i accidently ventured into stock market
in 2003 september.
at that time
i knew nothing about it.
i was a total stranger to it.
it was more of gambling to me.
i had fractured my left foot
and was confined to my home
for around one and a half months.
i had nothing else to do
so i downloaded
all the material i could
from the internet
related to stock trading.
i took out the printout of all that material
as i have always been more comfortable reading from paper
than from the screen.
i also remember
that the printout ran into more than 200 pages
it became almost like a text book.
i still remember i had crammed almost everything in there.
dow theory seemed so fascinating!
now when i look back
i shiver to recall
how useful as well as how useless
all that theory was.
the above statement might seem paradoxical but isn't.
it is a stark reality!
all the theory was useful
because it taught me the sintax and rules and basics.
but all that was useful
from today's context
because operators use
that very knowledge
to deceive everyone.
first they make us learn all that
and then don't play with those rules!
everything is there in the theory
except the tricks operators play.
if you know the theory
you know it and yet you know nothing.
and if you know the things they never tell you
(because they never know it
or because they can never know it, as it keeps changing)
you have some hope.
but for that
you have to know the basics.
anyhow,
coming back to those times
i want to share the watershed moment
when i finally decided
that i wanted to go for it
a full fledged plunge into stock trading.
two thoughts sealed my decision
one,
i realized
that the price could either go up
or down!
there was no third direction.
price couldn't come out of screen or paper.
it had to move in 2d and not 3d!
this resulted into my favourite stock market line
and my motivation
"The market will either go up or go down. So, there is always 50% chance of winning. All you need to do is try and increase that %age with technical indicators and market understanding."
after this i never looked back.
whenever in doubt or pain
i just looked at these lines...
--
and then came my second favourite line which fuelled my effortslike jet fuel
"The stakes of cracking the code of success in stock market are mind boggling!"
total time and money freedom.....
it would be like getting back your life
real life!!!
thereafter,
many hurdles and setbacks appeared
but i survived all of them.
--
all these memories
popped in my head today
when i read the following quotation today
in
'1001 motivational quotes for success'
by Thomas J. Vilord
"In every problem there is a hidden treasure inside.It's your job to find it."
Showing posts with label about me. Show all posts
Showing posts with label about me. Show all posts
Friday, May 27, 2011
Thursday, January 27, 2011
Friday, November 19, 2010
discovering the purpose of my life
I googled for "purpose of life"
and the first result led me to the following webpage
http://www.stevepavlina.com/blog/2005/01/how-to-discover-your-life-purpose-in-about-20-minutes/
----
I followed it honestly and came out with the following list of mine.
This is not the final one , i am sure, and not necessarily in the order of importance.
Also, I didn't cry in the end as mentioned in the webpage but definitely became numb.
Here is the list:-
. have a house, bank balance and fully-satisfied life?
. see my kids become "something"?
. become a great writer?
. enjoy tourism around India and the globe?
. relax and enjoy everyday of life?
. read as much as possible of wisdom and knowledge about various aspects of life that has been written since thousands of years?
. inspire and awaken people?
. to spend years as an excellent simple efficient effective GM?
. to experience time freedom and money freedom?
. live a cosmic life; the one that is in unison with the universe?
. become an amazingly successful trader with amazing techniques?
. want to look at life in a different way and discover the real one?
. want to reach the age of 90 (be around till that time)?
. want to drink life in the cups of music, writings, paintings, food, visuals, experiences, explorations...?
. want to be happy all life?
(myunauthorisedautobiography.blogspot.com)
and the first result led me to the following webpage
http://www.stevepavlina.com/blog/2005/01/how-to-discover-your-life-purpose-in-about-20-minutes/
----
I followed it honestly and came out with the following list of mine.
This is not the final one , i am sure, and not necessarily in the order of importance.
Also, I didn't cry in the end as mentioned in the webpage but definitely became numb.
Here is the list:-
. have a house, bank balance and fully-satisfied life?
. see my kids become "something"?
. become a great writer?
. enjoy tourism around India and the globe?
. relax and enjoy everyday of life?
. read as much as possible of wisdom and knowledge about various aspects of life that has been written since thousands of years?
. inspire and awaken people?
. to spend years as an excellent simple efficient effective GM?
. to experience time freedom and money freedom?
. live a cosmic life; the one that is in unison with the universe?
. become an amazingly successful trader with amazing techniques?
. want to look at life in a different way and discover the real one?
. want to reach the age of 90 (be around till that time)?
. want to drink life in the cups of music, writings, paintings, food, visuals, experiences, explorations...?
. want to be happy all life?
(myunauthorisedautobiography.blogspot.com)
Saturday, October 23, 2010
If you ask me...
If you ask me what all I think are the absolute basic requirements to be successful in stock trading then I would list the following. These come from my own experience till date.
1) Method
If you don't trade as per a method (i.e. you trade randomly)
or
if you keep shuttling between various methods and haven't yet shortlisted & finalised the method you are going to use
then there is no chance for you except some lucky run here or there!
If you have shortlisted a favourite method your journey upwards is definitely on.
2) Buffer amount
If you don't have sufficient buffer amount in your bank after the committed margin money, the stress generated by the normal and abnormal market fluctuations will effect your ability to take correct decisions and hold onto correct positions.
If you have sufficient buffer amount, then you have no tension about unforeseen circumstances.
Shocker times come very few but their fear wears you out!
3) Experience
Once you have a method in the pocket and buffer funds in the bank you still need experience. The real trading is much uglier than that displayed in the showroom!
A soldier who has gun in the hand and bullets in the belt still needs the experience of the battleground lest he should be butchered by the enemy who have three things in their bag - gun, bullets and EXPERIENCE!
4) Consistency
Consistency is the most inconsistent thing in the world.
Many talented and brilliant people faded away like a flash in the pan just because they couldn't be consistent.
You can be only as successful in life as you can be consistent!
Inconsistency can still scuttle your trading dreams despite method and funds!
5) Emergency skills
Emergencies and real bad situations do come once in a while, even in stock market.
No real champion is made without the ability to survive and overpower difficult situations.
If you don't prepare yourself to face such emergencies then don't be surprised that your trading career is hijacked one fine day!
6) Mental toughness
This is the stick you need to support you at every step in trading career!
This is the stick you need to shoo away every unfriendly dog encounter on the dalal street!
Everything is psychological.
No place or situation tests human endurance as much as battlefield and stock market.
A growing mental toguhness is the final frontier to trading success!
1) Method
If you don't trade as per a method (i.e. you trade randomly)
or
if you keep shuttling between various methods and haven't yet shortlisted & finalised the method you are going to use
then there is no chance for you except some lucky run here or there!
If you have shortlisted a favourite method your journey upwards is definitely on.
2) Buffer amount
If you don't have sufficient buffer amount in your bank after the committed margin money, the stress generated by the normal and abnormal market fluctuations will effect your ability to take correct decisions and hold onto correct positions.
If you have sufficient buffer amount, then you have no tension about unforeseen circumstances.
Shocker times come very few but their fear wears you out!
3) Experience
Once you have a method in the pocket and buffer funds in the bank you still need experience. The real trading is much uglier than that displayed in the showroom!
A soldier who has gun in the hand and bullets in the belt still needs the experience of the battleground lest he should be butchered by the enemy who have three things in their bag - gun, bullets and EXPERIENCE!
4) Consistency
Consistency is the most inconsistent thing in the world.
Many talented and brilliant people faded away like a flash in the pan just because they couldn't be consistent.
You can be only as successful in life as you can be consistent!
Inconsistency can still scuttle your trading dreams despite method and funds!
5) Emergency skills
Emergencies and real bad situations do come once in a while, even in stock market.
No real champion is made without the ability to survive and overpower difficult situations.
If you don't prepare yourself to face such emergencies then don't be surprised that your trading career is hijacked one fine day!
6) Mental toughness
This is the stick you need to support you at every step in trading career!
This is the stick you need to shoo away every unfriendly dog encounter on the dalal street!
Everything is psychological.
No place or situation tests human endurance as much as battlefield and stock market.
A growing mental toguhness is the final frontier to trading success!
Monday, October 4, 2010
Why overnight BTST works!
(This article is dedicated to my friend Rishant Verma who believed in overnight BTST so fanatically that I was forced to take it seriously and discover the magic! I was so amazed by the tactic that I decided to refine it to a higher level and thus got my holy grail at the darkest hour of my trading career!)
Why overnight BTST works?
* No-loss game!
= If you blindly buy a good stock or index in the last minute of the day's trade and sell it in the first trading minute the next day, you are assured that you will not have lost anything on monthly basis. Any 1 or 2 or 3 days negative run is assuredly cancelled by handsome gap-up runs sooner than later! Atleast 50-60% success rate is assured if you don't change the stock/index, if you don't quit after the negative day (if at all) and if you ONLY BUY (i.e.BTST and not STBT).
Once having got this assurance, all you need to do is find ways and means and tactics to increase this success percentage beyond 50 or 60%. It can go as high as 90% (or even more for some stretches!)
* Big market players can't trick you!
= since the markets are closed and you can't act or react, big players can't excite you to mistake! This is the number 1 benefit of overnight btst and immunity from the no.1 weakness of any trader!
* No problem of impatience
= When the market is open, the itch of "book whatever profit u r getting before it is gone" takes it toll on you! In overnight BTST this possibility simply doesn't exist as the markets are closed.
Either you win big or lose big! No peanuts.....the rewards of being right are assured to be big!
* You are assured of gap-up openings even during bear runs!
= Everyday is a "hopeful" day in overnight BTST. During bear runs, BTST supported by some technical indicator brings handsome results. During Bull runs, there is a windfall of profits.
* Markets generally fall during trading hours and rise at the opening!
= People need time to let their emotions and herd-mentality get into the trade and start throwing stocks!
* Buying is natural, selling is not!
= Overselling is promptly reversed, overbuying doesn't!
Why overnight BTST works?
* No-loss game!
= If you blindly buy a good stock or index in the last minute of the day's trade and sell it in the first trading minute the next day, you are assured that you will not have lost anything on monthly basis. Any 1 or 2 or 3 days negative run is assuredly cancelled by handsome gap-up runs sooner than later! Atleast 50-60% success rate is assured if you don't change the stock/index, if you don't quit after the negative day (if at all) and if you ONLY BUY (i.e.BTST and not STBT).
Once having got this assurance, all you need to do is find ways and means and tactics to increase this success percentage beyond 50 or 60%. It can go as high as 90% (or even more for some stretches!)
* Big market players can't trick you!
= since the markets are closed and you can't act or react, big players can't excite you to mistake! This is the number 1 benefit of overnight btst and immunity from the no.1 weakness of any trader!
* No problem of impatience
= When the market is open, the itch of "book whatever profit u r getting before it is gone" takes it toll on you! In overnight BTST this possibility simply doesn't exist as the markets are closed.
Either you win big or lose big! No peanuts.....the rewards of being right are assured to be big!
* You are assured of gap-up openings even during bear runs!
= Everyday is a "hopeful" day in overnight BTST. During bear runs, BTST supported by some technical indicator brings handsome results. During Bull runs, there is a windfall of profits.
* Markets generally fall during trading hours and rise at the opening!
= People need time to let their emotions and herd-mentality get into the trade and start throwing stocks!
* Buying is natural, selling is not!
= Overselling is promptly reversed, overbuying doesn't!
Sunday, July 11, 2010
Turning points in my stock trading career
I remember a beautiful quotation I had heard long long ago
"There is no real advancement without a crisis."
How true!
We hate crisis.
It is painful.
It almost knocks you out of the game.
But crisis is also symbolic of an approaching next level.
We buckle and we are left on this side of the crisis.
We survive the crisis and we enter the next level!
It isn't easy.
Its like new life.
Its like passing thru labour pains.
My journey in stock trading too has been from crisis to crisis.
Every crisis was like a slap, like a hit, like a scolding!
Being human, every crisis was hard on me.
But, as they say, there is always a day-after-tomorrow.
After one or two days, and sometimes just after a few hours, I always used to realise my mistake, my ignorance!
Thank God! I never stopped thinking.
As Marie Curie had said
"Nothing in this world is to be feared, but to be understood"
I tried to understand the things - right as well as wrong.
I always tried to challenge almost every idea and thought and method.
Gradually, the crises became fewer and smaller and higher!
Every now or then i stumbled across something which would change the way I traded.
From pure random trading, I started trading according to some rules....
I realised that I was not good at certain styles of trading,
I also realised that I couldn't be a master of everything,
I realised that many things didn't fit my emotional and financial setup,
I realised that sticking to certain rules made trading less painful and more profitable,
I realised that to trade effectively I needed to focus on select trading areas.
Stock trading is a sea.
Thousands of stocks.
Dozens of segments.
Delivery, Futures, Options.
Investing, Swinging, Day trading.
Shorting, Longing, Hedging.
Forex, Commodities, Stocks.
Hundreds of indicators.
Dozens of theories.
Hundreds of trading techniques and tactics.
Innumerable situations.
I realised that the more I wandered, the more I will be lost in the jungle.
I had to limit myself.
I had to focus on select things.
Things I was good at.
Things that were working for me.
This resulted in some crucial decisions, some crucial turning points
that made my progress in stock market irreversible,
that made my losses reduce dramatically,
that helped me finally get profits,
that helped me be 'in control' rather than 'being controlled'
Given below are those turning points, mile stones, crucial decisions.
Some were by choice, others were accidental and incidental.
1) Decision to trade only in nifty
Money doesn't know where it has been invested. Nifty and all indices are easier to predict. I have discussed this in detail in my post "Why I prefer to trade only in Nifty"
2) Decision to trade only with sufficient buffer to hold my positions in case of a disaster.
I started sleeping sound after this decision. Before this I used to get nightmares of "circuits".
I remember, a top stunt performer in Hollywood had once said in his interview "Performing stunts without foolproof safety is stupidity".
3) Decision not to short.
I was initially never comfortable with shorting. I still am not. Though I don't mind shorting in down-trends. Nevertheless, this decision helped me plug the major cause of my confidence leakage.
My losses reduced dramatically with this decision.
4) Decision to focus on my favourite indicators only
Trading without indicators is like walking on the mountains with eyes closed.
The day I stopped trading without indicators ensured that I will not go bankrupt.
After that surety was there came another dilemma - which indicators to focus on?
There were too many.
Initially I learnt a lot of them. Moving Averages, Trix, Mass Index, Bollinger Bands, RSI, Stocastics, Willaim%R, SAR, MACD and many many more...
But then I realised that like 'any road to God is ok', i should focus on one or a few indicators only.
RSI, Willaim%R and SAR are my top favourites. Though there are some other select super tools as well.
5) Discovery of Google Finance charts
Earlier I used to work with bseindia and y a h o o charts.
Then one day I came across google finance charts. (Earlier I had thought google was just into search engine. Today everyone knows that google is almost everywhere and still going).
And what a discovery it has been for me!
Google charts are almost live for nse, they are flexible and the least count of display is amazing.
What is not visible in other charts is magnified in google charts.
RSI and William%R look xerox of each other in other charts. But in google finance charts, both are dramatically different.
Every contour comes out so sharply and differently!
Though I feel that number of indicators in the options there should be more, yet Google finance discovery made one of the biggets changes in my trading career.
6) Decision not to invest or day trade, but swing trade.
I didn't have patience for investing.
Many traders like me are in too hurry to be investor.
I once read somewhere that till you are a millionaire, you should be a trader. Thereafter, you should be an investor.
Day trading, to me, is the game of the scared goats being chased by blood-hound operators.
Swing was my game - I realised. 2-5 days game gave me more control....and money.
7) Realisation of potential of BTST
People fear BTST, but I consider it the best, fastest and safest opportunity if we have done our homework.
Rishant Verma proved this with a hammer! He is the best!
8) Realising the importance of emotional stability and practice
Emotionally scared as well as excited emotional sheep walk right into the mouth of thankless emotionless lions!
9) Decision to trade only opportunities and not trade all the time
=80% of the profits come from 20% of the opportunities, and
Rest 80% of rest trading opportunities result in majority of the losses
10) Decision to never be worried about having missed the train.
A mentioned in my post "Cool advice of Uncle chips", I realised that whether nifty is at 500 or 50000, trading opportunities will always be there. Forget about the missed train. Next (metro train) is always coming around the bend. Never run after the missed one.
11) Resolve to take loss as the fees to "buy" a lesson!
and resolving to never repeat the same mistake.
12) Maintaing my notes
What is not recorded is lost after a few days.
My posts in mudraa as well as in my blog are my fossilized notes that will never be lost.
13) Trade only long in up-trends, only short in down-trends and long as well as short in ranging markets.
This has given jet thrust to my trading. And I am loving it!
14) A big turning point was my decision to use combination of rsi and william%r charts, decision to buy when both are at extremes simultaneously, decision to read both on 1 month chart and both with 14/30min reading did wonders for me.
All of a sudden, it propelled me into the next league of results!
15) I decided to reverse my 3rd and 9th decision mentioned above.
Perhaps this was an indicator of my growing confidence and technique.
16) When I came to know that CNX-IT and Bank nifty lot size have been halved, I was thrilled.
All this while I had to wait whenever the signal to buy or sell nifty was not there. I had always noted that timing of IT and Bank index funds was different from that of Nifty.
Thus these could have been traded had the lot size been lesser. (I was less comfortable in taking 5-6 lac position as compared to 2.5 lacs in Nifty).
The reduction of lot size of CNX-IT and Bank Nifty resulted in my having 3 options to choose.
This way I could trade more with obvious benefits.
17) I crossed a major hurdle in climbing the market everest when I decided to take bigger and longer positional calls. Earlier I used to book profit when it was too big to lose! Now, I changed the criteria to staying in the trade till there was an upside left.
18) The next turning point came when I decided that I will do a SAR (i.e. always staying in the market, be it long or short) using rsi (supported by William%R).
This became possible when I cracked the code of successfully anticipating the turning points.
I realised that turning points were different in rally and sell-offs/buy-ins! Whenever the rise or fall happened in steps, it was a rally. And whenever it rose or fell sharply (almost straight, with hardly any considerable hump) it was a sell-off or buy-in and NOT a rally.
I noticed that a rally always ended after after divergence between priceline and rsi. so found it safe to reverse position at the lower high (in case of the end of a bull run) or higher low (in case of the end of a bear run).
And in case of a sell-off/buy-in, I found that reversal happened at the time of rsi reaching the extreme. In such cases, no divergence takes place.
With this "always in the market" step, I was able to milk the market fluctuation to the max.
"There is no real advancement without a crisis."
How true!
We hate crisis.
It is painful.
It almost knocks you out of the game.
But crisis is also symbolic of an approaching next level.
We buckle and we are left on this side of the crisis.
We survive the crisis and we enter the next level!
It isn't easy.
Its like new life.
Its like passing thru labour pains.
My journey in stock trading too has been from crisis to crisis.
Every crisis was like a slap, like a hit, like a scolding!
Being human, every crisis was hard on me.
But, as they say, there is always a day-after-tomorrow.
After one or two days, and sometimes just after a few hours, I always used to realise my mistake, my ignorance!
Thank God! I never stopped thinking.
As Marie Curie had said
"Nothing in this world is to be feared, but to be understood"
I tried to understand the things - right as well as wrong.
I always tried to challenge almost every idea and thought and method.
Gradually, the crises became fewer and smaller and higher!
Every now or then i stumbled across something which would change the way I traded.
From pure random trading, I started trading according to some rules....
I realised that I was not good at certain styles of trading,
I also realised that I couldn't be a master of everything,
I realised that many things didn't fit my emotional and financial setup,
I realised that sticking to certain rules made trading less painful and more profitable,
I realised that to trade effectively I needed to focus on select trading areas.
Stock trading is a sea.
Thousands of stocks.
Dozens of segments.
Delivery, Futures, Options.
Investing, Swinging, Day trading.
Shorting, Longing, Hedging.
Forex, Commodities, Stocks.
Hundreds of indicators.
Dozens of theories.
Hundreds of trading techniques and tactics.
Innumerable situations.
I realised that the more I wandered, the more I will be lost in the jungle.
I had to limit myself.
I had to focus on select things.
Things I was good at.
Things that were working for me.
This resulted in some crucial decisions, some crucial turning points
that made my progress in stock market irreversible,
that made my losses reduce dramatically,
that helped me finally get profits,
that helped me be 'in control' rather than 'being controlled'
Given below are those turning points, mile stones, crucial decisions.
Some were by choice, others were accidental and incidental.
1) Decision to trade only in nifty
Money doesn't know where it has been invested. Nifty and all indices are easier to predict. I have discussed this in detail in my post "Why I prefer to trade only in Nifty"
2) Decision to trade only with sufficient buffer to hold my positions in case of a disaster.
I started sleeping sound after this decision. Before this I used to get nightmares of "circuits".
I remember, a top stunt performer in Hollywood had once said in his interview "Performing stunts without foolproof safety is stupidity".
3) Decision not to short.
I was initially never comfortable with shorting. I still am not. Though I don't mind shorting in down-trends. Nevertheless, this decision helped me plug the major cause of my confidence leakage.
My losses reduced dramatically with this decision.
4) Decision to focus on my favourite indicators only
Trading without indicators is like walking on the mountains with eyes closed.
The day I stopped trading without indicators ensured that I will not go bankrupt.
After that surety was there came another dilemma - which indicators to focus on?
There were too many.
Initially I learnt a lot of them. Moving Averages, Trix, Mass Index, Bollinger Bands, RSI, Stocastics, Willaim%R, SAR, MACD and many many more...
But then I realised that like 'any road to God is ok', i should focus on one or a few indicators only.
RSI, Willaim%R and SAR are my top favourites. Though there are some other select super tools as well.
5) Discovery of Google Finance charts
Earlier I used to work with bseindia and y a h o o charts.
Then one day I came across google finance charts. (Earlier I had thought google was just into search engine. Today everyone knows that google is almost everywhere and still going).
And what a discovery it has been for me!
Google charts are almost live for nse, they are flexible and the least count of display is amazing.
What is not visible in other charts is magnified in google charts.
RSI and William%R look xerox of each other in other charts. But in google finance charts, both are dramatically different.
Every contour comes out so sharply and differently!
Though I feel that number of indicators in the options there should be more, yet Google finance discovery made one of the biggets changes in my trading career.
6) Decision not to invest or day trade, but swing trade.
I didn't have patience for investing.
Many traders like me are in too hurry to be investor.
I once read somewhere that till you are a millionaire, you should be a trader. Thereafter, you should be an investor.
Day trading, to me, is the game of the scared goats being chased by blood-hound operators.
Swing was my game - I realised. 2-5 days game gave me more control....and money.
7) Realisation of potential of BTST
People fear BTST, but I consider it the best, fastest and safest opportunity if we have done our homework.
Rishant Verma proved this with a hammer! He is the best!
8) Realising the importance of emotional stability and practice
Emotionally scared as well as excited emotional sheep walk right into the mouth of thankless emotionless lions!
9) Decision to trade only opportunities and not trade all the time
=80% of the profits come from 20% of the opportunities, and
Rest 80% of rest trading opportunities result in majority of the losses
10) Decision to never be worried about having missed the train.
A mentioned in my post "Cool advice of Uncle chips", I realised that whether nifty is at 500 or 50000, trading opportunities will always be there. Forget about the missed train. Next (metro train) is always coming around the bend. Never run after the missed one.
11) Resolve to take loss as the fees to "buy" a lesson!
and resolving to never repeat the same mistake.
12) Maintaing my notes
What is not recorded is lost after a few days.
My posts in mudraa as well as in my blog are my fossilized notes that will never be lost.
13) Trade only long in up-trends, only short in down-trends and long as well as short in ranging markets.
This has given jet thrust to my trading. And I am loving it!
14) A big turning point was my decision to use combination of rsi and william%r charts, decision to buy when both are at extremes simultaneously, decision to read both on 1 month chart and both with 14/30min reading did wonders for me.
All of a sudden, it propelled me into the next league of results!
15) I decided to reverse my 3rd and 9th decision mentioned above.
Perhaps this was an indicator of my growing confidence and technique.
16) When I came to know that CNX-IT and Bank nifty lot size have been halved, I was thrilled.
All this while I had to wait whenever the signal to buy or sell nifty was not there. I had always noted that timing of IT and Bank index funds was different from that of Nifty.
Thus these could have been traded had the lot size been lesser. (I was less comfortable in taking 5-6 lac position as compared to 2.5 lacs in Nifty).
The reduction of lot size of CNX-IT and Bank Nifty resulted in my having 3 options to choose.
This way I could trade more with obvious benefits.
17) I crossed a major hurdle in climbing the market everest when I decided to take bigger and longer positional calls. Earlier I used to book profit when it was too big to lose! Now, I changed the criteria to staying in the trade till there was an upside left.
18) The next turning point came when I decided that I will do a SAR (i.e. always staying in the market, be it long or short) using rsi (supported by William%R).
This became possible when I cracked the code of successfully anticipating the turning points.
I realised that turning points were different in rally and sell-offs/buy-ins! Whenever the rise or fall happened in steps, it was a rally. And whenever it rose or fell sharply (almost straight, with hardly any considerable hump) it was a sell-off or buy-in and NOT a rally.
I noticed that a rally always ended after after divergence between priceline and rsi. so found it safe to reverse position at the lower high (in case of the end of a bull run) or higher low (in case of the end of a bear run).
And in case of a sell-off/buy-in, I found that reversal happened at the time of rsi reaching the extreme. In such cases, no divergence takes place.
With this "always in the market" step, I was able to milk the market fluctuation to the max.
Saturday, July 10, 2010
My journey in stock market till now
I got interested in stock market in October 2003.
I opened my initial demat accounts in January 2004 with Consortium Securities and ICICI
Securities.
For almost 2-3 months I kept on studying about the stock trading thru notes downloaded from internet.
Then I started trading with very small capital.
I used my ICICI account for online trading and Consortium account for trading thru phone.
For around 3 years I kept on trading alternatively like a scared goat and a street dog.
Sometimes I made some profit, many times I ran into loss.
My learning graph was not rising all this while despite reading a lot of literature and theories.
Perhaps I lacked a forum like Mudraa or a guide or mentor. I had no companion wiith whom I could share my trades.
I was reading a lot but not experimenting.
I was not growing.
I am shocked to recall now that I had no system.
I shiver to recall that i used to trade on pure gut feeling, on tips, on market herd sentiment, on emotions or on the basis of frivolous ideas.
I had started to fly fighter jets when all I knew was how to switch it on and off!
I was not aware of things like trendlines, rsi, fibonacci, MACD etc.
Perhaps I lacked exposure and good company.
I was lucky enough not to lose my shirt in those lackluster 3 years.
Perhaps that was because I never knew much about Futures and Options.
I didn't have the margin required for the same.
All this while I wondered how some people made a lot of money in trading?
I quit many times only to return back after a few days.
I used to quit the market but the market didn't quit out of me!
All this while I kept on looking for alternative methods of "making money".
I wanted some avenue where I could make extra bucks legally alongwith my job.
But fortunately / unfortunately, I couldn't find any to my taste and constraints.
One thing I knew from the beginning that traditional business was not for me.
I shivered even at the thought of going thru the ordeal of applying for Sales Tax number, what to talk of surviving the inspector raj still prevalent!
By 2007, my ICICI account got terminated since I had almost stopped trading.
In January 2008, I met Rishant Verma, a young man around a decade younger than me, with whom I once happened to casually share that I "used to trade in stock".
This youngman had a fantasy of trading in shares.
He got after me to tell him about stock trading.
For initial few months I couldn't guide him much.
But when I saw that he simply wouldn't let me off the hook I started sharing my understanding and concepts with him.
I must confess what i knew at that time was only better than what he knew.
But everyday he used to come up with some question and i had to dig for the answer to it.
This way I started learning seriously.
A teacher grows faster when a student is there.
As I started to mentor Rishant, I settled into a routine.
A habit about anything can be the best thing to happen to you.
Suddenly, the trading ambitions in me started to sprout!
I started reading more and more.
This time, I had a laptop of my own with internet connection which was decisive in my growth in stock market understanding.
I opened a new demat account, this time with HDFC Securities.
Rishant and me started growing very fast in stock market understanding.
I must confess, Rishant turned out to be a student who had the talent to surprise any teacher.
I asked him not to venture Futures as none of us knew anything about Futures.
Despite my saying no to him, he read about it from net and took the plunge.
I kept watching him from the sidelines.
When nothing happened to him, I too started trading in Futures!
Rishant was particularly brilliant in BTST.
He used to buy a stock future at 3.29 pm and sell at 10.00am (in those days the market used
to open at 10am IST).
He had almost perfected the art to BTST.
I have shared his method in one of earliest posts.
Both I and Rishant opened Moneybhai account on moneycontrol.com
We used to dummy trade there and had a lot of fun underlined with learning.
Our favourite sites were economictimes.com, moneycontrol.com and bseindia.com.
We used to see charts at bseindia and y a h o o.
We used to study a lot of indicators.
we even used to "invent" our own indicators.
Everytime we came out with a "brilliant" idea or method, we used to feel like Immortals.
We thought we were going to be millionaires the next day!
Only to find ourselves floored the day-after!
All our "brilliant" ideas fizzled out overnight!!
a time came when we were so frustrated to see all our ideas turn out to be flops, that we started fearing and doubting new ideas. Fotunately, we didn't stop ourselves from day-dreaming.
Everytime we fell down, the love of stock market got us back on our feet.
By the end of 2009, Rishant got so much confidence in his BTST based trading method that he decided to quit his job and go full time into trading.
He quit and I was left alone.
That was the time when I started searching for an online forum and I came across mudraa.com.
On my very first day, I posted 10 buy calls on mudraa.
All got auto-deleted within 2 minutes!
I didn't know who deleted it!!
I was angry.
But then someone wrote to me that I was supposed to give reason behind my "technical" calls
otherwise site administrator will delete them.
I didn't have any logical reason.
For I knew no reason except my gut feeling on seeing the graph of a stock!
That was the time when I seriously started studying technical indicators.
I kept on studying and kept posting my notes on mudraa.
Fellow mudraaites kept appreciating and I kept reading and posting more and more.
Fearing that my articles on mudraa might someday get accidently deleted, I created my first blog www.thebestbusinessintheworld.blogspot.com and started posting all my articles there simultaneously.
Rest they say is history, atleast for me!
I smile with tears in my eyes when I look back at my journey in stock market.
From a scared goat and street dog to a hunting wolf and african elephant!
Miles to go but I am on THE road!!!
I opened my initial demat accounts in January 2004 with Consortium Securities and ICICI
Securities.
For almost 2-3 months I kept on studying about the stock trading thru notes downloaded from internet.
Then I started trading with very small capital.
I used my ICICI account for online trading and Consortium account for trading thru phone.
For around 3 years I kept on trading alternatively like a scared goat and a street dog.
Sometimes I made some profit, many times I ran into loss.
My learning graph was not rising all this while despite reading a lot of literature and theories.
Perhaps I lacked a forum like Mudraa or a guide or mentor. I had no companion wiith whom I could share my trades.
I was reading a lot but not experimenting.
I was not growing.
I am shocked to recall now that I had no system.
I shiver to recall that i used to trade on pure gut feeling, on tips, on market herd sentiment, on emotions or on the basis of frivolous ideas.
I had started to fly fighter jets when all I knew was how to switch it on and off!
I was not aware of things like trendlines, rsi, fibonacci, MACD etc.
Perhaps I lacked exposure and good company.
I was lucky enough not to lose my shirt in those lackluster 3 years.
Perhaps that was because I never knew much about Futures and Options.
I didn't have the margin required for the same.
All this while I wondered how some people made a lot of money in trading?
I quit many times only to return back after a few days.
I used to quit the market but the market didn't quit out of me!
All this while I kept on looking for alternative methods of "making money".
I wanted some avenue where I could make extra bucks legally alongwith my job.
But fortunately / unfortunately, I couldn't find any to my taste and constraints.
One thing I knew from the beginning that traditional business was not for me.
I shivered even at the thought of going thru the ordeal of applying for Sales Tax number, what to talk of surviving the inspector raj still prevalent!
By 2007, my ICICI account got terminated since I had almost stopped trading.
In January 2008, I met Rishant Verma, a young man around a decade younger than me, with whom I once happened to casually share that I "used to trade in stock".
This youngman had a fantasy of trading in shares.
He got after me to tell him about stock trading.
For initial few months I couldn't guide him much.
But when I saw that he simply wouldn't let me off the hook I started sharing my understanding and concepts with him.
I must confess what i knew at that time was only better than what he knew.
But everyday he used to come up with some question and i had to dig for the answer to it.
This way I started learning seriously.
A teacher grows faster when a student is there.
As I started to mentor Rishant, I settled into a routine.
A habit about anything can be the best thing to happen to you.
Suddenly, the trading ambitions in me started to sprout!
I started reading more and more.
This time, I had a laptop of my own with internet connection which was decisive in my growth in stock market understanding.
I opened a new demat account, this time with HDFC Securities.
Rishant and me started growing very fast in stock market understanding.
I must confess, Rishant turned out to be a student who had the talent to surprise any teacher.
I asked him not to venture Futures as none of us knew anything about Futures.
Despite my saying no to him, he read about it from net and took the plunge.
I kept watching him from the sidelines.
When nothing happened to him, I too started trading in Futures!
Rishant was particularly brilliant in BTST.
He used to buy a stock future at 3.29 pm and sell at 10.00am (in those days the market used
to open at 10am IST).
He had almost perfected the art to BTST.
I have shared his method in one of earliest posts.
Both I and Rishant opened Moneybhai account on moneycontrol.com
We used to dummy trade there and had a lot of fun underlined with learning.
Our favourite sites were economictimes.com, moneycontrol.com and bseindia.com.
We used to see charts at bseindia and y a h o o.
We used to study a lot of indicators.
we even used to "invent" our own indicators.
Everytime we came out with a "brilliant" idea or method, we used to feel like Immortals.
We thought we were going to be millionaires the next day!
Only to find ourselves floored the day-after!
All our "brilliant" ideas fizzled out overnight!!
a time came when we were so frustrated to see all our ideas turn out to be flops, that we started fearing and doubting new ideas. Fotunately, we didn't stop ourselves from day-dreaming.
Everytime we fell down, the love of stock market got us back on our feet.
By the end of 2009, Rishant got so much confidence in his BTST based trading method that he decided to quit his job and go full time into trading.
He quit and I was left alone.
That was the time when I started searching for an online forum and I came across mudraa.com.
On my very first day, I posted 10 buy calls on mudraa.
All got auto-deleted within 2 minutes!
I didn't know who deleted it!!
I was angry.
But then someone wrote to me that I was supposed to give reason behind my "technical" calls
otherwise site administrator will delete them.
I didn't have any logical reason.
For I knew no reason except my gut feeling on seeing the graph of a stock!
That was the time when I seriously started studying technical indicators.
I kept on studying and kept posting my notes on mudraa.
Fellow mudraaites kept appreciating and I kept reading and posting more and more.
Fearing that my articles on mudraa might someday get accidently deleted, I created my first blog www.thebestbusinessintheworld.blogspot.com and started posting all my articles there simultaneously.
Rest they say is history, atleast for me!
I smile with tears in my eyes when I look back at my journey in stock market.
From a scared goat and street dog to a hunting wolf and african elephant!
Miles to go but I am on THE road!!!
Wednesday, June 16, 2010
My Swiss Army Trading Knife
One can't remember all one studies.
So,I devised this simple pictorial method to remember my most potent trading tools. Whenever the trading decision is difficult, I simply take out this swiss army knife and check!
Sunday, January 24, 2010
how i first started nifty futures trading...
1) first, learn nifty futures trading with mini nifty, where u need 10000-12000 hold, net leveraged amount is around 1 lac. don't start with full nifty lot or multiple thereof straightaway till you are reasonably "expert" and can afford that much risk.
2) one way to trade is to buy mininifty at support and sell at resistance. support and resistance level can be had from the several discussions on mudraa and all business tv channels....
3) alternatively buy mininifty on "higher lows" and sell on "lower highs". (Higher lows generally indicate that the price is going higher and lower highs indicate that price is most likely going down). book profit at 0.5% to 1.5% as per your comfort level.(This rule to be followed only as long as you are "expert" and have other ideas). Remember: Immediately square off and book small loss if your stop loss is hit or when u get the first feeling that the things are not going your desired way. typically, stop loss should be 0.25% (till you are "expert"). 2 out of 5 times you may have to book small loss. rest 3 times you are likely to get medium to big profit. I call "stop loss" as tripper. Trade like a machine. no emotions pl. Ruthlessly emotionless!!!
4) alternatively, you may buy mininifty on rising triangle and sell on falling triangle. learn about this from net by searching for these terminologies in google. this is a very reliable method.
5) you must trade with spare money which if lost all, will not drive you to crisis.
6) Golden rule; Take risk. No risk, no profit. Take studied risk, if it goes wrong, cover fast, if it goes right, dare to win big till what u r gaining is "big" for you. you never go broke by booking profit. play small till you are "expert". be "expert" but dont be overconfident.
2) one way to trade is to buy mininifty at support and sell at resistance. support and resistance level can be had from the several discussions on mudraa and all business tv channels....
3) alternatively buy mininifty on "higher lows" and sell on "lower highs". (Higher lows generally indicate that the price is going higher and lower highs indicate that price is most likely going down). book profit at 0.5% to 1.5% as per your comfort level.(This rule to be followed only as long as you are "expert" and have other ideas). Remember: Immediately square off and book small loss if your stop loss is hit or when u get the first feeling that the things are not going your desired way. typically, stop loss should be 0.25% (till you are "expert"). 2 out of 5 times you may have to book small loss. rest 3 times you are likely to get medium to big profit. I call "stop loss" as tripper. Trade like a machine. no emotions pl. Ruthlessly emotionless!!!
4) alternatively, you may buy mininifty on rising triangle and sell on falling triangle. learn about this from net by searching for these terminologies in google. this is a very reliable method.
5) you must trade with spare money which if lost all, will not drive you to crisis.
6) Golden rule; Take risk. No risk, no profit. Take studied risk, if it goes wrong, cover fast, if it goes right, dare to win big till what u r gaining is "big" for you. you never go broke by booking profit. play small till you are "expert". be "expert" but dont be overconfident.
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