markets give you next pain only when you have forgotten the previous one. so never forget your pain...self talk.
if market is applying savlon to your wounds, be alert.
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you may not know what the market is going to do, but you can definitely react to what the market has overdone. and overdo it definitely does as part of the game to trap/confuse/bluff.
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.
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 you fly a plane in zero visibility?
yes, if you have instruments with the technology.
can u trade without seeing price?
yes, if you have "technicals" technology.
i know some traders who keep price view "off" and trade only by seeing technicals. what they check for is of another level.
emotionless trading based on instruments.
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.
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.
theoretically there are 10
- north
- south
- east
- west
- northeast
- southeast
- northwest
- southwest
- into the screen
- out of the screen (to hit you!)
but in practice, it has only two directions to its disposal
either north or south...rest all are trader's fears induced by market fluctuations and bluffs.
every trader has 50% straight chance of making profit (1/2)
versus 2.7% in roulette (1/35)
it is understandable why roulette casino players are losing 97.3%, but what is the reason behind 80-90% loss of a stock market traders?
it is... fiddling
...due to fear of loss, pressure of bet size...
if any trader was to trade without applying mind, with all parameters fixed, then he/she is likely to win 50% in the long run... things start slipping below 50% when that dumb trader tries to be smart on emotions instead of logic or system. market induced emotions as well as self-inflicted emotions.
market forces have no power to beat the trader except emotions... be it through sharp move or bluff or both...
most traders can't stand the loss (because of bet size, and lack of logic of trade, defined entry exits) and hence lose frequently.
decide, on the basis of your trading system where the market or stock is going to go, as per what timeline, take bet size which you can afford to lose if all goes wrong (which wont go wrong that often as system improves), decide a stoploss (which should be the point where the logic behind your trade would seem to no longer hold), and take the trade.... after that, expect market to do all kind of bluffs and hold your trade tight (ofcourse till your stoploss definition above)...
only logic-based system with some edge can take you above 50% chance of profit... all the way upto 60-70-80%...or more... (the higher you go, the more challenging it is)
most of the times, if not always, markets and stocks go in the direction they are pre-decided to go (on various timelines).
once you take a trade, exit only if your target comes or stop loss is hit, don't touch it in any other condition.
example = suppose you decide to take a long trade when price cuts sma 34 from below (say)(after closing candle), then one possible logical SL will be when price cuts it from above (after closing candle).
similarly, if you take a long trade if rsi has given a bullish divergence, then u hold the trade till bullish divergence doesn't melt away, whatever the price... till bullish divergence is there, long trade is valid.
price SL is risky because it is visible to everyone and is very basic logic. also, because some vibration in price is bound to happen.
--
we should not add to positions ever once trade is initiated. when we add position, it should be considered a totally new trade depending upon setup at that time
in most cases, trade goes your way within "short time" of your taking the trade. you can "feel" it. you can also feel and tell if it isn't going your way,....of course, you still need to stick to SL, but your gut feeling tells you that you perhaps have entered a bit too soon, even before proper signal.
if your SL is hit once or twice despite system, it is ok. but more than that it is a signal that you tweak your system.
SL needs calibration
buy right, sit tight in trading also....
imho trading and investing are same....just a difference of time of holding....rules are same. if we trade the way we invest, we will lose less and win more.
the only visible difference is that we leverage in trade which makes all the difference in behaviour, and hence results.
reverse is also true imho. u can invest by trading methods, eg using charts. fundamentals as well as anti-fundamental-cartel-longterm-backing (like ACC in harshad mehta times) plus any other factor is reflected in the chart.
--
binus thoughts...
- only by compounding one can become rich. without that only expenses can be met at best
- check all charts for trade entry decision but stick to the same one chart for exit
# markets are not random. they are made to look like one but they aren't.
# the game is all about disguised accumulation and distribution.
# operators are ghosts but not myths. they are the driving force while the masses are the fuel. overwhelming cash or stock muscle weight is balanced by volatility momentum in this great flywheel mechanism.
# fundamentals are scapegoats, excuses, and script around which all movie is shot.
# the only way a trader can play this game is by not panicking. you panic and you become a victim. and for that, you need understanding and money management. and when i say understanding, i mean cracking the code.
(will keep adding as and when i recall more)
looking at sgx-nifty (after market closure, late evenings, overnight, early morning) so restlessly, anxiously, and obsessively indicates that
- we don't have a method or are not relaxed with it
- we don't have a strategy and a backup plan
- we don't trade probabilities with a system
- we don't have money management
- we are in a hurry
- we don't have the appetite for loss
- we are fearful and hence won't have the appetite for profit also
Js: Traders fed up with the rise a few days ago are fed up with fall now...
Trading is a game of cycles and trends.
Without cycles and trends, big players can't make money
Krish: This means human nature is always predictable?
Js: i would say that in a slightly different way...human schemes and the response to those schemes by other humans are always predictable. in fact, as legendary strategy gurus al ries and jack trout say, humans can't tolerate confusion. whether the operator or traders, the ruler or the ruled....all are predictable while trying to avoid confusion.
it's just that many times, clever men complicate, disguise, or camouflage things in such a way that the masses start thinking as if the confusion is really incomprehensible.
Krish: So that means, market reaching equilibrium too is non-acceptable.
Js: if an expert is at the driving seat of the operators or the establishment, it is almost surety that the confusion is just an encoding or encryption of some degree. because the moment confusion goes out of hand, empires and schemes crumble like a pack of cards....
equilibrium is the truth dead clocks kiss twice every day but hate it.
it is all a game and hence can be played. you only have to refuse to believe that you can't understand it. because you can.
it is all fixed and rigged.....beautifully and mathematically
Krish: As they say, there are patterns in the chaos too.
Js: yes....chaos too is a pattern...whenever you are sure that a pattern is emerging, you can be sure that it will change.....anyways, humans can't survive the chaos, including the operators. and as long as humans are controlling the algos of their trading machines we can rest assured that chaos can't be true.
Js: but the day, computers take over from their masters, assuring them profits in return at all cost, wild moves will be common and markets will die because a billion sheep will lose the attraction to the slaughterhouse.
Js: a trader may not earn even a rupee in the market all his life, but he can never lose love of life if only he ensures that he doesn't lose more than he can afford to....
Krish: That's so true, what maximum then they can do is, create an illusion of chaos to that perfection that it becomes so hard to crack by the same organization that created it..only the elite has the key to keep changing this pattern?
Js: such is the life giving quality of the markets.....
the illusion of chaos...yes....
that's the challenge, that's the hint....to crack the code
Krish: Mass is been fed with this narrative simultaneously to create another confusion.
Js: o yes...bullseye
Js: all tv's, books, videos, etc are all crimes by the innocent, on the innocent
Krish: An illusion becomes belief if taken on an everyday basis, so no wonder it becomes addictive too
Js: but you can't fight them, convince them, upset their cart, damage their dhandha or change their mindset.....and why do it.....as i often say....never argue the system, short it
absolutely
and we start loving the illusion. so much so that we are ready to die defending it
markets are mini-universe
markets only magnify what we truly are.....to horrible multiples
Krish: True, deep down this illusion has its base on the "fear" factor of masses. That's the only emotion that can be kindled with a few extra million out of their profit kitty.
Js: yes
greed too is the vengeance of the fear
a fearless man can be rarely greedy
a greedy man will often be fearful
Trading system pipes are pressure tested in adverse moves and volatile ranges. They start leaking or burst from their invisible cracks or weak points. Pressure tested trading systems should be appreciated and treasured by traders.
No trading system is perfect till pressure tested for every condition.
Pressure tested trading systems are not the fastest or the most productive but they are surely optimum yielding in the long run.
In "The Secret of Letting Go", Guy Finley says that though we want not to drown in adversity, our habits are exactly opposite. We cling to the thing which exactly is drowning us.
A trader has to continuously keep tracking his thoughts to ensure that he himself is not blocking his own path.
Our success is delayed not without any reason
Osho says freedom is nearer to us than we think. We can get liberated the moment we truly decide to. But our comfort with failure makes us nervous about uncharted success where all excuses evaluate. We want profit but not mind boggling. We want thodaa thodaa 😊
We have stomachs of sparrows but hate to be hawks and vultures we are out to emulate and beat.
To be successful at trading we need to sign the contract of getting changed in the head.
Fortunately there is a second way. Understanding the vultures instead of becoming one
I am once again amused by the unwillingness of overwhelming number of traders to accept the long rally in the market. they are repeatedly taking anti trend positions and being bleeded.
This reminds me of a very interesting psychological phenomenon...
Suppose you are standing in front of an atm machine late evening and swipe card for 1000rs. Now let's consider a scenario that the atm machine goes bad and keeps vending currency note after note after note and doesn't stop. It counts 1000 and throws them out. Then again counts 1000 more and throws out...
What will be your reaction? What will you do?
Chances are you'll soon call someone and point it out to authorities instead of just collecting all and vanishing. Because that's the way you are groomed. Both fear of punishment and moral hand brakes will keep you in check.
Same mindset and habit spills over to trading. When market whipsaws and beats you, you accept it like a victim accepts his torment. But when a trending market gives you profit and keeps giving you profit with insanity of a bad atm machine, you feel guilty in your subconscious and don't believe it. You feel so uncomfortable that in hearts of hearts wish that it ends.
whatever it does, market tires you. that is it's objective. and that exactly should be a trader's objective....to duck that.
it is a mind game to snatch each other's money.....even make others surrender theirs.....dirty mind game....that's all it is...
so, never trade with mind
trade with system
a trading system is a mind frozen in a strategy.
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those who say timing is not important mean to say that they are finding it difficult to time. timing is important. and wherever, timing is difficult, approximate timing is the next important thing.
you can't buy anything anytime without consequences.
Absence of fear and greed indicates that you don't qualify to be a trader as yet. Presence of fear and greed indicates that you don't have a system yet or are not sticking to it.
Fear and greed should become non players for anyone to be a professional trader.
market is a host who will drink a whole barrel/drum of wine right in front of your eyes, asking you to join but never making you comfortable enough to say yes and take more than a few sips...that too from his left overs in the glass.
being shameless and fearless is the only option.
i have always been of the opinion that a trader should not hesitate to share his views about trading opportunities and sides. in fact, this is v important. one must share his market views openly. i have written about this once or twice.
the benefit is huge...
once you have announced what u feel u have taken a public stance. this puts a hell lots of pressure on you to think twice thrice....do all the homework, stick to system.
people say paper trading is good practice. i agree. but i go one step ahead and recommend that an aspiring trader should share his trade opinion or trade. in paper trading you have no money to lose, thereby the pressure being v low except small ego hurt in hearts of heart. but when u announce it, although u don't have any money to lose, you have a reputation and ego at stake. that gives you as much practice as betting your money would have.
to be a champion athlete or trader or anything, we don't need to relieve pressure, we need to get used to it and perform because of it...
nothing propels you more than your injured ego...
paper traders who remain anonymous or unannounced don't gain much confidence from paper trading imho
the best person to announce your trade is to the one who doesn't want you to trade...eg wife, father, mother
nothing tests your system, resolve and readiness than a crisis. the strategy which survives the crisis is a good one.
pressure is god's blessing....provided we accept it
