Saturday, May 28, 2011

learn fishing to be a successful trader

when i was in college
i often used to go for fishing
alongwith my friends...

we all had got
our handmade fishing rods

we would take along
a good supply of bait
to put in the hook
bit by bit
for luring the fish.

for quite a few times
it happened
that i put the bait
lowered the hook into the water
took it out after some time
only to see the bait gone
but no fish!

i felt so bad...

till one day
when the bait was gone
and a big fish had come!

since that day

i never mind
the disappearance of small baits!

because i knew
that on and off
some bait will get me a big fish!

with this one and only and simple trick
we caught so many fishes
in our college days!

was our tiny investment
big rewards!

this experience
came handy
during my most difficult trading days!

when i trade
i take it as a fishing game!

i decide my entry point
and the stop loss
and i consider the difference between the two
as the bait!!!

that bait is meant to be fed to the fish
it is not a loss!

quite often
it gets me the fish
sometimes quite big!

this psychological trick
did wonders for me!

but remember
a bait is a bait
not full feast!

if you don't have a stop loss
or don't honour it
the sharks take away
the ship full of bait!


happy fishing!

a psychological indicator

do your technical analyses

listen to the tips

do whatever

but before you take that trade

ask your head

should i enter the trade?

if it says
don't go for it.

if it says
"are you nuts?"
go for it!


is this nonsense!
may seem like
but it isn't.

what the masses are thinking
generally doesn't happen.
rather the opposite happens
though stealthily.

also, generally the trade
which is difficult to take
opposite to the human psychology
full of fear
out of comfort zone the profitable trade!

try this
with token money
and check for yourself!

the one who loses best, wins!

there are two ways to lose
lose smartly
lose losely

u lose smartly when u lose like a pilot whose jet goes out of control and he ejects safely.

the jet is lost but the human life and a highly trained elite pilot is saved!

u lose smartly when u pull the stop loss ejection trigger. the good thing is that even the principle jet is saved here as well as the trader pilot and his peace of mind!

on the other hand, u lose losely when u lose too late.

u lose losely when the writing is on the wall and the loss is most painful.

u lose not in the eleventh hour but 13th!

u accept the loss when u have no alibi or excuse left. when even your acceptance is no more graceful.


it is well known but hated secret

that good trade is never comfortable.

so, there is always a chance of loss!

so, this makes it more important as to how we lose!


the question is not who will be a millionaire

the question is who will stay a millionaire

so more important than winning is

preserving and building on the win.

there is only one way to ensure that

...lose smartly

and lose least!


that is perhaps the reason

why it is said that

trading is a losers' game!

the one who loses best, wins in the end!

Friday, May 27, 2011

trading inspiration

given below are some quotations which i have taken the liberty to adapt to trading:

original = 80% of success is showing up.- Woody Allen

adaptation=80% of trading success is taking the trade

original=He who dares, wins

adaptation=He who dares to take the trade and dares to honour the stoploss, wins

original=Anyone who has never made a mistake has never tried anything new - Albert Einstien

adaptation=Anyone who has never lost in trade has never tried anything new

original=Money never starts an idea; it's the idea that starts the money.- Mark Victor Hansen

adaptation=Money never makes a trade, it's the trade which makes the money

original=Success is neither magical nor mysterious. Success is the natural consequence of consistently applying the basic fundamentals.- Jim Rohn

adaptation=Trading success is neither magical nor mysterious. It is the natural consequence of consistently applying the basic fundamentals.

original=The path to success is to take massive determined action.- Anthony Robbins

adaptation=The path to trading success is to take massive determined action.

original=Your dreams minus your doubts equal your true worth.

adaptation=Your trading ideas minus your doubts equal your true worth.

original=The man who said he never had a chance, never took one.

adaptation=The trader who said he never had a chance, never took one.

my motivation in stock trading

i accidently ventured into stock market
in 2003 september.

at that time
i knew nothing about it.

i was a total stranger to it.

it was more of gambling to me.

i had fractured my left foot
and was confined to my home
for around one and a half months.

i had nothing else to do
so i downloaded
all the material i could
from the internet
related to stock trading.

i took out the printout of all that material
as i have always been more comfortable reading from paper
than from the screen.

i also remember
that the printout ran into more than 200 pages
it became almost like a text book.

i still remember i had crammed almost everything in there.
dow theory seemed so fascinating!

now when i look back
i shiver to recall
how useful as well as how useless
all that theory was.

the above statement might seem paradoxical but isn't.
it is a stark reality!

all the theory was useful
because it taught me the sintax and rules and basics.

but all that was useful
from today's context
because operators use
that very knowledge
to deceive everyone.

first they make us learn all that
and then don't play with those rules!

everything is there in the theory
except the tricks operators play.

if you know the theory
you know it and yet you know nothing.

and if you know the things they never tell you
(because they never know it
or because they can never know it, as it keeps changing)
you have some hope.

but for that
you have to know the basics.

coming back to those times
i want to share the watershed moment
when i finally decided
that i wanted to go for it
a full fledged plunge into stock trading.

two thoughts sealed my decision

i realized
that the price could either go up
or down!
there was no third direction.
price couldn't come out of screen or paper.
it had to move in 2d and not 3d!

this resulted into my favourite stock market line
and my motivation

"The market will either go up or go down. So, there is always 50% chance of winning. All you need to do is try and increase that %age with technical indicators and market understanding."

after this i never looked back.

whenever in doubt or pain

i just looked at these lines...


and then came my second favourite line which fuelled my effortslike jet fuel

"The stakes of cracking the code of success in stock market are mind boggling!"

total time and money freedom.....

it would be like getting back your life

real life!!!

many hurdles and setbacks appeared
but i survived all of them.


all these memories
popped in my head today
when i read the following quotation today
'1001 motivational quotes for success'
by Thomas J. Vilord
"In every problem there is a hidden treasure inside.It's your job to find it."

Thursday, May 26, 2011

it's ok if ur trade goes wrong!

every morning before the market opens

i open the website

of a couple of renowned technical analysts

who regularly appear on business channels.

i quickly double check

as to what they have to say

about the day's outlook

and the outlook for the week.

this routine has been continuing

since a few months

and i have noticed

some unmistakably amusing patterns...

while one of them

is frank and blunt in expressing his "expectations"

even at the risk of being wrong

(which he is atleast one third of the times)

the other one's writeup

is a treat to read.

this otherwise highly knowledgeable famous analyst

picks his words very shrewdly indeed.

he makes sure that he has left enough

escape routes, scape goats, alibis and explanations

to justify

whatever direction market takes...

his daily outlook reads like

"it is likely to rain IF the clouds collide

and if they disperse, which can't be ruled out

a bright sunny day may unfold"

not only that

the next day

this gentleman

has the guts to use the words

"as expected" or "as i said"!

despite all this

i still read him daily

because there is something in him

which makes me seek his opinion!

why i have shared these private feelings and thoughts?

just to share

how much confidence i have gained

having come to know

that so called "experts"

also can't predict rightly

most of the times!

that they too don't know what lies instore in future!

when i see that even such big names

are also regularly befooled and outmaneouvred

by the market,

my trading pains

turn into mere bruises of a football player!

these days i refer to such websites of experts

just to tell myself

"it's ok if things don't go your way!"

"in the eyes of the market, everyone is equal"


"even if you are nobody, respect your viewpoint

as you may still be right, and the 'somebody' may be wrong!"


it is ok if your trade goes wrong.

just turn-off the wrong trades fast.

no compulsion to be happy

a short while ago
i was reading
'1001 motivational quotes for success'
by Thomas J. Vilord

i had reached
page 11
when i came across a quotation
which stuck me
like an electric shock!

it was simple
rather too simple
....but piercing!

i was forced to put down the book
and let it sink deep.

it said
"happiness is the highest level of success."

nothing big on the face of it

but the moment you dive below the surface
you realize the intensity of the statement...


it wasn't mentioned
who had said it!

but whosoever would have uttered it
must have been a great great man indeed!


everyone on this planet
is running running running

after what?

majority don't care?
many don't know?
and rest say they are doing it all
to be happy!

and how are they doing it?

by collecting gadgets and assets
by building bank balance
by magnifying our ego and diminishing those of others


they believe that this will make them happy?

so, does this actually make them happy?

they do get intoxicated
but do they become happy?

lets ask ourselves
are we happy?
are we relaxed?
is our race over?

why not?

the problem as well as the solution lie in the saying itself

"happiness is the highest level of success."

people think that since happiness is the highest level of success
one has to achieve all other forms and stages of success
to achieve this highest level i.e. happiness!

this is the very problem.

it is highest
not because of the place where it exists
but highest
because finally only happiness matters!

if finally only happiness matters
can we get it earlier than "finally"?
can we get it right here right now?
can't we be happy unconditionally?

can we detach our every race from happiness?

so that whatever we do, whatever is the outcome, we are always happy?

can't it happen that we do things because we need to do them

and not because we seek happiness!

can't we grow happiness under our feet?

can't we take happiness with us wherever we go?


there is no compulsion to say yes to the above question

just like there is no compulsion to be happy



if you are not successful

but still happy

please consider yourself

more successful than the most successful.

and if you are not happy

even after a piles of success

you are less successful than the least successful.


success without happiness is hollow

happiness irrespective of success is heavenly!

Wednesday, May 25, 2011

businessman of the year - I

(based on a true story)

javed couldn't study beyond 5 years.
his parents couldn't afford his fee.

in the next 15 years
javed completed his informal education
the university of
the road.

last year
this very day
was his birthday
as well as
his convocation day!

he was happy
but thirsty....

thirsty of success

without degree
without pedigree
and without money....

with these thoughts in his head
he stepped out of home
in sanjauli
on his way to
the mall road bazar
5 km away
in the heart of shimla.

he waited for the bus.

one came


he skipped it.

and so did many others!

another came

after good 20 minutes

...again overcrowded....

javed skipped this one as well!

and so did all others...


finally he decided to go to the mall

on foot

taking the upper narrow road

sealed to automobiles

but open for padestrians and cyclists!


as he was walking

he noticed

a big scattered caravan

of people on foot

ahead and behind him....

probably they too had opted to walk

instead of waiting endlessly

for few buses

with not so few passengers.


suddenly, an idea stuck javed...

he started walking faster

reached a public telephone booth

and called his friend karthik

semi-literate like him

and unemployed and unemployable...


voice from the other side

got shriller

on hearing javed's idea.


next day

karthik and javed

pooled in one thousand bucks each

and bought

a hero bicycle.


with that bicycle

javed reached

the starting point of that narrow road

and put up a packard


"bicycle for hire - sanjauli to the mall
rupees 20 only"

for full half hour

nobody sought his services....

"are people reading the packard?
will anyone be interested?
am i charging too much?
afterall, the bus charges 5 rupees
and it is so crowded!"

he was lost in all kinds of negative thoughts
till he was shaken out
by a voice
"i want bicycle!"

javed looked at the youngman in front of him
and the twenty rupee note in his hands!

the first order had come...

javed could hardly conceal his emotions!

the man took the possession of the cycle

and quickly rode out of sight....

and as he reached the mall road

he was greeted an surprised

by karthik

the other m.d. of the new transport company

with the plackard

"pl deposit back bicycle here!"


the customer was amazed

at the management of the "business".

karthik took hold of the bicycle

and turned the other face of the plackard

which read

"bicycle for hire

from the mall to sanjauli

rupees 20 only!"


"what if someone runs away with your bicycle on the way?"

asked a curious tourist...

"there is mountain on one side of the road

and a deep gorge on the other

besides, there are two more friends of ours

standing on the way

among the walking crowd

keeping eyes at the riders!

and all of us have got

lifetime mobile connections

with unlimited sms facility!"


full one year has passed.

the company's turnover has increased

from 400 per day

to 4000 a day

and their assets have grown

from 1 bicycle

to 10

including the ones for




and racers!


javed and karthik

have not figured

in this year's list of

businessmen of the year!


but they don't mind it!!!

dale carnegie's advice for traders

in his all-time bestseller
"how to win friends and influence people"
dale carnegie
had given four simple but deadly effective suggestions

never criticize
never condemn
never complain
never argue

it never serves the purpose!

same brilliantly applies to stock market as well.

never criticize market movement
never condemn, complain about what's happening
and most importantly
never try to argue with the market....

if you can
i repeat
if you can
try to go with it.

if you can't
step out and step aside.

but never ever criticise, condemn or complain about it

because if you do

your adrenalin will push you to argue with it

and that will result in the loss of a friend - the market.

if you can't befriend the market
atleast don't make it an enemy

it can be costly...

Monday, May 23, 2011

a different kind of stop loss

there are three main reasons why traders don't use stop loss"

1. fear of booking the loss

2. expectation (sometimes proved right) that market will turn

3. loss of face that you were proved wrong

these are genuine factors

and it takes lot of time and effort

sweat, tears and blood

to tame these psycho-dogs!


i too had a lot of difficulty in overcoming these hounds.

then, one day

i found a unique psychological trick

which helped me trigger the stop loss

without even an iota of hesitation.

rather, i started loving pulling the stop loss trigger.....

here is it.....


whenever i find that i am on the wrong side of the trade

i don't bother to trigger the stop loss.

i just buy double the reverse position.

this may sound childish

but for me

this mental trick worked

just as penicillin worked on multiple infections

many decades ago!!!


it not only saves me from the mental tug of war

with my ego and emotions

it also works as a SAR (stop and reverse) for me.

i am always in the trade

and any loss is immediately overcome with profit.

tears are too small lived

they get wiped out by smile.


i have further improved this trick as below:

i buy in current series (futures)

and sell in the next series.

i offset the booking of respective lots of respective series

by taking advantage of the zig zag motion of price within the channel.

the art of booking loss & profit!

traders are great athletes as well as great spectators!

when they run

they are a treat to watch........running like an obsessed creature....full of fear!

like a fugitive involved in a hit and run case!

and when they are not running

they are great spectators

cursing themselves as to why they are not in the race!

there are 4 types of trade athletes!

1. those who cut short their profitable runs but don't honour the stop loss hits

= typical newcomer unevolved trainee trader driven by 'fear of booked loss' and 'fear of loss of profit'. still, a good, necessary and inevitable phase for any new citizen of the market.

2. those who cut short their profitable runs but also honour the stop loss hits

= the first conscious effort of the budding trader. though he still can't overcome the fear of loss of profit, he definitely doesn't fear booking the loss. they keep ringing their piggy bank with coins till one mistake gets the better of them. such traders are less as this is more of an ideal state of a trainee mind.

3. those who not only let their profitable trades run but also don't honour their stop loss hits

= a wealthy newcomer who has got skin thick enough to bear the loss of accrued profit but not thick enough to accept that his calculation can go wrong. they win big and lose it all.....and finally blame the market.

4. those who let their profitable trades run till indication of trend reversal but honour their stop loss hits.

= matured seasoned silent emotionless egoless boring money machines. this stage comes with time but does come.

to rob or not to rob!

becoming successful
in stock trading
is not like a bank robbery

you learn
how to rob,
buy the equipment
walk-in with a gun
and walk-out with bags of cash.

unlike robbing
trading is like
daily visits to the bank
and withdrawing cash
in instalments.

those who try the robbery way
in trading
get robbed themselves.

fastest and surest and safest way
to become rich

even richer than the robber
without opting for his noble way


to keep visiting the market
keep withdrawing
keep ploughing back
and keep compounding!

Saturday, May 21, 2011

how to survive operators and make money

history of the world

is nothing but the history of the rulers.

and the story of the stock market

is nothing but the moves of the operators.

what operators do


and what do operators do?

they do

what helps them win

and hands you the loss.

how do they do that?

by tricking you!

these operators have just five tricks


even these five

prove to be too many

for the nervous creatures!

trick one:

when the majority is suspecting a fall

make the price rise with sharp falls

trick two:

when the majority is strongly fearing and waiting for the fall,

make the price rise

unrelentingly, steadily but gradually.

trick three:

when the majority is suspecting a rise

keep bringing down the price

with sharp pull ups.

trick four:

when the majority is strongly sensing a rise

keep pulling down the price

unrelentingly, steadily but gradually.

trick five:

but what if the majority is confused about the direction?

simple, make sharp unexpected false moves!


the better you know what is going on in your head

the better you know what the sentiment in the market is

the better you can anticipate the move of your predators.

time to passout?

when i joined pec chandigarh
in 1989
for a 4 year degree course
i was amused to see
a few students in our college
as we came to know
had been there
since a decade or more!

they were more like
amidst us.

upon some investigation
we found
that these "not-so-young" students
were still there
not because they were
poor at studies
(though they might have been)
but because they didn't want to passout?


because they all were
into politics

majority of them
either office bearers
of the student wings
of their patron political parties
their "cadre".

none of them wanted to
leave the plum posts rich with bucks and goodies.

all of them wanted to remain young forever
all of them wanted to remain students forever
because becoming grown up
would have rendered them ineligible
for "posts" meant for "growing ups"!

they were not bothered about "career" after studying
because they had got their "career" even while studying.

not surprisingly
they all remained there
even when we passed out
four years later.

i hope they are not their
after 18 years!!!

same thing happens in the market.

students join the "open school of stock market"
with an intention to passout
after learning.

to their own amusement
and to that of each others
they end up
like those "uncle" students
who never want to passout!

while learning never ends

there comes a time
when you learnt enough
to start making a living
and put learning
on back burner
and on auto-mode!

there comes a time
when you don't have substantially new things to learn!

that is the time you need to passout
and kiss goodbye to the school
and take up
"the job"

staying in the school
just to play to a gallery
or keep everyone in good humour

or settling for the "scholarship" instead of "fat paycheque"

proves costly!

Thursday, May 19, 2011

the trunk is not the elephant

market is a jungle
where the predators are after the prey.

but for a change
it is not the lions who rule
the elephants...
...the operators.

the movement of the elephants
decides the trend
but the poor hares, jackrabbits and deers
...the retail traders
take the swinging of the elephants trunk
as the change of the trend

and keep running scared
helter skelter
with the pendulum nose of the big creatures!

little surprise
they get trampled over!


ignore the swinging trunk
focus on the elephant.

Sunday, May 15, 2011

when the student is ready the teacher will appear

i extend invitation
to anyone wishing to learn
day trading or swing trading
from me.

you would need to come to shimla (himachal pradesh)
for one day
(with prior appointment)

the aim of this one day module
will be to equip you
with a few core tactics and methods
to finally start making money in the market.

charges : Rs.5000 *
(excl lodging/boarding)

for further details
pl email me at

Saturday, May 7, 2011

flies in the market

it was
a high altitude
chilled morning!

i and my trading buddy madhu
were on our adventure tour
into the himalayas.

we had reached bhawanagar
on a cliff
one kilometer above
the mighty satluj running below.

we were feeling a bit tired
and were looking for a tea break...

soon we noticed a small
tea vending stall
in a secluded fold
of the serpentile valley.

we signalled each other
parked our enfields
and ordered
"two special chai (tea), please!"

we sat across each other
in two "coke" chairs
across a "pepsi" table
eagerly waiting for our "chai"!

while waiting
i extended my body in the chair
and closed my eyes

while my buddy
spotted a newspaper in one corner
of the "dhaba"
and reached for it!

"its four days old, sir!"
the "cheff" said.

"i'm not going to read it!"
replied madhu.

i was surprised
and so was our host.

"then what for?" i asked, cutting short my mini nap

"for this...."
saying this
madhu triple folded the old newspaper
and smashed it in a flash
on the table.

when he lifted the weapon
i and the "cheff" saw
the dead body of
a housefly!

"i hate flies!" puffed the commando!

our host smiled
and turned back
to look at the tea on the boil!

"bang!" came another explosion!
another fly was dead!

"bang! bang! bang!"

three more....gone....

"what a relief! they are all finished!"
claimed madhu!

tea came
and also came
the next brigade
more flies!

madhu put down his tea cup
picked up the newspaper carrying the photo of george bush
and pounded the flies he hated
like the innocent iraq!

"bang! bang! bang! bang!"

all "stinger missiles" hit the target.

the battle was won
but the war was far from over!

more "sukhoi fighters" appeared
out of nowhere!

madhu gave up!

and uttered those immortal words

"these flies
are like stock market traders...

they see their fellow flies being killed
all around them
but they never get the clue
that somebody is after them!

they keep sitting there
they keep returning back
dreaming to drink the profit of
the sugary drops of tea on the trading table!
only to be smashed down!

majority of the flies
are poor dumb greedy flying machines

but some intelligent flies
who have demat accounts
keep blaming the deficiency in their technical knowledge
rather than acknowledging
the invincible skill
of the giant "gulliver" operator
across the table!