Learnings from mistakes....

Shall we learn from Friday’s Price movement…. It was nightmare for most of the traders on Friday. Indeed it was the Black Friday, proved to be unlucky for many more traders. In the morning, Infy result failed to pressure overall market in decline zone and remained in bullish mode. Considering Thursday’s upward journey, traders remained in long trade and found themselves safe from unlucky 13th Friday. But at noon suddenly in just few seconds heavy selling emerged and Nifty drifted to 5185 from high of 5306 in just 5 minutes….!!! Considering strong up move many more had cut their shorts and taken long and not even book partially…..even though they were intraday traders…. Many more had not even booked partially …many more even failed to put stop loss for their long trade…Whipsaw resulted into heavy losses for many more……Most of the traders were busy in finding the reasons behind the fall….watching TV, read SMS and telephoning their friends …to know the reasons for this sudden fall…. Even I got so many rings and messages at that time….all were busy in analyzing the reasons instead of cutting their trades at the psychological stop loss level, and ultimately suffered heavy loss. Those who have booked partially saved…Where is the mistake….? Keeping psychological stop loss creates hesitation to cut the trade when price reaches to that level and weakens our determination power. It is better to put stop loss (even though you feel it is wrong SL level) in the system. If your wrong stop loss is eaten away by the market, you can again take new position, if you feel so…but if you have not put SL in the system, the loss may become unbearable that you fear to take new position. After taking position, always keep already opened the “order” window so that you can immediately put the order. If you had long position, keep opened “sell” window and if you have short position, keep opened “buy” window….you have to just fill in the quantity and price only so as to save the time. This is so because most of the traders are not so fast in executing orders while watching price movement on the screen. As per usual habit they go on analyzing the reasons and waste time in thinking instead of concentrating on price movement. Even the positional trader should put stop loss daily at the beginning, if their entry is near to the current price level. If possible and get chance, they should not miss an opportunity to book partially in the gap up / gap down market and put stop loss for the rest of their holdings. An intraday trader must remain not only alert, but also remain fast in -             -     picking scrip,             -     executing buy/sell order along with stop loss,             -     booking profit at successive stages, and             -     trailing stop loss. Here I emphasize the word “fast” ….. He has to sit tight and also tight his sit belts while observing price movement on the screen. He should not feel any hesitation while booking profit partially or booking loss resulting due to stop loss. Intra day trading is beneficial only to those who are in a position to watch price movement on the screen during market hours.   If he is compelled to leave the screen for any personal or unavoidable circumstances, he must put stop loss order for his holding, and then should leave the terminal. This is the most compulsory step which he must follow. After leaving the terminal or screen, he must remain in touch with his friends, mates, or broker etc just to know the current price levels of his holdings, and if required, should take action accordingly. Many a times intraday traders hardly do this. Even positional trader should keep such habit. Again an intraday traders should not trade in so many scrips, but should select only few scrips to trade so that price movement can be observed easily, and orders can be put at right time. If he trades a number of scrips at the same time, it becomes very difficult for him to observe price movement of all and remain fast in putting order for the same. Why price is important…? Price is determined by the buyer and sellers in the market. Means demand and supply play an important in determining price level in all the market. There are so many factors affecting demand and supply and thereby affecting price. All these factors are reflected in price determination. And analyzing price is easier that to analyzing all these factors. If a trader wastes time in analyzing reasons for rise and decline, he most of the time fails to execute order in time. If the power of bad factor is too much, the price will definitely go below the support level, if the power of good factor is too much, it will definitely go above the resistance level. Then why should a trader waste time in finding which factor proved wrong and which proved right. Being a trader he should analyze price and price only and should not go deep in analyzing factors affecting price, otherwise he will be lost in the vicious circle of findings and findings …and trapped in it in such a way that he neither trade efficiently nor analyze any factor. An intraday trader should do some home work after market hours for study purpose. He should keep ready all the related numbers like daily–weekly pivots, daily–weekly high/low emas, high/low made during last few days and try to co-relate all these numbers with the price movements. Though these numbers are ready in my computer, my personal habit is to put these numbers in black and white in a note book page and keep ready while watching screen, because an impression for the route of price journey is automatically created in the mind while writing these numbers on a paper. And once such an impression is created, mind feels less hesitation in taking trading decisions for entry and exit, either fully or partially. A trader whether intra day or positional, should keep full record of his trades done and evaluate them during certain interval of time.  Many traders do not keep records of their trades and then fail to find out mistakes they committed. They simply look at their funds only, if their fund rises, they become happy, becomes joyful and go on enjoying profits earned …but if fund deteriorates, they become unhappy, become fearful, lose confidence (which most of the cases happens).....they fail to rectify their mistakes only due to lack of records. They fail to learn from their mistakes committed in the past. (to be continued…)

Why indiscipline...?

Army man discipline Discipline is directly related to the bottom line of a traders not only in the stock market, but in all the markets. The professional trader always tries to be disciplined and stick to his system. He himself follow disciplinary rules thinking always about protection of his money, making of money and always remain positive minded at the end of each trading period. He remains on sidelines when price movement is in narrow range and places stop losses while trading during that period. He moves his stop loss as the market moves in his direction. In every order he keeps priority in protection of capital employed and while protecting capital he aims to make money. He stays within the parameters of his risk and reward. His primary object is to profit, but capital should not be diminished to a large extent while trading. He acts just like a person aiming to shape his body. If you have a desired body shape in mind, then you will definitely eat and exercise accordingly….Exactly same is with the professional traders. He follows all the disciplinary rules like an army man. Accept the results whatever may be… While trading, whether it is in stock market or any other market, a trader either make money or lose money in any given trade. The ultimate result is aimed to make more money in the right trades than what is lost in the wrong trades. While doing such trading a professional trader learns to accept failure as a part of trading activity, but he also uses this failure as a learning tool. In fact what he learns from the losing trade is more valuable than what he learns from profit giving trades. His such type of psychological acceptance boosts him up with courage and next time he enters into a trade with utmost good faith and self confidence. Put aside ego… It is easy to recognize profit from a loss. It is easy to understand disciplinary rules framed for trading. Then what is difficult….?What makes it so hard to apply the rules…? There is some power which controls our mind and prevents a trader to act as per the pre determined course of action. Let us call that power as “Ego”. Until a trader learns to get rid of his ego, he will never make money in any market consistently. The market gives rewards only to those who have subdued their egos. This is so because when a trader does not identify his ego, he never accepts his mistakes done while trading and this prevents him in correcting these mistakes. He only goes on finding various arguments in the favor of his trade which is in fact a wrong one. So long as a trader makes money following his trading strategy and rules framed by him therefore, it is well and good. But after getting some success in few profitable trades, when he starts compromising with the rules framed already, and ultimately suffered a lot at last. Why…? If you make profits in some trades, naturally you cann’t resist telling you mates how well you are doing. Aiming good for them, you just tell them how easy it is to make money in the market (and how clever you are). All good things come to end when market changes its trend. It becomes harder for you to find good trades. You are frequently stopped out of your positions …incurring series of small losses. You start doubting your own decisions and trading strategy. You start changing your trading rules, looking for other additional indicators for confirmation, though they give conflicting signals. You forget your own original trading technique and rules …and now you concentrate on new technique with new rules…..and it wipes out you totally…..This is “Ego…” playing its vital role in making a trader undisciplined. There are so many trading courses available, but many fails to prepare traders how to face market place. They simply present trading plan with some examples where plan works very well, explain basic concepts only. It if is so easy, then why to sell such trading courses. Such courses fail to prepare and teach to traders for the times when their plan does not work. Such training courses fail to prepare and teach the trader for the pressure and uncertainties that he will have to face when the market goes against him, and how to come out from them. Many times trading courses are marketed on the assumption that the average investor is greedy and lazy. They offer only the prospects of wealth without effort. Of course, trading courses may help to gain good working knowledge of basics and explanations about traps and pitfalls that a trader faces everyday in the market. But such courses cannot teach any trader about self discipline and understanding of his own weaknesses. Only experience and lots of practice help in this line, there is not any magic formula for this. Let me quote the lines I read at site : http://www.incrediblecharts.com If you can’t stand the heat…. ….do not play in the kitchen…… If you do lose money in the market, don't blame your course provider, your broker, the institutions, insiders, the government, OPEC or the Fed. They are just some of the factors that you have to take into account in your preparation. You are responsible. You are on your own. No-one except you is going to shed a tear if you burn your capital. So take care ...... and PREPARE…!!! (to be continued......)

BAREFOOT COLLEGE !!!

 

In Rajasthan, India, an extraordinary school teaches rural women and men -- many of them illiterate -- to become solar engineers, artisans, dentists and doctors in their own villages. It's called the Barefoot College, and its founder, Bunker Roy, explains how it works. 

[ted id=1248]
http://www.ted.com/talks/view/lang///id/1248

Sanjit 'Bunker' Roy (born 2 August 1945) is an Indian social activist and educator. In 1972 he founded the Barefoot college in Tilonia, Rajasthan. The Indian non-governmental organization was registered as the Social Work and Research Centre. He was selected as one of Time 100, the 100 most influential personalities in the world by TIME Magazine in 2010. In 2002 he was selected for Geneva-based Schwab Foundation's award. Bunker Roy was born in Burnpur Bengal, present-day West Bengal. His father was a mechanical engineer and his mother retired as India's trade commissioner to Russia. He went to the Doon School from 1956 to 1962 and attended St. Stephen's College, Delhi from 1962 to 1967. He earned his master's degree in English. He then decided to devote himself to social service, to the shock of his parents. Bunker Roy, after his education, decided to work in the villages much to the chagrin of his parents. His dream of using traditional expertise rather than "bookish knowledge" for the uplift of neglected communities. He has worked all his life with the Barefoot College, an NGO that he founded. Barefoot College has trained more than 3 million people for jobs in the modern world, in buildings so rudimentary they have dirt floors and no chairs. The rural youth selected by the community have to be impoverished, subsisting on barely one meal a day to receive training at Barefoot college. Roy was influenced by Mahatma Gandhi belief essential for the development of India and his thoughts have been adapted to the work-style of his college. The philosophy of Mao Zedong, and modeled his organization after Mao's Barefoot Doctors. http://www.barefootcollege.org/ http://www.myhero.com/go/hero.asp?hero=Bunker_Roy_06

performance

Following are the trades triggered as per MySAR levels.
Calculation of only one lot has been taken into consideration.  
As per technique if Two or more lots are taken and partial profit is booked in between considering daily as well weekly pivots and ema numbers, and go on riding the trend as per the levels, then overall profit would have remained fantastic.....

Atithi Devo Bhav....Guest is God

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