It is sad that people look down upon technicals. Technicals are the footprints of the operators and masses. it is like a Morse code of secret communication. Technical traders have to have the mindset of a spy.
The best way to master any indicator is to learn in reverse. Mark 100 high and low points of any chart and see what that indicator did at ALL of those points. the secret will be revealed to you. like Bruce Lee advised, practice one (or select) technical(s) a thousand times....self talk
If your opponent knows your surrender point, he will exploit it.
Stoploss points, therefore, should be in mind, not in system IMHO, unless you're scalping or there is some other compelling argument.
They can see it!
Even otherwise, sudden moves are known to open jump stop losses
trading is like a property dealer or used car sale/purchase business.
you often get only 1-2 clients in a day...sometimes in a week. most of those opportunities are not juicy, there isn't enough risk reward in your favour. you have to say "no" to most of them. if you say "yes" to every trade that comes your way, you are not a trader, someone has "traded" with you.
but every now and then you come across a genuine trade that has risk reward ratio tilted in your favour. that trade should be taken and remaining left. boredom is the cost of safety from loss.....self talk
Trading is a 80/20 game. If you miss the 20% chance of winning the pounds, you struggle for remaining 80% time for pennies…
Therefore you have to have a top-class system which catches edges reasonably accurately, you’ve to have discipline and mental condition to stick to that system and survive that 80% uncertainty to catch that 20%.
If you miss the meat, you’re left with the bare bones.
the game is squeezed in that 20% portion, your system should be capable of pointing out the high probability zone of that 20%. Otherwise, you will keep struggling for the consistency.
Same is true for investing.
trade only one side (for a day/swing/trend/day/time period) based on the judgement of the trend direction)
either buy on dips or sell on rise
avoid both side trades
nothing confuses and forces wrong trades like both side trade
losses of wrong judgement are half or less when you take trades only on one direction...
if your one side trade is failing, most likely the trend is on the other side... a good system spots that before trading.
Let me share an observation. Any big rise or fall is actually in two parts, like a movie with interval.
Check any sharp spike or crash on any chart. Chances are you will see that there was a kink or pause in the chart near 50% mark. Between 40-60%.
Pl do check
So whenever any sharp move comes dare to shun FOMO and jump on, of course only that much amount you can afford to lose. Strong chances you entered near midway
Standard disclaimer: not a recommendation 😅
in trading log kya kahenge doesn't matter
nobody is going to share his profit or your loss
all associations are situational and conditional, and till they are pleasant.
ekla chalo
in trading you can never sure of the outcome of the trade. never. there is always some uncertainty.
but you can't be indecisive and shaky.... fearing, vibrating, panicking all the time, fiddling with the trade direction.
you have to bet. and have guts to stick to it.
you have to be ok with losing. only that will give you the guts to be worthy claimant of profit, handsome profit.
and since you have to be ok with loss, you have to manage the risk. can't be foolish gambler.
never swim naked.
atleast never trade naked.
if you are long, instead of buying 2 or 20 lots buy 3ce:1pe pr 30ce:10pe (or in that ratio). always trade hedged. that way, you use more funds, ofcourse, and a bit more in premium decay, but that is the insurance against trades gone wrong or adverse bluff moves.
always trade with a hedge...same instrument is advisable for amateurs. professionals have more sharp options.
don't hesitate to skim or book adverse moves, if and when they come.
however, this strategy is only if you have a trading system, you know when and why to enter or exit, in which direction is the high probability. if you don't know that or don't know what to do in case of an adverse move, then hedging won't save you much. you have to find ways to recover cost of the hedging insurance.
i, per se, never trade naked. swimming i'm learning. bathing naked is ok.
don't hold yourself responsible for what market does or doesn't
never feel guilty about that.
that is not in your hand.
the only thing that is in your hand is, deciding what shot to play to the ball pitched at you by the market.
you play stroke not as per your wish but as per the ball.
every trading day or trade swing, like a chess game has a opening game, middle game and end game....
the opening just sets the tone
and end game just ruthlessly stretches, extends or finishes the win or lose,
but it is the middle game which is tedious, heavy, boring and demanding. that is the real test of a trader....that's where the outcome gets manufactured or shattered. patience and skill is required. the bets need to be let mature or adjusted.
can't spot or be sure of the start of the trend?
don't worry....look for the end of the previous trend.
new trends start only after the end of the previous one.
this reverse way to looking for a new trend (with stoploss, ofcourse) is the alternative and less erroneous way of finding a new trend.
well, you eyes tell you
still, if you want to check it with some method, here is the one i use
assume there are 4 chart timelines
1) 1 min chart= child
2) 5 min chart = father
3) 15 min chart = grandfather
4) 30 min chart = great grandfather
the trend of the more aged is the trend.
eg if 1 min child chart sma trend is up and 5 min father chart sma trend is down, it is most likely a down trend, a sell on rise trend, for short or immediate term, atleast
sma trend means = whether price is above or below sma, whether smaller sma is higher or lower than larger sma. eg. if 15 sma is below 50 sma, trend is down.
checking of the higher generation sma trend is a good way of checking the trend.
take trade timed by smaller generation chart but in line with the trend of the higher generation sma
taking trade pro-trend is less risky than against trend.
There are 5 trading approaches
1. Technical
2. Fundamental
3. Guts
4. Emotional
5. Lottery
6. Copying
1st is best
3rd and 5th are ok
2nd, 4th & 6th are worst
Fundamentals are taken advantage of by operators. For trading, fundamentals are traps. Stocks fall on good results and rise on bad. Prices precede fundamentals.
Fundamentals are just rumours or sentiments most of the time.
What’s the fundamentals of market right now. Already into bubble. But this bubble may become football
All tactics and bluffs of operators reflect in charts. Yes bank fall was clearly visible just before fall. So was Satyam. You’ll be shocked, even covid fall was visible before the fall.
Trading = technicals + gaming
one way to book profit without coming out of the position (eg when trend is likely to continue but you want to take some profit off the table to feel comfortable and secure)
replace the costlier option with cheaper one....
eg assume you bought a BN call of 500 points...it becomes 800 or 900 or 1000.... it would be wise to book it and replace it with current BN call around 500 points.
no doubt, current 500 point call may rise slower than 1000 point call but profits will still keep trickling in if trend continues. the slight reduction in profit may be considered as the cost of insurance for peace and profit booking.
this tactic is like climbing a mountain cliff with progressively hooking oneself to higher harness.
this tactic has 2 more advantages
1. you now have money (out of thin air) to buy more positions if market steps back before resuming the trend.
2. if at all market reverses, you have your initial deployment safe.
of course, this tactic is valid for options only. which i anyways consider best for amateur traders because it is affordable for them and has inbuilt stop loss unlike futures.
also, to add that standard advise, trade with 3 times smaller trade size than you can easily afford. if you trade with small quantity (3 times less than what you can easily afford), you can become fearless trader who doesn't chicken out amid volatility, and who can trade the method till the end of trade's logic.
if your method is right even small trade size will make you rich, sooner than you think. and if your method is wrong, even larger bet size won't help. that will make you poor, that too, sooner than you think....
i know most old traders knew this, even better than this....just thought i should share for new traders. besides, when i write it down, it helps in revision.
if you trade with small quantity (3 times less than what you can easily afford), you can become fearless trader who doesn't chicken out amid volatility, and who can trade the method till the end of trade's logic.
if your method is right even small trade size will make you rich, sooner than you think. and if your method is wrong, even larger bet size won't help. that will make you poor, that too, sooner than you think.
go slow to go fast.
if we have the habit of not having Stop Losses (SL), why do we have habit of taking Stop Profits (SP)....we should be indisciplined both sides...
that's one of the key reasons why even traders with 50% success rate end up losing 90% money
unfortunately, fear works both side....instead of fear on the loss side, and greed on the long side....
ironically, traders have fear on profit side and greed on loss side...
trading is 90% psychology and risk control
risk control = the warrior who knows he can't die can fight much better and win more frequently....self talk
In Stock trading
No logic➡️no bet
No bet➡️no progress
You can’t feel good without getting used to feeling terrible. It’s like developing intestines of steel without being stupid
एक आग का दरिया है
और डूब के जाना है
The day you start doing trading like a job where your boss will fire you if you don’t follow the rules, you’ll start being successful at it
The day you accept the limitations of trading you’ll start improving
Treat as if you are on basic wage with everything above it as incentive, which can be anything small to big to v big. Taking trading as a job is not a bad idea. Takes off all pressure.
One of the oldest cliché we used to listen more than a decade ago when we got serious about trading was
Trend is your friend.
We underestimated the value of friends for so long.
Just because you lose because of friends for some time doesn’t mean he’s not worth gold in remaining times.
To be with the trend requires little brains and big guts.
If you can’t be with 1 minute chart trend, befriend 5 minute trend. If not 5 then 15 or 30 or 60 minute trend. But, for heavens sake, trust friend in market. Don’t leave his her hand.
Maybe he she can see something which you can’t...
