tag:blogger.com,1999:blog-11491522279802285562024-02-20T20:56:07.691+05:30Trading StepsThis is Sudarshan's blog - www.sudarshanonline.com. It discusses the technical analysis of Indian Stock Markets emphasising on online day trading and futures trading strategies.Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.comBlogger18125tag:blogger.com,1999:blog-1149152227980228556.post-17300558025050608672014-06-06T06:52:00.000+05:302014-06-06T06:52:05.368+05:30A Case Study Of Infosys<div dir="ltr" style="text-align: left;" trbidi="on">
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgInyrqKPT3BzUmnBe6JaIeS15LREWlBtUxG2vIwVtH9NwMqOZs6lK8cwVMmnNVp0Nlw_pJAddC-_WuVMPdXrpmD5mpn5G3CL_x_FIANid_6z-9A1HzJT7Dw3fMLcH3jCEutRpyRWUmSlK_/s1600/INFY.gif" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgInyrqKPT3BzUmnBe6JaIeS15LREWlBtUxG2vIwVtH9NwMqOZs6lK8cwVMmnNVp0Nlw_pJAddC-_WuVMPdXrpmD5mpn5G3CL_x_FIANid_6z-9A1HzJT7Dw3fMLcH3jCEutRpyRWUmSlK_/s1600/INFY.gif" height="195" width="320" /></a></div>
<br />
<br />
Infosys is in a continuous downtrend since March, in a Bull market and corrected almost 22% till now. While at the same time, Nifty rallied from 6000 to 7500 and trading at life time highs. However, Infosys is still holding its major support of 2950.<br />
<br />
When we look at the fundamentals of the stock then there is a lot of happening within it. The overall IT sector is in a downtrend due to Rupee strengthening against US dollar, which is major key of driving revenue.<br />
<br />
In Infosys, return of Mr N.R Narayan Murthy as chairman last September, leads to resignation of many top executives one by one till now. The client base is still behind from TCS and Wipro. <br />
<br />
There could be a lot more unknown factors behind its price decline, which we may not know about. It is also possible that the decline may have been overdone, and, we can say this since prices are near a support level. So it is good to keep an eye on chart, wait until (a) it breaks from support or (b) bounce back from support. There is likely to be a trade in either event.</div>
Unknownhttps://www.blogger.com/profile/13250375352355548671noreply@blogger.com2tag:blogger.com,1999:blog-1149152227980228556.post-50448575468267005752012-12-12T07:05:00.000+05:302012-12-12T07:05:08.557+05:30Mark Douglas on Psychology of Trading<div dir="ltr" style="text-align: left;" trbidi="on">
Mark Douglas states that success in trading is 80% psychological and 20% one’s methodology. If we<br />make an inventory list of a trader’s abilities in order to succeed in trading then technical analysis skill<br />is, though necessary but, just a small part of the overall business. Trading has much more to it than<br />finding entry & exit signals based on technical analysis. Trading successfully requires psychological<br />abilities which include-<br /><br />1. Creativity to develop strategies which have an edge.<br />2. Patience to wait for a high probability opportunity.<br />3. Confidence to take risk and pull the trigger when the opportunity arrives.<br />4. Discipline to follow his/her rules.<br />5. Ability to stay cool & calm during pressure situations.<br />6. Flexibility to change views/opinions to get in sync with changing market conditions.<br />7. Humility to accept mistakes when market moves in opposite direction to his/her entry.<br />8. Perseverance to learn and improve his/her trading.<br />9. Courage to be able to trade after a string of losses.<br />10. Love for trading which can make all of the above and everything else possible.<br /><br />This is not an exhaustive list and there are many other psychological aspects to trading. I am not<br />sure if a trader can have all the qualities listed above at all of the times. Traders are successful only<br />in proportion to the psychological abilities they show. Also we all should strive for perfection while<br />making best use of whatever we have got.<br /><br />When we trade we get to know more and more about our strengths, our shortcomings, in short our<br />character is revealed to us.<br /><br />As always, esteemed readers are welcome to share & enhance knowledge.<br />
<br />
(Contributed by Jitender Yadav)</div>
Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com10tag:blogger.com,1999:blog-1149152227980228556.post-74531237157925252902012-11-28T16:59:00.001+05:302012-11-28T16:59:32.445+05:30Markets similar to Story of Mankind<div dir="ltr" style="text-align: left;" trbidi="on">
History of the Markets is probably similar to the story of Mankind: more bullish than bearish.<br />
<br />
A blog post in Pragmatic Capitalism titled <a href="http://pragcap.com/the-perpetual-wall-of-worry" target="_blank">The perpetual wall of worry</a> discusses how markets face severe setbacks in periods of hardship, but, "if the citizenry are moving in the right direction, they are likely to
continue making progress. After all, when taken to an extreme that is
the story of man. We innovate, overcome, survive."<br />
<br />
The post says "Common sense says that mankind will always wake up in the morning
attempting to be better than he/she was yesterday. Fighting this
powerful trend through persistent pessimism might pay-off in the
short-term, but it is guaranteed to lose in the long-term. And a good
risk manager knows there will be bumps along the way. Plan accordingly."<br />
<br />
</div>
Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com4tag:blogger.com,1999:blog-1149152227980228556.post-76309312103023125042012-11-26T18:59:00.001+05:302012-11-26T18:59:43.082+05:30Five Steps to Trading Success<div dir="ltr" style="text-align: left;" trbidi="on">
Here are five steps, from different sources.<br />
<br />
<a href="http://vp.tradertech.com/vp-in-action/5steps_1.asp" target="_blank">Vantage Point</a><br />
<br />
1. Track, analyze, and evaluate specific markets on a daily basis.<br />
<br />
2. Find potential trades in specific markets or sectors.<br />
<br />
3. Confirm potential trades and select those that show highest probability of success.<br />
<br />
4. Define entry and exit positions that meet your strategic goals.<br />
<br />
5. Review and Evaluate the trade.<br />
<br />
<a href="http://optionalpha.com/5-steps-to-trading-success-let-technical-analysis-be-your-guide-9318.html" target="_blank">OptionAlpha</a><br />
<br />
1. Simple is better - only use a few indicators<br />
<br />
2. Test, test, test and test some more<br />
<br />
3. Paper trade using your trading system<br />
<br />
4. Set a proper stop loss<br />
<br />
5. Keep your emotions out of it<br />
<br />
<a href="http://commodityupdater.blogspot.in/p/five-steps-to-trading-like-professional.html" target="_blank">Commodityupdater</a><br />
<br />
1. Have a dedicated working environment and structured working hours<br />
<br />
2. Have regular performance reviews and keep detailed records.<br />
<br />
3. Find a profitable niche<br />
<br />
4. Develop a network of contacts and continually upgrade your education.<br />
<br />
5. Have the proper mindset.<br />
<br />
<a href="http://www.forexcrunch.com/the-5-stages-to-becoming-a-profitable-trader/" target="_blank">Kris Mathews</a><br />
<br />
1. Unconscious incompetence<br />
<br />
2. Conscious incompetence<br />
<br />
3. The Eureka Moment<br />
<br />
4. Conscious competence<br />
<br />
5. Unconscious competence</div>
Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com4tag:blogger.com,1999:blog-1149152227980228556.post-60660973399904045002012-11-24T11:44:00.000+05:302012-11-27T08:32:40.588+05:30Market Sense and Nonsense<div dir="ltr" style="text-align: left;" trbidi="on">
I just downloaded this book "Market Sense and Nonsense - How markets really work (and how they don't) by Jack Schwager in my kindle.<br />
<br />
I am a voracious reader, willing to read anything on Technical Trading. A new book by Schwager (Author of the New Market Wizards and more..) is a MUST read.<br />
<br />
As I started the book, I started laughing - the first chapter of the book is about the financial media. It is titled -<br />
Expert Advice <br />
Comedy Central versus<br />
CNBC<br />
<br />
Well, I did not read the chapter, just skimmed through it, because I wanted to share this piece of information on the blog. Whatever I read confirms my anticipation that the chapter will a humorous read, quite delightful, I hope.<br />
<br />
As an example: the chapter refers to Jim Kramer (host of Mad Money) saying "Bears Stearns is fine,keep your money in it. The author says, six days later, Bears Stearns went under, filing for bankruptcy.<br />
<br />
I think the book will be a wake up call for all analysts, including me. I will keep you posted on my reading.<br />
<br />
<br />
<br />
<br />
<br /></div>
Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com4tag:blogger.com,1999:blog-1149152227980228556.post-16042003943373224832012-11-21T06:52:00.000+05:302012-11-27T08:38:56.361+05:30Lessons in Technical Trading<div dir="ltr" style="text-align: left;" trbidi="on">
<a href="http://www.thekirkreport.com/2009/07/lessons-learned.html">thekirkreport.com</a> talks about mistakes in trading.<br />
The
report asked a question from its subscribers: "what is
the most important thing you've learned about investing, trading, and/or
the markets?"<br />
<br />
Some of the lessons learned were:<br />
<br />
<ul>
<li>Success takes longer than expected</li>
<li>That
you must learn to trade and trust yourself and not to become so
dependent on the opinions of others, which ultimately keeps you from
becoming the best you can be</li>
<li>The very best profit opportunities occur in the midst of extreme emotional sentiment </li>
<li>Persistence and dedication to a daily routine is key </li>
<li>Developing
an edge is the first step for trading successfully. Without that,
disciplined trading will only make sure you gradually losing money</li>
<li>You have to respect the market even if you think it is under some kind of manipulation</li>
<li>Anything can happen. Trading is all about probabilities</li>
</ul>
There is more in the report which was mentioned earlier.<br />
<a href="http://www.tischendorf.com/2009/06/28/dennis-gartmans-trading-rules-list/">Dennis Gartman</a> gives a set of trading rules. The basic themes are:<br />
<ul>
<li>Capital
comes in two varieties: Mental and that which is in your pocket or
account. Of the two types of capital, the mental is the more important
and expensive of the two. Holding to losing positions costs measurable
sums of actual capital, but it costs immeasurable sums of mental
capital.</li>
<li>In bull markets we can only be long or neutral, and in
bear markets we can only be short or neutral. That may seem
self-evident; it is not, and it is a lesson learned too late by far too
many.</li>
<li>Try to trade the first day of a gap, for gaps usually
indicate violent new action. We have come to respect “gaps” in our
nearly thirty years of watching markets; when they happen (especially in
stocks) they are usually very important.</li>
<li>Trading runs in
cycles: some good; most bad. Trade large and aggressively when trading
well; trade small and modestly when trading poorly. In “good times,”
even errors are profitable; in “bad times” even the most well researched
trades go awry. This is the nature of trading; accept it.</li>
<li>Keep your technical systems simple. Complicated systems breed confusion; simplicity breeds elegance.</li>
</ul>
</div>
Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com4tag:blogger.com,1999:blog-1149152227980228556.post-23536449368766196862012-11-19T20:32:00.001+05:302012-11-26T12:09:29.009+05:30It is Experience<div dir="ltr" style="text-align: left;" trbidi="on">
(from SMB Capital Blog)<br />
There is no substitute for experience.
As you gain experience you will leave poor risk/reward trades alone.
In the past you may have been tempted to jump into certain poor
risk/reward set ups but with experience you will not. You will also
understand your strengths better. You will learn how you make your
money. You will learn what set ups are best for you. You will identify
when to sink your teeth into a position. And you will search for more
of these set ups.<br />
Trading is just a game of math. There are set
ups that work best for you. There are set ups that should be avoided
based upon your trading style. And experience teaches you what will
work. The good trader exploits these set ups and leaves the others
alone. So if in the past twenty percent of your trades were made in
poor risk/reward setups then when you gain experience only one percent
will include poor risk/reward opportunities. This completely changes
your trading results.<br />
Be Like a Tiger<br />
Tiger Woods is the world's best Golfer, probably.<br />
Many
talk about wanting to be great traders. And many wish to be a great
golfer like Tiger. Wouldn’t that be cool? You would have a private jet, a
supermodel wife, all the money in the world, and access to anything you
desired. But seriously, how many are willing to pay the price that
Tiger does for success?<br />
Do not make the mistake that good golf
comes easily, He has practiced the winning shots a few hundred times a
week. And that is how he does it.<br />
“Tiger Day”<br />
6 a.m. - lift weights for 90 minutes<br />
7:30 a.m. - breakfast<br />
9-11 a.m. - hit balls on practice range<br />
11-11:30 a.m. - golf practice<br />
11:30 a.m.-12:30 p.m. - play 9 holes<br />
12:30-1 p.m. - lunch<br />
1-3 p.m. - hit balls on practice range<br />
3-4 p.m. - work on short game<br />
4-5 p.m. - play 9 holes<br />
5-5:30 p.m. - hit balls on practice range<br />
5:30-6 p.m. - golf practice<br />
<br />
<br />
<a href="http://club.ino.com/join/lessons/?a_aid=CD4337&a_bid=2bfdd065" target=""><img alt="" height="90" src="http://broadcast.ino.com/clients/ino/coursebanners/MC-tc-728x90.gif" title="" width="728" /></a><img alt="" height="1" src="http://broadcast.ino.com/affiliate/scripts/imp.php?a_aid=CD4337&a_bid=2bfdd065" style="border: 0;" width="1" />
</div>
Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com2tag:blogger.com,1999:blog-1149152227980228556.post-71907947508824953482012-11-18T09:02:00.001+05:302012-11-27T08:39:41.715+05:30When Genius Failed<div dir="ltr" style="text-align: left;" trbidi="on">
WHEN GENIUS FAILED: The Rise and Fall of Long-Term Capital Management<br />
Author: Roger Lowenstein, Publisher: Random House<br />
<br />
(Summary of book based on book reviews)<br />
<br />
Nobel prizes and billions of dollars don't always equal success<br />
<br />
Long-Term's basic strategy was to bet on the eventual convergence between the prices of extremely similar assets.<br />
<br />
As
an example, if Nifty futures offered a long term contract, say 1 year,
then the arbitrage will be between the 3 month and the 1 year futures
contract. Sometimes, the difference between the two will be Rs 10/-, and
sometimes it may be Rs 12/-. The idea was to use computer based
analysis to buy when the difference was perceived to be less and sell
when it increased.<br />
Now, making Rs 2/- on two contracts is no fun.
There is margin required on two contracts, and, transaction charges, so
where is the money? The return is going to be marginally higher than the
interest.<br />
In principle, it was a low-risk strategy, with tiny returns on each trade.<br />
LTCM
started with $4 billion. Then they took on loans for $100 billion. On
the 100 billion, they will make a small amount after payment of
interest, but that amount will become large enough on their own
investment of 4 billion. LTCM was earning 50% per year on its capital.
The 104 billion was used as margin to take on derivatives trades as
explained above. LTCM exposure in derivatives was $1.2 trillion.<br />
Now, all of this was working because the trades were almost risk free. Note my use of the word 'almost'.<br />
With
this kind of financial leverage even the most minute market move
against you can wipe you out several times over. Talk about financial
weapons of mass destruction! This risk did not deter Long-Term, though.<br />
Finally
in 1998, Russia defaulted on its bonds- many of which Long-Term owned.
This default stirred up the world’s financial markets in a way that
caused many additional losing trades for Long-Term.<br />
[As an
example, a sudden event in India causes the near month futures to fall
much more than the far month. If you are short the near month and long
the far month, you are in trouble!]<br />
By the spring of 1998, LTCM
was losing several hundred million dollars per day. What did LTCM’s
brilliant financial models say about all of this? The models recommended
waiting out the storm.<br />
That's true, bcause convergence between
two similar products was bound to happen at some point. But, if one
instrument suddenly went against LTCM while the other one did not go in
favor, LTCM was saddled with markt o market losses, increased margin -
all on the 1.2 trillion dollars of positions. Where was the money?<br />
By
August 1998, LTCM had burned through almost all of its $4 billion in
capital. At this point LTCM tried to exit its trades, but found it
impossible, as traders all over the world were trying to exit as well.<br />
With
$1.2 trillion dollars at risk, the economy could have been devastated
if LTCM’s losses continued to run its course. After much discussion, the
Federal Reserve and Wall Street’s largest investment banks decided to
rescue Long-Term. The banks ended up losing several hundred million
dollars each.<br />
What became of Long-Terms founders? Were they jailed
or banned from the financial world? No. They went on to start another
hedge fund!<br />
<br />
<br />
Reviews used to write this post:<br />
<a href="http://www.stock-market-crash.net/book/genius.htm">http://www.stock-market-crash.net/book/genius.htm</a><br />
<a href="http://findarticles.com/p/articles/mi_m1316/is_9_32/ai_65160621/">http://findarticles.com/p/articles/mi_m1316/is_9_32/ai_65160621/</a></div>
Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com1tag:blogger.com,1999:blog-1149152227980228556.post-8657913680237722092012-11-17T23:07:00.002+05:302012-11-29T08:59:21.459+05:30No limits to Greed<div dir="ltr" style="text-align: left;" trbidi="on">
Newspaper reports are filled with news about the arrest of a couple involved in a scam involving anything between Rupees Five billion to Rupees Eleven billion. Investors were offered a return of twenty percent <b><i>per month. </i></b><br />
<br />
<b><i>Evidently, </i></b>Investors came rushing in, giving their hard earned money to the husband and wife team. As happens with all such plans, the money was not returned.<br />
<b><i> </i></b><br />
There was criminal intent on part of the couple - that is clear. Law will take its own course.<br />
<br />
But, what of the people who gave money expecting 20 percent returns <b><i>per month.</i></b><br />
<br />
Surely, these investors are also guilty of extreme greed!<br />
<br />
Unfortunately, it is the families of the investors who will suffer the consequences of such greed.<br />
<br />
The bank interest on fixed deposits (which can be considered the risk free rate of return) is 9 percent per year. The scam was offering a return of 240 percent per year. Surely, such returns were impossible to obtain! Yet, so much money came in.<br />
<br />
The scamsters said they will invest in the stock market and obtain returns of more than 20 percent per month. People believed them. The stock market is perceived to be a magic wand which can give as much as a person wants. The truth is very different. The stock market is a business,and, like all other business, it offers a normal rate of return - if you get 20 percent per year you are doing well.<br />
<br />
Expectations of returns from the Market should be reasonable. Do readers understand this?<br />
<br />
<u><b>Notes on the New look for the Blog </b></u><br />
<br />
The default view for the blog has changed from timeslide to magazine. On the left hand corner in the top of the screen, there is an option called 'Magazine'. If you move your mouse there, you will see many options - which are different styles to view the blog. This includes "classic" which was the earlier format. Please experiment with different options. <br />
</div>
Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com2tag:blogger.com,1999:blog-1149152227980228556.post-20007693742447544202012-11-14T08:39:00.002+05:302012-11-26T12:09:57.705+05:30Building Scenarios<div dir="ltr" style="text-align: left;" trbidi="on">
Building Scenarios<br />
<br />
There are always innumerable probabilities regarding the market’s direction and movement or the<br />
lack of both these. Sometimes they can make large moves and sometimes they wouldn’t buzz for<br />
days. Sometimes they would move in the same directions for weeks and then sometimes they would<br />
change direction several times in a day. One of the interesting characteristics of the markets is that<br />
they never fail to surprise us with their actions and catching us off the guard. Often these surprises<br />
prove to be costly.<br />
<br />
Although no one can know for sure market’s next course of action still we can prepare ourselves<br />
to face the surprise. In the evening before the trading day we can imagine about all the possible<br />
scenarios that can play out next day regardless of their actual probability to occur. We can, for<br />
example, imagine the ideal conditions we would like to see before making a long entry or the worst<br />
conditions to make a trade at all. We can imagine about our response to breakout failure or our plan<br />
of action during a short squeeze. It won’t take much time to think of so many other possibilities and<br />
we can do it in our free time like while exercising or during the evening walk etc. Try it if you are not<br />
doing it already and please share your experiences regarding this whole exercise.<br />
<br />
Again the markets have their own minds and even after this scenario building exercise they can have<br />
something different in store for us but then if one of our imagined scenarios actually plays out, we<br />
our ready with our plan.<br />
<br />
[Contributed by Jitender Yadav]</div>
Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com4tag:blogger.com,1999:blog-1149152227980228556.post-88489926273005527452012-10-15T20:21:00.000+05:302012-11-26T18:31:36.765+05:30Know Yourself to Trade Better<div dir="ltr" style="text-align: left;" trbidi="on">
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<div class="MsoNormal">
For trading we analyse various types of data including chart
patterns. Most of this data is about the economy, markets, the security etc. These
data points are related to external factors of trading. One of the biggest
factors in trading is, the trader himself but how much data we collect and
analyse about ourselves as traders? How much we know ourselves?</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
To trade better the trader has to know himself better and to
know himself better he should keep record of data points related to him/her
also. Following are some of the examples of things we should keep record of. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo2; text-indent: -18.0pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">1.<span style="font: 7.0pt "Times New Roman";">
</span></span></span>The time of the day when I enter, exit a trade, what
percentage of my winning trades were taken at markets open, afternoon and near
closing time?</div>
<div class="MsoListParagraphCxSpFirst" style="mso-list: l0 level1 lfo2; text-indent: -18.0pt;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-align: justify; text-indent: -18.0pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">2.<span style="font: 7.0pt "Times New Roman";"> </span></span></span>For
how long I keep a position open and what is the percentage of winning trades that
were open for a few minutes, few hours, and few days?</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-align: justify; text-indent: -18.0pt;">
<br /></div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-align: justify; text-indent: -18.0pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">3.<span style="font: 7.0pt "Times New Roman";"> </span></span></span>On
what signal (for example support/resistance, breakout/breakdown, and
divergence, classic chart patterns) I enter and exit? What is the percentage of
winning trades for each set-up/signal?</div>
<div class="MsoListParagraphCxSpMiddle" style="mso-list: l0 level1 lfo2; text-align: justify; text-indent: -18.0pt;">
<br /></div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo2; text-align: justify; text-indent: -18.0pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">4.<span style="font: 7.0pt "Times New Roman";"> </span></span></span>What
is the position sizing of my trades? How much I risked in most of winning
trades and how much I risked in most of the losing trades?</div>
<div class="MsoListParagraphCxSpLast" style="mso-list: l0 level1 lfo2; text-align: justify; text-indent: -18.0pt;">
<br /></div>
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The above points are just a few examples and there is much
more to know about ourselves. After we start keeping records of the above data
points, we can analyse and know things like- </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoListParagraphCxSpFirst" style="margin-left: 54.0pt; mso-add-space: auto; mso-list: l1 level1 lfo1; text-indent: -18.0pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">(1)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>Which is the best time for me to trade, Morning,
noon or evening?</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 54.0pt; mso-add-space: auto; mso-list: l1 level1 lfo1; text-indent: -18.0pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">(2)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>In which type of trades do I fare better, trades
held for a few hours or few days?</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 54.0pt; mso-add-space: auto; mso-list: l1 level1 lfo1; text-indent: -18.0pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">(3)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>What set-ups are most profitable for me?</div>
<div class="MsoListParagraphCxSpMiddle" style="margin-left: 54.0pt; mso-add-space: auto; mso-list: l1 level1 lfo1; text-indent: -18.0pt;">
<span style="mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;"><span style="mso-list: Ignore;">(4)<span style="font: 7.0pt "Times New Roman";">
</span></span></span>How much risk can I handle comfortably?<span style="mso-spacerun: yes;">
</span></div>
<div class="MsoListParagraphCxSpLast" style="margin-left: 54.0pt; mso-add-space: auto;">
<br /></div>
<div class="MsoNormal">
Patterns about ourselves will emerge when we analyse a large
sample of data. Our strength and weakness will be revealed to us and when we
trade keeping in mind our strengths and weaknesses we have a better chance to
succeed.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
[Contributed by Jitender Yadav. My thanks to Jitender for providing these posts] </div>
</div>
Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com0tag:blogger.com,1999:blog-1149152227980228556.post-40877707407348707032011-06-12T08:10:00.001+05:302011-06-12T08:11:35.111+05:30Eye of the Bird<div dir="ltr" style="text-align: left;" trbidi="on"><span style="font-family: "Courier New", Courier, monospace;"><span style="font-family: Arial, Helvetica, sans-serif;">Guru Dronacharya decided to test his students in their skill of archery. He hung a wooden bird from the branch of a tree and then summoned his students. He asked the first one to aim for the bird's eye but not shoot just yet. He then asked the student what the student could see. The student replied that he could see the garden, the tree, flowers, etc. Drona asked him to step aside and not shoot. He repeated the same process with a few other students. When it was Arjuna's turn, Arjuna told his Guru that the only thing he could see was the bird's eye. This satisfied the Guru and he allowed Arjuna to shoot the bird.</span> <em>The lesson here is the power of focus.</em></span><br />
<br />
<span style="font-family: Arial, Helvetica, sans-serif;">Well, dear trader: what do you see? Do you have one pattern to trade with? If you are comfortable with indicators, then perhaps you use the MACD to determine entry signals. Sometimes the MACD will give you big gains, sometimes it just misses a move. Sometimes, there are losses which you control with your risk management methods. All in all, the system works. </span><br />
<br />
<br />
<a name='more'></a><br />
<br />
<span style="font-family: Arial;">During trading hours, do you keep your eye ONLY on the method that you use? The answer should be: Yes. The need for focus will also free you from the disappointment of not catching every twist and turn in the market. Nobody is expected to do this. But, deep inside we blame ourselves if we miss this or that move. When you understand that your task is to follow the discipline of your trading method, you will remain focussed on what the method gives you.</span><br />
<br />
<span style="font-family: Arial;">Just to take the analogy forward, it is possible that Arjuna could have located another target, even more difficult to shoot. He could have surprised Drona by taking out the more difficult target to prove his skills. But, he did not do so. because his task was to execute his responsibilities within the dscipline set by his Guru.</span><br />
<br />
<span style="font-family: Arial;">So also, it is posssible that your method will miss out on many market moves. So what? The moves that you get will be rewarding enough to give you your best trading experience. So, remain focussed.</span></div>Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com1tag:blogger.com,1999:blog-1149152227980228556.post-31479155282498294122011-06-09T18:07:00.000+05:302011-06-09T18:07:43.659+05:30Interviews with Technical Traders<div dir="ltr" style="text-align: left;" trbidi="on">ET NOW is starting a new program called “Technical Trends” which will broadcast interviews with Technical Traders. The First epsode features Sudarshan Sukhani.<br />
<br />
<br />
This show will be aired over the weekend, starting June 11th. The timings are :<br />
<br />
SATURDAY :<br />
<br />
10:00 a.m.<br />
<br />
09:30 p.m. (Repeat)<br />
<br />
SUNDAY, REPEAT TELECAST :<br />
<br />
07:00 a.m.<br />
<br />
12:30 p.m.<br />
<br />
08:30 p.m.<br />
<br />
A must watch show for all technical analysts and traders. This is for the first time that business channel is giving due credit to technical trading community. <br />
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</div>Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com0tag:blogger.com,1999:blog-1149152227980228556.post-31402412945541740782011-06-01T22:33:00.001+05:302011-06-02T18:27:50.906+05:30Problems of plenty - The Technical Analysis popularity<div dir="ltr" style="text-align: left;" trbidi="on">The mass movement toward some sort of technically based trading style has been of epic proportions. One reason may be that so few technical traders were hurt during the 2008 bear market. In fact, many traders made money and protected their investments during the bear run. and many more produced stellar returns.<br />
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As technical analysis becomes more popular, most commonly known patterns may begin to lose their predictive value. When any technique or signal becomes widely used, its effectiveness is sure to wane. Those traders who have diligently worked to stay two steps ahead of the typical retail trader are the ones who stand to gain the most.<br />
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Define your strategy<br />
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The first step is for a trader to define his or her style. This includes the consideration of which markets to trade, timeframes, risk parameters, stop limits, profit targets, available equity and myriad other “house cleaning” issues. There is absolutely no way to be successful at this venture without a detailed business plan—a map for navigating the perilous waters. This step must be as specific as possible and be in writing, otherwise it is merely a dream and not an action plan.<br />
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Understand patterns in play<br />
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The bottom line is that there are just too many eyes on the same patterns in play for them to hold as much fire <br />
power as they once did. In time, traders will develop a feel for what is working and what is not. Trading is not a cut and-dried science where one can take a chart pattern from a book and then expect to mint money each and every trade. With so many pairs of eyes watching the exact same indicators, those who survive in this arena will learn to digest the emotional makeup of other traders and front run their decisions. <br />
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[Adapted from an article by <span style="font-size: small;">Quint Tatro, author of the book, Trade the Trader]</span></div>Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com0tag:blogger.com,1999:blog-1149152227980228556.post-27495282047237477312011-05-07T19:26:00.002+05:302011-05-07T19:26:24.193+05:30Mark Douglas Trading Psychology 1<object width="480" height="390"><param name="movie" value="http://www.youtube-nocookie.com/v/ypCjoH1EsQ4?fs=1&hl=en_US&rel=0"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube-nocookie.com/v/ypCjoH1EsQ4?fs=1&hl=en_US&rel=0" type="application/x-shockwave-flash" width="480" height="390" allowscriptaccess="always" allowfullscreen="true"></embed></object>Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com0tag:blogger.com,1999:blog-1149152227980228556.post-12175905279937941402010-07-21T07:03:00.002+05:302010-07-21T08:41:03.605+05:30What are my strengths?<span style="font-family: Arial, Helvetica, sans-serif;">Gourav wrote: "Is there any specific reason you adress the traders as she instead of he.While reading i fell bit unusual"</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">My Notes: I should do it more often. Woman constitute 50% of the population, so, in all fairness, they should be referred to half the time in my writings. </span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">This question sparked off a thought: I feel one of my strong qualities is: I have an open mnd. This helps me in my trading. Traders should ask themselves: what are my strengths? Trading plans should be developed around individual strength, avoiding rules that can be influenced by weaknesses. If a trader can ruthlessly cut losses, then he should plan a strategy that trades frequently with many small losses and few large profits. To bring this down to a more macro level, for each trading day, reaffirm your strength before trading starts, decide on a goal for the day which uses your strength, then work for it. For example, A trader has the ability to identify momentum stocks from a list. Then, listen to the top 5 stocks given on CNBC, choose the two most likely to move that day, and, trade them with your levels. </span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">In the same way, identify your weakness. Ensure that your trading plans do not include any action that includes your weak spots. In this way, you can make your weakness, a strength (by knowing about it, therefore, avoiding it). A trader is quickly influenced by TV advice. She avoids getting caught in this trap by putting the TV on mute, so that only news flashes are visible.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">Readers are invited to offer comments on perceived strengths and weaknesses and how they can be used to enhance a trading plan.</span>Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com6tag:blogger.com,1999:blog-1149152227980228556.post-39184931445280452842010-07-07T11:53:00.004+05:302010-07-07T11:58:55.912+05:30Student's Dilemma<span style="font-family: Arial, Helvetica, sans-serif;">I received this email from one of our subscribers. This is of interest to most readers. Here is the email and my reply which is being given through this blog.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">Email:</span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">Quote</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">sir,</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;"></span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">Iam ur subscriber, also keen reader of your blog. Thank you for the valuable information you provide on technical analysis. its fascinating and wonderful.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">i have aquestion does a technical trader who trades with technical analysis should also take in in to account the fundamental picture. personally i want to trade focussing only on the charts, but sometimes the noise abt fundamentals thru media creates confusion while taking acall on charts. also sir while reading charts alwys at the back of my mind theres always a thought whether you personally are bullish or bearish, for example when you post articles about analyst or experts bearish like in june, it creates confusion while analyzing a chart as i tend to look at achart based on preconceived notions as what ever i know or assume i know about technical analysis is thru your news letter and by using trend analyzer .As technical trader is it not better to try and only focus on the charts.if yes how can it be done. Please advice.</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">your student</span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">Unquote</span> <br />
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<span style="font-family: Arial, Helvetica, sans-serif;">My Notes:</span> <br />
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<span style="font-family: Arial, Helvetica, sans-serif;">I see three issues:</span> <br />
<span style="font-family: Arial, Helvetica, sans-serif;">1. "sometimes the noise abt fundamentals thru media creates confusion"</span> <br />
<span style="font-family: Arial, Helvetica, sans-serif;">2. "alwys at the back of my mind theres always a thought whether you personally are bullish or bearish"</span> <br />
<span style="font-family: Arial, Helvetica, sans-serif;">3. "tend to look at achart based on preconceived notions"</span> <br />
<span style="font-family: Arial, Helvetica, sans-serif;"></span> <br />
<span style="font-family: Arial, Helvetica, sans-serif;">Well, here is the good news. Most traders have gone through these steps at the initial stages of their careers. There is nothing to worry about. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;">Information on fundamentals are important because they enable traders to make shortlist of stocks to focus on. But we do not have to listen to the buy and sell calls. Ignore their trading advice altogether, but listen to the names being discussed. </span><br />
<span style="font-family: Arial, Helvetica, sans-serif;"></span> <br />
<span style="font-family: Arial, Helvetica, sans-serif;">Am I bullish or bearish? I discuss a lot of information moving around in blogs all over the world, so readers can obtain in one place a collection of learning. I have a long term view of the market - likely to outperform fixed income investments, intermediate view: deep correction possible, short term view: changes from day to day.Traders should develop their own view on the market. We are never going to be perfect. We just want to be correct more often or rather for a longer duration than going wrong. This means, suppose I was correct on the bull run from 2800 to 5400. Since April I am looking for a deep correction. Now, I may be wrong, not once but two three times for the next one year. Yet, I emerge a winner since my corrrect analysis compensates for many wrong calls. My point is: do not worry about being right or wrong. No one knows the future. Spend your time on developing a trend identification method that makes you comfortable. Then use it / follow it.</span> <br />
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<span style="font-family: Arial, Helvetica, sans-serif;">When you look at a chart searching for a fixed number of patterns, you will find that the preconceived problem will largely go away. I will give you an example. In the beginning of June, I classified a rally in the Nifty as a rising wedge. This is a bearish pattern. Now, the Nifty did not go down, instead it broke out above 5150. At that point I suggested buying because of a breakout. Am I depressed because of the wrong identification? No! That's what I saw then. It did not work out, so what? </span><br />
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<span style="font-family: Arial, Helvetica, sans-serif;">In summary: go easy on yourself. Trading is not a stress buster, you know that it can become a major stress creator. That's why, you need to keep the process as simple and easy as possible. And always understand, it is not your fault. We get whipsaws because it is the nature of the markets.</span> <br />
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<span style="font-family: Arial, Helvetica, sans-serif;">Have fun!</span>Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com6tag:blogger.com,1999:blog-1149152227980228556.post-41411027785021683592008-06-24T22:12:00.004+05:302008-06-24T22:33:31.498+05:30Denial: If I refuse to see it, it does not existFinancial Analysts will often go into a state of denial: If I refuse to see it, then it does not exist. This happened in the USA when the start of the sub prime crisis was promptly followed by cries of "nothing to worry". All the leading perpetrators of the crisis intially claimed that things were just fine. Later, we realized how little these people knew about their own businesses. But, ignorance came later. Denial came first.<br />In India, we are confronted with a simiar story of denial by the leading financial analysts who come on CNBC.<br />The Nifty has been in a bear market since Janaury 2008. This fact is apparent with the Index falling from 6350 to 4150 (today). Nothing to worry, say our 'fundamental' friends - economy is good, earnings are robust, the fundamentals are strong, growth propects are wonderful...... Now, this is denial. The stock market has fallen by 35% and threatens to fall more, but the analyst insists that things have never been better. Sure. The nice thing about India is that we are a free country. Freedom of speech is guaranteed by the constitution. So you can pretty much say what you want. But listeners should take all of this talk with more than the customary pinch of salt. Since most fundamental analysts are fund managers or portfolio managers of some kind or the other, there is a conflict of interest involved. Remember, these people get paid when they receive funds from the public. You do not get money when you say that we are in a bear market. Therefore, when all other explainations fail, you start saying, the long term picture is excellent. Translation: give me your money otherwise I will lose my two crore (twenty million) rupee per annum job. I call it denial.Trade with the Trendhttps://www.blogger.com/profile/04872255827781271211noreply@blogger.com