Thursday, February 24, 2011

6 rules to avoid getting trapped by operators!

you can't beat the operators

so the best thing

and the only thing you can and should do is

be with the operator!

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here are the 6 rules for being with the operator (dedicated to mihir shah who provoked me to coin these)

* expect the opposite of the expectation to happen

= the one u think is against logic, is not easy to happen (like fall after huge fall or rise after already huge rise etc.), the one which is against logic, one which is not obvious

* be prepared for unexpected directional changes at unexpected times to unexpected extents. even expect extraordinary straight gradual climb up or climb down when everyone is expecting change in direction.......this is not jugglary of words, it is the straightest i could put it! if u say it is difficult, who said trading was easy (till ofcourse you train yourself!). having said it, let me add that doing all this requires full attention fulltime! only a well trained trader can hope to make money. otherwise, trading is a bermuda triangle if not a black hole!

* in cricket, fast bowler kills not just with a rocket ball but also with slower ball. similarly, in trading, if a move is slow, don't mistake it to be weak and short-term, and if it is fast don't label it immediately as big and sustainable move. a slow move may be a bull-dozer and fast move may be high decibel quicky! anyway, it requires lot of pratice and training to achieve this finesse to negotiate the challenge of the jumbo operators.

* never worry about zig-zag movement. look for the direction of the zig-zag!

* in trading, forget about fundamentals. they are just excuses!

* and last, but not the least, be with the minority (especially while trading in options)

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