To Be a Trader-20yrs

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

Thread Title

29 June 2015 12:38 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.

P A R T -- 1 Introduction

02 July 2015 02:42 PM

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 it‟s 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/

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

04 July 2015 10:28 AM

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..

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……….. enjoy………stressful

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

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.

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 ... DON‟T 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...

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 doesn‟t 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 don‟t 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 don‟t 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

FINANCIAL RISK/ TRADING

04 July 2015 10:31 AM

� 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

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 Vivekanand‟s 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.

-->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 gambler‟s 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.

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. Don‟t 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 investor‟s 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 doesn‘t 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, it‘s not logical to l ook at every tick or to

think that every tick or every chart formation has meaning. They don‘t. 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, they‘re 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 won‘t 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 August‘2004) 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

who‘s 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

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."

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.

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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”

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