tharp
39.valueline
40.trade plan
41.problem in trading
42.dr elder
43. way to trade..........a good one
44.toby crabel
45.volatility
46.mm[money management]
47.momentum
48.trading on volume
49.jessi livermore
50.sector trading
51.bear market course
52.break out
53.j. hurst
54. mechanical trade system
55.mark doglous
56. trade journal
57. bird watching in lion's country
58.emotion free trading
59.wave concept
60.bernstein
61.bollinger band
62.farley on swing
63. fa
64. turning pt concept
65. divergence study
66.float analysis
67.contrarian investment
68. news play
..................................................
all of them have some contribution .........to me as a trader
conclusion:stock picking is an art...an experience hand can do it.
fundamental data gives the potential of future betterment.for a different industry ballgame is different...futuristic busines s up has to be seen in light of
profitability.
so some idea...on a sector.
hospitality and tourism ....on hotel.
theme of cram...export
banking...rate of interest...npa
............
next comes ta...its the reflection of price......what present traders r doing..
how far they r bullish?
here most traders make mistake........they presuppose to guess..[hoping accurately...forgetting its a probalistic model]
its only DIRECTION CAN BE PREDICTED. not the target...
judgement must be for continuation[trend]..or reversal[mean reversion]
various tool r used to do same...some of them has superior guessing value.
hence for target...sar is better.
initial plan must be based on low risk strategy...and what works on present market condition.
risk analysis must be done...before entry.
ur news letter ...tradersedgeindia very helpful...
as a trader ur plan is short with trend bias ...hence relative strength plays imp role in stock scanning...
as price reflects all known event....we should spend money to get unknown news...which may affect price
or otherway...we must study reflection of news on price......example.ongc result bad..price holding 910..its moving up rs5/ - on monday...opens rs 7/- up on
tuesday..holding..by 1300hr..it crosses days open...hence promise higher up...soon break imp weekly pivot 923..and hold 928 -929...hence a promising up
play,...for all good trader.
.........next factor...how u close a trade...and what u learnt from a trade.
its those analysis makes u a mature trader
-------------------------------------------some pt i think useful as suggested by pitbull
.................................................. ...................
1.routine
2.checklist........70stock
3.prepare for tomorrow.........big picture,inflection pt.channel zone and spotting trend
............
his theory on natural /acquired quality

1.gambling feeling
2. good with number

To be a Trader-20yrs Page 105

2. good with number


3.how to think and what to think about
4. how to perform under fire
5.money management
....................
trading methodology to suit personality
ur strength............................
.dedication and hard work
hate to lose attitude

.........................ur weak pt
fear of loss
constant praise is reqd
mentally someone must give comfort
..................................................
accuracy factor in guessing
understand to make money learn to cut loss quickly
exactly know u shall fight in own terms
market analysis........how price try to move
10ema as a trend
feel on support /resistance and oscillator base signal
gap play
imp of cash in hand
money flow of fii,mf
3day rule........1..2..3 day up then reverse play
how market react to news.............-news,shrugged off by market..........bullish ...............take position
new high
probability calculation ........trading signal on half hr basis
nontrade day..............watch top for reverse
..................................
ego is worst enemy,divorce from trade decision..........trade only to make money
CONCEPT
.................
1.TRADE OR FADE
2. PLAN IN DETAIL
3. HONOUR STOP
4. WHEN TO PLAY BIG
5.HAVE A MENTOR........HAVE SOMEONE..TO SOOTHE NERVE
6.DEVELOP A METHODOLOGY THAT FIT U.......TRADE FIRST TO PROVE UR ABILITY.
TO BE WINNER............FIRST BE IN LINE OF FIRE AND PULL THE TRIGGER RIGHT
PREPARATION PAYS......ITS ESSENTIAL TO KNOW MORE THAN OTHERS
7.WHERE U R GOING THAT COUNTS..........ie. what u shall be
8.never gamble for large amount........never gamble if u have other priority.....never lack selfdiscipline.......stick to ur money earning plan,good gambler not
only keep bet low,but led a rational life also[stressfree within limit]
9.ASSUMPTION OF PRICE RISE IMP.NOTHING CAN BEAT KNOWING WHAT MAY HAPPEN,BEFORE IT HAPPEN .........EXCEPT WHEN IT IS WRONG.
10.KEEP UR PRIORITY STRAIGHT,MANAGE UR MONEY........CHANGE U.
11. TRADER MUST UNDERSTAND GAMEPLAN VS. GAMBLING........WITHOUT IT NOTHING POSSIBLE,DIVORCE EGO FROM TRADING.......FIND UR ED GE AND
STICK TO IT
12. value of info..............[inside one]
13.u must change direction of bad trading by first.....neutral.......must stop.......then reevaluate.....where and why wrong
14.dont go for killing trade,........u shall be killed first then,instead learn to take small profit
15.exiting a losing trade cleans head and bring back objectivity
16.trading is a full time commitment,personality fitment........plan first with worst case scenario...then improve at what co ndition with alternate scenario,go
detail....in problem get out.........fight another day attitude.auction game .....helps
17. fibonacci,wave theory helpful. read uncertainity well.......it may be oppurtunity
18.never let.......friendship,family relationship get into way of sound decision making about money.......follow written rule , be ready for all eventuality
......................
a view of market wizard...champ
------------------------------------------------------know market........its dynamics.........with more EXPERIENCE ,u learn more.....it offers oppurtunity.........where u read wro ngly the price.......its
threat...survived first then....
2nd level..........where u stand up better than others in this arena?
learn debriefhow much info u can handle ?.......can u represent them objectively,........preferably mathematically......u have to be cryst al clear....so apply as oppurtunity
comes.
.......develop a harmony in u.........a trading personality.

here some ideas r given for trade learning


pl evaluate them as per ur level and pocket+zeal
.............................
take one month membership of traderji paid site.........copy the idea of traderji.
............
download from 4shared .......key word 'technical analysis'
read them at least 1yr
similar key word........'trading'........read again 1 yr
.......
read any financial newspaper........see market reaction of it. dont trade......just see the impact of news.
......
take any software......go detail into it.......dont take my mistake like half knowledge.
learn in deep ....ms/ag/omni/mt........any one is good.........i dont have amibroker.... ...particularly understand scan/expl oring.
listen to any pro teacher.... provided they trade in own a/c profitably atleast 5yr........otherwise he is a learner .......a snake oil vendor.
they can tell u a vague idea , mostly not implementable.
learn to think and implementation of stop.
................
take backoffice operation seriously.....more money i have lost by fraud/theft ....by broker.......trade jounal; is must.
...........

To be a Trader-20yrs Page 106

...........
develop an iron solid psychology to have faith in u ,not tipstar.
........
understand basic fundamental moneymarket/interest rate/inflation......and what drives a sector........this is imp.
.....for daytrader........neutral mind most imp.
swing trader.........experience
position trader.............understanding how other players shall behave.
....what type of ur personality.............suitability /matching counts in long run
..........
market will always provide oppurtunity..........but without...proper knowledge/survival skill it can kill u.
.....prepare a list of weak pt ........must to develop plan to overcome them.......a cunning investor can buy bharati @25.... ..10000...........add on 20000 @
38.........50000......@72
............sell half @380...............others @760..............is not my cup of tea......i salute that investor..........h e knows how to invest.
btw......he never try in daytrading.........in bengali ......one phrase...'jole kumir danwa baagh'..........be a crocodile in water or a tiger in forestland,.........respect ur zone also of opponent.............simple saying .......bulls make money,also bears.........pigs r to be killed,..........remember always.
..........................................
many a pro guide how to trade..........provided u have element......they r not snake oil seller[nor a failed trader/ an opera tor]
....for beginning understand www.trend-dynamics.com and tradingmarkets.com
--------------------------------------------------------------------------------------------

To be a Trader-20yrs Page 107

Let us start from basic


05 July 2015
10:46 AM

imp. element
1]why u want to trade ?
2]what u want to trade?..stock..f&o,commodity,forex..
...for every game rules r different..though certain generalisation possible.
3]u must understand reason behind market move...
4] a broadbased price direction idea.
5]what present price direction tells u.
6]the observer with money will join in which side...bull or bear
7]ur risk analysis skill
8] a theoritical trade plan...condition of entry...
entry..
holding condition..
exit policy..
9]an actual practice of execution to do so
10]why u miss the cup? after trade analysis
11]behavior modification to improve...
12] learn money management..
13] where u use leverage..
14] a network of info.
15] a thorough knowledge on a particular software
16] a balanced life to handle allthing carefully
.............many good member has given their view ...for developing one.......
...first check how much u can digest?
ur execution skill...methodical approach for time management
for fa..read value analysis..report of a good broking house.
...then after..u do what u like
then learn money management...
it takes nearly 2yr to answer this basic
if u can afford..take course from safety in the market..they teach trading

To be a Trader-20yrs Page 108

GAP
05 July 2015
10:47 AM

GAP :
I guess there are 2 reasons, the first one is during the market hours all the news/new data/info that hits the wires will be digested by the investors and
priced into the tape slowly when they understand what the data means, but after the market close the market will not will not open till the next day, all the
news about the companies then tries to get priced into the stock at once, (just like opening the dam gates),
the second reason is, there is a saying that the "markets are opened by amateurs and closed by the professionals", if there i s a good news the stock jumps
up 20% and slowly comes down to come down to 5% gain and if there is bad news about a company the -20% down then corrects to -5%, amateurs wants
to buy at any price and sell at any price depending on news ,if there is buying or selling at market open the market may go a gainst that during the day, but
when you see heavy selling during the end of a day or heavy buying during the end of the day generally the next day will foll ow suit, "buy with the
professionals and sell to amateurs......
fortunately.....gap up/down.. fade trading r very useful .
normally amateurs get shock....as they have no plan to trade with it......instead they must write what to ..if gap up .....th is particular value....again another
set......if gap up another value......always .....watch by price and flow of market.........whether its diminishing or increa sing........this is essence of strategic
day trading

To be a Trader-20yrs Page 109

Support and Resistance are dynamic


05 July 2015
10:47 AM

support and resistance r dynamic....


moreover...depending on variation on chart...timeframe...it varies
...static idea...as if similarity with daily pivot...reason of most loss .
...instead follow idea of cluster of price zone...
..this is one of right approach...
..alternative..openioned idea...but not conviction...key is make more money when right,less loss when wrong
A good trader will always make a good analyst,not true for the reverse.
Analysis may be technical,as in levels,stoploss etc or fundamental as in inflation,growth etc.Always hindsight and foresight required

Decision making is instantaneous,in realtime.


.........................Find Support Based Buy In Normal Market...and Momentum Based Pullback Buy In Bullish Market Useful Entry Technique....ma
X..identifying Pattern...r My Edge
......stop Loss ...execution Still Lot To Learn
Next Is What Maxm Help I Can Get From Others....and Leverage Skill
....another Typical Thing...i See Tv To Get Result Flash/news...never For Openion...hence I Alone Responsible For My Failure'....
--------------------------------------------------------------------------------the market has upwards bias intact.thursday friday......money release by selling class 1 stock.....to create +movement......in midcap/low float stock
proves ......stem is left
...
hence entry on a normal correction after result is out.
alternately....with better than expected particular result......a better entry is possible based on momentum play
...........
pl study bse ....sector strength......and compare with last quarter..........u dont reqd call giver to earn
however a defined strategy.....suiting u......is must.
,,,,,,,,,,,,,,,,,,,,,,,,
.i meet a rm......an av earner of 40000/50000 per week.......an mba with 3yr dealer experience +be[mech]
he shows me .....why he earns....a la linda style short @ future.....on well publisized [media]
.....as market is losing strength....on individal high volume counter he does fade trading....
professional dealers r doing now that[ unless u have trained eye dont experiment it]
..........so what i mean to say
1. he has a trading skill
2. its suit him[high risk taking young individual , dont predict market....just follow order flow....when its bearish, a particular pivot bias ....where
resistance may act based on dynamic condition.
3.news checking.....what media wants to fade today
4.understanding of market as extended bull run
5.implementing strategy
-------------------------------------------------------------------------------------here i give hint of a word called .....proactive....in the context of trading.
we start trading from family/own interest/others talk[peer syndrome]....and related job
soon we learn how much water actually we r in.
we may have earn /loss......it creates inquisitive mind to learn further....atleast to know what to learn........yes with self realisation.....an ordinary why
'search person.....think what is called oppurtunity......in a defined way
the class called what to do now........is below......as they have not understand word ....REALISATION
it may be call taking/greed drive......or fear driven thrown out of market'lot......who knows /smells again......turn TRADER.
so predictive mode start with search of literature/article....qualified analyst.
few who survive .....understand .....imp of solo journey......continuation concept of work
in the word of cv......a master craftsman.
so price or economypredictive road........2 distinctive journey path evolve in market place.
learn and learn is motto then
we all know now.......money main driving force........show where money is business and flourish.....like old days of ancestors........nomad to stay near
good river.
so now all know why......fii came in india
so think like them where they put money[before putting it actually]
......yes i have read a book on indian industry ....economic development 2002..12.
a costly one 9500/- @ 2002......direct prospect upto ..2007.....and interpolative predictive target....on 2012
..........so when money flow starts .......u should see .....from price .....in flow....predictive mode........just take proper action.
----------------------------------------------------------------------------------

let me present another known tips followed by present aggressive pro.


its regarding future.....though can be applied in high volume cash....basic idea momentum.
the runaway market [bullish upbias,continuity].....attracts trader more....also joes in later on.
candidates shows extra strength.....concept hint also given meta-formula.com
basically...capital good market showing strength on 2004......is great from excellent trading prospect...as we all know now....however few could re-enter
it.so this high risk-high reward ratio trade style....based on market +bias,....then strong sector..then leader/....for short ....
weak sector /then laggard.
so market bias.......and sector strength r criteria......basically scanner is used in metastock to find relative strength comparison......or relative
performance high one
then sort by strength......as we normally can follow max 3trade at a time.....so CANDIDATE FOR NEXT DAY/WEEK r prepared ....what can be done.....to
execute .....to grab oppurtunity
.......its basically....in rightside of chart showing oppurtunity bias.
so trade is taken as per ur criteria..of entry/exit.......when price starts move up.....and stall.
a recent entry.....of mrpl @54........or ongc @860....clarify trade logic.
even as per Mr Mark Boucher .....is the no 1 tool......2nd one is.......where the growth is.,which......i express in last posting......by a single word
[proactive].....though another word REALISATION calls on.
............some pro .....broad market analysis.....and leading sector ....la canslim style...USE SAME THING.
---------------------------------------------------------------------------------------

To be a Trader-20yrs Page 110

Key Concepts
05 July 2015
10:48 AM

1.key concept is u have to build a base


2. price and you .......reading price movement rightly
3.direction of trade
4.a system and how aggressively to trade
5.a trade is based on mistakes of others[ploy in chess terms]
6.bma--broad market analysis
go where the strength is
direction and strength of present market
7.location of obstruction which can affect price
8.when i have an edge and where.....how aggressive i shall put money
9.some high probability pattern
10.effective trade management
11.leverage strategy
12.when not to trade......%age of random trade failure idea

To be a Trader-20yrs Page 111

RDS Course
05 July 2015
11:11 AM

chapter1
...........
learn entry/exit pt.........what drives a trader to act.......fa.
create a strategy that suits u......firm grasp on mm.get organised......visualisation is necessary.
fa is anticipated expectation of supply/demand based on some news flow.if demand increase price shall have tendency to move u p.interest rate declaration
and employment rate r 2value.......past trend,last data vs market reaction and current expectation........3thing u must study .......with probable case scenario.
note....a nominal rate hike may execute to hold inflation.a rate hike is detrimental to index.
......pl study gap to understand when reports come out
chapter 2
...............
know ur opponent if u want to survive in market.use patience and when to fold.a pro knows throw away loser.......search for w inner..again.understand risk
reward.study market daily.ta helps for timing.develop a particular timeframe playplan where ur guessing and execution is supe rior.trade evaluation is
must,..its is key.if u play breakout.......chance of failure ...very high.......never forget it.std pattern of reversal...... ......a good tool.........to guess how others
r seeing market.
build ur confidence in exit as per signal.........simply execute , dont hold......here novice and pro differs.
chapter3
.............
football analogy and mometum..........bull bear character can change any moment,.......a match is exciting as anybody can win ,......but as spectator,a
pro/gambler...bet on who can win......not whom u like.its ur experience to watch........over many match.....ur cool judgement ,personal idea as
player.......develop a sense to bet rightly after seeing fast few min of match,......understand momentum and reserve strength [spring coil action in price]....be
a cool calculative head.
understand realistic profit target.pl see how momentum is fed in a stock......if its fading.........get out.
chapter4
.............
one of the interesting pt..........after reading lot of ta literature....what they have in common?.......study of close price ....its bias.......yesterday high
low........can they help to predict tommorow.......NO.......BUT THEY SUGGEST IF PRICE X SMOOTHLY LOW......AND WITH MOMENTUM,. .....-IVE BIAS IS MORE
ACTIVE,......SIMILARLY IF HIGH IS BROKEN ,MOMENTUM BUILT UP CAN BE SEEN.......NEW BUY ORDER IS COMING,........DEFINITELY U SH OULD JOIN AS
BULL
...
fibonacci is good tool.........both for retracement and price projection.
basically as watcher of price wave............ur duty is judge how easily it break some resistance,.......or how smoothly pri ce falls before bouncing.
chapter5
............
when price begins to fall from trending high,.........u must get out.......earliest u sure by confirmation.
similarly be ready to enter when downfall stops.......only after confirmation by price......u must have some systematic appro ach,pref mechanical to do it.
......its the essence of execution
hapter6
................
for break out play use strong momentum candidate...in overbought zone........only break out possible ,.......mind high risk,l ow probability
recent example...........thomas cook
........always have a check list before trade,.........if u feel uncomfortable just reduce trade size
use macd as exit signal.
chapter8
..............use ma.
chapter9
..............
rsi as an indicator...........
learn when to use as contrarian tool
chapter10
.............
chart pattern recognisation.........
it helps to pull the trigger easily........however no method is infalliable
.......bullish pattern
bearish pattern......
continuation vs reversal pattern
...use pattern recognisation software.........for throwing away subjectivity....and scanner.
last chapter
..................
weekly support resistance .........another good tool.
...........
market profile useful as a trader

To be a Trader-20yrs Page 112

For Development of New Trader


05 July 2015
11:28 AM

1.routine
2.checklist........70stock
3.prepare for tomorrow.........big picture,inflection pt.channel zone and spotting trend
............
he believes in routine,70 stock....watchlist.inflection pt.......probable swing pt.
.........................
next 5pt......must he believes......to be a trader
1.gambling feeling
2. good with number
3.how to think and what to think about
4. how to perform under fire
5.money management
....................
how he gave up his 9yr+ fundamental background........
and way he transforms
.........................ur weak pt
fear of loss
constant praise is reqd
mentally someone must give comfort
..................................................
accuracy factor in guessing
understand to make money learn to cut loss quickly
exactly know u shall fight in own terms
market analysis........how price try to move
10ema as a trend
feel on support /resistance and oscillator base signal
gap play
imp of cash in hand
money flow of fii,mf
3day rule........1..2..3 day up then reverse play
how market react to news.............-news,shrugged off by market..........bullish ...............take position
new high
probability calculation ........trading signal on half hr basis
nontrade day..............watch top for reverse
..................................
ego is worst enemy,divorce from trade decision..........trade only to make money
CONCEPT
.........................
next his direct suggestion and between line concept .....expressed as pt........
1.TRADE OR FADE
2. PLAN IN DETAIL
3. HONOUR STOP
4. WHEN TO PLAY BIG
5.HAVE A MENTOR........HAVE SOMEONE..TO SOOTHE NERVE
6.DEVELOP A METHODOLOGY THAT FIT U.......TRADE FIRST TO PROVE UR ABILITY.
TO BE WINNER............FIRST BE IN LINE OF FIRE AND PULL THE TRIGGER RIGHT
PREPARATION PAYS......ITS ESSENTIAL TO KNOW MORE THAN OTHERS
7.WHERE U R GOING THAT COUNTS..........ie. what u shall be
8.never gamble for large amount........never gamble if u have other priority.....never lack selfdiscipline.......stick to ur money earning plan,good gambler
not only keep bet low,but led a rational life also[stressfree within limit]
9.ASSUMPTION OF PRICE RISE IMP.NOTHING CAN BEAT KNOWING WHAT MAY HAPPEN,BEFORE IT HAPPEN .........EXCEPT WHEN IT IS WRONG.
10.KEEP UR PRIORITY STRAIGHT,MANAGE UR MONEY........CHANGE U.
11. TRADER MUST UNDERSTAND GAMEPLAN VS. GAMBLING........WITHOUT IT NOTHING POSSIBLE,DIVORCE EGO FROM TRADING.......FIND UR ED GE
AND STICK TO IT
12. value of info..............[inside one]
13.u must change direction of bad trading by first.....neutral.......must stop.......then reevaluate.....where and why wrong
14.dont go for killing trade,........u shall be killed first then,instead learn to take small profit
15.exiting a losing trade cleans head and bring back objectivity
15.exiting a losing trade cleans head and bring back objectivity
16.trading is a full time commitment,personality fitment........plan first with worst case scenario...then improve at what co ndition with alternate
scenario,go detail....in problem get out.........fight another day attitude.auction game .....helps
17. fibonacci,wave theory helpful. read uncertainity well.......it may be oppurtunity
18.never let.......friendship,family relationship get into way of sound decision making about money.......follow written rule , be ready for all eventuality
......................
note....he is known best scalper.
since people loves easy money.......no hard work....not even ready to read good books,forget to buy and learn.i try to gist.. ...........of that 'pitbull'
personally i believe..............all thing u want to become a successful trader........
r expressed in 5 thread........i have writen.
journey....
quality....
maturity...
method.......
system....
adept and adapt.......
..................................
fitting of jigsaw and u into system .....thats ur job.

To be a Trader-20yrs Page 113

Trade Elements
05 July 2015
11:28 AM

Remember, We can always make money. But, never make adjustments on how We do business. What I mean is, never move stops. If
we do and lose money, we are not just losing money. we will lose confidence. This will affect the outcome of decisions on other
positions.
Here I am writing
.
Trade element.

1] you..swot ..time to learn..your natural patiencetime u have..


BELIVE IN REALITY ,NO WISHFUL THINKING
2] marketyour believe on market
your ta tool mastery
your fa tool mastery
info network
3] fund to learn and experiment..
play less analysis more..use diary..
many help available @traderji.com

4] PSYCHOLOGY
readbook of dr elder..
market wizard series
mark doglous
ari kiev
Livermore
5] personality& trade analysis
dr van tharp
dr bill William
larry William
Linda
Mark boucher
Dave landy
RAKESH JUNJUNWALA
6] trade system design
..
Bernstein
Kaufman
Tusher chande..
Martin pring
Technical trade system
Instant profit
7] individual choice
bird watching in lions country
phantom of pit
personal softwaremetastock & omnitrader
8] trading styleits an individual choice
9] recent experiment.
Dynamic trading..and trend dynamics
10] encyclopedia of chart pattern
candle stick chart study
11] most useful concept
..
money management
risk control

To be a Trader-20yrs Page 114

Cycle
05 July 2015
11:29 AM

a layman term i try to explain...........CYCLE


shm........simple hormonic motion .........repeating cycle.
in human ..........born grow......maturity..........death
in company..........start.........growth .........expotential growth.......other competitor try
to expand...........a stable position........decay
in ECONOMY BOOM BUST CYCLE
at low of gnp, recession .........bank interest cut........create idea generator. to do
business........easy margin ....confidence..........make business click,now further money
creates expansion ........creates boom.........growth rate improve........ultimately
expansion r parabollic.........fools try to make without knowing what to make........paper
business tiger.......unnecessary expansion,excessive supply of creates demand
down....further rate rise by bank.......add the balloon ready to bust......inflation show its
ugly head.prudent sells share........take cash.......suddenly based on a rumour , panick
reaction .........make bubble busts.........slowly recession moves up,....economic growth
rate comes down............this CYCLE occurs again again.in stock market we call it bullbear cycle,trough -peak analysis.
just see indian market.........guess what state it is now
.....................
EXPERIMENTAL TA..
1] TREND AND NON TREND BOTH EXIST IN MARKET
2] RANDOM NESS HAS ITS ROLE
ITS AFTER BREAKING OF RANDOMNESS TREND STARTS
WHEN TREND TERMINATESITS DIFFICULT TO PREDICT
3] PRICE PREDICTION AND STOP GIVES OBJECTIVITY
HOWEVER.. BASED ON WHAT PRICE TELLING U MUST EXECUTE
CONTROL OVER MIND MOST IMP.

4] SCANNING TOOLPORTFOLIO CONCEPT HELPFUL

To be a Trader-20yrs Page 115

THESE R HARD CORE FACT BASED ON OBSERVATION OF


MARKET FOR LAST 12YR
05 July 2015
11:29 AM

AUCTION CONCEPT IS VERY IMP FOR TRADING, NEGOTION OF BUYER AND SELLER ..A VALUE ZONE,HIGHER UNJUSTIFIED A SELL PT,....LOWER A GAIN
UNJUSTIFIED BUY PT.
...FOR A DAYTRADER LAST 0.5HR..TIME TO CLOSE TRADE[IRRESPECTIVE OF PROFIT/LOSS]
PROFESSIONAL MONEY MANAGER WHO BELIEVES IN TA LOOK FROM LONGER TIME WEEK/MONTH.....START BUY THEN AS THEY HAVE MONEYPOWER.
normally we all @ lower price ....use for buy oppurtunity and use higher price zone for profit booking oppurtunity.
in normal condition market stay at top or bottom a little .and stabilise at price equilibrium pt
IF WE LOOK FROM LONGER TIMEFRAME WE HAVE BETTER ANALYSIS TO TRADE
IMBALANCE OF PRICE IS OPPURTUNITY
HENCE PRICE TRY TO REACH QUICKLY TO BALANCE.
NOW TIME TO REACH THAT...IS OPPURTUNITY
WE must study behavior of market to understand it.
define ;RANGE DEVELOPMENT
NORMAL DAY
TREND DAY.....UP AND DOWN [nothing told consider UP - to put specific idea]
VOLATILE DAY
................
RANGE -HELPS TO DEFINE DAY IN TIME
...............
CONCEPT OF CONTROL ; BUYER VS. SELLER
................
PRICE NORMALLY GREED DRIVEN IS UP
PRICE UNDER CONTROL OF FEAR...DOWN TREND
MARKET MOVES FROM IMBALANCE TO BALANCE
THROUGH PRICE EXTREME/RANGE EXPANSION OR VALUE AREA..SLOW MOVE
LONGTERM TRADER WATCH FOR OPPURTUNITY, SEARCH FOR A PRINT[REPEATATIVE TENDENCY OF EDGE- 'GIANT FOOTPRINT'
WHEN LARGE BUYERS COME PRICE MOVE UP AND WHEN BIG SELLORDER COMES PRICE FALL DOWN.
IN UPMOVES LIKE RESPONSES COME FROM GREED DRIVEN OBSERVER
..................
HENCE MARKET BEHAVIOR STUDY FURTHER BREAK UP 2SUBTLE ISSUE
1]IMBALANCED DIRECTIONAL MOVE
2]BALANCED ROTATION OF MONEY IN CYCLE /FOR SECTOR ALSO DUE TO CONSTANT CHANGE OF PARTICIPANTS PSYCHOLOGY[GREED AND FEAR]
OPNION...Longterm opinion of price reflects true value of stock
current value=todays value[all known and unknown openion hidden in price]
its imbalance we search for.....in weekly chart we see value shifting higher to see oppurtunity of longterm buy
range extension[predictive] shows biasness of close,normally in a range day DAYTRADER do active participation[whether earn or lose] at day top and at day
bottom(some at top believe in break out, some at same price SEE reversal)
now continuity of price at extension towards end of session provide biasness of watcher[better skilled trader] to put money f or future oppurtunity to earn with
trend[continuation]
AT CLOSE TIME HIGHER PRICE BUYING ACTIVITY SUGGEST LONG TIME STRONG HAND BUYER ACTIVE [OPPURTUNITY EXISTS TO EARN]
HENCE STUDY FOR OPPURTUNITY TO CONTINUATION OF IMBALANCE IS IMP WITH THE HELP OF 3 TOOL......PRICE,VALUE AND MARKET ACTIVITY.
................
wide expansion is good for daytrade.....from range to wider range ...to be watched for
now narrow range suggests 'side ways market'.....
INITIATION OF TRADE
.............................
1.WATCH[OBSERVATION]
2.RESPONSE- i]extreme......STOP
ii] favourable[ continue to hold or add]
other factor....problem of hope
3.now study specific case[with past data ,if ieod very good
4. failed expansion....too much too soon
5.trend termination...........trend of opposite....if professional fading coming with volume
..........................
always ask current condition , value with mean [open high low close=mean] vs close price
HOW LONG TERM PLAY TRADER R THINKING ? R THEY UNCERTAIN ??
IF YES , DONT PUT MONEY......OBSERVE, LET OPPURTUNITY SLIP BUT DERISK
.....so now u test idea
check imbalance & direction of price move.......to reach a value in time and rupee from imbalance to balance.
IF FAILED EXPANSION CAN GIVE FADE....OPPOSITE DIRECTION TRADE[VICIOUS MOMENTUM
NEXT COMES STRENGTH OF BUYER AND HOLDING POWER....VS MARKETING STRATEGY ADOPTED BY MEDIA.....TO LURE THE WEAK MIND IN FORMING A
CROWD RUN/CHASE
.....same way at bottom imbalance occur .........if new directional trend fail ? study....
oppurtunity or risk!!!
Study- neutral day and volatile day
...........................day 1,day 2, day 3, day 4, day 5.......@TOP ZONE AND BOTTOM ZONE
.R U GETTING THE SIMILARITY ......HOPE NOW USE IT FOR STOCK SP. CASE
now we actually watch this constantly- unfortunately positional holding [blocked opinion of direction] CRIPPLE OUR READING[ANALYSIS CAPACITY]
IMP OF LONGTERM TRADER,- ACTIVE PARTICIPATION CREATES BULLISH BIAS . ON THE CONTRARY AGGRESSIVE SELL BY THEM CAUSE DOWNFALL.
WHEN THEY R UNDECIDED , WATCHING.....market stays in sideways.

Another imp observation ,....once first move fail[neutralise by counter selling] THEN AGAIN MOVE ...........THIS NORMALLY HEL PFUL, ACTUALLY 3RD MOVE
HAS MORE STATISTICAL UPBIAS .
MIND IT ALWAYS.......PERCEPTION OF VALUE ITSELF IS VARIABLE
U MUST STUDY RELATIONSHIP WITH PREVIOUS DAY/WEEK......WHAT IS HAPPENING NOW?IN MARKET ,IN THIS SESSION ..TODAY....THIS HR??
STUDY BALANCED DISTRIBUTION WHICH NORMALLY HAPPENS BUT AWARE OF POTENTIAL LIQUIDATION PT
A bull is ready to liquidate for profit .......but where??
adding of new info [+ive dimention].....no risk....hence hold further for bigger profit.
but opposite direction move starts.....bull must liquidate to book money profit.
hence excess of profit[desire].....act a new dimention to an existing trade
VOLUME TO STUDY....BIG MEANS MORE ATTRACTIVE BUYER OR SELLER
HENCE STUDY AFTER OPENING WITH RESPECT TO YESTERDAY CLOSE .......HOW MARKET IS BEHAVING TODAY [1/2 HR]...CRUCIAL .UNDERSTAND WHAT IS
A TREND IN CONTINUITY.
WHETHER IT EXISTS AND FURTHER CHANCE OF CONTINUITY , ON THE CONTRARY imbalance and move to extreme or mean reversion balancin g move[no
trade oppurtunity exist then]
ON THIS CONDITION ON ACTUAL MARKET CORRECT TRADE EXIST.....AND THIS IMBALANCE AND MOVE TO EXTREME FACILITATE A TRADE[ CONTINU ATION
TYPE BUY SYNDROME TRADE WITH TREND]
HOWEVER ANOTHER DIFFERENT BALL GAME IS CHOSEN BY A FEW PRO.

To be a Trader-20yrs Page 116

HOWEVER ANOTHER DIFFERENT BALL GAME IS CHOSEN BY A FEW PRO.


LOGIC..change can happen rapidly .observe[perception change of participants]
Normally its dificult to understand change of trend due to bias[ so being minority these pro r in right side of trade -,unexpected event duly taken care of]
study session 1 hr chart bias & gap fill..session 2 ...session 3...session 4 session 5
similarly in day 1 day 2 day 3 day4 ....day5......WHEN OPPSITE FORCE ATTACK ?
HOW IT ATTACK ........INDIVIDUALS PERCEPTION OF VALUE......MOMENTARILY WEEK HAND GO IN UNCERTAINITY MODE AND ACT FOR SELF
SABOTAGE.....THROW AWAY IDEA [IF AT ALL] IN PANIC.......AND supply money to this cold blooded pro......as if natural loser[be ing weak disciplined person]
HOWEVER STRONG HAND ALWAYS PROVEN RIGHT DUE TO CONFIDENCE[JUST LIKE RECENT ENTRY ]STICK TO AND READY TO BUY , ABSORB AT FALLI NG
PRICE CONSIDERING IT AS FURTHER BUYING OPPURTUNITY
hence perception of same event has 2fold outcome/influence.......weak hand seller and strong hand as buyer
.......as a normal person we r fearful of uncertainity , so any event which has financial implication we watch, and try to de rive its influence in short term and
those who can think for long term,......size and visionity.....a cluster zone can be created considering upper boundary price tag[target]....and lower zone value
[entry pt]
All we know condition affects price.......so plan should be ,
1]change of price up...sell oppurtunity
2]low zone...considerably buy idea....provided new percept not so bad
........dynamics of each case- stock specific is different
....hence another idea ....i].surprise event.
Ii]unlikely event
Iii]expected event ......has to be added
.................
in expected event normally mean reversion towards value equilibrium occur
another 2 factor.....fundamental impact of an event and understanding time frame r imp.
normally higher time frame ,say weekly......has more bias...
however in case an unlikely event ,occurs as a shock, price and its value both move together towards a directional bias until stability
hence give priority to surprise event as it act as oppurtunity
on the contrary if u r in wrong side , book loss early if possible reverse position
......remember for expected event after announcement normally price reacts to opposite direction
THIS INSIGHT HELP TO UNDERSTAND RISK BETTER IN TRADING
buyers /sellers confidence and uncertainity r imp factor
actually buyers' dominance /sellers big volume attack....this 2 greatly influence price and so called direction into 'oppurtu nity' [threat to a fool]
wild move suggests thrust, when participant transfer from hesitent to aggressive ...wide range occurs.where as openion based participation without rigid
parameter and future uncertainiy cause wide fluctuation [volatility]
hence a feel for value is vital
oppurtunity=price away from actual value
normally price fluctuate above and below value
execute=how quick u can act
depends on how much clearly u can visualise with certainity
always study from long term prospective,..what chance is there from present balance to go to quickly imbalance and stabilise higher[new] balance zone
.....now ask ....will sombody buy at higher,if yes....ok..buy now.
for shorting , if u see big seller may come or not.
hence mean reversion is a good theory to apply in market
..........................
hence u check if at present
1] current market is undervalued or not [strategy]
2]study of imbalance in buyer'side
3]continuity factor
..................
hence reaction to news is an imp study to understand internal strength of market
confident trader[longterm mature buyer] vs. novice day to day [trouble lover]
...........................
remember current perception of value r always reflected in price
............................
be ready for atleast 2 different event 1]unlikely.....2]expected one
play plan for both r entirely different
for unlikely event,if u r in otherside ,damage is very costly,hence prepare for it,..as then price and value both quickly goe s against u,shockingly bigger loss
hence be ready in mental level for it[worst case scenario]
experience helps to understand this price/value/event relationship and expectation of people vs. news and its reflection in p rice
this i call market dynamics of watchers
hence confidence and uncertainity of watchers[potential buyer/seller] gives only directional bias.with uncertainity more rota tion occurs ie. distribution phase
PRICE DISTRIBUTION STUDY
........................... study of ask vs. bid
1]915..9-45first half hr
2]13-1330 lunch hr
volume or order flow study based on
3]15-1530 close hr tick data
.................................................. ..............................
this study of tpo...time price oppurtunity concept u have to do for u [own research]
mine shall not validate ur plan....however i suggest to distinguish to understand
up day
down day
volatile day
.................
first half hr ..opening initial balance with yesterday close
lunch hr...observation of biasness development
closing hr...time to take action
................
most imp is long term holder[strong money] r participating or they r sensing danger...hence selling delivery [distributing] t o sit on cash and/or taking money
out
.............
normally all buyers want to buy low and sell at profit[high]
so categorise buyers......short term and long term in trading percept.
long term trader search for unfair low price with bigger view with higher holding period
shortterm player search and book profit with quick imbalance
hence when break out style is visible ,ranging is moving up with interesting higher pivot break pt, with perception of imbala nce to continue.......long term
player put big chunk of money near day end with high bias of continuity
so short term day trade type player ,skillful in execution take its advantage ..with their computer generated signal [an edge to take !%profit] continuously
take profit with him as per his comfort level ......he is happy , as his scanner suggest oppurtunity every now and then.....b ased on %up list/volume up signal
/a quick pivot break up.
however for long term buyer its not that easy........he has to search continuity of directional bias , ruthlessly buy out vol ume at top with money power to
prove break out.
To be a Trader-20yrs Page 117

prove break out.


hence study on eod /weekly chart of impulse[main direction] and distribution [reaction]..
where this phenomena is going to happen now
-------------------------------------------------------------------------------hence i repeat again ,good 1-2 day mometum players use to play to trade in the side of big money player.
some other skillful player trade ..buy and sell in small targeted zone.
however when other players-,new players vs. strong money players maintain equilibrium ....
hence plan of small profit with sector rotation occur as equilibrium tradezone facilitates buy low at support and fade at wee kly resistance pt.
so long term fund is out and watching as imbalance creation is aim for strong hand......with watch when they found without ne ws some strong resistance zone
is touching again and again ,they test with good money power ..can they break it? ,if yes, put it....and pull price price out of that resistance to new imbalance
with a hope of continuity ,luckily greedy buyer or fearful short seller, sometimes media with news help them to fulfil target .
this balance area of around resistance line is test ground .....against new buyer by other pro seller or experiment field for short term players,
however ...continuity or holding several days over this new acquired land [from bear]....severity of opponent comes down ...a s a true pro they leave to win
against bull in other stock where high price on top may attract short seller.
corolliary: market moves directionally unless opposite [reaction against impulse]...strong orderflow comes[attack by big sell ].
CONCEPT OF WHOLE [MARKET] VS. PART[INDIVIDUAL STOCK]
..................
nifty component imp one r to be checked .....similarly for summation of total effect ie. play plan of nifty.
similarly for intraday........first playplan
i]range is defined ....high/low in first 10min...[for av trader 1/2 hr]
balancing of flow in it.....when and where it showing range expansion.....show direction defined
ii]so verifying continuity of imbalance in mental level
[i do it,u can use suitable software for it]
enter the trade.....as strong order flow is coming inyour direction ,while breaking predefined pivot ........
yes its the real intraday trade.
[however unless u know control of mind /experience.....hit of moment its not possible
.
top,high
I 1UPPER ZONE
I_
I 2MID ZONE,EQUILIBRIUM VALUE
I_
I
I_3 LOWER ZONE ,BEARISH BIAS
..............LET US STUDY THIS FIGURE, KEEP STRONGLY IN MIND
FOR OUR SIMPLICITY WE SEE AS A DAY BAR, HIGH.MIDDLE,LOW
middle maintain balance,some body called mean value....with a random +/- small value
a zone of equilibrium ,trade will try to facilitate near to it.
now total day bar.....dissect in 3 part, 1part top
2 part middle
3 part bottom
hence a daily range divide in 3 sect.......further study of a day activity.
imp thing is close, by defn end of day close defines....after fight by full day among bull vs. bear....final score.....where they maintain equilibrium
some body use crude 1/3 each, somebody modify total range 0-20 top
20-80 middle
80- 100 low
its in percentage of total day range, for deep study of close
i prefer for indian market , top 15%upbias
15-85%middle equilibrium range where fluctuation normal,mean reversion works
85- 100% bottom value for -bias
somebody prefers to calculate with pivot idea,someone with mean range ...top..bottom,
whatever may be chosen ...structure is same .........a top bias ,an mean equilibrium,a bottom bearish bias
.................we have to think now where is close, that way the biasness.
closing on top........strong upward bias
middle zone....any thing can happen
bottom....suggest bearish bias
now after day close.....all news info,new development...money extra available to put market
reflect quickly with next day opening.
as to facilitate trade day trader search for balance ,longterm player search for imbalance....entry idea and exit plan for bo th of them r different[in longterm
we search for continuity]
now this similar concept can be put in hr bar range and weekly bar
normally higher time frame has more influence
however for simplicity we study hr bar here to understand impact on day trade from microlevel,
now on that particular range closing on top suggest we r interested
next hr bar more wide...moving with higher price zone decides to enter bullside..with big order flow coming in same direction
continuity 5-6bar creates a total day picture......with further strong bias
hints....friday close bar study ,close at bottom .....has given me computer generated short signal in my simple 10hr dema,clo se cut down]
.............role of observant and vigilant
..................................................
all we know ftse market of opening .....affects around 14hr in trading......and opening bias of nasdaq in tech shares.
now beginning must be observed carefully[in fluctuation as well as orderflow]
price must be treated as supreme ............holding of price over a particular value ...in a particular duration suggest lot of things
yes its the secret of trading
hence study of imbalance and test trade r imp.
...now after new price discovery it has a typical tendency to reach new balance , old resistance bounce .....idea of test val idity of new price strength
somebody puts in oldway of impulse......and distribution [reaction]....upto a particular retracement value,
however next flow is all imp .......as it gives all important continuity of imbalance.....as seen in pennant and flag pattern
in other words orderflow or new money is vital.
imp oppurtunity occurs if continuiity can be seen,......VISUALISE for higher time frame .
the delivery trade by close........drying the float uplift price normally further up.
some of us in this field of trade experiment put this mean value +/- 2sigma.....a balanced zone with typical past data calculation for 'sigma' value...in this
days of statistics,for them monthly once new value based on 20 trade day better.......however i warn too much math make tradi ng less profit worthy....as its
the execution and sense of survival that counts after stoping self sabotage,...holding the profitable trade sufficiently take care of u and ur family.dream big
should not be motto,learn big and live in reality
.................
normally high value order occuring in the stable zone slowly seen....as all r ready to watch for volume play.market moves as perception of value[fundamental]
changes.as all [different time ,different style players participate in market simultaneously view and analysis is not so easy [in fact very difficult time consuming
process for me six year to learn and i am putting this hypothesis].......thats why an organized analytical view help.
key component r 1]interest of shortterm buyer[intraday]

To be a Trader-20yrs Page 118

key component r 1]interest of shortterm buyer[intraday]


2]interest from weekly chart[view from intermediate term]
3]interest of swing style [eod study followed by av
hence organize trade from this 3 element[put 3 different power spec. to see different view
and now give weightage]..........VISUALISATION IS KEY TRADE TOOL, IT ONLY HELPS TO ACT WHEN OPPURTUNITY/THREAT COMES ........ .otherwise
fear/greed put u wrong trade..
put u in info paralysis,courage not to act.......u can be an analyst but not a trader.
larger time player has thats why better judgement,as considering temp fall they can buy in strong bull run.
report publication and its impact change in near term value.......later when bruice die down they enter slowly if long term v iew is that really good.in all time
frame balancing occur through movement of price from quick imbalance[impulsive] to reach next probable balanced zone. volume suggests aggressiveness of
participant
study of std 1-2-3 pattern[a-b-c named by others] is always helpful to understand change in value perception
successive session continue ie. biasness of trend.uncertain buyer/seller can not hold trade
linda has suggested first this simple break up of a range bar in 3sect......higher as 1, middle equilibrium and 3 low as down bias......now close gives more
mathematical judgement than foolish openion style trade,.....see at close where more activity is ,in tick chart volume by mor e activity suggest buy by short
term moody buyer or deep pocket longterm player .....
study of time and distance move by price clears it......
time when it breaks and move up very imp.
influence of current pice[close of last] also to be seen.close shows final sentiment of that particular time frame ..balance pt of bull/bear.now come
influence ........if influence of price towards back[rationality].....price goes back to mean reversion.
if confirmity of irrational by price........up and up or by gap up ......concept of greed or trend fulfils.now most market pa rticipant believe [mean of total ie.
market majority] it shallmove up....really it will move up.
this is the forward move of price......confirmity.
........................
normally most of time market maintain balance[equilibrium].
short term break of balance shown in long term chart[weekly]...gives oppurtunity when strong money players[biased] participat e in trade with a vbiew to
hold.
imbalance strength can be studed by volume , price roc also imp.....also study distribution [price relationship]
-------------------------------------------------------------------------------Majority time after new value discovery price move quickly occurs by impulsive move to reach new stable zone. a forward price driveness occurs in market,
based on earlier close and feed by media.among all timeframe player higher time frame has max influence [dominance]
.......................recognisation of trend..............
to define a trend ,a ref pt has to taken..it may be yesterday close ...mean pt. or opening stabilise
another factor,.....market needs time to develop trend [continuation]..ie. market must show some move , then opposite directi on force has to be neutralised,
then only new direction strong trend move possible .
step 1; study in 'balance area'
so which direction imbalance is building up
step 2; now in relation to bigger picture ...how a trend may form
so fairly low..fairly high] ...which one is breaking with thrust ....govern..move in future

To be a Trader-20yrs Page 119

REMINISCENCE OF A TRADE-LEARNER
05 July 2015
12:13 PM


first is what u r ?be honest to answer it...........say mr dhakkan.........an exceptional knowledgable fellow loses in market .........where as sgm earns from
market regular basis.
...........answer is right initiation.
u must have zeal to learn..........not zeal for trading.
.................................................. .....................
personal adaptibility..............another key theme.
.................................................. ........
in ur personal life .........u play different role, though u feel trader in u, can surpass other
................fact may be its incoherent with ur service life,family life.so u have to put trader in u..........in spl nurs ery.............to grow it up........under best
care by u
IT TAKES TIME.
.........................................
aim to be a professional trader...........who gets 100% annual return from market........that is only job.normally it takes 4 yr after initiation to become a pro.
since middleclass and concept of earn and learn imp...........it reqd some time before initiation..........from amateur to pr o.
so this amateur state to be defined...............approx. 3yr........gather knowledge......
take trade here and there..........some profit some loss..........many profits......then some big loss .......back to square one[ludo]............journey to take
tips.......with mixed experience.....reading ta books /internet /message board/tv watch/fundamental of business..and economy. ............lucky to be get
mentor........or learn by hard knock from market.
one thing is sure..................he knows whether trading is for him...........so his next attempt is serious[if not perish ed already]
so amateur now knows value of knowledge, danger of half knowledge ......imp of risk analysis.........value of probability
can he be governed by price or by opinion....................will decide his fate.
.................................................. ......................
if opinion comeback to fa..........learn to be an analyst[an mba in finance or cfa in india]
study and investigate............talk and talk.......sell product[to client name of share.....a dream].............ofcourse b uy it in name of relatives[to avoid insider
trap]........yes its a way........workable...........big names do in india
so called fund managers..........+aggressive propaganda/marketting in tv channels
.................................................. ...............................................
problem of opinion is...........u can not use stop.basically amateur trades based on emotion...........forgetting its a game of maturity.worst is..........a trade
loss not booked
...........converted to an investment.............a bigger loss[i have enough in this trap]
If U BELIEVE IN FUNDAMENTAL, an enormous amount of information u have to gather and assimilate...........then understand game of hype.
instead if u understand chart.....................chance of success av joe is higher.so now
perceive.....a method is reqd,discipline is reqd.............commitment is reqd..........only on those condition i shall trad e.............otherwise shall pass on.
so ..........trade-learner..........must never be an investrader.
must not believe in gossip/tips
a routine to learn...........a habit of self evaluation ........take practice trade ........and evalute why he is right/when wrong why?.........that is practicing of
right side of chart......a software called omnitrader'......has this game playing mode.......excellent for trade learner..... ....as its choose stock.........one yr
back.......now allow u guess right.....bar by bar ......game goes on...pattern will be developed before ur eye.
chart is nothing but reflection of market participants........interpretation.........what is ur perception?
........what on earth is ur superiority to predict right side........RIGHT ......most of the time.
yes only by watching u can learn how to watch...........do it......learn swimming only by swim
,learn driving only by driving..........yes u reqd zeal...........zeal not to trade but to watch....
how beautifully its telling .........untold story of market.......u can check accuracy later..........by reading newspaper/wa tching TV channel
have u heard word 'volatility'..........its nothing but when, predictive power is poor.....at random in statistical term.
o conceptually u have to kill ur investment attitude..........develop a feel for price....be indifferent to habit of listen t o news[media hype].
so u know what u r doing...................
let us come to game of caution ............speculation.self question how far u r right by yourself?........so far no help com es..........can u survive on own?if
yes.......how is ur ESP?..........just shuffle a deck of cards............draw 1........can u guess?draw another......2nd gue ss.......r u right this
time?..........ok .....let us make this simple......
distribute......52 cards in 4hands.........now see 1 hand[13cards].........can u guess other cards?.........so in other hands what is there.............can u see by
observing other 13 cards................just check ur accuracy level and perception..........now by seeing 3rd hand, anybody can tell.......other 13[52-13-13-13=
13]
...............if u dont like cards......simply take a dice ...1 -2-3-4-5-6.let it be rolled.........
but u guess......beforehand........outcome......50 observation........,say sl no ur chosen no,actual observation...........ho w many times both r
right...............just see.
if u r less than 40% correct.............throw away............just understand speculation is a loser's game.
THEN HOW U SHALL TRY?
be reactionary............follow trend.........when random ,simply sit out.
understand trend........then trend continuity...........at what condition u shall enter.......how u shall know .......U R WRO NG THIS TIME..............simply get
out.
definitely trader in u,..........will get good oxygen to live long.
then learn to question ......idea behind those trade.........can u assimilate.......read dr elder..........its stimulant for a trader.
..
knowledge is over........however LEARNER does not know how market works............this he has to learn by self. i just put s ome facts
1.MARKET IS NOT PREDICTABLE,PATIENCE PAYS
2.BASED ON OPPURTUNITY AS DEFINED ,EFFICIENT MARKET OBSERVER CAN MAKE MONEY OUT OF MARKET.
3.MANY A TIME U R WRONG,JUST LOSE LESS.......SOMETIMES U R RIGHT.........USE BETTER MONEY MANAGEMENT TO EARN OUT OF IT.
4.TREND PLAN IS EASIER TO FOLLOW
5.TRADEZONE IS EASIER TO DEFINE...........DIFFICULT TO MAKE MONEY OUT OF IT.
6.KILL UR INVESTMENT AND GAMBLING ATTITUDE ..........BEFORE THEY RUIN U.
7.WITH TIME U CAN LEARN..........WITHOUT A DEFINED SYSTEM......ITS ALMOST IMPOSSIBLE TO SURVIVE IN MARKET
8.UNDERSTAND TREND TERMINATION.
9.RISK ANALYSIS IS MUST,THROW AWAY....HOPE,FEAR,GREED
10.DEFINE A TIME FRAME IN WHICH U CAN OUTGUESS OTHER TRADER ON REGULAR BASIS[UR EARNING STATEMENT ,DRAWDOWN ANALYSIS TELLS
U].......JUST STICK TO IT
.................................................. .....................
so what r the factors trade-learner should see?
1. self modification.........throwing out investment attitude /gambling tendency........replace with defined risk strategy
2.understand that price is always balanced..............but may have a biased in longer time frame.........say last week char t suggests -bias for nifty...........so
on monday by confirmation by price.......around 11-1130..........u r supposed to short ...........allowing profit book on thursday.........1030 hr.if u can not
see..........bearish scenario.......u r yet to learn it................profit from price......is not that easy.somewhere..... .u have some
opinion......fear/hope...........which is self destructive.
3. so a system is called for.........3way price can move........up down nowhere.
be ready .........for all three.........i.e. strategic planning.............now based on your signal trigger.............u en ter.get out..........when continuity in that
direction nomore high probability.

To be a Trader-20yrs Page 120

Let us see some successful Traders


05 July 2015
12:13 PM

let us see some successful traders .........i have seen them.


trader A............a scalper......a future player......a trade vetaren,believes in some condition of market shall make a directional move possible,......based on
extensive backtesting, develop programme code.......real time explorer signal ,enter trade....
book profit/loss after some minute.naturally its need not to say %accuracy very high .
trader B..........another scalper.......future player,screen addict,programmer.....believe in no psychological issue.........follow dynamic strength/weakness
zone .......take reversal trade........accuracy level very high,also have discreation of position size,based on signal strength.
traderC............half hr signal based trader.....comes to tv,believe in pattern....buy on low,reverse penetration of half size candle,stop at1stick below lower
candle......no programme.....just eyeball,watch multi chart in iris,16@a time two screen=32 stock,..around 70%accuracy level,has a pro friend to save his
skin other 30%by flashing call.
trader D........an exceptional knowledgable person,a mature of market,use hrly chart,calmly trade based on trend........study mostly at night.......another
future/call-put player...........use trade continuity concept+mm.
trader E........a nervous trader.......guides his boys to take now....dont click himself,break out........principle..........tells them where stop zone........add
them to 5times on right trade,ask them@3-30 what happened,.......mean while dont see same position again in intraday. i ask him?........his
suggestion.......since he knows him, its 2nd observation on price will affect his objectivity, instead he search for other oppurtunity....
moreover this 15000/-pm boys can handle better execution and observe scenario after entry.
trader F........eod player,news study.........whether its for dumping/may create euphoria.
cool enough to get out if wrong.
................
trader G.......amateur trader like me[different profession...loser in day trade]has a list of around 80 stock in different sector,all he knows of
fundamentals.......at what condition they shall move up.....track result and order flow,also macro economy.so when big fall comes he sees how far big fall
possible,when pro starts accumulation........from chart he see just accumulation.......and big volume charning at top to get out. no he dont use
stop.........but definitely sell total portfolio.......yes this amateur earn 100%return in all last 5 yr,including this yr....40%........trade only on those stock
where he knows,has a notebook......on which fundamental change offer an oppurtunity for which stock[groupA and midcap.....member of
equitymaster,nothing else....through ***** base see free data
....definitely give 2hr a day in study...and weekend portfolio analysis.....definitely buy after big fall .......a contrarian character.
.................................................. ...........
yes i have seen them........not while they bloom,after in their maturity.......though 6 of them r different........deadly accurate in their craft......no
hotchpotch.common theme......to reach there they evolve.......and stick to it.another thing.......they r honest
[though trader E hides to his staff,trader C braggs regarding market opinion as profession.trader F....regarding his job success]...........commitment
exceptionally high.
----------------------------------------------------------------------------------------Recently i have a meet of a group of 15, so called trade dreamers.........i told them ...'none of u r suitable for trading'.........come to reality...dreaming is
good to start new business....hard work pays there..........here u reqd some typical knack and do alone attitude. u have to do habit of interpretation...go
with the flow.......unfortunately most people r blocked by own trap......clean slate is reqd.even a great SAINT can not produce another saint...[Trading is
not everybody's cup of tea]
those who try to understand what i mean pl read......theme behind new high/advance decline/vix.....broad market analysis]
EXPRESSION is another place...where learners lag............clear thought process ,..........why there is only one boss thats YOU?
Can u see the versality of saint?......so smoothly he can travel for oppurtunity from one time frame to another..........because of his ta depth and
calmness.
................................
i know many of trade learner......who often come and go....study a lot but clumsy in thought process..
...go back to tips-giver.....saab a le lo'...or a tip....breakfast analyst....just like kitty party..discussion
[ladies excuse me i dont like to hurt].......useless talk no progress..........max development for them to be a call giver.
in stead they should contact to learn/see trader......who analyse system give free call with radical judgement ,ofcourse implementable.
EXAMPLE............ say last week chart suggests -bias for nifty...........so on monday by confirmation by price.......around 11-1130..........u r supposed to
short ...........allowing profit book on thursday...
....1030 hr.if u can not see.......bearish scenario.......u r yet to learn it.
.................................................. ................
i am asked on telephone on thursday ..........after u could predict it ....how before?
......yes telling on monday.........confirmation by price.......I HAVE NO ANSWER.
Pl remember-.NO DOUBT THOSE WHO PLAY 3MIN CHART......PREDICT 15-18MIN.similarly studying in hr /eod chart ............prediction is possible.but THE
CALLER ARGUED 8HR BEFORE I AM TELLING.
............i have to say ...its hunch........afterall many years before........i practiced by seeing 13 cards.........what may be others 13 cards in other three
hands, with av accuracy of 6/7 cards right reading.
...................................
for critics its nothing but dart throw..........[btw i have shown many a time this shall move up now. .....accurately..in front of screen , idea is new order
position add +quick calculation]..
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
after u become pro.........just stop slippage from there..........basically to follow a checklist,follow ur system diligently.........dont be extra smart to self
sabotage.
................
u must have some relaxation which is noway relate to trading to stop burn out of u.
some follow outing...........some help fellow trader......some does backtest........some reads book.
.............
but when they comeback again............all r extra committed.
. have u seen some trader-scalper?
..........basically they r good at computer signal based trading,easily implement stop,stick to strong zone intraday......normally have zero opinion.mostly
stick to specialist.
................................
short term trader...........primarily trade based on momentum,.5/1hr chart ......signal validity........10..15hr,study eod to find out candidate.....in market hr
use predefined confirmation for entry /exit.
position trader.......he knows what he is doing.........experience taught him when to enter and exit. at dynamic support..........enter considering little fall is
possible, or take high probability break out trade.........mostly they use eyeball/direct price study .
there is another neobuddist/intellect persuation...........currently developing in indian hype..........trading best on expected result/after result move.here
they sought with news how price shall react ........prescribed continuity ,some time try to outguess market........mostly lose money.on the
contrary.........safe buy like fm when market falls r safer method[contrarian].
Mkt moves in a fashion of it's own,we do not try to predict it but follow it,say it went upto a certain price & the next candle / bar could not sustain & falls
below the earlier few bars ,established gradient (the gradient eastablished by the earlier candle),that is a SMS by the Mkt,now we are to watch carefully
whether this was a one off & see the next ongoing bar.
Now we can see the start of a temporary down move.
Remember Mkt ,in most of the time it will always make a second attempt towards the earlier Up move.We are now ready to take a Short Entry hence wait
for Mkt to make a small upmove ,there with a Wide Eye we make a Short Entry ,though our eyes are wide we shrewdly calculate the Stop Price BEFORE
initiating the Trade if within our Money Mgmt. discipline ,we simply pull the trigger ,no hesitation no 2nd thought & after the trade instantly put the Stop
order,becoz Mkt has told us the LIMIT area of it's Upmove.
Never do we trade Indicator / Osscillators / Pattern / etc.We should have this Mind-Set that we should never try or Dream of trading with Indicators.
(Any Indicator even a conventional MACD is just good enough to Trade Mkt.)
We trade Price & Price have a PERSPECTIVE ,that is the Bigger picture.If you cant see the bigger picture in one cursory glance to a chart then be assured
To be a Trader-20yrs Page 121

We trade Price & Price have a PERSPECTIVE ,that is the Bigger picture.If you cant see the bigger picture in one cursory glance to a chart then be assured
you have to have more 100 hrs of Screen time,under your belt,otherwise use a Longer period MA to guide you about the bigger trend.
Here to determine the Perspective ,i have seen many old traders of my age use simple Pivot only to determine the Bigger picture ,there analogy if the
Price is below a pivot ,then bigger picture (-)ve & they will trade towards S1.
Now 2nd stage is identifying the Trend ,how ? by Saint's method,HH HL or LH LL ,simple no damn indicator only Price action Nothing else.
We now have the Bigger picture we also have the Present Ongoing Trend in Wave forms.
Now we are to initiate the Trade TOWARDS the Bigger picture in the Ongoing waves reversal zone.Say we intend to Long & Mkt moving Down wait & wait
until you get HH & HL .Remember we do not trade whenever Close above ,.. but we wait to get our HH & HL .Then ONLY after you get the Ongoing
Wave also Conforming TOWARDS the Bigger picture you may need a TOOL to trigger your Entry Point ,at that point even a conventional MACD if gives Buy
signal we take it becoz the EDGE is already there ,the Chances of Win are more,hence any Tom Dick & Harry indicator osscillator pattern will Do,will suffice
our need of a Trigger.
In many of my chart u may have seen a Money Management tool,if above that Stop then my Longs will be more if below my Shorts will be more,if below
Stop i intend Long then normal qty,if above Stop i initiate Short Qty would be normal.That also helps me to see the Bigger picture the Perspective the Back
drop
Remember even when we get HH / HL & the Bigger picture is for Short ,we do not LONG but Wait for the Short,to get the Edge in our favour ,both
PERSPECTIVE & Ongoing Wave are to be in SAME direction.
---------------------------------------------------------------------------------------------------------------

To be a Trader-20yrs Page 122

So what we learned so far?


05 July 2015
12:14 PM

trading is an intellectual persuit with greed driven mechanism,not suitable for all.
..........honesty zeal to learn,stoicism........be in present,visualisation......action,cool nerve.
....................
bma........broad market analysis........long drawn interrelated idea
concept of fad..........sense of smelling danger.
........................
after this comes ta........to know how other trader shall behave+price confirmation concept.
...............
next come data +software...........synchronisation........signal development /backtesting
............implementation
after that polishing what works for u and unlearning all other things.last thing is very difficult.....indians have tendency of garbage in..........though cv
relentlessly suggests to check utility first and sharpen own tool.
btw...........nowadays forex concept , from viratech data all currency pair and chart study of world index.............suggest..........money is moving out from
which country and entering where.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Hope now all have a fair idea about the capital mkt & the Risk involved.
Intraday....in any chart in one axis is Time,hence if now we compress the charts say from weekly figs to monthly or even to yrly,we will find a clear Trend
or a bias to (+)ve or (-)ve.
If that be so then WHY we expand the time frame to intraday,where the volatility is more or noise is more ?
I am RISKING more ,for what gains ,brokerage,margin,thrill,working from home.
Before indulging in this More Risky aspect ,plz ask what do i gain.
And on what LOGIC this seems very easier task.
ANSWER:
Day trading is to have complete control on your every emotion & 1 slip = 1 or more loss & remember few good trades are always what lures people to daytrade & that's when trouble starts, then they dont give up even in losses & its a battle of ego.
.................Nobody can disagree that this is Risky,if so then the Outcome is UNCERTAIN.
What is the PROBABILITY of the outcome.So TEST on past incedents to find out.
How do we know that all those past performances where not RANDOM.
Was Big Bang a Random ,a evolutionary ? a scientific process ? Can those be measured to find out or based on BELIEF ? What should we do ?
Gosh i thought day-trading was an easier job ."Shrewd, Sharp, Silent" are only few traits one needed to experiment for trading, just my obeservation
though.
I want to learn as much as I can and keep learning in future at the same time start very small and make it big later.
I am willing to risk a small amount of my hard earned money for it
.............. Capital Mkt is a place where people always trade with "Calculated Risk".
There are people who MAY not know the extent of this Risk & trade profitably upto some time & there may be people who knows & trade un-profitably.
Before plunging 1 should know.Even the Risk Appetite varies from people to people
.............1. use a certain limit for day trading (as of now its 10-20lakh will increase gradually to 40lakh no more)
2. enter every trade with stoploss. thus limiting my losses
3. as gain occurs increase stoploss to seal it.
4. each day transfer my gain to account and start with same amount of money. enter only known scripts and control emotions. If i lost a good entry point,
will wait for later time ..............................Is it necessary that you HAVE to day-trade ? Plz trade based on EoD data .Many a people term it as Swing
Trading.

I was at that catogory only,just been promoted to next category recently.


"By swing trading do u mean buying at EOD and sell tomorrow morning or 2-3 day later at around 5% gain or less..... ???"
With 3-5% Gain (after adjusting brokerages) can be next day or few days until Stop Loss Hit.
Precaution?

You think? that means you DONT KNOW. What makes you think?
Stoploss limiting losses? How much? And how accurately?
Transfer gains? Great! And as loss occurs? where do you replenish it from?
How would you control emotions? And how do you know that YOU WOULD control emotions?
........................UNDERSTAND THE DEPTH IN QUESTIONING!!!Imagine somebody thinking that F&O means High Leverage hence my Wins can give me
double/triple returns on Equity !! are we aware about the Probability part.
We all trade in F&O ,but where Risk is visible & manageable,No room for wish full thinking,few Winning trades under my belt & i become the Black Belt .

To be a Trader-20yrs Page 123

PERSPECTIVE OF A POSITIONAL TRADER IN RESPONSE


TO LAST POST
05 July 2015
12:15 PM

Last Post:
so what we learned so far?
trading is an intellectual persuit with greed driven mechanism,not suitable for all.
..........honesty zeal to learn,stoicism........be in present,visualisation......action,cool nerve.
....................
bma........broad market analysis........long drawn interrelated idea
concept of fad..........sense of smelling danger.
........................
after this comes ta........to know how other trader shall behave+price confirmation concept.
...............
next come data +software...........synchronisation........signal development /backtesting
............implementation
after that polishing what works for u and unlearning all other things.last thing is very difficult.....indians have tendency of garbage in..........though cv relentlessly suggests to check utility first and
sharpen own tool.
btw...........nowadays forex concept , from viratech data all currency pair and chart study of world index.............sugges t..........money is moving out from which country and entering where.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Hope now all have a fair idea about the capital mkt & the Risk involved.
Intraday....in any chart in one axis is Time,hence if now we compress the charts say from weekly figs to monthly or even to y rly,we will find a clear Trend or a bias to (+)ve or (-)ve.
If that be so then WHY we expand the time frame to intraday,where the volatility is more or noise is more ?
I am RISKING more ,for what gains ,brokerage,margin,thrill,working from home.
Before indulging in this More Risky aspect ,plz ask what do i gain.
And on what LOGIC this seems very easier task.
ANSWER:
Day trading is to have complete control on your every emotion & 1 slip = 1 or more loss & remember few good trades are always what lures people to day-trade & that's when trouble starts, then
they dont give up even in losses & its a battle of ego.
.................Nobody can disagree that this is Risky,if so then the Outcome is UNCERTAIN.
What is the PROBABILITY of the outcome.So TEST on past incedents to find out.
How do we know that all those past performances where not RANDOM.
Was Big Bang a Random ,a evolutionary ? a scientific process ? Can those be measured to find out or based on BELIEF ? What sh ould we do ?

Gosh i thought day-trading was an easier job ."Shrewd, Sharp, Silent" are only few traits one needed to experiment for trading, just my obeserva tion though.
I want to learn as much as I can and keep learning in future at the same time start very small and make it big later.
I am willing to risk a small amount of my hard earned money for it
.............. Capital Mkt is a place where people always trade with "Calculated Risk".
There are people who MAY not know the extent of this Risk & trade profitably upto some time & there may be people who knows & trade un-profitably.
Before plunging 1 should know.Even the Risk Appetite varies from people to people
.............1. use a certain limit for day trading (as of now its 10 -20lakh will increase gradually to 40lakh no more)
2. enter every trade with stoploss. thus limiting my losses
3. as gain occurs increase stoploss to seal it.
4. each day transfer my gain to account and start with same amount of money. enter only known scripts and control emotions. I f i lost a good entry point, will wait for later
time ..............................Is it necessary that you HAVE to day -trade ? Plz trade based on EoD data .Many a people term it as Swing Trading.

I was at that catogory only,just been promoted to next category recently.


"By swing trading do u mean buying at EOD and sell tomorrow morning or 2 -3 day later at around 5% gain or less..... ???"
With 3-5% Gain (after adjusting brokerages) can be next day or few days until Stop Loss Hit.

Precaution?
You think? that means you DONT KNOW. What makes you think?

Stoploss limiting losses? How much? And how accurately?


Transfer gains? Great! And as loss occurs? where do you replenish it from?

How would you control emotions? And how do you know that YOU WOULD control emotions?
........................UNDERSTAND THE DEPTH IN QUESTIONING!!!Imagine somebody thinking that F&O means High Leverage hence my Wins can give me double/triple returns on Equity !! are we
aware about the Probability part.

We all trade in F&O ,but where Risk is visible & manageable,No room for wish full thinking,few Winning trades under my belt & i become the Black Belt .
-------------------------------

What you are referring to is intra-day noise. This effects short term or intra-day traders. Mid to long term traders generally avoid this intra -day noise to ride
the trends.
When you look at the performance of the stock market at the end of a trading day it can be hard to work out why shares have e ither risen or fallen in value.

Broadly speaking, share prices are influenced by news or information: new data on employment, manufacturing, directors deali ngs, political events or even
the weather, all kinds of news can influence the way shares move.
The health of the economy has a fundamental influence on share prices because it is ultimately responsible for driving compan y profits. Broadly speaking, if
the economy is growing, company profits improve and shares will become more highly valued. If the economy is weakening, compa ny profits will fall and
share prices will go down.
Investors look at a vast amount of data to try and work out what is going to happen to the economy and shift their portfolios before the events occur. This is
why you will often see markets move well ahead of an actual event occurring. You may, for example, get little reaction from t he stock market when interest
rates rise. This is because investors have already anticipated the shift months in advance and adjusted their portfolios befo rehand.
You can usually assume that the stock market will anticipate moves in the economy by around six to nine months. So if you wan t to stay ahead of the game
you will need to follow price data as closely as the professionals.
Investor sentiment can lead to irrational buying or selling of shares and result in bull and bear markets. A bull market is w hen share prices rise while a bear
market is when they fall. In the technology boom of the late 1990s, for example, investors paid extremely high prices for sha res and ignored traditional
valuation measures, such as P/E ratios. This carried on until 2000 when investors belatedly realised these shares has risen t oo far and resulted in a three year
bear market in shares.
.....................................
.when with maturity at what condition u enter, hold and exit,.......all other r void from mind .....[if u programme it ,very best].......u r a SUCCESSFUL
TRADER.

------------------------------------------------------------------------------------------------------------------

To be a Trader-20yrs Page 124

FORMATION OF STRATEGIC PLAN- INTERMEDIATE TERM


05 July 2015
12:17 PM

Stocks can be bought by using this plan only at early stages of an intermediate upward
trend
When markets crash and then bottom out and then again start an intermediate uptrend
Buy stock that belong to the strongest sectors and have a high Relative strength.
some other factors also count like,
Quality of management is important. example - you can always bet on reliance
Need to understand general economic environment. example - IT companies who were
earnings 40+ % margin are bound to be hit hard by rupee appreciation so avoid IT
mass consumption theme is playing the round - get into sector like telecom
big plans of govt for power sector - buy power equipment/utility provider
after filtering the stock through numerous such criteria, BUY the Stock future
keep a SL at the lowest point the stock had hit during the preceding downtrend
trail the position with wider SL to catch the maximum trend.
Strictly no MID CAP position in this plan. Only Large Cap.
limitation of this plan is that you need to have a deep pocket.
...........
1.Observe the relative performance of various sectorial indices for couple
of trading sessions
2.Stocks that fall the least ,during correction tend to bounce back fast,
so keep an eye on those stocks and the sectors to which they belong
3.If you watch cnbc for 1/2-1 hour everyday before market opens, they
generally discuss stocks/sectors gaining momentum
4.keep a watch on list of gainers everyday, that gives you a feel
of the winners
if you observe last 2-3 years, it is always the telecom/capital goods stocks
that outperform, so good growth sectors stay for a while, so it does not
change very often, only some structural change changes the fortune of
a sector.
........inflow of money in a particular stock generally push price up
2]in balanced area[sideways market] play within range .....buy at lower pt
3]a forward price influence occur with trend
4] normally balance exist in trade ,however its tilt that to be studied
5]play in upper zone is bullish , study it in higher time context
6] failed to brake suggest top fall
7]volume thrust .....reversal in trend
8]considering trend .....buy/sell ....action must be at top /bottom......not inbetween
9]range expansion suggest biasness
10]time-price-oppurtunity study
11]unlike event must be seen in context,if hints r it may continue .....danger
12]understand value.......fairprice
maket activity is nonrandom,it can be deciphered with strong judgement,at top of price
when nomore buyer available price shall come down.same ay after market fall ,no more
seller available ......price shall start to move up.
13]we search for continuation or change[reversal]
14]its the imbalance make trend
15]last 45 min is time to trade with break out on delivery......its the long term player's
buy style we shall follow.
...................................
concept of under value buying
........................................
identify volume with selling and buying ........is entirely different , and wrong assumption
/analysis will be costly for volume analysis
.......................ask question?
1]what was the activity in this session
2]how does this activity in larger move
note: higher volume at topmost pt,with price maintaining strength suggest actually
strong hand buying
To be a Trader-20yrs Page 125

strong hand buying


total volume[say 5hr adding a day]suggests further activity required to continuity of
direction
new event + development at that time .also to be checked in this context.
price vs. volume .....activity occuring where ?
top
middle
bottom
.......
at top its ok,at lower also ok
but if at middle ,it does not have any directional bias ,simply mean area efficient market
condition.......random trade zone,profit by luck......a losers game
infact good news to upmove suggest ......be ready for show,
low volume with up price suggest buyers r nervous[normally individual stock presedence
is different actually].........price fall is soon expected .
.....so take very small position and see....on individual stock basis on real time test and
analysis.
tick data higher volume play at top value suggest strong hand play plan
delivery % at day trade......
new mf/fii buy,
hence higher price tick volume at closing hr, suggests strength/interest by player
....let u try to correlate with news ,....study whether break out shall fail or confirm?

volume confirms liquidity and price distribution, actually used for confirmation of price
strength.it may help in your decision making tree.
1]trend is going to continue??purpose is react early
ask question ...to clarify ...what market imp.participant r doing ?buying or selling..or in
distribution [watching]
in trade zone ....again see as per range in middle no participation , near top.....high
volume participation with good % delivery.......take risky entry
near bottom low volume participation ...again take entry....support buy.
...........
can we distinguish buy volume vs. sell volume?in higher range with price up,volume up
phenomena is good .
in lower range , higher volume suggest sell volume.
........
next question is at lower volume at down day who is buying it?....definitely long term
informed buyer r buying with good idea on company /near future.remember long term
buy is done at comparative lower price ......with different play plan of sleeping money.
cash flow up
...............
higher volume near top suggest interest by strong hand .....a short term aggressive play
plan.
total volume tool
.................
creating momentum more than double volume ,compare to 10day av. is good.observe
when down volume brings strong buy .....quick up move [not allowing to stay in
bottom].......it suggests whenever good news flow comes , probability of strong upmove.
similarly if low price brings more activity ,price shall have to go down .....to stabilise
first.decrease in volume in low price ......stock has no more interest,however bottom is
near.
if low no trade @top,.....buyers seem to be not confident .......hence fall is imminent
in general volume pick up suggests more participation of public in direction of price.
advertisement of commercial when marketing.....play to lure participant is natural....
so it can be a tool for oppurtunist trader ........
more activity [normal type distribution ] @ av zone.......is balancing action......watch
only.
ultimate shift to topside or bottom zone has some utility.hence expected behavior in
trade zone .........buy at lower value and sell @higher value [channel play]
but who is behind to change it........to create a new trend?
hence sudden sell by pro at lower value means they expect bottom further, similarly buy
To be a Trader-20yrs Page 126

hence sudden sell by pro at lower value means they expect bottom further, similarly buy
by them at top.......means they have reason to be greedy[unexpected event ]
,,,,,,,,,,,,,,,,,,,,,,,,,,
....Three main criteria to pinpoint potential Stock Picks
A history of consistently strong sales and earnings growth

A reasonable price

Strong price action relative to the market


.........................
As long as the stock shows consistently strong sales and earnings growth you can
continue to hold it. This of course is fundamentally. However since we trade price and
profit from price trend I would suggest you get out of your holdings as soon as the stock
you are holding begins a decline/downtrend is prices.
stock picking is an art...an experience hand can do it.
fundamental data gives the potential of future betterment.for a different industry
ballgame is different...futuristic business up has to be seen in light of profitability.
so some idea...on a sector.
hospitality and tourism ....on hotel.
theme of cram...export
banking...rate of interest...npa
............
next comes ta...its the reflection of price......what present traders r doing..
how far they r bullish?
here most traders make mistake........they presuppose to guess..[hoping
accurately...forgetting its a probalistic model]
its only DIRECTION CAN BE PREDICTED. not the target...
judgement must be for continuation[trend]..or reversal[mean reversion]
various tool r used to do same...some of them has superior guessing value.
hence for target...sar is better.
initial plan must be based on low risk strategy...and what works on present market
condition.
risk analysis must be done...before entry.
as a trader ur plan is short with trend bias ...hence relative strength plays imp role in
stock scanning...
as price reflects all known event....we should spend money to get unknown news...which
may affect price
or otherway...we must study reflection of news on price......example.XXX company
result bad..price holding 910..its moving up rs5/- on monday...opens rs 7/- up on
tuesday..holding..by 1300hr..it crosses days open...hence promise higher up...soon
break imp weekly pivot 923..and hold 928-929...hence a promising up play,...for all
good trader.
.........next factor...how u close a trade...and what u learnt from a trade.
---------------------------------------------------------------------------------------------------------------------

To be a Trader-20yrs Page 127

Do you understand the Cost?


05 July 2015
12:18 PM

do u understand cost?......this very question ........help u.


cost of learning
cost of not putting stoploss.
cost of leverage[interest vs blow out risk]
cost of foolish greed
cost of following tips
cost of not writing trade mistake
cost of not doing behavior modification
cost of faith in brokerage house
cost of distracting thought and destructive mind
.................
just calculate........u move up lot of step ahead

To be a Trader-20yrs Page 128

On Trade Learning
05 July 2015
12:18 PM

ON TRADE LEARNING:
assumption 12pass with 60% marks.....lets start
.................................................. ...
statistics.........basic concept of probability, regression analysis, sd.....and qc
ECONOMICS.....stock market as lead indicator, demand/supply.cycle concept
business..........enterprenaur what makes him click,why a business fail,concept of monopoly and market share
MARKETING.........NEW PRODUCT aggressively develop market share, old product how to cut competition.......game of advertising
macro economy.......budgetary policy,rbi monetary and credit policy,la.repo...reverse repo........rate of interest .......inflation and its impact
INTERNATIONAL FINANCE..........forex,global village,cheap product ,political risk ,stable govt,fdi ,import export gatt,ppp and swap,money flow and money
squeeze
BEHAVIORIAL FINANCE.........how crowd behave,how greed /fear affect individual and when in group.dream vs reality,wish hope,study on fallacy.........when
one quits
VALUE OF MONEY.............time value discounting concept,cash in hand ,oppurtunty
TIME MANAGEMENT........priority,get organised,abc analysis,delegation,imp learn to plan then act.
self development.........SWOT ANALYSIS.pogress review
company.........product development,market niche,ir ,distribution channel,vision,fund management ,integrity

accountancy..........debit/credit,3statement..balance sheet,profit loss,cash flow,financial ratio analysis its implication


corporate finance..........budget and forecasting,debt/equity ratio, how to fund
costing.......of a product,value vs. perception,time value ,break even ,overhead, profitability
VALUATION..........discounted cash flow,firm valuation,relative valuation technique,dividend model,book value vs replacement value
basic financial planning..........ur personal balance sheet.....asset vs liability,derisking and insurance concept, asset allocation , ur suitability as risk taker
BOND MARKET.........yield curve analysis,interest rate implication
COMMODITY MARKET.......CYCLE , WHERE LIES OPPURTUNITY
STOCK MARKET..........WHY , for whom no, neat/bolt function........concept of software
OPTION /FUTURE.........leverage tool, derisk vs speculation,pricing model like black scoles/binomial..........danger associated in trading
RISK RETURN STUDY.........risk premium,expected return ,variance, beta,capm
PORTFOLIO THEORY........efficient market, portfolio diversification,markowiz model ,indexing,sharpe ratio,portfolio performance ,arbitrage
FUNDAMENTAL..............INDUSTRY ANALYSIS,govt policy,burgain power of buyer,substitute product,PORTAR MODEL
STOCK PICKING..........MANAGEMENT QUALITY,LIFE CYCLE OF A STOCK,operation profit/operating asset,analyzing non financial aspect of company,leadership
in sector,emerging blue chip,cyclic turnaround defensive stock
SECTOR AND ITS LEADER..........banking, hotel, power,pharma, metal, fmcg, refinery, cement , auto, software..................[idea i learn from
equitymaster.com]
SCENARIO ANALYSIS
.................................................. .........
BEHAVIORAL FINANCE ............aspect of repeatative mistake
ta...............which indicator suit u...........learn to read volume , overbought oversold market,mometum and stoploss,leverage to winner / cut loss early
YOUR CHECKLIST...............SCREENING CRITERIA, WATCHLIST,SYNCRONISATION technique.
TRADING IS MORE WITH PSYCHOLOGY,BUSINESS ,WAR
FIRST decide why trading?what u want to after 3yr......after 5yr/8yr?
study ur personal life.........ur strength , what u do when u find something wrong?
your skill development attitude...........commitment level
...........ur comfort level
...............................................
life is oneway............trading another way......NONO
HOW TO COPE FINANCIAL LOSS
AVOID ROAD OF SELF DESTRUCTION.........CONSCIOUSLY STOP IT
BEHAVIOR MODIFICATION TO IMPROVE.......TAKE ego pride out of u..........they r main hindrance in trading
AVOID COMPULISIVE BEHAVIOR
......................
PREPARE STRONG FOUNDATION............MAKE U A BETTER TRADER AFTER 3YR,STRATEGIC PLAN............STEADY DETERMINATION
UNDERSTAND AND FACE REALITY
..............FOLLOW MOMENTUM AND INERTIA..........
UNDERSTAND PRICE...........WHEN IT TAKES UP SPEED
CHANGE IS LAW............IN TRADING/IN MARKET /IN U
COMMIT TO CHANGE FOR +,IF THINGS OK........DISCIPLINE NOT TO CHANGE FROM IT
COMMITMENT TO CHECK A/C URSELF
...................
REASON OF UR DOWNFALL..........AVOID OVERTRADING
ENVIRONMENT TO SUCCESS .........IMP
HAVE A PUNCHLIST.............TIME AND PRIORITY CONCEPT
UNDERSTAND MONEY MANAGEMENT...........READ RYAN JONES

To be a Trader-20yrs Page 129

Prediction
05 July 2015
12:19 PM

All rational people will agree that there is uncertainty in the stock market, that predicting where prices will go is foolish .In Science we know how cloud is
being formed but can you guess that the most scientificallydeveloped nations CANT get their Weather Forecast right upto 65 % time.
Govt. of each Republic we see in a political map has a Weather Forecast deptt ,think about the combined Billion Dollars World spend each month !! and
through decades of experience;Data; pool of
Statelites;these Guys cant get the Forecast RIGHT.
Then we with a computer & Data & some knowledge have the audacity to think we can Predict
Price ,where it involves millions of trades with million different emotion & intention.
Atleast in case of Weather we have 100 % scientific knowledge how & what of Weather.
We think that we can predict where stocks will go, that is the reason we trade the market,
to make money from our predictions.
But no one can predict the market with absolute certainty. Therefore, you have to stop
looking at trading ONE trade at a time. Imagine what would happen to the Matka owner
who looked at their gambling business one bet at a time. The Matka can not predict who
will win the Super Lotto or what the next 'Patta' drawn in a game of zero to nine will be.
It can be Ekka or Panja -the Operator does not bother ,they don't try.
Becoz in the Long Haul Probability is going to play in their Favour this Simple fact is
known from the Casino owners of Las Vegas to the 'Matka' operators of Gujrat.The Gambler
plays AGAINST the House,the House wins by Long Haul as probability is stacked in their
favour.
What the casino does, and what we as a trader should be doing, is trading the probability
of what will happen. The casino makes money because they know what will happen over the
next 1000 hands of blackjack.They have an edge.
The question is, do you have an edge in the market?
Are you trading a strategy that assures you a profit over a large number of trades?
If you are serious about making money in the market, you should be able to define the expected
out come of your trading strategy in the same way that a casino can predict their profitability from millions of dollars wage red in the pursuit of 21.
How do you calculate your edge? Simply:
((Profit of a successful trade times the probability of a successful trade)
- (loss of an unsuccessful trade time the probability of an unsuccessful trade
As an example, a trade that has a 30% chance of making Rs 5000 and a 70% chance of losing
Rs 1000 has an expected profitability of Rs 800.
Here we see how even a trade that has the odds stacked against it is worth taking because
it has a positive expected outcome. If you make this trade enough times, you will average
Rs 800 in profit per trade.
This means we need to set out on a study to determine the probabilities of profit and loss
for a trading strategy. Establish a set of rules and then test them over a large sample of
trades to determine the expected value of the trade.
But, if we find a trading strategy that has a profitable expected value, are we assured of
success in the same way a casino is assured a profit hosting games of blackjack?
No. In blackjack, there are rules enforced by the casino. The player must give the casino
their money if they go over 21. They must give their money if they have a hand that is
lower than the dealer.
In trading, there is no one to enforce our well tested trading rules except WE.
In the heat of the trading moment, when WE must decide whether to exit the trade at the stop loss
point or hold out for a turnaround, it is only up to US. When we have the choice of
selling for a profit or continuing to hold until we get the sell signal ;though our strategy was
tested for, it is only up to US.
And we, assuming we are a normal human being, are likely to break our own trading rules.Why?
Because we avoid pain and pursue pleasure. We lack confidence in our strategy because
of our recent experience. We think we can use our better judgment based on what we
are seeing NOW in the Price. We lose focus.
These are the things that turn the relatively simple pursuit of making money in the market
in to a frustrating, mind numbing and stressful process. Who is at fault?
Only us.
We Trade Price,hence 1st of all we have to find the Greater Trend ,there a Longer
term say 144 period Weighted MA to find What is the Slope (-)ve or (+)ve.
Then say EoD pivots to find the General Trend.After we get the GT (Greater Trend)
by WMA slope & EoD Pivots we then look at current on going Trend.
Current Trend is strictly only by Saint's HH HL OR LH LL.
Here when we get the GT & CT ,we trade only towards the GT means whenever CT ,in its
wave form is towards GT we take only those trades.
Here we must also keep in mind the
Reaction areas ,that is EoD's R3 R2 R1 P S1 S2 S3 & EoD's Fib levels,becoz our trades
flow may get stalled or reversed on those reaction areas.
Say we get a workable few points EMPTY SPACE FOR EASY MOVE ,between these reaction points,where both GT & CT in same direction we take those
trades.
Maybe in FULL DAY there may be only 2-3 trades but we take only those trades no other trades.
For consistence we look for High probability trades only.
These trades have greater probability of Wins.

KMI INDICATOR can work as a visual aid to identify the current trend of PRICE (HH HL LH LL)
Change of slope green/red will define Wave Highs and Lows .
Here pl be clear the Indicator change in color is not Waves High Lows but the Price action,
prior to that has influenced the indicator to change it's color hence High Low is in PRICE.
You dont gain a lot but you can have nice quick visual reference of the current direction.
You may reduce whipsaws on sudden price spikes that can point to false

To be a Trader-20yrs Page 130

You may reduce whipsaws on sudden price spikes that can point to false
lows/highs especially in fast timeframes or less liquid instruments.
COMMENTS ON INDICATOR
.
Indicator is to be used only as a visual aid .Dont misinterpret its price predictive and take a trade based only on the indi cator .Trade only to be taken on
price analysis + confidence ( ur reliable indicator bias)
What is the Trade Off ?
You introduce an indicator to improve efficiency of trend direction prediction but you end up losing consistency. There are h undreds cases that what
INDICATOR SUGGESTS,the opposite will happen;
BEST take price HH/LL .
the key issue here is to avoid CONFLICT, suitable MA indicates a direction bias, Use this in your trading plan. On a daily ch art where waves are naturally
smoother but look at the potential implication of introducing a 2oMA ,- 2 or 3 indicators you may decide to use, BUT may end up in conflicting signals that
will certainly create bad trading decisions/ failure to activate trade.
After all my job is to find Room between reaction points , we still have to pull the trigger,put the trade.Any delay will red uce my risk/reward,hence we
need TIMING the Entry.
It can be above last bar high or below last bar low or crossing 50 % level of last bar.
This we will have to work out which suits me best in PRESENT MARKET CONTEXT.
Here the indicator may help,close above/below a value, as a trigger or you can wait
for a conservative change of slope green/red for confirmation.
Remember: we do not trade Indicators we trade Price- it is just a trigger.
WHAT IS THE GOOD OF IT?:
It can give you an objective entry point, reduce drawdowns and identify warnings that
the trade MAY go bad and/or clear exit signals.
.
NOISE :The first and foremost thing to have is to practice absorbing the NOISE.
Practically speaking the NOISE is nothing but what is happening in the security's price above or below certain % value, it is the entry levels before either the
stop is hit or the target is hit. So anything between the entry and stop or entry and target is noise.
This noise varies according to the chart periodicity. The noise for a person who trades using Daily charts might not be the n oise for the Trader who uses 30
min. charts. Hope it is not confusing.
So, first we have to understand what time frame we are using in charts to initiate the trades. And then the entry, stop and e xit. Anything in between is a
noise. So while practicing, just go least bothered what ever happens to the security in between. Wait to get stopped out or t o reach the target.
If we start paying heed to the movement of the asset price in between, then we will start changing the trade plan and spoil t he trade. This changing the
trade plan might help us once or twice, but finally it makes us losers in the market.
So, once the trade is initiated with a good trade plan, never change it. To go that rigid, before initiating the trade itself - try visualising the scenarios with
"what if" thought in the mind. "What if this doesn't go like I planned", then we will start thinking in the other way and und erstand one more route
for the security's price movement. Like this if we are ready while designing the trade - with the Road Map of the price move - then the price behavior won't
surprise us and it further helps un in going stable and absorbing the noise.
I remember one incident He initiated trade in Infosys. And booked a huge profit in it. But this was done out of trade plan. The trade was initiated keeping
Daily charts in the mind but exit took place just for the reason the security was tracked intraday. ..it was a profitable tra de. that member must have taken
one more entry into it at a good price and must be running it still- as he is wise in practicing technicals. nobody is foolproof when dealing with the markets.
So time and again we should protect ourselves.
It is better to make a record for the trade plan and track it. We should look into it whenever we try to do something with th at security in which we are
already in, to understand the original trade plan- which should preferably be with the Security's Price Road Map. Then we will get reminded of the trade
plan. And this helps us in sticking to it. It will work wonders my friend.
This definition on noise helped me a lot in building a position sizing strategy
Ok, so we are talking DSP here.Talking abt filters, MAs are low pass filters while derivatives of SMA etc like MACD are hi -pass filters.But before we get into
all that, lets talk about the time-series itself.
Ok, so a stationary series is one whose statistical properties are constant along its length. Its quite well documented that financial time-series are heavytailed and not stationary.Volatility clustering is another important topic, i.e tendency of autocorrelation in volatility.Giv en all these different conditions, I
think its absolutely treacherous to try and detect signals within all this noise. Theres just too much randomness to deal wit h here than most people think
and most are 'getting' fooled by it.
Normally no effort was made into understanding the data itself. For me INDICATOR the buy -sell signal part hardly is the important issue, the key thing is to
beat randomness.I have attached a map of my development process, the 'Analysis & Mining' is the primary area of my developmen t. Another thing it does is
to help with 'intuitive' understanding of markets. Ofcourse people are not interested in such undertakings, everyone wants to quickly get to the 'buy-sell'
stage. Again, as I have said before, its not bad at all , as Napoleon once said - " Never interrupt an enemy when he is making a mistake". Ofcourse I am
talking generally and not about superior guys like U, but this is not the way to go about system design.

To be a Trader-20yrs Page 131

How to Employ the most sophisticated and effective risk


management rules used by professional traders
05 July 2015
12:20 PM

How to employ the most sophisticated and effective risk management


rules used by professional traders
..................................................
with their focus solely on capital preservation the pros use risk management to prevent big loss.
I think that especially with beginners, risk management is not understood very
well and people dont understand that you can greatly increase your returns by
having some definite risk management rules .
Just by having a stop loss in place, youre limiting your downside risk before you
do anything else.
Once youve conditioned yourself to accept that you must use a stop loss as a
trader, the next step is to fashion a methodology for setting that level which is
the most appropriate level for either the kind of trading youre doing or the
instrument that youre trading or the approach that youre taking in the market,
and so on.
For example, if you put your stop loss too tight, you will continually get stopped
out of profitable trades where the stocks have just pulled back to pause or rest
for a couple of days and hit your stop loss level before it subsequently moved
back up.
It is very, very important to establish these levels where they will:
a) Do the job in terms of preserving your capital,
b) Will not be so tight as to see you disadvantaged, being stopped out early
of trades that have the potential to run on for even greater profits.
While some of the simple rules that we talk about are very simple, getting them
to be a habit and actually applying them with discipline every time you trade is
tough to implement.
As You are battling against human nature. That fact only reinforces
why you have to manage your emotion out of trading in order to accurately and
diligently use your stop losses.
One of the first levels that we put stop at might be below holding support.
If you have a stock that has been falling down, say its consolidated around about
100/- and it started to move up and youre deciding to buy into the stock at say
102/-. Having your stop loss, below that 97/- level is really quite sensible
because 100/- being support several times, your expectation is the stock may
then come down and touch that 100/- level again.
If you put your stop right at 100/- above you are invariably going to get
stopped out. So instead of having at100/- just have it slightly below, maybe
97/- just to give you a little bit of comfort and less likelihood of
getting accidentally stopped out.
Of course, the other way to look at this is if the stock does break down through
the holding support at 100/- consolidation has failed and the down trend is
continuing, in which case youd want to get out. Thats just one methodology.
When youre trading stocks that are perhaps a little bit more volatile or have
moved away from a level of support... one of the things I like to use is the ATR .
Look at the last 10 or so trading days of price action. Once Ive had a look at those last ten or so days, I identify the most volatile day anywhere there
was the largest trading range. Once Ive identified that, I then take an arbitrary amount which say for argument is 80% of that trading range. If you had
a day where the biggest trading range the stock traded in was 5/- 80% of that will be 4/-, so Id put my stop loss 4/- below my entry.
Now whether use 80% of the trading range, 100% of the trading range, maybe
120% of the trading range or only 50% of it is almost irrelevant. The key thing is
to arrive at a level for your stop loss in a structured way where you have a
process. When the process is consistent. Then youre going to get consistent
results.
So its not just a question of 80% of the biggest trading range of the last 10 days
you could use 60% of the biggest trading range over the last 20 days, it
matters not. What matters is the process used to get there is consistent. Once
you have consistent , at least youve got a degree of consistency from which you can then start to work on and improve.
Once you start to work on that, you can then fine tune
and improve the model and thus get increasingly better results.
One of the other rules for stop losses is what we call the 2% rule.
Traders universally regard the 2% rule as the golden rule.
You never risk more than 2% of your overall trading capital on any one trade. Lets say you have 500,000/- to trade with, the most youll be prepared to
lose on any one trade
would be 10,000/- (being 2% of 500,000).
When you start to look at three or four approaches to determining your stop loss
combined, you can then start to choose which level suits you best. You might
just use a fixed percentage stop loss, which a lot of people do when theyre first
starting out.
So to give an example, you might use a 5% stop loss, youre not going to risk
any more than 5% on your trade, so if youre buying into it, a 100/- stock that
means if the share price falls to 95/-, thats where youre going to be getting out
- thats 5% less than your entry price no emotion or doubt, just an exit out of
the trade.
Again, youre arriving at that process in a fairly structured way, and that fixed
percentage rule is one of the more basic ways of approaching the market but it
still gives you a very good degree of consistency because youre doing the same
thing every time you trade.
.................................................. ................................................
Some other strategies include the use of leverage.
When you talk to people about leverage they often see it as quite scary and risky.
I counter that by saying not knowing what youre trading is just as risky because
youre going to get smashed in the market anyway.
By learning and having a fairly robust trading plan, all were doing then is
leveraging off our ability to pick stocks correctly.
Lets just say for arguments sake, 6 times out of 10, you know youre going to
pick a winning trade thats going to make you 15%. And 4 times out of 10,

To be a Trader-20yrs Page 132

pick a winning trade thats going to make you 15%. And 4 times out of 10,
youre going to pick a bad trade thats going to enable you to lose 5%.
On the basis that youve got good risk management on your downside with your
stop loss constraining any loss to 5%. But when you make money, youre letting
your profits run quite hard. So why wouldnt you introduce a factor of gearing?
Gearing with a margin loan,futures, option etc.
All youre really doing is amplifying your upside, your downside you are
constraining to 5% still. So if youre confident in taking the trade, why not gear
up and actually leverage off picking the right idea and really making some serious
money out of it.
Rather than make a 10,000/- out of the trade, if youve got ten times gearing, why
not make 100,000/- out of it. And then on the downside, okay, you could say that
your losses are also augmented but if they are preserved at 5% and your upside
is 15%, youre going to come out ahead.
Again, it makes perfect sense if you have a process and if the process is objective
And constrains your risk and enables you to let your profits run.
And herein lies a problem. When you talk about trading, everybody says show
me the leverage.. racy stuff that looks really interesting and theres big zeroes on the end of everything and yeah, the percentage numbers are big.
But the work seems to be on learning how to pick the stocks and more
importantly, not just pick the stocks, but actually manage those positions through
good money management skills. Thats the area thats not as rosy. Its not as
exciting but it is an area where the hard work needs to be done.
But what people fail to realize is without the work being done all youre ready for a fall. And if youre using leverage, an even bigger fall.
So first take the baby steps in terms of learning and to understand and read the charts
properly, how to overlay your fundamentals, how to pull that information together
into a robust, proven, unemotional, simple checklist, process orientated trading
plan that really anybody can follow.
If you can make money using that trading plan. Once youve got a comfort level whereby you actually have a belief level that the plan is working for you,
then you can start to apply the leverage and thats really where the reward comes in for the efforts that you put in.

Up trending bullish market: Long equities


Up trending bullish market: with price rise Long equities with leverage
Down trending bearish market: sell stock and Short futures.
Sideways trending market: use swing strategy

To be a Trader-20yrs Page 133

So now we are approaching slowly towards reality


05 July 2015
12:21 PM

So now we are approaching slowly towards reality


.................................................. ............................
First a learner should be guided by inquisitiveness , not by greed.
if greed is driving force to look at market, pl throw away that wrong notion first.
2nd
..... It takes time to learn . patience is a virtue.
if u dont have it , develop and practice it.
3rd
.......Do u understand the value of discipline and reading and syncronizing in life ?
if not spend some yr to do this.
here i find the root cause of failed trader,........they failed here.
4th
......
r u an independent personality ? Most learner may differ, its not an wish, but necesity .
BY simple term , u can consider/calculate other's contribution to your daily life monitorily and pay back it .
So u r +ive , not a liability.this concept i found exceptionally useful in trading ,all sorts of business and understand strategic thought process .
A leverage personality on the otherhand lives on mercy of others. ....good for service work , but a total NONO trade learner.
NOW we see,why novices lives on confusion and novices cant solve/overcome this 4steps
......before seeing the blue print of trade learning ...this principle r to be in your heart.
So a novice understands (a)inquisitiveness
(b)time to learn . patience is a virtue
(c) discipline and reading and syncronizing in life
(d)independent personality
........So many novices without understanding this are making a hard knock on market-wall ,forgetting workdone principle ........force x distance. so their
effective effort o.
..................
Instead they should understand what is reqd............if its not with him/her , he has to cultivate it,....thats why behavior modification.
Soon other 2 factors......mother of any venture,......time management and knowledge comes
Another exceptional quality PERSISTENCE......its unique in trading field, insistence to comeback to fight for another day.
.............
Pros know when not to come back, when to accept challenge.......but av joe never understand that Pro is superior , also know flexibility.
As a new learner ...... u reqd balance confidence . To create this balance confidence...... we normally follow some back testing, what works in past.....those in
advanced stage of learning , plan for FUTURE market condition,
Some prepares with action guideline , with hypothetical WHAT IF scenario .IN any case ur own personal trade experience....r also to be correlated , a good
trader adds also EQUITY CURVE analysis.[ some person calls it draw down /without money simulation test]
now we shall go in knowledge aspect.
.......................................
Theoritically a successful trader/broking community passes essence to close relatives/ favourite students of market...........but actually change of market
condition always keep on toes,even experience traders, ........here a master trader fights against 3,
1.self /
2.other master traders
3.and market...........no novices r never his challenger, maximum a distractor of time,.....
(worst case if master is blocked to superiority feelings if he is surrounded by crowd of av joe,hence developing the ego of i am the best syndrome, )
...........................................
Market is reflection of human mind,.........so chart should primarily be used to understand that,then shift to highertime side,......whether trend continuation
possible...if WHY.
if not reversal possibility ......why ???
similarly at bottom of cycle .......question what u see , can it be a money making oppurunity for me?
MEDIA hype has to be neutralised in your mind.......so see price volume....delivery
3elements r always present in market ,,,,,,,normal trading, speculation and big money flow.....
u should have a method to segregate them......this is my aim for objective analysis.....
I see fundamental......to get forward looking view of management .......and to understand new price discovery if further money chases the particular
stock/sector/market..........same way,,,,,,,in danger which share be dumped first even by OWN management.(candidate for short).
...............................

SYSTEM DEVELOPMENT HINT


......................................
market condition trend UP or DOWN........use simple 2 MA cut ,5/20 very good
market condition TRADEZONE........use stockastic/%r
market condition volatile......USE EOD break out/ momentum scanner...... play for intra day.........dont worry on confirmed direction bias ..If u r not earning ,
then simply this market volatility/unpredictiveness DONT SUIT U.GET OUT FROM MARKET,join only at low volatility directional break.(i have studied/prepared
about 2yr for this condition , in other market actual simulated past data , in a software OMNITRADER, where u can hIde data of right side/predict bar by bar &
can see /compare vs. price actual blossoming)
CAUTIONARY NOTE:
any personal disturbance /other priority .......dont trade.
do u ask anyone for market condition,what to do now..............DONT TRADE
basic clarity of a trader............a model for job fitment......pentagonal peg and 5sided hole..........
next comes psychology .Any novice when comes in market ,basically a donor to market, so collectively good pro try to save him by giving him free knowledge.
Problem starts......when av joe thinks.............he is capable , defended by wellwisher , a la ABHIMANYU style ......forgetting he has to die,.......as he dont
know survival /nor forward prediction.
the basic SWOT........must be done.........so if u have emotional urge , plus many a goody goody values /other priority..........pl dont try to come.
yes actually 99% above failure rate is here.Just understand why iimc fresh boys r taken on as buddy trader with av 40lakh salary.......to teach them in 3-4 yr,
with may give return of 25-30% later by the FI.AND 10% of them only get success. JUST understand filtering of them through JEE-CAT. u understand
requirement.
a good trader is speedy -good analyst-forward looking-calm-objective + checks himself.
.........understand this is pre-requeste.
WAR is not a computer game,....u bleed here.......only blood is money.
KNOWLEDGE ...behavior modification........fitting what works for me......fine tuning comes last.
u know probably......IIM produce good investor , as their professors r failed trader.
..............................................
understand difference of predictabiliy vs. speculative.......
for me anything of happening chance upto 59% ........is speculation.so NONO

To be a Trader-20yrs Page 134

for me anything of happening chance upto 59% ........is speculation.so NONO


upto 65%.....i can not distinguish.
but 65% and above.....it may happen...........a zone suitable for set up/candidate for trade........price confirmation .......follows actual trade.
many a speculative idea r winner.........but a missed trade also......many a trade candidate move southward............that is part of my system.....to hit stop.
probilistic analysis suggest ..........i have to live on reality
................................
another imp thing to backtest on indicator based signal............its better in any particular timeframe with around 70 % accuracy level..........so find that
holygrail .
no i have any.........but.........some r having , as they consistently earn out of market........i am aged now........can not afford search.......have to happy with
my 60% tool...with complex understanding.......and book loss in other 40 % of time.
So when i cant understand ,have to be out of market .....to save from draw down. Understand reality........street fighting......only be learnt at street , by
fighting only
........................................
why i trade stock ? because that is what i little bit understand ......moreover some fundamental scenario change i can understand better,atleast better than
young fund manager.......so i have survival bias here , so i trade stock.
WITH around 100 stock list.........thats all, but plan to comedown to 60 ,as i cant handle properly .
............
for understanding trend aroon is very useful
for understanding range atr + price band is useful
for understanding thrust......volume accln/momentum very good.
for understanding reversal .......excessive + reversal candle like engulfing is sufficient.
........................................
for random style.......weekly pivot
for volatility play.........volatility comparison tool ..........pioneer work is done by director of tradingmarkets.......father of VIX tool
.............................
this is the right way to use ,........i am not talking of indicator specialist/ they know their tools and limitation........and have +ive expectency to earn from
market by his system.
[+ive expectency= no of right trade x profit per trade - no of losing trade x lose per trade]
My personal bias on stock
...................................
i have to choose stock based on what i know better.......
in India .......certain sector behave differently with so called biasedness........as i am not from finance.........i dont play in bank share........[hey here opponent
know better]
i definitely.........play in oilsector...since i worked in power ministry.........i have basic understanding.......so its upstream and user.
as i have some knowledge on spl engg product....naturally on some engg equipment/ its supply chain.
since i work in project........naturally cement and steel comes........so comes project execution and consultant.
naturally ......gas / oil pipeline producers
some pharma and computer co...........basically CRAM concept
i like tourism and hotel......as its concept easy to understand.
since i trade , naturally stock broking company r my watchlist
Apart from that some monopolistic company,which i have seen some years .
.............
i have poor understanding on export/import......here i lost in past,also in media sector........so i avoid them.
some commodity related cyclic stock i am studying..........may be after 1 yr i may add.

To be a Trader-20yrs Page 135

Good Trader
05 July 2015
12:23 PM

1]We trade only price. We do not trade information. We do not trade knowledge (of the asset being traded). Nor do we trade computing power
or expertise. We do not trade anything at all other than price: ie: the number. Therefore since the only factor that counts in this game is the price,
it is only smart to focus all, or almost all, our attention on this number on the price and its movement; in other words, what the price has done in
the past and is doing in the present. Approach the game/business of trading in this manner - an up down number game where the focus is on
what the price does and not why - and you will be on the right path to succeed as a trader
You are trading against the wealthiest and most knowledgeable people and organizations in the world. Do not delude yourself, you cannot
compete on their terms: information, knowledge, experience, staying power, and so on. Do not spend time and energy trying to figure out why a
price moves. Focus all your attention and energy solely on what the price is doing. You are a trader. A trader does not get paid to understand or
explain why something has happened. The question "why?" deals with the past. The question "what?" deals with the present and provides the
best clues to the future. And never forget that you are trading "futures," not "pasts." Discovering the supposed "why" of a price move will
provide you with little more than temporary intellectual comfort. Whereas observing and focusing on what the price has done and is doing will
help you anticipate what the price will do in the future. Leave the intellectualizing to those paid for their words not their deeds, i.e., journalists
and brokerage house analysts
Predictions tend to lock you into a preconceived scenario of the future making it more difficult for you to adapt to unforeseen events.Futures
trading is not like betting on a horse race. In futures trading you can change your bet as the race progresses. In trading, as soon as you make a
specific prediction about where a market is going, you sacrifice your freedom. A trader must always feel free to change trading positions on very
short notice. And most importantly, you do not need to be good at predicting to do well at trading. If making predictions can be quite harmful
and you do not need to be good at predicting in order to be successful, why bother with predicting at all?
The average trader focuses too much on big payoffs. This is a stock market mentality, i.e., buy it and ride it to the sky, or sell it before the crash.
Trading is not about predicting and catching the "big" moves. This is "fantasy" trading. It is the "lottery" approach to trading which, in the end,
pays off only for a very, very few. Trading is about "seeing" momentum and positioning with it, "seeing" trend and following it.
The average trader relies too much on feel, on intuition. The possibility that any one of us is a natural market genius is realistically somewhere
between zero and none. Accept that you will never be a world class athlete, sing a perfect musical note, or find a theory beyond relativity; and
neither will you ever reliably predict the future. But be aware that you can know the past and see the present.
If you're going to trade futures, you might as well do it correctly; and doing it correctly means doing it intelligently. Look at reality. Futures
trading is a competition. It is financial warfare. You are trading against thousands of smart, aggressive, extremely well-informed, very well
financed, extensively experienced professionals. Look at the facts! Over eighty percent lose; so by definition the average trader (even the well
above average trader) is going to lose--eventually.
- Chick Goslin
2]Most traders and potential traders are looking for rules-based trading systems or approaches. Using rules to make money is, of course,
incredibly appealing; however, such cut-and-dried rules are seldom accompanied by the most important rule - a rule to connect, manage, and
harmonize all the other rules.
Every trader will be tested emotionally, mentally and monetarily to varying degrees in his career. Most times, itll be extremely unpleasant and
youd most likely want to quit right there and then. Only those who can endure this kind of hardship, learn from their mistakes and persevere on
will make it.
Trading with confidence has to do with having a method which you have proved yourself, and which you know will win over time if you follow
it consistently. That means being able to recognize the conditions which allow you to trade, and only trading when they are all present. This is
comparatively easy with hindsight: when we're actually there, we can see when all the pieces fit. But beforehand, we don't know that all the
pieces are going to fit
3] The study of charts is not as some people claim, the mere identification of certain labeled patterns made by the actions of stocks. That sort of
thing borders on the mechanical and does little to aid in the development of one's judgment. But when a student undertakes to read from his
charts the purposes and objective of those who are responsible for a stock's action in the market, he is beginning to see, in a true light, the
meaning of scientific stock speculation.
The market always tells you what to do. It tells you: Get in. Get out. Move your stop. Close out. Stay neutral. Wait for a better chance. All these
things the market is continually impressing upon you, and you must get into the frame of mind where you are in reality taking your orders from
the action of the market itself from the tape. -- Richard Wyckoff
As traders, we cannot afford the luxury of wishing and hoping because it puts us in a passive relationship with the markets. When we wish and
hope, we are shifting responsibility on to the markets for making something happen instead of confronting the conditions and doing something
about it ourselves. If we find ourselves wishing and hoping, it is an excellent indication that we don't know what is going on and as a result need
to get out of the markets. - Mark Douglas
4]....... the problem with amateurs, they only have half a plan, the easy half. They know how much of a profit they're willing to take, but they
don't have the foggiest idea how much they're willing to lose. They're like deer in the headlights, they just freeze and wait to get run over. Their
plan for a position that goes south is, "Please God, let me out of this and I'll never do it again, but that's bullshit, because if by chance the
position turns around, they'll soon forget about God. They'll go back to thinking that they're geniuses, and they'll always do it again, which
means that they're sure to get caught, and get caught bad.
What most people fail to understand is that while you're losing your money, you're also losing your objectivity. It's like being at the craps table
in Vegas, and the fat bleached blonde in the sequined dress is rolling the dice, and you're losing, and you're determined that you're not going to
let her beat you. What you've forgotten is that she doesn't care about you, she's just rolling the dice.
Whenever you have jealousy as an emotion, or greed, or envy, it distorts your judgment. The market's like the bleached blonde in Vegas, it
doesn't care about you. That's why you have to put aside your ego and get out. If you have trouble doing that, as most people do, be like
Odysseus: tie yourself to the mast with an automatic stop and take your emotions out of play. - Marty Schwartz.
a story to understand a RIGHT trader................
there was one old chap who was not like the others. To begin with, he was a much older man. Another thing was that he never volunteered
To be a Trader-20yrs Page 136

there was one old chap who was not like the others. To begin with, he was a much older man. Another thing was that he never volunteered
advice and never bragged of his winnings. He was a great hand for listening very attentively to the others.He did not seem very keen to get
tips -- that is, he never asked the talkers what they'd heard or what they knew. But when somebody gave him one he always thanked the tipster
very politely. Sometimes he thanked the tipster again -- when the tip turned out O.K. But if it went wrong he never whined, so that nobody could
tell whether he followed it or let it slide by. It was a legend of the office that the old jigger was rich and could swing quite a line. But he wasn't
donating much to the firm in the way of commissions; at least not that anyone could see. His name was Partridge, but they nicknamed him
Turkey behind his back, because he was so thick-chested and had a habit of strutting about the various rooms, with the point of his chin resting
on his breast.
The customers, who were all eager to be shoved and forced into doing things so as to lay the blame for failure on others, used to go to old
Partridge and tell him what some friend of a friend of an insider had advised them to do in a certain stock. They would tell him what they had
not done with the tip so he would tell them what they ought to do. But whether the tip they had was to buy or to sell, the old chap's answer was
always the same.The customer would finish the tale of his perplexity and then ask: "What do you think I ought to do?"
Old Turkey would cock his head to one side, contemplate his fellow customer with a fatherly smile, and finally he would say very impressively,
"You know, it's a bull market!"

One day a fellow named Elmer Harwood rushed into the office, wrote out an order and gave it to the clerk. Then he rushed over to where Mr.
Partridge was listening politely to John Fanning's story of the time he overheard Keene give an order to one of his brokers and all that John made
was a measly three points on a hundred shares and of course the stock had to go up twenty-four points in three days right after John sold out. It
was at least the fourth time that John had told him that tale of woe, but old Turkey was smiling as sympathetically as if it was the first time he
heard it.
Well, Elmer made for the old man and, without a word of apology to John Fanning, told Turkey, "Mr. Partridge, I have just sold my Climax
Motors. My people say the market is entitled to a reaction and that I'll be able to buy it back cheaper. So you'd better do likewise. That is, if
you've still got yours."
Elmer looked suspiciously at the man to whom he had given the original tip to buy. The amateur, or gratuitous, tipster always thinks he owns the
receiver of his tip body and soul, even before he knows how the tip is going to turn out.
"Yes, Mr. Harwood, I still have it. Of course!" said Turkey gratefully. It was nice of Elmer to think of the old chap.
"Well, now is the time to take your profit and get in again on the next dip," said Elmer, as if he had just made out the deposit slip for the old
man. Failing to perceive enthusiastic gratitude in the beneficiary's face Elmer went on: "I have just sold every share I owned!"
From his voice and manner you would have conservatively estimated it at ten thousand shares. But Mr. Partridge shook his head regretfully and
whined, "No!No! I can't do that!"
"What?" yelled Elmer.
"I simply can't!" said Mr. Partridge. He was in great trouble.
"Didn't I give you the tip to buy it?"
"You did, Mr. Harwood, and I am very grateful to you.Indeed, I am, sir. But --"
"Hold on! Let me talk! And didn't that stock go up seven points in ten days? Didn't it?"
"It did, and I am much obliged to you, my dear boy. But I couldn't think of selling that stock."
"You couldn't?" asked Elmer, beginning to look doubtful himself. It is a habit with most tip givers to be tip takers.
"No, I couldn't."
"Why not?" And Elmer drew nearer.
"Why, this is a bull market!" The old fellow said it as though he had given a long and detailed explanation.
"That's all right," said Elmer, looking angry because of his disappointment. "I know this is a bull market as well as you do. But you'd better slip
them that stock of yours and buy it back on the reaction. You might as well reduce the cost to yourself."

"My dear boy," said old Partridge, in great distress "my dear boy, if I sold that stock now I'd lose my position; and then where would I be?"
Elmer Harwood threw up his hands, shook his head and walked over to me to get sympathy: "Can you beat it?" he asked me in a stage whisper.
"I ask you!".I didn't say anything. So he went on: "I give him a tip on Climax Motors. He buys five hundred shares. He's got seven points' profit
and I advise him to get out and buy 'em back on the reaction that's overdue even now. And what does he say when I tell him?
"I beg your pardon, Mr. Harwood; I didn't say I'd lose my job," cut in old Turkey. "I said I'd lose my position. And when you are as old as I am
and you've been through as many booms and panics as I have, you'll know that to lose your position is something nobody can afford; not even
John D. Rockefeller. I hope the stock reacts and that you will be able to repurchase your line at a substantial concession, sir. But I myself can
only trade in accordance with the experience of many years. I paid a high price for it and I don't feel like throwing away a second tuition fee. But
I am as much obliged to you as if I had the money in the bank. It's a bull market, you know." And he strutted away.............
Without the stabilizing effect of a theoretical framework of how the markets function - whether intuitive or logical built upon the trader's
fascination with the inner workings and price movement - research, trading-plan development and trade execution will remain volatile. - Joseph
Hart

A characteristic of a good trader is to be realistic and understand what comes from noise versus what comes from true data. Another is to
understand whether you have done something stupid, or if you were too quick at judging yourself. Another characteristic of a good trader is
being able to find an effective way to deal with his emotions, to set them aside. - Taleb
"The art of contrary thinking consists in training your mind to ruminate in directions opposite to general public opinions; but weigh your
conclusions in the light of current events and current manifestation of human behavior."
"It may appear to some readers as though the theory of contrary opinion, or the art of contrary thinking, is a cynical one. I do not think it is at all.
I believe it is merely a matter of getting into the habit of looking at both sides of all questions and then determining from your two-sided
thinking which is the more likely to be the correct vision - which in turn leads to the correct conclusion." Humphrey B. Neill
"It is very important to visualize the many ways in which the market may unfold, rather than trying to forcast or predict how it will unfold. With
a market understanding, you can begin to visualize each possibility, and what each would indicate to you about the market and your position."
I'm sure there are highly profitable pros somewhere who trade wave patterns, moving averages, chart formations, and the like. In several years of
working hands on with such traders, however, I have yet to meet one who uses these methods. The pros do, on the other hand, care very much
To be a Trader-20yrs Page 137

working hands on with such traders, however, I have yet to meet one who uses these methods. The pros do, on the other hand, care very much
about who is in the markets and why markets are moving. The principles provide a framework for making sense of market behavior, which then
can be used to filter the setups provided by charts, cycles, and the like. The really good traders understand markets; they don't just predict
them. - Brett Steenbarger
"For every style of trading there is a "perfect" market environment. When the market is aligned to your style, everything you touch will turn to
gold. Your patterns will set up and run without stress to your target zones, your excitement and confidence will soar as your win cluster grows.
But these glorious periods seldom last long. Stops will begin to appear again, and then perhaps a loss cluster. This constant cycle from "zero" to
"hero" and back again is why trading is the manic depressive business it is. This constant shift from in alignment to out of alignment is what I
call the payout/payback cycle."-Bo Yoder
"If the market or individual stock does not act according to one's primary analysis, the market itself is trying to tell the trader to change that
analysis, or at least cut losses short and get out.
Economic history is a never-ending series of episodes based on falsehoods and lies, not truths. It represents the path to big money. The object is
to recognize the trend whose premise is false, ride that trend, and step off before it is discredited - Soros
Trading is 'teachable' but its definitely not something you can teach through seminar/lectures, there are just too many subtleties involved....CV
"The main goal of each trade is to minimize risk rather than maximize profit. Positions are managed according to the market's behavior after
we've made our trade. We can't really predict the outcome. For example, if we are trading on a test, we don't know if it will lead to a true
reversal or just a consolidation pattern before further continuation of the preceding move. We are trying to achieve a "headstart" in the right
direction together with a chance to put in a tight stop."
Al Simpson: I would like to ask you a question that I have wondered over the past couple of decades: When you take a position, do you feel you
have taken a good position?
Phantom: Never! Do you understand my NO? If a trader thinks at any time they have a very good trade, they are going to get removed from
trading very quickly. I make the best trade on my trade probabilities program, but who is to say my guess is better than someone else's? Never
do I know it is a good trade until it proves to be.
To feel you are making a good trade is signing your death warrant in trading. The majority of traders do certainly feel they have a good handle
on a trade and are only putting on good trades.- Phantom of the pits
And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you
this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right
on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I've known many men who were right at
exactly the right time, and began buying or selling stocks when prices were at the very level which should show the greatest profit. And their
experience invariably matched mine that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. .....Jesse
Livermore
in this business if you're good, you're right 6 times out of 10. You're never going to be right 9 times out of 10. .........Peter Lynch.
let us clarify ..........both basic of investment and trading not told to free forum
INVESTMENT starts with concept of business. So enterpreneur comes first.HE has a zeal, supported by knowledge and money. Now requires
adventurism , marketing click and ofcourse flow of fund.....all this make HIM sustainable and capable .THEN fund raise ..by equity or through
bank loan , if HE can maintain ROA + growth , business succeeds. So durability is to be checked ,continuity is to be confirmed and business
acumen of CEO makes a company click,WHICH CREATES A CANDIDATE FOR AN ANALYST/FUND MANAGER TO MAKE MONEY
out of a name.
SO u as investor has to be shrewd ,well informed + understand hype in market.
NORMALLY to follow buy comparatively low and
sell later with better realization.BUT if he dont understand business/sector /business viability ..DONT EVER TRY TO INVEST DIRECTLY IN
MARKET ,better come through MF.
So as a trader, first clarify who u r...............means ur time , knowldge on psychology , peoples behavior ,understanding of behaviorial
finance,profit and loss,objectivity in mind, extra money availability.
WHY u can forecast , market shall follow, ur confidence, at what condition u understand u r wrong, necessary corrective action .......again
comeback attitude, knowledge on ta,money management , habit of diary writing.
MOST imp is change of self , when market condition changes
there r few secrets in trading but difficult to implement , because our intellect tells us to sabotage ,so we use software for objectivity
TRADE SECRET
1] ALL INDIVIDUAL R NOT SUITABLE FOR TRADING ,IT REQD DIFFERENT MENTALITY/DISCIPLINE
2] MUST UNDERSTAND BUSINESS /PROFIT-LOSS/RISK AVOIDANCE FIRST.
3]OPPURTUNITY COMES TO U, IF U UNDERSTAND MARKET....IT TAKES TIME TO LEARN.
4] FIRST DISCIPLINE,THEN MONEY MANAGEMENT THEN SEARCHING OPPURTUNITY AND FOLLOW UP AFTER TRADE
ANALYSIS.
5] TRADE FROM HIGHER BACK UP TIME FRAME.IF POTENTIAL OPPURTUNITY RS20.CASH ON Rs 10/-........KNOW WHEN NOT
TO TRADE.
6] WIN OVER TRADE EXCITEMENT ,MAKE IT A BORING -REPEATATIVE ATTITUDE, TRADELIFE AND PERSONAL LIFE R 2
DIFFERENT THING
7] BE A SPECIALIST ON SOME STOCK/SOME SECTOR/PARTICULAR TIME FRAME
8] DEVELOP HABIT OF TELLING LOSS/WRONG TRADE.......IT MAINTAINS HUMILITY, a preventive doze...A SO CALLED
SUCCESSFUL TRADER ONLY DIE BY SELF ARROGANCE.

To be a Trader-20yrs Page 138

Phantom of Pit
05 July 2015
12:25 PM

best single book to learn ..phantom of pit.


gist of the book is here : 1. be an observer first
2. learn from own mistake and other mistake......imprint this in mind
3.correct knowledge and behavior modification.
4. preparation yourself thoroughly for entry and exit.....with some superlative idea....what goes up must come down[mean reversion]...it takes
time to rise but fall rate is quicker....
clock ..stands for timing....diary ..to write opinion and mistake study
5. behavior modification.....this unlearning process is key.......what works for u.
correct behave is....what to do under unexpected event......not emotional reaction.
6.share market is a loser's game....u must know to survive first.then learn probabilistic approach on right trade vs. learnin g trade[assuming
loss]............add position to winner immidiately...and cut loser earliest whole @ a chop ..
7.design everything to all unforseen scenario....so that u can act while they occur..as its a journey on unknown.....be ready where to exit and
when....on what condition........understand...rush problem of public.....in fear and in greed...always act before them.........must get out @
redoubtable top..........same way.....wait for a minor confirmation @ intermediate bottom...then enter.but act swiftly
8. always say.....i am only responsible for my behavior modification,proper observation to trade and correct reaction[execute ] to market.i must
adapt with market...not vice versa..otherwise sit idle...... i must understand bull trap...and check for it
i must think before i act/i execute a trade......[punch list]
9.sometimes i must look for reverse image[in chess terms look from otherside of board].....and plan for reversing the trade.[ this is the toughest
psychological hurdle i find to overcome]
10.Initially i should take a small position.........must be swift to liquidate that one if sense....
market proves u wrong.
11. always use own signal only for entry..........but use market guidance to continue/exit/addition ......or even reverse pos ition.
this slow behavior modification is to be practiced unless it became ur 2nd nature......this is right way to trade for interme diate term.
12.when u hold a position ,within a reasonable time [as per ur chosen validity period]....it is not confirming to prove corre ct........better get out.
RULE 1:
In a losing game such as trading, assume you are wrong until the market proves you are right. Positions established must be r educed and
removed until or unless the market proves the position correct. Why is rule one so hard to implement? The answer is that 98 p er cent of all
traders trade to be right. The rest trade the markets to make money. The fear of being wrong is more often than not a greater motivator than the
fear of losing money. Be conscious of it when you are trading.
RULE 2:
Press your winners without exception. By incorporating rule two in your game plan from the start, you will be eliminating the desire to be
proud when the market moves in your direction, and to take profits to show you are right. Traders love to be right. This is your enemy to love
to be right. Your motivation must be to love to do the right thing. When you think you are right in the market, this is just the beginning of your
trade not the time to take your profits to say to the world, See, I was right! Who really cares if you were right? You will becom e the best
trader you can be by being wrong small, not right small! Get that in your mind now. You are going to have to press your winne rs if you really
consider yourself to have the ability to make a living or extra income from trading. Otherwise, face the truth that you are o nly playing to break
even. The money will follow the correct action.

To be a Trader-20yrs Page 139

Some truth to novice


05 July 2015
12:26 PM

1] knowledge is very powerful thing, RIGHT knowlege with experience are more.U reqd inbuilt discipline, right knowledge and p atience ,even before starting
career as trader.within 3yr, if u can not break even, its better to quit.
2] Turning pt trade gives big money, learn it.(ANTICIPATORY TREND CHANGE PT,
say elliot target, is an anticipatory value).Making money by following trend is myth.
When trend change starts earliest, is actually counter trend , money lies here, because so called TA, practisioners understan d after6-7% move is over, thats
time i derisk by selling half, in volatile market ,fully i sell as i dont know ,what may happen tomorrow.
Higher frame is nothing but weekly chart in trend,............so when pull back occurs to std support zone/fib value take pos ition with day trade.
Pullback another technique, its validity in higher timeframe,.......may allow u trade in lower time frame.
3] Big money is not by entry,nor by exit, but from excellent money management & position size.news is a trap in india, use it .
moneyflow anticipation for future, there r various clue, where FII actually buy/sell.....normally its against media publicati on,........most cool trader knows
it,after good result ........price normally reacts as FI books profit.
If u see , in detail , quarterly result publication VISAVIS........delivery volume at NSE , u can see urself ,relation of act ually buying or DISTRIBUTION.
4]orderflow concept is very imp for intraday trader-- hidden order u want to see.
Its the real money ,when it shall come or get out................before others ,u have to know and act.
5] Unless u mastered art of survival (stop management, not to enter trade when greedy,to enter trade when fearful)...u should not play BIG.Pl
understand...........play small & master them, then play big bet
6] TA /FA useful.........if u know to use it, but not in conventional way
Example..........at imp upmarket , use good news/result to book profit.
Use 15min break out for trade entry for 1 day hold trade, with 1-2% target
7] Never learn from finance industry , how to trade,......learn finance/marketing from them.Learn ta from ta practicioner,lea rn FA from fund manager,how to
value a stock from IB(investment banker)............but never, i repeat NEVER LEARN trading from them,.......they r all faile d trader.
Here even some good trader in personal level helps/teaches approach them.Trading can be learnt from only professional /succes sful trader,yes.......u reqd
mentor........a must for trade learner/just like driving school( self knock can teach ,but that is hard way to learn).....a p opular writer from Pune, teach TA,FA
combination..........but not even himself a daytrader(just u dont go to doctor for shoe repair)........some of socalled TA pr eacher r snake charmers.......avoid
them,
8] use FA for big picture clarity,normally mentality of contrarian helps in trading.Discipline to write trade journal,....... ..using software to query ,conditions you
to objectivity
(my biased view it takes normally 10yr to become a trader-------mentor may reduce time)
TOUGHEST THING IN TRADING IS NOT RETURN BUT CONDITIONING YOURSELF WHEN MARKET CHANGES
IN reality........ trading is at its core a self development exercise
..................................
In 1st 5yr,.......its novice game(assuming 5yr a bull bear cycle)
2nd 5yr.........seeing market , another casual+ cautious approach
3rd cycle......here actually u make money, its different for others, but repeatation for u.
4th cycle.....its catwalk , ur presence gives money, its taking laddooo from child
..............Trade as & when oppurtunity comes, dont force trade
self analysis to be a trader
1] do u believe in prediction? ur success rate
2] if u dont do prediction, how u create directional bias, what is strike rate of that tool?
3] if wrong , how quickly get out, to save money on table
4] how well u understand & have skill in any field of life
5] your ACUMEN
A simple analysis
..............................
Most of us watch CRICKET,listen to commentary,..............we think just like a batsman we can play, actually we are NOVICE, commentator r ex player, no
more can play.n Test players r real pro.
Actually we dont have the capacity to play in real arena.
spectator can never be a pro. They spend money to see the match, PRO earns. Novice gives money to learn what real trading is all about.
In imagination ,we think like we r commentor, .......i would not DO that mistake in batting.
Actually there is lot of gap between , chosen player/commentator vs spectator.\
Even to get a call to select in PROBABLE...........u have to PERFORM a lot.
Reality vs illusion..............understand .
, 90 % people r not suitable for trade learning.But other 10% can learn it,simply earn to run family - 90% its dog's tail,for those 10% .........they become
within short time like others, become emotional and lose.However under proper mentor , they can make sufficient moey to run 2 generation.
Trading is always uncertainity, good trader r master risk manager.
A man called,BERT at singapore,ota ........shows the imp of skill, it takes him 20yr to learn/earn from trading.so he's now m illionere trader in forex.
i saw ,not to trade for 3days, then on a flash quickly earn about 10000$ in forex, as he found high probable /low risk set up .
yes for av joe ,trade learning is not possible.
..................here is a professional approach to learn
Level 1
.......................
1] introduction to trading & trading foundation
here u shall understand pro vs novice,basic thinking/action difference.
2] ta- demand/supply ,candle- trend........thats all
3] trading strategy, buy low/sell high.......counter trend/break out
4] understanding pattern for long term bias, reversal /continuation & volume relation
5] Ta tools- indicator, remember they help /supporting tool
ma/macd
rsi-divergence
stockastics
atr- for stop & intraday
adx- for strngth of trend
bollinger band
...............................how create ur system
level2
................
1] fundamental analysis -economic scenario
2] future trading /short
3] FIB tool
4] evaluating a potential trade- odd enhancer
5] risk & position management
6] laws of trading
7] trader's mind -psychology
8] be a pro-pre -post market analysis
PLAN
To be a Trader-20yrs Page 140

PLAN
TYPE OF TRADER
A-B-C PATTERN
APPLICATION OF TRADE PLAN ON U BASIS
.................................................. .............
A] successful traders trait
B] ur plan /routine -execution
c] game/book u play/read to IMPROVE TRADE SKILL

........................most people dream & lose money in market.


1] pro makes money -because they lose less.Novice lose because of HOPIUM
2] pro knows market prediction not possible,only high probability turning pt,he can pin point.they take position,but get out early if wrong.Novice fears ,and
buy after upmove ,actually when pro r ready to book profit
3] PRO study risk/reward relationship in chart.Novice search with his greedy eye,biased to win/money........react emotionally
4] Pro get out/get in EARLY,before media hype.......novice listen to TV,act late to lose
5] pro creates a plan,then execute as per plan,with if.........then ACTION...........
NOVICE ask/think then trade,never proactive.
as a new learner,answer first why u will make money,........others shall lose against as a trader. Being a BULL u have to pre dict fall of BEAR,as well as
CHARGE early to take credit from OTHER bulls.
Understanding SUPPORT/resistance dynamism and money flow in terms of GREED/fear ,only a baby step. then follow economic event s predictives & its
reaction of price in stocks/commodity.
Next learn ,higher time frame bias
If u want to technical trader/........understand which ta tool u shall master, what condition of market ,u bet in market.
Write the trade...........reason behind winner/loser,this analysis helps
let us understand a scenario.............probable RBI meet to cut interest.............
if no cut,......market drift slowly
if 25bps cut,......market move quick up, novice in BUY ,pro in sell mode.......as market reaches a strong resistance now
if 50 bps cut,.......morethan expected cut,,,,,,,,,,, so it will be decisive up ,with bottom at nifty 6000.
this way if u have to prepare scenario .so action guideline before others give money.
Which Stock?.....ofcourse the banking sector.
.............................................
From 4-5 yr regular earning from to switch to PRO level, u reqd to evaluate.........ur decision making system(how robust they r..... .how good ur discipline
habit)
why u make money against others (ur edge)..........ur skill to play BIG on winners
................
can u predict,market in bull trend or in exhaustion mode..........if YES, big money awaits for u
Pl learn to play contrarian against news.
A big move in ONGC,brings to longterm resistance to 350, .........so short and take money in market.
remember......good news give u---------selling oppurtunity
Let us question ,very critical for a trader.........where u suit?
1] longterm player-investment type
2] aggressive trader in position
3] short term swing play
4] intra day player
..............................all have strong success , in proper market condition
........1] think long contrarian ,in big stock on big fall ,comes to enter once in 4yr cycle
2] here u play on fundamental understanding, in price chart -break out.
suit large-mid cap.
MA is good tool ,but technical stop must,use atr as sar.
3] play in counter-trend or pull back in direction of main trend with small stop,entry total position in single go,avoid news/result here.
4] intraday- based on momentum or continuation , stop .1ATR,profit 1/2 atr.........play in volatile stock ,where u know how that particula r stock behave
...............ur guessing or analysis is good at market,by proven return on market...........so switch to future. On big -ive scenario ,short at resistance,with stop
on 1/2 atr.
Similarly ,u strongly know imp support,ready to risk some amount..........so buy support value(call).......if expiry is atlea st 10 days.when right get 6-8%,if not
lose .......2% call money. If call value about 3% underwrite call.
----------------------------------------------------------------------------------------------------------------------------- ---------------------------------------major thing for trading is TRADE PLAN.
YOU HAVE TO TRADE ,AS PER WRITTEN PLAN.
1] what type of personality.......suits for trading or not.
2] what type of market
3] understanding uncertainity & your action guideline against it.
4] momentum plan
5] swing plan
6] exit rule
7] money management strategy
8] how U define , market shall move up
9] your guideline to keep u neutral
10] strategy of learning from ur personal trade history.
Price doesn't lie. Price doesn't alibi. Price never complains and never explains. It is what it is - Bhav Bhagwan che! ...........this truth from
EAGLEONE......always to be respected .
.................................................. ........................................
Quick thought process,flexibility ,experience r my edge;,,,,,,,,,,,,so pl get more. shall try to give CLARITY .
U can see trading zig-saw puzzle solved and elements will be shown , may not be elaborate.No knowledge gap....Order may be as perceived /at random,
but all has its relevence.
So i start NOW
INDEX
1] trading,investment vs gambling
2] why novices/ameteur fails and shall fail yr after yr ?
3] what is successful trading model
4] most imp factor YOU
5] what is market
6] what price is telling
7] Do u really know
8] a plan vs Method
9] Role of media
10] understanding financial model
11] Time and its element
12] flexibility a key tool
13] why we r born to fail /but u can convert urself successful trader
14] Commitment
15] confidence
16] Mentor vs mentee

To be a Trader-20yrs Page 141

16] Mentor vs mentee


17] value of regularity vs discipline
18] Patience
19] whether Discreationary or Mechanical
20] Problem of self sabotage
21] Envirornment
22] Economics..........the backyard for trading field
23] Equity curve.............INSA ALLAH of stoploss
24] DO i STRESSFREE ?
25] understanding EIC model
26] understanding sector model
27] Usefulness of TA
28] Creating TA model
29] A mode for searching oppurtunity
30] how to use software
31] Risk mitigation theory
32] Fitting the zig-saw puzzle
.................................................. .....
most of this is already mentioned, still some may be clarified.
----------------------------------------------------------------------------------------------------------------------------- -------------

To be a Trader-20yrs Page 142

Trading, Investment vs Gambling


05 July 2015
12:27 PM

1]trading ,investment vs gambling


..............................................
TRADING : its nothing but trade off with potential risk vs. profit dream , most novice can not visualise actual risk , so they could not a plan
potential risk mitigation , and fumble before actual risk losing money. Honestly they should make only on condition understood by them, which
has higher chance of happening ,at nearby support base ie. at least risk potential ,Theoritically u should plan a 15/- profit on 5/- risk. Since we can
not see future ,we have to forecast ,always prudent being wrong what to be done.Uncertainity of the event , not uncertain in ACTION.
OrderFlow is to be understood to predict what comes next. Its a skill on future reading, by seeing ENOUGH past.Alternately by seeing what
happening in higher time mode, similar happening on smaller timezone(BIAS). A quick study of weekly price in detail.........how it may give big
picture.
IT is imp to understand least risk ,and high probability.Then understand MOMENTUM or flow.
INVESTMENT : when u have excess money,u keep in BANK,the institution lends MONEY to big houses/enterprenaurs against flow of
interest.So they have to check the party ,whether business in proper shape or not(not investment apprisal report,nor broking house analyst
visit).........these shrewd finance practitoners can tell/smell danger and oppurtunity, suggest some remadial to enterprenaur , .......so understand
technically if they create a TRUST, floating mutual fund, complying regualations,........now utilising that info before others ..........they can take
postion and sell later at tight time.Pl understand bank works on principle of interest ,paying u 7% ,taking from industry >10%............so by least
risk ,if they could get higher return ........mutual fund ,backed by Banking r born.Its inside INFO (sensitive info + interpretation skill + jardon to
decept others)........sole purpose to create higher return for fund.
So where is investment? ITS the inside info. One of best house .......TATA 2001-02 write off TELCO/TISCO certain loss and other financial
headeque ......keeping price below 100/-.........yes creeping acquisition by none other than TATA investement and TATA sons..............only after
3-4 yr u know the fact. Again who bought TELCO 2008-9 at 250-280,and later selling around 1000/-..........yes its the big man TATA.
Have u seen the game of RELIANCE .........2 brother split drama,............and later rise of stock price some yr back? YES Reliance cap/fund
manager Mr Kela........ they r buying ,when public are feeling panic.YES another great negotiator.......icici fame also dealng. Mr Kamath ,the
famed officer 30/35 yr back hog limelight by giving fund to Mr D A.........yes this time its not info..........but a planned game to make money out of
market.
HAVE u seen how money made..........price rigging before after buyback ?
DO u know how investment banker get the deal ...........
Yes actually Investment is nothing but a scheme of making money, mostly by some persons with contact.............sometimes understanding
/visualising a situation before it happens , sometime creating it.......mostly on INSIDE info. YES if u understand macro-economics/holding some
higher govt post on policy matters .......then u know before others what may happen .But ur PA made more , by dealing with cartel called
OPERATOR . Yes principle is money works. SECTOR deregulation pays ,economic cycle move up/down........consumer sentiment
changes .............but bet on shrewd /practical enterprenaur........his stock........u will make big money..........La Mittal.........story..........in telecom
sector.
...................by the way..........theory of valuation.........all r job searchers tool, just like marketing guys' smile.
IF u doubt,..........just see where modern VC r putting money, small/medium scale industry enterprenaurs.
Again past monologue .............long days back ,a lady put a research firm in VC .........icici,..........later in 2002........ipo 440 band.............VC put it
20/-............slowly at/after ipo ........make money..........yes now its BIOCON.
Everybody knows............reliance power story of.......2008/money minting by ANIL ( if u dont, sell all share.........all holdings/u cannot live with
shark............with poor knowledge..............keep money for saving a/c)
..............................
So any other HOPE ? understand BUSINESS,.........when market with big fall/ which sector r actually doing better. Simply buy big name and
some growth story..............await for around 2-3 yr..................U WILL MAKE MONEY BY INVESTMENT
so understand rule and characteristic of contrarian, alternate scenario creation,media hype.
In the say of a big trainer,...............u reqd just one story/one company..........a big bet with patience , understand why u r betting...........money is
yours in long run
Gambling : its nothing but what av investrader do actually:.........holding the loser. We dream /put hope after purchase .........share price shall move
up,but..........so we block money and pray, yes its gambling.
I dont know, i have not read............yet i make experiment with hard earned money..........again gambling.
Trading is my passion(actually clicking /watching price move)............again gambling.
I have to ask some done .........what to do presently............gambling .
I decided to loose max 1lakh, but betting 5 lakh..........another gambling.
Selling early the winner........to get thrill of wmoney..............its also gambling
Without a plan/risk management tool/proper education coming to market/indiscipline attitude.............all r manifestation of gamble.
Pl understand here u r betting against not only shrewdest.............but against INSTITUTION , who had practised and developed the
art.............atleast 50yr.
yes i gamble to satisfy my that instinct.........to get thrill/ but i know i shall lose money,..........and for making money which shall be discussed
later,..........i have to invest or TRADE , never to gamble.Never fighter a fully loaded gunfighter from 25m with a bare knife in hand.
.................................................. ........
so before u become a successful player in market............pl understand the concept with clarity..........investment-trading vs gambling .Throw away
gambling instinct from u,...........choose any one Trader or investor............lady luck may smile.
2.why novices/ameteur fails and shall fail yr after yr ?
Answer : they have not Requistee /prerequistee.
why i can not live in water ? i dont have gill.
TRADE LEARNING .........reqd balanced mind..........patience to learn, may be 8-10yr of journey.
Confidence in u,but doubter at heart over situation can whirl,
Slowly you become believer in price .NO to gambling attitude
Love to adherence to discipline
Stoicism in mind........so that fear /greed has min effect
Objectivity development:
Understanding of business/economics/public sentiment
So novices start without map to reach somewhere where few people have reached.So they all r naturally absorbed in quick sand. Yes ALL. THEN
To be a Trader-20yrs Page 143

So novices start without map to reach somewhere where few people have reached.So they all r naturally absorbed in quick sand. Yes ALL. THEN
some of them may reach.................no its illusion,first they have to learn TO SURVIVE.
then preferably from successful MENTOR
,always from mother of all teachers........MARKET.
Read history on how to reach treasure island'............so u reqd good navigator ,good tools to handle directional problem,dedication & confidence ,a
group of searcher who shall not BETRAY U,...........yes in trading ur minds' chance of betrayal is very high.
Yes at start you are not understanding- WHAT is reqd, poor control over mind,not inbuild patient and insurmountable combination of
oppurtunity/danger same time.
Variability of market condition............they can not visualise in their weirdest DREAM.
So they fail and shall fail again. IN good words of Levermore..................market shall remain as always............supplier of fools.
.................................................. .........
So u dont to be like them...........
.pl see .........1]your toolkit.
2]Understand structure of market
3] get a mentor if possible or learn from market (without repeating mistake)
4]Have a healthy optimistic view on life
(3)what is successful trading model
.................................................. .
A little bit detail may require here.
Generallisation: Some gen element
Specialization : some sp element to suit one
Simplest example : army officer selection .......pentagonal peg & 5sided hole
Requirement : sp intelligence iq 110-120
patriotism & objectivity.......good or above
Complaining attitude : nil
Execution skill ; higher , the better
Delegation : specific , not over /nor under
Have u understood i what mean to say .........clearing with written under upsc NDA/CDS and strict physical fitness (also clearing medical
board).........is nothing but generalisation.But ur innert attitude as tested by SSB will decide psychologically whether u FIT in permanent
commission .If intelligence high , u may get bore with ROUTINE/discipline.Complaining attitude must be NIL, otherwise u may be the trouble to
the system,Delegation specific .........u must do task as a TEAM ,also to be resourceful,master leadership may create COUP, .............
Fortunately ENOUGH study and TIME spent on to find out successful trading model and its available
Core question is whether u like to be.Let us understand inherent constraint of Individual.
(Dr tharp ,Elder, Doglus ,Kiev have done good amount of RESEACH).
Jist is as under
........................
U require some inherent characteristic , and some acquired one,.........normally available with successful businessman
Some extremely balanced character.......which apparently look PARADOX ,DISCIPLINE to write and evaluate self,exceptional ability to face
HUMILATION ,yet comeback attitude.
Where is the MODEL ?
Pl follow who is already successful............. 3 different characterics ........psychology -ta-fa tool may be suggested
1]must know 10+math
basic finance
balanced life
discipline
confidence (not high nor less)
perseverence
patience
writing/reading habit
indifferent to media report
self sufficient attitude
FROM MARKET
2)Whether exist trend or non trend
momentum of present move
expected reversal pt
present sentiment of bull/bear
BASIC MACRO IDEA-FA
3)Where from moneyflow is coming
CAGR of a company
understanding forward growth/future of sector
Risk from competitor
Govt uncertainity factor
Macro economy of country
consumers choice and expense power
.................................................. ..........
yes this much is reqd
..... Acquired :
Money management principle and position size
How much risk u can take without losing sleep
Network creation to get info.
De-stressing mechanism
To be a Trader-20yrs Page 144

De-stressing mechanism
Visualisation technique(with alternate scenario)
.................................................. .........
Apart from this believing in philosophy ....PRACTICE MAKES A MAN PERFECT
pL UNDERSTAND this 5 r to suit one ie. case specific
Many may not agree on my model theory,.........may say only ta or fa is sufficient.........i can say in my 20 yr on market.....i have seen successful
trader in counting by finger..........100% return ........comes back to -30%.Even Mr R D of turtle trade-trainer fame........got out of market due to
only TA model,........though acquired ALL acquired qualities.Many may use different kind of filter.........to achieve this,.........but optimum model
is based on generalised + specific(acquired to suit one)
......................Only one thing presently hidden .........weightage to each of them.

u can break them first as prerequistee ..........and 2nd as REQUISTEE (to be practiced while the journey started) as per your convenience.
yes without all those characteristics also i have successful trading(in money terms with less return).
Only by seeing orderflow , quickly studying momentum of price directional move , on a known list of stock watch.........specialist jobbers made
his punch on own a/c to get 0.5 % return, yes he made twice/thrice a week that right punch.....with his patience/momentum reading /first hand
study year after yr before screen his edge.
I have practiced master swing with higher probability from a portfolio.......
...to bounceback play from 2nd support..........with >75% of directional accuracy.
Have seen 0 stop investor.........to get 40%av return for uncanny ability to play turnaround stock..........no it does not suit me.
A lone player with good card reader without a degree may come in market av once in 4yr cycle,...........buy index stock............and sell based on
market hype........yes he was right in 1994-1999-2004- 2007.
A PROJECT MANAGER ,in market since 1984-85 has earned a lot in playing tata -reliance brothers story[as mentioned in investment].........he
understood business acumen,..........so working on his forte.
yes all of these common theme..............working on own edge.
most imp factor YOU
4] most imp factor YOU

.....................................
know who u r...
how much time u can spend on u..
BELIVE IN REALITY ,NO WISHFUL THINKING
Ability to give up a chance even though you know you can make money is a trait you need when trading. You want to do that if the winning trade
is against your methodology. Even though in short span, you might make money on a trade or two of this sort, but, overall you stand to lose more.
Do you break out in a cold at the mere thought of risking something - such as your own capital? Do you think of trading like 'gambling,' a long
shot to make a million? Or can you handle risk in a disciplined fashion, knowing how much is 'too much' for both your capital and your
constitution?
Trading is not for everyone. If risk makes you ill, on the one hand, or if taking a risk brings out the recklessness in you, then trading is probably
not for you. But if you can handle risk with discipline, then perhaps you can find a vocation or avocation as a trader. Only you can answer that
question.
After development of your interest in market..u must check whether u suit here or not.....
pentagonal peg and 5sided hole...an easy ? quick check up pt...
1]your risk profile...market risk concept
2]your fund...your plan increase it ..proper utilisation of fund,when to sit idle....when to play aggressive
3]your knowledge bank...steadily u have to increase..judicious use of it
4] understanding market shalloffer oppurtunity...patience and discipline your two weapon
5] a stable analysis power , when to play PREDICTABILITY when to
use RANDOMNESS .
after this test u have to ...say yes,to ALL....OR MODIFY YOU...
GIVE TIME IT MAY BE SOME YR, or simply quit...
indian defence dont take who not fit their criteria
So now comes your journey as trading cadet
u r lucky, if u r in trading industry.., U can make all experiment in others money
sharpening your skill without self injury. committed money here and there.
its not trading but timemanagement..and stress control
your daily routine...
how far u r discipline ..in personal life..
how far u can take stress...know your elasticity band
Your time management skill...alotted time for study
study market...
analysis for trade...
scanning of idea. based on news...
stock scanning based on chart..
plan of action what other trader may plan ..how far they follow u after entry..
what r DANGER ALERM signal.
One of the primary reasons individual traders fail is an inability to act freely and decisively.
Temperament costs investors more than ignorance
In Investment, understanding is more important than information.

To be a Trader-20yrs Page 145

Trading is a mindgame. So to a large extent your success is controlled by your beliefs and actions.
The stock market is an unusual environment.It is a pressure cooker type atmosphere, for those unfamiliar with it and it shall generate emotional
and irrational behavior.
At a personal level, fear and greed are the primary emotions at work. And stress and anxiety are common issues that need to be dealt with.
Discipline is so important in trading. You need it to do the things that you have to do, even when you might not want to. Such things as analysis;
risk control; money management and record keeping. All are critical and all require discipline
So fact remains.......u have to be independent........trial and tested method to fit u.....which must have +ive expectency.

5] what is market
.................................................. ................
Market is a place where buyers and sellers exchange their opinion and change the ownership of stock/derivatives.
So among many a players, brokers....as a community ,insist on trading,Govt to play role of regulators /specialised body like SEBI,RBI -central
bank agency to handle monetory policy ,ofcourse Financial institute...MF industry/if from outside FII ;.........HNI and retailers(piggs)
3types or style is imp to understand.....
1]speculator
2] Arbitrage player
3] hedger
If one understand basic concept of financial services..........with distinct clarity , later understanding of trading shall be easy.
SPECULATOR : DIRECTIONAL PLAY .........core strength is understanding /taking action before others........take higher risk.
ARBITRAGE PLAY ; preferred by professional institution , with directional bias,if tilted towards a particular direction,cut off other leg,.......let
profit run in tilting side. Also prefer to play underwriter in option.........considering novices/individuals shall make mistake most of the
time.LARGELY use media in favour to destabilise public by constantly pouring with info/misinfo........confusion as a tool,.........so earn both by
arbitrage,.......also if bias is created,.......naturally as INSTITUTION keep different teammembers, for buy/for sell/for risk mitigation.........but
actual control in a system /very mature team.
Hedger : they r basically play safe mentality..........use a concept called insurance........mainly commodity/forex........also in very up
stockmarket........used by mature institution .........spend a small amount to derisk..
Brokers want maximum entry /exit..........(ORDER PLACING BY NOVICE)
Govt in capitalism structure .......prefer distribution money to more knowledgable individual/institute........ofcourse losing should be less in %.
creating dream/job oppurtunity /analyst course/financial literate,........around 5% fund distribution + tax generation
But problem starts vested interest of individual.........policy liberalisation/loan disbursement/commission in order and leaking inside info ,ofcourse
by favourable judgement.........CORRUPTION is real culprit.
Have u seen ........PM saying, we earn more,.......purchase better thing..........so cost is increasing.........is the reason behind inflation,....... he creates
joke out of him.
Mutual Fund or specialist in banking system.........earns by INSIDE INFO, by getting to know beforehand from company and management,........so
they miscampaign toughness/volatility ..........tell u to give money to them for play.
FII is better lot.......using some method /better paid staff /meeting at analyst meet,.....ofcourse playing with proper cornering ......and better
execution with software,......may get some return.
SO where u stand as an individual.....U r fighting against them, better see who r bull or bear/out of this 2 who is winning, where money is
flowing , join there and make money.
Most imp : understand value of a stock firsthand...........keep a band of error for u, throw away hype factor,.........be a buyer at lower band,.........
.and always a seller at higher zone. If nothing u know,.........simply follow p/e....
..around band 15 buyzone.........around 22-24 sell as per fund manager.
Pl always watch on info,.............also learn to decipher it.THEN only come to market..
.....sit beside great player .........learn and watch his action,.........why he is getting out.
WHY at dec 08.........i investment..........a 5lakh 1 yr portfolio.........because i feel shall not fall big in 1 yr time frame.
U understand now.............luck is not mentioned in MODEL
PL understand market structure,................distribution ........accumulation.
HOW weak hand sell and feel fustrated later, make buy again at top,............because dont understand MARKET.
ITS a felicilation oppurtunity with right knowledge people.........actual success ratio 0.01 %,........yes 99.99% shall fail.
.............................................
Do u really know
Ans:This is one of the toughest topic i face. Yes unless u faced an upside move.....in which u miss ,another one u make money,similarly another
downside move.........where u hold and lose , in other one u short & earn,........then comes a short /longer phase of volatilty .........u buy at
top,instead of break out, market comes down........u book early loss ; similarly eager short play ,,,,,,,suddenly market take U-turn ,forcing u to
short-cover;................yes U have to go through this, atleast 2 bull/bear cycle
.......one must be profit/loss ............another sudden volatile direction play ........in which faced LOSS financially(learnet from MASTER TRAINER
MARKET HIMSELF,.......then after only really U KNOW ,what may happen psychologically,.........U KNOW NOW......
YOUR ADVANTAGEOUS EXPERIENCE,OTHER'S SHALL REACT WRONG(others r new in game)...............so now actually u make
money , being in RIGHT side. U may lose occasionally..........but definitely not big loss
Certain thing, u must know...........how many stocklist u can watch.
which which sector u can follow.
What factor influence that sector
How much av time u take to understand what is going on in a sector/stock.
From where u expect distraction ?(a personal shield to avoid it)
On what condition ,out of frustration u may sabotage own trade a/c
What u really know better than professional analyst...........so that if he seats against in other side of trade ,U DEFINITELY WIN.
How u follow your equity curve & ur plan for long haul.
Another typical difference to understand TACTICS vs strategy
Tactics is what u have to do NOW ? ........reactive, response as per situation
STRATEGY : long term plan, depends upon market structure, ur major assumption on life,attitude to loss,what u plan to do with
money,knowledge acquiring idea,macro things
To be a Trader-20yrs Page 146

money,knowledge acquiring idea,macro things


Both must NOT foul much. Infact synergy between this 2, Applying tactics in strategic context is a sure way to get success in life, added with
REALITY
.................................................. ....................................
Let me explain further.................in trading after practicing for certain yr, we may face the truth.Truth are
1] market is flexible /changing.
2] u have to understand trade selectivity/on sp condition u enter/present condition has some bias for future direction,understood by u before others
and taken entry and keeping /observing change in scenario/ur preassumption
3] If wrong dont pray, get out at first instance
............................
Market view market itself changes...............In layman's term.........a blind has found a pole before crossing the road,.........next day he
comes..........by hitting with stick ,on that expected pole ,he finds its not there.Now the dilemma.......is the pole is removed ? or i am making wrong
Once you understand..........market itself change its characteristic..........solve a lot of beginner's trouble.
2]Trade is not possible in all condition/all stock............u have to understand sp characteristic of a stock/sector. Also sp condition market like how
longer its duration bullish/bearish/volatile condition,.........beforehand or at the time of its happening.
Now from ur past study of market, u prevail this sp condition ,scenario shall exist for a certain time.Based on this assumption u create or visualise
some stock movement ,commonly known as Target.Know at least risk pt or high probability of happening the event u enter.(also opposite view of
yours ie. who shall be otherside of potential trade-if they going to be RIGHT ,when u throw TOWEL.)
Now see the info/is there any case sp macro/micro change. Shall it affect my target..........favourable.........increase holding TIME.........to get more
profit out of it
3] If any were wrong, micro/company sp/govt scenario/uncertainiy........based on reflection in price(price is dropping)..........pl GET OUT.be on
survival mode.
............this is the essence of trading i found in over a decade being in market.

To be a Trader-20yrs Page 147

A Plan vs. Method


05 July 2015
12:29 PM

Normally i see what to be done ,in detail as hypothetical case is a plan,method is how to implement with suitability.
In theory of PPC,production plannning and control,...........we are learnt first put desire outcome, then see resource availibility, then constrain of it, then comes
scenario preparation ...........how to do something on that scenario on paper.Suddenly we find after experience,something suits someone better............
basic idea of METHOD starts.
A chess player use sp plan which suits him in a battle/a level playing competition among equals............suddenly he finds opponent is taking unnatural time to
think.So he does not make game SIMPLE.ALLOW the opponent most to consume most imp resource....TIME.SO his winning method is deliberate complication
to win by time.
But suppose he is up a KNIGHT, his method is simplification.........and use opponent to fight in close contour, allowing knght fork, even that fails ,use extra pc
in endgame to capture pawn,............use extra pawn to QUEENING.
so method is something with comfortability.For example...........swing is a method , break out is a method.
how u will make money ........is a business plan . how much u risk,where to put stop........part of plan.
SWING METHOD .........suits comfortably with day/week time frame, naturally understand support,.........use discreation.
BREAK OUT ..........suits when understand RESISTANCE better, ......volume thrust, conditional suitability of market/stock.
so we know now at a natural resistance ............30% chance to fail.........so with volume thrust breakout possible. Another 70% chance to HOLD..........so
swing short possible,......so depending upon actually scenario, we plan for both idea..............as situation favour or against .........book profit or predetermined
loss,.....and move to another stock.
SOMEONE who has mastered............may play any one of above SWING/BREAK OUT, with programming to find out set up within N number of stock , and with
particular set up , when price also confirms ..........just take predetermined size position and trade out of it......a best use of mechanical approach.
,,,,,,,,,,,,,,,,,,,,,,,,,,
Role of media
.................................................. ...................................
Media normally we consider for INFO.............is basically a tool for marketing in finance industry.Normal gullible people dont understand abc of
finance...........so get attracted by it on its AD,sometimes after being cheated ..........create bloc against it.
IN marketing technique...........interest has to be hyped also repeated.............after sometime,..........those who READ,..........may make believed by it......A
powder can not change ur colour,a shampoo can make a little outshine to hair,.........all knows it,it is the food + natural color.........MORE IMP.
ALL CINE STARS,use wiggs /make up...........as per requirement of role,.............but fashion may be created.........by hype .........and young boys & girls(read
NOVICE/FAN) may follow it ....Director/make up decides casting/role play.Role demand as fix....... make up, looking original. Similarly ur thorough knowledge
on market may only TRAIN u to understand..........what is HYPE , by financial media.
Another case, not understanding NEWS...In normal news , is info of past considering current affairs, but in gossip.............of a company buy back, take over, a
new product successfully tested.............now to be launched...ibasically NEWS.
So in rumor state.........if u could get,.........decipher it, based on your experience with higher chance of happening is REFER as NEWS,
Since stock market forward looking,..........thats why RESULT is meaningless,.........but forward guidance is NEWS.
Since operators /MF makes money out of new comers MISTAKE, heavily advertise before SELL......all things look excellent future..............READ forward
earning of 3yr.
AND similarly when they BUY....suggest market is too risky,............U should WATCH and WAIT(they tell in media)......actually let me complete my buy)Many
a times CEO also join in them by lure of making easy money ......and cycle goes on as if eternal truth.
So form part of system- around market top.....excessive hype by media,........ pl sell PORTFOLIO.
Businessline /Business std...........certain publish better economic report and ET sometimes write company sp RUMOR.
TV channels........r worst type,.............infact very easily opp. direction play is possible ,if u have RIGHT skill of execution.
Unfortunately in INDIA ,most technical analyst coming in MEDIA , are not passed CMT,(they r hype type- get paid for it) so ethics dont apply to them(quacks).
We create hulla-bulla in media for........forgy DOCTORS/ pilots/food adultration...........but not against TA/media hype,.........and operators use them as per
game plan.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
understanding financial model
(My background : trained by 2yr in ITM, attended course by BSE on financial model and from corporate bridge academy + CFA material reference.some basic
idea in first page of thread-so some light will be touched upon )
.................................................. ....................................
Actual user of financial models r credit rating institute/UTI/some broking house.......based on excel.Also used by Investment banker

In accounting we use past data, however in market ,its only on future and probability.
So we use basically forecasting model, and linear approach.......also growth model.
PREMISES are..........if studying ......past yr -3,-2,-1,........if u can reach o year ie. present base yr.
Similar forward looking estimate can help .......to predict FUTURE, atleast to some extent,.....then use an error band,..........u may REACH
somewhere..........something is better than nothing.
we have 3 statement : balance sheet, profit & loss, cash flow.
Assumed we know their interrelation. In some industries............sales data is stable....so on it ,with tax rate 30% , capex growth nil, salary growth(expense )
10% , material consumption cost 8%.........other factor....we get ............cost side. Now we increase 10 % sales growth,advertise cost 5% higher,.....we get
some profitability. Against 15% growth , adding 8% capex........we further increase the model for
yr+1, yr +2,YR+3..............so a sensitivity is developed, however crude it may look.
Now from cashflow,..........creating o trouble,...........we may get an idea in ideal condition .Actual things start now.............WACC,various assumption on
improvement on growth, non collection of actual money about 2%,inflation factor,............now may create a DCF, pl use a terminal value ,substract loan
amount , u can get value of company ,........divided by number of share........u get worth of a share.
Damodaran has done good work ,,also Mckinsey model..........yet who shall apply it r too theoritician, also audit suggests.......management rarely gives True
PICTURE. Also so many ifs and buts exist,with due respect to error factor and uncertainity,...........this is near impractical to trade by it alone, however getting
job by this skill is good,.......also good for giving lectures,sellng financial products.
though very useful in INVESTMENT BANKING,
It helps for anchoring some valuation,..........so that hit of the moment,u should not pay high price to buy(losing objectivity)
BTW :some materials r copyrighted,but freely available in 4shared and torrent,......those who reqd may collect.
U may get pleasure out of calculation.....geting a final value,......more useful is SENSIVITY, and if u know to use P/E band ............with help of peer analysis in
sectors
So for a company ,if it 3 different types of business , pl consider them separately as part1,part2,part3.........create their value , and then add to get total.
This model may work in FMCG, also in continuous steady growth for a company.
............But entirely FAIL in cyclic product , business environment changing.(hypothetically entity works for better, with sole aim to improve shateholders'
value...........which is not true.
but this creates a micro model by which we understand a company..........and strength /weakness study helps to follow sustainability .
Never apply them in small cap, as data r prepared,[ unless u r the auditor..........to have access to real cash flow data.]
For a sector, relative valuation plays imp clarity............why a company is leader of a sector..........others r laggerd,............some company enjoys better
p/e........darling of market.
.................
this model may help ,catagorically when u put..............sectorwise company.
1]fmcg
2]software
3]automobiles

To be a Trader-20yrs Page 148

3]automobiles
4]pharma
5] fertilizer
6] paper
7] cement
8] steel
9]sugar
10] hotel
11]paint.......etc
any std magazine like capitalmarket is helpful.
Master positional trader then develop another skill, multi timeframe analysis,........ie. how a bias of one timeframe can be carry forward to another.(fractal
concept)
Some checks also various indicator,.......short term RSI holding above 60,........may suggest breakout is possible in higher timeframe.
Another critical study on time,........what worked on past...........shall work in future or NOT?
People underestimate the time it takes to succeed as a trader. Some people come here
and think they can sit with me for a week and become great traders. How many people
when they went to college would've thought to walk up to the professor and say, "I know
the course is for a semester, but I think a week should be enough for me ."
Gaining proficiency is the same in trading as in any other professionit requires
experience, and experience takes time. A man few years ago asked me, "How long will it
take me to become a professional trader ?"
"Three to five years,at least" I said.

To be a Trader-20yrs Page 149

why we r born to fail /but u can convert urself successful trader


05 July 2015
12:30 PM

Few parents wish their children,most r born by wedlock,........allah ka daan'..........but even by circumstances from early notorioty, rarely we find children as
product of environment.........,strong will power is rare,astonishly death of parents produced ........some extremely rare survival quality, by which we may
outshine.
Normally children r grown up with aim to fulfil parents' desire.........what they have not achieved,............fulfilment of dream.
As per society norms/schooling one goes through the stage.........respect/do's and dont, hatred, belongings........all this create a rational defination(a blockade
in mind), which r against normal trade environment.
Infact cheating, discipline,freedom,taking money from weaker, self-centred........some natural trait u apply as trader.........r not natural.
Attribute of a cunnying fighter, principle of chanakya,...........should be baby's day ............for a child trader.
Unless u develop to be thrifty,..........how u trigger small stoploss?
Unless u r perfectionist by habit ,how u develop a system.........?
Unless u kill bird/cockcroach by hand,........ do execute smoothly as trader?
unless u have mastery of observation of ants/fishes hr after hr,.......how u learn to grab a Right trade ........after rejecting 9 greedy trade ?
Yes these r not with us,.........let us face the fact, before we start.
Let us consider ourself lucky..........born with silver spoon in life,......naturally COCKY, so we r designed to fail ,due to not understanding value of humility.
Next .........a bright student, la iitian + iim product,......chosen to be Madam right , a super confident,.........naturally above mentioned failure+non believe in
stop,( i must be right attitude-superiority complex)........dont understand value of experience ........a sure recipe of disaster
Another scenario, a rich film star/model.......naturally a great oil taker(lives on hype) ,........can not understand u to be public shy,......without showing others
have to understand market,.............characteristics totally unsuitable for showman.
A product from,lower class , strong determined candidate............only problem is dreaming for money,.........so loss distract him more, should
understand.........loss is a part of trading in stock market.
..................So now i have mentioned generalised public ,.........similar plenty of cases,.........but message is same, not suitability.
Only advantage is of big broker's/fund manager's siblings, same like owner's of circus (an old gladiator himself)..........train new strong physique slaves in
weaponery to survive in battle field of GLADIATOR.
That's why many a good fund manager dont train their son.........to survive in this battle field, unless they see knack in that chap, also a failure in other field.
.................................................. .....................
It makes a good ground..........only banking industry in their protective environment know .........what to be done, teach some part to rare
breed,..........utiicm.com /nism in india...............but for rest,...........all dont know,........u require a real drive to know from scratch.
2nd part is now how we can convert us to be successful .
The good experiment of turtle proved.........we can learn it, provided we have basic psychological ingradients and a proven right method,........which we shall
copy with discipline.
Basically its nothing but behavior modification to follow some rules in the field of TRADING.
1] trading is lose making business ,if played always,........only on certain favourable condition u shall play ,otherwise fold.
2] without participation u dont know what is right,.........so take entry and get out with small loss.
3] If right , use your advantage to play to earn.
4] money managent is more imp.
5] discipline is key.
6] u must know some background,.......terrain.
7] emotion should be least here.
8] right mentor can help, though market is best teacher.
9] documentation and planning really helpful ,believe in yourself.

Another aspect is reading of good books, .........a heavy doze on what may happen, if u r not always cautious, previous generation market wizard,and modern
expert ......how they cool to face adversity.
u reqd.........tremendous hard effort..............to maintain state of unconscoius confidence.
Yes...........come back attitude u have to master.
whether Discreationary or Mechanical
.................................................. .........
Both r ok, actually individual choice.For All new learner..............mechanical is better, but 8yr onwards one may switch to discreation for further better result.
At the start...........discreation is very dangerous,infact harmful..........as clear idea of what to be done, can not be executed .
So learn little , follow some rule, use mechanical entry/exit..........practice trade journal , that way prepare urself...........if returns r coming , consider urself
exceptionally lucky,..........market condition actually favouring ur style of trading.
Discreation can not be started..............unless u have seen bull-bear cycle, directional bias before something can happen , then only may come within
YOU.........
Also u have to study lot of INDICATORS in past,......so when indicate Right, where they fail,.........is known to you.
Infact discreation is use of your VAST EXPERIENCE,....
But if mechanical return is ok, never plan to shift.
For simple mechanical 2MA x is better,..........also some condition profit booking.
Add pattern criteria.Then add momentum tool.
Later u may see some conditional tool,...........to understand market.
However slowly develop a habit of reading financial news, and its impact on market.........u may shift oneday to create a filter out of it.
Alternately total shut NEWS,...........if it affect your price reading(forecasting) quality.
Mind it,...........u have to practice and practice again.........until it becomes habit.
Also then u shift to particular style like swing .

Problem of self sabotage


............................................
All traders know this problem.............definitely the most imp thing for blow out,..........after trading a decade.
Self sabotage is when u know what to be done,...........yet u do as per whims...........destroying our a/c.
example : an arbitrage player............playing a big directional trade.
2] a good forecasting player...........suddenly not triggering stoploss,........holding position to prove himself RIGHT at market.
3] a break out player , seeing gold at high , with new buy coming from some Govt, due to some inexplicable reason........plan to short........(desiring upside is
limited so i am shorting.)
...................Last2 EXAMPLE HAVE COMMON THEME............desire to prove market/price wrong.
First one..........Going against own philosophy of trade,...holding losers may cost heavily if u wish price shall turn in opposite direction , alas he will be not a
player.........
So get out on danger sense is not followed ... only big loss when market proven wrong,....u r putting hope.........on bounce i shall get out,.........which may not
materialise at all.
Last 2 cases r being rooky...........so the sabotage.
..................
It has been told we have adventurism..........suddenly after many yr,.........which resurfaces , braking our discipline barrier ,...........and we join our tradeadventure, spoiling not only hard earned money,.........but also own trade system.
....................
Known work by Ryan jones.........is best to prevent it.

To be a Trader-20yrs Page 150

Known work by Ryan jones.........is best to prevent it.


Arrogance is your enemy..........core reason of sabotage.
Mastery over Ego.........and indecision ..............helps to overcome sabotage.
Key idea is ...............sabotage is natural, extreme discipline to be practiced , again & again to can stop it.
Risk of loss must be seen as REAL , and control ur expectation.
Imp of preparation in mind ,scenario preparation vs. your action guide line written ....again and again emphasised here.
"have talked with thousands of traders in my life. Many of them are well-educated and have high-paying jobs. You name it, doctors, lawyers, engineers, realestate developers, airline pilots, scientists and the list goes on. Inevitably, almost ALL of them I have talked to believe that because of their education, because
of their success in their job, they can simply transfer that education, experience and success into the trading world. This is ego talking, not truth.
The truth is that an airline pilot cannot transfer his education, experience and success to the operating table and seriously expect to succeed. Why, then do you
expect your education, experience and success to transfer to trading? Vast and enormous mistakes are made as a result of this erroneous belief about
trading"...........Ryan jones
..................... There are no short-cuts except to do it right .Successful traders dont FORCE their comfort levels on the markets, they conform their comfort
levels to WHAT WORKS!
remember : if u can not give ur allocated time............its sabotage. If u bring nearer one to ur trading a/c.............without proper experience(ie bringing
inefficient near your trading)..........its self sabotage, .......sure recipe for failure,.............i vow for it knowing it firsthand Not once but Twice.
Envirornment
...................................
An auxiliary aspect of stockmarket.Normally understanding financial services is first step towards clarity on finance/stock market.
Bank does business on give and take of loan , with a fixed % in between
CENTRAL BANK, rbi in india, control banks, decide interest rate, govt borrowing policy, stimulas to export,maintanances of stability of doller/rupee parity,
maintain macro policy with SLR,CRR, REPO/REVERSE REPO, brief financial threat to govt ,and give stimulus togrowth/debt/inflation.
Leasing/factoring...........a spl service
NBFC.........ARRANGEMENT OF pvt loan
INSURANCE SECTOR : risk to be distributed among masses , againt premium underwriting........making a little money out of it.
Investment banker.......does the valuation for company.
RATING AGENCY.............grade a company/country based on its past.
CA.....DOING AUDITING OF COMPANY and for financial part of individual fot tax purpose.
COST A/C.........studying cost analysis , so that project viability can be seen in real term.
FE/FI.........expertise on new innovative product preparation and its sell, without considering its consequence.
Brokers...........purely getting a little commission out of buy/sell by invidual ,though large in number ,normally bottom of food chain.
Sebi/stock exchange.........ensure...........small -ive sum game available to masses with illusion to big profit, actually helps brokers generation after generation
to run families of stock brokers and a little money to govt, with a key cover of transperency/regulation

ALL types of money ,basically by dream of enterprenaur come to development with a belief of growth,.....create services,.........growth can be sustained or
not .......thats a different story.
PROBLEM STARTS ........we all have greed , also seeds of speculation and dream of easy money.
.............................
CERTAIN TIME , instead being pro of our otherlife..........we plan to earn more.......out of our specialization.
NORMAL BANKS..........WITH THE HELP OF MutualFund...purchase company shares,.
which they know shall outperform........as economy/growth shall be reflected with better prices of stock in long run, also media shall do its part of greed hype.
Investment bankers.....after doing value justification in the interest of client, also plan to buy a distress sell company....after understanding its better potential.
INDIVIDUAL OFFICIAL...in various capacity , lure by personal interest.......accept favour........detoriating the service , also putting institution at RISK.
COMPANY OWNERS..............with help of operator/brokers tells big story,.........corner stocks........and later dump (pooring the fools-common investor)
CORRUPTION IS part of system, accept it,deminishing return exists,.....u have to be shrewd to prosper.
..................
So keep an open eye/ear.............evaluate gossip , do real SWOT on it,..........if u believe it may become an opportunity , put some money on it.
...................
Normally what is written on top , this essence is reqd to understand ......atmosphere u r working.also realise a concept called ......'failed
trader'..........educator, call giver, financial planner ....all different pseudo name.
NEXT U REVIEW A SPACE ...........called HOME....... why in financial industry..........a comfortable space in office...?...for decision making
..........to avoid distraction, a place to do positive for the company in objective way.
MAY BE........your home is not suitable for that, DISTRACTION IS HIGH ........u may do sabotage, may be other members dont understand ........what is
reqd,.....a hindrence . Other member May do harmful comment.....'what nonsense u r doing? bring abc from market instead'..........'be join a service'
YES ....showing seeds on concrete.....adding coal tar, ......CAN NEVER PRODUCE A TREE.
.................................................. ............
So environment shall be like an INDEPENDENT Puja room in a house,...........where u r the priest.
Do your ritual to keep discipline,..........spend time on decision making, alternate scenario preparation , written instruction for execution,.........and later journal
writing. Out of these only,....execution may be delegated to a subbroker/RM. other 3.....strict NO
U May use , various outsource............to filter data,(like pro membership, fully knowing what they provide & accuracy level,......more u add more inefficiency
comes in)
An independent data source, for fundamental as well as technical is better.
Also if u could afford COACH , to cut out any psychological issue,...(not triggering stop )
also afl may be helpful................to stop out.
Pl use a concept AUDITING............atleast a month, for investor..........once in quarter.
.................................
Plot ur return.......if in 4 yr.....if no improve,....QUIT......trading is not everything in life.
But if u get good return..........30% annually ........pl do everything to maitain it, create a strong barrier to protect that dream gem in u

To be a Trader-20yrs Page 151

Economics..........the backyard for trading field


05 July 2015
12:30 PM

first i come to know from a course by Mark Boucher.......who teaches for fund managers and in tradingmarkets.com in 2002. I check it and found principle
work it all markets....
Austrian economic model championed by SOROS........u have to consider Economy is the backbone of industry.If in democratic country, free will
exist.............it shall surplus expectation , creating a boomimg economy,.........
Contrarily,when growth rate shall be forced to turn down..inflation's ugly head turns up.
......central bank abandons it creating a bust.This economic boom-bust cycle can create prosperity in country's stock market, which has also bull-bear cycle.
If u understand properly this as global scenario.....u can be way ahead......global fund managers use it......considering country as a scrip.......invest and get
out,.........both with leading macro economics..... GOVT IMPLEMENTABLE POLICY, WORKFORCE/ENTERPRENAURSHIP and moneyflow...........tools they
employ in financial model, helped by p/e band for timimg.
............................................
i use little of it, without understanding in 2002............,if most indians not in market,.... dont understand big money has not yet entered.........just simply
buy,......sell at first signal of turn down in nifty ,DEC03/JAN'04......around bse'6000.
Later i have studied in detail macro-economy..........to understand,,,,,,,,,,demand/supply fitment in commodity model.
Crude calculation mathematically may be found in Elder's bull power/bear power tools, also DR BILL WILLIAM'S fading trade model.
Basis is at crucial/imp pivot...........study demand/supply with moneyflow, see also newspaper headng as contrarian, coincide with p/e
band.......lower/upperzone,......
yes u can beat fund managers' in their own game.
..fiscal deficit and inflation study.........may give u real knowledge.......whether growth of a country sustainable,...when stock market
....decouple with growth, may turn south.
.........................
Yes utility concept, demand/supply , monopoly creation,sustainability of growth, govt's will to implement fiscal policy.....................this things u have to
understand/practiced in your backyard's....before employ them in trading. THEY GIVE MONEY
Equity curve.............INSA ALLAH of stoploss
.................................................. .....................
All engineers know data representation,mba aspirants practice to clear written test, accounting and marketing guys dreadfully see it in ppt to understand
fall,...........yes data representation in plot on a graph.........has a more impact.
Yes most failed trader has a common fault to ignore equity curve,..........portfolio plotted in chart.
Dr elder uses it 6% concept, for u may be 10% ...........if your total portfolio falls 10% from top, simply get out,...........save money,after suitable behavior
modification or change in market condition,.......... come back to market.
For a technical trader, u may follow similar to SAR , in any technical software..........a definite stopolss to save a trade.
Similarly total portfolio must be seen , it helps to save trading business, not addition/subtraction on value.........plot it , it can be done in excel, may be graph
paper on weekend 1pt, but definitely...........save your big money. STATOR -std trading /money management software has this facility.
Normally new forex trainee candidates practice to improve execution......'no let loss run.'
...........i vow this technique will improve bottomline of trading business, and do it yourself, so firsthand u know .........market may burn your house, so pour
water...
...once a draw down of 50% happens , its very difficult to survive.
ALL pro follow this philosophy in trading

DO i STRESSFREE ?
.......................................
No, that is the reason of new learners failure.If i am not properly commited, there exist gap...........dream vs reality........a source of stress.
We all know eu-stress ,..........stress within limit to act is BETTER.The stress band u feel comfortable is good ,problem lies..........outcome which is not within
ur hand,........takes your brain time-creating a gap between thought process vs. execution..........,distract in ur planned operation ,.......this failure to time
target creates.....pending work dilemma.........adding to point of no return psychologically , creating stress.
How much u r overloaded.........can easily help u to understand stress in modern day. Say, u r age of 26, doing job 8hr x 5 days , journey 3hr x5 days ,
personal time being ready 2hr, sleep 6.5 hr,sitting in computer / reading 2hr.............so 8+3+2+6.5+2= 21.5hr, less than 24.........u have leisure to
relax.........NO STRESS.
Suddenly u r abused in office/ u want to improve , become mba.........your weekend old habit........has to cut to fit college time,..........also ur gap of 2.5
hr......will help to do little bit study,.............so now schedule is hectic,............but YOU CAN MANAGE.
Suddenly u find a good looking girl, who may fit with ur dream,...............but u have to spend time with her,.......or new priority must cut down........old
garbage of computer/reading,.......then cutting personal time to 1 hr and sleeping upto 5 hr,..........u create.........a time schdule , and adjusting with
time,.......within stress limit. Suddenly your boss tells u to stay another 3 hr more at office,........creates a stress.Your families talk on arranged marriage
adds irritation with you,...........now a small indifference of ur girlfriend............add insult to injury.........may cause an outburst towards that girl,........yes
this is stress , showing its ugly head,.........i know as my past in games of chess/bridge...........study , professional service life.........other familylife.........all
messed up,.....to create bodily trouble ,in form of BP , diabetis also in memory fall.
This body m/c shall fail oneday i know,.......so with some modern de-stressing technique like bipasana/reiki /walk ........can heal,.....but really i have to
change lifestyle.
I must understand my limit,.........live a dog's day. so prefer trading.........to get more time and live on own terms, and with normal conflict in personal life.
......so its a chamber of utilising 24 hr, on job, personal learning, family, my hobby.........also some time to body m/c.UNLESS THEY R PROPERLY
CHAMBERISED .........THEY SHALL KILL TRADER IN ME.
,,,,,,,,,,,,,,,,,,
A trader must understand this thing in long haul, all good traders.........balance this front first and then they trade, remember..........sabotage.
Actually trading is a stressful event, so life front....stress should be minimal to do right trade. u must get a set up to give your best...........as u have to fight
in market, ......
...................
Actually morning walk. pranayama, reiki, seeing fish in aquarium,.......quiet mind......really helps trader
understanding EIC model(economy-sector-company)
...........................................
Many years back there is a debate what is imp....economy or performance of company ? Course r created in 1963........in mba to use best avalible practice in
america,...........so a course was born in 1970......as per success seen by industry and feed to mba colleges,.....cfa r created to evaluate company / stock
analysis better. Naturally it come mba-finance curriculum in iim, speciality in icfai,hyderabad........utiicm course later,.......also now in bse.
since its for industry.................
FIRST must be economy.govt plan ........where new stress , sez also export orientation.......r key theme.
pl understand money supply,........how a confident enterprenaur successfully apply porter's five force model..... strategic management course and spl
economics by......go to it........... extensively detail.
Basic thing is if u understand ECONOMICS,........u may understand where DEMAND shall come.
Now study SECTOR,.........upstream/downstream facility with integration factor, pl study original idea.......its for industry...........not for novices ( fallacy is CA
never worked there/nor the college teacher, so inbuilt error exists) But atleast u get skeleton to work in industry......so understand with Porter's
model ........sustainabiity and plan & condition to develop growth.........so comes I.
Also search for new economy sectors............just see the leader.U R through.........allow CFA to read and write then publish on C.......company. U simply
read , check its assumption , see price strength from stock market..........EARN by the model.
ICFAI had done good work in C .......considering many research .......pioneer,......just u have to add latest data...........if u love hardcore research.
Actually company micro study is nothing but auditing, data scanning........to throw out lie, just like investment to find its true value,.....also future
forecast...........here again problem.....unless u have first hand experience in that sector........u cant get it(here lies superiority of a mature business
person ,he understands , he smells)

To be a Trader-20yrs Page 152

person ,he understands , he smells)


......................................
OFF topic...........analyst's use......in a board meeting in presence of 3 good analysts CEO suddenly asks his finance guy.......'do we have fund idle ?".....yes
sir . 3pairs of ears reacted .Suddenly discusses expansion plan which turns (conclude -ive)down,.......... but he suggests fund should be utilized and company
has a rosy picture after 2 yr. From a corner a chap calls to use that fund in better way. CEO stops him, suggests to honor 3 great analysts to go to
lunch.........he can close door to discuss further , and promise within 10 min to join in buffet.So bright eyes have to move out,.......taking foods and later
eager to know after 15 min,..........CEO suggests nothing . One of his associate while taking lunch suggests buy back is thought.Also 25% growth rate is very
much achievable. CEO tells..........he may talk in next quarter.After 20 days suddenly 6% upsurge in that stock.......and slowly moving NORTH .CEO on
telephonically told ......i shall tell in next quarter........another 63 days. Yes board meeting day is decided and analysts r called. .............But before.........the
2 days of meetings.............price around 30-25% up , considered from first meet,....stocks are dumped.
Of course.......who made money .......u know now...........who lost,.....the dumb fund manager/tipstar...directly associated with those analysts,.......Fish eat
fishes in their own game.
.................
REPEATING again,.........it is proven beyond doubt eonomy , sector to be studied first...........not the company
Understanding sector model
................................................
Concept of sector is very imp,.........as birds of similar feature,shows crowd mentality,........so same sector moves up/down with strong
correlation ..........first proven by Mark Boucher.
In mature market, money rotates.............rarely we can see strong bull move, money moves to where result is better and then where expected to be farther
better.
In india equitymaster.com.........has created good sector, also visualtrader , a software .......show in volume and price moving up , in syncronization.Its a
trend up for somedays, intra -sector,.............however for inter-sector..........money flows out from bad to good one.Actually its a strategic play between
Hedgefund type , shortterm play.......where overall moves little ,but inter sector movement is around 10% in month.
Play plan is similar to commodity,...........consider a upper band /lower band .........play in between ,within sector index. Alternately...........main 5 company
of a sector........may be with high beta, speculate to move further with +ive correlation.
Sugar, paper, steel, aluminium , power, software, pharma, hotel...........all places u can play like this.
In metastock,........omnitrader, i know.....sector strength up calculation,.....similar can be done , in other software.Superior rel strength in
14days........suggest sectorial upmove.
Another play plan is,...........allow a sector to fall,....
.then bottom fish ........the sector, atleast after 6month,..........if price is moving up, or strong fundamental good announcement on a particular sector.
......It suit to positional trader.............not in day trade.
Risk mitigation theory
.................................................. ...
Actually i find it most useful as trader.During project implementation.............i find .......u have to visualise first, then only MITIGATE
.A what if scenario preparation,........
.in permit raj of HOTwork.......i follow the same model,
While studying FincialRisk Management books........many very bookish jdea r told,
......core is acceptance as probabilty of happening , be prepared if unavoidable,...
...cut down..the sizes as well as cost......minimize risk first.
I think knowledge..............well awareness of what may happen ........first tool to control.
NO iffy trade,.....................
Find certainity of some potential move,.....be not surprised by MARKET,....
.......read prices.....what its telling.
If u dont know your line of action price showing uncertainity, dont enter...trading can not be HOBBY.
After some favourable move,...........book some profit..........take real money,..
.......DONT give back market.
If u r busy,.........dont ever enter new position.
Equity curve on portfolio value...........really helpful.
old saying in investment..........never lose money.
Old saying in trading .............never let LOSS run.
Old saying in risk management,..........never experiment,........Do in which, u r an expert.
Demand supply is an imp concept...extensively taught in OTA...
..........here students of economics have superiority.
Higher the demand ,price shall move up in stock..........if more money is chasing....so is the demand. Money flow concept......correlate with float
analysis.......suggests what may be the expectation.......strength of buyer's conviction .
Other one is giant footprint...............what big fund managers/fii r doing.......
.....try to get that info........NOT MEDIA HYPE. Chance of earning big from market by u , easier.......when u flow in same direction .........not against them.
Read to understand.......accumulation and distribution.........study in on chart.......
definitely u can tell what is actually going on.Yes .........if u can say accurately....
....present phase an actually bearish distribution,so u can avoid bulltrap.
U know when accumulation at lower price shall start......simply take position.Naturally to understand this concept........basic support/resistance u know...
.....and their intricacy i.e. dynamic support/resistance +pivot/swing pt.
Take any software....study the price(after market hr)....spend some hr....soon u know them.

See the chart.......to know how other pros shall behave, also other majority traders.(who will give money to u).......their expected line of action.
so give weightage ...who can win easily.......strength and conviction in trend.
Thats why pro makes big money........out of market........strong visualisation and watchful eye.........a master in execution and money management.
ORDINARY MORTAL SHOULD DREAM OF IT........so that they can be atleast a pro.

To be a Trader-20yrs Page 153

Starting on TRADING SYSTEM


05 July 2015
12:31 PM

if no system : poor trade result occurs with emotional trading.


Basic is risk/reward , low risk and high probability trade.
Even with system,when personal psychology not match with particular style,it fails.
hence a system of timing must have
1. set up condition
2. entry
3. exit...profit target
4. risk analysis
5. exit ..contingency plan
philosophy of trade : market is war arena..ruthless fighter can only survive
You must have seen one 1bull-bear cycle..or as a pro 100% retracement and comeback.

trading offers great no of oppurtunity to pick.A position


may be oppurtunity or a trouble[loss]...nobody knows
while picking,What it shall be.TIME will unfold......it is profit making one or take money out of you.
other element : experience,
market research and checking data for validity/testing [ ofcourse u must have ability to test]
position management

Day trading , short term , position trade and investment..4 r different scenario . condition for success in each ..has some peculiarity.

To be a Trader-20yrs Page 154

Day Trading System


05 July 2015
12:31 PM

master your craft.practice and practice...ignore all others is the mantra


............u have to understand how price reflect everything..suitable indicator(derivative from price).. ..to maintain strength...and eye for order flow....
thats all...alas! one is sufficiently difficult...3 is awesome in real time.
SO u must have some method to understand price increament shall continue
and then another when price dilution coming.
[objectively a programmer can do]2min/10min ma x...also 15min rsi has some use...big order coming in sell side has its impact.
whatever it may be , real time execution is key.alert helps
.................................................. ......................................
high probable trade
............................
its the directional bias...where most waiting watchers r ready to join..
market buying(selling) r coming...big volume r increasing
concept is use momentum ...act now.
Another concept a trend started yesterday 3pm..hence further steam left.
scan at night for candidate.(BTST).....without any news. on real time..sudden volume surge..price is also moving up.ACT NOW ..NO TIME TO THINK make
money
shortterm trade/ swing trade
............................................
here u must reqd eod data .... a software ..preferably some risk reward analysis
some low risk entry tactics and stop-umbrella to save from rain.
u have to define entry characteristic .
1. entry after break out over longterm resistance zone
2. after twice bounce in support ..price just starts moving up.
3. sector starts moving up..stock has good rel strength comparison within sector.
stop
......below 3% of last week low
if not 4% up move occurs within 5 trade days..use time stop
profit target 8-10% from entry..however after 5-6% price is NOT HOLDING ie.showing not to move further infact going down about 1-2 %
....get out with small profit...DONT turn profit into loss
for system study see beyond ta..by Tusher chande
next position trading
..............................
personally i decide only some shortterm winner to be extended for long.
its basically on chart ..after trend change suggested entry at predetermined pt
for me some% up with volume increase...in metastock RSC EXPLORER candidate must be in upperside.
yes i use eye ball technique and pattern failure[ in h&s when instead of fall price starts move up and w.pattern price slowly starts moving..acceptance of
price]
my idea given money in past..i dont know whether shall it work now.
IMP:support base has to be created.....
another criteria...when nifty starts moving up again after retracement
Enter good candidate[presently who r in near yearly high ]
Third unexpected good result published and buy volume shows high demand
Most imp part of position trade is stock list...here u know from back ground move shall continue..further.....as u try for bigger profit ,failure rate is high.
hence u must have inbuild moneymanagement system to get out with small loss and add on winner.
Say being in known field i must track some news on company..
also result out of infy(weather indicator in software) ..how +ive it is , so how it shall affect midcap computer company..

As position trade is a judgement game..hit of the moment decision should NEVER be taken..infact temporary fall is a great buy oppurtunity
Strength indicator on 2week chart basis [ ie converting data on 10day high-low-close basis available in metastock] is good way to see.
however stop and checking of nifty must...its better to see advance-decline curve as in www.icharts.in
For further study understand extended bullmarket and volatility condition
and see after result out how price is behaving
system implementation
..............................
1. assumption .....condition of trade....if it does not exist no trade
2. entry..particular signal
3. holding profit one...give time.
4. exit..with profit target
with loss.
5. contingency plan..to save skin.
6. write after completion of trade what i learn ..implementation vs. reaction of me based on price.... ..what actually works.
OTHER ELEMENT
........................

To be a Trader-20yrs Page 155

........................
U factor..how to be neutralised so that i can think right...before taking position i must have an opinion but PRICE must confirm my opinion otherwise i must
use stop and book loss and throw away opinion.
MARKET HAS TRENDINESS AND ALSO UNPREDICTABILITY ELEMENT. NEWS AFFECT MARKET [UNKNOWN EVENT]....MAJORITY TRIES TO GUESS WHAT
MAJORITY MAY DO , TAKING RISK OF PREDICTION BY PUTTING MONEY BUT READY TO RETREAT IF WRONG........PUT MORE MONEY WHEN RIGHT.
Here is my personal opinioned model on positional trade
.................................................. ...........................
u have to work on prediction model in which chance of RIGHT/BEING WRONG has to evaluated.
a. company result..good business../..20% weightage
b. macro economy + moneyflow....40% weightage
c.sector business ..priority 20% weightage
d. other factor..operators game/random factor ..20% weightage
total 100%

ALWAYS TAKE CHANCE OF BEING WRONG 40%...SO THAT IF WRONG ...MUST BE PREPARED
by the chart , i SEE how others r viewing..ready with my move ..tv news guide me how fools shall behave,..many a time i am wrong ..but i stick to it.
For TA it takes time....the same chart looked by 3lakh ta enthuaists
hardly 200 shall be right....
....as trading is not a game of perfection , 50%accuracy is sufficient.
read...HUNTER AND THE HUNTED,
so in this trade universe....3terms i introduce...exhausive, exclusive and intersection ie. interrelation between 2 element. I use 3 statistical term....
EXHAUSIVE..U HAVE TO GO INTO DETAIL
EXCLUSIVE..NO RELATION EXISTS..INDEPENDENT ELEMENT
INTERSECTION;INTERRELATION BETWEEN 2 ELEMENT...INTERRELATIONSHIP BETWEEN MARKET...INTERRELATIONSHIP BETWEEN MANY COMPANY IN A
PARTICULAR SECTOR.
exhausive gives micro view.
So before reaching to become a master...one goes through various way to question and answer this 3 element...[may be in different name]....he knows how
far he understands...his limit..so now practice on regular basis[system]
and follow it diligently[discipline]

now u see all good potential trade in search mode..nothing but ..can be expansion of 3 idea.
Another idea....yes EXECUTION.Pl UNDERSTAND SLIPPAGE IS A BAD ELEMENT....u miss ur total effort.... idea in real sense...so the difference with beginner
and pro clearer to me..its IMPLEMENTATION.
EVERYTHING U CAN VISUALISE...,BUT THEY WILL BE VALID ON IMPLEMENTATION BY U.
Random trading /fractal system ; its great to see theory of Dr Bill William , and quantum trade software, principle of 3ma,allegator concept, behavior of
natural tendency of price reversal at defined pivot........yes i made money out of that theory, but not as told,.....actully by confirmation through PRICE.
.yes it is the best filter.........confirmation by price.
Remember 3 force co exist in market...........trend, reversal tendency, fractal [random factor]...........u as an observer what is dormant NOW..also check who
will rule soon ie. near future.
If u use any discreation cautionary note:IGNORANCE is highest risk, MOOD swing next,OVERCONFIDENCE then
SUPERIORITY of advance learner;
1)nightly preparation and scanlist
2)WHAT IF scenario preparation ......and past trade analysis .......yes thats all.
ALSO sharpening ur skill , if u r a programmer , practice more programe for further objectivity.......for execution ........bigger size position.
also future long term skill to learn.......holding winner, add if possible.
PRO now develop a portfolio. a list of stock(based on past trade & understanding of Market)... condition to trade,.......
how quickly u understand danger..........and get out quickly from bad trade
Some also prepare ......sector sp strategy/ and study fund rotation principle.
other imp aspect of PRO...........they dont search holygrail........its already with them, occasionally they lose, but they self tune again.
JUST looking back their journey to professional trading to success road......its matter of some tuning.......hey they have done that in past.........when
situation was tougher.
MAXIMUM HE NEEDS A CLOSE CELL TO THINK AGAIN IN MIND-MOVIE .
PRO"S thought process
......................................
i see , but before entry i confirm by price.
i do consistently...........i am doing in last so many year.
i shall be not in market...........as situation is in unpredictable zone , even with my experience.
i have seen in 2 cycle of bull-bear-volatile market.........now first i can define present market context...........so its an opportunity.
losing trade is part of trade business,only i have to check in journal exit/entry rules followed.
i am a specialist in this market, in this type of trade.
regularity and health is also my priority........so i am a better trader
If u believe, u r Advance level of trader but psychology reqd some improvement ,here is Mastering the Mental Game
Identify your personal trade barriers
How to mentally focus and follow through on your personal plan before, during and after the trade.
The use of New Habit Formation to negate harmful emotions and reinforce positive emotions that affect your trading success and effective decision-making.

Successful discipline is about skill-building and a structure of routines, habits & protocols.DECIDE first Playing not to lose and THEN play to win.
.................................................. .................
If u trade for some yr ,but want to get better return
Advance TA stratregy is right answer.Index Futures traders can analyze the markets trends and behaviors in order to classify, distinguish and properly time

To be a Trader-20yrs Page 156

Advance TA stratregy is right answer.Index Futures traders can analyze the markets trends and behaviors in order to classify, distinguish and properly time
their trades. Youll learn to determine the markets overall direction and then take a position that is harmonious with the market. These will be focused
around pure price-based technical analysis using the major indices as forecasting bias.you have to learn:
Identify trends in multiple time frames through dynamic correlation.
How to use analytical tools to apply logic, concepts and strategies to changes in the market.
How to select the appropriate strategies and adapt your trading plan accordingly
Use of IMPACT TA ,including GAP + Understanding the Market from Economic Data Releases and Sectors Rotation
Quantifying a supply and demand imbalance for opportunity
This shall be followed by Rule-Based Strategies for Trading
o Buying the Supply Breakout
o Buying at Demand Levels
o Selling Short the Break of Demand
o Selling Short at Supply
o Low Risk Entries from lower timeframe & Profit Targets

hope it will help to create trading system for a trader


...........................
every book has some uniqueness in it....for simplicity i write 2lines.
Beyond Technical Analysis (Tushar S. Chande, PHD}...a bible to understand system
Bill Williams - Lit (New Trading Dimensions}... it gives new light on market and randomness
Book - Tom Williams Volume Spread Analysis..read it..u see..use of volume ..why?
DYNAMIC TRADER GUIDE ..understand judgement ..price time analysis
Encyclopedia of Trading Strategies ..idea what may suit u
Kuhn - Marder Intermediate-Term Momentum Trading Course ..a technique to trade
Momentum Investing By Ken Wolff ...same in depth..key theme of modern trade
OmniTrader (Systems Manual) ...background of comp.based trade with low risk
Steve Nison Japanesse Candlestick Charting Techniques ..a must
The Daytraders Bible by Richard D. Wyckofff ..how a real trader succeed in market
The Four Biggest Mistakes in Futures Trading by Jay Kaeppel Book ..teaches to keep a foot on brake always
Trading as a business ..a basic but imp concept..for all dreamer
Willam J O'Neils How to Make Money in Stocks ..why buy high,sell higher works..the useful concept of fundamental,stop,cup and handle pattern
,,,,,,,,,,,,,,,,,,,,,,,
only with exceptional mental stability....a person can be flexible like clay
....can react most of the time RIGHT
......for others.....a Zone has to be created......on certain conditional fulfilment ,before, accepting a trade......otherwise....REJECT THE
OPPURTUNITY[considering uncertainity]
.....THIS ATTUNEMENT I CALL PSYCHOLOGY OF SUCCESSFUL TRADER
Surrogate concept i learn from
............................
1]divergent concept.........explained in paolo's blue print
2]trading system .......kaufman and beyond ta
3]psychology of trading with ta.......tony plummer
4] concept of trading & life....dr van tharp
5] trading idea & implementation........kiev
6] broad market analysis......key theme in modern day trading
7] volatility Vs price prediction........random & fractal concept
8] moneyflow idea and present fundamental fad.....do read research report of houses to get idea(dont trade with them,just gain knowledge)
9] how newspaper/tv sells .........hypes biasedness for creating opinion .......to create momentum of bullish/bearish theme
10] market structure .......trend .........trend termination play.......application of mechanical stop
Being advanced learner,understand some people r ahead of others........search for oppurtunity-some pro can identify & risk analyst by nature.
......Others r gullible, simply bombard by media.....and believe to follow.they r the source of food for U....concept of marketing story..........a brahmin, a
goat[ which he believes a dog due to self doubt,........ploy used by 3 thugs],an excellent teaching of panchatantra........u see in day to day life, media
hype........understand how news flow create wrong illusion on market.
-------------------------------------------------------------Lists of good company...what i know...what they do...on what condition company profitability move up...its a key arsenal..................
MARKET HAS TRENDINESS AND ALSO UNPREDICTABILITY ELEMENT. NEWS AFFECT MARKET[UNKNOWN EVENT]........MAJORITY TRY TO GUESS WHAT
MAJORITY MAY DO. I TAKE RISK OF PREDICTION BY PUTTING MONEY BUT READY TO RETREAT IF WRONG...AND PUT MORE MONEY WHEN RIGHT.... .
UP...DOWN ...VOLATILE...3DIFFERENT STRATEGIC PLAN ...
4TH CASE IS UNPREDICTABLE...HERE I MUST NOT PARTICIPATE...WAIT AND WATCH
............................
LET us give stress on useful part of ta.
concept of break out is imp......
concept of support buy r useful........
most imp is predict market danger zone(when not to trade)
.......................................
learn trend first......
defn of up/down......volatile.......
next distribution /accumulation
........this must be applied on nifty
........then study,..........fibonacci
then study pattern .....psychology behind each pattern
....imp one for actual trading.......
.......in bullish market ..cup and handle
...then learn bearish one.....h&s..double top/triple top.....and what condition they fail
learn shortterm imminent reversal......oneday/ 2day sp. pattern bullish/bearish reversal based on candlestick.
next solve.......gap up and gap down.......use it to judge strength of market....no other purpose.....till u grasp it fully..
after this u should u can look through indicator.....
use ma........dual ma.....experiment with many alternatve.......remember just basic......
smaller one cutting and move up.....shows upward bias.
take a suitable indicator....to gauge strength of market.when u know more study one momentum tool for overbought/oversold .....i prefer william%r.
next level .......is to define and predict........trend or non trend.........which as per me a trader must learn first......2 /3 tools available choose any one
....spend time on it........patience pays
now come developing a system based on technical.....ha ha..its ur job(hints r given)

To be a Trader-20yrs Page 157

now come developing a system based on technical.....ha ha..its ur job(hints r given)


.btw .....in actual position trade,without divergence study do nothing
.........................
u think u know......but.....study another 2tool ...advance decline and new high/low data......and raw moneyflow data...partic ularly fii/mf.
Next i try to throw some light on rsc......rel strength comparative.....
its a good tool ...first extensively advocated by mark boucher in his course....
its momentum tool....strength of index vs a share.......a stock in a particular sector rank.
"buy with the professionals and sell to amateurs.......the reason behind gap up/down .
fortunately.....gap up/down.. fade trading r very useful .
normally amateurs get shock....as they have no plan to trade with it......instead they must write what to do ..if gap up .....this particular value....again
another set......if gap up another value......always .....watch by price and flow of market.........whether its diminishing or increasing........this is essence of
strategic day trading.
Support and Resistance r dynamic in nature.
moreover...depending on variation on chart...timeframe...it varies
...static idea...as if similarity with daily pivot...reason of most loss .
...instead follow idea of cluster of price zone.....this is one of right approach.A good trader will always make a good analyst,not true for the reverse.
We have to take decision/action before that people make and move markets,
By studying in detail of PAST price action -what has happened in the PRESENT and
as the past tends to repeat itself it can give us an indication from the PRESENT ,what may happen in the future.So technical analysis provides the framework
for a systematic approach to trading. More importantly, it gives us the confidence to make our trading decisions- critical for success.
TA provides precise mechanisms for trade entry and exit....the best strategy for determining the timing, particularly useful over the short-term.
Indicators are derivatives or second tiered smoothing of price action. Inherently, all indicators are lagging in one way or another. It is important to
understand how they relate to price, potential future movement of price and how they are affected by past price spikes.
does ta work?yes...yes...yes..
trading has a random element..also.. trend factor...
known event..+ expected result ..is always discounted in price...
so u have to know..how to react in unknown...
ta ..visualisation..gives..fair idea...how MAJORITY MAY SHALL BEHAVE...
nothingmore, nothingless...
alterative scenario..must be in your plan.....
if u apply ta in this context...u shall be always successful...
Q1]...TA AS PREDICTIVE TOOL....no hardly 50% times correct...
ta as probabilistic model...definitely workable....
Q2] MOST IMP INDICATOR....
PRICE...normally..few can follow ..with discipline...
price roc...crossing an price 10dayma ROC ..derivative is good...
however...aroon continuation..validity of strength helps...
TRADING ON PRICE HAS 3ELEMENT...NOISE...TREND.....SHOCK/EVENT
Noise..a price within +/- 3%[arbitary..as per my experience ]
its the time u should watch..
soon some big fund /syndicate starts buy or sell..with price change +/-change..defining an up or down trend accordingly...
its when more volume joins ..media writes....oppurtunity to make money for early entrants..when trend is no more moving up..[i put hope on triangle
pattern shall show CONTINUATION]..ANOTHER RISKY ATTEMPT CAN BE MADE..BUT WITH STRICT STOP..........
Q3] OTHER..HELPING HAND APART FROM PRICE...IF ANY...
VOLUME...MOMENTUM STRENGTH
Q4] WHAT ABOUT PATTERN....
its subjective....experience helps...
Q5]what about support/resistance..trendline....
THIS ARE TOOLS TO 'SEE' HOW OTHER TRADER SHALL BEHAVE...
so its purpose is to prepare trade strategy...
Q6]WHAT ABOUT MA...
better use it as a confirmation tool..., better is ma..X..
q7]divergence study....is it useful ?YES
8]HOW TO STUDY STRENGTH?
correlate..expected...vs. ACTUAL...ANSWER lies there...
9]how can i learn better ta...
USE SOFTWARE.. TO SCAN...SEE CHART.
DANGER OF TA
......................
WITH AV INTELLIGENCE.... IT TAKES..3YR STUDY+2YR PRACTICING
expect another 2yr to mastery...total 7yr to learn
oversold zone..bullish candlepattern...NORMALLY SUCCESSFUL
but those who use sector rotation...higher comparative strength with ..NIFTY...ALWAYS
MAKE PROFIT....
However concept of buyer strength VS. seller stength...
based on that WHO is winning...and JOIN WINNERS SIDE
NORMALLY GIVES PROFITABLE TRADE....
IMP:Technical analysis just points out to the possibility of price action in the future...you have to look for evidence, cross verify, go to the past and
future...AND THEN DECIDE whether the probability of occurance AND the CHANCE of FAILURE fits within your RISK - REWARD ratio.
Using different forms of money management with different account sizes, (what my be suitable risk reward to you, may not be suitable to me. )There are
nothing like UNIVERSAL low risk trades...then everybody would have taken that and the trade would immediately move away from its base making it a
profitable one.

I present here.'how to lose money in stockmarket'......pl avoid them


.................................................. .........................................
1]Trade in options without understanding and context of present market condition
2]not use stoploss
3]Cut your profits short and let the losses run
4]Select a method and start trading it because you are in a hurry to trade, not because the method is sound
5]Don't use any method or plan at all! ... Just buy as much as you can or short as much as you can
6]Take a position and go to sleep!
7]Listen and trade according to CNBC calls........(JUST REVERSE ,ITS GOOD EARNING METHOD).
8] Never use your own brain for trading ... Never try to learn anything but taking position and squaring it off! Search extensively secret underground sources

To be a Trader-20yrs Page 158

8] Never use your own brain for trading ... Never try to learn anything but taking position and squaring it off! Search extensively secret underground sources
for TIP ...
9]Trade against trend ..........BUT THIS IS ONE OF MY EARNING METHOD.
10]Engage in extra-curricular activities during market hours AND Forget your commitment of trading seriously/mindfully .
11]Always assume that you are right..even when proved wrong by price....take it as temporary setback and start with fresh vigor resuming your assumption
that you are and will be always right.
12] If the basic hypothesis upon which a trade is entered does not exist, then one has to remain in the trade, hoping the situation will improve(actually it
worsens)
13] Emotions aka false ego.... i know all -i longed/shorted this script and its going to follow me,i longed/shorted this script coz i know all about
markets,(always remember markets are supreme)
.................................................. ....
Avoiding the methods of losing money mentioned in this thread would be quite helpful to become a successful trader
------------------------------------------------------------------------------------

To be a Trader-20yrs Page 159

Worst Trading Mistakes


05 July 2015
12:35 PM

Just curious to see what are worst trading mistakes that we commit- to help each others.

* Traded blindly without any homework or trading plans (poor discipline).


* Traded impatiently in congestion or non-trending zone (poor trade plan).

* Traded without Stop Loss or with too big Stop Losses (poor Risk Management).
* Traded way too many trades in a day resulting net losses (overtrading).

* Traded against the prevailing trend and then booked losses (Ego problem).
* Traded with the trend but booked small profit and too early.(forgeting trade rule)

* Traded with good plan (mm, rm, plan, discipline) but with no faith in the plan resulting less profit .
* Traded at Market Price in less volume scrips resulting big losses.(novice mistake)

* Traded on speculations, rumour or news and getting trapped in Market Makers game resulting big losses.
*Traded within fear/greed barrier and without knowing risk/reward ratio.(emotional fool)

* Traded on spoon fed tips resulting huge losses. Traded getting psyched from CNBC or US/Europe speculations and resulted hug e losses.(food to pro)
* Traded not even realizing after loosing lots of money & time in markets is Not Knowing which Time frame suits personality.( Ignorant)

* Averaging and overleveraging to losing position and selling in panic.(novice)


* Converted intraday or swing trades into short term and long term without reasons.

* Was unable to bare the loss and then traded more and more to recover the loss..ultimately completely or nearly wiped out th e account(self sabotage)

To be a Trader-20yrs Page 160

Private Lone Trader


05 July 2015
12:36 PM

Before u become a Pro- a pvt lone trader (only trade on own money) should have checked his return as part-time trader.
A QUALITATIVE CHECKLIST ON
1] CONFIDENCE
2[ KNOWLEDGE ON MARKET
3] KNOWLEDGE ON TA -HOW FAR TA CAN BE APPLIED
4] EXPERIENCE
5] SKILL OF EXECUTION
6] MARKET PSYCHOLOGY-CROWD BEHAVIOR
7] OWN PSYCHOLOGY
8] OWN EMOTIONAL CONTROLLING MECHANISM WHILE ON TRADE
9] RISK MANAGEMENT
9] DISCIPLINE ATTITUDE
10] DEFINING OPPORTUNITY
.................................................. ......................
method checklist

intraday -momentum
swing -countertrend
position-both fundamental+ ta bias
OUT OF THIS WHICH HAS MORE SUITED ie. by which style actually u made money
............................................
WHERE U R MASTER?- SOME PARTICULAR STOCKs ,or some sector, some technical pattern
What is ur threshold for booking stop?How u define HIGH Probability in a trade ,before u enter- what mitigation plan if otherside low probability event
actually happens.
..............................................
What is your plan of learning/behavior modification plan in everchanging Market condition (which may change some characteristics even within a week)
How do u capitalize sector rotation of fundflow?
.................................................. ......
all this things must be written & follow regular basis ,in your journey as a pro
hope u enjoy to become a pvt trader.

To be a Trader-20yrs Page 161

P A R T - - 2 RAUNAK AS I SEE IMPORTANCE FROM


OTHERS' VIEW WHICH HELP ME TO BECOME A BETTER
TRADER.
05 July 2015
12:38 PM
First Mr Raunak
...........................

Solution to any problem in any form of life begins by asking the right set of question. If the right set of Questions are asked, the right set of Solution are
sought after. This is one aspect which successful people do very well. Going by the same notion, we can say that the first step in becoming Successful in
Investments is to ask the right set of Questions. You need to know why you need to Invest, why you need to be in the Markets and What are your Goals.
Follow the Set of Questions mentioned below to start with. Once you answer these, you will be amazed by how important this is to seek clarity of thought.
a) What is Your Main Motive behind Investing?
b) What is Your Long Term Goal? Where do you see yourself in the next 10 Years. How does Investing help you to reach that?
c) What is Your Past Experience with Investing?
d) What are the Short Coming from the Past Experiences? How do You intend to improve?
e) How much time can you devote to the Market?
f) What are the "Instruments" which you have identified for Investments?
e) How much can you lose in Investing?
f) What is your back up plan? How are you going to plan your finances in case of Investments failing?
g) What are your current beliefs about the market? Have these beliefs helped you to make money? If not, its time to revisit those beliefs.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,
Write down the answers to these questions and keep it in your "Investment Journal". Make a section in the Journal and Call it "Knowing Myself" and keep this
answer within that section.
What these set of questions will do is, it will get you focused towards what "You" want in your life and more importantly from Markets. It will remind you of
your long term ambitions and it will prevent you from making short term wrong investments which eventually give you negative returns.
Out of all the Investors out there, there are about 1% Investors who undertake this step. Those 1% are among the most successful Investors. Hence, if you
need to become an Investor, begin answering these questions.
Remember, Returns in Market & Clarity of Thought, go hand in hand.
Take the First Step: Being an Optimist and Being Realistic
Once you have answered the set of questions mentioned above and known more about yourself and your Investment needs, it is time to move on to this
section wherein the importance of being an Optimist and being Realistic is highlighted.
Being Optimistic - Since you are now entering the World of Investment, you need to know one thing and that is that in this World, there is only one certainty;
Risk. Everything else revolves around this. There are a lot of investors who get intimidated by the amount of money they can lose and hence they either move
out too early or after one bad experience never return to the markets. To prevent yourself from making these mistakes, you need to be an Optimist in this
field. Believe me, there is no pessimist who has ever conquered the stock markets. And as far as I know, there will never ever be one. Investing is just like
any other business. You need to stay in this for long to reap the benefits of it. All the successful investors in this world have remained in this market for 'n'
number of years and understand the importance of having a long term view of the markets.
Markets will supply you all kind of information you need to be successful in this business. However, it does not supply the "Emotional" quotient required for
this business. On the contrary, it will always make you feel like you are doing something wrong in this field. Hence, the most important supply (that is the
Emotion Supply) has to come from your side and make sure it comprises of Discipline, Hard Work and Optimism.
Being Realistic - Apart from being an Optimist, one has to be Realistic. The disconnect between perception and reality is of utmost importance. Reality in this
field can be judged by the answers to the questions you gave in the first section. See if any of the answers you gave in the first section, matches what is
being described below. If it does, then correct your perception right away and make the first step towards embracing reality.
Often, investors come in this field to make stupendous returns over time frame of 1-2 years and most often get disappointed to know that it was more of their
wishful thinking and less of research that made them think so. Yes, investors can make amazing returns, but the focus should be over a period of 3-5years.
One must always be rationale enough to know how much time one's investments need in order to grow multi folds from their initial value.
One must also judge and expect returns in terms of opportunity costs for investments. For example, Fixed deposits in India offer 8-9% per annum (risk free)
and thus if your investments in Equity market is not generating 8-9% returns (excluding inflation etc) then your opportunity costs are mounting up. Your
investments must at least outperform the Fixed deposit rates and in best case account for the inflation in order to realize true returns. Therefore, a more
realistic return that one must expect from one's capital is around 20% - 25% growth on an average period of 5 years. Furthermore, one must also be savvy
enough to judge where returns can be made more easily. An astute investor always knows when the markets are not conducive for returns and hence one
such period comes, he his flexible enough to shift his funds towards instruments like Bank deposits which in that period gives risk free returns.
Having a balance between Reality & Optimism is going to take one a long way in the field of Investing. The tools and techniques required to do so are
discussed at a much later stage, however at this stage, the most important thing to realize is to be Optimistic at heart and Realistic in Mind.
Now, we come to the most fascinating question often asked in the field of Investing. That is, whether to apply a Fundamental approach or Technical Approach
for Investing?
The answer to this again depends on how you have answered the set of questions provided to you. Hence, if your purpose is to make long term gains out of
the market, then the best approach for you is adopting a Fundamental approach to Buy and Technical approach to manage your positions. Let us get into a
snapshot of each of these approaches and once you have answered the question set and you have gone through these snapshots, you will know which
approach is the best suited for you.
The broad definition of Fundamental Analysis and Technical Analysis here is the Investment Model which I use for our Investment decisions. Similarly we have
explained the same .
Fundamental Analysis This is an approach where an investor looks at the following in order to determine the scope of Investment. Kindly look at the brief
framework below. This framework will be individually explained in Fundamental Analysis section.
1. Prospects of the Economy
- Fundamentals of the Economy
- Growth of the Economy
- Governance within the Country
- Policy Actions and Government Actions
- Growth Potential
- Interest rates & Inflation
- Production Capacity/Expansion

2. Prospects of Sector
-

Composition of Sector
Outlook for Demand
Outlook for Prices
Outlook for Costs
Growth Potential Within the Sector

3. Prospects of Company

To be a Trader-20yrs Page 162

3. Prospects of Company
-

Market position & Strategy


Quality of Management
Mergers & Acquisition Impact
Key Performance Ratios
Valuation of the Company

Technical Analysis - This is an approach where Investor is concerned about the Price structure of Sector/Stock along with other indications of how well the
Stock is shaping up for the move ahead. This relies more on studying historical movement of prices and thereby judging the future move. Investors should
broadly concern themselves with following points.
1. Identification of Trend
2. Identifying stages in Markets
3. Market Classification according to the Dow Theory/Elliot Wave
4. Sector Rotation and its importance
5. Analyzing the Broader markets - Sister Stocks Approach
6. Identifying Bullish - Bearish Range within the market
7. Risk & Money Management.
Whatever methodology one follows, make sure to be comfortable with it. Which methodology is more beneficial and which is not, will always remain up for
debate. But from our experience, all we can say is that, combining Fundamentals and Technicals is the best way to move forward. Feel free to explore these
domains and accordingly pick your methodology.
Take the First Step: Choosing the Right Set of Tools
Now that you have gone through the building blocks of becoming an Investor, it is the right time for us to show you how to select the right kind of tools you
require for executing what you have learnt. Every Investor has his own set of tools and hence he needs to get acquainted with them. For us, we have
identified certain tools which we use day in and day out.

Fundamental Investor Tools


- Brokerage Reports Available from your Broker (Almost all brokers provide this)
- Databases for Macroeconomic Research - Data for Financial Analysis Technical Investor Tools
- Charting softwares - Metastock 11 & Amibroker. Prefer to use either of them. Please avoid Web based charting packages.
- Data - Avoid taking data from local subscribers. Data is often prone to errors.

- Technical Stock Scans - Available for free at Moneycontrol.com


Computers/Laptop Configurations
- Processor - Anything above 1.8 Ghz will do fine. They have high computational power and are very fast.
- Monitor - Flat Screen LCD with Minimum 24 inch display. Make sure to see the charts on big monitors. Its much more easier to identify good stocks.
- Multi Monitor - NVIDIA Graphics Card for Multi Monitor Setup. Card versions keep changing hence PM me for latest Card configuration.
- Disk - Hard Disk with minimum 500 GB's as capacity (Quite common)
- KeyBoard & Mouse - Compact Key Board & Mouse. You don't want your work desk to be too cluttered.
Take the First Step: Choosing the Broker
You are now almost ready to get started in the Financial World. However, before you do so, you need to select the right broker for your needs. Brokers charge
commissions (plus taxes) and hence having the best brokerage along with the right kind of service can impact your profitability in the right way. Follow the
guidelines below to find the right broker for you.
1. Brokerage - Whether you are a small investor or big investor, you will have to pay brokerage. Try and bargain for the best brokerage price. Your Broker will
tell you that he is offering you the best rate, but try and bargain further. Usually they can give you rates which you don't even dream off. Hence with the right
kind of account size, you can get the right brokerage. In our opinion, if you are paying anything more than 0.2% on delivery and 0.02% on futures (inclusive
everything) then you are paying too much. We have our accounts with one of the largest Brokers in India and we pay Brokerage less than what we
recommend here. If your account size is large, then you can get unbelievable brokerage prices. So Investors, Please Bargain more !!
2. Investing Platform - Choose a Broker who gives you a Desktop based application for placing your orders. There is no problem with Web Based applications.
However during busy times, it becomes difficult to login through web based applications. Most of the good brokers have Desktop based application, hence opt
for them. Some brokers will charge you for the application. However, with the right kind of negotiation, those charges can be waived off.
3. Research Reports - Most brokers provide free Technical and Fundamental research reports. Make sure to avail this through your brokers.
4. Reputation - Try and strike a balance between the rates you want and the reputation that the broker has in the Market. As a rule, stick with good brokers.
In the end it matters a lot.
5. Transaction Alert Facility - Avail the facility of "Transaction Alert" from your broker. This can be either availed on Mobile or on Email. Good brokers should
provide these basic facilities.
6. Range of Services - Make sure you find out what services your broker can provide. For E.g. ETF buying, Mutual Fund subscription, IPO Online, Online
Payment (within T+1), linkages with online bank accounts. These services seem unimportant, but in reality these are very important.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,
Simply Technicals
With the Advent of Technology, Markets have evolved and transcended into new dimensions. What seemed to have worked earlier has lost the edge now as
Participants, Volumes, Volatility and Financial instruments have evolved on their own. Due to this, there has been an explosion of Analysts and their views
regarding how to trade and invest in markets. Instead of making things simplified, they have contributed towards barrage of information which eventually
confuses a beginner even further.
Practical Side of Technical Analysis is an effort to make a beginner realise that if one has to earn well from markets, then one has to keep things simple and
logical and has to practice the principles of Technical Analysis on a Consistent basis. -these are the things which we look at while analyzing markets. As a
word of caution, do not take this thread as a guide towards trading. This is purely Investment oriented Technical approach.
1.Basics of Technical Analysis
2.Defining Trend
3.Identifying Stages in Markets
4.Dow Theory Revisited
5.Sector Rotation
6.Sister Stocks
7.Identifying Bullish - Bearish Range through RSI
8.RSI Bullish - Bearish Range in Investment Model Form
9.Understanding Risk & Money Management
10.Putting it altogether
1. What is Technical Analysis?
- Study of the Market within itself rather than studying what moves the market. -Studying Pure Price action.
- Study of various Market Statistics. For E.g. Studying Volume patterns, OI patterns, Historical movements, Cyclical Analysis.

To be a Trader-20yrs Page 163

- Study of various Market Statistics. For E.g. Studying Volume patterns, OI patterns, Historical movements, Cyclical Analysis.
- Study of various Human aspects. For E.g. Studying Bullish/Bearish Sentiment, Using News as an Indicator, Futures and Options data.
2. Assumptions in Technical Analysis
- Markets move up/down in Trends.
- Market is always correct. Opinions are often wrong. Stick with the trend and don't try to second guess market movements.
- Markets are solely determined by Demand and Supply and Markets often tend to move in trends.
- More than information, it is how Investors react to the information is more important. Any reaction can shift demand and supply which eventually causes
reversal in trends.
3. How to use Technical Analysis to benefit
- To benefit from Technical Analysis, one can use it in two different forms; Predictive & Reactive.
- Predictive Technical Analyst try and predict the next market move by using various principles of this discipline.
- Reactive Technical Analyst follow what the markets are doing in the present. They believe that markets are supreme and follow the flow of the market.
- Reactive & Predictive can both be beneficial. One must know when to be reactive and when to be predictive. Since prediction has more risk associated with
it, it must be practiced with great discipline
PREDICTIVE IS USED IN COUNTER TREND
1. What is a Trend?
- Trend is a phase where markets continue to move in one direction with momentum.
- Trends are of two types; Uptrend & Downtrend
- Uptrend is when prices make Higher Peaks and Higher Troughs
- Downtrend is when prices make Lower Peaks and Lower Troughs
2. How Can a Trend be identified?
- Trend can be identified by various methods;
Visual Inspection, Linear Least Square Regression method, Moving Averages and Highs/Lows.
- Trend can be identified clearly by analyzing Previous Highs/Lows.
3. Visual Analysis of Trend - Trendlines
- In order to visually analyze a trend, we can draw trendlines between tops and bottoms
- Trendlines are lines drawn between extreme points, tops and bottoms which are separated by reasonable number of days in between.
- Draw back of this method is that its easy to identify a trend and draw a trendline in hindsight.
4. Analyzing Previous High/Low - Better way of determining Trend - Dow Theory Way
- We analyze the previous Highs/Lows of the market
- We trade in the direction of the trend when the breakout happens from previous high
- This method is more reliable as it makes us trade the "Present"
Base is marked in Red. Immediate tops are marked in Blue. Whenever prices move above "Blue" lines, its time to Buy keeping the previous base ("Red" line)
as stop loss.
- When the previous base ("Red" line) begins to get breached on the downside, its an early warning that trend change is in place.
- This method was widely discussed first by Larry Connors.

1. What is the basic meaning of Stage?


- Markets have always operated in stages which can be identified. This is not similar to an Investing model. It is just a way to identify stages. For some
markets these stages will be identified easily. However for some, it won't be easy to do so.
- Broadly, these are three stages in which markets can be categorized; Accumulation phase, Mark up phase, Distribution phase and Mark down phase.
2. How Can Stages be used?
- Stages can be used in Investing and in Trading
- Key is to identify which stage the markets are in currently and devise a strategy for that stage
- Most important aspect of identifying a stage is that once its done, an investor will always be on the right side of the market. For E.g. - In a Mark down
phase, one would not commit the mistake to go long.
3. What are the Characteristics of Accumulation Phase?
- During Accumulation phase, sentiment would be the worst.
- Market would have declined for several weeks
- Markets will eventually appear to have lost down side momentum.
- Eventually Markets would start trading side ways to mildly positive
- Gradual increase in Volumes and arrest in selling pressure will be witnessed.
- An eventual breakout would happen of the previous range. Breakout should be considered for only that range where the markets have stopped sliding.
- Markets will start to trade over its 50 Week Moving Average
- Accumulation stage is more clearly visible on broad time frames (Weekly, Monthly)
4. What are the Characterisitics of Mark Up Phase?
- Volumes during this stage will be robust
- Market corrections stop at the 50 Week Moving average or move maximum of 5% below it. Whipsaws around the 50 Week Moving Average happen less
frequently.
- Broader sectors/Market leading sectors will confirm the same with the main market index.
- Periodic corrections of 15-20% will be a feature of this phase.
5. What are the characteristics of Distribution Phase?
- Volumes in this phase will really start picking up.
- Along with volumes, Volatility bands will start expanding
- Prices will start fluctuating around 50 Week MA and whipsaws will be common
- Magnitude of correction will increase significantly
- Open Interest and F&O activity will be peaking
6. What are the Characteristics of Mark Down Phase?
- Prices will continue to trade below the 50 MA and will retrace upto/above 20 MA
- Stocks with low Market Capitalization will begin to show disproportianate cuts.
- Volumes will be relatively (in comparison with recent stages) highest.
- 50 Week Moving Average will start trading flat. Whereas 20 Week Moving Average will start trading down.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, ,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Simply Technicals - Dow Theory Modified
1. What is Dow theory?
- Perhaps the oldest Technical theory along with Elliot Wave. Its usage in the current era is minimal. But that does not mean that it does not work. Emphasis
on Price trends and Business trends within the Economy.
- Important point to note is that it is not used to forecast market movement.
- One of the only few theories along with Elliot wave which gives emphasis on Trend confirmation and Trend direction.
2. What are the main Principles of Dow theory which are applicable today?
a) Markets reflects all the news/earnings/rumors - Whether it was the previous Bull run, severe Bear Run or the Current Bull run, markets discount all

To be a Trader-20yrs Page 164

a) Markets reflects all the news/earnings/rumors - Whether it was the previous Bull run, severe Bear Run or the Current Bull run, markets discount all
information. Trust the price and only price.
b) Markets consist of Primary Trend & Secondary Trend - Primary Trend can be a long term Bull market, whereas Secondary Trend can be corrections within
that Bull market. Magnitude of Secondary trend can range from 15-25% of the Primary Move. All the "red" support zones are marked. None of the previous
supports were broken in the entire Bull run. Supports were only broken in 2008 March which triggered one of the worst Bear Phase. Even during the current
phase, unless May 2010 low (4786) gets breached we will not be in a Bear market. Till then the current 2011 correction is a Secondary reaction within the
Primary Bull market. Dow theory is late in reacting, but it will keep one on the right side maximum number of times.

c) Emphasis on Closing price & Volumes - Given the volatility today, it was wise earlier and even wiser today to pay more emphasis on closing prices. Also,
Volumes and Prices go hand in hand. Though this might not happen always, but in general look for expansion of volume with expansion in price. If volume is
missing, be cautious.
d) Confirmation of Indices - Bull markets is when Prices rise. Bear markets are when prices fall. Direction-less markets are when neither prices rise nor do
they fall. One of the best ways to catch a Bull phase and a Bear phase is to look for confirmation among indices. In Bull markets, majority of Indices will be
Bullish and in Bearish markets, majority of indices will be bearish. In direction less markets, major sector indices will reflect the same.
E.g. - Lets say we are in a Bear market, in case we suspect a Bull market taking shape, look at rest of the indices. See if they have stopped falling and started
forming a base. Eventually when broader index breaks out, see if others are breaking out as well. If they are, then you have got yourself a new Bull market!
Dow theory looked at confirmation of Two indices. Given today's markets, it is wise to apply this to other sectorial indices and see their trend with respect to
broader market index.

To be a Trader-20yrs Page 165

What is Sector Rotation


05 July 2015
12:39 PM

1. What is Sector Rotation?


- Stock Markets operate in Cycles and money flows in/out of various sectors all the time. As an analyst one is expected to know which sector does well in various
economic scenarios.
- Broadly, Stock Market moves on two broad Industrial Categories; Liquidity Driven Industries & Earnings driven Industries.
2. How to we classify various Economic Sectors & rotation of money within them?
- In Technicals, this concept was first introduced by Martin Pring. Would definitely recommend for you to read the original pie ce of work. We have just adapted
and slightly modified what had been explained by him.
- Bull Market - Stage 1 - At beginning of a Bull market, Liquidity driven sectors tend to do very well. These typically include Financials (Brokers, Ba nks, Nbfc's),
Consumer Non durables (Personal Care, Foods, Tobacco, Beverages), Real Estate & Construction and Transports. Basically all th ose Sectors which are
directly/indirectly related to consumer spending.
- Bull Market - Stage 2 - In this stage Conservative sectors like Consumer Durables (Autos, Media, Hotels, Appliances), Health care (Hospitals, Pharmac eutical
Companies, Health insurance companies), Retailers & Manufacturers do well.
- Bull Market - Stage 3 - During the end of Bull market, Earnings driven sectors tend to do very well. These are typically related to Coal & Mining, Oi l & Oil
refineries, Technology and Basic Industry (Steel, Metal, Machinery, Chemical, Paper)
- In Bear Markets, its exactly the opposite. First, Liquidity driven sectors fall, then Conservative sectors and finally Earnin gs driven sectors. The necessary order
may not play out, but the extent of correction exists. That is, Liquidity driven sectors correct the most, followed by Conser vative sectors and Earnings driven
sector.
What are Sister Stocks?
Since I have introduced the concept of Sector rotation, let me introduce the concept of Sister Stocks. Sister stocks are stoc ks belonging to the same sector and
the same industry. So, for example, Hdfc Bank & Icici Bank are sister stocks.
Market tide effect
Tracking the movement of Sister stocks together is extremely important. Tide in the market, lifts nearly every stock belongin g to the same sector. This is not a
rule, but exceptions in this is a rarity. Usually when a Sector becomes in flavor, all the stocks belonging to that sector se e spurt of buying interest. Tracking
stocks together gives us good insight into how the broader sector should do going forward.
How can tracking Sister stocks be beneficial?
Tracking movement of Sister stocks together leads to elimination of whipsaws. For example, if many stocks from the same secto r are breaking out, the
likelihood of the breakout being GENUINE. Tracking movement of Sister stocks also enables us to stay within the "moment" of m arket action. That is, staying
with stocks which are moving. As Investors or Traders, least you want is to stay with stocks which do not move. Lastly, Siste r stocks movement can in one
glance tell you the sectors which are leaders and laggards within the current move.

What is Relative Strength Index?


Relative Strength Index, introduced by J. Welles Wilder measures the strength of an issue against its history of price change by comparing up days to down
days. Wilder assumed that overbought levels generally occur after market has advanced for a disproportionate number of days a nd that oversold levels generally
follow a significant number of declining days. The RSI can range between 0 to 100 and the most popular parameter used by trad ers is 14. The most common
use of RSI is to trade on the positive side once it breaches 30 on the upside and to trade on the short side once it breaches 80 or 70 on the down side. Now,
most of you who have ever traded this indicator, would know that this method works well some times while rest of the times it is not profitable. It leads to more
whipsaws and draw downs which cannot be sustained by small trading accounts. Hence, what we will use in this is slightly diff erent.
How to Use the RSI to identify Bullish - Bearish Range?
As mentioned earlier, RSI used traditionally cannot generate returns over the long run and this is precisely why we will be u sing RSI in a modified manner to
measure a securities Strength and Weakness. Credit to identifying this modified use of RSI should go to Andrew Cardwell about whom I read in Constance
Browns book. I would definitely recommend any trader reading the original piece of work. Let us discuss the rules briefly her e for the sake of understanding and
later on we will revisit rules in form of examples.
Modified RSI Use,
In Bull Market RSI remains in the range of 80 40 - RSI never goes below 33
In Bear Market RSI remains in the range of 60 20 RSI never goes above 60 67
Application of this Rule?
By using this, in one glance we should be able to identify the Bullish - Bearish range of the stock. If on the weekly time frame, we find a stock maintaining range
of 80 - 40 RSI, then we'd know that the stock has legs in it to go even further. We can then devise trading strategies around this co ncept to take advantage of
the same. Similarly, if we find that stock has been maintaining RSI range of 60 -20, it would mean that stock does not have significant strength within to move
up.
ABB in the previous Bull run respected the range (marked in green), but after that has struggled to climb up and is not shift ing with a downward bias as RSI
level is capped on 60 (marked in Red).
Unitech is the same as ABB. Here, till mid of 2010, 40 range was respected. What this said was that stock has enough legs to move higher. But eventually when
the stock started to Rise, RSI found difficult to cross the previously respected 60 band and hence the stock begun to crack a gain.
(Bullish Bearish RSI range Investment Model)
Moving Averages
To help understand moving averages, it is first necessary to discuss time series, i.e., series of data points that are chrono logically ordered. The daily closing
prices for a commodity are one example: They form a string of data points or bars that follow one another in time. In a g iven series, a sample of consecutive
data points may be referred to as a time window. If the data points (e.g., closing prices) in a given time window were adde d together, and the sum divided by
the number of data points in the sample, an average would result. A moving average is when this averaging process is repeat ed over and over as the sampling
period is advanced, one data point at a time, through the series. The averages themselves form a new time series, a set of va lues ordered by time. The new
series is referred to as the moving average of the original or underlying time series (in this case, the moving average of the close). The type of moving
average just described is known as a simple moving average, since the average was computed by simply summing the data points in the time window, giving
each point equal weight, and then dividing by the number of data points summed.
Using Moving Average
For our Swing Trading Model, we will be using a Simple Moving Average with a Parameter of 50 on a Weekly Time frame. As per y our research, this parameter
can be adjusted. I have found this Parameter to work well across various asset classes.
Why Moving Averages and RSI together?
Moving Averages are used to capture trends and to essentially have enter and exit points and RSI is used to measure the stren gth of the securities price
structure. Moving Average techniques will only be applied to those securities whose price structure is strong and hence we wo uld avoid having too many
whipsaws. In a nutshell, Strength would be captured by Trend.
Parameters required by this Model
Weekly Time Frame of the Security
Simple Moving Average with 50 as Parameter
Relative Strength Indicator (15) with levels of 80 & 40 in Green and 60 & 20 in Red

To be a Trader-20yrs Page 166

Relative Strength Indicator (15) with levels of 80 & 40 in Green and 60 & 20 in Red

Model Specific Rules (Buy Sell Hold)


1. Identifying the Current Market
First step in this model is to identify the current securities strength/weakness. To see that, look at where the RSI is tradi ng. To be more specific, look at the
range in which RSI is trading. Whether it is in the Bullish range (80 - 40) or is it in the Bearish range (60 20). Visual inspection should instantly tell you
whether the stock is Bullish or Bearish. Refer to the chart below. Since April 1930 to April 1932, Dow was trading in a Beari sh Zone. How do we know it? Look at
the RSI(15) range. It is trading between 60 and 20! Similarly Bullish stocks can be identified.
2. Making a Trading Decision
Once the current markets structure has been identified, all you have to do is wait for a suitable entry. For entry and exit we will be using a 50 MA or a 20 MA in
some specific case. If we see, a Securitys RSI hovering around the 40 level (That is, RSI taking support near 40), we will w ait for the price to move above the
50 period average. Once this happens, we will then keep a stop loss of 50 DMA or can use volatility based stop to protect our account. In case of profits, we will
let our profits run with suitable trailing stop as we move higher
Similarly, if we spot the RSI taking resistance at 55-63 zone, we will wait for prices to close below 50 MA or 20 MA in order to go short.
Buy RSI Strength + Price above 50 MA
Short RSI Weakness + Price below 50 MA
There will be times when trends are so strong that prices wont retrace back to 50 MA for a suitable entry. In that case we w ill use 20 MA for entries.
Buy RSI strength + Price above 20 MA
Short RSI Weakness + Price below 20 MA
In no case shall we ever Short a market trading above its 50 MA even if RSI is showing weakness. Similarly, in no case shall we ever Buy a stock trading below
its 50 MA even if RSI is showing strength.
Putting it altogether
We have covered so much information that somehow for a new user this will look very intimidating. This is precisely why I am here to guide you step by step on
applying what you have learned so far. This step by step review will contain information on how to start through scratch in A nalyzing a specific Asset.
Step 1: Always Start with Broader Market
The reason this is so important is because if broader markets start to slide down, no matter how good the stock is, it will e ventually follow the course. Hence
determining what the broader market is doing is absolutely critical.
Since we realize the importance of broader market trend, we need to now form a small framework on how we will analyze the tre nd. The first and foremost step
here is to analyze the Previous/High low points on the chart (That is, the Mini Dow theory) as explained earlier. Then come t o Dow theory and see whether we
are in Primary Trend or in Secondary Trend. Once we are through with this, analyze the Stage of the market as explained earli er.
Mini Dow Theory - Identify whether on Daily charts and weekly charts we are forming Higher highs and higher lows
Dow Theory - Apply the concepts of Dow theory to identify whether we are in Primary Trend or Secondary Trend. Look at Volume confirmation and confirmation
of other indices. Apply the concept of Sister stocks on Sister indices as well.
Identify Market Stage - Once you have noted the observations of Dow theory, identify which stage we are into. If we are in Stage 4, and Dow theory is showing
Bullishness, then it might be possible that we are entering Stage 1 and then Stage 2 in future. However, if we are strongly i n Stage 3, wait for more
confirmation and do not be eager to initiate trades.
Identify Sectors - Identify the strongest sectors in the market. See if other Industrial indices are confirming the same what the major sector i s conveying. Use
the above mentioned steps in finding out the Trend and Stage of the Sector and the Industries within that Sector.
Step 2: Identification of Stocks to Invest
Once the broader Market trend is identified and the Individual sectors are identified, its time to narrow down to Stocks. Sto ck identification has to be done with
the following steps.
Stock Trend - Identify the stock trend the way you have analyzed the broader market trend using Mini Dow theory and Dow theory.
Stock Stage - Identify the Stock stage and see if we are in Accumulation phase or in Distribution phase.
Bullish - Bearish Range - If the Trend and Stage of the stock is clear, identify and confirm the same with the RSI Bullish -Bearish Range.
Investing - Once the above analysis is in place, use the RSI Model described in step 8 to start investing in the stock.
Step 3: Risk & Money Management-.In a nutshell,
Know Your Capital
Risk Per Trade
Exit Point
Correct Position Sizing Technique
Correct Pyramiding Technique
Since every Investor has his own risk appetite, we cannot tell you how much to risk and how much to buy. You need to figure t his on your own.
In conclusion, what we have discussed here are steps for an Investor to make it on his own. If you practice what has been tau ght here, we have no doubt that
you will be immensely successful going ahead. Remember, you need to have patience in this business before you start finding t hings to work for you. Be Patient,
Invest Wisely and Manage your risk well.

To be a Trader-20yrs Page 167

Trading Strategy using TA


05 July 2015
12:40 PM

Trading strategy using TA ...........by Raunak


Intraday Strategies
1.
2.
3.
4.
5.
6.

Rectangular breakout for Intraday Purpose


Using 5-Min Charts for Profit (Ascending triangle)
15 - Minute Chart Breakout
15 Min Intraday Setup
Classical Gap Setup for Intraday Trades
RSI and Bollinger Band Setup on 60 Minute Time Frame

Daily Strategies
1.
2.
3.
4.
5.
6.
7.
8.
9.

Retangular Consolidation Pattern


Failed double top - Daily Pattern
5 Day Momentum Trading Strategy
RSI Divergence Strategy using Daily Chart
Dual Time Frame Momentum Strategy
Using a trending Indicator (ADX) efficiently
Trading Positive Divergence on Daily Time Frame
Swing Trading with MACD and Stochastics
Trading Setups

Weekly Strategies
1.
2.
3.
4.

2-3 Week Swing Trade Setup


3-4 Days Swing Setup
EMA Cross Over System
Turtle Soup Plus One (With AFL to spot the pattern)

Other Useful Posts


1. Position Sizing in Investments
2. Importance of Data Validation and Data Accuracy
3. Importance of Getting in and Getting out of Trades
4. The "What If" Syndrome
5. Futures or Equities
6. Picking the right kind of stocks for Swing Trading
7. Setting Stop Losses
8. Position Sizing Techniques
9. Setting Stop Losses Using Historical Volatility
10. Focussed Approach versus Diversified Approach
.................................................. ..............................
I would certainly provide you with the kind of sources you want. But I'd like you to specify what you exactly want. As far as I am concerned, I use some
standard setups for each time frame.
Weekly trades: I rely a lot on rectangle patterns clubbed with MACD, ADX, Trendlines, Volumes
Daily Trades: I rely on classic A-B-C pattern clubbed with MACD, Volumes and ADX
Intraday Trades: I use two setups (Rectangle pattern and Sure trend pattern) with MACD and MA.
As I explained the weekly setup in my previous post, I will be explaining the daily and intraday setups in the following post s. So to understand what I do, you
will require basic understanding in,
1)Candlesticks
2)Macd
3)Adx
4)Volumes
5)MA - Moving Averages
6)Basic technical patterns
7)Trendlines
.................................................. ..............
RECTANGULAR PATTERN ON WEEKLY BASIS

Tools Candlestick/Bar Chart, ADX (14) and MACD Oscillator with standard settings
Trade Setup The basics of this setup is very easy to understand. All you need to do is monitor selective stocks (high beta high volume) o r the Index. The
pattern to look out is usually a horizontal range in which the particular entity trades and then gives a breakout in either d irection. This pattern is extremely
effective and provides with good risk/reward ratio. I chose high beta stocks to cash in on the moves as quickly as possible.
Time Validity - I trade this pattern only on weekly charts. The reason behind this is simple. The more the data, the more reliable the patter n. Thus data and
patterns on monthly charts are certainly more reliable than weekly chart. Some analysts do say that the weekly pattern should not extend beyond certain
weeks. However, my research indicates that this condition may or may not hold true. Personally, I prefer the formation rather than the time frame.
When does it occur - This pattern can be found during consolidations, new highs and new lows. Some books do indicate that these patterns are typic ally
consolidation patterns but I have found these patterns effective in nearly every situation.

How to trade it - Refer to the chart below. What we see is that HCC forms a bottom by forming a rectangle pattern. Usually there must be 4 poin ts of contact
in the pattern (as marked in the figure). However, in some extreme cases I have seen points stretching to 6 -8. Volumes during the pattern should diminish
and the NDI should be greater than PDI. Though NDI is greater than PDI, the stock instead of falling further consolidates in a range. This usually is the first
clue for the stock validating the pattern. As the pattern develops and begin to show strength, the volumes, ADX (14) and PDI all start to pick up. This is
usually the second clue and beyond this only the breakout confirmation is required. The breakout confirmation is usually reco mmended as validation of pattern

To be a Trader-20yrs Page 168

usually the second clue and beyond this only the breakout confirmation is required. The breakout confirmation is usually reco mmended as validation of pattern
breach. However, I personally prefer to see a gap up breach (check chart). I have found that gap up along with the previous c lues mentioned works
exceptionally well for this pattern. The stock usually runs up quite fast and doubles in near term. Though the gap up is rare , but if you find one, then latch on
to it. Keep in mind the slope of MACD while buying. It should be positive and should have an upward bias.
Target - Add the range of the rectangle to the breaching level. This is the minimum target that can be achieved. The maximum cannot be predicted.
STOPLOSS - I would prefer not to refer to stop loss levels as every trader is different in having his own rules of money management. Ple ase use your own rules
for managing equity.
Usage - This pattern is effective in weekly and daily trades. However, I have also had considerable amount of success using it on int raday basis. If someone
wants, I'll post how to use this in intraday setup
What makes trading so fascinating and, at the same time, difficult to learn is that you really don't need lots of skills; you just need a genuine winning attitude.
..................................
RECTANGULAR PATTERN ON INTRADAY BASIS
This is the "heart" of my day trading. And I hope it will benefit all.
Tools Candlestick/Bar Chart (5 Minutes), MACD Oscillator with standard settings, Support and Resistance levels on 5 Minute chart
Trade Setup The basics of this setup is very easy to understand. All you need to do is monitor selective stocks (high beta high volume) o r the Index. The
pattern to look out is usually a horizontal range in which the particular entity trades and then gives a breakout in either d irection. This pattern is extremely
effective and has occurred nearly 70 times in the past 11 months on Nifty. On an average one can find at least 3 -5 trading days in a month where this pattern
forms. The average points to capture on one particular move are about 20 -60. These figures on based on Nifty analysis. However, with 50 high beta futures
stock, this pattern is bound to occur in many stocks on daily basis. Top 48 beta stocks exhibit this pattern atleast 1 -2 times. So on different days you might
get different stocks exhibiting this pattern.

Buy Setup A typical buy setup occurs when the entity breaks out on the upside after trading in a horizontal range for most of the day. Buy at the closing of
the breakout candle and keep a stop loss at the low of the previous candle. MACD slope in this setup should largely be up. The risk reward ratio of this setup
is extremely rewarding. Prior to the breakout ideally Nifty should have traded in the range of 25 -35 points.
Sell Setup A typical sell setup occurs when the entity breaks out on the downside after trading in a horizontal range for most of the da y. Short at the closing
of the breakout candle and keep a stop loss at the high of the previous candle. MACD slope in this setup should largely be down. The risk reward ratio of this
setup is extremely rewarding. Prior to the breakout ideally Nifty should have traded in the range of 25 -35 points.
Important Notes Look at the slope of MACD when you enter the trade. Also, always take a note of where prices are trading with respect to thei r support and
resistance.
Have patience and you will see this pattern occurring regularly.

I am posting two out of many examples I have for NIFTY alone. If you want to see this for individual stocks then let me know.
Trailing stop - If one wants, in a short sell setup, the moment the current candle's high is taken out, the position can be squared off. Howe ver, the drawback
with this is that often prices tumble again and the good move is missed out. I have researched 3 years of Intraday data and w hat I have found is that it is
better not to keep a trailing loss. Instead what I do is that for NIFTY I keep a target of 20 points and keep the market runn ing down. If the market turns
around, then I square off the position the moment my 20 points profit is in threat. So this way, the minimum I make is 20 and the maximum is what luck
throws at you.
Exit - Again this is subject to the choice of the trader. Out of 183 times (in 3 years) that this pattern has occurred, the NIFTY ha s fallen in the range of 20-30
'63' times and rest results vary. Hence, the minimum would be 20. I have a lot of trading capital and hence I take up huge po sitions in order to compensate for
any loss in potential points. Hence, as a trader one must decide how much points he wants. For some 10 -15 points is too much and for others sky is the limit.
__________________
As far as I am concerned ... I don't use oscillators on such small time frame ... the reason is simple ... over the period of time, the more data you plot your
indicators, the less accurate results you get .
One thing that you must remember is that Oscillator values are the effect ... they themselves are not the cause for price to move ... only when 'price' moves
does the value of oscillator change ...
Hence Price is the cause and oscillator values is the effect ... unless and untill you are a swing trader there is no point l ooking in oscillators for such small time
frame ...
But if still you want to know ... then I would use 13 and 5 for MACD and 3 for signal line ... however you will get many whip saws out of such small time
frame ... if you are a swing trader ... either switch to 60 Min chart or 30 min chart .. nothing less than this ...
If you want to use a 5 - min chart ... then trust price patterns and volumes activity on such smaller frame
............................................
Ascending Triangle on 5 - Min Chart
Tools Candlestick/Bar Chart and Volume(Color Coded). Since 5-min chart is extremely small time frame, I prefer not to use any oscillator or indicator.
Trade Setup The basics of this setup is very easy to understand. All you need to do is monitor selective stocks (futures based stocks) or the Index. The
pattern to look out is usually a horizontal range on the top and higher lows on the bottom. This pattern is extremely effecti ve and provides with good
risk/reward ratio on 5-min chart. Essentially can be used as an effective swing trade strategy.Those with sizable cash in portfolios can choose futu res stocks for
this pattern (leverage advantage). I'll use a very recent example to demonstrate the use of the pattern.

Time Validity - I trade this pattern only on 5-Min chart. The reason behind this is based on my own research. Ascending triangles which occur on daily or
weekly charts either dont complete fully or give false breakouts. On analyzing 5 -min charts I found that these patterns are highly effective on this time frame.
When does it occur - This pattern can be found during consolidations when a stock pauses before moving higher. Higher bottoms in this pattern indi cates
bullish momentum being built up.
How to trade it - Refer to the chart below. What we see is that Aditya Birla Nuovo has recently finished a ascending triangle pattern. It forme d a nice horizontal
base (A,B and C) around 895 levels with it constantly forming higher bottoms (1,2,3,4,5,6,7). The stock eventually broke out from these levels and is trading
at 909 currently. The ideal setup would be to buy on breakout only when there is huge increase in volume activity around brea kout levels (refer chart).
Target - Add the range of the ascending triangle to the breaching level. In this case it would be the vertical distance between point 1 and A (roughly about 35
points).
STOPLOSS - Use point 7 as stoploss levels. We would ideally want the triangle to fall out completely before deciding that it is a false one.
Important Points - Along with the standard points mentioned above, there are a few points I would like to share in order to judge the strength o f the pattern.

To be a Trader-20yrs Page 169

1) Strength of Horizontal Top Line - Ideally there should be atleast 2-4 points of contact made with the horizontal top line. In this case we have had 3 point of
contacts marked as A, B and C.
2)Strength of Trendline - Number of point of contacts made with the trendline determine the strength of it. In our case we have 7 point of contact. Thi s is
brilliant. Ideally I would like to see 3-4 point of contact.
3) Strength of the points (A to C and 1 to 7) - We need to check whether these points are of any use or not. Plotting points is not difficult. However testing
them is difficult and important. A simple way to do this is to monitor the volume activity. Look below each major point (1 to 7) how volume acivity picks up as
soon as the price reaches the trendline. High volume at these points resemble force (demand) and hence make these points impo rtant. I have circled the
volume activity underneath each point.
4) Strength of Pattern - When the above mentioned points are in place, then the only thing left to verify is the time of the breakout. Ideally the pat tern must
breakout before the lines converge. At point 7 the pattern is 70 -75% complete and hence this is the right time of breakout.
Ultimately always remember that no pattern is fool proof. In this particular case we have found a very healthy pattern and we can just hope this blossoms into
profit. I have huge positions in this stock. Hope this works
Those interested in using Moving Average systems (Price crossovers) to trade can use these Parameters for ADITY BIRLA NUOVO ( 5 - min chart only)
Buy Average:60 EMA
Sell Average: 30 EMA
Short Average: 35 EMA
Cover Average: 5 EMA
.................................................. ........................
Not always true, I have seen an ascending triangle breaking downwards on many occasions, and similar behavior with descending triangle too.
Well said ... The way I see it ... if a pattern fails ... its an awesome opportunity ... some of the best trades (in the opp direction) occur when patterns fail ... In
every faliure there exists an opportunity ....
__________________
i am talking about the normal market behaviour. in normal market behaviour the ascending and descending triangles work, but w hen on peaks and bottom can
reverse any times... Reversals are always there...to identify them you need to include more studies
...for eg. If you consider the ascending triangle to be good buy signal in overbought stochastics, declining rsi and crossing averages then no body can do any
thing. Then nothing can be done .so its better that we introduce the methods one by one if it is a beginners data...and then move on to next step...the reversal
of ascending or descending triangle can be predicted by various method including divergence, volume etc. But some things are rather learnt practically and
step by step. it is much better if you try to figure the formations ur self....it will give you practice and help identify th e trend for this patter....try to identify it
on various time frames like on intraday, daily or weekly charts....try to figure out what they do on specific movement...if o pposite is occuring in the formation
then try to look for the reason for opposite movement....hope you will find the answer....more you will analyse more you will know
....just do your homework.....later ............The problem with MACD is that it plots an average of an average of an average .This is an extremely lagging
indicator. As price moves first and MACD
second it is much more useful for longer-term trends. As a rule of thumb it is lagging 5 periods on a candle chart. Consider using this on a 10 -minute chart, it
is lagging 50 minutes.
How useful can this be in day trading?
However,when picking out a longer-term trend, a five-day lag may not be too
harmful considering the time you intend to hold the position.

To be a Trader-20yrs Page 170

15- Min Breakout Setup


05 July 2015
12:41 PM

15-Min Intraday Setup


Requirement Candlestick Charts/Bar Charts with MACD (standard setting) and MA (50), EMA (20) and EMA (10)
Brief Introduction I came across this setup while watching Greg Capra's seminar. I have modified this setup based on my trading experience.
I have added the MACD indicator for filtering out bad trades. The setup is simple to understand and implement. This setup is extremely effective to day trade
and can get about 30-50 points on the Nifty. Please use this strategy on Nifty as I have researched this setup on it.
Trade Setup - Pick a stock which has run up quite a bit and is due for a correction. A typical setup occurs when the 50 MA slopes down (wit h angle between
20-30) and prices fall sharply. Eventually prices retrace back to 20 EMA or 10 EMA which also happens to be the 38 -50% retracement from the swing high.
Enter a short position at this point and book profits according to your own appetite.

Example - In an example shown below, Nifty has run up quite a bit and has formed a new high. Prices start to drop off from this level. Over the period of two
days, the slope of 50 SMA starts to curve down and the setup is formed. Prices fall off on 14th sharply and then retrace back to 20 EMA on the 15th. This level
is also between 38.2 and 50% retracement level from swing high. MACD slope is negative and is about to turn below zero. Ideal setup for a short trade.
StopLoss - Stoploss if it breaches the 20 EMA and reaches the 50 SMA. Ideally, one can stop if the trade breaches 20 EMA.
Usage - This pattern can be used on 15Min charts for day trades.
1) Firstly, there is NO TRADE which is a lucky trade. Give yourself some credit for this wonderful piece of analysis.
2) Now, since you are using Robert Miner's Dual time frame Strategy, I will show you how to execute it with greater efficienc y so that you can enter the trade
early. Also, with this point, you will know that it wasn't luck that favoured you. But it was your analysis. Look at the char t below, I have marked three letters
A,B,C. THIS is the key to the setup. At point 1, there is a new swing high. From there on there is the first swing low (marke d as A). Then the prices rally a bit to
form mark B. Now to determine whether the markets will move higher, the low at A should be taken out and new low should be fo rmed. Then, after the new
low is formed, the market must again move back in the range of A. When this happens, then, just above B you must enter the tr ade and hold on to it. This is
what actually happens. Market from B forms a new low at C (low is a low even if it is just few paise below). Then from C, the prices move back to A range. This
signifies that the new high is probably going to be made. Once B is taken out, you must enter and ride the trend. You entered at 145.5, whereas according to
Rob Miner's work, you should have entered at 144. Hope you got my point.
3) Your usage of E-Wave and retracement was very good. Whether or not the ewave will complete is difficult to say. But once the A,B,C thing happ ens, it is
more than likely that the new high is going to be formed. Targets as you have done can be measured from APP and Fib extension s (Internal and External). I
hope you used the dual momentum setup with stochastic of two different time frames. You can plot both the stochastic on the s ame chart. Will be easier for
you to analyse trades.
__________________
could you please why ABC correction happening in market ?
The way I think, ABC is a way for uncertain traders to be driven out of the market. Now, lets say someone is not sure of this trade. The moment a new low is
made (C), he will think of unwinding the position. Had he been an informed investor with faith on his analysis, then he would have seen the prices go back
again in the 'A' range and would have profited. Those who are unsure about their own analysis and those who do not trade prag matically are eventually driven
out at point C.
could you please comment on mass physiology behind all popular setup like Bollinger Band etc ?
one more question,please tell how to set two different Time Frame stochastic on same window in Amibroker?
Now if you are using 5min chart for smaller time frame, select the stochastic indicator and this will be stochastic for 5 -min chart. Now if you want to use 30 min
chart (larger time frame) and want to see level of stochstic of this then save the attached file in your indicator list as "S tochastic 30 Min" and then select
indicator and press insert linked. Now you get two stochastic (one of 5 min chart and other of 30 min chart). Below is the co de for stochastic 30 min (8,3,3).
.................................................. ..
Failed Double Top - Daily Pattern
Tools Candlestick/Bar Chart (Daily), Colour Coded Volume, 21 and 50 SMA
Trade Setup This is a very powerful EOD setup which I came across during my early days of trading. It is one of my favourite EOD trading strategies. To walk
you through this setup, I am going to explain it to you in various steps.

1. Trend Determination - There has to be a 'trend' in place for an effective reversal to kick in. Hence, the first step of this setup is to identify s tocks which are
trending. You can either do this through a trend line or you can use the method which I use. I usually plot 2 SMA (period 21 and period 50) and determine the
trend of the stock by the slope of these averages. If 21 SMA and 50SMA do not touch for a while and both exhibit slope greate r than 25 degrees, then the stock
is in a very strong up trend. These are the kind of stocks we want to choose for this particular strategy.
2. The Pull-Back Phase - After, a descent run up, the stock forms a new high (1st Top) with heavy volumes and retraces back to the 21 SMA or 50 SMA. U sually
the stock does not touch the 50 SMA. The stock usually forms a candlestick reversal pattern and head's off to make a new high .
3. The Trap (Top) - As the name suggests, this is the phase where a New High is formed. This is a new high, which is formed on very light volume and
convinces many traders as a genuine high (breakout). It is here when many traders enter long positions in anticipation of a p rice rise. What essentially happens
is that the prices fall back below the first top (within 2 days) and continue to slide down to the previous swing high. This dents the confidence of those who
went long on the new highs and usually panic selling kicks in. The gain is quick in the set -up and the risk reward ratio is amazing.
Example - Oriental Bank recently formed this pattern. The stock was in an uptrend from september as determined by the slope of averages . The volumes at
first top were high whereas at the second top they were low. The stock price fell below the previous top within 2 working ses sions. Finally it fell back to the
previous swing high.
Important Notes Do NOT forget to look at the trend of the stock and the volumes. Finally, the prices must fall back within 2 days below the f irst top.
Stop Loss - Keep a strict stop loss of a close beyond the high of the 2nd top.
-----------------------------------Now look above. How about an ascending triangle ?? Look at the black lines.
The key here is the present leg of wave being formed. This will determine whether we r in a horizontal range or ascending tri angle. As of now just wait and
watch. My gut feeling is that Yes Bank is trading a bit weak. If it takes out the current high on good volumes then the price would (and should) rise
dramatically. But since it is little weak (not too much though) on daily charts, I'll wait n watch this script carefully.
One more thing ... your horizontal range isn't right .. thrs one bar (around 1) which is out of the range. Though some may sa y this is allowed, I'll still tell u this
is not that valid. Rest time will tell .
....................
83.4 is the current swing low ... now it is trading above that level but also in symm triangle zone. One the price breaks dow n from the symm triangle, wait for
83.4 to be taken out. If on retracement the prices do not re -enter the sub 83.6 levels , then short it. MRPL is relatively under performing the NIFTY. So it

To be a Trader-20yrs Page 171

83.4 to be taken out. If on retracement the prices do not re -enter the sub 83.6 levels , then short it. MRPL is relatively under performing the NIFTY. So it
should be a good trade.
...............................
if previous swing low or high taken out by progressing complex correction .then it is end of complex correction?
Yes. You will have two factors on your side.
1. Triangle breakout (strong sign)
2. Prev Swing low taken out (again a strong sign)
Add up volumes to check validity
.................................................. .................
I had told you guys that I was trying a system which I had mentioned in My Stock Watch list thread. Well, since this is in te sting phase, I'll post my list here.
The beauty of this system (mixture of Trend Following Systems and Mean Reversion Systems) is that it gives returns within 1 -4 day of trades. It's a real time
scan system and hence positions have to be taken between 15.15 - 15.30. I have got in house development done for the system's software. I'll be posting my
results live here and will certainly release the system (with software) once it is successful. Results on backtesting the dat a were very good. But it is necessary
to see if it works in real time. At times this system generates contradictory signals
. Eg: If it gives BUY for a security on 4th Jan and then short for the same on 6th Jan, then earlier position have to be clos ed and new positions should be
added. At present am tracking only 40(high beta stocks). I hope it works. Here are results for January along with today's res ults. CMP indicates closing price of
signal generation day. Stop Loss is based on EOD prices.
[12 jan'2010]This is the final list as of 15.15 - 15.20
Banks and sugar stocks are looking weak.
For Short - BAJAJHIND, BANKINDIA,RENUKA,CENTURYTEX,IBREALEST, ICICIBANK,TATASTEEL
For Long - Wipro
Testing phase is on. Please don't trade.
Signals are based on closing prices. So, since we r seeing these at 15.20, It might be that (in very rare case) we might get one false signal.
-------------------------------------------------------------------------------Since this is a T + 1 to T + 4 system (Maximum holding till 4 sessions), I am uploading performance of signals generated on 4 th and 5th of this month. Four
day cycle for these are over. On 6th and 7th there were no signals. And the next signal was on 8th, 11th and 12th (today). Wi ll be uploading result when 4 day
cycle ends for them.
-------------------------------------------------------------------------------Signals for Today. I had posted these at 15.20. Just doing them again in proper format. Keep SL 5310 for NIFTY. Rest SL at 2. 5%
CMP is the market price on the SIGNAL day
.................................................. ......
i had a query. the nifty short call was initiated at 5210 with a sl of 5340. so shoul we expect a fall of at least 200 points nifty considering the sl to be 130
points?
Watcher right above the image I had mentioned SL of Nifty as 5300 ... coz thts the next major level ... I think u missed this line ... refer back to the original
post.. also today was T + 1 of the signal ... the signal takes maximum T + 3 to validate ... if not it has to be ignored ... still testing to let us see if we can
modify a few things here .
These are the signals generated in 2009 for Nifty. As you may see, this strategy is effective (30% net return deducting broke rage at 0.03% each side + extra
costs) for Day 1 trade. So, what I do is, if the Buy Nifty is generated today at 15.15, I buy the nifty and hold only for '1' day. If it gives me profit, then fine else
I close my position at end of the day. In no circumstance do I take a loss of beyond 2.5%. I manually square off the deal. Th is is just a BTST or STCT strategy.
You can see the list and get an average target.
__________________
As per your 2-3 week swing trading set up, I have screened two scripts. Please let me know if my selection of stocks are correct as per you r strategy.
1) INDHOTEL------uptrending stock with a pullback, hammer candle pattern formed on 13/01
2) SAIL----------uptrending stock with a pullback, I hope its bullish engulfing candle pattern on 13/01
Sail has not given a Engulfing pattern .. it is more of a piercing one ... and in Indhotel I would have wanted the hammer to be a little more ideal (long
shadow) ... for Indian Hot the patterns have formed at 38.2 retracement level ... it would have been good had it formed at 50 % retracement ... for Sail though
it has formed at 50% retracement ... which is good
Sail especially is looking good on the broader note ... Displaying more strength than Indian Hotel ... stop loss of 215 and 2 32 looks good ...
__________________
Do you mean fibonacci retracement level should be 50% and above for strong buy signal.
Am I right in understanding your message. Please clarify me.
Finally regarding the entry price, target price and stop loss methods explained and followed by you in simple english will be really helpful.......
Yes it should be at 50 or between 38.2 and 50 ... for Sail it is exactly at 50 ...
Entry - if you are planning to take up 100 positions ... then first do a probe test ... this means .. first buy only 20% of your posi tion once the stock crosses
previous day's high ... If you then continue to see the stock showing strength over the past 2 -3 days, then increase your position. This way, even if the stock
goes against you, you will have less loss as you have invested only 20% of your position at first...
Target - I dont believe in target's ... so it's upto you when you want to exit .. or you can use your strategy
Stop loss - previous swing high ... or you can take 61.8% fib level
.................................................
Honestly I don't believe in back testing results ... there r so many dynamic things in the market (plus the human element) th at back test results do not
incorporate ... hence am testing it live .. lets see ...
......................................
Classical Gap Setup - Intraday Trades
Tools Candlestick/Bar Chart (Hourly Time Frame), Comparative Relative Strength (Base Index: Nifty)
Brief Introduction Now, Lets take time over understanding this. Markets are based on demand and supply. Gap down, as shown in one of the images below
indicates that today the market opened lower. Hence, the bidding today started much lower than yesterdays lows. This means t raders are expecting the
market to go down and hence are not even bidding near the levels of yesterday. This is classical sign of bearishness. Same go es for upward gap.
Concept of Relative Strength - First of all, do not confuse this with Relative Strength Index (RSI). RSI is completely different. Comparative Relative stren gth is
when a stock is compared with a base entity (lets say an index; Nifty). By using Comparative Relative Strength we compare wh ether the stock is outperforming
NIFTY or underperforming NIFTY. We will always want to buy stocks which are outperforming the index and will always want to s hort stocks which
underperform NIFTY.
Trade Setup - This is one of the few setups which gives consistent returns in intraday. We enter a BUY position when there is an upward gap on Hourly time
frame and the gap is sustained for one hour with the Comparative Relative strength sloping/pointing up. We enter a SHORT posi tion when there is downward
gap on Hourly time frame and the gap is sustained for one hour with Comparative Relative strength indicator sloping/pointing down.
Time and Validity - I trade this pattern only on Hourly charts. Out of 10, I must say 6 of the gap patterns are successful. If you get a gap up i n a stock that has
reversed or formed a base, then the pattern seems to work more efficiently. If you apply the same structure on daily charts, results can be even better.
Stoploss and Target - I have explained the stop loss in the charts. Targets may vary depending on the range of the stock.
Examples - I have given 2 very recent examples. One for Buy setp and one for short setup. Please refer below.
Note - Intraday trades are for very experienced traders. Please master some setup and paper trade it before putting real money.
__________________
Punjllyod is giving a lot of false signals ... it is common for a stock to do so if its not trending ... we r planning to inc orporate a trend identifier in the system so
that better results can be given ..
prefer desktop based applications like Amibroker, Metastock , Tradestation ...

I can tell u how to add Comp Rel Strength indicator in them ...
------------------------------------------------------------------------------As promised the AFL is ready. AM posting the results of the strategy (3 -4 Swing trade setup) and I must say results are pretty good.
Since you know I don't believe in giving targets, hence I measure the performance of the strategy in days. Here, since it is swing trade, i have measured the
performance in two durations; 5 days and 10 days. I must say the results are pretty satisfying. In 2009, this strategy has ge nerated 72 Buy signals and in 5
days from day of trade, the success rate has been 73%. When performance is measured in 10 days from trade, the success rate i s 86%. Results are based on
stocks trading in the Futures and Options segment. As mentioned, this strategy works well in Strong Trending stocks. Will be posting the AFL
2009 ---> 5 day hold --> Trades 72 ---> Success 73%
2009 ---> 10 day hold -> Trades 72 ---> Success 86

To be a Trader-20yrs Page 172

2009 ---> 10 day hold -> Trades 72 ---> Success 86


.................Entered SAIL at 242.95 (2-3 Week swing strategy). Closed at 240.85. Lets wait and watch.
Why did u exit ??? din u do a probe test ... U had a valid reason to enter ...
But did u have a valid reason to exit ??? I had a look personally at Sail .. its not looking bad at all
You had a swing trade for 2-3 weeks ... then y did u square off based on one day ...
__________________
I guess slope of 22 SMA ---Lupin----is flat, instead of up. Please correct me if I am wrong.
Tata motors -----satisfies the rule----however, I see that this script has ended in red last couple of days, even though market ended green last couple of days.
Your views on this Raunak ?
Yes that was one of the reasons why Lupin is little weak compared to Tata motors ..
Tata motors meets requirements and though the stock has closed in red, I would still prefer it ... however since it is result s season, I'd definitely do probe test
entry in both stocks... the day previous day's high is taken out, entry should be made in small quantities.
__________________
for EOD Stochastic 8,3,3 or 6,3,3 with a bullish candlestick pattern does give good next day results ...
.............................
RSI and Bollinger Band Setup

Tools Candlestick on Hourly Time Frame and RSI (14)


Trade Setup I just can't recollect where I read this setup. But, it is a very useful one of you apply it correctly. If you identify the s tocks on which this setup
works, then it is going to be very profitable. Usually, you should pick weak stocks for this setup. Stocks which are under pe rforming the broader market or
which are in intermediate down trend. Else you can get many false signals.
How to trade it - Look at the chart below. Bharti has been under performing the market for quite sometime now. If you look closely. The prices have crossed
and closed above Bollinger band (upper) two times. On both occasions the RSI(14) was not above 70. Now, RSI is an indicator o f strength and despite the price
closing above the band, the RSI remains below 70 (does not exhibit strength). Hence, we then look for some sort of bearish co nfirmation on candlesticks (Doji,
Hanging Man, Bearish Engulfing). The moment you get this confirmation, short the stock with stop loss being the highest price (of the previous two candles). In
case of Bharti, in the first case we got a Doji whereas on the second case it was a variation of bearish engulfing pattern.
STOPLOSS - Stop loss is the highest price (high) of the previous two candles.
Usage - Can be used on 60 Minute time frame chart. You can use 15 - Minute chart for entry.
-------------------------------------------------------------------------------------------------------

To be a Trader-20yrs Page 173

Mr. Savant
05 July 2015
12:43 PM

What Mr. Savant gives is not a blind proposition for investment. If you have the patience of going through his threads, you will indeed learn a lot. His returns
are more than 100%. However the time duration is much longer.
What we do here are small trades and quick trades. These trades look attractive, but are only effective if you are an experienced trader. It is not to say that
you won't make money here, but all am saying is that monitor these strategies for some time before committing even a paisa into them. Hence, what I'll
advise you to do is that learn what suites you the best. But don't put in money straight away. If you loose during this, your appetite for learning will diminish
exponentially. Follow Mr. Savant's stocks, invest in them and simultaneously learn from here. Once you learn and master something, then neither you will
need Mr. Savant's thread nor this thread for making your own killing in the market.
.................................................. ........
Following are the stocks for "Investment". Start accumulating small quantities on dips. The stop loss for the stocks will be low which just goes to show the
growth these stocks can have over the period of time (usually 12-24 months).

1. Hold these stocks for Investment purpose only. These are not swing trades nor they are scalping trades. These are purely investment based trades based
on numerous factors.
2. Maximum loss that we will take for a particular stock is 10 - 15%. Again, the stop loss is deep but these stocks can give amazing returns. For some stocks
stop losses are more deep. However, this is only because these stocks are showing good long term momentum.
3. Buying criteria is based on a weekly technical system (neither a trending system nor a mean reversion system) and long term fundamental - economic
system.
I'll be really grateful if someone could assist me with updating this list of stocks on weekly basis.
I'll be posting the list in this same post in sometime ... Will be updating the stocks as I find new investment opportunities ..
.............-------------------------------------------------------------------------------AvgRange = Sum( abs(O-C),15 )/15;
Doji = IIf(abs(O-C)<=0.1*(H-L),1,0);
HAMMER = IIf( (H-L > 1.5*AvgRange) AND (C > (H+L)/2) AND (O > C),1,0);
Cond1 = Cross(StochK(8,3), StochD(8,3,3)) AND StochK(8,3) <30;
Cond2 = RSI(3) < 30;
Cond3 = Close > MA(Close,150);
Buy = Cond1 AND Cond2 AND Cond3 AND (Doji OR HAMMER);
Sell = BuyPrice*1.05;
Filter = Buy;
AddColumn(Buy, "Buy", 1.2);
AddColumn(Close, "CMP", 1.2);
AddColumn(BuyPrice*0.97, "SL set at 3%", 1.2);
AddColumn(IIf(Buy,100*((Ref(Close,5)-Close)/Close),100*(Close-Ref(Close,5))/Close),"Profit% on Day 5",1.2,3,width = -2);
AddColumn(IIf(Buy,100*((Ref(Close,10)-Close)/Close),100*(Close-Ref(Close,10))/Close),"Profit% on Day 10",1.2,3,width = -2);

// Have included performance tracker in percentage terms (%) after period of 5 and 10 days
// Stop loss is set at 3%. Please suit your own risk levels
//Stochastic setting are at 8,3,3 You can modify it to 6,3,3 as per original settings. However it does not make much of a difference. Since you have the AFL
now, I'd advise you to follow it first without putting in the money. Keep a note of all the dummy trades and see what exit policy suites you better ... Backtest
the afl and see what sort of gains it gives ... It is YOU who has to be comfortable with the system ...
Personally, I never take a loss of more than 5% on any stock ... and I do wait for end of day closing prices ... Stock may be down 7% on intraday but for me
closing price matters.
Today nucleus was down 6 % but when it closed, it was not down so much ... hence i held on to the trade ...
__________________
Watcher, we all work with probabilities .. sometimes we r right ... sometimes we r wrong
.................Originally Posted by watcher
Slowly but steadily I am maturing to the fact that TA gives you more chances of winning, keeping your losses in check. Like all other methods it is not 100%
foolproof, but it is always better to go with structured probability rather than our whims.
Oh certainly .. Knowledge gives you an edge in everything ... I'll soon be starting a fundamental analysis thread where I'll teach how to analyse firms
fundamentally from scratch ... I aim to give out atleast 100 strategies here for TA ... Once am done with it ... I'll switch to fundamentals ... Do not fear
developing your own technical system ... Failure comes first ... and then comes success ...
---------------------------------------------------------------------------------------------------------------------------------------------------------------------

I know one thing which leads to a wipe out ...


Too much of leverage coupled with lack of knowledge of the risk involved in doing so with absolutely no stop loss (risk management rules).
...................................
exited sail at 232 since it trigerred stop loss...
tatamotors is doing good......
just a learning experenice for me.....since real money was involved, there was more concentration of everything about the scripts....price, volume,
indicators...etc.
I was not able to get the same concentration on paper trading.....
hope would stick to some strategy with less risk and less profit....
If you identify a strategy that works, give at least 50 trades (small quantities) to see whether it works or not in real time ...
--------------------------------------------------------------------------------------------------------------------------------------------------------------------............Have taken short positions (5230) in the NIFTY with a stop loss of 5260 .... This is an extreme high risk trade ... will post the details later as to why I
have gone short for the shorter time horizon ... ..............Ok, now's the time as to why I was short on the market ...

To be a Trader-20yrs Page 174

have gone short for the shorter time horizon ... ..............Ok, now's the time as to why I was short on the market ...
1. Asian market's have been weak from the past 3-4 trading sessions and Indian market's have been in the range of 5200 - 5260.
2. Majority of Asian market's have not made new highs and have been falling on momentum. India in this case has made a high on low momentum.
3. US market's have had earnings been reported with majority of earnings still showing signs of concerns.
4. China over the past week has started controlling the credit outburst and their markets are rightly correcting gradually.
5. Technically, we are looking a little weak for the short term and hence a correction at this stage would be very healthy.
I had posted one article on Jan 6th ... Its a pure technical view about short term correction ... Do refer it .
................................................. had shorted the Nifty at 5230 as previously mentioned and I squared off 70% of my short positions today. At present, I
want to tell you how I am trading the nifty. Refer to the figure below. The nifty had violated Trendline 1 (marked in white) and hence shorting was a good
opportunity. Now, after two days of volatility, the Nifty has taken support at Trendline 2 marked in Red. Till this support prevails, I will look to be long in the
market with fewer short positions for restricting loss. Support at trendline 2 was formed with hammer-like formation and support has a good chance to hold.

EMA Cross Over Weekly Trades


Tools Candlestick/Bar Chart (Daily), 150 EMA, 70 EMA and 20 EMA
Trade Setup This is a trend trading system which gives enormous returns while trending markets and many whipsaws in non trending markets. Keeping our
economy in view, this is going to be a profitable system in coming years as we are in an age of trending markets (either up or down). In this system we make
use of 3 EMA; 150 EMA (Long term average), 70 EMA (Medium term Average) and 20 EMA (Short term Average).
Buy Setup A typical buy setup occurs when the Short term average (20 EMA) crosses over the 70 EMA with the 70 EMA being above the 150 EMA. Same
principle (but reverse) goes out for short trades.
Sell Setup Exit the trade once the short term average (20 EMA) crosses the medium term average (70 EMA) form above.
Important Notes To use this system effectively, exit the positions once you get returns in the range of 50-70%. Start offloading the positions once 50%
return is on the cards.
----------------------------------------------------------------------------------------------------------------------------------------------------------------

To be a Trader-20yrs Page 175

Accumulation
05 July 2015
12:44 PM

Accumulation is always on the cards watcher. However one has to weigh in the current scenario. Markets are not going anywhere . Investment opportunities will
always arise and the one with patience will be rewarded.
At present the markets are a bit heated. It might run up to new highs and hence missing out on the rally also seems unwise. W hat I have done at present is
committed only 15 % of my cash. I was in the market sub 2800 levels and now I am waiting for a reasonable dip before starting to commit more funds.
IIP numbers for the country have exceeded everyone's expectations by atleast 1.5%. Inflation rates are rising and the credit demand is picking up. Credit growth
usually lags behind the industrial growth by about two quarters. Hence by keeping this view in mind, the RBI is almost likely to increase the repo rate and
reverse repo rate.
I am waiting for the rate impact and the budget impacts on the market. During this duration, we will get a good entry price a nd I would then increase the
position.
..............With reference to EMA setup for weekly trade, is it EMAs crossing each other or price crossing EMAs ? I checked with 20, 70 & 150 EMA for most stocks
for last one year period. There is hardly any crossover of EMAs in most of them for last one year whereas this set up is supp osed to be for weekly trade. In other
words if EMSs donot cross, trade will not be initiated in the first place.
Alok, the 20 EMA crosses the 70 EMA. I have put this in the weekly setup because I have not created a monthly category on the 1st page. This is a monthly trade
if you actually test it. Returns are good when held on for months. Such setup happens once a year (if it is successful, its r eturns are good).
Almost all the trending stocks this year have given this setup between Apr and May ...
..............Actually, I was never vouching for the markets to crash. I was expecting a fall before 5300 is breached. See, c orrections like these which happened in
last two days are healthy for the market.
I totally agree with you on the points you had mentioned earlier. Hence, untill something major happens, our markets will con tinue to do well. My only concern is
that the price structure of Shanghai, Hangseng and now Taiwan is not looking good. Whether this scenario spills to our market s or not,
--------------------

I had shorted the Nifty at 5230 as previously mentioned and I squared off 70% of my short positions today. At present, I want to tell you how I am trading the
nifty. Refer to the figure below. The nifty had violated Trendline 1 (marked in white) and hence shorting was a good opportun ity. Now, after two days of volatility,
the Nifty has taken support at Trendline 2 marked in Red. Till this support prevails, I will look to be long in the market wi th fewer short positions for restricting
loss. Support at trendline 2 was formed with hammer-like formation and support has a good chance to hold.
Now, the markets have broken the trend line 2 mentioned in the chart above. This leads us now in the 'wait and watch' period for the markets. The markets from
here can either fall or can stagnate. Bounce from these levels is almost likely. However, I will be very circumspect regardin g the rallies in the market. I am still
accumulating shares in very small quantities for my long term portfolio. However, I am completely out of the market's as far as trading is concerned.
An ideal market participant has to switch roles in the market. Currently, the 'investor' role is likely to be more profitable as the market's may witness great deal
of volatility which may lead to losses for traders.
Here's the updated view of the market. If the Market's don't claw back and hold on to 4900+ levels, then it can tank down to 4650-4700 levels. .
There are few things I wanted to say,
1. We are not in a bear market. That's why I don't think any rally here is a bear market rally. Nifty is going to make a new high this year and I strongly believe in
this. The market would change it's stance from Bull to Bear when 4500 and more importantly (3900) get's taken out decisively.
2. TA assumes that the trend will continue in motion till signs emerge to suggest otherwise. As of now, there is nothing that suggests this. It is human tendency
to get shaken up by such corrections and volatility. How much has been the rise since April and how much has been the correct ion recently ?? As traders and
investors we should not draw conclusions so early.
3. What Dow is doing currently is completely different. They have a structure economic problem which is far from getting over . The recent changes in US policies
do indicate that. Hence, before linking Dow with Nifty, we need to consider the economic structure of the countries in perspe ctive. The transition of growth and
benchmarking has to take place from the US to the Asian countries. Hence, the impact might be there initially, but It wont be a permanent one.
4. The RBI quarterly review released yesterday indicates that in our economic system, things are progressing well and though monitoring is still been done, there
are no apparent signs of any weakness.
5. Technically Nifty has formed a high wave candle (indecision of movement) on Thursday and a strong hammer on Friday. Hence, clinging on to these levels is
not such a bad idea. Volatility will be there and hence trader's should stay out. But, for long term portfolio, it is not a b ad idea to accumulate stocks. If the
market signals a bear move ahead, then we can liquidate always. But anticipating what the market is going to do is always fat al.
The earlier short signal at 5300 was given by my positional system .
----------------------------------------------------------------------------------------------------------------

To be a Trader-20yrs Page 176

For Investment Purpose Only


05 July 2015
12:45 PM

Stocks selected here are not based on any system mentioned in the thread. This is based on my own personal system which I use for my trades.
Unfortunately, it is not an AFL but a customized application.
. Please select stocks out of these lists suiting your own investment criteria. These are pure technical play outs and I don' t know whether they are
fundamentally strong or not. [31 jan'2010
......RSI Divergence Strategy Using Daily Charts
Tools Candlestick/Bar Chart, RSI(15)
Trade Setup On Daily chart frame, this strategy is going to give out extremely good results if you continue to stick with it. The setup i s fairly easy, but you
do need to monitor selective group of stocks to get a feel of their levels. Hence, this strategy does require some subjective analysis.
Time Validity - I trade this pattern only on daily charts. I use this particular time frame because divergence is more easily visible here. O nce the trade is
initiated, I carry forward the trades for 2-7 days.
When does it occur and How to Trade it- This pattern occurs when a stock or an index runs up quite a bit and retraces back to some level. From there on,
the stock/index ralies again and makes a significant new high. It is during this high that we need to look at the RSI level. If the RSI level is significantly low
than the previous high's level, then initiate short position with High of the rally as a stop loss. I have particularly used this strategy to short the Nifty recently
at 5300 level which I had disclosed on this thread.
Examples - I have provided example of Nifty. Refer to the chart below to understand the setup properly.
, though I have provided some setups on Intraday, I personally don't use intraday that often in stock market's. In forex thou gh, I am mostly a day trader
and hence I avoid carrying positions forward.
I'll advise you to pick one intra day setup and master it. While doing so you'll automatically realise the screening procedur e. Screening procedure is not
entirely mechanical.
....................................
Though these are tough times, I still believe we are in a long term bull market. However, I will change my mind once 4540 and more importantly 3900 get's
taken off. My long term system has indicated closing off long positions on Nifty but has not indicated short positions.
It may seem surprising but I am still accumulating stocks in small quantities for my long term portfolio. Rather than believi ng news going around, I am
trusting the level's reflected in charts. So, I am comfortable till 4540 and 3900 holds.
At present, I don't think we need a system to tell us what's gonna happen in near future. Thing's are getting ugly on global front (just look at currencies,
commodities and stock market's) and I think same is going to happen to us. At this stage I can't take a call on very short te rm movements
----------------------------------------------------------------------------------------------------------------------------- As a human being, we are tuned for this...i.e.to see the people around us with similar thoughts like ours. Unfortunately, tha t is damaging trait in trading.
If you have already setup your max pain limit of loss then take action when that limit is hit. You might be able to take loss of 5Lac that doesn't mean u
should wait till it reaches that level. After big loss, recovery would be difficult.
If you are not able to take the pain, then my suggestion will be to atleast cut your position partially, rather then fully. T ry to see historical pattern in chart,
and observe
- how much steep a fall could be
- what happens after that
- how much worse can it get in short term etc.
- what signals appear that indicate bounce is fizzling out and downtrend is again building up.
Based on that draw down ,prepare OWN strategy to play in the market.
In my observations, all global markets have fallen 5 to 10% in last 5 -6 days with no real bounce. Selling after selloff is typical trait of novice /immatuare
traders. Even if market has to goto 4k level, it will not happen in one wave.. there will be bounces in between.
After such steep fall, bounce is inevitable but can't predict whether this will happen tomorrow or in next 4 days. Hence DON' t be contrarian and build long
position until u see some signs of bears disappearing. Bulls will keep showing up but they get beaten down again.
There could be bounce which might help you in cutting your loss. If your system told you when to enter, you must trust it for when to exit. By taking my
views or any other user's view, you are cluttering your mind with too many things.
Things are going to get tough today. We have to see where we go from here. For your future reference I'd suggest you to pract ice the probe test buying
technique.
As far as your current positions are concerned, you might well be selling off in a typical "Sell off" situation. You might ge t a bounce back.
If your stop's have been triggered, it's always better to exit. Else, I will stand by the system (assuming that your system i s back tested with good results).
----------------------------------------------------------------------------------------------------------------------------- ----

To be a Trader-20yrs Page 177

Trading is not a Game.Its a Business


05 July 2015
12:46 PM

trading is not a game... its a business...


Before entering any business You should have good knowledge about it and how to manage it.
Because in trading lots of risk involved...
Stocks for Investments Only. Keep away from low volume stocks.
________________________________________
Dual Time Frame Momentum Strategy
Tools Candlestick/Bar Chart, Stochastic (8,3,3) Daily and Stochastic (8,3,3) Weekly
Trade Setup This setup was made popular by Robert Miner. The basis of this setup is to use momentum of 2 time frames to get into trades. Though Robert
Miner also showed how to use E-wave and fibonacci with this setup, we will essentially stick only with the basic dual direction momentum setup.
Trading the Setup - Switch to the daily chart mode to use this setup. Below the main price window, you must have Stochastic (8,3,3) daily time frame and
Stochastic (8,3,3) weekly time frame. It is absolutely essential to have both the stochastic windows (one for daily time frame and other for weekly time frame)
on the same time. We enter the trade when the Weekly stochastic has crossed over in the oversold range (usually should have crossed around the 20-30
range) and is pointing up. We then pay attention to the daily stochastic and then buy when the daily stochastic crosses on the same mentioned range. When
the daily crossover happens, the weekly stochastic should not be in the overbought range. Best signals in this setup occur when both the weekly stochastic and
daily stochastic cross together. One such example, in the case of DLF has been explained below.
Target - Continue to hold the stock till the daily stochastic indicator does not signal a typical sell signal (that is, bearish crossover).
Stoploss - Stop loss in this strategy is fairly simple. Either this strategy works or it fails. Thus whenever the signal comes, do not take loss of more than 3% on
the trade or keep stop loss of previous swing low. This strategy has a success rate of about 60%.
Note - This is not an investment strategy. Hence, do not continue holding the stock. This is pure momentum play. Buy it and exit once you get good gains and
when the sell signal emerges. For better understanding I have cherry picked this example. Like all the strategies, even this is fallible.
Time Frames - You have to pick out proper pairs to execute this strategy. Here I have used Daily - Weekly pairs as I don't believe too much in shorter time
frame trades. You can experiment by using 30 Min - 5 Hour pair or 5 Min - 30 Min pair. But bear in mind that there will be a lot many false signals as you
continue to shorten the time frame.
the main point in this setups is that when both daily and weekly stochastic hook out of the oversold zone...above 20 at the same time...only then we should
enter the trade
..Simultaneous crosses and moving out of zones give the best signal ...
Otherwise even if weekly has moved out earlier (but not overbought) and daily gives you a buy currently ... even then u can enter.
My target is to read at least one book about trading every month and this month it is a book about selling strategy's on options on futures from John Summa.
.................................
FOR Watcher : that's going to be very difficult to do. See, its a complete portfolio and I cant specify which one's are the strong one and which are the weaker
one's. All stocks are buy's based on various parameters. Minimum holding period is 1 year. So, it may be that they are not performing now, but they might
begin to perform in coming days.
Watcher, am not an avid supporter of support and resistance hence I wont give you any level. But, I am looking for 4540 as a critical point. Not because it is
some major support level but due to its relevance in determining the structure of the market. I will begin to worry when this level is taken out. Hence, till this
happens, I will continue to hold on to my positions. It is better not to anticipate in this scenario. I invest equally in every stock that gives a buy. That way,
investment gets diversified and investments remain small and well divided.
As of today, most of the stocks are giving better entry points. I will continue buying till the market does not show me structural changes. No matter who the
chartist is, till the market shows me the change, I will never react.
......What I appreciate most in you is not the conviction but the clarity of thought. Because the former is the effect and the latter the cause.

To be a Trader-20yrs Page 178

Using ADX for Profit


05 July 2015
12:46 PM

Using ADX to Profit


Tools Candlestick on Hourly Time Frame , ADX (14) and MA 20 period
Trade Setup A 14-period ADX must initially be greater than 30 and rising. This is mainly done to identify strongly trending market. Once the initial job of
identifying a strongly trending market is undertaken, then look for a retracement in price to the 20-period moving average. When the price touches the 20period moving average, buy above the high of the previous bar and ride the trend. The buy signal should come within the next two trading sessions. If this does
not happen, then the pattern is void.
Example - Below is an example of Auropharma which has been one of the trending stocks in the current run (look at the 14 period ADX below). I have
highlighted three areas where the price has touched the 20 period average and formed the pattern mentioned above. Everytime the prices touched the MA 20
period average, the next bar high has given the entry signal. Profits usually should be taken once the price moves 5-10% away from the moving average. This
pattern is extremely effective but works only with strong trending stocks.
STOPLOSS - Stop loss is if the price closes below the 20 period average. Also previous swing low can be used.
Usage - Can be used on Daily time frame chart.
______________
15-Min Intraday Setup
Requirement Candlestick Charts/Bar Charts with MACD (standard setting) and MA (50), EMA (20) and EMA (10)
Brief Introduction I came across this setup while watching Greg Capra's seminar. I have modified this setup based on my trading experience.
I have added the MACD indicator for filtering out bad trades. The setup is simple to understand and implement. This setup is extremely effective to day trade
and can get about 30-50 points on the Nifty. Please use this strategy on Nifty as I have researched this setup on it.

Trade Setup - Pick a stock which has run up quite a bit and is due for a correction. A typical setup occurs when the 50 MA slopes down (with angle between
20-30) and prices fall sharply. Eventually prices retrace back to 20 EMA or 10 EMA which also happens to be the 38 -50% retracement from the swing high.
Enter a short position at this point and book profits according to your own appetite.
Example - In an example shown below, Nifty has run up quite a bit and has formed a new high. Prices start to drop off from this level. Over the period of two
days, the slope of 50 SMA starts to curve down and the setup is formed. Prices fall off on 14th sharply and then retrace back to 20 EMA on the 15th. This level
is also between 38.2 and 50% retracement level from swing high. MACD slope is negative and is about to turn below zero. Ideal setup for a short trade.
StopLoss - Stoploss if it breaches the 20 EMA and reaches the 50 SMA. Ideally, one can stop if the trade breaches 20 EMA.
Usage - This pattern can be used on 15Min charts for day trades.
-------------------------------------------------------------------------------Markets have potentially entered an 'iffy' period. I don't know how long this would last. But as of now I am not adding long positions. I would particularly wait
now for the previous high to be taken out (5330). This would be a good point to go long. As of now though, I am sitting with tight trailing stop loss waiting for
the market's to show me what to do.
Markets globally have rallied for quite sometime now. In particular if we speak of India, investors have got a healthy return of over 70% on the index alone.
There has been no notable period of correction in this one year period. Probably equity markets were having their best time last year as a result of low interest
rates, low P/E multiple and the positive growth story of India. However, at this juncture, things dont look that positive. World market problems are beginning to
creep up, commodity and oil prices are rising, dollar is continuously falling and the inflation rates are heading north. Typically these scenarios are never good
for stock markets and I feel now it is time to book profits and have cash in hand (atleast 75%).
The current price rise and the currency appreciating is a sign of problems to come in the stock markets. The RBI which will meet this month for monetary policy
review is already hinting at hiking interest rates. The IIP numbers have been good in the past and on Monday if the numbers turn out to be more positive, then
it would almost ensure a rate hike in coming few days. Moreover, if one observes the market action closely, Capital good sector and Basic material sector is
beginning to do well. These sectors usually do well in middle expansion phase of economy where rate hikes are part of the economic scenario. On 13th April
2010, Infosys is going to declare its results and guidance. It is perhaps going to set the tone for the markets. Even if the markets continue to rise, I would
personally be very skeptical regarding the rally. Upside may indeed exist, but the risk to reward ratio does not favor a trade currently.
_______, what is the cut off point will you place to exit all longs, for example your long time investment portfolio. Will you advice to exit in the event of market
correcting? or will you advice to hold all longs irrespective of the fact correction setting in?
Sai, last week I squared off 40% of my portfolio. In the coming week, on Monday, I am going to offload another 40% or so. See, I am not positive on the
market, because technically and fundamentally it is not the right time to be investing. I'm willing to miss out on another 1000+ rally but I am not willing to go
against what I am thinking. In the mean time I will be undertaking swing trades so that even if market's correct, I am not hurt badly. On an average I have had
a very good return on my portfolio and I don't intend to be too greedy for another 10-15% or so. Once I am comfortable with the market's, I'll return back to
commit funds.
But for me, as of now, swing trading seems to be the flavor of the month.[11april 2010]

To be a Trader-20yrs Page 179

Thrust Swing Trading


05 July 2015
02:14 PM

Yes thrust Swing trading essentially means staying in stocks which show good momentum (upwards or downwards). Swing trades may or may not be based on
news. I personally dont care about the news. I have a system/methodology for swing trades and i follow that.
If Nifty closes around these levels or it closes below current levels (5350) but not higher than 5380, then we could be potentially forming a tweezer top or
harami pattern on the candlestick chart. The fact that this will form around good resistance level will make it more meaningful. Let's see how Nifty spans out.
[12 th april2010
Tools Candlestick/Bar Chart
Trade Setup This pattern was popularized by Larry Connors and Linda Bradford. Now everyone knows the original turtle trading system where shorts were
initiated when new 20 day lows were made and longs were initiated when new 20 day high was made. The problem with turtle trading system was that it had
many false signals. This pattern tends to capitalize on these false moves.
Buy Setup - The typical buy conditions are as follows. The market makes a new 20 day low with the previous 20 day low being atleast 3 sessions ago. The
current close should be near or below the previous 20 day low. Following this, the next day market rebounds and trades above the previous low (ideally should
close above the previous low). Enter the stock by placing a stop at the previous low. This offers an excellent risk to reward ratio.
Time Validity - This pattern has to be looked for on daily charts. But the trading time frame should be of 3-5 days. Book profit after 3-5 days.
How to trade it - As most of my previous examples, I have again picked a stock which has recently formed this pattern. I recommended Balrampur Chini as a
buy in my swing trading thread. And this was precisely why. Look at the chart below. Balrampur forms a 20 day low (Rs 90.3) on 25/03/2010. After this the
stock rallies a bit and then again makes a new 20 day low on 1st april 2010 (Rs 87.7). Now, on the next session the stock closes at 90.8 which is above the
previous low of Rs 90.3. We enter here placing a stop at 87.7 and trade on the long side. Currently the stock is trading at Rs 99 which is about 10% gain in 6
trading sessions.
Target - Target is specified in time. Book profits in 5-6 trading sessions.
STOPLOSS - Previous Low made.
The Turtle system was essentially built (conceptualized) on the Donchian channel system. So when this fails, turtle soup plus one and turtle soup comes into
the foray.
Here's an AFL to plot horizontal lines at 10 day high and 10 day low. By right clicking on the parameters window and adjusting the value, one can plot lines for
any duration. This will visually help to scan the Turtle Soup plus one strategy mentioned.
_SECTION_BEGIN("N_Day_HiLo");
// Set chart display parameters
// Chart background is Black,
// Date Axis displayed,
// Long titles wrapped to next line
SetChartOptions(0, chartShowDates | chartWrapTitle);
SetChartBkColor(colorBlack);
// Locate Highest HIGH and Lowest LOW in last N days
N = Param("Days to go back(Excl today)", 10, 2, 200, 1);
PriceStyle = ParamStyle("Chart Type", styleCandle, maskPrice);
LineStyle = ParamStyle("Line Style");
NDayHi = H[BarCount - 1 - N];
NDayLo = L[BarCount - 1 - N];
XH = XL = BarCount - 1 - N;
for(i = BarCount - 1 - N; i < BarCount - 1; i++)
{
if(H[i] > NDayHi)
{
NDayHi = H[i];
XH = i;
}
if(L[i] < NDayLo)
{
NDayLo = L[i];
XL = i;
}
}
// Define the Lines to be drawn
HLine = LineArray(BarCount - 1 - N, NDayHi, BarCount - 2, NDayHi);
LLine = LineArray(BarCount - 1 - N, NDayLo, BarCount - 2, NDayLo);
// Plot chart
_N(Title = StrFormat("{{NAME}} ({{INTERVAL}}) {{DATE}} {{OHLCX}} Vol=%1.0f\n{{VALUES}}", V));
Plot(C, "", colorGrey50, PriceStyle);
Plot(Hline, WriteVal(N, 1.0) + " Day Hi", colorBrightGreen, LineStyle);
Plot(LLine, WriteVal(N, 1.0) + " Day Lo", colorYellow, LineStyle);
_SECTION_END();
__________________
In my view, Results tell the history..i.e what happened in last 3 months / 1 year.
whereas, stock market discounts the future earning in price. So even if results are good,
current price of reliance already takes it into account.
Do you think those highly paid analysts /fund managers have not done their analysis ?
My common observation is, if results are good, price jumps for short time, or few days due to purchase by novice who think they are smart and making sound
fundamental investment decision, and very soon, professionals come in to dump their stock and price drops or corrects.
And, CEO's are another breed of human being.. in bullish market, they are more optimistic about their projection.. and when market is bearish, they dump all
the bad news.
One thing that my expensive education taught me was that "The best sellers in the world are not the one's who win a Pulitzer or a Booker's prize. But they are
the one's who sit at Wall Street"
I agree, what is the cut off point will you place to exit all longs, for example your long time investment portfolio. Will you advice to exit in the event of market
correcting? or will you advice to hold all longs irrespective of the fact correction setting in?
As of friday, I am completely in Cash now. Have descent amount of short positions though. Don't mind missing the upmoves from here (if they happen)
It may seem surprising but I am still accumulating stocks in small quantities for my long term portfolio. Rather than believing news going around, I am
trusting the level's reflected in charts. So, I am comfortable till 4540 and 3900 holds.
At present, I don't think we need a system to tell us what's gonna happen in near future. Thing's are getting ugly on global front (just look at currencies,
commodities and stock market's) and I think same is going to happen to us. At this stage I can't take a call on very short term movements.
..........................................
In my observations, all global markets have fallen 5 to 10% in last 5-6 days with no real bounce. Selling after selloff is typical trait of novice /immatuare
traders. Even if market has to goto 4k level, it will not happen in one wave.. there will be bounces in between.
After such steep fall, bounce is inevitable but can't predict whether this will happen tomorrow or in next 4 days. Hence DON't be contrarian and build long
position until u see some signs of bears disappearing. Bulls will keep showing up but they get beaten down again.

To be a Trader-20yrs Page 180

There could be bounce which might help you in cutting your loss. If my post make u think then do keep in mind that there are same 50% chance that the pain
might get worse before it can get better. Nimish I agree with what AW10 has said. If your system told you when to enter, you must trust it for when to exit.
By taking my views or any other user's view, you are cluttering your mind with too many things.
Things are going to get tough today. We have to see where we go from here. For your future reference I'd suggest you to practice the probe test buying
technique.

To be a Trader-20yrs Page 181

Trading Positive Divergence on Daily Time Frame


05 July 2015
02:15 PM

Tools Candlestick/Bar Chart, Stochastic Oscillator with standard settings (15,3). Overbought/Oversold conditions used as 80/20
Trade Setup The basics of this setup is very easy to understand. If possible, monitors stocks which move in any kind of market. Typically these are high beta
stocks. However, most of the stocks traded in Futures segment should do fine. What we are looking for is a stock making a new high whereas the stochastic highs
forming a lower high. That means, stock makes a higher high and Indicator makes a Lower High. This is highlighted in red lines on price and Indicator. Now once
the stock makes a new high, we need to see the indicator levels. If this indicator level forms a divergence and goes back into the neutral zone (that is below 80)
then we short the stock, keeping the high as our stop loss. I usually target a 5-8% move. Remember, the divergences should occur over period of 1-2 Months.

Time Validity - I trade this pattern only on daily charts. However, it can work on any time frame. Please remember to adjust your targets accordingly. On daily
time frame I use targets of 5-8%. On an hourly frame, this comes down to about 2-4%.
How to trade it - Refer to the chart below. Gujrat Ambuja made a high on 3/29/2010. It then rallied in April and made a new high on 29th April 2010. There was a
distinct divergence visible on the charts. We now wait for our indicator to go into the neutral zone (that is, below 80). This happens on 30th April 2010. We get
filled at 121.05 and keep a stop loss of 125.8. Over the next 10 sessions Gujrat Ambuja attains the target of 5-8%. The stock goes down much lower, but we
maintain out targets and exit the trade.

Adding Positions - Divergence setups usually have very good risk to reward ratio. When trading these patterns with indicators, there is always a risk for the
indicators to reverse and the price to move up. Hence, we need to take use of signals which are perfect. To do this, what we do is add one more lot once the
stochastic indicator goes below 50. Usually indicator reversals for perfect signals rarely take place below 50. Hence we add position here. This is depicted by Blue
horizontal lines.
Target - 5- 8%
STOPLOSS - Recent high of prices
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Usually how u trade breakouts? I read that we should trade the pullbacks of breakout and not breakout.Take LT, it gave breakout on 17/05/10. I didnot enter as
such a huge volume and it went up from 1474 to 1606 in a day.But two days past its still going up only. Now waiting for pullback,but missed a gud move.
So in general how we should trade breakouts?
Trading breakouts on pullback is "Ideally" the right way to do it. However, let me tell you something. Most of the breakouts which do run up quite a bit are the
one's which never give a pullback. Hence you need to see how and when the break out occurs. If the stock has been negative (not so bullish) for quite sometime
and then you suddenly see it breaking out of a range, then this kind of breakout will run up fast.
E.g: LT was trading weak. It suddenly broke out and is now heading high. Broke out after news hit the market.
E.g: RNRL was doing the same. But the news even was yet to be delivered. Hence you need to be careful.
Hope you get my point.
..........................................
Let me give u a small story
Once a person was learning astrology ok
after some time he tell that I know now everything about astrology
person ask him what is in his feast (hand)
He started calculation and in that it comes that there is something living thing with more then 4 legs
he tell at once wow see my calculation its OCTOPUS
he never think that it can b cockroch or ant just like that people saw only chart never see what is happening it gave 15% more then street expectations
I know few person who shorted on that day too and leter cried ohhhh my sl hit
TA is just to help think of a trade after keeping in mind everything
__________________
"Coin Always Makes Sound But The Currency Notes Are Always Silent So When Your Value Increases Keep Yourself Calm Silent"
----------------------------------------------------------------------------------------------------------------------------- --......Either keep a fixed target (range of 30 - 50) points or use trailing profit protection of price crossing and closing above the 10 EMA or 20 EMA in volatile
conditions. Hope this helps.
However I have two points to make.
Firstly, you are using Robert Miner's Dual time frame strategy. Now you haven't taken into consideration ABC correction phase and time retracements. In my
opinion you are missing out on very important factors. You have to consider ABC correction wave and time retracement. It's like driving a car without steering and
brakes. ABC correction phase (is steering; tells you whether market is in correction or trend) and time retracement (is brake; it tells you when to stop). Hence, I
will encourage you to use these two important points in your trade. It's better to master a setup rather than mastering a part of it.
Secondly, since you are relying on fibonacci retracement, I would advise you to use trend lines with it. Using trendlines, fibonacci and candlesticks together give
some of the most amazing trades. Once you master this setup, you will start buying much lower and will make larger gains. If I were you, I would have entered
the trade once the prices would have retraced back to zone 'A' (15 minute chart keeping stop loss of 722).
----------------------------------------------------------------------------------------------------------------------------- ----------

To be a Trader-20yrs Page 182

Swing and Positional Trading


05 July 2015
02:16 PM

Swing and Positional trades are two different things. Hope you get my point.
............................
If you have a positional trade then stick with your stop loss. Weekly momentum is still not positive. Whether it will get pos itive going forward, only time will
tell. Whatever your reasoning was, just stick to your plans. It does not matter what I or other users say. Ultimately, market 's will decide where it wants to
go.
M&M is in a very strong trend. Avoid shorting it. Also, the stochastic which you mention is in overbought zone now. It can re main there for a while and the
stock can continue to remain up. Short weak stocks and Buy strong stocks. Avoid doing the opposite. Look for divergence in we ak stocks.
--------------------------------------------------------------------------------------------------------my 2 cents on this topic.. (specailly from the way i practice it)
- Price is the main source.. and indicators are only derivative of price. So start with price chart.
- I pay attention to price pivots (or swing points - these are points where price has changed the direction) on the chart.. So any analysis is based on price
pivots first..
- to identify divergence, take any two price pivots, and take the oscillator values at that time, compare them and interpret th em.
- If they are diverging, then u get a nice setup..Now go ahead and look at your precise entry rules to take a trade or wait for some more bars to develop
- And if you get Convergence.. it is another signal.. Not to anticipate reversal but confirmaion of trend continuation .. so tr ade that as well.

- while taking a trade on the basis of divergence, keep monitring that oscillator has not negated the prev reading.. (i.e. from oscillator making lower highs, it
has made new higher high).
- I don't call 0.1 or 0.5 differnece in RSI/Stoch as a divergence.. Hence define your own limits to call it divergence.. (say a tleast x% of difference). Similarly,
the price peaks have to few bars away.. not just the 3rd or 4th bar.
Example - say as per EOD chart we in good up trending and intra chart (say 5 min TF) makes a negative divergence and after that it refu ses to fall for
sometime, but it does enough to give negative feeling to many. Then we would get a flying move when price crosses above the h igh. This is because, all
would have gone short seeing the divergence! The way I look for entry with trigger above high. To judge whether we are in cor rect trade not, you will find
price would move 15-20 points minimum in next 5-10 min in favor.

...........................................
.................................................. .........
When u don't see divergence, then ther is potential that u might see convergence.
Look at the left side of the chart that u posted. In Nov, there was small pause in Stoch around 60 level, and then it broke -out from that on stoch. at the same
time price also made new high..
In Dec starting, again there was breakout in stoch as well as in price.
Only in Jan, we see some divergence coming in.
In Early March, prev div that we saw in Feb got negated, price made new high and so the stoch.. and mkt flew to new high afte r that.
Hope you can catch some pointers from this and build further on it .
----------------------------------------------------------------------------------------------------------------------------- -----------------------I wud like to share something from larry connors book... I have not experimented it yet and m still not sure on how this work s... just sharing with you all as I
happen to learn this strategy this weekend only...
1. Stock must be trading near or at 3 months low
2. Today;s volume must be double the 15 days average volume (more than double is better)
3. Either today, tomorrow or day after, stock must close above its open
4. When rule 3 is met within next 2 days, buy above the rule 3 day high
5. Initial stop loss should be placed lil below rule 3 day low.
...........................
I am no analyst nor a guy worth giving an opinion on the mkts but I feel that every transaction that happens in the mkt is a clash of opinion / ideology (the
buyer wants the stock price worth a buy and the seller feels the opposite).
We can all have differences of opinion and thats the charm of the mkts and also of life. But there are civilised ways of putt ing forward our differences. And
also when we put forward a differing opinion then we become party to a difference. Then let the Mkts in due course of time de cide who is correct instead of
trying to pull someone down.
I am of the opinion that there are 3 kinds of people in this mkt.
The first ones (in a pathetic minority in terms of numbers, but the ones who dictate the flow) draw the graphs,
the second ones analyse them and the thrid ones (read morons) keep pestering the second ones for their opinions.
Now I do not know of anyone (and trust me I have worked with many analysts/operators) who are mostly correct about the mkts.
----------------------------------------------------------------------------------------------------------------------------- ----------You can try and use some filters as ADX. Everything mentioned here is a start up. It is not a complete system. You can use a basic setup mentioned here and
create a system of your own with various filters and rules.
.........................................
Look at the big picture first. Now I am going to reply in point terms. Look at the chart while reading it.
1. Look where I have written point 1. I have marked it at a long white candle which was the swing high in mid June. Now, lets come back to the 13th July
candle. What has this candle actually done? It has surpassed the previous swing high made almost 20 days back. This entire th ing happened in one session.
This in itself is a very bullish sign. If ever you would have entertained thoughts of selling, it would only be below the pre vious swing high. That is, below 70.
2. Now see where I have written 2. I have circled it at a place where you sold because of black candle piercing. In my honest opinion, that is not a piercing
pattern. The black candle started above the 13th July candle, but did not penetrate enough to be verified as a piercing trade . Please remember, piercing
pattern is valid only when the black candle, starts above a previous bullish candle and penetrates deep into the white candle (closes atleast below the half of
white candle).
3. I haven't marked the point 3rd on the chart. THis is because this is more of a concept. Usually when you have a long white candle, the middle part of it
becomes strong support. Till the price does not penetrate the mid point of the long candle, do not entertain any thoughts to sell.
4. Make use of moving averages for trend determination. Not for trading decisions. Think about this. Does market care which m oving average you look at??
What you should actually do:

To be a Trader-20yrs Page 183

1. Always look at the intermediate swing high support


2. When using candlesticks, be sure to apply the concept properly. Everyone struggles, even I did, but once you understand wh at works and what does not,
things are going to be much easier.
3. Always and always look at bigger picture before deciding to buy or sell.
4. Most important, define what you want to do with the stock first. In my opinion, clutch auto should not be sold. It is a bu y on dip stock as of now.
----------------------------------------------------------------------------------------------------------------------------- ------------

To be a Trader-20yrs Page 184

Checklist
05 July 2015
02:18 PM

Checklist:
Day prior to set up day 1 has to have close greater than close of four trading session earlier: Y
Set up :9 consecutive close less than close 4 trading days ago: Y
Set up Qualifier: n Ninth day's low less than 6th day's low: Y
Countdown
13 close less than/equal to low 2 trading days earlier: Y
Countdown qualifiers:
Close of day 8 of buy countdown less than close of day 5 of buy count down: Y
Close of day 8 of buy countdown less than close of day 3 of buy count down: Y
Close of day 13 is less than/equal to close of day 8: Y
Confirmation of entry
Price flip appear on day after 13 or before stop loss is triggered Y
Cancellation
An intraday high which is higher than the highest close in setup/countdown: N
An intraday high which is higher than the highest high in setup/countdown: N
Close higher than highest close: N
Close higher than highest high: N
Close higher than highest true high: N
Contradictory set up appeared: N
.................................................. .

This time I m in need of guidance from the perspective of money management or trade management.
What do we do when trade is not going in favor of your analysis and neither it is hitting stop loss? Shall I get out of it with minor loss especially market is at
the stage wherein it can have explosive move either side? I have been holding FDC for last 20 days or so and it is not hitting stop loss and neither moving
upward. I m at loss of around 1 rs per share including brokerage shall I get out of it?
I am a short term trader and usually hold position for couple of weeks... however, I have enough capitalization to hold position further.
As far as I go, if a stock is not hitting your stop loss, then it is definitely going in your favor. So just hold on to the position and see. FDC is low on volatility;
both on day basis and Annual basis. Hence, it will give returns with respect to its volatility. Always consider the stocks volatility (historical) before deciding
upon your level of expectation. Recently the stock is trading with good volatility.
FDC should come down (consolidate) little more before it starts to move forward. Keep SL of 85-86. The double top that you see on the daily frame is as of
now a fake one. Let's see. I'll track this stock. Overall the stock is in a good bullish structure.
.................................
When the number of correction candles increase, it does not always signify bears gaining control. In this case, even though the number of bearish candles are
increasing, the stock is undergoing mere consolidation. The correct way to interpret this is that the "Cycle or the waiting period of the stock is increasing". This
means, anyone now wishing to buy this stock, should be prepared for a little bit more holding time than the situation was on the previous minor cycle. Hope
this helps.
I have been building up positions in Adani from 530 levels. Hence for swing perspective, I had a 40 point profit on average. I purely exited based on this. It
may well go up and had it been for Investment purpose I would have held on to the stock. But for Swing trades I always have some % profit booking zone and
Adani reached those zones. Moreover, I found Lupin on friday, and hence had built up huge futures positions in it. Was up by 4% today, so that kind of also
begins to enter my profit zone.
So if you want a one line answer, here it is. "I prefer to buy at weakness and sell at strength". This is applicable to swing trades only.
.......................................
Nice piece of work. Frankly, I did not see so many things are in favor of this stock. I am more the "Feel" kind of player. If I "Feel" it is good, I just go for it.
The stock is relatively weak and hence I am buying it. I'll sell it when it shows strength. Regarding stop losses, my rules are little different than what book
teaches. I don't kind of look at previous swing lows that often. I monitor the prices continuously and from that I get a feel of whether the prices are going to
slide or going to take support.
If you are talking from text book perspective, then I do feel the SL set by you is appropriate. On the whole Divergence part and ADX part mentioned by you
does bring some value.
................................
I don't know how you pick a stock for swing trades. But for me, fundamentals don't form a part of swing trades. However, if this is the way you do it and are
successful at it, then do not change your method.
As far as technicals are concerned, if markets remain healthy, ABAN should see levels of 925 and 948 for swing perspective. On very shorter time frame, the
stock can also undergo consolidation. Hence, be patient.

To be a Trader-20yrs Page 185

Basically Learning
05 July 2015
02:19 PM

U R BASICALLY LEARNING FROM RAUNAK AKA SWINGKING ,AS COPY PASTED IN MY LAST THREAD'- METHOD HE HAS CHOSEN -Q & A - AS WELL AS
EXPLANATION
.................................................. ..................................................
4. Most important, define what you want to do with the stock first. In my opinion, clutch auto should not be sold. It is a bu y on dip stock as of now.
Waiting to enter .... was on radar ... just at the blue TL. Solid support there .. it i just retracement ... check the volume (not in the attached charts .. imo it
should be on decreasing vols) and then the bounce should be super ...
.............................................
What is your holding period?
Which instrument have you invested in ? Equity or Futures
Anyway, if u have bought equity, keep holding it. Banking sector is doing very well. If you have bought futures, then you hav e to decide when to exit it. On
short term stock is positive.
...........................
In IDEA according to weekly charts, can this be called as a possible breakout from the descending triangle formation? We had high volumes too last
week(though, it was a red candle) when it broke out.
So, is this valid formation?
It looks like it is a valid formation. However, I would still wait before actually buying this for investment. Let it show so me strength.
Stock however is strong on momentum on lower time frames. Hence, looking good for swing trades.
.............................
My 2 paisa...
I agree... I wud wait for previous swing to be carried out if it is descending triangle.... Fundamental thought behind descen ding triangle is, bears r in power
and pushing price down with the maintained lower highs (swing points) and bulls are also having some strength to not let pric e go below certain level and
hence maintaining equal lows (swing points). When we got higher break out from descending triangle means, bears are getting t ired and bulls have hit final
stroke.. it cud be coupe de grace by bulls but what if bears are not actually tired.. They are just setting back and preparin g themselves for final stroke???!!! so
just to make sure who is getting control I wud wait for previous swing high to be carried out with momentum....
Had this been Ascending or symmetric triangle, I wud think of initiating trade on break out...
----------------------------------------------------------------------------------------------------------------------------- -How do we interprete these 3 candles made by NIITTECH? 1st long bulling white candle, 2nd not so long but good sized black ca ndle, 3rd again not so long but
good sized black candle...
As Per Steve Nison, many time we shud or we can combine 2 candles against first one to reach to particular pattern.... so on a similar note, can we say
NIITTECH making bearish engulfing or dark cloud cover???
Kindly give your opinion from your observation on indian market for this type of patterns.?
Look at the chart below. Your chart had too many lines, so read carefully what I have written on your chart.
Look where I have marked previous resistance. It is precisely at a place where bearish engulfing was formed and this now beco mes our primary support area
(Resistance turning into support).
Also look at the base of a long white candle. Usually mid level and low level of a long white candle becomes important suppor t. Hence we have two zones very
close to each other which form good support levels. Also if you look below the long white candle support zone, near levels of 183, NIIT reversed near mid of
june. Hence this intermediate swing top is also a support. So you have three support zones around 190, 186 and 183. If stock goes below these, its time to
exit.
These candles do not represent anything as of now. First candle is not a piercing pattern nor is it engulfing one. However, t hey do represent new resistance
zone at 200. Hence anyone holding this stock should only add further positions once the stock is above 200 levels.
Always always and always see where is your candle pattern emerging. Ask yourself, where is the previous support. In this case strong support zone is in
180-190 zone. Stock is in a good bullish wave structure. Even if support breaks, we need to review our view again.
----------------------------------------------------------------------------------------------------------------------------- ----

To be a Trader-20yrs Page 186

Risk : Reward
05 July 2015
02:20 PM

This might sound strange. But why wait for 1:2 or 1:3 risk reward trades. To me this concept does not make sense. I go for tr ades with 1:1 rewards. It just
depends on the setup and the probability of it running in my favor. This is contrary to what you might have read in some book s. But for me, the concept of risk
to reward is blown out of proportion.
Apurv, this is completely normal. I'll advise you to develop a mechanical system first and trade it till you develop the nece ssary skills to analyze charts with
higher probability using discretion based analysis. Hence be patient, read a book on how to develop systems and then go and b uild one.
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
Regarding RPOWER
What you are trying to do here is very effective. And amazingly this works with very good accuracy. However, ask yourself thi s: What does market tell you
when correction bars are increasing? Can you tell me what this means? If you can't find the answer, let me know.
...............................
Sir I think all depend on experience of traders and his pocket size
But I saw most of people when in loss stay in trade in hope and when in profit they are in a haste to book instead of trailin g and I am one of them too .
.........................
When the number of correction candles increase, it does not always signify bears gaining control. In this case, even though t he number of bearish candles are
increasing, the stock is undergoing mere consolidation. The correct way to interpret this is that the "Cycle or the waiting p eriod of the stock is increasing". This
means, anyone now wishing to buy this stock, should be prepared for a little bit more holding time than the situation was on the previous minor cycle. Hope
this helps.
...............................
Another way is to look at the chart in a Weekly TF too ....
Price has taken resistance at 178 where some amount of supply has come in BUT follow -up supply vols are not there .. that means either the super vols in the
push-up bar of breaking the resistance of 163 has liquidated somewhat .. and the stock may test 163 again once and then bounce bac k ....
But surely it is not in a downtrend as of now ....
Also the 163 levels were a horizontal trading range for many days and has been broken. Target for the same is 163+(163 -136)=190 odd levels ...
If you see previous recent high, it is 210 BUT the body of the candle is from 194 which matches with the horizontal breakout target.
Just a matter of time and patience imo .... and those are two of the few things required in abundance for a trader/investor t o get better of the market ...
----------------------------------------------------------------------------------------------------------------------------- --------------------I have been building up positions in Adani from 530 levels. Hence for swing perspective, I had a 40 point profit on average. I purely exited based on this. It
may well go up and had it been for Investment purpose I would have held on to the stock. But for Swing trades I always have s ome % profit booking zone and
Adani reached those zones. Moreover, I found Lupin on friday, and hence had built up huge futures positions in it. Was up by 4% today, so that kind of also
begins to enter my profit zone.
So if you want a one line answer, here it is. "I prefer to buy at weakness and sell at strength". This is applicable to swing trades only.
.............................
What are we keeping as stop loss for Glaxo? My analysis as mentioned below kindly correct me if I m going wrong...
1> It is hovering at 20 and 50 EMAs and seems to be making base here...
2> Strong divergence from the perspective of RSI (9)
3> Contraction on 8 DMI from higher negative index getting contracted towards positive index - my interpretation is bulls loosing dominance...
4> ADX (8) coming down towards no trend strength zone from bear strength..
5> Combined interpretation of ADX and DMI - seems bear trend strength getting reduced and bulls are trying to get control and displayed as contraction of
DMI...
In my opinion stop loss should be little lower than 2000. Kindly evaluate my analysis and correct me.?
Nice piece of work. Frankly, I did not see so many things are in favor of this stock. I am more the "Feel" kind of player. If I "Feel" it is good, I just go for it.
The stock is relatively weak and hence I am buying it. I'll sell it when it shows strength. Regarding stop losses, my rules a re little different than what book
teaches. I don't kind of look at previous swing lows that often. I monitor the prices continuously and from that I get a feel of whether the prices are going to
slide or going to take support.
If you are talking from text book perspective, then I do feel the SL set by you is appropriate. On the whole Divergence part and ADX part mentioned by you
does bring some value.
----------------------------------------------------------------------------------------------------------------------------- ------------------------As on 27th JUL, 2010 I see that in the cash segment both FII and DII has turned -ve (22 and 222.28 Cr) respectively. In spite of that the indices were up
today. For almost the last 30 days FII were +ve(most days) and DIIs consistently negative. From todays figures can we infer t hat the domestic retail segment
is taking on the strength of the financial institutions? Because we can all see that there is no correction worth its name co ming though everyone has been
predicting the same since a pretty long time.
In case you find my query to be not relevant kindly ignore it.
PS : Was thrilled at the timing of the lupin call, but could not muster the courage to get in at these levels. I am sure that is I follow the thread we will have a
plenty of such successful calls coming from you.
FII and DII data is a bit difficult to relate with overall market situation. It works well in market extreme. But usually it does not work well in between. Hence
what you can do is use the data as one of the indicators to tell you what exactly is happening. On standalone basis the accur acy of this indicator is no good
than other indicators available.
..........................
Now that the fundamentals for the company has improved, the main negativity out of the way, what is the target for the compan y, and does it qualify for a
bullish/ swing trade.
I have gone long on the stock, today, at 885 aug fut 2 lots, added 1 lot at 900. what do you recommend that I should do.?
I don't know how you pick a stock for swing trades. But for me, fundamentals don't form a part of swing trades. However, if t his is the way you do it and are
successful at it, then do not change your method.
As far as technicals are concerned, if markets remain healthy, ABAN should see levels of 925 and 948 for swing perspective. O n very shorter time frame, the
stock can also undergo consolidation. Hence, be patient.
.................................
Today and tomorrow are extremely crucial days for the Index. For shorter term, we would know whether we are going to go highe r or on the way down. The
bias as of now remains on the long side in shorter time frame. ..........29.07.10
.............
Noticed these days ...
LT was down before results were declared. After results ... bcoz they were not as per expectations .. more down .....
Mkt was down bcoz of expectations of tougher stance on credit policy etc. Since they were good .. markets rallied back ....
So maybe today they are down in expectation of bad gdp of the US and if its better than expected we move back up else we stay (no more downs) as it is
already factored in ...
Just thinking aloud .. not necessary though ...
Options OI is showing bottom at 5300 though that can change in an hours time .
...................
Following stocks should do well in short term.

To be a Trader-20yrs Page 187

Following stocks should do well in short term.


Sterling Tools
Shasun Chem
Precision Wires
Mangalore Chemical and Fertilizers
Lanco Infratech
Indian Oil Corp
HDFC Ltd
ETC Network
Dabur
Archies
Andhra Bank
The one highlighted in Bold have their respective futures in the derivative market. Rest are some mid/small cap companies whi ch are looking reasonably good.
Let's see how these work. ..............2.8.10
Statistical probability and practical application of probability are two completely different things. You need to understand this before you can understand what i
write in future.
----------------------------------------------------------------------------------------------------------------------------- ------------------------------------I understand this is your scalped call & you squared it off as soon as you get profit.
Just wanted to know what if you would have hold it with stop loss(say5400) for day & waited till day end. OR you was of opini on that there will not be much
upside for the day.
Just want to understand your logic while closing this trade.
Whenever I trade, I trade with multiple sub divided accounts. I have divided my assets into three categories. Medium term tra der/Investor, Swing trader and
Scalper. So when I scalp 33 points, I am essentially doing it through Scalping section of my assets. It is quite possible tha t on same asset I am long in
medium time frame.
Regarding waiting to square off. My scalping targets are 30 -40 points on Nifty and 60-80 points on Bnifty. Whenever I get it, I just get out. The sooner the
better.
........................
All I can say is that go through this thread. You will find plenty of things that work. In some places, I have actually poste d charts and have explained why they
are a good buy. Most of the things mentioned here cannot be back tested as there is a lot of "relative analysis" involved. I am not entirely in favor of too many
mechanical systems. Human mind cannot be replaced by some "Ghz processor". Although, you will require to train your mind to l ook for set -ups. With
practice, it will come. Be patient.
..........................
I can help you. But you have to do the hard work.
Don't expect some system/software to generate Buy/Sell for you everyday. Had it been so simple, then all the fund managers wo uld have done the same.
Face the reality rather than living in hopes.

If you want to learn, I can help. If you want some system, I can't.
Here's what you can do.
1. Change your attitude !!! Markets pay you to make decisions which are tough, but correct. Market's don't know who Karan Is. Hence, stop being afraid and
be prepared to work hard.
2. Read these two books. Master the trade by John Carter and Trading in the zone by Michael Douglas. In the first book you wi ll find many strategies that
really work. You will need to master any one of them. But you will have to MASTER it. Second book will get you to think posit ively and it will help you a lot
psychologically.
There's no System which can do the hard work which you have to do. I am sorry if this disappoints you. But this is the most I can help you with. I dont sell
systems neither do I give tips. I believe in analysis and that is the path I can show you. I'll definitely help you if you ha ve doubts when you read those books
or for the matter any book you find resourceful. But beyond that, I cant do much and that is an honest reply.
.........................................
In my opinion, trading system is something which suites and fits individual... something like straight fit jeans fits me bett er and boot cut does not... it could be
otherway round in your case...
I wud suggest from my limited knowledge and experience that build your own trading system or pick one and alter it according to your trading style.... i
believe in this... "Read, Read and read a lot... then experiment and then u will automatically know what is ur trading system .."
If you can find, try to read Thomas DeMark methodologies, ADXcellence by Dr. Charles B. Schaap and RSI by John Hayden... Most ly these will solve dillema of
your life...
..........................
PTC
LT
JSW steel
Reliance Capital
Union Bank
Unitech
Those highlighted in Bold are my favorites. Let's see how these do......2.8.10
,,,,,,,,,,,,,,,,,,,,,,
...............
That may be the case blackberry. Accumulation stage is not important. It is the mark up phase after the accumulation phase wh ich holds importance. We have
to see when that begins.
Mark up is the phase we should concentrate.
As it is said that practical experience is better than theories, I would like to share my experience on similar note...
I m holding Aloktext since long bought at 18.50 or so with the consideration of accumulation and then sharp shoot out... Thou gh it gave break out but again
went into consolidation... Undoubtedly I am sitting on lil more than 10% profit which is not bad at all if ur holding period is less than 3 months...
So what I am trying make point is sometimes, accumulation phase gets stretched and we may get frustrated... in today's world sometimes, accumulation
phase is suddenly changed to distribution.
..........................................
Begin to tighten your stop losses. Protect your trading profits in whatever positions you hold............this is key.
.................
Markup phase buying and Euphoria based buying are two different things. Identification of each is extremely important for pro fitability.
..................
Keep a SL of 5575 - 5600 in mind. I doubt we will reach 5600 levels. But then, I have been proven wrong so many times that it makes me feel reall y old at
times. This is where Risk management comes into the foray.
.......................
Regarding setups, its better if you concentrate on positional setups first. Swing trading is something you can learn later. I t is not easy to pick up swing trading.
Hence once you become proficient in positional trading, you can start specializing in swing trading. I'll certainly help you with anything. Keep posting your
charts and your trades and I'll take you through.
----------------------------------------------------------------------------------------------------------------------------- -------------------------------When we measure correlation with an underlying asset, the period of standard deviation of results has to be such that error i s minimized. This means that
although day to day correlation between assets may not hold any value (as highlighted by SM), but long term correlation alway s holds very important
information. This in fact is the correct way to analyze what is happening across the globe. Once we start reducing our time f rame (that is, shift to day to day
analysis) we are attracting more and more random noise in our decision making. Which for instance is any trader's worst night mare.

To be a Trader-20yrs Page 188

analysis) we are attracting more and more random noise in our decision making. Which for instance is any trader's worst night mare.
..........................
In the same line, I try to do my analysis of bigger picture of our market based on our chart. Market follow simple thing most of the time (except certain big
changes) and it always repeats itself someway or other. We do not really need to see Dow for this.
But I too do some inter market relationship analysis. Sometime trading decisions affect this as well. It is always a complex relation, look at how many question
we have to answer, before we can decide what we are going react in current day trading and on the next day (most of us are in terested in these two).
1. If EU has fallen 1% in bullish market, can it bounce and trigger short covering in out market while trading?
2. If EU is negative now, can it be up tomorrow and make a bullish trigger tomorrow. Is it making shorters nervous today?
3. Dow has corrected yesterday, can it go up today?
4. Most Asia have closed down today, can those be up tomorrow?
Its a bit complex I think. Better, we look at our chart and get clue most of the time. Though, some cases, global markets do change the path of our market.
...........................
! What I really want to talk about today is to contrast something "context" free versus viewing something contextually.
The market is a two way auction process Allocates bids and offers in an extremely fair and efficient manner(supply and demand ) Searches out and
reveals market-generated information. If you will begin to think of markets as an auction process you will begin to understand that if highe r prices
are attracting more bids the odds are, that the auction will continue higher.
If higher pirces are cutting off a number of bids, the auction is ending and risk of maintaining long positions has increased substantially.
Of course, just the opposite would be true: if offers were taking the market lower. The results of the auction are what we re fer to as market generated
information. The three components of the auction are time, price and volume.
- Price advertises all opportunities
- Time regulates all opportunities i./e., if it is a good deal, it shuold not be there very long
- And volume measures the success or failure of the advertised opportunities
What is important to realize is that the The Market Profile is a real -time evolving database that capture sand records the markets two -way auctions
(content of slide you see) or, as we say, it allows you to view the market in the present tense
Phil Jackson said when he was managing the Bulls, Winning results from operating in the Present Tense, not rehashing yesterda y's game or playing
tomorrow's game too early.
----------------------------------------------------------------------------------------------------------------------------- ---------------------------------------We can take some questions for Jim.
Freddy [17:06:41]> Hi Jim, am your biggest fan and have been using the profile for more than a year now - your trading concepts are terrific - one of my
biggest challenge as a trader is to correctly anticipate - to the extent humanly possible (!) (and thus have CONFIDENCE in) the TYPE of day (and when there
are changes in conditions invalidating such analysis) - breakouts from low volatility, failed auctions or gaps are typical clues for possible trend days, and
neutral internals (breadth / volume) and no strong money flow clues for neutral days - any of your own tips you could share on that?
Also, if you don't mind , I'd like to hear you on how you use stops (on neutral and trend days) and how do you take into acco unt the risk/reward ratio (and as
well leverage) for your trades, any minimum RR you are looking for, any particular situation where you use more leverage, etc . thx Jim ! You rock
FReddy: the first thing I look for is to see if we are opening above value , within value, or below value
I look to see how much confidence there is around the opening For those who have read Markets in Profile you are aware that w e describe 4 types of
openings:
- Ranging from very high confidence, to very low confidence.
- Trend days, seldom occur, following an opening that takes place in the center of the previous days value.
- An upside trend day, for example, more often occurs when the market has opened above value for the previous day, combined wit h a high confidence
opening OR
- When the market has opened below the previous days value area and particularly below the previous days lowest price and shows a high confidence opening
to the upside (in the case of a long)
Once the trade is entered, it then becomes important to monitor the trade for continuation. By this I mean, the profile shoul d remain elongated with the
point of control that steadily migrates higher throughout the day Additionally, I would expect to see the market "one time fr aming" By one time framing,
if the market is trading higher, I mean that the second bar or period, does not take out the low of the first bar but does ta ke out the high of the first
bar (30 minute charts) With this process continuing throughout the day An inside bar, where price remains totally within the bar from the previous period,
..does not negate the one time framing action.
It is rare to have a trend day, where the market would stop "one time framing" for more then one period. This is my choice, n ot recommended for most: but I
seldom use stops, rather, I rely on changing market structure to tell me that my trade is not developing as anticipated.
rolcol [17:13:49]> (going from CQG display & Stedlmeier observations) ..........do you have any comments on either I/J (12 -1 pm cst) or M/N (2-3 pm cst)
overlap periods and their tendencies?
I do not consider issues like this even though from time to time they may have relevancy. I have found that by thinking of th ese types of things
thinking in terms of what time periods' highs or lows are made thinking in terms of average range extension actually diminish es my mental flexibility
and has a tendency to trap me on the really important days such as trend days.
To expand on this question, when the market is in a relatively narrow trading range for the day, these type of things that yo u bring up are meaningful,as are
more traditional technical indicators.
However, on the BIG days, when the long term money is in the markets, these type of indicators get blown away and can do some serous damage to short
term traders. It is not uncommon, to hear traders say they make money most of the days. However, if it hadn't been for one or two days of the month, it
would have been a great month.
By focusing too heavily on shorter term indicators it is too easy to miss the changes that occur as serious money quickly ent ers the market place.
----------------------------------------------------------------------------------------------------------------------------- -----------------------Kindly have a look on chart of IFB Ind. IMO, it is resuming upward journey after having little rest and consolidation.
Break out confirmations:
1> RSI (9) breaking out of down TL as well as breaking above previous peak
2> +DMI (13) breaking above its previous peak
3> Low volume during consolidation and significantly high volume on break out
4> ADX (8) moving above level of 20 to 25
Feel free to correct me if I am going wrong anywhere...
It's in a very strong uptrend . But let it cool off a bit. Accumulating it from levels of 130 would be ideal. Fundamentally this company will do good in coming
years. Business model is very encouraging. 5.8.10

To be a Trader-20yrs Page 189

years. Business model is very encouraging. 5.8.10


----------------------------------------------------------------------------------------------------------------------------- ------------------------I have mentioned many times on this thread that I don't trade through systems. Some times (only some times) when I scalp, I t rade with systems. I am a
medium term trader/investor and hence my analysis has lot to do with subjectivity. I dont have a setup/system which gives buy /sell signals. I have a
customized software, which suggests whether the asset is worth investing or not based on Fundamental and Technical parameters . That software is something
on which we operate our funds and i cant release it in a forum.
I suggested you Asnavale's setup because it is something that works. He has explained it beautifully. It is a positional base d system. Hence that should be
good for you to start with. later on you can read and develop your own system.
.....................
It entirely depends on your risk appetite. For me, protection does not mean buying options. When I am short on Index, and the Index keeps rising, I simply
open up long futures positions in stocks which are making the Index move higher. As stocks in the short run, tend to outperfo rm the Index, I gain in long
futures and if I am right shorting the markets, I gain in that too. Else, I close my positions. The key here is to know the v olatility component in each
instrument and choosing optimum position size to offset the losses in Index with the gain in Stock futures. Its a bit complex , but I hope you got the gist of it.
----------------------------------------------------------------------------------------------------------------------------- -------------------------I'll still stay away from these If's and But's. Till the price begins to move, I'll prefer to not listen to any of this. I am more comfortable in catching a trend,
riding it and exiting it when I have some profits. Rather than, buying something first, sitting on it and waiting for the tre nd to appear. Its just more stress free.
.................
IMO, Objectiveness is not in system, it is in mind... When one is running high on emotions, it is really difficult for the pe rson to be highly objective and keeps
on failing... it is common across the globe - no matter whether it is business of trading or any other profession.
I would like to share my own experience - when I passed out with my software degree back in 2003, I was struggling hard to get decent job (IT was just
coming out of wounds). I started getting into trading just to keep my mind occupied and get lil relief from the frustration o f being BE-ROJGAR. Here my point
is I was not going through balanced mind set... During those days I kept on jumping on to different methods, systems, strateg ies and nothing worked for
me....
Then eventually, I got the job in the world of software in 2005 and started getting into balanced mind set... now what I m ob serving is same bloody methods,
systems and strategies started working for me as big as one can say WOW WOW WOW! Then I started getting feeling that it is pu rely luck that these methods
did not work back in 2003/2004 and now in 2006/2007/2008 I am lucky and they are working.... then again they did not work in 2009 so I stopped trading
with the thought that year 2009 is not lucky enough for me...
Then in early this year (2010), I accidently happened to visit one website related to meditation and attended a seminar on th e subject matter of Left and Right
Hemisphere of brain and its functioning...
Then I started going through thought process of why I failed in trading in 2003, 2004 and 2009???!!! Why I got beautiful succ ess in 2007, 2008 and
2010???!!! What is common???!
As a result I realized that during 2003/2004 I was going through professional problems in life and in 2009 I was going throug h personal problems in life...
During both the phases I was not working with balanced right and left hemispheres of brain i.e. in simple words I was not hav ing balanced mind set due to
high degree of emotional flows.. Here emotions cud be anything anger, greed, fear, utter pessimism, utter optimism, access ha ppiness, access sadness etc....
As a bottomline, I would say balanced mindset is key to success in trading... many new traders/readers here might be facing s imilar problem. Observing
Karan's posts I started getting flashes of my past (No personal offense Karan, just got into some past memories)... My intent ion of writing this long story is to
explain that be calm, cool down ur emotions, sit aside and think think think....
I can talk or write as long as you want on this subject so better now I end here with the last word... I love Thomas DeMark's statement, "Read, read and read
a lot, research a lot and experiment a lot..." I personally say, reading, researching and experimenting is very helpful in co oling down emotions
----------------------------------------------------------------------------------------------------------------------------- -------------------------

To be a Trader-20yrs Page 190

Use of ADX / DMI


05 July 2015
02:25 PM

Since this thread is related to trading strategies, I would like to share my collection which I consolidated from different books... Kindly experiment at your own
risk...
Currently I am researching on use of ADX/DMI. I have selected ADX/DMI because it is not so widely used and popular and hence could give very effective
signals. I would surely share my study after sometime.
Buy Set ups
1 2 3 4 Method
1. ADX must be greater than 30
2. 14 days +DI reading must be higher than 14 days DI reading
3. Wait for the market to have 1 2 3 correction i.e. 3 consecutive intraday lower lows or 2 lower lows and one inside day
4. On day 4 only, buy 1 tick above day 3 high
5. Initial stop loss should be placed day 3 low.
Volatility Observations
1. Whenever 10 days volatility is 50% or less than 100 days volatility, large move is likely to occur
2. The longer the time frame a historical volatility remains under 50%, the larger the move will be
3. When these occurs look for the larger bar within last 9 days and trade in the direction of larger bar
The 8 day low reversal method
1. Day one must be 8 day low
2. Day two must trade above day one high
3. Day three or four or five or six must trade under the low of day two (this can be new low)
4. When condition 3 is satisfied, we buy one tick above day two high within next four trading sessions
5. Stop loss goes one tick below day two low
Spent Market Trading Pattern
1. Today it must make 10 period low
2. Todays trading range must be the largest range in last 10 trading sessions
3. Todays close must be in top 25% of the days range
4. Tomorrow or day after, buy one tick above todays high
5. Stop loss goes one tick below todays low
Sell Set up
1 2 3 4 Method
1. ADX must be greater than 30. Higher the ADX is better
2. The DI must be greater than +DI
3. Wait for 1 2 3 rally i.e. three higher highs
4. On day 4, sell 1 tick below day three low
5. Keep stop loss near day three high
Double Volume Topping Method
1. Stock must be trading near or at three months high
2. Todays volume must be double the 15 days average volume
3. Either today, tomorrow or next day, stock must close below its open
4. When rule 3 is met within next 2 days, sell under the rule 3 day low
5. Initial Stop Loss should be placed at top of rule 3 bar
The 8 day low reversal method
1. Day one must be 8 day high
2. Day two must trade below day one low
3. Day three, four, five or six must trade above day two high (this could be new high)
4. When condition 3 is satisfied, we sell short one tick below day two low within four trading session
5. Stop loss is high of day two
Spent Market Trad