knowing is power

self talk....if u don't know why u lost,u have lost more than u think....if u know why u lost, u have actually gained proportionately much more....

if u don't know why u profited, u have not profited in reality.....if u know why u profited, u have gained much more than u think...

knowledge is power...

refuse to fiddle

market can either go up or go down.....
this makes it 50-50 chance for winning for anybody.....
yes....anybody...!!!

then why does everybody....yes.....almost everybody loses 80-90% of the times?

doesn't it sound amusing, if not outrightly absurd?

any idea why it happens that way?

despite that much of advancement in the technical indicators, expert fundamental advise, scores of business channels, tonnes of research and countless trainings!!!

well, in my opinion the culprit, in one word is,

"fiddling"

the more you know, the more u r anxious, the more u r greedy, the more u r fearful, the more u r emotional...............the more u r nervous and unsure and full of doubt.

coupled with the noise all around and the fear of financial loss, u r always a perfect pigeon to fly at every clap.

"fiddling......yes fiddling"

when u r right...u fiddle and chicken out...

when u r wrong...u fiddle until it becomes highly stressful and breaks...

the pinnacle of learning in trading is......unlearning!!!

i have seen traders learn learn learn....

though that is not wrong....rather a must, they forget to complete the studies which requires the trader to unlearn what their accumulated wisdom points out as "wrong, fake info"

this leads him/her to a filtered, evolved, distilled simple method which is carved by the chisel of improvement with losses arising because of  "refusal to fiddle"....

self talk: 

market is a tiger (who can surely eat you alive).....but a blind one.....a deaf one.....the one with non functional nose.....he can't even smell you around!!! 

he just can't spot u till u move or come in his way!!!

self talk

self talk....every aspiring trader MUST resolve to gather his her own lessons....only they are their best friends.....only they can liberate....
---
self talk...technicals indicated uptrend start. back to back parties will always be there alternatively hosted by bears and bulls
---
self talk....even if u can afford to take 100 nifty lots.....dont take more than 1. that too of 25size, not 50. all u need is 50000 in ur account to backup even a 1000 pt adverse move!!! master the method first and then increase the trade size...
---
caution.....i am human....with all defects a human trader is prone too. i may be wrong. pl take my trades only as one of the indicators. trade only after ur own study. i m just sharing my trades. these are not recommendations.
---
self talk....the best way to wipe incidental accidental losses is not the u-turn of market in ur favour but u-turn of ur trade in market's favour.
---
self talk.....a 20-20 ends in 20 overs....test match is different
---
allen u asked
" i read your self talk on buying just 1 lot even if you can afford 100. In this context. .I remember your self talk long back which I connected and believed immensely.  You wrote that" getting a trade right has nothing to do with the number of points that a trade may give. So success ratio of getting a trade  right is the same for a small medium or large ride.  So why don't traders go for multiple lots...on short rides."  I found much wisdom in this strategy. Your comments therefore on the 1 lot issue.  Rgds.

= my reply : that's what I'm still saying. first get the method right. and once that becomes highly dependable never trade penny small....
---
self talk....the beauty of positional trading is that u r totally free till the next reversal signal comes. and reversal signal generally takes 2to3hrs to develop....so u need to check chart for a few seconds or mins  once every 2hours....
---
self talk...whatever the chart time frame u decide....select it....and then weave the entire method around it....
---
self talk....main purpose of the indicators and other tools is to segregate whipsaws from genuine turns....
---
self talk....positional direction doesn't change more than 1 or 2 times in a month....rarely 3times....no need to panic
---
caution....in the forum, both intraday as well as positional views are pouring in.....use separate minds for both
---
a question which will precipitate any budding trader's mind....where will u be in trading in 5 yrs from now ??!! where do u see yourself to be? attempt an answer and work accordingly.
---
self talk.....i can't sweep all swings cent percent.....my target is to be able to Sweep atleast 70pc of the swing....larger the trend run better the percentage....nd vice versa

trading light

"travel light"....thus goes a maxim

this aptly should be translated as "trade light" in trading!

eg. lets say u short nifty at 8150 and it falls all the way down to 8000! u r sitting on a profit of 150 points. u start fearing the loss of the accumulated profit. so, how does this effect ur trading behavior? u start bearing the burden of this fear, magnified if their is volatility and chicken out of the trade even if u know that there was no need to do that, on the basis of the technical indicators.

had u not been carrying the weight of those 150 points, u would have probably checked and obeyed the technicals without any pre-conception, without any influence, without any stress. u might have taken a fresh short position happily!

the beauty of the situation is that the market doesn't know whether u r carrying a profit or loss and how much! it is you yourself who is conscious of the "profit" you have stolen!!!

drop that burden and trade light!!!

self talks

.....whether the market is at 8000 or 6000 or 4000.....only thing imp for  trader is that it should keep vibrating, keep moving.....profit comes from movement unless u r premium eater nd prefer dead movement


....if u can potentially hold a long forever, u never have to book a loss.ur every trade will be profitable. and imagine....u always have more to put in at every dip!!!....this is what Deep Pockets do....

...a sufficiently advanced automode algorithm attached to ur bank account will be like an automatic tap of money....

....swing positional trading is very boring if ur mind runs fast.....but it is most exciting if ur mind's least count is quite large and u tune it down accordingly...

butchers and draculas

everyone thinks operators make big money.....they make small percentage..... only difference is that there capital is so big the net amount is mind boggling.....imagine 1pc of a billion multiply by 200days

one big loot point is options..... operators have premium for their breakfast and lunch......or dinner they only take scotch

someday i will share the modus operandi of options premium eating thru algo trading by them...will blow ur mind....u just can't beat them....they are bigger than Banks nd 98pc of their guys are below avg traders.but the top 2 pc use the super software hig the rest 98pc are supposed to just monitor. u tube is full of a few startling documentaries on their world

they are bleeding the world.....they make sure they don't overdo....that they keep us alive

they are not butchers....they are draculas

know them to survive them. u have to be in the minority.... with them. dont look for logic if u have their company. they can't harm u if u r ulon their side....

reminds me of the classic Brad Pit movie "world war z"

yes. they also do book loss and kick the a#$$ of the stupid who causes it. that's why they dont let fresher super MBAs touch the trades. treat them like clerks.

fear, greed and hope

operators hate those who say "No,not now." or "i will think"

operators like sheep and goats

we can never be sure in trading....but it helps to have a clue.....markets are probabilistic,not deterministic

doubt both fear and greed. both are good (essential) and bad...

never trade on hope

www

i have a safety measure in cases of reentry or adding to positions (besides the indicators).....

i call it www

....win win wait

meaning.....when my gut feeling says...go....i wait.....for half hour or more.....

if it comes down....assuming i was short already with remaining Lots...i win......if it goes even  higher....i win by having waited and got better price to short more....

in the second case.....i once again apply "www"

a pledge...

i hereby, pledge, to donate all my share trading profits (besides dasvandh from my salary) to the cause taken by Bobby and alike. i earn enough from my salary to support me and my family and live a happy satvik life.

http://thebestbusinessintheworld.blogspot.in/2014/12/17-myths-of-charity.html

17 myths of charity

the world is full of pain, sorrow, suffering, misery, trouble.....

many of these problems, especially in the third world countries are for the lack of funds. we often look towards govts for this financial support. govts often cite the excuse of lack of funds. but we all forget that the funds govt is talking about is actually nothing but the tax paid by the millions. therefore, we forget the power of the common people......we all....we all are those millions who fund the govts, armies etc.....then why can't we fund the help our fellow suffering humans need? let us not underestimate our ability.

in every religion including hinduism, sikhism,islam, christianity, buddhism and all other great religions of the world, there is a provision of contributing a percentage of one's earnings towards the help of the needy.

---

this article is dedicated to Bobby (Sarabjeet Singh), my friend in Shimla who has and is inspiring hundred and thousands of persons to come forward and extend a helping hand to those who are in need.

he has been running a dead body van in shimla free-of-cost since long time. 24x7, 365 days he is available at the beck of a call to reach anywhere in shimla and around to serve and carry the dead body of any departed soul of any religion, caste, creed, background.....for their last rights.

and recently, he took another initiative which has caught our imagination my storm. he, alongwith his spirited and dedicated friends of shimla and beyond, with the help of the CM and the concerned authorities, started serving free tea and biscuits for all poor patients/attendants in the local cancer hospital every morning 7 to 8 am. to this, he added serving free rice & dal every evening from 7 to 8pm. everyday expense is coming out to be rs.4000-5000 serving approx 200 people in morning as well as evening.....all free of cost. initially, i thought, will there be anyone who would be needing this? are there so poor people in the capital who would be needing this?......but then, when i saw and heard the response, i was shaken to the roots. i came to know that people from all corners of the state were bringing their loved ones suffering from cancer to this state hospital. many of these were very poor. though the govt is giving them free treatment, some medicines are so costly that what to talk of it! this free morning evening free service is a blessing for those broken, poor souls!

no wonder , Bobby has named his NGO (Almighty Blessings)

Bobby's cell no. is 094180-61000.

there must be many Bobby's in your city. support them. if there aren't any as yet, be one.

like me, you might be having many apprehensions, inertia stopping you from taking that first step in this noble cause.

following are some of the myths, inhibitions, inertia dead weights.
i hope this helps in identifying and blasting away those excuses and propels u in helping fellow humans....let's make this planet a better place to live.

and in the words of Dr.Pramod Batra

"kii farak painda (what difference will it make?) v/s bot farak painda (it will make a difference)

(even i thought for once....what difference this article will make? but Dr.Batra's words pushed me to write it....bot farak painda!!! just like Bobby, i can, i thought, trigger my stranger friends far and wide, thru social media........and make a difference. over to you!!!)


---

17 myths of charity
====================

* only rich can do charity

= not true. how many rich have i seen who don't, won't and can't give and help! and how many "not so rich" and "not apparently rich" have i seen who have been helping!

my definition of being rich is simple - the one who give are rich and the one's who can't are not.....irrespective of their net worth. period.



* charity has to be big

= not true.sometimes all a man or woman or child out there in the winter needs is a cup of tea and a few biscuits! don't harbour inhibitions. start with whatever u can, whatever they need.



* "what will i get"

= if u r serious with that question.....do it and find out. answers will shake u, rejouvenate u! but for heavens sake, do it.



* "i don't have a reason to do it"

= but they have a reason to need your help. pl help.



* charity is for the successful who have "arrived"

= u will never be that much "successful" and that much "arrived" if you have seeds of discontentment......u will always be discontented and will keep postponing the help u could always give. "arrive" right now and make somebody's day!


* charity is for "someday" in future

= somebody's today wants that "someday" to be this very day! pl help.



* one needs a platform to do charity

= if u see a good platform, get on board, get associated. but if don't see one, make one. and if even that seems difficult, start without that. earth u r standing on is enough of platform to do what u can.


* "i find nobody needing my help"

= don't see, watch. don't hear, listen.....feel.....everyone needs help.



* i don't have money

= then give love, empathy, emotional support, physical help.....whatever.....u r very rich.......money is just one parameter of being rich.



* charity is promotion of begging

= use ur head and emotional intelligence to spot the difference. but don't stop.



* "will i get 80G (tax rebate) on it?"

= don't know. but definitely 80B (Blessings) and 80S (Solace)



* i can't afford to give

= if u can afford that smartphone and gprs and cigarrete and pizza and shoe and jacket and all that.......u can surely afford some iota more. rethink.



* it will be misused

= use ur head, crosscheck, verify....but for heavens sake don't stop. there are many like u who are honest to the bones! support them. join them.



* "somebody" should do it

= "i" is that "somebody"



* charity begins at home

= it definitely shouldn't stop there. and if Almighty is a father figure, who isn't in ur family.



* i didn't get help when i needed

= now, set the example. be different. make sure the one who is looking upto you doesn't say that.forgive and help.



* enough of it has already been done

= no, not enough. the world is waiting.

===================

i hereby, pledge, to donate all my share trading profits (besides dasvandh from my salary) to the cause taken by Bobby and alike. i earn enough from my salary to support me and my family and live a happy satvik life.

how to day trade

dear Chandrakantji,

u have asked

"may I know strategy for intraday with single indicater or minimum indicaters?"

--

ur query gives me an opportunity to rethink, after a long time, a credible way to day trade, if i have to.

--

if i have to day trade, i would prefer to trade the following way

- a strong stock in nifty uptrend, or a weak stock in  nifty downtrend....at their respective pullbacks in their respective directions. i will not day trade in stocks which are duds. only those with strength (or weakness) should be touched for day trading. lithargic, sick, indisciplined, moody horses not for day trading! this reduces the risk tremendously. also, i will never buy a strong stock in weak market OR short a weak stock in strong market.

- for this, i would have to be sure about the nifty trend. once that is done, half the homework is done. all that is left thereafter is to spot the strong (or weak, as the case of the market may be) stock.

- i would shortlist a few indicators - 2 or 3, to act as markers for entering and exiting the trade. e.g. one can ne sma crossovers, the second being rsi and the third being (fibo) pullbacks (higher lows or lower highs as the case may be)

- i would trade with strict pre-defined stop losses.

- would trade high volumes (small rides never mind).

- would exit in steps (and enter that way also).

- would have a sound low brokerage broker.

- would have lightening fast assured net/broadband connections

- will never take stakes more than 5% of the money in my trading account, even if that means it will take me 50 years to be a millionaire. (because i know there is something called compounding effect which will take care of the things later on)

- i will have good software (even if it is a free one called google finance)

- i will keep god out of trading and not blackmail him. (god helps those traders who help themselves)

- i will be ruthless in stop losses and methodical in profit booking.

- i will treat the loss, if resulted after following the above rules, as the unavoidable, expected and healthy cost of trading.

- i will not spend the profit but keep 50% in buffer fund and 50% ploughback for the next trade.

- i will not trade just because i want to. i will trade only if and when there is one, as per the written-down well-defined carefully selected method.

- i will not trade if i am excited or depressed or nervous or threatened or happy or sad or under any influence.

- i will not count my profit or loss. i will keep trading as per the method. i will remain living a decent frugal life i have always been living. 

trade stock or nifty?

dear Shankarji,
u have asked

"Majority of people are trading different stocks at one time and losing complete focus and concentration. Will you please give your views and the importance on concentrating Nifty or any stock exclusively"

--

well, i feel in stock market world, there are several totally different mini-worlds.
- stock investing
- day trading in index futures
- day trading in stock futures
- swing/positional trading in index options
- swing/positional trading in stock options
- scalping
- hedging
- arbitrage etc etc

all of these, i reapeat, all of these look similar but are a universe apart...

all of these require different training, different temperament and carry different risk/reward scenario.

different funds / entities specialize and focus on different categories from the above.

i am often utterly surprised to recall how i used to hop between day trading to swing trading to investing to scalping etc etc, just like fugitive who, when wanted by one state's police runs across the border to another trading territory.....only to be decimated wherever he goes.....

grass and trade on the other side always looks greener!

--

coming specifically to what u have asked shankarji,

stock trading is very very different from index trading.

since index is the average of top stocks (floating weighted mean of market cap) it's behaviour is totally different from the behaviour of individual stocks. it is less volatile and more predictable. it's response to technicals is more "true". in other words, index futures responds more accurately to technicals than individual stocks. also, stocks need different indicators to tame than indices.

contrary to a myth, to trade a stock u do need to have a tab on the fundamentals of that stock too besides understanding the macro exconomical factors which can effect them. otherwise, one misstep will take away much more than u have gained in many small favourable moves.

also, since the liquidity of nifty futures is much more than that of stocks, the premiums and market rates of nifty futures are much more "genuine" and much less "inflated" or "distorted". slippages are also quite less.

even among bank nifty and cnxit and nifty, there is heel of difference in scenario!

--

stocks are wild horses while nifty is a disciplined trained well bred stallion.
u decide which one to ride depending upon whether u r a tarzan or a professional jockey!

what to do when u have missed the trade?

murliji, u have asked

"Those who left the down trend bus prematuredly or those who haven't boarded yet, can they board in on Monday?"

--

i don't know that for sure.

will have to see the technical set-up / indicators on monday morning. if there is a big gap down opening, bullish rsi structure will be destroyed and that would mean that market will have to go down further to "make" next bullish divergence to be eligible for the next uptrend.

but inbetween the destruction and re-construction of this bullish divergence, market may attempt pullbacks or ranges. those may be the sell on rise occasions. we will look for the opportunities as they come.

difficult to predict too much in advance.

predicting market movement is like predicting weather. while u can predict to reasonable degree of accuracy for the next few days, the farther u attempt the prediction, lesser is the accuracy u can claim.

i have experienced that market itself doesn't know too much in advance where it is likely to go. operators don't know that either but what they know is this - they know that they can manipulate the way the things happen which have to happen.

--

having said that, i must add what i think of missed opportunities now a days...

an opportunity is always coming once every week. atleast, 3 times in a series for sure. not just for this series but forever.

so, whenever anyone has missed an opportunity, he/she would not have to wait for more than a few days, give and take a few.

but, whenever someone talks of the next opportunity, i take it as an indication of one kicking his boots for having missed a juicy chance and is itching for the next chance. though this is totally understandable, this needs to be conscious about as desperation can lead to reactive/instinctive behaviour by a trader leading to being trapped in operators' net.

we are susceptible to doing what we want to do instead of what we should be doing.

ejecting from trades.....lessons from fighter pilots

pro traders and fighter pilots are not supposed to eject till the very last moment.

murliji's poser has made me delve deeper into this off-the-cuff remark which i strongly believe in. let me think the why and how of it aloud here.

operators' (and for that matter every serious trader, big or small) primary, if not sole, aim is to get others' money. (it might sound devilish and hawkish and unethical, but that's what it is, trading being largely a zero sum game unlike investing).

since operators are the controllers of the market (they controlling overwhelming majority of the capital) they have to do that by ensuring that they catch the majority on the wrong foot.

and to do that, unpredictability/stealth/dodge/surprise/shock et al are their chief tactics. they will do even the most obvious in the most unobvious way.otherwise what's so difficult about the bet which has 50% assured chance of winning? (market can only go up or down, can't come out of the screen or go in deeper!)

now look at the other side of this predator-prey ground......the mass herd of traders!

while operators have tonnes of confidence and iota of fear, small traders have tonnes of fear and ounce of confidence! they are pre-paid failures!!! retails traders are doves ever ready to flutter and fly (eject) away, with or without their capital!

this fear is exactly what the operators want to keep the trader's in the losing majority! and mind you, greed is fear, inside out!!! both fear and greed are, hence, traps.

so, what does a trader have to do to be a Pro and not be an Am so that he ejects not a second too soon?

first, have a method. learn to fly the jet to the hilt of perfection. crash the simulator a thousand times. ten thousand times....literally! cry, sweat, quit and return....a hundred times! know everything that is on offer in the market. be there, do that. don't be afraid of any thread of experience. that can take from a few months to some years. depends on your resolve. the more u keep urself safe from bruises and cuts and heat and dust and pain, the weaker ur mental bones remain.

i recently watched a ted video wherein the speaker said that it has been proved that one can learn anything in 10 hours and master anything in 10000 hours. 10000 hrs, at a rate of 5 hrs a day will take 2000 days (roughly 7 years, give and take)......but remember.....10 hrs takes 2 days! so after the second day, u r on ur way and it gets better and better.....u start enjoying the pain after just a few weeks!

practice so much that every damn bluff and tactic of the operator becomes a "seen that tantrum a dozen times" stuff for u.

this is the stage when u are no longer a dove.....but a fellow hawk. u hear all the fairytale story of the operator and say "i am not impressed!"

u develop thick skin and develop of habit of seeing beyond what is being projected. that way, u don't fear any longer......u find it much easier to hold on....a few seconds, a few minutes, a few hours, a few days more! u hang on....u master ur fear and keep looking at the opportunities......ur fear becomes dwarfer than ur self-confidence....u start to test the operator rather than the other way round.....

confusion fog will still and always be there....but u will get the infra-red, x-ray....eyes to look thru....

u bear the pain of the wait and keep urself ready for any eventuality.....u become a sharp shooter marine who can shoot the coin-sized eye of the enemy from a hundred yards between narrow valley of two heads of friends!

u become so expert that u r able to spot right and wrong with amazing accuracy and at amazing speeds!

but u have to have a method....and then, u have to practice it like a possessed soul......tapasya!!!

in the words of one of my ex-bosses in my career....."nothing is magic, everything is logic". practice makes seemingly impossible things appear like magic!

i and they and you.....all are as good as our methods....and our practice.

this kind of practice on the method......ensures that operators can't easily "surpise/shock/dodge/confuse/frustrate/unsettle" you!!!

while a good fighter pilot or trader is courageous and bold enough to risk his life and capital, with technique and practice he has tamed his fears to the extent that he can take the right uninfluenced decisions.

litmus test for a trader

markets (read operators/fii's/deep pockets/smart money) are like bacteria. 

their aim is to be resistant to as many indicator drugs as possible and infect the money of the MAJORITY. 

surprise/dodge/confusion/uncertainty is their key weapon. and the effectiveness is increased exponentially by mixing it with heavy doses of boredom.

fall till here was fairly predictable. from hereon. expecting some real surprises.

in my opinion, the test for any trader is not to be able to see what's in store in distance but how nible he/she is to understand,accept and adapt to what is actually happening in the present.

interpreting fii's move

when market is falling, 4 scenarios arise viz a viz fii activity

1. fii net buying but not much
2. fii net buying heavy
3. fii net selling but not much
4. fii net selling heavy

interpretation
scenario 1 = downtrend doubtful as of then.
scenario 2 = just a pullback in confirmed uptrend.
scenario 3 = fii's want more time to fish for chosen stocks for lesser
scenario 4 = run (short) for life(time opportunity).crash approaching.

and

when market is rising, 4 scenarios arise viz a viz fii activity

1. fii net buying but not much
2. fii net buying heavy
3. fii net selling but not much
4. fii net selling heavy

interpretation
scenario 1 = uptrend at advance level? go slow with eyes wide open
scenario 2 = party just started, get onboard bagsful
scenario 3 = caution : diversion ahead
scenario 4 = last call before the diversion.

stay invested in good stock during mkt corrections

market corrections are rarely more than 33% from the highs

sometimes they are much less, or, the rebounds from the correction lows are so fast that u r not able to get on to the band wagon again.

not only this, u rarely trust the bounceback after correction so easily. u keep on suspecting the recovery and keep hoping that the stock will go down further before u buy back the stock again.

four more logics and the argument in favour of staying put with the good stocks in correcting markets is complete.....

1. any gains in the stock will be totally tax free if u stay invested for more than 1 year! u will save upto 33% tax u were otherwise required to pay! that 33% will take care of any potential 33% decline!

2. u don't miss on any bonus issues or dividends etc.

3. peace of mind.

4. you can always buy more when good stocks decline!

curious case of stock split!

every icici bank share split into 5 today
from 1798, it "fell" to 361 (cmp)

no of shares became 5 times, value per share became one fifth.
market cap of the company remains same...

so why split the share?

this simple curious question led me to the article

http://www.investopedia.com/articles/01/072501.asp

in simple words, it is more of a psychological pricing tactic. instead of 1kg sugar packs, the same amount now availble in 5 packs of 200gms each!

amusing! interesting! intriguing!

but to me, it has done irreparable damage......my technical chart is damaged.....blasted......no tech analyses possible now for a long time!

A rose by any other name would smell as sweet.....sure
but a stock will blow bigger and faster like a bubble when split!!!

(caution: to an unsuspecting amateur investor, such splits can split end the life with a cardiac arrest)