Nifty Spot Hourly....Confused and Directionless !

What are you focussing on ????

Lessons in Trading from Kung Fu Panda !!!

Nice movie with lot of philosophy thrown with animation. What struck me was that the message of the movie is very apt to our trading psychology!

In one of the scenes under a peach tree the wise old man Oogway tells his student master Chifu to let go the ILLUSION of control and start BELEIVING(Chifu has serious doubts that the big fat panda can make a dragon warrior). He says that things don’t happen as we wish but they happen on their own and take their own time. Same with good trade setups we should WAIT to let them happen and don’t try to preempt them! All we can do is nurture our trade and believe in it!

In the second instance in the movie when the Panda becomes the dragon warrior, and open the centuries old scroll to read the secret, he finds it blank with only his reflection on the scroll. Dejected by not seeing anything on the scroll he assumes that after all he wasn’t the true dragon warrior. Realization dawns on him later when his father the noodle soup seller tells him the secret ingredient in his secret ingredient noodle soup is NOTHING! Yeah he say there isn’t any secret ingredient and to create something special one needs to believe in that you are special. Bingo! There is no secret indicator or method to play the markets….Its only about you and your beliefs in your system. A nice lesson in trading I must say.

I BELIEVE THEREFORE I AM!!!

Caveat...Time to be a Li'l more watchful !

In my last chart posted on Nifty I had mentioned either we have very strong undercurrents or we are in for a nasty surprise soon. Whats surprising is Nifty has shrugged off most of the negative news as no-news (remember the saying no-news is good news!). On the other hand its giving more credence to news that yet to happen something like GST, Monsoon would be more than full filling etc etc.

 If you look around every single stock is making good money. You might as well spin a wheel to select a stock and it would certainly make you some money. The buy calls from any random person is doing well and number of people who say " I told you so" is increasing. None descript stocks from BSE and NSE which have very low volumes generally are seeing volume spurts and doing well. Stocks with low promoter holdings (as low as 20% ) are doing well. Stocks which have avg weekly delivery at 20% vis a vis trading volume are doing well. All chatrooms and twitter handles have a buy call which is the next rocket...next bazooka and not what. Fundamentals are frowned upon and "Bhaav hi Bhagwan che" is the new mantra. And yes the GOD (Price) has not dissapointed anybody yet.

It's an old saying " Cream Rises to The Top" but then so does Scum. In this rally a lot of Scum is rising too along with the Cream. Closing Gaps with Gaps is not a healthy sign as mean reversion is surely to kick in. 

So is it time to shout BEAR? No. Its just time to be very carefull about your positins. Its the time to be very very and very serious about your stops. Its time to be patient and check the GREED within.

Posting a chart: PE chart of Midcaps. See how far its stretched from its average. Something scary something screaming " Just Be Carefull".

Chart Courtesy LINK

Well ofcourse all of this does not matter to the day trader but a swing trader should be wary and carefull while choosing stocks and allocating capital.

Right Now How are You Trading?.....Doji Style????

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.

Magazine Cover Indicator...Anyone betting on this????

Read all about magazine cover indicator here

The NAMO Effect....Cheers or Jeers on Monday????

Finally....yes Finally the Aha! moment for Narendera Modi...The man ...the PM choice for BJP.

We have had The syria effect, the Raghuram effect, in the market, the big question is will we have the NAMO effect on monday????

Given that there were right noises by the corporate sector on how they want Modi, will the market Cheer or Jeer???

As a nation of a billion views and opinions we are also a nation fascinated by conspiracy theories...!

The "what if" has an oomph like quality when discussing such theories.

"What if" the market celebrates the NAMO news with a rally ( hehe an upper circuit can be left for laters!)???

"What if" the UPA by some news leak (read data) spooks the market for monday and scuttles the rally to deny the NAMO effect???

"What if" none of the above happens???

Well whats going to happen on Monday will happen on Monday...as they say Que Sera Sera...or as they say in hindi "picture abhi baaki hai dost!!"

WISHING YOU ALL A VERY HAPPY NEW YEAR 2012

The Don't Quit Poem !!!

                           
                                 
                                                                                                                   

The Serenity Prayer!!!

How the Serenity Prayer Can Help You Become a Better Trader…Click on the link to read a brilliant write up by Craig!

I was really moved by this, so decided to share it here on my blog for the benefit of people who might have missed this awesome post! I guess when you want to learn anything you just need to look around and LIFE teaches you all you want to know!!!

Things Are To Be Used... People Are To Be Loved!!!

While a man was polishing his new car, his 4 yr old son picked up stone and scratched lines on the side of the car.

In anger, the man took the child's hand and hit it many times not realizing he was using a wrench.



At the hospital, the child lost all his fingers due to multiple fractures.



When the child saw his father..... with painful eyes he asked, 'Dad when will my fingers grow back?' The man was so hurt and speechless; he went back to his car and kicked it a lot of times.



Devastated by his own actions..... . sitting in front of that car he looked at the scratches; the child had written 'LOVE YOU DAD'.
The next day that man committed suicide. . .



Anger and Love have no limits; choose the latter to have a beautiful, lovely life & remember this:

Things are to be used and people are to be loved.

The problem in today's world is that people are used while things are loved.



Let's try always to keep this thought in mind:

Things are to be used,
People are to be loved.

Watch your thoughts; they become words.

Watch your words; they become actions.

Watch your actions; they become habits.

Watch your habits; they become character;

Watch your character; it becomes your destiny.

I'm glad a friend forwarded this to me as a reminder..

I hope you have a good day no matter what problems you may face

it's the only day you'll have before it's over.

Two Interesting Vids!!!

Howard Lederer: On Poker & Trading the Markets

Dennis Gartman Video- Legendary Trader Explaining His Trading Rules

The Gartman Letter's Dennis Gartman on Trading Rules @ Yahoo! Video

Read About the rulez here!

So.......What's Your EDGE???

Once you are on the road to trading, there will be a time, when you will need to ask your self this question “What’s Your Edge?” Infact you even need to ask this question to anyone whose services you have subscribed to or would want to subscribe in the near future or when buying a trading system.

So what’s the Edge? Edge or as some say Expectancy is mathematically calculated using the following formula;

E= (PW*AW) – (PL*AL)

Where:

E= Expectation or THE EDGE

PW= Winning Percent

Aw= Average Winner

PL= Losing Percent

AL= Average Loser

To make it more lucid, let us assume that you have a trading system which has 50 percent winning trades and average winning trade is for Rs 500 and the average losing trade is for Rs 350. Then using the above formula we can calculate your Edge;

E= (PW*AW) – (PL*AL)

Edge= (.50*500) – (.50*350),

Edge= 250-175,

Edge= Rs 75 on an average per gain per trade.

This means over a time you would expect to earn Rs 75 for each trade placed. Now assuming that you are approached by an analyst or a system vendor, who offers you his services for a fee, but has a system, which has only 40 percent winners, with an average win of 900 bucks and an average loser of 350 bucks. What would be his Edge be? Again using the above formula we get;

Edge= (.40*900) – (.60*350),

Edge= 360 – 210,

Edge= Rs 150 on an average per gain per trade.

So it seems your so called analyst has almost 2 times the Edge and you would be better off trading with him or at least would agree that his system is better placed even though his winning percent is much lower!

Therefore next time you see someone screaming that they give “90 percent or for that matter 99 percent winning trades” don’t get excited, but very quietly ask the gentleman “So What’s Your Edge?”

Achmed the Dead Terrorist!!!

Illusion and Reality By Kabir Das!!!

Jo Dise So To Hai Nahin,

Hai So Kaha Na Jayee

Bin Dekhe Parteet Na Aave,

Kahe Na Koyee Patiyana

Samajh Hoye To Rabeen Cheenho,

Achraj Hoye Ayana Koi

Dhyave Nirakar Ko,

Koi Dhyave Aakaara

Ja Bidhi In Dono Te Nyara,

Jane Jananhara

Woh Raag To Likhia Na Jayee

Matra Lakhe Na Kana

Kahat Kabir So Padhe Na Parlay,

Surat Nirat Jin Jana


English Translation



What is seen is not the Truth

What is cannot be said

Trust comes not without seeing

Nor understanding without words

The wise comprehends with knowledge

To the ignorant it is but a wonder

Some worship the formless God

Some worship His various forms

In what way He is beyond these attributes

Only the Knower knows

That music cannot be written

How can then be the notes

Says Kabir, awareness alone will overcome illusion

The Dick Davis Dividend- A Must Have Book In Your Library!!!

I haven’t been updating the blog this weekend as I was busy on catching up with some personal work and doing a bit of reading! I had the pleasure of re reading the book- The Dick Davis Dividend. Click on the image below to take you to Dick Davis site.

It’s a good book to have in your library. You see when someone with over 40 years of experience in the Wall Street writes something, it pays to listen. No this book aint about any get rich quick methods rather it’s about how to get rich slowly but surely! The book is full of hundreds of quotations by eminent personalities. These quotations in themselves are a delight to read! A no nonsense practical advisory is what you get when you buy this book. Will it make you rich? Not instantly but it will surely leave you a lot more wiser and that I presume is the first step to getting rich.

Here you can read Dick Davis’s interview with Charles Kirk!

The Good Life!!!

Many of us have already heard this story in many of its variations, but then a good story is a good story and meant to be enjoyed over and over especially when you know it’s a poke in your face!

Any plans to change how you go about living your life? I am already at it…amen!!!

Always Boils Down To Love!!!!

It was a busy morning, about 8:30, when an elderly gentleman in his 80's arrived to have stitches removed from his thumb. He said he was in a hurry as he had an appointment at 9:00 am.



I took his vital signs and had him take a seat, knowing it would be over an hour before someone would to able to see him. I saw him looking at his watch and decided, since I was not busy with another patient, I would evaluate his wound. On exam, it was well healed, so I talked to one of the doctors, got the needed supplies to remove his sutures and redress his wound.



While taking care of his wound, I asked him if he had another doctor's appointment this morning, as he was in such a hurry.

The gentleman told me no, that he needed to go to the nursing home to eat breakfast with his wife. I inquired as to her health.

He told me that she had been there for a while and that she was a victim of Alzheimer's Disease. As we talked, I asked if she would be upset if he was a bit late.



He replied that she no longer knew who he was, that she had not recognized him in five years now.

I was surprised, and asked him, 'And you still go every morning, even though she doesn't know who you are?'



He smiled as he patted my hand and said, 'She doesn't know me, but I still know who she is.' I had to hold back tears as he left, I had goose bumps on my arm, and thought,



'That is the kind of love I want in my life.'



True love is neither physical, nor romantic.

True love is an acceptance of all that is, has been, will be, and will not be.

Viagraaaaahh!!!