Sunday, October 31, 2010

10 Dog Facts for Traders

1. If you give your dog a fancy name, it's not for your dog but for your pride. You'll end up using a nickname.

= If you have any misconception about your trading genious then it is not for your skills but for your ego. You'll end up under the misconception.

2. Owning two dogs is no more work than owning one, but three dogs is hard work.

= Two technical indicators are enough. More than 2 will start playing games.

3. Pay no more than half of the retail price for a used kennel.

= Better use your own method suiting your psychology and realities.

4. 1 pound of dry dog-food for every 30 pounds of dogs.

= Atleast 1 pound of learning is a must for 30 pounds of profit appetite.

5. In a suburb of medium density, a dog's bark can be heard in 200 surrounding houses -- or by 800 people.

= Traders' unsolicited loud opinions can be big irritants

6. Anything over 45 minutes seems like forever to your dog. You will be greeted as enthusiastically coming back from a two-hour shopping trip as you will coming back from a two-day vacation.

= Wait for the opportunity to be greeted more passionately by profit.

7. A stray dog who is afraid of people will trust the people associated with the dogs it plays with.

= Don't blindly trust what fellow traders are doing.

8. The old rule -- multiplying a dog's age by 7 to find the equivalent human age -- is fallacious. A dog is able to reproduce at 1 year and has reached full growth by 2 years. To calculate a dog's age in human terms, count the first year at 15, the second year as 10, and each year after that as 5.

= Humans mature late. Expect immaturity in trades and take precautions.

9. If a dog tolerates gentle handling between its toes, it probably is suited for children.

= Only defensive stocks are suited for the "kid" phase of a trader life!

10. The best time for taking a puppy from its litter -- psychologically and physically -- is when it is 49 days old.

= Take 49 tiny trades before stepping out into the trading world of big hounds!


Dog facts courtesy

Adaptation to stock market by me

7 anti-habits for highly ineffective stressed people

Anti-Habit 1.

Don't be Proactive (Least be reactive)

= Get out of the race. It's life.


Anti-Habit 2.

Neither the end, nor the start; neither the beginning, nor the end; don't "do" it, let it happen!

= Get this clutter jargon out of your head. Life is not an assignment. Live it!


Anti-Habit 3.

Put the first thing and the second thing and all things till the last thing......last!

= Only life comes first!


Anti-Habit 4.

Don't just think win-win, throw the win out of winDOW!

= Life became hell when win became more important than life. There is more life in "losing" than winning! Recognise it!


Anti-Habit 5.

Never mind whether you can understand before being understood. Just love - everyone and everything will be understood!

= Life has got consumed in the understand-understood fight.


Anti-Habit 6.

If Synergy isn't there on its own, it doesn't want to be there.

= Synergy can't be created, it comes...naturally. Live as it comes!


Anti-Habit 7.

Don't sharpen the saw any more, it is bleeding you and everyone!

= Just light a candle in the dark lives!

Saturday, October 30, 2010

10 laws of effective trading

Law 1 : Trade less

= saves you from 80% of the losses


Law 2 : Use method

= protects you from 80% of the mistakes


Law 3 : Wait now to avoid waiting later

= saves from entering wrong trades 80% of the time


Law 4 : Learn more

= saves you from 80% of the mistakes caused by ignorance


Law 5 : Trade is complex but trading is simple

= simple but sound approach saves you from complex traps


Law 6 : Feel the trade to sense the result

= protects you from the traps logic can't foresee


Law 7 : Emotions which calm you are good, emotions which excite you are dangerous

= this single fact can protect you from 80% mistakes caused by trading hysteria


Law 8 : Accept today, Trust tomorrow

= saves you from quitting when you must not!


Law 9 : Respect the difficult situation

= saves you from picking the wrong fights


Law 10 : Just behind the obvious is the reality

= the favorite hiding spot of the market's true intentions!


Sunday, October 24, 2010

The Tip of an Iceberg!

Desperate unsuspecting traders are more than willing to tip over any tip that comes their way!

But often this tiny tip drowns them!

the reasons are not hard to find.


The tippers never tell you that they themselves are trading on super high speed always-on lease line connections!

- that you may be in a highly disadvantageous position if you are trading by other slower means


They never tell you that they always have auto Stop-loss bids in place in their dedicated terminals with powerful software!

- that you may not be able to trigger stop loss fast enough in case of a stampede and that there may be a huge gap between your order stop-loss price and the actual executed price!


They never tell you that they are operating on penny brokerage plans and that their own cost of trading is peanuts and hence their net loss in case of a SL-hit is much lesser!

- that your brokerage plan may not make it easier for you to afford even a stop-loss!


They never tell you that they have more than enough buffer funds to hold onto their losing positions if required

- that your risk may not be justified in the absence of adequate buffer funds and you may be on the road if your stop loss remains un-triggered!


They never tell you that the client is expected to make money only IN THE LONG RUN as some losses are inevitable

- that you may be left behind if you stop trading after the loss and are expected to keep following the tips even when you lose!!!


They never tell you how many more clients are receiving and acting on that call, and that such mass tip circulation is a favourite hunting environment for the big-pocket pick-pockets


- that you may actually be volunteering to be a sitting lame duck for the hunters!

(This probably explains why I found majority of the calls going the wrong way after a mass tip in the media or from a big brokerage house!)

(Manipulations thru mass tipping is common these days where only the first few benefit!)


They never tell you that their own actual exposure to that particular scrip or trade is much lesser as a part of their entire portfolio and hence a loss in this particular trade may not hurt them much overall.

-that you may be putting all your eggs in a single basket which doesn't even belong to you!


They don't share the basis of the call and whether the tip is a copy paste from another source!

- that you may be tipping on a tip that has no or frivolous base!

(Putting your life into the hands of someone who is not even sure about his!)


A tip is not just a simple innocent tip.

It is the tip of an Iceberg!

Saturday, October 23, 2010

The Trading Mahabharata

In Mahabharata

Kauravas outnumbered Pandavas by 100 to 5

In trading Mahabharata too

Kauravas outnumber the Pandavas!

The Kauravas are the ones who trade on gut feeling.

Even the Kauravas are of two types

the good ones who trade on gut feeling based on experience

and the bad ones who trade on gut feeling based on rush of blood.

The Pandavas are the ones who trade on the basis of a trading system.

They are in the minority!

The system of Pandavas tells them accurately about the trend of the Kauravas' guts!

Whenever a Pandava is in a dilemma over pulling the trigger as suggested by his system but discouraged by the Kaurava blood in him, Krishna (the trained part of a trader's brain) persuades him to follow his Dharma and enter the trade - leaving the result to him!

In the end, both the good Kauravas as well as the Pandavas go to heaven as both have fulfilled their respective Dharmas by following their respective trading styles.

Hell falls in the lap of the bad Kauravas who forgot their Dharma and followed their lust!

If you ask me...

If you ask me what all I think are the absolute basic requirements to be successful in stock trading then I would list the following. These come from my own experience till date.

1) Method

If you don't trade as per a method (i.e. you trade randomly)


if you keep shuttling between various methods and haven't yet shortlisted & finalised the method you are going to use

then there is no chance for you except some lucky run here or there!

If you have shortlisted a favourite method your journey upwards is definitely on.

2) Buffer amount

If you don't have sufficient buffer amount in your bank after the committed margin money, the stress generated by the normal and abnormal market fluctuations will effect your ability to take correct decisions and hold onto correct positions.

If you have sufficient buffer amount, then you have no tension about unforeseen circumstances.

Shocker times come very few but their fear wears you out!

3) Experience

Once you have a method in the pocket and buffer funds in the bank you still need experience. The real trading is much uglier than that displayed in the showroom!

A soldier who has gun in the hand and bullets in the belt still needs the experience of the battleground lest he should be butchered by the enemy who have three things in their bag - gun, bullets and EXPERIENCE!

4) Consistency

Consistency is the most inconsistent thing in the world.

Many talented and brilliant people faded away like a flash in the pan just because they couldn't be consistent.

You can be only as successful in life as you can be consistent!

Inconsistency can still scuttle your trading dreams despite method and funds!

5) Emergency skills

Emergencies and real bad situations do come once in a while, even in stock market.

No real champion is made without the ability to survive and overpower difficult situations.

If you don't prepare yourself to face such emergencies then don't be surprised that your trading career is hijacked one fine day!

6) Mental toughness

This is the stick you need to support you at every step in trading career!

This is the stick you need to shoo away every unfriendly dog encounter on the dalal street!

Everything is psychological.

No place or situation tests human endurance as much as battlefield and stock market.

A growing mental toguhness is the final frontier to trading success!

Basic Mathematics of Trading

1) You + 0 = You

If you bet too small, you practically don't go far enough howsoever good you may be in trading.

Whatever small distance you cover doesn't take you far enough into the green territory to make you in the position to absorb any potential setback.

2) You x 0 = 0

If you bet too big or too recklessly then you are trying to multiply your present worth with zero which is sure to land you on the right side of the above mentioned equation!

3) You x 1.2 x 1.2 x 1.2 x 1.2 = 2U

If you bet neither small nor too big and with a method and with consistency, you have power of multiplied compounding on your side!

4) U/1.2 = 0.8U;

0.8U/1.2 = 0.69U

If you don't bet too big but have weak discipline or without method then you will keep slipping down. Power of division is working against you.

Friday, October 22, 2010

Myers-Briggs trader personality types

"What is happening?"

"What do I do now?"

If you are a trader, then these two questions must be appearing before you everyday!

What your answer is depends on who you are and

what is your personality type!


First, lets see how different people find answer to the question

"What is happening?"

According to Myers-Briggs theory of personality types

One type of people perceive situations on the basis of data and information!

while the other type of people perceive situations on the basis of the bigger picture!

The first one is based on logic in the left brain.

The second one is based on the intuition in the right brain.

If you are none of the above two, then you are not using the brain!

If you are one of the two, you will do good in the market.

If you are both, you are a pro!


Now, come to the second question

"What do I do?"

According to Myers-Briggs theory of personality types

One type of people take decision purely on logic

while the other type of people decide on the basis of feelings - on the basis of likely impact of the decision.

The first one is based on logic in the left brain.

The second one is based on the intuition in the right brain.

If you are none of the above two, then you are not using the brain!

If you are one of the two, you will do good in the market.

If you are both, you are a pro!


Thursday, October 21, 2010

What do you do when....?

What do you do when you win an unexpected but handsome profit?

If you pack-up and leave to enjoy the booty then nothing wrong with you


If you dare to bet it all or most of it on the next trade

ADVISED by the method

and supported by the just-won profit

then you have in you what makes a professional trader!

On the other hand,

What do you do when you lose unexpected and rather big?

If you fight back instead of surrendering then nothing wrong with you


If you dare to accept the unexpected adverse situation and decide to stay away till you regain your sense of understanding of the winds

then you again have in you what makes a professional trader!

In the words of Pat Holland in his dazzling book

"The 35 rules of Gambling that all investors should know"

Rule 4 : Never chase your losses!

Rule 6: Gamble your early winnings!

waiting for you!

All traders trade for money.

They want money for happiness.

We all want to be happy too.

Whatever we do

the desire is to be happy!

But in the end we are not happy.


It's because

although it appears that we are after happiness

what we are really after is

permanence of happiness.

If happiness is not there

we seek happiness.

when it comes

we suspect it

and expect it to be lost... this happiness fails to make us happy!

Then we continue seeking happiness.

The cycle continues!

This explains the disease of unending accumulation of wealth

The fear of difficult times has gone bone deep in us.

Rather, all kinds of fears have sunk deep in us.

We are so frightened that we want guarantee from someone that our happiness will not vanish in future!

Obviously, such guarantee never comes!

It isn't there, anywhere!

If someone looks at Earth from the space he will find billions clinging tight to the trees of sorrow seeking permanent happiness.

If someone digs deep inside the Earth he will find billions of bodies still clinging tight to the trees of sorrow seeking permanent happiness.

Our fears suspect the happiness that is right under our pillow every morning!

'The happiness of the next morning' seems to be the true happiness.

And it is not surprising that 'tomorrow never comes'.

Seeking permanence is the root cause of every trouble in life!

Our deeply injured souls are after the wrong thing!

Happiness of tomorrow cannot come today.

Happiness of day-after-tomorrow cannot come today.

Happiness of day-after-day-after-tomorrow cannot come today.

Happiness of future is a mirage.

Happiness of today is here

and is waiting for you!

Wednesday, October 20, 2010

Trading on gut feeling?

There are two types of guts or intuition

One, Intuition and Gut based on experience and training.

Two, Intuition and Gut based on rush of blood.

The first one is an angel

the second one is a devil.

In the words of Curtis Faith

in his masterpiece work

'Trading from Your Gut'

"Relatively recent advances in psychology and neuroscience show that human intuition can indeed serve as the basis for powerful rapid decision making.

Our brains can make decisions using thousands of individual inputs almost instantaneously. This type of rapid parallel processing occurs in our right-brain hemisphere.

Because of the speed of the right brain, it can be a powerful tool in
the hands of an experienced trader."

Same idea is echoed by Malcom Gladwell in his brilliant

'Blink: The Power of Thinking Without Thinking'

Difference of opinion!

One of my friends, a talented young man had had a tough time in life!

He tried his hands on quite a few jobs but couldn't make much headway.

Finally, he decided to try his luck in business.

He had an idea and some money.

One of his friends strongly shared his passion for the business idea.

So my friend started the business in partnership with that guy!

Everyone was happy for him.

We all wanted to see him get his due after a long unexpected unexplained struggle in life.

Yesterday, I happened to meet him after almost 7 months since he and his friend had started the

ambitious business.

I expected to see him in a great shape!

But was disturbed to see him in the same or worse state than before!

"What happened to you? How's the business?"

"I wound up the business 3 months ago!"

"Why? What happened?" I was visibly disturbed.

"I had serious difference of opinion on many issues with my partner!

Whenever I wanted to do something, he would tow an altogether different line!

Whatever I planned, he vetoed!

Whatever he did was simply beyond logic and sense. so I too blocked his misadventures!

All my advice and suggestions seem to fall on deaf ears!

He always seem to be against me!"

"What are you doing these days?" I asked!

"I started to trade in stock market after I walked out of the partnership business."

"How's it doing?" I questioned, eager to hear the good news.

"Even that has failed!"

I was shocked beyond words!


"I had serious difference of opinion with the Markets, too!"

Tuesday, October 19, 2010

Time to say "Thank You!"

Who's the most reliable friend of a trader?

The one who always gives the frank, harsh and blunt advise come-what-may!

Whether you like it or not!

Whether you ask for the advice or not!

Whether the advice is sweet or bitter!

The one who is ALWAYS there!

Never leaves you!

The one who always speaks in soft voice!

The one who keeps quite if you ask it to - when you don't like the advise!!!


No,no, it is not the broker

It isn't the software

No, it's not your friend also!

(Though he is priceless!)

It isn't your spouse too!

(Though he/she is God-send!)

It isn't God either!

(You know why!!)

Neither is it the genie in the lamp!

(It doesn't come out any more!)

Nor is it your faithful dog!

(It can feel your pain but can't do anything!)

So, Who's it?


It is the tiny voice inside you!

The little, gentle, shy, super-sensitive angel advisor inside you

who is always there!

She speaks up her mind the moment you think anything!

She always speaks the truth

but only once...

but only gently and softly...

(though always very clearly audible)

doesn't mind if you don't listen!

doesn't mind if you don't take the advice!

doesn't mind if you bulldoze it!

doesn't mind if you ridicule or abuse it!

doesn't pester....

doesn't force....

doesn't make you feel bad when you are hurt by ignoring her whisper!!!

always sits huddled in a corner inside you

loves you more than herself

and doesn't want to see you in any trouble!!

even in trading!!!

Time to caress her!

Time to say "Thank You!"

"Don't trade!"

I don't trade.

I always say "No" to a trade whenever a Technical Indicator suggests one!

I never trade.

THEY make me trade!

They FORCE ME to trade!

They (the indicators) finally give me an offer (situation) I simply can't say no to!

Their initial offers are often bluffs, traps or half baked peanuts!

In the end they always put on the table a mouth-watering offer I simply can't say no to!

That trade is less of a trade and more of a throw-away by the market!

By now, I have made it a rule

"Don't trade!"

"Go get the prize!"

A great hunter's hunter son returned home in the evening

after a day out in the deep jungle......hunting

dejected and tired!

"Why are you empty handed, son?" proud hunter father asked his talented hunter son.

The son remained silent.

"Tell me, son? Did you go for hunting today?"

The son nodded in affirmation.

"Is your gun OK?"


"Did u have the ammunition? Was the powder dry?"

"Yes, Dad!"

"Was the weather OK?"


"Did u find the animals?"

"Yes, Dad! Many of them?"

"Then, son, what happened?"

"Dad, When I aimed at a moving deer and was about to pull the trigger,

I saw another dear closer to the first one and moving slower!

The second dear appeared more lucrative target

so I changed the aim to this second deer.

I was about to shoot when this deer changed its speed

just then I saw another deer which was not moving.

So I thought it prudent to target this stationary one.

I changed the aim and just then the deer starting running.

I chased my gun's barrel in his direction when I saw another deer who seemed an easier target.

I pointed my gun on this one but just in the nook of time he moved behind a bush!

All day, Dad, I kept aiming but never got the chance!"

"We will go together for hunting tomorrow, Son! Now come and have dinner!"

The next morning the father and the son got up early.

Father picked up his 1920 vintage double barrel rifle and wore his lucky hunter shoes.

"Why don't you take your best gun, Dad?"

"You hunt your best with mind, not with gun, Son"

They went deep into the jungle.

The son spotted a deer!

"Over there, Dad." he whispered to his Dad

The father aimed.

The deer sensed the danger and started running.

Deers around that deer also started moving.

The father kept his aim on the marked deer and ignored all in the foreground.

Locked the target

and pulled the trigger.

The deer turned in a flash.

The bullet missed the deer.

Father kept his eye on the running deer in the target eyepiece of the rifle.

And pulled the trigger for the second time.

"Go get the prize, son! It's over there near the rock!"

Sunday, October 17, 2010

Respect the indicator but ignore it

When a technical indicator tells you that the stock is going to fall

don't believe it

don't go short

instead.....just wait!

My experience is that more often than not

stock rises further!


Our nervousness

our anticipation

our expectation

our eagerness

our readiness

makes us




the technical indicator's indication!

Also, if the money is simply pouring into the stock

the momentum simply stretches the rally!

The difference between a pressure cooker and the overheated stock market is the difference in their vent valves!

The vent valve whistle of the pressure cooker blows at a fixed pressure limit.

The one in the stock market is different

It just turns red (overbought) and nothing more!

Also, when you see the overbought signal

millions other are seeing that too!

and so are the "big pockets"!

so, what do they all do?

A mental game starts.

The "big pockets" close their eyes.

Many don't see the signal.

many who see the signal simply ignore it.

many ignore it because they see many others ignoring it.

Gradually, everyone has his foot in his mouth

.....the pendulum has gone too far!

That is the time when nobody wants to buy

but nobody wants to sell either!

Stampede is about to start

but delayed by some more fools!

and then it starts!

Even then it doesn't always crash under gravity!

But the pendulum surely starts its journey backwards.

That is the time when the indicator gets the respect.

So, my experience is that

take the indicator as a yellow traffic signal

and not the green one!

Wait for signal light to burst!

Top Gun!

When I was in class 10 in K.V. HMT Pinjore in 1987

one of my juniors was Vinod Mittal

a young mischievous, sharpminded but academically weak boy

not too much in the good books of teachers!

After completing his 12th standard after somewhat struggle

someone guided him to apply for the post of Airman in Indian Air Force.

An airman in IAF is equivalent to Sepoy in the Army and Seaman in the Navy.

He got selected.

His parents must have been happy for their shaky son having got a stable job

but somehow the young restless Vinod wasn't.

He knew that he had settled for the entry-level post in IAF

He knew that though he had got a job, his flight in life was also capped.

He knew he was different but his academic weakness and insecurity caused by it had sealed his ambitions.

He started his training for the Airman.

He used to see trainees of his age being moulded into pilots on the same airbase he was posted at.

One day he came to know about a lateral entry scheme wherein 1 or 2 airmen who were highly talented but somehow had landed in the airman's uniform were given a chance to qualify for pilot's role.

1000 airmen were shortlisted and Vinod Mittal was one of them.

Out of those 1000, 10 were shortlisted and Vinod Mittal was one of them.

Out of those 10 only 2 were finally selected and Vinod Mittal was one of them.

Thereafter we lost track of the lucky man!


After almost 2 years one fine Sunday of 1992, I was strolling in the famous Yadvindera Gardens in Pinjore with my childhood friend Ashish Dewett when we saw a dashing young man say hello to us!

In front of us stood a smart guy with minimal hair on his head, chest out, head held high, smile on his tough face and proud shining eyes behind dashing Aviator Rayban!

Flight Lieutinent Vinod Mittal !!!

We were amazed beyond words !!!!!

We shook hands and sat in the cafeteria nearby.

There the Flight Lieutinent shared his amazing story...

After having got selected for the pilot's training

He had been further marked for the training as a FIGHTER pilot

not only this, he was further marked to the fighter pilot for a CHOPPER and not jet.

To be a fighter pilot of a combat chopper is arguably more demanding than being the fighter pilot of a jet!

Perhaps because choppers can't fly high and fast enough to escape the enemy missiles that easily!

But choppers can strike the places and the way no jet can!!!

"Why do your lips seem as if you have been training as a boxer?" I asked him jokingly.

"Training!" he replied.

"A squadron leader trains two pilots in one go inside the cockpit after the theory session.

My trainer makes me and my buddy pilot sit on his either side inside a cockpit near his elbows.

Then he gives us a situation and asks for the answer.

We have to reply in a flash.

If we delay our response or give a weak or wrong response

BanG! hits his elbow on our cheek or chin!

My lips often come in the way!" he gave a 1000 watt smile.

"Tell us more about the training." Ashish asked Flight Lieutinent Vinod Mittal.

"Inside our cubicles, right in front of our study table we have pasted a huge poster of the cockpit.

This way we are always programming our minds to get accustomed to the cockpit.

The cockpit has become our world.

On the front wall of our cubicle, right in front of our beds

we have written formulae and readings and instructions

so that whenever we are lying in our bed but awake

we keep revising and repeating them.

These readings and formulae and instructions have to pop out of us in a flash when the situation comes.

We have to be the best.

Afterall, a nation is at stake!"


If only we traders train the way the IAF trains its fighter pilots!

for we are no less than fighters pilots

and that too of a chopper which is an easy target of the market missiles!

difference between trading & life's challenges

What's the core difference between trading and every other challenge in life?

In life's every other challenge

what's more imporant in the beginning is

'learning how to win!'

followed by

'learning how not to lose!'

In stock market, however,

it is the other way round...

What's important in the beginning is

'learning how not to lose!'

followed by

'learning how to win......big!'

a note to the new traders

Nothing succeeds like success!

Nothing fails like failure!

But nothing is more dangerous than a success that succeeds too easily!

and nothing is more tragic than a failure that fails too early!

The former sets the stage for a demoralising collapse

the latter hits your confidence below the belly and unsettles your resolve!

When new amateur, learner, innocent traders enter the market

they are excited

with spark in the eyes

and dreams being painted with those sparks!

An early success makes them turn their back towards method and discipline and emotional strengthening drill!

But when the devil of the market shows its true colours

the new market ducklings panic

and many simply have no idea how to cope with the unexpected unexplained setback!

Their dreams are shattered!

Their fears start taking the place of their dreams

They meet the thoughts of quitting the trading on their pillow every night when they hit the bed.

Four understandings in the new trader's bags can help him/her in those inevitable dark hours

First, bet small till you have seen the character certificate of the devils in the market.

Second, suspect every success (till u know the real real real reason behind it).

Third, be ready for the hell training which every gentleman cadet goes thru at the military training academy before getting commissioned as an officer!

The fourth and the most important procedure has been suggested by legendary David J.Schwartz

in his classic "The Magic of Thinking Big"

"Keep your eyes focused on the big objective"

In trading our big objective is to become financially free by mastering the trading skills

and not just winning one or two or few profits here and there!

"Resolve to keep your eyes on the big ball."

Whenever you lose, thank god

for losing small

for learning the next lesson

for moving one more step towards the triumphant "commissioning".

Protect yourself from getting burnt out by losses and failures...

Whenever a loss wants to picks up a petty fight with your ego

and tries to knock you out

just ask yourself

"Is it really important?"

"Don't fall into the triviality trap."

"Concentrate on important things."

"Resolve to keep your eyes on the big ball."

Thursday, October 14, 2010

Midnight sleep-blabber of a stressed trader - II

I am the most powerful trader in the world!!!



Last week I single handedly prevented Hero Honda from falling!

I single handedly prevented Bharti Airtel from collapsing too!

Last month I didn't allow Reliance Industries from rising!

Last Friday they couldn't lift the HDFC Bank just because of me!

I had the power to halt the fall of SAIL today!

So many times I helped lacs of co-traders mint money buy saving their stocks from adverse price movement!


When I shorted Hero Honda, it stopped sliding!

When I shorted Bharti Airtel, it stopped falling!

When I bought Reliance Industries, it stopped rising!

I longed in HDFC Bank and it lost the steam!

I shorted SAIL and even the steel refused to sink!

I have the P O W E RRRRRRRRRRRRRRRRRRRRRRR..................




For Midnight sleep blabber of a stressed trader - I

go to

"Why take it to heart?"

"Why are you depressed?"

"I lost in trading today!"

"to whom?"

"Must be someone!"


"Some other trader I don't know....!"

"How would he be feeling now?"

"He must be celebrating and feeling good!"

"When YOU celebrate, who feels bad?"



"Some other trader I don't know...!"

"Why take it to heart when you play with fire!!"

Wednesday, October 13, 2010

Myths & Facts about Hypnotism - II

Myth #1 – Hypnotists have special powers.

Fact: Hypnotists don’t have any special powers. They just know humans inside out, and use that know-how!

Trader's confession : I don't agree with the fact! Market hynotists do have special powers!


Myth #2 – Hypnosis will only work on certain people

Fact: Wrong! Anyone who wants hypnotism to work and is willing to co-operate can get hynotised!

Trader's confession : Here, I am again with the myth. Hardened traders frustrate the hynotist. But I also admit that if a trader refuses to cooperate with the hypnotist, he can't simply be hypnotised!


Myth #3 – People who get hypnotized are weak minded.

Fact : Wrong! People with good concentration and creativity are ideal "hypnotic subjects" they are easily susceptible to hypnotist's suggestion.

Trader's confession : I am once again with the myth! In trading, those who get hypnotized are surely weak minded! But I also admit that more creative the trader mind, more he/she is susceptible to "hypnotist's suggestion".


Myth #4 – Hypnosis can be bad for your health.

Fact: Wrong! It relaxes you if you cooperate!

Trader's confession : In trading, hypnosis is bad for wealth and hence very bad for health! The more we cooperate the less relaxed we are!


Myth #5 – You’ll become dependent on the hypnotist.

Fact: A professional and ethical hypnotist makes you feel empowered rather than dependent!

Trader's confession : The market hypnotists are never ethical.


Myth #6 – In hypnosis you’ll be able to recall everything that’s ever happened to you.

Fact: Wrong!

Trader's confession : On the contrary, trader tends to forget every lesson of the past when hypnotised!


Myth #7 – Hypnosis is dangerous and is the devils work!

Fact: Wrong!

Reality: Hypnosis is surely the market-devils work! We must keep the cross (of method) around our neck!


Monday, October 11, 2010

Myths & Facts about Hypnotism

Myth: A person is asleep during hypnosis.

Fact: A person is totally awake during hypnosis.

Proof: Just watch traders trade!


Myth: A person in a hypnotic state does not know what is going on around him/her.

Fact: A hypnotised person can hear everything. He/she is aware of the surroundings.

Proof: Just watch traders trade!


Myth: The hypnotist can make you do things you don’t want to do, like take clothes off etc.

Fact: This is incorrect. The hynotised person can reject any such suggestion.

Proof: (While the myth is definitely wrong, but I can't give a trader's example as a proof as they often forget the fact and endorse the myth, to their own peril!)


Myth: A person can get stuck in a hypnotic state.

Fact: No. A person cannot get stuck in hypnosis.

Proof: Every trader returns to his senses to realise his blunder!


Myth: The hypnotist hypnotizes people.

Fact: The person hypnotizes himself/herself. The hypnotist just guides the client through the process.

Proof: Just watch traders trade!


Myth: A person loses control of himself/herself when hypnotized.

Fact: Incorrect. A person has total control of himself/herself when hypnotized.

Proof: Just watch traders trade!


Myth: When you say "I’ve never been hypnotized."

Fact: Everyone experiences natural hypnosis, to some degree, every day.

Proof: Just watch traders trade!


Sunday, October 10, 2010

Crumple zones of stock market!

Just like every car has "crumple zone"

- a criss-cross webcage of joints and steel members

which bend and absorb the energy generated by the impact in case of an accident

stock market charts too have crumple zones in the form of

supports and resistances.

Whenever there is an accidental or incidental fall or rise

the tremendous energy generated is absorbed by at these

support and resistance points

as a result of which a free fall or free rise is prevented.

This acts as a safety system for those who are caught on the wrong foot.

Whenever there are no support or resistance levels between two points

expect destructive energy to land on the traders caught in-between!

So, those who have nightmares about "circuits"

can take some heart from these crumple safety zones in the stock market.

But, remember, when you see yourself saved by the crumple zone in front of your nose, treat it as time given to you to eject. Crumple zone chain reaction may finally stop only after you!

Check your stock or index for these today!

Invisible Profit Powers behind winner traders!

Winners in stock market make profits effortlessly.


They have the following invisible profit powers behind them

# Power of Simplicity

No complex analyses, no fancy tools, no smart manouvering....

......just simple method backed with good risk management!

By keeping their heads free of clutter, winner traders have an invisible power pushing them towards profits by not pulling them towards loss!


# Power of Method

A trader's no.1 enemy is a professinal and bigger trader!

A trader's no.2 enemy is he himself!!

A method saves you from both!

When you trade with a method, you automatically have an invisible power edging you towards profit!


# Power of Failure

Winners love failure!

Firstly, it helps them zero-in on their "holy" method!

Secondly, failure helps them further improve and master their "holy" method!

Both ways, failure acts as an invisibile power that pushes winners near profit!

For losers, failure is like a hound standing at the gate of profit which scares them away everytime!


# Power of Focus

Winner traders know that they have limited time and money and stress-and-loss-bearing ability!

They know they can't "try out" and "master" too many methods!

They focus on what works and not on fighting with what doesn't!

They know that money doesn't make any fuss about the method used to fish it out!!!

(There are no awards for knowing more methods. There are punishments, though!)

Focus is the power that invisibly pushes winners towards profit.


# Power of Uniqueness

Winners are not copy-cats.

They know that they are different.

They know their limitations.

They give themselves the luxury to use their own improvised method.

Your own method may not be a Nobel prize winning one but it has the invisible power to make you profitable!

Saturday, October 9, 2010

11 Bitter Pills of Trading!

Trading Bitter Pill #1:

Either you are among the winners or among the losers.

If you have any misconception, clear it first!


Trading Bitter Pill #2:

Now when you have accepted that you are among the losers decide who is responsible for this situation!

If you think the responsibility lies with the market forces or bad luck or slow internet connection or bad advice of broker etc then there is little scope for you ahead.


Trading Bitter Pill #3:

Now when you have acknowledged that you yourself are responsible for your being in the losers' herd and not in the winners' group, find out what is not working!

(since you are losing repeatedly, majority of the things you are doing and the way you are doing ARE NOT working)


Trading Bitter Pill #4:

Now when you know what worked and what didn't in your past trades

....start rebuilding your trading career around what worked!

Shamelessly keep repeating the trick that works!

Exploit and milk it to the max!

Trading is about reward, not fair-play award.

A trick that works is worth 10 that promise to work.

Winners don't know more tricks.

Winners know more effective tricks!


Trading Bitter Pill #5:

Courage is the fear whose prayer has been said!

Trade is the risk whose homework has been done!

There can be risks without wins

but there are no wins without risk!


Trading Bitter Pill #6:

Knowledge is not money.

Knowledge in action is!


Trading Bitter Pill #7:

Nobody knows the answers in stockmarket...only opinions!

Ask keeping this in mind!


Trading Bitter Pill #8:

Trading losses have nothing to do with being unlucky for trading.

Its all a method, psychology and risk-management issue.


Trading Bitter Pill #9:

Market hits our actions, not us!

Market rewards our actions, not us!


Trading Bitter Pill #10:

Forgive your mistakes, remember the lesson, stand up and move forward!

Every winner has a history!


Trading Bitter Pill #11:

If you are not clear and specific about what and how much and by when you want from the market, you won't get it!

Also, be clear about what you are willing to give in return?

Tuesday, October 5, 2010

Taking us all for a ride?

The market car was running non-stop since last 800 kms!

The tyres said

"We are tired, we should stop!"

The steering said

"I can't steer straight any more! Shouldn't we stop!"

The headlights said

"We can't see the road ahead clearly. Better we stop!"

The radiator said

"Its not cool anymore! Its getting overheated! We should stop!"

The clutch said

"I am sliping. I may fail, I warn you. We must stop!"

The gear box said

"I am tired. Desperately want to go neutral!"

The door said

"Pl stop! I want to open out!"

The stereo said

"Stop mind numbing loud music! Its getting on my nerves now!"

The seats said

"Why don't you take a breather! and let us breathe too !"

The brakes too wanted to stop but couldn't muster the courage!

But as the criticism of all parts of the car mounted

the brakes blamed the engine!

"Why don't you ask him to stop? He is the one dragging us!"

The engine was furious!

He, inturn, blamed the fuel !!

"Why don't you ask the fuel to stop pumping in? How can I stop till he doesn't?"

The fuel was listening to all this

He smiled and whispered

"Why don't you ask the banks to stop giving interest-free easy loans to my master who keeps my tank full and take us all for a ride!!!

Monday, October 4, 2010

Why overnight BTST works!

(This article is dedicated to my friend Rishant Verma who believed in overnight BTST so fanatically that I was forced to take it seriously and discover the magic! I was so amazed by the tactic that I decided to refine it to a higher level and thus got my holy grail at the darkest hour of my trading career!)

Why overnight BTST works?

* No-loss game!

= If you blindly buy a good stock or index in the last minute of the day's trade and sell it in the first trading minute the next day, you are assured that you will not have lost anything on monthly basis. Any 1 or 2 or 3 days negative run is assuredly cancelled by handsome gap-up runs sooner than later! Atleast 50-60% success rate is assured if you don't change the stock/index, if you don't quit after the negative day (if at all) and if you ONLY BUY (i.e.BTST and not STBT).

Once having got this assurance, all you need to do is find ways and means and tactics to increase this success percentage beyond 50 or 60%. It can go as high as 90% (or even more for some stretches!)

* Big market players can't trick you!

= since the markets are closed and you can't act or react, big players can't excite you to mistake! This is the number 1 benefit of overnight btst and immunity from the no.1 weakness of any trader!

* No problem of impatience

= When the market is open, the itch of "book whatever profit u r getting before it is gone" takes it toll on you! In overnight BTST this possibility simply doesn't exist as the markets are closed.

Either you win big or lose big! No peanuts.....the rewards of being right are assured to be big!

* You are assured of gap-up openings even during bear runs!

= Everyday is a "hopeful" day in overnight BTST. During bear runs, BTST supported by some technical indicator brings handsome results. During Bull runs, there is a windfall of profits.

* Markets generally fall during trading hours and rise at the opening!

= People need time to let their emotions and herd-mentality get into the trade and start throwing stocks!

* Buying is natural, selling is not!

= Overselling is promptly reversed, overbuying doesn't!

Sunday, October 3, 2010

Market Warfare !!!

This write-up is for the traders well past the basics; who have either found their holy grail in the market or are looking for one!

This article is dedicated to Dronacharyas - 'Al Ries and Jack Trout' who changed the life of an Eklavya (that's me) 14 years ago!


In their masterpiece "Marketing Warfare", Al Ries and Jack Trout talk at length about 4 possible warfare tactics

- defensive, offensive, flanking, and guerrilla!

Everything in life is a warfare - friendly or hostile!

Ries and Trout's warfare tactics are applicable in each of those life situations

including Stock Market!

In stock market, either you beat the market or the market beats you.

The trader who has learnt the basics but is still losing needs tactics to achieve "results"

If you are heading straight into the market after seeing an "opportunity" which everyone is seeing

you are deploying "offensive" tactic by taking on the market at its strength

- deception and volatility.

You are likely to be beaten out if you are scantily-funded or weak-emotioned!

If you don't flow with the market frenzy but wait for the herd in the market to get caught on the wrong foot

you are deploying "defensive" tactic by catching the market at its weakness!

You are likely to win but need patience for the few chances that come.

If you are wise and practical enough to understand the foolhardiness of "offensive" tactic (till you are a pro)

and also hungry enough to be turned-off by the "peanuts" offered by the "defensive" tactic

then "flanking" tactic is for you!

Every assasination in the world's history took place when the assasin had studied his target's every movement of 24-hr minutely

and struck at the repetitively unguarded weak invitation point!!!

Market tries to be deceptive and unpredictable.

but still, being a product of humans, it is predictable in its habits.

We are generally so confused and frustrated by the chaos and frustration injected by the markets in our head

that we plainly miss the gaping holes in its defences!

We simply miss habit after habit of the market wherein it leaves its defenses down and is predictable like a child!

Under "flanking" tactic, a trader picks up one such weakness of the market and

keeps milking it again and again and again


without shame!

(Market is about money and not honour!)

and without madly craving for innovativeness associated with a trading genious!

And finally,

if you haven't still found the soft spot of the market

better employ "guerilla" warfare

which, simply put, means

"surprise assault and escape with extraordinary concentration of available forces"

Whenever you are sure of the market mood for the next few minutes atleast

take heavy positions and scalp!!!

Whatever be your reality

probably you do need a "tactic" to succeed in the market warfare!!!

Saturday, October 2, 2010

Snakes in stock market


Elachistodon westermanni....

You probably have not met them.

They are not openly visible, but everyone does come to know that they had come!

These are two genera of egg-eating snakes...

Similar snakes are found in stock market jungle as well !

They are not openly visible

but everyone does come to know that they had come!

They are always around!

They eat three types of eggs

- premium (F&O)

- stop losses

- slippages (difference between order price and trigger price)

Beware of them!