Saturday, April 30, 2011

the analyst in the air, the trader in the car!

two qualities are essential
to succeed in stock market-

ability to analyse the situation
so as to
a "high-likelihood" price movement.

please note that i didn't say
"high probability".

i said

since majority of people can
sense "high probability"
it is not profitable
for the operators
to let it happen.

hence, the importance of

likelihood is high
when perceived probability
of the event
is low.

so coming back to what i was saying

two qualities are essential
to succeed in stock market-

ability to analyse the situation
so as to "sense"
a "high-likelihood" happening

and "get ready" accordingly.

to trade what's actually happening!

if you don't have a reasonably trained
and experienced analyst in you
but have decent trading skills
you will be like a skillful warrior
airdropped in
an unknown enemy territory
without a map/gps/compass....
much more than required!
highly stressed
and susceptible to traps
and mental burnout!

and if you are a good analyst
rather, an overwhelmed one
than you are likely to find yourself
analyzing forever!
even when you should stop thinking
and just follow what is in front of your eyes!

the analyst in you
feels good when his analysis
proves right
and the trader in you
feels good
if he makes money
irrespective of the anaylsis.

both seem to be so opposite
to each other.

one is so sensitive
the other is thick-skinned.

one is a thinker
the other is a doer

one is a white-collar executive
the other is a blue-collar workman

both appear to be so different

but in reality
both are complimentary
to each other....

both are meant
to maximize the profit
and minimize the threat!

both are severely handicapped
without each other....

what should one be?


turn by turn?


who's the boss?
both are team-mate commandos

the analyst and trader in you
are like
a team of
a cop in a car
and a cop in a helicopter
both chasing a criminal
as in "the most amazing videos"!

the cop in the helicopter
radios the cop in the car
about the location
of the fugitive on the run.
(the fugitive is free
to change his direction
as per his will!)

thereafter it is the job of
the cop in the car
to complete the task!

the job of the cop in the air
is not finished
till the cop in the car is in the street!

the analyst in the helicopter
and the trader in the car
have well defined roles!

it will be disastrous
if the trader is in the air
and the analyst is in the car!

Thursday, April 28, 2011

secret of making big money in trading

in stock market
i have realized one precious thing...
if you know a secret to make money **
and if you don't use it
it is almost as good as
not knowing that secret!

and if you know "a secret"
the trade will still be risky
but you've got to take that risk!

that mountain of emotions has to be crossed over!!

i repeat
that mountain of emotions has to be crossed over!!

but on the other hand
if you don't have "a secret"
better not take any risk at all
till such time that you have one
tried and tested...

even surety is risky!
(who knows what it will bring?)
but risky surety is better that risky uncertainty!

now the question is
if you know "a secret"
how much should one risk?

you should risk
what you can afford to lose!

going a few steps forward -

- manage the risk
- try to hedge the risk
- and keep backup plan ready!

those who don't take risk
remain standing...

those who take blind risk

**(pl note that i said "a secret" and not "the secret"
- as i believe that there are more than one secrets or ways
to take money out of the stock market)

currency trading for dummies (kt)

this mini book will introduce you to the world of currency trading

it can be downloaded free

but you need to sign for a free practice account for that at\

a popup window will give you the book-link.

copy it and use it whenever you want to read it.

(i got my direct link but sharing that straight amounts to violation of copyright.)

index trading strategies for indian markets (kt)

a brilliant article

- to understand the behaviour of nifty, bank nifty and cnx-it

- and hints to exploit them

(kt=knowledge trasfer)

Tuesday, April 26, 2011

"god, tussi phir bhi great ho!"

(in lighter vein)


i am really impressed

when i read at the end of

many posts where a call is given

or the posts where a call goes right

"god is great"

nothing is written where calls go wrong.

this might annoy

our cute


sensitive god

(who definitely has

a terrific sense of


and blessing

good trading calls)


this is to say

"god! whatever be the result of the call

tussi phir bhi great ho!"

Friday, April 22, 2011

the silver lining!

(based on a true story)

sandy was so happy...

he had just got his first job

as a salesman

in an automobile sales outlet

in his town.

he started working

with passion

and zeal!


and then years

started to roll.

his employers

were really pleased

by his hardwork, loyalty and consistency!

they "rewarded" him

by offering him to marry

their niece!

a small step for the man

a giant leap of the fate!

he got a good dowry

a decent pay-hike

a seat at the round table

besides a promotion

to manage the show independently!

sandy and his family

lived happily thereafter


sandy got an itch

to do something "more"!

the student was ready

the appearance of a "teacher" was "inevitable"!

sandy met a customer

who was into stock trading!

the customer became a friend

and the friend became a "trader"!

sandy opened a demat account

and after brief flirting with stocks

started dating commodities

on the exchange!

initial fear

got extinguished

by chance big shots!

the unexpected profits

overshadowed the tiny trickle of salary!

sandy "became" an "expert" in commodity trading!

whatever he said


with the profit

he bought a ford ikon!

the ikon inspired the lifestyle

the lifestyle fueled the attitude

the attitude sparked the ego

the ego signed the bigger cheque!

sandy had come a long way

all set to go places!

his family was happy

and so were his foster parents!

whatever he touched

turned into


so, he started trading in silver

in the commodities market!

he took long position

in the shining metal

and hit a jackpot!

he booked profit

and waited

for the next chance!

chance came

like the next train

sandy jumped onto it

and got down at the next station

with his bag full!

by now

sandy had doubled his "savings"

but he wanted more!

more money

and more respect!

he wanted to prove

that his success

was not a fluke!

so the expert in him

pointed it out to him

that silver had come up too much

and was all set to crash!

this is the opportunity

sandy wanted

to prove his "trading abilities"!

while everyone was long (buy position)

sandy shocked everyone

turning short (sell position)!

that day

the market remained flat

neither up nor down

perhaps giving a serious look to sandy's position!

sandy felt great

but couldn't sleep properly

that night!

next morning

he drove fast to his office

switched on the tv

and hit the roof

in ecstacy

on seeing the silver down!

his prophecy had come true!

he was truly a genious!

a rainmaker!!

a trader with a midas touch!!!

he went out of his room

lighted a cigarette

puffed out the smoke rings of invincibility

came in

head held high

and looked at the corner of the tv screen

to see the latest "score"

his eyes mistakenly read

the wrong score!

he ordered his eyes to look at the score properly

the eyes obeyed

but the result was same!

silver had started to climb again!

sandy was "sure" that this was only momentary!

he sank in the chair

ordered for a cup of coffee

and waited!

but silver continued to climb!

minutes and hours passed

the day closed

the silver was still shining!

sandy closed the office

went home

didn't talk to wife and kid

and slept without having dinner!

next morning

he was awake

before the sun rose

in the land of the rising sun!

japanese marets opened

and silver was up!

the day dawned in india

and sandy welcomed it

by shorting one lot more!

he had enough funds

to sign the extra margin cheque!

that day

silver shot up big!

sandy got his first major hit!

now he was sitting on a loss!

he decided to wait!

the next day

silver continued its run up

unmindful of sandy's expectations!

sandy's account was now bleeding!

in the evening

sandy's broker called him

and politely requested

the business family's son-inlaw

for the additional margin cheque!

sandy signed his last "good" cheque

away from his wife's attention

and sent it to his broker!

"silver has gone up too too much

it has to fall!"

sandy consoled himself!

but silver didn't listen...

it continued to rise

at the ring of the trading bell

the next morning!

by now

sandy was in deep loss!

he didn't have the nerves to book the loss

nor did he have the money to hold the position.

but he knew it very well

that he won't be able to recover the huge accumulated loss

except from the trade itself!

"it might start falling

the moment i square off my position!"

he thought.

this thought made him very clear

about what the right course of action should be!

he borrowed 50000 from his friend

and paid it to his broker

to keep the short position alive!

silver said "thankyou"

and climbed big the next day

digesting sandy's borrowings!

now sandy found himself in a no-return position!

he borrowed 1lac more

from another friend of his

to fund 2 more days of survival!

2 days came

in eactly 2 days

and swallowed sandy!

sandy went mad!

he stopped talking to anyone!

at night

he silently

took out his wife's gold jewellery

to support his terminal trade

for a few more days!

"i will get all this back

once silver starts falling!"

he consoled himself!

next few days

silver continued to steam roll up!

sandy's fear now turned ugly!

it was a fight to the end for him now!

he locked himself in a room

lit his cigarette

and started looking at the available options!

and then


he got an idea!

he had received cash advances

from his customers

as bookings for their cars!

he opened the chester

and counted... was over 4 lacs.....

he picked them

sat in his ikon

raced to his broker's place

and dumped the cash

on the table!

the broker was shocked!

but he was "wise" enough

not to ask any question!

sandy's position got a week's reprive!


week came

and went!

silver continued to rise!


sandy finally decided to "stop loss"!

he went home

took out the gun

and pulled the trigger!


his kid

performed the last rites,

his wife

handed over the keys of the ikon

to the debtors,

locked the house

and went back to her parents' house!


next morning

the markets opened


silver continued to shine


Sunday, April 10, 2011

road to trading success....

churchill said
"success is going from
failure to failure
without losing enthusiasm"

this line sums up my journey in stock market.

do i lose?
yeah! you bet!!

am i a good loser?
no way!!!

for the first one hour after booking the loss
i am like a dog sniffed by a snake....
i simply become a statue and don't talk to anyone.

for the next one hour thereafter
i kick myself a hundred times

for the one hour thereafter
i decide to quit trading
and simply drown myself
in some task which can help me forget everything!

only after those three hours
do i cool down!

then i realise
that while it is easy for me to take myself
out of the market
it is not that easy (if at all it is possible)
for me to take the market out of me!

it is then
that i sit down
take out my entire army of concise trading notes and tools
and start to analyse
what went wrong
and why!

80% of the times
i realise
that i had all the tools and info
to pick the right trade
and didn't
because i was "in a hurry"!

i look into the nearest mirror
and it confirms to me
what a careless trader i am!

rest 20% of the time
i realise that something had happened
which was simply not in my experience and understanding database.

that is what
re-sparks the learner in me.
i get down
to update my "software"
and plug the gap in my method.

i have been telling my wife
four times every month
for the last 27 months
(since jan 2009)
i have plugged the loop hole in my system...
and everytime
i return and confess
that i just came across
another nasty one!

this way
i have been improving
my trading method
time after time
after time
after time
after time....

...everytime i feel
that i have got my "holy-method"
only to be
painfully deceived!

and amusingly (but not ashamedly)
biggest failures
and loopholes
surfaced in recent times!

it may sound strange
but i think it is expected
and ok!

my patience has been tested
to the extreme....

but thanks to all this
my trading system today
is quite strong!

am i confident now!
yes! you bet!!

am i sure that there are no loopholes left?
no, not really!

so, have i stopped trading?
no way!
not NOW!!
at any cost!!!

while i won't be surprised
to see the next loophole
i expect to see them fewer!

i will not desist from kicking myself hard
if i don't stick to my
latest version of
trading taj mahal!

for i know that i am not very far
from trading success
which will stay with me
for a life time!

"success is going from failure to failure
without losing enthusiam!"