Wednesday, June 29, 2011

urge to enrich fast

“one major mistake
of all speculators
is the urge to enrich themselves
in too short a time.

instead of taking two or three years
to make 500% on their capital,
they try to do it
in two or three months.

now and then they succeed.

but do such daring traders keep it?

they do not.


because it is unhealthy money,
rolling in rapidly,
and stopping for
but a short visit.

the speculator in such instances
loses his sense of balance.”


How to Trade in Stocks
by Jesse Livermore

greatest blunder in trading

"i did precisely the wrong thing,"
livingstone notes.

"the cotton showed me a loss
and i kept it.

the wheat showed me a profit
and i sold it out.

of all the speculative blunders
there are few greater than
trying to average a losing game.

always sell what shows you a loss
and keep what shows you a profit."

reminiscences of a stock operator

trading simple

"livermore never considered himself an investor;
he was a speculator.
he didn't mind being long or short,
he just wanted to be correct.

his approach was to figure out
what the path of least resistance was
and then go with the flow.

he didn't believe in picking tops or bottoms;
he waited for a trend to be confirmed
and then jumped in,
thus never fighting the tape.

livermore never traded out of boredom
or solely for the sake of the excitement it brought to him.

he knew that he could get rich
by following a defined trend
and thus calmly waited on the sidelines
when the market was directionless.

had livermore been alive today
he would certainly be
a momentum / price action based trader."


review of
Reminiscences of a Stock Operator


how do you trade?

with head?


liver (gut)?



ears (tips)?

eyes (graph fluctuations)?

blood pressure (impulsively)?


howsoever you trade

“all stock market mistakes wound you in two tender spots - your pocketbook and your vanity."

- Reminiscences of a Stock Operator

shadow can't be the body

shadow is shadow.
it cannot be the body.

shadow can do a lot of tantrums
go ahead
go behind
go round and round
become small
and big
even vanish!

all depending upon
the "supply" of light!

but ultimately
it has to tow
the line of the body.

body is free to go anywhere
but the shadow
must ultimately
follow its master.

same is the case with
the price movement manipulated by operators.

whatever they do with the price
they drive the price
they can't ignore the fundamental scenario.

if demons of inflation
or crude price
or currency strengthening
or political stability etc
are bearish
operators simply can't
flirt with the horns of the bulls
for ever.

in the words of jesse livermore

"whatever might seem to give a big swing, initial impulse,
the fact is that its continuance is
not the result of manipulation by
pools or artifice by financiers,
but depends upon basic conditions.

and no matter who opposes it,
the swing must inevitably run
as far and
as fast and
as long as
the impelling forces determine."

secret of making big money in trading - II

"It never was my thinking

that made the big money for me.

It always was my sitting.

Got that?

My sitting tight!

It is no trick at all to be right on the market.

You always find lots of early bulls in bull markets

and early bears in bear markets.

I've known many men who were right

at exactly the right time,

and began buying or selling stocks when prices were at the very level

which should show the greatest profit.

......but they made no real money out of it.

Men who can both be right and sit tight are uncommon."

excerpts from

'Reminiscences of a Stock Operator'

who wants to lose?


nobody wants to lose.

nobody likes the feeling of a loss.


we don't admit that we have lost!

and hence keep on going down.


i am reading

Reminiscences of a Stock Operator

a 1923 classic novel by Edwin Lefevre

(disguised biography of Jesse Livermore, ranked #15 on 'Fortune's 75 The Smartest Books We Know').

what i found very interesting was

the admission of jesse livermore

that he never mind losing

as he knew that he would

always make good profit "on balance".


only good losers can ultimately make it large in trading

not the bad losers!

difference between stock gambling and stock speculation

both are risky.
both are loaded with money.
the difference lies
in the probability.

when you gamble
i.e. when u take a blind plunge
there is still 50% chance
you will win.

if you play equally big and long gambles repeatedly
and you have sufficient funds and guts
you will end up in

but when you speculate
i.e. when u take trades
after good, patient and shrewd homework
and if you take equally big and long trades
without giving a damn to operator tricks
you will end up in
pretty handsome profit.

there is nothing called
without being closely followed by
kick of the jack
and the pot smashed on the head!

patient pileup of the reward
from speculation
is the only way
to attract
big sustainable riches.


we call gambling - speculation

speculation is the guts of a seasoned trader.

behaviour of a friend

do you have friends?

chances are, that you do have
some pretty fast friends.

since they are your fast friends
you know quite a good deal about them.

what if
some day
they don't behave like what they usually do?

what if they look and act different.

you may not have the real reason
but you know that something is wrong.

your awareness antennae get alerted
and you go slow.


same thing goes with trading with stocks.

first, never trade in a stock
till both of you
are friends.

you can be friends
only if you know about it

it's behaviour
it's state of affairs.

and then
if you find
that it is not behaving normal
in the direction you expect it to
you should preferably stay away.

in the words of jesse livermore

"....there is what I call the behavior of a stock,
actions that enable you
to judge whether or not it is going to proceed
in accordance with the precedents
that your observation has noted.

if a stock doesn't act right
don't touch it;
because, being unable to tell
precisely what is wrong,
you cannot tell which way it is going.

no diagnosis, no prognosis. no prognosis, no profit."

beauty of doing business with crooks

abraham lincoln had said
"you can fool some of the people all of the time,
and all of the people some of the time,
but you can not fool all of the people all of the time.

alas, lincoln lived in an era
when stock markets weren't there
and hence
he didn't know about
the big pocket operators!

those who are against the operator position
if the majority is on the side of the operators
the operators change the side.

so, only a minority on the side of the operators
make some money.

when operators do their maneuvering
some smart
cheeky traders
do manage to snatch away
some or good money from operators.
operators know that
but don't mind that.

there are traders
who don't let the operators
take their money easily.
they refuse to take the bait.

operators don't mind even that.

it is all part of the tiny expense
they have to incur
for mass trapping.

the operators know
that sometime someday
even these cheeky traders
will return their money.

in the words of jesse livermore
"the beauty of doing business
with a crook is
that he always forgives you
for catching him,
so long as you don't stop doing business with him."

Tuesday, June 28, 2011

twin trading technique

twins always stay together
hand in hand
till they grow up
too much!

two such twins are
bpcl and hpcl.

here is a day trading strategy
for these two twins
and all others
which are very very similar.

any one of these
moves more than the other
by more than half a percent
(more the better)
just short the futures of the above
and long the futures of the lower.

99, if not 100% of the times
the price line of the two
will touch again.

sometimes they crossover
soaring the profit.

this reunion happens
usually in the same day,
otherwise definitely the next day.

don't prolong this trade
more than 2 days.

also, stick to futures
and not options or delivery segment.

enter and exit the trades fast.


this technique can be tried in other siblings also.

dealing with witches and magicians

while doing business
with a witch
or a magician
there is one golden rule to follow
"never look into her eyes".

while swing trading
against the operators
which are no less
the golden rule becomes

"never look into their eyes".

tick by tick
price movement
on the graph
is their eyes!

if you do
then don't complain
of hypnotism
or outright

games operators play

there are only two directions
the price can go.

either up

there is no third way.

and one of these directions is right
in a given time period.

if you take the right direction
which is a 50% probability
and if you stick to it
(the probability of which is very less
but lets assume it for the sake of discussion)

then how would the operators feel?

not very good.

what would they want to do in such a situation?

they will pray that others don't do that.
atleast the majority doesn't take that position.

if the majority does that
then the operators are left with just two options

either, force change the reality to the opposite direction
(which is dangerous for them considering fundamentals)


as the better option

scare or trick you out or opposite.

so, choose right, sit tight.

advanced trading lessons from my trading diary

- be aware whether u r in a rally or range. trading decisions are totally different for both conditions.

- pro-rally indications are juicy, anti-rally are bitter

- at the start and towards the end of a rally, there are rangebound movements. these are foggy and tense times and need to be avoided.

- fill it, shut it, forget it. once you know the direction (from experience, trained gut and indications) just sit tight and don't fiddle. don't look at scary price gyrations. ultimately, market will do what your trained mind has figured.

- trade in index. it is surprise-proof.

- if u r trading in index, and if u r well-trained, and if u have sufficient backup funds, if u have done ur homework well, u don't need a stop loss or option insurance.

- go for option insurance only when they are cheaper.

- shut up those b#@$%^$s!!!. they know nothing.....chirping langoors........they have explanation for everything. stick to ur own head.

- 1-2-3 positional trades per month are enough. these will give you enough money to be super happy. more trades only bleed ur account.

- disasters don't happen in indexes without notice. even circuits (only 3 circuits in the history) don't kill if u r not stupidly leveraged. also, pro-circuits are heavenly (though to be attempted only by well-experienced). never worry disasters except in stocks (recent examples, gtl family).

- "courage is fear whose prayer has been said" : have guts to take a studied position. have the heart to see the blood. if ur homework is right, blood turns into ketchup sooner or later.

- core trading technique is god. if u have the technique u can bat on any pitch with confidence (like gavaskar, laxman)

Saturday, June 25, 2011

just a piece of info

when a company ceo comes to know

about a very big news

that can shoot up or down

the company's stock price,


when the governement knows

of some big policy decision

they are about to make

that can shoot up or down

the market or sector or company stock price,


when some FII / DII knows

of some big ticket buying or dumping of stocks by them

1) who all do you think know the news?

2) what do they do with the news? do they just release the news? or do they wait and do something with it before releasing it?

3) whom do they share it with? why? how?

4) what happens after that?


a piece of info

can be worth a few thousand crores.


welcome to the worlds inside the world.

trading doesn't need explanations

"......when a stock is going up

no elaborate explanation is needed

as to why it is going up.

it takes continuous buying to make a stock keep on going up.

as long as it does so,

with only small and natural reactions from time to time,

it is a pretty safe proposition to trail along with it.

but if after a long steady rise a stock turns

and gradually begins to go down,

with only occasional small rallies,

it is obvious that the line of least resistance has changed

from upward to downward.

such being the case

why should any one ask for explanations?

there are probably very good reasons why it should go down,

but these reasons are known only to a few people

who either keep those reasons to themselves,

or else actually tell the public that the stock is cheap.

the nature of the game as it is played is such

that the public should realise

that the truth cannot be told by the few who know."

(reminiscences of a stock operator)

reminiscences of a stock operator (ebook)

Friday, June 24, 2011

don't worry about your trading success rate

what is better in trading?
70% success rate
or 45%?

70%, right!

well, not necessarily.

i was just checking
my old trading data
from the
ruthless trading diary that i maintain
and want to share two crucial observations.

1. out of 46 trades i took
during a particular period last year
my success rate was 63%
but i had eroded 12% of my principal amount
compared to what i had at the start of that period.

2. out of 18 trades i have taken
in the last 2months
my success rate is 45%
and i have made 19%
on what i started with
at the start of this period.

on digging deeper
the reasons were simple

in case 1
i was cutting winners early
and booking losses late.

in case 2
where my strategy was different
i had hedged positions.
so for every profit
there was a loss.
but since i had hedged
two different things
of different nature
the difference in profit and loss was big.



though recording and analysing
trades is important
too much of emphasis on trade success ratio
is not that important.

it often is just a reflection of your method.

you may be winning more
and yet bleeding.

what really matters is
your strategy
its implementation
and consistency.

so, don't worry about your trading success rate
once you get it right
you will see a dramatic change in the net results!

trader on a roller coaster

if the price line in the stock market

is a roller coaster

then the operators are its designers!


they design

the ups and downs

the turns and twists and loops

and runs and stops

and climbs and falls

in such a way

that the riders

i.e. you and me

experience the maximum



the shock turns

shock retardation

shock acceleration

stops and starts

loops and tilts....

all are designed

to generate maximum g-force!

they know it very well

that there is always a limit

to the extent of g-force

a normal

trader can withstand!


the poor trader

first enjoys the ride

then gets the thrill

and when the "real ride" starts

he or she is gasping for breath

but the ride doesn't stop.


the only way out -



you get the thrill

the operators get the money!

your money!


the same thing happens

time after time



so, what can a trader do?

learn to anticipate the turn?

learn to cram the turns?


that won't help.

they will change the turns everytime.


so what to do?

practice practice practice

adjusting your body

to the g-force cycles

just like a fighter pilot.



even operators can't change a g-force song

every second.


with time

you will learn to ride the roller coaster

like mr.bean



enjoy the ride!

Thursday, June 23, 2011

why technical indicators are not enough

if you are a medium term (swing or positional) trader
you have decent chance to make money
after learning and practicing the basics
1. money management
2. method
3. mind management

but if you are
a day trader or a very short term trader
even the above three
may not be enough

you may find it difficult to make profit

and you may find it extremely difficult
to preserve the profits
assuming you had got some!



operators don't want you to be profitbale.


because if you are profitable

then they won't be!

so what do they do? you, trick you, confuse you, bulldoze you

......trap you, checkmate you

how do they do that?

simply, by doing

what you don't expect to happen

the way you don't expect that to happen.

unpredictability is the only predictable thing in the market!

and what do we learn?

'predicting with indicators!'

'anticipating the trends and change of trends!'

and this is where you get beaten

hands down!!!



what to do?

my learning is

that you can't beat the market with indicators

and trained gut alone!



you need to find ways

which land you in a win-win situation!

you need to find

'casual' moments of the market

- situations and moments

when the market's bluffs lie exposed!

where the operators can't play traicks on you

at least that easily!

you need to find ways

to be with the minority that is on the side of the operators.

here are some examples

- btst is a corner
where operators can't trick you.

- similarly, hedging is a way
where operators can't befool you.
(hedging is always done between unequal objects)

- likewise, using the one sided power of options
is a great way to take safe calls.

- one more weak spot of the operators
is the fact that operators can't change directions
at the drop of the hat.
there are time intervals between such turns.

- another possible idea for tactics is
the fact that mass public trades on
predictions of indicators
and sentiments.
so you can be sure
what the "herd" is going to do
and hence
what the operators might do

- yet another tactic
is to expect the unexpected
at every expectation point.


i just shared a few ideas with you.
i am developing my method
on the basis of one of these.
you may choose yours.
but the core / central message is

- indicators without tactics
are boomerangs.

- tactics with indicators
make the real defensive and offensive trading systems!

Sunday, June 19, 2011

the whisper - II

the markets had fallen big
and since long!

everyone was dejected.

majority traders had turned long.

an analyst
analysed his charts
and softly whispered

"the markets are likely to fall more
and big!"

markets actually did.

what did the traders call the analyst?

"the man with the black tongue!"

the whisper

"why do you move like this?"
asked the breathless bleeding trader
to the market.
"why don't you move straight
where you want to go?"

market raised its head
looked into traders fearful dry eyes
kissed his forehead
and whispered in his ears
"because i don't want you to come with me!"

the innocent trader
took it to his heart
wiped his dry tears
and left.

market felt guilty
went after him
touched his shoulder
and said softly
"want to come with me?"

trader turned again
and silently nodded his head.

market smiled softly and said
"then don't stand too close.
don't look at what i do
just watch from a distance
and try to see
what i am trying to do."

Saturday, June 18, 2011

overcoming fear!

have you ever feared anything?

what did you do?

i bet you never pounced on your fear....

nobody does that

otherwise it is not fear

but anger!

so what did you do when you last time feared something?

chances are, you felt like

running away!

changing your path!!

altering your plans!!!

did you feel good when you did so?

again, the chances are

you felt even worse!

so, what happened thereafter?


chances are,

you must have kept worrying

caught in the stalemate!

the fear not leaving

and your ego not forgiving you for running away!



there is a way out.

next time you come across a situation

you are not comfortable with,

a matter you fear

a thought, a person, an act that is troubling you

....don't run!

neither fight

nor flight!

just stay put!

do nothing!!

just stay there!!!

coolly, calmly

but determinedly.

like a cool rock.

chances are

the fear will diminish

and get exposed.

chances are

you will be free

without a external fight.

with just a small but intense

internal battle!

Wednesday, June 15, 2011

100 laws of business success (ebook)

the 100 absolutely unbrakable laws of business success - brian tracy

ebook (pdf)

project "freedom"

when i was in college
we had read somewhere
that any project taken in hand
double the cost
and triple the time.

and that too
if our preperation was great
and we were skilled.

and chance factors
play a big role!

same thing applies
to many aspects of lives
learning stock trading.

it takes
double the cost
and triple the time
if not more,
hell lot more!

and that too
if our preperation is great
and we are skilled
and disciplined
and mentally tough
and lucky!

we have started the endeavor with full seriousness
and preferably under watchful eyes!

i started trading seriously in january 2009
and expected to be
financially free
on the basis of trading
by december that year.

all this while
i was damn serious
and enterprising.

only now,
as recently as today,
i have had
the first glimpse of my aim
completion of which
is still a few months away.

i am already 18 months behind my targeted aim!

and how much money i can't disclose!!

what a journey it has been

project "freedom"!!!

6 last laws of trading

* there is no alternative to experience.
= trading without experience will ultimately lead to experience!

* do ph.d. in one or two indicators and stick to them
= if two are not good enough, neither will be twenty-two!
= difference of result comes not from the number of indicators, but the depth of understanding.

* trade only and only when relaxed. stop trading when excited
= the excited will be trapped, the relaxed will be spared and rewarded.

* no risk, no profit
= risk is and will always be there. nothing, i repeat, nothing will happen till you take it.

* use your own head
= others are only confident confused compulsive liars as successful as you.

* take only that much risk which you can afford to bear
= excessive risk hypnotizes good trading

my view on the markets

11am, 15jun,2011
= bullish on nifty / bank nifty. good upmove on the cards starting today or tomorrow.
nifty = cmp 5486, bn = 10759

Monday, June 13, 2011

how to know what the operators are doing?

how about a graph

of operator activity?

what if we had a chart

which showed us

when the operator is buying

when the operator is selling

and when the operator is simply letting the price drift

without much support to the opposite side?

if only we had a chart

which told us

when the operator was accumulating

and when he was distributing!

the amazing fact is

that such a graph actually exists!

it was right under our nose since ages

but was never looked at from this angle.


i am talking about

the rsi graph.

amazing and unbelievable as it may sound initially to you

an rsi chart

is not just the momentum indicator

it is the defacto graph

chart of the operator activity.

when the price and rsi are rising together

operator is buying,

when price is rising and the rsi is flat

operator has started distributing

and the general trader momentum has picked,

when the price is still rising

while the rsi has started to fall

the operator is distributing.

and when the price starts to fall

the operator's distribution is at an advanced stage

-the collapse is on the cards.

similar cycle occurs

during downturns.

know the operator movement better

to trade better.

how to know when are the operators laying a trap?

= when even the advance indicators

(under the watchful eyes of even seasoned trader-sense)

fail to indicate


start indicating falsely

it is

the time

when the control of the money and stock heaps

has been taken over from the trading software

into their own hands

by the operators.

their active intervention has come in

and the trap is being layed!

Sunday, June 12, 2011

rat sense

a trader was always losing
despite good knowledge
of technical indicators
and operator tactics.

he got frustrated.

he stopped trading
and went to his ancestral house
in the remote village.

cool breeze
lush green fields
zero pollution....

everything felt so great

a lot many were there!

one evening
he took out a mousetrap
stuck a piece of bread in the hook
stretched the trap ready
and went to sleep.

he was woken up
not by the alarm clock
but by the loud clap
of the mousetrap!

the trader jumped out of his bed
switched on the light
looked down
and saw his prize
- a small lean mouse!

he was feeling so good!
just like he used to feel
when he used to book
the rare profit
in stock market!


he switched off the lights
and got down relaxed
to resume his sleep!

hardly had he lied down
when he noticed
chik-chik sounds
of rats!

he turned on the light in a jiffy
and looked at the trap again!

three fat rats
sitting besides the dead body of their poor lean buddy
were merrily enjoying the piece of bread!

as he got closer
they all vanished!

the trader was red in the face
just as he used to feel
when operators used to take his money
in the market!

next evening
he again laid the mousetrap.

as expected
he was again awakened
right in the dead of the night!

this time
he kept lying in the bed for some minutes
and turned on the light
only when he heard the screeching
of the rats again!

as he looked at the crime scene
he was shocked to see what he saw!

though the trap had got its prize
-a lean small rat
with his neck in the trap,

four fat rats
were sitting by the ringside
feasting on the bread!

instead of getting angry
the trader was amused!

he was amazed to see the
cunning strategy of the fat rats!

the fat rats wanted the piece of bread
but they were aware of the trap too!

they didn't know what the trap was
they didn't know when or how the trap will go off!

all they knew was
that there was a trap
and that this trap usually went off
only once per night
and thereafter
it was always safe to eat the bread!

they had decided
to always wait
till the hidden trap went-off!

their wait had always paid-off.

some lean hungry greedy desperate mouse
would always fail the patience test
and enter the trap first
...sniffing the bread
inviting a certain death!

and once the trap was exposed
the fat rats would arrive
for their share of the bread!


a big smile
beamed on the face of
the dejected, rejected and ejected trader....

he had realised that this precisely was his problem as well!

he was one of the lean hungry desperate traders
despite having good technical knowledge
despite having the ability to predict a movement
couldn't see the trap
couldn't wait for the operator trap to be exposed
and went in
always first!

their sacrifice
always exposed the trap before the fat rats
who would then jump in
for the party!


next morning
trader woke up
to a new lease of life!

he was ready to go back to mumbai
to trade with the newly acquired
rat sense!

angel traders who never lose!

i know someone
who never loses in trading.

when someone around him loses
he makes money

when someone around him wins
he makes money

even when someone around him escapes
with no profit no loss
he still makes money.

but when no one around him trades
that is the only time
he too goes home
sans profit....

he is the one
who never fears
a crash
or a mad bull run

meet him

he is my
friendly neighbourhood

who is always there to help me

( a price!
and he doesn't spare me even when i am bleeding)

i don't exactly love him
but i can't live without him

on the contrary
i want to be like him

being a broker is better than being a broke!

god! make me a broker
in my next incarnation!!!

why real experts don't and won't share their real secrets - 2

when i joined pec chandigarh in 1989
one of the first thing we asked a professor was
"what's the difference between engineering and technology?"
"why is our degree B.E. and not B.Tech.?"

our professor was taken aback by the question.

he explained in a jargon which we couldn't comprehend.

it was years later
when we answered the question for ourselves.

technology is the science behind the engineering
engineering is the application of the  technology .
technology is the reason behind the  engineering  formula.
technology is the making,  engineering is the final product.
engineering is the usable form of  technology .
engineering is the process of designing an engine,
the formula behind repeatedly mass producing those engines!

technologies are generally secrets
science and engineering are universal building blocks.

knowing the  technology is critical.
if you know that part
any number of engineering are just available for a sincere asking.

the tricks the operators play
are the engineering.

the technical indicators and concepts
of stock trading
are the technology!

since it is not possible
or not that easy
to get your hands on the technology of trading
-the tricks
does it mean that it is no use
learning the indicators and concepts?

no. not at all.

you can make
or counter
a trick
or an engineering
only if
you know the science and technology
behind them.

if you keep on learning the science
the engineering will come to you
almost magically
one fine morning!

why real experts don't and won't share their real secrets

because if they do
the "secrets" will stop working.

you would have to find out your own
or buy it.

in both cases
the secret will have its shelf life.


trading is all about beating others
and taking their money
or their potential profit
before they take yours!

it is not easy to snatch
anyone's money?
it has to be legal

traders have to hand over their money to you


everyone knows or can know
the fundamentals.

if its raining
its raining...
everyone knows that.

then how do you trade his umbrella
how do you make the other guy
sell you his umbrella
while it is still raining.

for that
you need something more
than the common knowledge of fundamentals.

something tactical tricks

this is what operators do with the mass traders

and this is what
wise traders need to align with
so that they end up
on the side of the big pocket operators
and not on the side of the slaughtered sheep.

these tricks and tactics
are therefore
the key
to trap the mass traders.

what is the value of the magic trick
when it is no more a secret?

what is the value of a trading tactic or strategem
that has been revealed?

this is the reason
why i say
the real tricks of the real successful traders
are not in the public domain
and are unlikely to be.

and if some big shot trader is naive enough to do so
he or she is risking the trick to become ineffective.

the operators will be quick to see the trick get exposed
and discover more.

the real importance doesn't lie just in the ingenuity of the trick
but the secrecy of it!

no trick is permanent

rather, it is as permanent
as it is secret!

what does this all mean?

it means that all the tricks and methods in the public domain
are blunt
and ineffective
and crap.

they might sound intelligent and logical and feel good
but they are good only for books and training schools.

trading is about trapping
and trapping is a moving target.

Thursday, June 9, 2011

playing bid-bid - II

when i saw

the leader of this "trade brigade"
actually perform
this magic live

i asked him the inspiration behind this "trick"!

"it occured to me accidently!" he told me.

"once i wanted to buy a put option
anticipating a fall!

i called the operator
and she told me that rate was 349!

i asked her to buy.

she did.

at 349.

but to my horror
i soon realised
that 349 was a bid
whereas the last traded rate before that
was 285!!

i had been tricked!!!

i had lost 64 points
even before entering!

i was shattered....

i felt like booking the loss!

till i was struck by a crazy idea!

i called the operator again

and placed a ridiculous bid
to sell-off that put
for 389!!!

all this when the asking rate was still 285!

i never expected that bid to find a fool like me!

obviously, it didn't trigger


a sudden sharp move!!!

though not terribly big

the move was enough
to cause a momentary panic in the market

just enough to trigger
my ridiculous bid!!!

i had found a bigger fool
running for cover
in panic!!!

that day onward
i stopped trading
and started playing bid-bid!"

playing bid-bid

many of my successful seasoned trader friends
just play bid-bid!

they trade mostly in options

(and there is a reason behind this
which i will share below...)

but first, let's see their "modus operandi"

it is simple but effective!

over a period of time
they have developed
reasonably good understanding of
their favourite technical indicators
as well as
the "behaviour" and "body-language" of the market.

on the basis of this knowledge
they anticipate a move
and place a "mouthwatering bid"!

if it gets triggered
they are "in the trade"
at "better than justified" rate!

they are in profit
even before the start of the anticipated move.

if the move doesn't happen
they can always come out rate to rate
because of their advantaged entry.

and if the move comes
(which generally does come
courtesy their experience and cunning operator mindset)
they don't book profit in a plain vanilla way...

on the contrary
they book profit based on two criteria!

first, they wait for technical indicators' exhaustion signal.
then they put a "mouth-watering bid"
one more time!

as i have seen
and myself experienced,
this bid too gets its "victim"!

the fact that they place such a bid
9even before the actual point
when indicators say "square off"
enables them to place those)
"predator bids"
before the actual avalanche!

this is important
because nobody can anticipate
the exact timing of the avalanche!

in the stampede which happens
the desperate retail traders
accept whatever bid is available!!!

this way
my friends "squeeze" the extraordinary juice
from an ordinary move!

and now
the answer to the question that
why they play this "trick"
in options
and not in futures!

they know
that ordinary traders
play options without proper training and understanding
of how to calculate
correct and reasonable cost of the option!

trading is an artificially accelerated game
which suites the predators!

i started learning trading
some years ago
expecting it to be
a science!
it has turned out to be
to much of my amusement
a game
not much different from
a casino
where you don't have to beat the market
......just fellow players!

Friday, June 3, 2011

are contra calls dangerous?

contrarian calls are called 'contra' in short

are contra calls dangerous?

are they that bad?

well, that depends upon

what kind of contra they are?

if they are contra to the trend

they may be dangerous

because picking the turning point of the trend

is easier only for the operators

but if the contra calls are contra to the street sentiment

they can be very good indeed!

street sentiments

are often driven by

greed and fear

expectations and prayers.

and hence erroneous.

Wednesday, June 1, 2011

play one side

one of the best ways to learn trading is watch business tv channels.

and one of the best ways to learn wrong habits in trading

which will die hard and not go away easily

is also to watch business tv channels.


these channels are injurious to wealth

because their noise and excitement

make you nervous or excited

fearful or greedy

impulsive and reactive.

besides, they create a false impression that

"everybody is thinking that way"

this is very dangerous

as this makes the retail traders

sitting ducks for the operators.

if i were an operator

i would keep a close watch at what sentiment the mass media is spreading

i would be using it to trap the traders!



as i said in the first line

these channels are also the best ways to learn trading.



because they expose you faster

to the sintax and rules and phrases and terms

theoretical as well as practical aspects....


the discussions of the "experts"

interviews of businessmen, bankers, traders, economists etc.

is highly enriching for the new traders!


one such technical analyst i admire

is sudarshan sukhani.

these days he comes on et now channel.

i admire this man

not only for his

ability to read situations

but also his guts

to speak clearly unambiguously.....

he never uses

'if and but' language.

he never uses face saving tactics

and hence he never loses face

whatever be the outcome of his calls or opinions.


quite a few things that come out of his mouth

are like quotations for students of trading.


one such thing

which he uttered this evening

is shared below -

when asked

he said that in his opinion

the market was presently

in uptrend (whether short lived or more).

"up" was the theme being played, he said.

and when the anchor asked him

"do you see some stocks which can be shorted right now?"

he replied brilliantly

"i can't play on two sides at the same time.

now, when i feel that the up theme is being played right now,

i will wait before i pick shorting opportunities!"


how right he is.

when market is going up

not only the good stocks rise in leaps and bounds

even the not-so-good stocks flow with the wave.

even outright bad stocks take advantage of the wind

and escape being hammered!

the overall bullish sentiment

prevents people from going short.

same is the case when overall market is trending down.

in that scenario

everyone is in selling mindset

and very few people are willing to be buyers.

so, it is wise to wait for going long in even good shares

till the overall negative sentiment and trend is there in the market!