the game is squeezed in that 20% portion

Trading is a 80/20 game. If you miss the 20% chance of winning the pounds, you struggle for remaining 80% time for pennies…

Therefore you have to have a top-class system which catches edges reasonably accurately, you’ve to have discipline and mental condition to stick to that system and survive that 80% uncertainty to catch that 20%.

If you miss the meat, you’re left with the bare bones.

the game is squeezed in that 20% portion, your system should be capable of pointing out the high probability zone of that 20%. Otherwise, you will keep struggling for the consistency.

Same is true for investing. 

never swim or trade naked

never swim naked.

atleast never trade naked.

if you are long, instead of buying 2 or 20 lots buy 3ce:1pe pr 30ce:10pe (or in that ratio). always trade hedged. that way, you use more funds, ofcourse, and a bit more in premium decay, but that is the insurance against trades gone wrong or adverse bluff moves.

always trade with a hedge...same instrument is advisable for amateurs. professionals have more sharp options. 

don't hesitate to skim or book adverse moves, if and when they come.

however, this strategy is only if you have a trading system, you know when and why to enter or exit, in which direction is the high probability. if you don't know that or don't know what to do in case of an adverse move, then hedging won't save you much. you have to find ways to recover cost of the hedging insurance.

i, per se, never trade naked. swimming i'm learning. bathing naked is ok.

what is and isn't in your hand

don't hold yourself responsible for what market does or doesn't

never feel guilty about that.

that is not in your hand. 

the only thing that is in your hand is, deciding what shot to play to the ball pitched at you by the market.

you play stroke not as per your wish but as per the ball.

when can you consider yourself as a pro in trading?

the day you make trading a system based mechanized assembly line 

and you are making consistent profit, both sides, 

and are free from any anxiety, 

you have turned a pro...priod

forget about profit

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.

in how many directions can stock market go?

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.

--

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

somebody isn't thinking

a trader will go bankrupt without a system and mad without following it.

u have some base to start working

operators can hide their stealth bombers but not it's magnetic fields as visible in many indicators

the more and longer you observe and record, more secrets you stumble upon

throw ancient rules of Elliott waves out of window. majority don't work. those were primitive. modern market behavior respects basic psychological and accumulation distribution principles those were being the original Elliott Wave theory but the rules are no more valid. market dynamics have changed. strong hands have had to evolve in trapping the majority money. i wasted a lot of time sticking to classical Elliott rules. those are perhaps perfect ploy to befool the masses.

if you believe everything available on net, books or media, you'll never be able to liberate yourself to success. majority of those are recycled outdated untested glamorized hyped fad stuff. some are expired medicine.

fatal

when thieves know that all their tricks are available in the market for everyone to read study or train, won't they have migrated to newer ones?

and I'm yet to know see meet anyone consistently big time beating or surviving operators, all noise notwithstanding...

the biggest of names around in India fall flat on their face consistently...

successful ones are hidden

they never reveal their codes

old trader values are still and shall always be valid, not old tricks especially without adapting to contemporary market realities.

any trading room is neither a pub, nor a club, nor a casino.... it is business chamber.

--

There are two times when people forget their principles: at the top of the market and at the bottom.
- Phillip A. Lowe

and they are not sure of the top as well as the bottom

--

If everyone is thinking alike, then somebody isn't thinking. ~ George S. Patton

Pressure tested trading systems

Trading system pipes are pressure tested in adverse moves and volatile ranges. They start leaking or burst from their invisible cracks or weak points. Pressure tested trading systems should be appreciated and treasured by traders.

No trading system is perfect till pressure tested for every condition.

Pressure tested trading systems are not the fastest or the most productive but they are surely optimum yielding in the long run.

surviving the mafia with trading system

Q.... If as per system, it is going to be a loss of 10 lac momentarily (according to the tf as ur system is made) whereas ur discretionary intuition says to cut that loss & reentry at a later stage... What will you do? Assuming fast recovery like V, system has not given suitable entry, what will one do?

A...in that case, we should incorporate the discretionary intuition logic into the system. next time, the system takes care of a similar situation.

this way, with every incorporation of intuition or observation or experience system, keeps improving.

that system isn't infrared enough to catch emerging or dissolving V. that's why i say traders shouldn't waste time trading for years without a system. because it takes months and years of observations and experiences, stumbled and falls, and flukes to build a system.

both good and bad, amateur and professional traders go through the same experiences, challenges, setbacks, profit and losses, slaps and pats,  tears and frustrations... the only difference between the two is that those casual ones just forget market feedback and experiences and keep putting trades like an egoist out for vengeance. 

on the other hand, the evolving ones don't forget the experiences, note them or remember them, understand and deep dig them until they crack the mystery code behind what happened. they make those stumbling stones the bricks of their continuously emerging system wall.

otherwise, all teasers have three ears, two nose, and horns on the head to identify the genius

Q: I agree with this.... But traders also loosing with the help of the system. ....

A: true. they should improve the system. having a weak system is no consolation in the market.

what is a trading system.... just a few rules of entry, exit and hold... and of course how much you'll bet and how you'll multiply over the period of time. plus did and don'ts based on burn marks on bum

if one writes down on a piece of paper answers to these two questions....

1... rule for when will i enter

2.... rule for when i will exit

that'll dramatically change fortunes.... the devil lies in the answer. extremely simple but extremely difficult.

basically you have to survive the mafia. it's all fixed and rigged worldwide game. imho you have to see through and benefit. they are not after 1 person ie you. they are after the money of the masses. be in the minute monitory. there is a massively disguised pattern as that's the only way mafia can manage mountain of money.

importance of a trading system

only a system can tell you when to enter and when to exit. more evolved a system, more the accuracy. rest all entry-exit are psychological

akin to soft tingling gambling

you eventually feel good of your systematic trade goes wrong. you eventually feel terrible when your casual trade goes wrong. both of these are temporary. system-based teasers will eventually start falling in place, casual ones always remain at the beginning sinking you gradually

a penny of system-driven profit is much more precious than a dollar of a fluke. the former is a seed carrying many trees, the latter black hole

markets are casinos for those who trade without a system

and a self-employment/business for those who trade on some basis/logic/system. without consistency promise there cannot be any sustained profit in any business

better be system poor than systematically poor