Monday, 29 May 2017

Saturday, 27 May 2017

Being honest as a trader

The most critical concept that has helped me become a good trader is being honest with myself as well as others around me. I always try to be honest because I believe honesty always develops trust better than anything.... trust in my trading method, trust in my trade plan and If I am honest with you, you will also develop trust in me as a trader. The things to success are simple but we make them look complex which is why staying honest with oneself helps trader realize his/her mistakes and improve trading capabilities, clear dusty cloud off the mind, think straight and clear and keep on learning and improving oneself to climb the ladder of success. This is very simple thing but still not understood by human psych.

Also being honest with oneself helps practice discipline....again the most critical in trading.  Once I have made my trading rules, I just need to be honest in following them.  If I need to exit out of the trade on the break of certain level, I need to be honest and exit at that level.  If I need to stop trading after certain loss making trades, I need to be honest with myself and stop trading.  I cannot cheat myself by allowing myself to widen the stop loss or continue trading with consecutive losses.  If I start doing that, I know for sure it will only lead me to disaster.

As you all know, I regularly post end-of-day Nifty future charts along with little bit of thought process involved in spotting a setup. The trading may look very easy to you by just going through those charts but in reality trading is not that simple. As a trader, we have to deal with different trading situations and these situations make the trading complex. Let me give you few examples.  We will be often put into the situations where it will just trigger the entry and after triggering the entry prices will never move in our favor.  Prices will start to move only once we exit the trade.  After hitting the stop loss, it will only move in favor.  Prices may move very quickly in favor but we cannot profit out of it because it may retrace quickly too vanishing all the profit. It may so happen we wait for the prices to reach the target but prices reverse without reaching the target and take away majority of profit.  We keep on looking for the setups but they either do not appear or get missed.  The list will go on and on like this.  Also there will be lot of stress and emotions involved which too make trading difficult.  So what I try to do in my posts is I try to present the charts demonstrating how best one could have followed the trading method and benefited from it by being honest to the trading method. It never reflects my actual trading.

Of late I have started trading stocks.  I have not kept it only to myself but also made an effort so that it becomes possible for you to copy my trades and to learn how I trade the stocks too. I trade systematically and share my stock trading performance with all the transparency.  If you closely go through the stock trading performance, you will realize how I have managed to be honest, not only with myself but with you too.  If I had to stop trading after 2 consecutive losses, I had stopped trading for that day.  I never widened the stop loss.  I was in front of screen and be ready all the time before the market open.  I never allowed the fear of losses or stress or emotions to gain control over my trading.  I also shared with all the honesty whatever trading I was able to do without worrying about the end result.  I am able to do that because I am aware in short term, there will be lot of things happening which will affect the trading performance but in the long run everything gets even out. Sometimes there is high volatility, sometimes less, sometimes there is heavy news flow driving the prices, sometimes very dull markets. So these are things which is not in our control and we cannot let them dictate the trading performance.

Trading, blogging, educating others on trading and even allowing them to trade with me, all became possible because I have full faith in my trading method and I am honest as a trader.

Friday, 26 May 2017

Bank Nifty Future 26052017


Bank Nifty was little sluggish in the morning and traded in the narrow range till noon time.  It provided two setups as marked to go long.

Thursday, 25 May 2017

Nifty Future 25052017


Expiry day.  Opened within previous day's range but was able to trade above PDC and then BRN. This indicated strength in buyers or in other words bullish bias. Then there was a good BPB of BRN setup.  Unfortunately, it did not move much and prices remained in narrow range for around 2 hours.  It then first tried to break the lower range extreme but failed.  You might have probably heard that a failed attempt to break one range extreme often leads to successful break of another range extreme.  You might have also heard that once the prices consolidate enough, they will be ready for the move.  You also might have heard that during expiry day, prices often move from BRN to RN or another BRN.  Plus there was a bullish bias with range forming higher than earlier range.  All these indicated to go for a direct BO ignoring PDH above.  This direct BO yielded around 100 points of gain.

One more observation I would like to share with all of you.  Lately, on expiry days it is observed that markets often make a final sizable move exactly after 3 pm.  Just wait for the clock to hit 3 and immediately after that it will give a good move.  I have marked an arrow on 3 pm move to illustrate my point.  It was around 40 point move.

Tuesday, 23 May 2017

Nifty Future 23052017


It opened within previous day's range and soon broke below PDL.  The down move was very sharp and quick and did not allow the entry.  After that it consolidated below BRN for a long time. Expected a good move out of this consolidation.  The BO of range high was a good setup which did reach to LOL of PDL & PDC.  Here again the prices got rejected and gave another good down move.

Monday, 22 May 2017

Nifty Future 22052017


It opened within yesterday's range.  Once it broke below PDC and got accepted, there was a BPB short trade setup.  PDC continued to act as a strong flip the next time prices came back there and again presented a BOF setup for a short trade.