Thursday, November 28, 2013
Wednesday, November 27, 2013
Friday, November 15, 2013
Sunday, November 10, 2013
NIFTY Daily Chart Views !
What you see below is the NIFTY Daily Chart and a few observations;
1. Yes there is an Inverse HNS (blue dotted lines with shaded band as neckline) which is visible and indeed kind of given a break out. Minimum target to the upside from the breakout point is 500 odd points and maximum some 1000 odd points. This can take Nifty to some crazy levels. Now a caveat here...inverse HNS patterns have better chances of working out when formed near the lows or basing out moves and this one is kind of forming at the top.
2. I have also taken a liberty of drawing (red dotted lines) a small HNS that might form...please remember I am using the word MIGHT!!! So this shaded band is very significant for both the bullish and the bearish players.
3. What is important here and what matters most is that inspite of the last 5 days in red we are still in HH and HL sequence and that is the best way to define or follow the trend.
4. Yes its alright for traders to speculate and try and forecast but it is also equally important for them to change their views or bias as soon as the circumstances change and in this case it is THE PRICE ACTION! Speculation or forecasting works best with good risk management, which not only protects you from the risk of ruin but also lets you live another day.
1. Yes there is an Inverse HNS (blue dotted lines with shaded band as neckline) which is visible and indeed kind of given a break out. Minimum target to the upside from the breakout point is 500 odd points and maximum some 1000 odd points. This can take Nifty to some crazy levels. Now a caveat here...inverse HNS patterns have better chances of working out when formed near the lows or basing out moves and this one is kind of forming at the top.
2. I have also taken a liberty of drawing (red dotted lines) a small HNS that might form...please remember I am using the word MIGHT!!! So this shaded band is very significant for both the bullish and the bearish players.
3. What is important here and what matters most is that inspite of the last 5 days in red we are still in HH and HL sequence and that is the best way to define or follow the trend.
4. Yes its alright for traders to speculate and try and forecast but it is also equally important for them to change their views or bias as soon as the circumstances change and in this case it is THE PRICE ACTION! Speculation or forecasting works best with good risk management, which not only protects you from the risk of ruin but also lets you live another day.
Saturday, November 9, 2013
Sunday, November 3, 2013
Saturday, November 2, 2013
NSE Indices Views !!!
A few observations from the weekly charts of various NSE indices;
1. Nifty chart shaded in green, is trading above May 2013 highs and now looking to breakout to the new all time highs.
2. The CNX 500 shaded in Blue is still trading below the May 2013 highs and might just catch up with Nifty.
3. The Banks, the Midcaps, the Junior and the Small Caps are way below May 2013 highs.
4. This only warns that one needs to be careful in choosing stocks and not to be euphoric just because the Nifty or the SENSEX is breaking out.
Wednesday, October 30, 2013
Ten Trading Aphorisms !
-
An entry does not determine profitability it only determines potential profit the exit is where the win or lost occurs, focus on that.
-
A robust trading system means nothing unless you can follow it with discipline and self control.
-
Charts don’t care about any one persons opinions why should you?
-
Good trading will make you some money but only good risk management will allow you to keep the money.
-
Good traders search for the right entries, great traders search for the right systems.
-
Bad traders have an opinion, good traders have a plan.
-
In the markets money flows continually from those you do not really know how to trade to those who do.
-
Eventually those with the best risk management and trading method end up with the money from those who only have a good trading method.
-
Bad traders tend to be stressed and emotional, good traders tend to be more quiet and at ease.
-
Show me a trader overly focused on just one trade and I will show you the 90% that are unprofitable, show me a trader focused on the whole process of trading with little concern over any one trade and I will show you a member of the 10% that are profitable.
Credit Stephen Burns
Sunday, October 13, 2013
Saturday, October 12, 2013
Ten Pieces of Advice For New Traders
If someone was ready to start trading
and had a basic understanding of trading and the markets and asked for
some of my best advice on how they could make money as a trader, this is
what I would tell them.
-
Understand that trading is like any other professional endeavor, you will be monetarily rewarded based on the effort and work you put into it to learn how to trade. Trading is one of the few places where amateurs can go compete with professionals for a very low price of entry. Your trading tuition will have to be paid through the experience of losses and time doing your homework.
-
If you have to get others opinions about your trade, asking others advice on entries and exits, then you really need to stop trading and work on a detailed trading plan that gives you a road map of how to react before you enter a trade.
-
Do not waste your time on searching for that Holy Grail, easy money, can’t lose, trading method. Trading is always a competitive event and market conditions are always changing from volatile to stable and from trending to choppy so nothing works in all market environments.
-
Successful trading is based on your winning trades collectively being bigger than your losing trades are collectively. So your goal is to either trade a system with a few huge wins and a lot of very small losses or a high winning percentage system that keeps the losing trades controlled.
-
Do not look for a good trade, instead look for a great winning methodology to trade with.
-
Your risk management that you use while trading will determine your trading success more than your method. You have to make it safe to be wrong a few times in a row and not lose all your trading capital.
-
If you want to be a successful trader then focus on what is actually happening with price action and stay away from your own opinions and biases of what should happen. Wanting to be right for the sake of your ego is another expensive game.
-
You can’t use anyone else’s system, you have to trade a system that fits you. One that you understand and can trade with discipline because of your confidence in it and yourself.
-
Look for and find your own edge. What are you the best at doing in the markets? Some are masters of shorting, others trend following, some are great at selling options that expire worthless. Usually the type of trading you are the most passionate about gives you the drive to research it until you find that edge.
-
Master some aspect of trading, find something to be an expert on. A market, a stock, IPOs, options, futures, day trading, trend following, etc. Don’t be a jack of all trades, be a master of one type of trading.
The Three Keys That Unlock Trading Success
If you want to be a winner trading in the long run there are THREE elements of trading that you must have in place. If you do these three things you can not lose in the long term, if you are missing one you will likely not last very long as an active trader. These three simple things work together to keep you profitable in the markets.
A Robust Methodology
#1 You must trade a WINNING
trading method: Your trading system must be valid and profitable through
past markets. The best way to win in the markets is to have a method
that identifies potential trends and gives you entries and exits that
put the probabilities on your side for winning trades. Many times these
systems will have huge winners that pay for all the small losses and
make you profitable. Regardless of time frame the primary thing all
traders are in search of for profitability is trend capture. The key is
to go through historical price data and see how your method would have
performed in different types of past markets, bull, bear, and sideways.
Along with some outlier times like October 1987 and the Fall of 2008. A
winning system either has to have a few wins so big that it pays for all
the small losses or a very large winning percentage that keeps the few
losses from getting out of hand. Find your edge
and learn how to make it a profitable one. If you have no edge and no
winning system your trading account will be eaten away bit by bit. The
market has an edge over you, it is counter intuitive and slippage and
commission are drooling to start chewing on your account.
Risk Management
#2 You must manage RISK: Even
with a winning system betting too big on one single trade can ruin you
quickly when not if it goes wrong. Betting even 10% or more of your
capital on any one trade can ruin your account with 5 straight losses.
To really succeed you have to lower your risk to no more than 1% of total trading capital,
this does not mean to trade with 1% of your capital or with a 1% drop
of your asset that would be foolish it means to set stop losses and
position size carefully so that if you are wrong you will only lose 1%
of your account. Even if a real disaster happens and your stops are
gapped through you may still only lose 2%. This is how traders survive
for the long term through losing periods. A $50,000 account=$500
maximum loss per trade. Many traders use 2% risk of trading capital per
trade but they need higher win percentages are will suffer from bigger
draw downs. The reason that risk management is so important is that with
a high enough risk of capital per trade you eventually end up with a
100% chance of ruin at some point through a unexpected low probability
event that causes an out sized move or a string of losses in a very
volatile trading environment that were unexpected. The key is the trader
must get from their first trade safely through to the returns they are
looking for with out going to zero capital before they get there. Many
professional money managers, firms, and traders learn this lesson the
hard way. With out the proper risk management traders eventually end up
with an account of $0 or worse they owe their brokers money.
Psychology
#3 You have to have the right
MIND SET. To win in trading you must have faith in yourself, your
system, and your method. If you are a trend follower you must believe
that trend following is the most profitable way to trade, you must
believe that your system is a winner because of the back testing you
have done on price history or charts based on your rules. You must have
faith in yourself to do the right things and remain disciplined. If you
lose money you must understand that it is just part of the game and that
you will make it back eventually. Only stress management, perseverance,
faith, hope, passion, and a goal orientation can really take a trader
from the trading starting line to successful trading. Trading just for
the money doesn’t work, because they first five years the money is not
worth it in almost all instances and the new trader quits.
If you have these three things, nothing can stop you, if you are missing any of these three things nothing can help you.
Credit Stephen Burns
Thursday, October 10, 2013
Monday, October 7, 2013
Sunday, October 6, 2013
Friday, October 4, 2013
Thursday, October 3, 2013
Monday, September 30, 2013
Sunday, September 29, 2013
Tuesday, September 24, 2013
Monday, September 23, 2013
Subscribe to:
Posts (Atom)
