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)

beauty of being pro-trend

dear dhiraj,

yes, no change in the uptrend, though the trend has paused (rather locked!)

at such points, trend can be considered neutral (neither up nor down), yet i am long (and saying that uptrend is hidden) because of certain parameters discussed above. 

markets may slip down sharp but that will be temporary. those who are in the bus since 8000 or 8100 or 8200 won't mind any such hiccups. for others, any volatility might be a cause of anxious moments testing nerves.

the earlier u catch the trend, safer it is. but, at times, u have no option but to get on to the trend in between (even near the last leg). in those cases, u have to have good holding capacity and cool like a poker player.

however, in my opinion, those who take pro-trend position even at later stages or with terrible timings, rarely lose big!

that's the beauty of being pro-trend.

vice-versa is also, true. those who take anti-trend position even at best times, rarely make big profit! 

lessons from 'freakonomics'

currently reading
"Freakonomics" - by Levitt & Dubner

kept jotting down the lessons in my language or code words to remember for long time............thought u would love to read too
=========================================================

- everything is (or isn't) because of some incentive

- every "conventional wisdom" is a myth

- world is a astronaumical mix of "butterfly effects"

- elephant effects must be obvious, too

- how u look at the data is what it tells u

- economics decides everything

- economics and technology can solver any problem

- there is no truth.....only convenient truth

- perception is the reality

- life is unfair, world is unbalanced, manind is unequal

- goats are born to be milked

- goats are born to be scapegoats

- go to ground zero and check

- demand and supply still decides it

- the whole world is caught in a tournament it knows it has no chance of winning

- try something different to have any chance of making it

- inability to innovate quickly and sufficiently is the world's problem

- time changes the game before u master the rules

- risk vs reward is only for the ruled

- world is the sum total of gangs

- it's all about money, honey!

fundamentals and trading

dear lakshmi / raju

ur opinions are welcome.

but i am of the opinion that one should never trade on the basis of fundamentals. 

a fundamental(ist!!!) trader is always proven right just after he goes broke.

there is generally a phase difference between the fundamentals and the actual movement. markets are known to sink much before the actual collapse, and known to rise much before actual recovery.

....trading is a cat and mouse game. in this tom and jerry one sided chase, cat (operators) is 1% size and 99% power, while the mouse (retail traders) is 99% size and 1% (money) power.

while trading on the basis of fundamentals is a disastrous idea in my opinion, i go to the extent of saying that technicals are quite risky too. operators know what u r looking at before trading. their trap is designed exactly on the basis of that. i have explained this in my numerous articles. 

operators have to be in the minority. they have to make sure that they catch the majority on the wrong foot all of the time. that is how they make money. they will use every trick to make sure that only the fittest and the most adamant are left on their side of the trade. 

i am often surprised, if not shocked to hear traders talk fundamentals and.....trade!!! 

well, investors should think and talk fundamentals, not traders. 

"technicals know that the news is coming".....as they say. though not fully, i do believe quite a lot that all fundamentals have built-in technicals.

the exact equation is

fundamentals + tactics = technicals

by the above definition, technicals are not exactly fundamentals. they are loaded with tactics to dress the fundamentals.

whats the idea of being proved right about "fundamentals" and lose all money by then?

never use fundamental or technical knowledge as excuses to reduce the pain of losing.....a veil to hide from the bitter truth!

agreed, that there is a possibility of markets crashing in a few days due to the macro economic factors u have mentioned, but is it wrong or illegal to profit from the bull dash till that time? should we play moral and avoid profiting from this up move just because it is illogical? why not eat while ice cream is being served and enjoy the coffee when its turn will come? won't mind shorting when market falls from the roof.

i'm sure there will be fundamental good news when market slips just to pacify and justify the
"overdue reasons" we are discussing now. a phase difference helps operators trap retail traders and be(belated) right, at the same time!

trading is not purely and totally logical.....it is a sophisticated gambling where ur gain is sombody's loss. it might sound painful but nice people are not known to be successful in trading unless they call the bluff of not-so-nice people who believe that "everything is fair in love and trading". trading is actually not trading. it is tricking! tricking by the cartel of the cattle!

some trading finer points

dear balu,

I am smiling big time couched in quilt in my bed in front of tv in shimla this bright and sunny morning made to glow even more with such warm words.....said and implied.

.....thank you......

I wish you guys don't lose because of me.

I am learning and markets keep throwing me down quite often.only, I have learnt to survive by,

1.improving my trading system non stop,

2.keeping enough buffer funds to ensure holding capacity,

3. having enough funds to buy or short more when I am losing but system is hinting pro me status,

4.keeping emotions to minimum and practicing emotional 6 packs......a few more which I will recall later perhaps......trade very cautiously.....

5.trading very less (at least trying to).....neither under trading nor over trading.....as you might have noticed, you don't need to generally change direction more than 1 to 2 times in entire series.....one you get the direction right all you have to do is keep skimming

......lack of holding capacity, lack of self confidence due to lack of faith in trading system, lack of courage and money to commit more capital during deep adverse situations, lack of emotional stability are some of the prime reasons for not making it despite being in the journey for years.....what you see as "only profit"result card is actually the result of facing and overcoming hell like situations to filter them out, survive them and  coming out of even them with something in bruised hands

dilemma of buying when premium is high

dear dheeraj,

whatever is at premium has good value....

also, when u will sell, u will get good part of premium back. premium will not become zero at the blink of eye.

plus, high premium indicates that somewhere in the series market will enter a range.....that helps in trading (ranges). you interpret technicals accordingly, in that light.

i am more jittery buying when premium is too low. generally i avoid it.

my views

see, i can't bet my life on that. i can be wrong. 

but my technical understanding says uptrend is theoretically ON and downtrend signal is OFF. there is no downtrend signal as of now.

while practically it is slipping and threatening to fall, there are some clear hints that it may go up smartly in 1-2 days. 

pl don't follow me or anyone blindly. i may be wrong. and as already mentioned earlier also, i have sufficient backup funds and plan B. i trade on probabilities based on my trading system. 

i therefore trade without stoploss which might not be acceptable to others. pl take my sharings only for study/critical analyses/corss reference. pl use ur discretion.

one has to be bold and risk taking to make money. how much and how, is a subjective question. trading is fortunately not spelled "gambling"

my dear operators!

self talk, 3:04pm, 29sep, cmp=7949spot

what do i want myself to do? keep running like a scared dog at every sound of fundamental?

why look at fundamentals when trading technical(+tactical)

and why look at technicals when trading (investing) fundamentals

"technicals know that the news is coming" - as they say

i don't think i am that fool to buy the theory that operators don't know the "news" beforehand!

now, stop that nautanki and do what u r dying to do, my dear operators!

only obedience

whether it is to play the dead cat bounce 

or to short again 

or to be ready for the next trend/swing, 

the best best best thing is to wait and let the market make the first move. 

operators want you to make the first move (by greed or fear). 

the ones who resist the temptation escape the operators' trap and enter the trade in winning position. 

right now, market is in this very position. 

the greedy may blink too fast and the bleeding will be too eager to settle the score and "snatch back" the lost money. 

perfect setting for an abetted suicide. 

the more u wait at such crossroads, the better. 

u don't only make money while inside the trade, but also while u wait outside. 

give operators enough room to bluff. bluff is their only tool to trap the majority.

will like to wait on the sidelines with my hands and legs tied, eyes half sleep.

no prediction of the market, only obedience. no hurry, let her make the first move.

catching the missed train

- entering trade midway is risky, till there is a pullback. pullbacks are the least risky points to enter the train who couldn't at the platforms.

- it is least risky to enter at the appearance of the signal. entering in-between (once the trend has started) is quite risky as market may retreat/pullback or trend may reverse prematurely. entering immediately at the signal gives lot of safety cushion. often, i have got away "rate to rate". earlier used to think "let the trend get established and then will enter." not correct!

trading is essentially answers to these 3 questions!

for me trading is essentially answer to 3 questions:-

1. is there a trade?

= should i trade or should i stay out?

2. which direction?

= if there is a trade, judging the direction is the next question. finding the trend, knowing which way the market is or about to move is the single most important decision. this is decisive! this is the heart of the trading. it took me years to get this right. once this step is right, rest is fine tuning, though therein lies the efficiency of the trade.

3. what quantity?

= this decision, answer to this question, decides the effectiveness / efficiency of the second decision above. not all situations are to be traded with same quantity. you have to enter and exit in steps. u have to commit the stake depending upon the probability, risk. u have to hold some cards for the contingency!

once the answer to first and second question are settled, all i am left to do is keep adjusting and managing the third one. i have to keep reducing or increasing or monitoring the magnitude of my stakes.

all this depends upon my market analyses and my answer to operator games. this also took many years to spot and learn.

i am rarely with zero stakes in the market when the answer to first question is 'yes'.

limitations handicaps weak points of operators

in the financial jungle, operators (hedge funds, large banks, fii's, cartels etc) are the predators preying the smaller and retail players.

fight with them face to face and u stand no chance.

fortunately, they are not invincible. they have their loop holes. they have their weak links. they have their unguarded lacunas. they also leak. they have their pockets of inefficiencies. they have their moments of vulnerability.they have their "situations". they also have times when they have their guards down. they are also....quite mortal....

so, what are those limitations, handicaps, weak points?

here are some i have identified and am learning to exploit:-

- operators can't hide the traces of their moves in technical indicators. they can make it complex, confusing and smart, but they can't erase their tracks.

- operators can't stretch beyond a point. they have to obey fundamentals. they can go this way that way to an extent. beyond a limit they might strangulate themselves. and farther they go from fundamental reality, faster they have to retreat.

- operators have to eat all the premium before the expiry of the series. they can't keep their cakes in their hands and just run. they have to go into the caves if ranges, whether they like it or not, so that they can eat the cake in their hands and make the money their "clients" want them to, come-what-may.

- operators have to fight with other operators. there are times when sharks come too close and there is a clash of interests. though they are fairly integrated, yet they are competitors and vying for the same pool of investors' trillions. operators can't be too insensible to be stumped by competition.

- operators have to let smaller operators make some money. they have to "keep some people happy". they can't afford enemies "who know what they do". they have to "share". so, operators can't be that reckless as they are thought to be.

- operators have to keep giving some crumbs to the retail fish traders. they can't just let the small fish starve to death. otherwise, who will come to the markets? just to be preyed?

- operators can't overdo it. afterall, there are market regulators, watchmen, media, governments, whistle blowers, activists.....nobody can afford the collapse of the system.

- operators don't know everything. well, they know many things, they have all the crucial insiders' information, but they don't know everything. they can't control everything in the world. there are bound to be "surprises"! they can't be too adventorous!

- operators have to do stupid things to trap the overwhelming majority of retail traders. the one who can see their bluff and call it can make a lot of easy money ridiculously easily!

- operators have to balance indices with stocks and stocks with indices. operators have separate positions in stocks and indices. there is a limit to micromanage positions in everything in perfect balance.

- operators are human.....and prone to stupidities and overlooks!

- world is too complex to comply to a single or a few dictats! you simply can't manage everything.

- operators have targets to meet. they have to return the easy money to the nervous banks. operators are traders themselves.

- operators have very limited room to play the game. they can take the market either up or down or keep it rangebound. their options are very limited. this is too boring and limited in scope! they have to do the dodge trick within these constraints.

- operators are big bluffers. that's what is their only tool. call it surprise, shock, dodge, moneypower, bluff, confusion, irrationality, speed....they try to "get rid of you", trap you....with every possible deceptive way! and this is where they are vulnerable......anyone, who refuses to be intimidated, befooled, tricked, confused......anyone who can see thru their game.....can not only escape their trap but hit them where it hurts. the only consolation for them is that such retail players are too less.....almost insignificant proportion.

a retail trader can take advantage of all this. operators are poor chaps. they have their limitations. they pray that u don't get those. if you can, you can turn the tables and bleed them. u can be the perfect suckers to the suckers.

be a guerilla fighter with the giants.it is where it hurts them and they can do little about that!

"hone ko to bahut kuchh ho sakta hai?"

"hone ko to bahut kuchh ho sakta hai?"
(as it is, anything can happen)

market can rise unexpectedly, market can collapse.....

that u can come to know only once it has happened! u can ofcourse wait to see what happens and then come in the trade. but then what's use? what was to happen has happened? u were not in the contention for the possible rewards.

trading and fishing are rarely meant for those who intend to keep sitting at the shore waiting for the absolutely calm sea......which anyhow, as they say, never makes a skillful sailor!

"hone ko to kuchh bhi ho sakta hai!"

but u can't make a living out of trading like that! u can't realise ur dreams like that!

here, probability comes into play.

trading, as i always say, is probabilistic and not deterministic.

there are times when the market's move in a particular direction high probability and then there are times when the said probability is low.

a good trading method + trading judgement is the one which can segregate the low prob opportunities from high prob ones.

a trade can never be assured. otherwise, all trader universe will jump in that direction and there will be no buyers for sellers or sellers for buyers! market will vanish!

probability is the sister of opportunity.
sensing the probability is like spotting the opportunity.

with time, practice, experience and learning, probability picking skills can be astonishingly honed!

and the beauty of the probability going wrong (mostly initially, rarely later) is that a trader anyhow always has the brakes and steering in his/her hands.....isn't it?

u can always stop and turn!!!

indecision is dangerous in trading. doubt freezes ur ability to act.

it is the indecision which causes loss in trading.

how to paper trade?

do u play chess?

if yes, has it ever happened that u made a move only to forcefully request your opponent to let u retract the move?

what if ur opponent refuses to let u?

chances are that u might have quit the  / surrendered / scrambled up the game!

why do u do that?

possibly because of frustration.....knowing the sheer hopelessness of the situation u find urself in courtesy that one wrong move.

but, if ur partner lets u withdraw the move, he/she is doing harm to u by programming u with the habit of always being careless with the moves knowing that u will be allowed to take it back.

on the contrary, if ur partner doesn't let u do that, he/she is doing u a world of good to u.

u will soon be free off the habit and start making right well thought of moves. u will act slow and own the responsibility for ur moves.

paper trading is like such a game of chess.

budding trader should do paper trading before he/she commits hard earned money to the market black hole.

just like a trainee pilot who initially is allowed to fly a jumbo in a  simulator!

but how to paper trade.

if u paper trade in the way that chess player was playing knowing that u can always take back the move, the purpose behind that paper trade is deafeated.

ur ego is intact. u r emotionally not involved. nothing is at stake.

so, how to make paper trade real like? how to involve almost real emotions which u r likely to encounter in the trading war time?

one good way is to announce ur paper trade. this way, though ur money is not at stake, ur pride is.

ultimately pride or face loss is as painful as the money loss.

u can announce that paper trade to urself (as by writing/noting in a diary whose page u would not tear), or to ur peers in a forum (like mudraa.com) etc.

once u have announced it, u have taken the plunge, bitten it. u would now have to chew it!

now, u can't disown it. u would have to face "the consequences"

u r "in" the trade....."in the real learning"

keep a record of 5 such trades and look in the mirror............u will see something real!

after the pride, get ready to pawn ur sweat, tears and blood....money can wait for the safe shores!

avoid this deadly phase difference

don't trade on what market "will do" or "is about to do"

trade on what market "has started doing".

otherwise, market will do what u thought it would do, but it will be too late for u to be there in a position to profit from it.

there is generally this deadly phase difference which prevents even knowledgeable traders from profiting.

"will do / about to do" is for preparing only

4 key words of operators

the trouble with most traders is that they always try to see logic in the trade, understand it, feel comfortable, reduce fear......whereas the fact is that there is none.

though it is hard to do all this, there isn't any other way!

operators have 4 key words

- illogical

- difficult to understand the reason

- uncomfortable

- full of fear

promises they never keep!

in trading

elephants can fly
fish can sink

spiked price can spike further
sunk value can sink deeper

why?

because there is an element of surprise in it
there is entrapment, there is numbness-creating effect in it

majority don't believe it
minority is too small

operators love minority.....just a tiny one!!!

the majority knows physics (gravity), chemistry and maths.

operators love philosophy
promises they never keep....

a yogi can be a better trader!

do u ever feel the same chill down the spine when u watch a horror movie without sound?

then why trade without muting the sound of business channels!

or swallowing every bit or opinion being thrown about in every article or discussion or group! experts have explanations, extrapolations and expectations but not predictions. otherwise, they would be trading themselves.

and consensus of amateurs means nothing except the bait for the operators do exactly the opposite

stay silent, stay studied, stay disciplined

opportunity won't come just because u r ready

it will, rather, come when u r not!

only practice of discipline can make u be successful in market.

a yogi can be a better trader!

3 possible strategies for the trader who gets stuck

there are 3 possible strategies for the trader who gets stuck in a bad situation:

1. i am gonna win everything even if i have to risk losing everything
2. i am gonna save my capital substantially even if i have to forego quite a bit of profits which become subsequently possible
3. i am gonna save every penny of my caiptal even if if have to forego all the profit which subsequently appears quite possible.

the first one u can afford if u r an advanceed player and what u risk is much much less than ur total kingdom

the second one is a wise but defensive approach somehow hinting that either ur money management or ur method hasn't yet come of age

the third one is the best remedy for the trader who has got it all wrong

depending upon which one u choose, u need to build ur gameplan around it.

remember, the market doesn't know what ur position is, what ur size is. markets are like politicians. a poor individual doesn't matter or interest them. they are interested in the masses.

market will do what it has to.

so, u do what is in front of u. bat technically correct. trade ruthlessly unemotionally, like an intelligent algo. 

2 types of trades

there are 2 types of trades i (am forced to) take

one= when my technicals whisper that the market is about to move in a particular direction.

two = when technicals enter a dark tunnel (are unable to see), and only tacticals are there to guide.

in the second case, while there is no or little directional indication from technicals (i typically call it fog), tactical possibilities with operators to dodge/surprise/maneouvre/shakeup-the-market are good invert indirect indications.

presence of fear covered with froth of disbelief keeps such opportunities covered and potent.

while the first type are pro-active trades, the second ones are more of anticipatory types.

no wonder, it is easier to catch the formers than the latters.

(the current long position in a downtrend is a typical second type of trade)

the hidden truth of trading

there is an unholy question which many avoid, many ignore, many distrust and few acknowledge

"does insider trading happen?"

well, well, well!!!
what a question....

it's something like asking
"does betting happen in cricket?"

o my my!!!

what do i say!!!

in my humble understanding
trading is "meant" to be "insider trading" by the "big" guys

for the majority, the unsuspecting retail traders, the public, the masses
it is 99.9% pure and holy!

--

how many executives of a company know what the numbers of the company's quarterly figures are going to be?
how many officials of a govt department know what the new policy or decision is going to be?
does nobody know a judgement before the judgement?
does nobody know a strategic clearance?
does nobody know a coming or going order?
doesn't the big mafia which is funding a terror network know when what is going to happen?
is that mafia or entity so naive that it won't take "benefit"?
does any new discovery happen in one eureka moment?
does any bank fail in just one day?

the examples are not in dozens or hundreds
they are in millions

there is a very thin line between information sharing and insider trading.

with the corruption at all times high globally it is anybody's guess as to how much secrecy is being / can be maintained in above matters.

some experts are of the opinion that just as the secondary market is bigger than the primary market, insider trading gains are bigger than the primary market gains! so much so that the primary market exists because of the secondary or tertiary (insider) market!!!

how do big investment banks / hedge funds gain edge over competition competing for billions of dollars worth AUM (Assets Under Management)?

if u think that only trading skills are being used, then god bless you!

honestly is too costly and ineffective road for the financial world!!! 

there is more inside to the trading than outside!

"they" know what is going to happen before it happens!!!

the "they" here is a class, not an individual or one institution.

insider trading is a global omnipresent phenomenon.

the one who gets caught brings a bad name to everyone who is doing it "nicely" and "professionally".

insider trading is a big truth like some dirty professions which nobody wants to admit acknowledge or discuss.

never try to recover the loss

dear A

u are holding 8000pe lots @ 95
right now, it is around 33 (loss of 62)

now, u have to recover 62 points, that's obviously ur first aim

well, here is my first, off-the-cuff frank advise

"never try to recover loss, try to gain if there is a possibility

that gain will automatically bridge/erase/cover the loss

but never trade with negative mindset

that fills u with nervousness/fear/anger/frustration leading to wrong decision and lot of stress

if a loss has come, it won't go away just because u need it to

prayers don't work in the market because god's men are on both side of the trade, including those of operators!

while a loss can't be erased per se, profit can definitely come

assume u were not in loss, then what would u have done?

if u knew it might fall, u might take fresh short position
or if u knew it is likely to rise, u might take fresh long position

--

so, if i were in your situation
i would square 8000pe's straightaway (money saved is money gained)
tomorrow morning i might get atleast 30 bucks for it.

putting 35 bucks more, i would have bought 8100pe lots

right now
8000pe=33+
8100pe=62+
8200pe=111

if (and everything depends on this if)
the market falls another 100 points

8000pe will become=30+ (surprising)
8100pe will become=100+
8200pe will become=170+

ur loss of 62 can be recovered only by 8200pe
that comes with condition of "risking"/putting more money on the table!!!

alas, there is nothing called free lunch!

sorry, for ur loss. take it, as of now, as price u pay for learning (i  used to assume losses as fees for my MBA (Trading) from the University of Operators!

pardon my language!

best wishes!!!

---

alternatively,

if market opens gap down tomorrow, or slipss too fast at opening, u gain some crucial points

i expect market to be volatile thereafter till expiry, which is quite away

u will get opportunities to make money

just need to keep ur calm

such experiences help in thickening of skin (which lady traders can't avoid) which helps u gain with less pain

reality of investment bankers / hedge funds - II

assume u r sitting in University College London among the students in these videos and listening to Anton Kreil (ex-Goldman Sachs super trader) 

get to know the first peep into the reality of  "operators"

though this is a talk about investment bankers and hedge funds, it gives u a good idea of the jungle and the mafia

try downloading it using torch browser (or any other way) and watch when u r absolutely free and in fresh mind

these videos are one of the many which helped me develop trading muscles in the mind

(will post advance videos later)

enjoy

https://www.youtube.com/watch?v=vbuborn14Mc
https://www.youtube.com/watch?v=-UG11JzWzMY
https://www.youtube.com/watch?v=OReolQm34TQ
https://www.youtube.com/watch?v=apOUbIDOu0A
https://www.youtube.com/watch?v=ZfrRsTd_-mE

soap operas of the market

i don't generally watch soap operas
neither on tv, nor in the market.

my way of trading is simple

- find the direction of the trend (if any trend is there)
- align
- wait for the reversal signal
- in between keep booking/adding as the case may be

all the tamtrums and dramas and baits of the market operators are more boring than the tv melodramas.

i simply mute the market and practice pity on the poor souls.

love to hate them! but they are so magnanimous that they still teach me!!!

mole

dear rakesh,

technicals are the moles of the operators

they were planted to create a mass consensus which operators could exploit

which operators, no doubt, do

but still, being a mole, and not a spy, they do give u some critical clues!

--

as i said 

technicals are right, but we don't have patience

also, we are so honestly obedient to the technicals that we miss the woods for the trees!

--

i am beyond the trader age when one assumes.

trade with a poker face

if u r surprised at the market,
then market is right and u r wrong.

the market is gonna surprise u even more
till u stay surprised.

if u r not surprised,
and pretty confident that market will do what u think it will do
then, either u r a pro,
or the market has a surprise for u!

perplexed!!!

--

well, markets job is to surprise u
only that way it can keep u among the majority
whom it will squeeze
while being the minority.

--

so what to do?

learn, practice and master the game,
till then
distrust ur surprise.

once, u come of age, and have arrived,
hide ur lack of surprise
under the veil of surprise
and walk with the market
with a poker face.





(read "market" as "operators")

trade in the present

dear harish

thank u!

to answer ur first question as to whether there can be a fall of 2-3% in coming days

= i don't know. and i doubt if operators have decided that this early! i doubt if anyone can be sure about that this much in advance!

it is certainly possible......though chances are less.

i would like to say one thing.....a range bound movement during a trend is generally of 50-150 points....which comes out to be 2-3%......but if that comes, it will be like a drift of the market and buying chance. the market is in a pause mode / ranging as of now.

the tools i have developed accurately indicate me the instantaneous trend only. i.e. trend as of now. they tell me the time when trend changes. but they don't tell me that much in advance. but i am more than satisfied by this much. i have to live the present first. and the next week will come next week and that too in the form of present.

intentions of the market can't be known before market finalises its own intentions!

for the future gazing (1 week and beyond), i have to rely on my other (lesser evolved) tools which tell me that we are yet to peak in this short-term rally.

i am absolutely sure that the down trend has not started AS OF NOW. i can bet any amount on this. and i strongly expect that resumption of upmove is unlikely for the next 1-2 days. i am long as of now in nifty. at the indication of resumption of up-trend, i would like to add to long positions.

--

about ur second question as to whether market can slip 20% or so in coming weeks/month

= i don't know......can't rule out. frankly, i don't have tools to ACCURATELY predict that.  i doubt if any one can. studied guesses can be made, but accuracy....i doubt.

--

but i strongly feel....where is the need to think about what will happen after 1 week or later? (unless, of course, if u r stuck in wrong side trade, in which case u should immediately square and take right side trade. chances of recovering and making money are more in the direction of the rend, which is up, as of now)

just trade the present. future is only in the mind! it doesn't actually exist!

trade the present successfully....and u will always be successful!