can't spot or be sure of the start of the trend?
don't worry....look for the end of the previous trend.
new trends start only after the end of the previous one.
this reverse way to looking for a new trend (with stoploss, ofcourse) is the alternative and less erroneous way of finding a new trend.
well, you eyes tell you
still, if you want to check it with some method, here is the one i use
assume there are 4 chart timelines
1) 1 min chart= child
2) 5 min chart = father
3) 15 min chart = grandfather
4) 30 min chart = great grandfather
the trend of the more aged is the trend.
eg if 1 min child chart sma trend is up and 5 min father chart sma trend is down, it is most likely a down trend, a sell on rise trend, for short or immediate term, atleast
sma trend means = whether price is above or below sma, whether smaller sma is higher or lower than larger sma. eg. if 15 sma is below 50 sma, trend is down.
checking of the higher generation sma trend is a good way of checking the trend.
take trade timed by smaller generation chart but in line with the trend of the higher generation sma
taking trade pro-trend is less risky than against trend.
forget about profit or loss of money
is your system prediction in profit or loss, that's the point
who wins if system is wrong
and who loses if system is right
if you are happy at profit, you will be sad at loss.
if you are in indifferent or nonchalant about profit, you will be understanding of the loss.
being conscious of profit makes you fearful of losing it
being conscious of loss makes you more fearful of losing more.
being conscious of the process is important
look at the mental stability of the shooters in olympics... calm and stable...
standard advisory : trade 3 times less than what u can afford to lose.
There are 5 trading approaches
1. Technical
2. Fundamental
3. Guts
4. Emotional
5. Lottery
6. Copying
1st is best
3rd and 5th are ok
2nd, 4th & 6th are worst
Fundamentals are taken advantage of by operators. For trading, fundamentals are traps. Stocks fall on good results and rise on bad. Prices precede fundamentals.
Fundamentals are just rumours or sentiments most of the time.
What’s the fundamentals of market right now. Already into bubble. But this bubble may become football
All tactics and bluffs of operators reflect in charts. Yes bank fall was clearly visible just before fall. So was Satyam. You’ll be shocked, even covid fall was visible before the fall.
Trading = technicals + gaming
one way to book profit without coming out of the position (eg when trend is likely to continue but you want to take some profit off the table to feel comfortable and secure)
replace the costlier option with cheaper one....
eg assume you bought a BN call of 500 points...it becomes 800 or 900 or 1000.... it would be wise to book it and replace it with current BN call around 500 points.
no doubt, current 500 point call may rise slower than 1000 point call but profits will still keep trickling in if trend continues. the slight reduction in profit may be considered as the cost of insurance for peace and profit booking.
this tactic is like climbing a mountain cliff with progressively hooking oneself to higher harness.
this tactic has 2 more advantages
1. you now have money (out of thin air) to buy more positions if market steps back before resuming the trend.
2. if at all market reverses, you have your initial deployment safe.
of course, this tactic is valid for options only. which i anyways consider best for amateur traders because it is affordable for them and has inbuilt stop loss unlike futures.
also, to add that standard advise, trade with 3 times smaller trade size than you can easily afford. if you trade with small quantity (3 times less than what you can easily afford), you can become fearless trader who doesn't chicken out amid volatility, and who can trade the method till the end of trade's logic.
if your method is right even small trade size will make you rich, sooner than you think. and if your method is wrong, even larger bet size won't help. that will make you poor, that too, sooner than you think....
i know most old traders knew this, even better than this....just thought i should share for new traders. besides, when i write it down, it helps in revision.
assume there are 4 chart timelines
1) 1 min chart= grandchild
2) 5 min chart = child
3) 15 min chart = father
4) 30 min chart = grandfather
buy on the basis of child chart, when price cuts sma 50 from below IF price is above sma 15 in father chart. with stop loss as the points when price cuts child or father chart respective sma mentioned above.
similarly, you can make strategy for short trades.
this strategy is for short term trading.
i know of some retired para commandos who can tackle any hound with bare hands and any big cat with just one stick. similarly, i also know some traders who trade with just sticks of sma....the simple the strategy, the better.... complexity confuses
standard disclosure : no responsibility of the outcome. pl consult certified financial advisor before trading. always trade small which you can afford to lose without losing sleep. trader discretion advised
if you trade with small quantity (3 times less than what you can easily afford), you can become fearless trader who doesn't chicken out amid volatility, and who can trade the method till the end of trade's logic.
if your method is right even small trade size will make you rich, sooner than you think. and if your method is wrong, even larger bet size won't help. that will make you poor, that too, sooner than you think.
go slow to go fast.
i have seen that many traders avoid taking overnight positions. they fear btst or stbt.
while i respect their logic or decision, i am of the strong opinion that btst or stbt are the best trading opportunities especially in mature markets where operators find lesser ways to shoo off not-so-dumb retail traders.
so, gap up or gap downs are the preferred modes of market moves for operators.
you might notice, in mature markets like US, most market movements happen overnight. markets are comparatively quieter and range bound during the trading hours.
overnight positions are good for retail traders as well for another reason. since they can't do anything while the market is closed, they can't fiddle with position due to emotions. the patience is forced. that way full outcome of trade is ensured. you don't lose more and profit less. the loss or profit is as per full potential of that trade for that time.
everything depends upon the direction of trade taken at close. not on fundamental level, but on technical level reflected in charts.
only caution, and a big one.... trade small quantity that you can afford to lose, with the one you can sleep with a sweet smile of cute gamble....
i know some fellow traders who do only btst/stbt....rest of the time.....till 3pm, say, they are free, whistling....
btst/stbt is one of the most bang-for-the-time-buck way of trading.
two more things....first, clear btst/stbt setup may not be there everyday... but then, there is no compulsion to trade. second, btst/stbt trade is not valid a few minutes before close and a few minutes after opening. out of that zone, other factors are at play.
one more bonus idea...if the btst/stbt outcome is still a negative surprise, the move post that pro-trend may be tried.
just sharing my thoughts. your discretion and expert opinion advised. those weak in technical analysis shouldn't attempt btst/stbt.
if we have the habit of not having Stop Losses (SL), why do we have habit of taking Stop Profits (SP)....we should be indisciplined both sides...
that's one of the key reasons why even traders with 50% success rate end up losing 90% money
unfortunately, fear works both side....instead of fear on the loss side, and greed on the long side....
ironically, traders have fear on profit side and greed on loss side...
trading is 90% psychology and risk control
risk control = the warrior who knows he can't die can fight much better and win more frequently....self talk
In Stock trading
No logic➡️no bet
No bet➡️no progress
You can’t feel good without getting used to feeling terrible. It’s like developing intestines of steel without being stupid
एक आग का दरिया है
और डूब के जाना है
The day you start doing trading like a job where your boss will fire you if you don’t follow the rules, you’ll start being successful at it
The day you accept the limitations of trading you’ll start improving
Treat as if you are on basic wage with everything above it as incentive, which can be anything small to big to v big. Taking trading as a job is not a bad idea. Takes off all pressure.
theoretically there are 10
- north
- south
- east
- west
- northeast
- southeast
- northwest
- southwest
- into the screen
- out of the screen (to hit you!)
but in practice, it has only two directions to its disposal
either north or south...rest all are trader's fears induced by market fluctuations and bluffs.
every trader has 50% straight chance of making profit (1/2)
versus 2.7% in roulette (1/35)
it is understandable why roulette casino players are losing 97.3%, but what is the reason behind 80-90% loss of a stock market traders?
it is... fiddling
...due to fear of loss, pressure of bet size...
if any trader was to trade without applying mind, with all parameters fixed, then he/she is likely to win 50% in the long run... things start slipping below 50% when that dumb trader tries to be smart on emotions instead of logic or system. market induced emotions as well as self-inflicted emotions.
market forces have no power to beat the trader except emotions... be it through sharp move or bluff or both...
most traders can't stand the loss (because of bet size, and lack of logic of trade, defined entry exits) and hence lose frequently.
decide, on the basis of your trading system where the market or stock is going to go, as per what timeline, take bet size which you can afford to lose if all goes wrong (which wont go wrong that often as system improves), decide a stoploss (which should be the point where the logic behind your trade would seem to no longer hold), and take the trade.... after that, expect market to do all kind of bluffs and hold your trade tight (ofcourse till your stoploss definition above)...
only logic-based system with some edge can take you above 50% chance of profit... all the way upto 60-70-80%...or more... (the higher you go, the more challenging it is)
most of the times, if not always, markets and stocks go in the direction they are pre-decided to go (on various timelines).
once you take a trade, exit only if your target comes or stop loss is hit, don't touch it in any other condition.
example = suppose you decide to take a long trade when price cuts sma 34 from below (say)(after closing candle), then one possible logical SL will be when price cuts it from above (after closing candle).
similarly, if you take a long trade if rsi has given a bullish divergence, then u hold the trade till bullish divergence doesn't melt away, whatever the price... till bullish divergence is there, long trade is valid.
price SL is risky because it is visible to everyone and is very basic logic. also, because some vibration in price is bound to happen.
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we should not add to positions ever once trade is initiated. when we add position, it should be considered a totally new trade depending upon setup at that time
in most cases, trade goes your way within "short time" of your taking the trade. you can "feel" it. you can also feel and tell if it isn't going your way,....of course, you still need to stick to SL, but your gut feeling tells you that you perhaps have entered a bit too soon, even before proper signal.
if your SL is hit once or twice despite system, it is ok. but more than that it is a signal that you tweak your system.
SL needs calibration
