two qualities are essential
to succeed in stock market-
ability to analyse the situation
so as to
"expect"
"anticipate"
"predict"
a "high-likelihood" price movement.
please note that i didn't say
"high probability".
i said
"high-likelihood"
since majority of people can
sense "high probability"
it is not profitable
for the operators
to let it happen.
hence, the importance of
"high-likelihood".
likelihood is high
when perceived probability
of the event
is low.
so coming back to what i was saying
two qualities are essential
to succeed in stock market-
first
ability to analyse the situation
so as to "sense"
a "high-likelihood" happening
and "get ready" accordingly.
second
to trade what's actually happening!
if you don't have a reasonably trained
and experienced analyst in you
but have decent trading skills
you will be like a skillful warrior
airdropped in
an unknown enemy territory
without a map/gps/compass....
panicking
much more than required!
highly stressed
vulnerable
and susceptible to traps
and mental burnout!
and if you are a good analyst
rather, an overwhelmed one
than you are likely to find yourself
analyzing forever!
even when you should stop thinking
and just follow what is in front of your eyes!
the analyst in you
feels good when his analysis
proves right
and the trader in you
feels good
if he makes money
irrespective of the anaylsis.
both seem to be so opposite
to each other.
one is so sensitive
the other is thick-skinned.
one is a thinker
the other is a doer
one is a white-collar executive
the other is a blue-collar workman
both appear to be so different
but in reality
both are complimentary
to each other....
both are meant
to maximize the profit
and minimize the threat!
both are severely handicapped
without each other....
so
what should one be?
both....
turn by turn?
no...
simultaneously!
who's the boss?
none....
both are team-mate commandos
the analyst and trader in you
are like
a team of
a cop in a car
and a cop in a helicopter
both chasing a criminal
as in "the most amazing videos"!
the cop in the helicopter
radios the cop in the car
about the location
of the fugitive on the run.
(the fugitive is free
to change his direction
as per his will!)
thereafter it is the job of
the cop in the car
to complete the task!
the job of the cop in the air
is not finished
till the cop in the car is in the street!
the analyst in the helicopter
and the trader in the car
have well defined roles!
it will be disastrous
if the trader is in the air
and the analyst is in the car!
Saturday, April 30, 2011
Thursday, April 28, 2011
secret of making big money in trading
in stock market
i have realized one precious thing...
if you know a secret to make money **
and if you don't use it
it is almost as good as
not knowing that secret!
and if you know "a secret"
the trade will still be risky
but you've got to take that risk!
that mountain of emotions has to be crossed over!!
i repeat
that mountain of emotions has to be crossed over!!
but on the other hand
if you don't have "a secret"
better not take any risk at all
till such time that you have one
tried and tested...
even surety is risky!
(who knows what it will bring?)
but risky surety is better that risky uncertainty!
now the question is
if you know "a secret"
how much should one risk?
well,
you should risk
what you can afford to lose!
going a few steps forward -
- manage the risk
- try to hedge the risk
- and keep backup plan ready!
those who don't take risk
remain standing...
those who take blind risk
sink...
**(pl note that i said "a secret" and not "the secret"
- as i believe that there are more than one secrets or ways
to take money out of the stock market)
i have realized one precious thing...
if you know a secret to make money **
and if you don't use it
it is almost as good as
not knowing that secret!
and if you know "a secret"
the trade will still be risky
but you've got to take that risk!
that mountain of emotions has to be crossed over!!
i repeat
that mountain of emotions has to be crossed over!!
but on the other hand
if you don't have "a secret"
better not take any risk at all
till such time that you have one
tried and tested...
even surety is risky!
(who knows what it will bring?)
but risky surety is better that risky uncertainty!
now the question is
if you know "a secret"
how much should one risk?
well,
you should risk
what you can afford to lose!
going a few steps forward -
- manage the risk
- try to hedge the risk
- and keep backup plan ready!
those who don't take risk
remain standing...
those who take blind risk
sink...
**(pl note that i said "a secret" and not "the secret"
- as i believe that there are more than one secrets or ways
to take money out of the stock market)
currency trading for dummies (kt)
this mini book will introduce you to the world of currency trading
it can be downloaded free
but you need to sign for a free practice account for that at
http://www.forex.com/uk/land-dummies.html?v=displaydumsecure&src=201103BTA11512&utm_source=Investopedia&utm_medium=banner&utm_campaign=2011DisplayUS\
a popup window will give you the book-link.
copy it and use it whenever you want to read it.
(i got my direct link but sharing that straight amounts to violation of copyright.)
it can be downloaded free
but you need to sign for a free practice account for that at
http://www.forex.com/uk/land-dummies.html?v=displaydumsecure&src=201103BTA11512&utm_source=Investopedia&utm_medium=banner&utm_campaign=2011DisplayUS\
a popup window will give you the book-link.
copy it and use it whenever you want to read it.
(i got my direct link but sharing that straight amounts to violation of copyright.)
index trading strategies for indian markets (kt)
a brilliant article
- to understand the behaviour of nifty, bank nifty and cnx-it
- and hints to exploit them
http://www.business-standard.com/india/news/index-trading-strategies/433513/
(kt=knowledge trasfer)
- to understand the behaviour of nifty, bank nifty and cnx-it
- and hints to exploit them
http://www.business-standard.com/india/news/index-trading-strategies/433513/
(kt=knowledge trasfer)
Tuesday, April 26, 2011
"god, tussi phir bhi great ho!"
(in lighter vein)
==========
i am really impressed
when i read at the end of
many posts where a call is given
or the posts where a call goes right
"god is great"
nothing is written where calls go wrong.
this might annoy
our cute
loving
sensitive god
(who definitely has
a terrific sense of
identifying
and blessing
good trading calls)
so,
this is to say
"god! whatever be the result of the call
tussi phir bhi great ho!"
==========
i am really impressed
when i read at the end of
many posts where a call is given
or the posts where a call goes right
"god is great"
nothing is written where calls go wrong.
this might annoy
our cute
loving
sensitive god
(who definitely has
a terrific sense of
identifying
and blessing
good trading calls)
so,
this is to say
"god! whatever be the result of the call
tussi phir bhi great ho!"
Friday, April 22, 2011
the silver lining!
(based on a true story)
sandy was so happy...
he had just got his first job
as a salesman
in an automobile sales outlet
in his town.
he started working
with passion
and zeal!
months
and then years
started to roll.
his employers
were really pleased
by his hardwork, loyalty and consistency!
they "rewarded" him
by offering him to marry
their niece!
a small step for the man
a giant leap of the fate!
he got a good dowry
a decent pay-hike
a seat at the round table
besides a promotion
to manage the show independently!
sandy and his family
lived happily thereafter
till
sandy got an itch
to do something "more"!
the student was ready
the appearance of a "teacher" was "inevitable"!
sandy met a customer
who was into stock trading!
the customer became a friend
and the friend became a "trader"!
sandy opened a demat account
and after brief flirting with stocks
started dating commodities
on the exchange!
initial fear
got extinguished
by chance big shots!
the unexpected profits
overshadowed the tiny trickle of salary!
sandy "became" an "expert" in commodity trading!
whatever he said
happened!
with the profit
he bought a ford ikon!
the ikon inspired the lifestyle
the lifestyle fueled the attitude
the attitude sparked the ego
the ego signed the bigger cheque!
sandy had come a long way
all set to go places!
his family was happy
and so were his foster parents!
whatever he touched
turned into
silver!
so, he started trading in silver
in the commodities market!
he took long position
in the shining metal
and hit a jackpot!
he booked profit
and waited
for the next chance!
chance came
like the next train
sandy jumped onto it
and got down at the next station
with his bag full!
by now
sandy had doubled his "savings"
but he wanted more!
more money
and more respect!
he wanted to prove
that his success
was not a fluke!
so the expert in him
pointed it out to him
that silver had come up too much
and was all set to crash!
this is the opportunity
sandy wanted
to prove his "trading abilities"!
while everyone was long (buy position)
sandy shocked everyone
turning short (sell position)!
that day
the market remained flat
neither up nor down
perhaps giving a serious look to sandy's position!
sandy felt great
but couldn't sleep properly
that night!
next morning
he drove fast to his office
switched on the tv
and hit the roof
in ecstacy
on seeing the silver down!
his prophecy had come true!
he was truly a genious!
a rainmaker!!
a trader with a midas touch!!!
he went out of his room
lighted a cigarette
puffed out the smoke rings of invincibility
came in
head held high
and looked at the corner of the tv screen
to see the latest "score"
his eyes mistakenly read
the wrong score!
he ordered his eyes to look at the score properly
the eyes obeyed
but the result was same!
silver had started to climb again!
sandy was "sure" that this was only momentary!
he sank in the chair
ordered for a cup of coffee
and waited!
but silver continued to climb!
minutes and hours passed
the day closed
the silver was still shining!
sandy closed the office
went home
didn't talk to wife and kid
and slept without having dinner!
next morning
he was awake
before the sun rose
in the land of the rising sun!
japanese marets opened
and silver was up!
the day dawned in india
and sandy welcomed it
by shorting one lot more!
he had enough funds
to sign the extra margin cheque!
that day
silver shot up big!
sandy got his first major hit!
now he was sitting on a loss!
he decided to wait!
the next day
silver continued its run up
unmindful of sandy's expectations!
sandy's account was now bleeding!
in the evening
sandy's broker called him
and politely requested
the business family's son-inlaw
for the additional margin cheque!
sandy signed his last "good" cheque
away from his wife's attention
and sent it to his broker!
"silver has gone up too too much
it has to fall!"
sandy consoled himself!
but silver didn't listen...
it continued to rise
at the ring of the trading bell
the next morning!
by now
sandy was in deep loss!
he didn't have the nerves to book the loss
nor did he have the money to hold the position.
but he knew it very well
that he won't be able to recover the huge accumulated loss
except from the trade itself!
"it might start falling
the moment i square off my position!"
he thought.
this thought made him very clear
about what the right course of action should be!
he borrowed 50000 from his friend
and paid it to his broker
to keep the short position alive!
silver said "thankyou"
and climbed big the next day
digesting sandy's borrowings!
now sandy found himself in a no-return position!
he borrowed 1lac more
from another friend of his
to fund 2 more days of survival!
2 days came
in eactly 2 days
and swallowed sandy!
sandy went mad!
he stopped talking to anyone!
at night
he silently
took out his wife's gold jewellery
to support his terminal trade
for a few more days!
"i will get all this back
once silver starts falling!"
he consoled himself!
next few days
silver continued to steam roll up!
sandy's fear now turned ugly!
it was a fight to the end for him now!
he locked himself in a room
lit his cigarette
and started looking at the available options!
and then
suddenly
he got an idea!
he had received cash advances
from his customers
as bookings for their cars!
he opened the chester
and counted...
...it was over 4 lacs.....
he picked them
sat in his ikon
raced to his broker's place
and dumped the cash
on the table!
the broker was shocked!
but he was "wise" enough
not to ask any question!
sandy's position got a week's reprive!
---
week came
and went!
silver continued to rise!
--
sandy finally decided to "stop loss"!
he went home
took out the gun
and pulled the trigger!
--
his kid
performed the last rites,
his wife
handed over the keys of the ikon
to the debtors,
locked the house
and went back to her parents' house!
--
next morning
the markets opened
and
silver continued to shine
shamelessly!
sandy was so happy...
he had just got his first job
as a salesman
in an automobile sales outlet
in his town.
he started working
with passion
and zeal!
months
and then years
started to roll.
his employers
were really pleased
by his hardwork, loyalty and consistency!
they "rewarded" him
by offering him to marry
their niece!
a small step for the man
a giant leap of the fate!
he got a good dowry
a decent pay-hike
a seat at the round table
besides a promotion
to manage the show independently!
sandy and his family
lived happily thereafter
till
sandy got an itch
to do something "more"!
the student was ready
the appearance of a "teacher" was "inevitable"!
sandy met a customer
who was into stock trading!
the customer became a friend
and the friend became a "trader"!
sandy opened a demat account
and after brief flirting with stocks
started dating commodities
on the exchange!
initial fear
got extinguished
by chance big shots!
the unexpected profits
overshadowed the tiny trickle of salary!
sandy "became" an "expert" in commodity trading!
whatever he said
happened!
with the profit
he bought a ford ikon!
the ikon inspired the lifestyle
the lifestyle fueled the attitude
the attitude sparked the ego
the ego signed the bigger cheque!
sandy had come a long way
all set to go places!
his family was happy
and so were his foster parents!
whatever he touched
turned into
silver!
so, he started trading in silver
in the commodities market!
he took long position
in the shining metal
and hit a jackpot!
he booked profit
and waited
for the next chance!
chance came
like the next train
sandy jumped onto it
and got down at the next station
with his bag full!
by now
sandy had doubled his "savings"
but he wanted more!
more money
and more respect!
he wanted to prove
that his success
was not a fluke!
so the expert in him
pointed it out to him
that silver had come up too much
and was all set to crash!
this is the opportunity
sandy wanted
to prove his "trading abilities"!
while everyone was long (buy position)
sandy shocked everyone
turning short (sell position)!
that day
the market remained flat
neither up nor down
perhaps giving a serious look to sandy's position!
sandy felt great
but couldn't sleep properly
that night!
next morning
he drove fast to his office
switched on the tv
and hit the roof
in ecstacy
on seeing the silver down!
his prophecy had come true!
he was truly a genious!
a rainmaker!!
a trader with a midas touch!!!
he went out of his room
lighted a cigarette
puffed out the smoke rings of invincibility
came in
head held high
and looked at the corner of the tv screen
to see the latest "score"
his eyes mistakenly read
the wrong score!
he ordered his eyes to look at the score properly
the eyes obeyed
but the result was same!
silver had started to climb again!
sandy was "sure" that this was only momentary!
he sank in the chair
ordered for a cup of coffee
and waited!
but silver continued to climb!
minutes and hours passed
the day closed
the silver was still shining!
sandy closed the office
went home
didn't talk to wife and kid
and slept without having dinner!
next morning
he was awake
before the sun rose
in the land of the rising sun!
japanese marets opened
and silver was up!
the day dawned in india
and sandy welcomed it
by shorting one lot more!
he had enough funds
to sign the extra margin cheque!
that day
silver shot up big!
sandy got his first major hit!
now he was sitting on a loss!
he decided to wait!
the next day
silver continued its run up
unmindful of sandy's expectations!
sandy's account was now bleeding!
in the evening
sandy's broker called him
and politely requested
the business family's son-inlaw
for the additional margin cheque!
sandy signed his last "good" cheque
away from his wife's attention
and sent it to his broker!
"silver has gone up too too much
it has to fall!"
sandy consoled himself!
but silver didn't listen...
it continued to rise
at the ring of the trading bell
the next morning!
by now
sandy was in deep loss!
he didn't have the nerves to book the loss
nor did he have the money to hold the position.
but he knew it very well
that he won't be able to recover the huge accumulated loss
except from the trade itself!
"it might start falling
the moment i square off my position!"
he thought.
this thought made him very clear
about what the right course of action should be!
he borrowed 50000 from his friend
and paid it to his broker
to keep the short position alive!
silver said "thankyou"
and climbed big the next day
digesting sandy's borrowings!
now sandy found himself in a no-return position!
he borrowed 1lac more
from another friend of his
to fund 2 more days of survival!
2 days came
in eactly 2 days
and swallowed sandy!
sandy went mad!
he stopped talking to anyone!
at night
he silently
took out his wife's gold jewellery
to support his terminal trade
for a few more days!
"i will get all this back
once silver starts falling!"
he consoled himself!
next few days
silver continued to steam roll up!
sandy's fear now turned ugly!
it was a fight to the end for him now!
he locked himself in a room
lit his cigarette
and started looking at the available options!
and then
suddenly
he got an idea!
he had received cash advances
from his customers
as bookings for their cars!
he opened the chester
and counted...
...it was over 4 lacs.....
he picked them
sat in his ikon
raced to his broker's place
and dumped the cash
on the table!
the broker was shocked!
but he was "wise" enough
not to ask any question!
sandy's position got a week's reprive!
---
week came
and went!
silver continued to rise!
--
sandy finally decided to "stop loss"!
he went home
took out the gun
and pulled the trigger!
--
his kid
performed the last rites,
his wife
handed over the keys of the ikon
to the debtors,
locked the house
and went back to her parents' house!
--
next morning
the markets opened
and
silver continued to shine
shamelessly!
Sunday, April 10, 2011
road to trading success....
churchill said
"success is going from
failure to failure
without losing enthusiasm"
this line sums up my journey in stock market.
do i lose?
yeah! you bet!!
am i a good loser?
no way!!!
for the first one hour after booking the loss
i am like a dog sniffed by a snake....
i simply become a statue and don't talk to anyone.
for the next one hour thereafter
i kick myself a hundred times
for the one hour thereafter
i decide to quit trading
and simply drown myself
in some task which can help me forget everything!
only after those three hours
do i cool down!
then i realise
that while it is easy for me to take myself
out of the market
it is not that easy (if at all it is possible)
for me to take the market out of me!
it is then
that i sit down
take out my entire army of concise trading notes and tools
and start to analyse
what went wrong
and why!
80% of the times
i realise
that i had all the tools and info
to pick the right trade
and didn't
because i was "in a hurry"!
i look into the nearest mirror
and it confirms to me
what a careless trader i am!
rest 20% of the time
i realise that something had happened
which was simply not in my experience and understanding database.
that is what
re-sparks the learner in me.
i get down
to update my "software"
and plug the gap in my method.
i have been telling my wife
four times every month
for the last 27 months
(since jan 2009)
that
i have plugged the loop hole in my system...
and everytime
i return and confess
that i just came across
another nasty one!
this way
i have been improving
my trading method
time after time
after time
after time
after time....
...everytime i feel
that i have got my "holy-method"
only to be
painfully deceived!
and amusingly (but not ashamedly)
biggest failures
and loopholes
surfaced in recent times!
it may sound strange
but i think it is expected
and ok!
my patience has been tested
to the extreme....
but thanks to all this
my trading system today
is quite strong!
am i confident now!
yes! you bet!!
am i sure that there are no loopholes left?
no, not really!
so, have i stopped trading?
no way!
not NOW!!
at any cost!!!
while i won't be surprised
to see the next loophole
i expect to see them fewer!
also,
i will not desist from kicking myself hard
if i don't stick to my
latest version of
trading taj mahal!
for i know that i am not very far
from trading success
which will stay with me
for a life time!
surely
"success is going from failure to failure
without losing enthusiam!"
"success is going from
failure to failure
without losing enthusiasm"
this line sums up my journey in stock market.
do i lose?
yeah! you bet!!
am i a good loser?
no way!!!
for the first one hour after booking the loss
i am like a dog sniffed by a snake....
i simply become a statue and don't talk to anyone.
for the next one hour thereafter
i kick myself a hundred times
for the one hour thereafter
i decide to quit trading
and simply drown myself
in some task which can help me forget everything!
only after those three hours
do i cool down!
then i realise
that while it is easy for me to take myself
out of the market
it is not that easy (if at all it is possible)
for me to take the market out of me!
it is then
that i sit down
take out my entire army of concise trading notes and tools
and start to analyse
what went wrong
and why!
80% of the times
i realise
that i had all the tools and info
to pick the right trade
and didn't
because i was "in a hurry"!
i look into the nearest mirror
and it confirms to me
what a careless trader i am!
rest 20% of the time
i realise that something had happened
which was simply not in my experience and understanding database.
that is what
re-sparks the learner in me.
i get down
to update my "software"
and plug the gap in my method.
i have been telling my wife
four times every month
for the last 27 months
(since jan 2009)
that
i have plugged the loop hole in my system...
and everytime
i return and confess
that i just came across
another nasty one!
this way
i have been improving
my trading method
time after time
after time
after time
after time....
...everytime i feel
that i have got my "holy-method"
only to be
painfully deceived!
and amusingly (but not ashamedly)
biggest failures
and loopholes
surfaced in recent times!
it may sound strange
but i think it is expected
and ok!
my patience has been tested
to the extreme....
but thanks to all this
my trading system today
is quite strong!
am i confident now!
yes! you bet!!
am i sure that there are no loopholes left?
no, not really!
so, have i stopped trading?
no way!
not NOW!!
at any cost!!!
while i won't be surprised
to see the next loophole
i expect to see them fewer!
also,
i will not desist from kicking myself hard
if i don't stick to my
latest version of
trading taj mahal!
for i know that i am not very far
from trading success
which will stay with me
for a life time!
surely
"success is going from failure to failure
without losing enthusiam!"
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