the belle

one of my trader friends from Chennai "M" was in the Netherlands as IT professional. we came in contact with each other through mudraa.com. what an IT buff he was. i was scared because of his daring capabilities. once he came to meet me at Shimla and stayed for over a month. he needed fast internet access. he was daring enough to hack a service provider. the reasons i am "praising" his skills lie in what i am going to share below.

one of his (even more sharp) IT pro friend "K" was in the UK, working for someone in London Stock Exchange. my friend M told me that K was always under intense surveillance...including when he called his family or friends. every movement and acquaintance was strictly as per dos and don'ts. for all this and beyond, he was paid much much more than his pass-out peers.

what was "K" doing?

well, he was the programmer (one of the team) who were asked to create and manage the Bots (robots/programs) which would be given instruction every now and then as to where to take the market or a particular stock in the next few hours or days or weeks or months....both sides

core members/experts/syndicates decide what to do and then let their (computer) jockeys take the (market/stock) horses where they want to...

...computerized accumulation and distribution at its ruthless execution.

i spent months if not years looking for the pugmarks and traces of those computer synchronized belle's...got some clues...in fact quite a few.

the races and the race of races...all are rigged.

thank God!

driving in low visibility and shooting with a rocket

 in trading, price prediction is like driving a car at night or in low visibility.

while it is very much possible to foresee which way the road is bending ahead but it is only as much clear as is the distance till which the light is thrown by the headlight.

charts and indicators of a particular timeline throw light only till a particular distance ahead.

we can see reasonably clearly till a distance (for that timeline chart). when we get there or as we get closer, we see beyond that point more clearly). the road becomes visible as we travel further.

it is not possible to look beyond a distance with a particular timeline chart.

to look further, we have to switch to higher timeline chart.

but as we do that, accuracy and least count decreases.

a trader, therefore, shouldn't whip himself to know all the answers with same clarity at once.

and believe me, situations change as we get closer. not only because we couldn't see what was there already at a distance, but also because things change before we reach there. markets are dynamic situations. operators act as shock absorbers.

that is why, if you ask me about closer to the present, i can attempt shooting an ant, but if you ask me far or wide, i would need a planet to shoot with a rocket. 

before letting go

nobody likes bad experiences. nobody wants to remember painful memories.

we are often told all our lives that when you fall down, get up, dust your knees and get going.

but, so often in life, including trading, there is something different or more that cries to be done.

it is noticed that so many irritating and painful events have a tendency of repeating. one of the key reasons is that the root cause of their happening remains intact.

therefore, when anything happens that shouldn't have happened, though it is so important for you to overcome it and move forward, while you are dusting your knees and consoling yourself to move forward, you must pause for a second and do the following.

look straight into the eyes of what went wrong even though that is the thing you would like to forget and not recall. just for one last time. purposefully, deliberately and courageously dive into the details of what happened. lay it threadbare and understand it.

and don't leave till you have understood why it happened.

it hurt you by happening and now you hurt it back by understanding it. this way two benefits will happen. one, its spell would be broken and you wouldn't have to carry the mental scar of it all your life. its fear will be gone as its emotions would have burnt to the ashes in the heat of pure ruthless logic. second, you would know why it happened. you will, chances are, smile, slap yourself, shake your head in disbelief and move on with lighter feet. in the process, you would get automatically programmed to not doing that mistake again.

mistakes and pains avoided are the ones that don't go away and become cables and monsters.

the classic James-Lenge principle also underlines that - "you don't run because you fear, you fear because you run."

so, next time your trade goes wrong, before you forget it, understand it. and then, let it go.

self talks

Trading is 20% analysis, 20%money, 20% luck, 40% psychology.

-

Always keep fearing yourself (only).

I doubt my every position every morning noon and evening. I do fresh analysis every time, draw fresh lines...

After every successful trade, pat your back and reset the reputation.

-

Cricketers and traders are only as good as their last 3 trades.

And when if despite scrutiny from fresh angles the analysis, interpretation, and inference is the same it gives immense confidence. 

Things can still go wrong but the probability is highly reduced.  Practically and actually.

You can't prefer or embrace total uncertainty just because some uncertainty is always there in studied certainty.

-

Trading is the chess played between CEs and PEs based on the price moves traced and understood with charts.

There are lots of threats... genuine and bluffs, lots of defense and offense,  lots of missed chances and lucky runs, moves, and traps...

an advise for aspirant traders

One of my friends has asked me to recommend some good books to learn trading

well, here are the two which immediately come to my mind...

1. Trading for a Living - Dr.Alexander Elder

2. Reminiscences of a Stock Operator - Edwin Lefevre

Best learning though is by doing.  Hardly any Marwari learns trading from books IMHO

And best doing is by playing small, not fearing losing, noting every observation, making a small simple system and improving it continuously

Pl watch movies on stock trading

Gafla and Margin calls are excellent

Reading "how to trade" books is the surest way to get lost. You'll learn all the wrong things full of how claims. It will be extremely difficult and costly to unlearn them later. 

Absolute basics and definitions are there on Google. 

One of the reasons i didn't get lost was because I read no book. Just inspirational books of champions in market

Avoid learning technicals first. Technicals are like fertilizers and pesticides which kill the healthy trading bacteria inside budding trader's fertile mind. Later on, becomes impossible to switch to natural organic gaming trading sense. 

Play the trade, don't trade the trade. Be cunning and wise. 

Touch technicals only after understanding the game and tactics behind it. Nobody guided me and was fortunate to get back on the highway after wandering for years

Operators want you to learn technicals. They know what technicals are indicating and they know poor ducks are trading on technicals

Technicals don't lie but only if you learn to interpret them yourself and not by using codebook provided by dropout trading teachers and authors

the Eclipse

 i have jokingly nicknamed various charts as below (based on their timelines)

1 min tick chart=mangal

5 min tick chart=shukr

15 min tick chart=shani

1-hour tick chart=ketu

1-day tick chart=rahu

1-week tick chart=surya

1-month tick chart=brahaspati

i keep an eye on all charts albeit with different frequencies based on their timelines. eg i need to check mangal dasha every 1 hour or so while brahaspati needs monitoring once every quarter or so.

i have experienced that when 2 charts coincide, bigger moves happen. and when more than 2 coincide, tremors occur. the bigger the chart (planet) in the union, the more the magnitude.

in coming 2 weeks or so, mangal, shukr, shani and ketu all seem coming to the same square and rahu is dangerously close to the venue.

something is cooking....

The 3-Hour Rule

one of the most difficult things to do in trading is: patience

patience, when stock or market is not moving but your system is telling you that a move is on the cards...

patience, not to chicken out but add to the position (subject to money management and safety measures) when the market has moved adversely and your system is saying that it is in the most likelihood a bluff...

patience, not to book profit too early just because you have not seen such a good profit for long or just because you desperately need this profit but your trading system is telling you that the move is far from over.

this impatience is one of the key reasons for budding traders never making it to the next level.

i struggled with this for a long time.

over a period of time, i came up with homemade solutions some of which have stayed on and hardened as i found them brilliantly effective.

one of them is what i call "the 3-hour rule"

this rule is not for day traders but for short term traders. also, this rule is not for those who don't trade as per some system and just bet randomly or arbitrarily.

let me explain the rule with an example.

suppose you are holding a long position for a few days. the system is saying that the price/stock/index will go up. needless to say, there is a strong likelihood that there will be turbulence, and the price fluctuates.

while a seasoned and hardened trader with a not-so-scary volume of holding will be less or no fearful at the times of fluctuations, a normal mortal one will be scared a lot. especially if he/she is sitting on a profit.

at this time, our mind starts talking to itself.....sort of self-talk....and mostly the thoughts are of fear.

under such circumstances, traders tend to rivet their eyes to the screen, thereby making it easier for the operators/strong hands to hypnotize and shake them out.

so, here is the 3-hour rule.

check the price, check the system...if it says up for the next many hours or a few days, stand up and get lost or busy for 3 hours. don't check the price for the next 3 hours. mark the time or set an alarm.

so many times it has happened that a particular option was 155 (say) at 10:15am and when i checked back at 1:15pm it was at 237. you can well imagine what would have been my reaction. especially considering that had i kept staring at the screen post 10:15, the pressure to book profit would have been too much for me to bear resulting in my booking at a big compromise.

you may argue that after 3 hours it can also happen that the 155 is reduced to 55. well! possible, very much possible. but that is where the first rule of trading comes into play....trading only with a system. without a system, it would be gambling and not trading....and surely the 3-hour rule can be suicidal.

with a system (and more so with an evolved one) the probability of trade going right is much more.

with the 3-hour rule, you are allowing profits to maximize. with the system, the profits you collect when trades go right are much more eventually than the loss you suffer when the trades go wrong.

even otherwise, the prime reason for even sincere traders losing money despite getting things right 50% or more is that they book too early when right and book too late when wrong. ruthless adherence to the 3-hour rule takes care of that anomaly.

when you are not able to wait, don't wait, get busy.

which timeline chart for which trading

for scalping....use 1-min tick chart

for day trading or overnight...use 5-min tick chart

for swing trading....use 15-min tick chart

for positional....use 1-hour tick chart

for long term holding....use 1-day tick chart

for investing...use 1-week tick chart

for hindustan motors like experience...use 1-month tick chart

you can use higher or lower timeline charts also for the same purpose but that may affect efficiency and effectiveness just like you can cut a tomato with a sword instead of a knife or use a spoon to fill a jug, but the same is not recommended

*tick=least count

*take trade only in the direction of the parent chart...eg 5 min chart is the parent of 1 min chart

trend is like a hand pump (& other musings)

 A trend is like a hand pump. It gives you opportunities again and again for profit to keep coming out from the other side.

-

if we enter on price logic, we should exit on price, if we enter on rsi bullish divergence we should quit if that BD structure is destroyed.

-

In bull runs, pullbacks are like stretched pressed springs.

-

Technicals are not dumb. We are hard of hearing. Markets and operators tease us by speaking out the secrets in technicals...we refuse to learn the new language beyond the slangs.

-

Corrections are pillars for higher stories of the bull buildings.

-

2 to 3 technical indicators are enough IMHO. But don't do friendship with them. Marry them. Surrender your life....(Whatever indicates is an indicator... dance in sync and you know what it is saying)

how would you trade if ... (musings of a trading coach)

It takes conviction to buy on dips... And that comes only from a trading method and money management. Otherwise, traders don't buy at heights because of fear of fall and they don't buy after falls because of fear of further fall. No end to that fear. They are sheep with a wish to be hunters called traders.

--

Gambling with a system is better than gambling without a system. Gambling with money management is better than gambling without money management.

--

What would you do, how would you trade if you have assured stumble on the way but assured recovery from that on the way to the target?

--

Don't burn your peace of mind knowing how (the market is going to do what it hints it is going to do). just know what (it is going to do) and sit tight. The more you trust the market of your system, the more it rewards you.

--

How will you trade if you were the operator? How will you trade if you were to get the money of others reading these lines? You'll surely not trade together. You'll surely have to play tricks like you do in cards being games. You will use bluff, fear, and greed. That's exactly what operators do. The more we acknowledge and understand that the more we profit by trading absolutely differently

--

Technicals never emerge for the whole path in advance in detail. They gain the megapixels as time passes and the market progresses.

The day enough people know the game, operators will change the game

There are so many charts for the same technicals based on which time frame you choose. One of them is always showing you the right picture.

fill, it shut it, forget it....

 best stock master approach i have understood over the time is

fill it (understand it wrt the evolved system)

shut it (take the trade)

forget it (don't bother till the SL based on same criteria as taken, holds)

... get off the hero honda spendor 10meters before the destination as indicated by the map (system)

by the way, here is that classic ad with iconic line, for nostalgia sake

https://www.youtube.com/watch?v=xQcZVDTjAis

what operators have seen beyond covid and why

when a patient sick for 6 months get s a little better, his meals jump in quantity versus when he was sick and couldn't and didn't want to eat due to sickness. this sudden smart jump in the diet is temporary. something like our economy witnessed in october/november. 

but it will be a big mistake to fail to look beyond this temporary increase in the diet which is the initial crisis survival reaction.

the patient is recovering and by now he has just taken in the "emergency" supply as a knee-jerk, fight back natural measure to bounce from critically low levels.

as he recuperates some more and recovers from reserve and ICU levels, his body would want to stand up, get ok and go to work.

there would be a lot of weight to be gained for a normal life. it is inevitable that this deficiency suffered and accumulated for several months is overcome, systematically or in a stampede.

this is what is suspected and expected from the economy in 2021.

and since markets precede the economy by 6 months (because operators have to befool the majority and do accumulation/distribution) the current market run can be understood. it is aptly incidental that vaccines have started appearing.

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

how i conquered my fear of losing the profit

 i once coined a phrase to soothe myself and protect against the fear of losing the profit even when my system was reasonably green on the trade.

i would often fear that the market would eat away my profit already earned. i would often face increasingly strong butterflies in my stomach. people often complain about having sleepless nights because of adverse market movements leading to unbooked losses. but hardly anyone talks about having sleepless nights with unbooked profits.

i would check my trading system again and again. but despite my system assuring me a v high probability of trade going eventually my way (and often it did, with or without me), i would still feel so fearful of losing the much-valued profit that i would feel comfort only after booking the profit, partially, if not wholly.

eventually, that comfort would turn out to be salt on my wounds if not short-lived. the market would in my direction without me.

occasional market reversals only strengthened my fear.

"this can't go on forever", i said to myself.

one fine day, i was so fed up that my alter ego slapped me with the following line

"market is not after you! market can't see you. you as an individual are invisible to it. you yourself are conscious and coming in the way!"

it was like a thunderbolt of relief. i suddenly felt better.

it was only my fear and imagination - i thought.

that day my trading changed. i still had some reversals and loss of profits but those were much much less than what i gained. i had never stomached big profits till that day.

even a single massive profit often more than covers dozens of small losses.

recently, i realizedthat the above line is true beyond trading. it works amazingly well in almost every aspect of life.

correct way to decide a Stop Loss (& the logic behind 80/20 movement of price)

Stop Loss (SL) is more of a mere statutory requirement especially if conviction is sky high and risk managed eg by trade size. 

a crucial fact about SL is that a trader can't put price-SL if trade taken on pattern of technicals instead of price. SL is to be decided on the same criteria which is used to decide the trade.

--

many traders either miss out or wonder why markets move 80 percent in 20 percent time and why they languish for the remaining 80 percent time.

IMHO, besides the tactical dodge critical part, another key reason is that operators take that much of time to get the sheep on or off the train...

--

the judgement of direction and patience are key signs of a non-bad trader...

why sgx nifty shouldn't be taken seriously (& other thoughts)

one reason why we shouldn't take sgx too seriously. just like nifty is used to trap resident Indians, sgx is used by operators to trap retail non resident Indians or foreign traders who trade in nifty, while India is supposed to be sleeping. if Indians keep waking up restlessly to take flying arrow of sgx even at night it is serious destructive hypnotism. ultimately operators are uncles of none.

---

without system, all traders are scared pigeons and innocent market fluctuations cats.

---

you can't blame snakes for moving in higher highs and lower lows on trading sand.... they have to move like that... net movement of price should be seen instead of inevitable normal zig zags.... traders who don't have even that much of holding space can't stay in the ring for long.

check any graph any time line. there is good net movement despite scary zig zags

---

once we realize and acknowledge that we are playing against deep monster pockets managed by super algos backed by a strategy loaded with tactics, we will trade differently. we will play the trade instead of trade the game.