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...220-230....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..
MY SOLILOQUY-AS STOCK TRADER
05 July 2015 10:45 AM
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...andcbot 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.
... 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...trend-dynamics course 5 volume...[best one i believe]
2005...cd from moneycontrol
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 ... ... ...
15.pristine.com
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.
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
2. good with number
3.how to think and what to think about 4. how to perform under fire
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
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
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