Let me share an observation. Any big rise or fall is actually in two parts, like a movie with interval.
Check any sharp spike or crash on any chart. Chances are you will see that there was a kink or pause in the chart near 50% mark. Between 40-60%.
Pl do check
So whenever any sharp move comes dare to shun FOMO and jump on, of course only that much amount you can afford to lose. Strong chances you entered near midway
Standard disclaimer: not a recommendation 😅
in trading you can never sure of the outcome of the trade. never. there is always some uncertainty.
but you can't be indecisive and shaky.... fearing, vibrating, panicking all the time, fiddling with the trade direction.
you have to bet. and have guts to stick to it.
you have to be ok with losing. only that will give you the guts to be worthy claimant of profit, handsome profit.
and since you have to be ok with loss, you have to manage the risk. can't be foolish gambler.
the way i try and hold to multibaggers all the way is this
lets say i buy 1 lac in a stock and it becomes 1.3 lacs when i sense discomfort against what assurance chart is giving me
i book stock worth 30000 and invest it elsewhere, holding 100000 still in the same old stock
this cycle continues.
it is like taking out the seed from plant as safety but leaving the plant planted. u have got one more seedling which becomes plant. the crucial factor though is...where are u investing that 30000? it has to be in a stock as good as the priginal one from where u took it out.
this way u can hold onto any stock as per your system while letting the forest grow without anxiety
looking at sgx-nifty (after market closure, late evenings, overnight, early morning) so restlessly, anxiously, and obsessively indicates that
- we don't have a method or are not relaxed with it
- we don't have a strategy and a backup plan
- we don't trade probabilities with a system
- we don't have money management
- we are in a hurry
- we don't have the appetite for loss
- we are fearful and hence won't have the appetite for profit also
Js: Traders fed up with the rise a few days ago are fed up with fall now...
Trading is a game of cycles and trends.
Without cycles and trends, big players can't make money
Krish: This means human nature is always predictable?
Js: i would say that in a slightly different way...human schemes and the response to those schemes by other humans are always predictable. in fact, as legendary strategy gurus al ries and jack trout say, humans can't tolerate confusion. whether the operator or traders, the ruler or the ruled....all are predictable while trying to avoid confusion.
it's just that many times, clever men complicate, disguise, or camouflage things in such a way that the masses start thinking as if the confusion is really incomprehensible.
Krish: So that means, market reaching equilibrium too is non-acceptable.
Js: if an expert is at the driving seat of the operators or the establishment, it is almost surety that the confusion is just an encoding or encryption of some degree. because the moment confusion goes out of hand, empires and schemes crumble like a pack of cards....
equilibrium is the truth dead clocks kiss twice every day but hate it.
it is all a game and hence can be played. you only have to refuse to believe that you can't understand it. because you can.
it is all fixed and rigged.....beautifully and mathematically
Krish: As they say, there are patterns in the chaos too.
Js: yes....chaos too is a pattern...whenever you are sure that a pattern is emerging, you can be sure that it will change.....anyways, humans can't survive the chaos, including the operators. and as long as humans are controlling the algos of their trading machines we can rest assured that chaos can't be true.
Js: but the day, computers take over from their masters, assuring them profits in return at all cost, wild moves will be common and markets will die because a billion sheep will lose the attraction to the slaughterhouse.
Js: a trader may not earn even a rupee in the market all his life, but he can never lose love of life if only he ensures that he doesn't lose more than he can afford to....
Krish: That's so true, what maximum then they can do is, create an illusion of chaos to that perfection that it becomes so hard to crack by the same organization that created it..only the elite has the key to keep changing this pattern?
Js: such is the life giving quality of the markets.....
the illusion of chaos...yes....
that's the challenge, that's the hint....to crack the code
Krish: Mass is been fed with this narrative simultaneously to create another confusion.
Js: o yes...bullseye
Js: all tv's, books, videos, etc are all crimes by the innocent, on the innocent
Krish: An illusion becomes belief if taken on an everyday basis, so no wonder it becomes addictive too
Js: but you can't fight them, convince them, upset their cart, damage their dhandha or change their mindset.....and why do it.....as i often say....never argue the system, short it
absolutely
and we start loving the illusion. so much so that we are ready to die defending it
markets are mini-universe
markets only magnify what we truly are.....to horrible multiples
Krish: True, deep down this illusion has its base on the "fear" factor of masses. That's the only emotion that can be kindled with a few extra million out of their profit kitty.
Js: yes
greed too is the vengeance of the fear
a fearless man can be rarely greedy
a greedy man will often be fearful
Absence of fear and greed indicates that you don't qualify to be a trader as yet. Presence of fear and greed indicates that you don't have a system yet or are not sticking to it.
Fear and greed should become non players for anyone to be a professional trader.
market is a host who will drink a whole barrel/drum of wine right in front of your eyes, asking you to join but never making you comfortable enough to say yes and take more than a few sips...that too from his left overs in the glass.
being shameless and fearless is the only option.
i once coined a phrase to soothe myself and protect against the fear of losing the profit even when my system was reasonably green on the trade.
i would often fear that the market would eat away my profit already earned. i would often face increasingly strong butterflies in my stomach. people often complain about having sleepless nights because of adverse market movements leading to unbooked losses. but hardly anyone talks about having sleepless nights with unbooked profits.
i would check my trading system again and again. but despite my system assuring me a v high probability of trade going eventually my way (and often it did, with or without me), i would still feel so fearful of losing the much-valued profit that i would feel comfort only after booking the profit, partially, if not wholly.
eventually, that comfort would turn out to be salt on my wounds if not short-lived. the market would in my direction without me.
occasional market reversals only strengthened my fear.
"this can't go on forever", i said to myself.
one fine day, i was so fed up that my alter ego slapped me with the following line
"market is not after you! market can't see you. you as an individual are invisible to it. you yourself are conscious and coming in the way!"
it was like a thunderbolt of relief. i suddenly felt better.
it was only my fear and imagination - i thought.
that day my trading changed. i still had some reversals and loss of profits but those were much much less than what i gained. i had never stomached big profits till that day.
even a single massive profit often more than covers dozens of small losses.
recently, i realizedthat the above line is true beyond trading. it works amazingly well in almost every aspect of life.
