Monday, 31 August 2015

A lesson

Below is one of the lessons that was taught in the ongoing training program.

There were three big fishes living in a lake. Out of these three fishes, one was very intelligent.  Then one day a fisherman came there one morning to cast the net and catch the fishes. The intelligent fish said "I know what to do if the fishermen come and catch me." The intelligent fish thought of a way to escape.  It jumped out of the lake to the fisherman and acted as if it were dead. The fisherman threw that fish away in the pond thinking it was dead.  The other fishes tried to follow that intelligent fish and jumped out of the lake to the fisherman.  They simply followed the intelligent fish.  They did not know what the intelligent fish actually did.  So these two fishes did not know anything about holding the breath and acting dead.  They only jumped out and fisherman caught them and took them with him.

Moral of the story is when we follow someone, we only know the move that is made but we do not know why that move was made and what was the reason behind that move.

We need to become an intelligent trader and make sure we just do not blindly follow the move but we learn how and why that move was made and what was the reason behind that move.

Now I would like to ask the readers of my blog.  When you look at the chart on my blog or anywhere else, what do you usually think? Have you ever thought about it?  Are you only looking at the patterns that were traded?  Are you only looking at the success and failure of the trades that were done? Are you only following the trades and setups?  Have you tried to know the actual reason and thought process involved?

Ask yourself.  Are you only blindly following?  Are you trying to learn?

Wednesday, 26 August 2015

26052015


Missed the long trade in the morning as marked as I was not much confident.  Around noon, shorted as BOF of LOL PDH and BRN.  It moved in favor well. Booked when it seemed to bounce from the probable range at that time.

Tuesday, 25 August 2015

25082015


Today Nifty opened gap up within yesterday's big range. There was a good sell at BRN 7900 in the morning.  Missed it as I was busy with work.  Some time later took the late trade as BPB of PDL.  Moved well.  Covered it around BRN 7700.  Then there was a good reversal from 7700 after a good BOF. Did not participate in it.  Also missed another opportunity to enter into the up move at 7800.  Around 2 pm attempted one sell trade as it seemed to be getting resistance at 7900.  It moved in favor 30 odd points but quickly reversed.  Scratched it.

One needs to get adjusted to a new situation very quickly, here it being high volatility.

Monday, 24 August 2015

24082015


Big full gap down and turned out to be type 1 trend day. Missed the BO trade below BRN 8000.  Later it bounced back to the same area.  Shorted this time as BOF.  Covered when it bounced from LOD then.  In the afternoon took one more short at failure of 7950 which was acting as range extreme.  It moved well breaking 7900.  Covered when it seemed to bonce from 7850.

Sunday, 23 August 2015

First day of training program

Today there was a first session of "Hand-holding" training program.  I had the opportunity to meet with two very passionate traders, Shashank and Shailendra.  There were two others who showed their interest about the program but due to time constraints and other ongoing commitments could not join.  Shashank and Shailendra have been very keen about learning the trading.  They know the importance of proper training on the subject.  It was an introductory session and also to make sure the technical setup for the training is in perfect working condition, like webcam, mic etc.  After the brief introduction to each other, I gave them an overview on the main topics of this program and how likely this whole program is going to take shape and where the major emphasis will be.  Here I present to you the excerpts of our brief discussion on learning, especially the trading.

  • People don't know how to do trading but they indulge themselves into it. 
  • They know they need to learn everything in life right from the birth, starting from learning the mother tongue to schooling, college but here in trading, they think they do not need to learn it. 
  • Trading can be learned like we learn driving a car.
  • Once you have learned it properly, you will not feel a need to follow someone for trading.
  • When you follow someone, you know the move that is made but you will never know why that move was made and the reason and purpose behind that move.
  • There is nothing wrong in doing intraday trading.  There are lot of people around us who do daytrading, like milkman, vegetable vendor etc.
  • One needs to be very efficient in daytrading. 
  • Importance of learning from others' mistakes.  If you try to learn everything from your own mistakes, it will cost you a lot. 
 I will keep sharing some interesting excerpts of the program, which is going to be done very professionally, from time to time, in case you are interested in it.

Friday, 21 August 2015

21082015


Nifty opened full gap down.  Did not attempt WT gap BPB trade on down side.  As expected it spent some time trading in the range.  Shorted on what appeared to be a good BOF of range high.  Had to scratch.  Then it gave wonderful opportunity to go long at DO/HOD then.  Made the most of out it.  Booked around 8310.

Can trading be taught?

I believe trading is an art which can be learned and taught.  I thought this small story might inspire you.

http://users.rider.edu/~suler/zenstory/graphics/lock.gif








The son of a master thief asked his father to teach him the secrets of the trade. The old thief agreed and that night took his son to burglarize a large house. While the family was asleep, he silently led his young apprentice into a room that contained a clothes closet. The father told his son to go into the closet to pick out some clothes. When he did, his father quickly shut the door and locked him in. Then he went back outside, knocked loudly on the front door, thereby waking the family, and quickly slipped away before anyone saw him. Hours later, his son returned home, bedraggled and exhausted. "Father," he cried angrily, "Why did you lock me in that closet? If I hadn't been made desperate by my fear of getting caught, I never would have escaped. It took all my ingenuity to get out!" The old thief smiled. "Son, you have had your first lesson in the art of burglary."

Let me know your thoughts this weekend.


Thursday, 20 August 2015

20082015


Today nifty opened gap down, within yesterday's range.  Missed two shorting opportunities in the morning, one as BOF of BRN 8500 and another one as BO of narrow range, as I was not in front of the screen at that time.  At last, took a short below BRN as marked.  Covered at 8360.

Wednesday, 19 August 2015

19082015

The big picture chart,


Today in the morning, immediately after open, it tried to break PDL and the area as marked in above Big Picture chart, 8440-45 level, but failed. Went long on BO of the range. Covered at PDH.  Later at fag end, tried a short below range low.  It failed.


Tuesday, 18 August 2015

18082015




Nifty opened today within previous day range, gap up.  Missed the short on BOF of IRH. Shorted below PDC.  Covered when it seemed it could not break PDL at RN.  Missed the long trade on retest of PDL as I was away.  No other trades.

Saturday, 15 August 2015

"Hand-holding" a training program on day-trading

As you all know, I have been writing and maintaining this blog for quite a long time. SMART Trader is the one who prompted me and encouraged me a lot to pursue blogging. Thank you sir. I learnt a lot through blogging. I had an opportunity to interact with other fellow traders. It helped me align and put my thoughts in one place. And last but not the least it helped me with my trading. Those who regularly blog would realize how difficult it is to maintain a blog, the kind of efforts it require in running a blog. Hats off to blog authors.

Through active blogging I also realized there are traders who strive success in trading. I tried to learn the shortcomings for them and came to know what they lack most is proper knowledge of the subject. The learning process had been improper or incomplete for them and that was the main reason for their struggle. I thought about helping them. I tried writing few posts, putting my knowledge about trading concepts, sharing my experience. I even tried to personally solve their queries through emails and blog comments. But that was not enough. It required more than that.

After discussing with other traders, friends and well-wishers I thought about designing a training program and leading it, to cater to day-trading needs in today’s world. Here I am putting my plan regarding the same in some detail. Please go through it if you find it interesting, and take one step forward in the direction of a real "Trading Independence" on this Independence Day.

The impact of training on trading and why it is essential for success
Isn’t it nice if there is someone helping you out in trading, understanding your problems and finding the way out to success, so that you do not have to spend years of frustration and disappointment? Won’t you be glad if there is someone out there to provide you practical, enjoyable, user-friendly and effective training on day trading?

I believe learning is the consistent and deep engagement of the mind and body in the active pursuit of knowledge and experience from birth to death. Learning is something that impacts nearly every facet of our existence every day. Trading is a serious business and so should be Trading education. Stock market is the place where if you come unprepared, without any proper knowledge and experience, you will be chopped off left, right and center. There is no mercy to untrained, novices. Not only you would lose financial capital but also the emotional capital. You need to be fully equipped with the knowledge and proper training. You need to learn the trading concepts and its practical application thoroughly so that you can put it into practice in any market, be it index, stocks, commodities, currency, anything. Traders who rely on buy/sell nifty trading systems or nifty tips or news and rumors will eventually lose. Believing in learning, acquiring the required knowledge, improving through practice under expert guidance is the key to success in the trading world.

The perception of people about trading and how hard it is to get properly trained
In India, the problem is most people don’t even think that trading can be learnt. They think it is a kind of gambling and would rather prefer to listen to a tipster and then act on the tips. But the fact is that the trading is an art which can be learnt, provided you have aptitude for it, enough courage, persistence and patience to carry it through. You won’t believe, in my city with the population of over 30 lacs, my search for a local good trainer yielded me nothing. I could not find someone who will sit with me, understand me, guide me and teach me the real trading. I had to look at other avenues like books, internet blogs and lastly luckily I found the great trainer, the author of blog, Nifty Nirvana, SMART trader. He took me to another world of looking at the markets. His knowledge about the market structure and trading concepts mesmerized me. I decided to dig deep into it and he helped me every possible way he could. SMART trader is really a great asset to the trading community. I am indebted to him and will remain. Now I feel it is my turn to share the knowledge and experience that I acquired over the years with you and help you to become a good successful trader.

Learning the trading and applying trading concepts
To become a successful trader, it is very important that you learn not only what the trading is but also learn how to apply that knowledge and gain something from that knowledge. You need to learn and understand the trading concepts very well before you actually apply them. A good teacher/trainer is very much required in the process of learning the trading. It is also required that a teacher dedicate the time, impart knowledge, understand the needs, and sharpen the skills. Self learning should be the last resort as it has its limits.

What role an experienced trader can play in developing you as a successful trader?
Only a trader understands the other traders’ needs. A role that an experienced trader plays in upbringing the other trader is immense. It expedites the process of learning and ability to read the markets, what to and when to expect from markets, how to remain disciplined and develop patience. Basically, how to actually dance on the tunes of Market. Through this training program you will find a trader/trainer with you when you need the most.

Process of training
The training process will be very structured. It will be designed in a very simple and lucid way so that even a common man with little or no background about stock market and day trading can understand the dynamics of the same. It will focus not only on the daytrading aspects of the trading but also will focus on the psychological issues which are very essential and need to be dealt with carefully. It will help you learn how to read, interpret and decode fear and greed in any market. Emphasis will be more on practical application of trading concepts rather than its theoretical counterpart. You will learn the system which has been tried and tested by a trader who is currently trading with the same system and has spent lot of money and time during this process. Now you will save your time and money by holding my hand.

About me as a trainer
Though I am yet to opt the trading as a fulltime career, I have enough experience trading different markets and different market phases. I have acquired most of the trading knowledge through my own trading experiences, mostly trial and error method. I would proudly say that I have successfully trained six batches of trainees in my company for a BPO process. Those training programs were designed, conducted and supervised by me. I hope this venture into the training on trading will also be successful in helping traders.

Training program overview
This program will be ideal for anyone who is looking to day trade Indian stock market. For other markets like currency, commodity I am sure you will be able to apply the knowledge acquired through this training program successfully. List of some of the main topics of training program here.

An overview on day-trading. Importance and the role the different timeframes play. Basic Market structure. Trend. Support and Resistance. Concept of Range and Decision Points and its role in day-trading. Different trading tactics. Trade identification and execution. Trade management. The Risks involved.
Likely duration will be one week.

Practical application of the concepts through mock trading and trade simulation.
Likely duration will be one week

Assessment of mock trades and discussion on further steps required and implementation of those steps.
Likely duration will be one week

Live trading and hand holding for one week for further improvement. So total duration will be approximately four weeks, i.e. one month.

This training program will be done online through web conferencing, a dedicated blog for this purpose, and a telephonic conversation/interaction, so you will not need to come out of comfort of your house. It will be in English language.

The timing of the program, commencement date will be mutually agreed upon. As it is done online we will have liberty to do it at any time and any period of time that is mutually agreed by all parties involved.

Finally, what it would cost
Email me at charttechnicals@gmail.com for details.

Stop wasting your hard-earned money and precious time. Trading success is not illusive. It can be achieved. Act now, right now before it is too late.

Email me at charttechnicals@gmail.com if you are interested in this training program or other queries.

Friday, 14 August 2015

Trend Reversal

https://ethicsalarms.files.wordpress.com/2013/03/reversal.jpg

Today I am trying to write something about trend reversal in very simple language.  It is a very vast subject in technical analysis world and many traders have written about it.  There is nothing new in this writeup.  I have just presented it the way I think, the way I approach reversal while day trading.

Some Basics
We all know “the trend is your friend until the end when it bends” but we fail to remember it every time we take a trend reversal trade.  It may happen because the trade looks very good and well poised for reversal at the extreme.  Here I feel a trader should be cautious, because after the first move against the trend, the market actually continues to trend and attempts to test the old extreme level in the trend.  We need to understand that a reversal during a trend may not necessarily be an actual reversal from a downtrend to uptrend or from an uptrend to downtrend, but it may stand for a transition between an uptrend or downtrend and a trading range, a transition between a trading range and an uptrend or downtrend, or a mere breach of a support/resistance.

In Reality
What actually happens most of time is that after some kind of a good directional move, price will chop around and consolidate.  We simply cannot expect another good move immediately.  Usually, there will be a second leg or at least an attempt for a retest (second push).  V shape reversals are rare.  There will be a lot of pullbacks, chop, consolidation along the way in a strong trend, hence trading in the direction of the trend at the consolidation or range extreme is the only way to trade rather than looking for reversal.  There will be even complex pullback so it is always better to wait for the same especially if there is a strong trend.
Remember, trends may last for longer than one would anticipate, most reversal setups fail and the majority of continuation setups succeed.  This explains why traders need to use extra caution when trading against the trend, based on reversal setups.

Trend Reversal
Trend will ultimately reverse, no matter how strong the trend is.  It simply cannot go on and on.  There will be sometimes a sign of tiredness or exhaustion in the trend before the actual reversal in the trend.  Sometimes it will reverse from the good demand/supply area.  There can be any reason to trigger the reversal and once the reversal is confirmed, one can look to trade in the direction of the new trend.

Usage of Trend Reversal in Day-trading

For day-trading we need to constantly look for the trading opportunities and there will be a lot of reversal setups during the day which we cannot ignore.  Here are the few specific setups for the so-called “reliable counter-trend trade.”

1)  The only most reliable counter-trend entry is to trade counter-trend to a pullback (as the pullback represents a small trend in the opposite direction of the main trend).  It may lead to at least a test of the extreme level in the main trend.  Buying/selling at range low/high is what we need to look for constantly.  Here the concept of TRAP setup comes into play and can prove to be a very good trade setup.


2)  Pressure Play setup plus BOF of DP or range extreme is a deadly combination for a good reversal trade.


3)  Orderly pullbacks in a trending move, stalling at a DP, retest, and a fag end of the day is another deadly combination of a good reversal trade.  It is explained more in the example below.




4)  Sometimes if a trading range prolongs too much, it is reasonable to expect that it may lead to a reversal.


Conclusion
It is always rewarding to trade in the direction of the trend.  Hunting for the reversal setup majority of the time is not going to work especially if the trend is strong.  Being very selective while approaching reversal, as illustrated above, will likely help staying with the trend till it bends.

I will try to write more about the  reversal in day-trading context some other time.  I hope you would find that interesting.

 

14082015



In today’s post I am going to highlight the role that the higher timeframe traders play.  For that, I would like to draw your attention to last few days’ price action, especially since Monday this week.  Here is the chart,




I would like to bet on the probability of remaining in the range or breaking out (reversal), not for the break down.  Why?

Because I feel higher timeframe traders are going to play their role.  They will act at higher timeframe support and resistance and this area seems to be a good support.  It is very evident from the chart that market is in the process of making the triple bottom.  In last two days it bounced from the same area, so it seems those traders are buying near this area.  Yesterday also there was a last minute rush to buy from that area.


 Now today it opened gap up just above PDH (as per my broker’s chart).  First candle was a big red candle.  Then it seemed to take support at BRN 8400 and traded in a narrow range.  I went long on break of this narrow range.  A Pressure Play kind of formation gave me more confidence to enter there.  Plus it was the lowest point I could enter as I thought there would be a lot of order flow above PDH/DO as it would confirm the reversal.  Also if reversal is confirmed, we can anticipate trending kind of day (type 1 trend day).  As expected, it moved well.  Could not resist myself to book it at BRN.  Took second trade at the fag end when TRAP pattern happened.  Booked it at RN.
Today's chart,


  
Reversal confirmation.


 Keeping an eye on bigger picture is always going to help.

Thursday, 13 August 2015

13082015


Today Nifty gaped up 35 points just above BRN, within yesterday's range.  Initial move was up about 40 points.  Was looking to short at BOF of PDH as it was very close, which did not happen.  Then around noon shorted on BPB of BRN.  Booked once it bounced after closing the gap. Then the upmove was straight up.  Later avoided trading at BRN as price seemed to be getting barbed wire. BOF of LOD/PDC came very late.

Nifty lot size revision


As per SEBI guidelines, NSE is going to increase the lot sizes of stocks and indices. Nifty lot size is getting revised from 25 currently to 75 from November 2015 contract onwards.

Read more about it here

Margin requirement at 10% of the Nifty value of 8400 would be Rs. 63000.

Wednesday, 12 August 2015

12082015



Nifty opened full gap down.  Could not take BPB of PDL as I was late.  Took a trade when it seemed to get resisted at DO/HOD/RN.  Scratched it.  Took the second trade on break of the range low.  Covered when it bounced from BRN.  Was not able to trade afterwards.

Saturday, 8 August 2015

Meet The Real Long Term Investors

Reading the article from http://economictimes.indiatimes.com

They own shares in hundreds of companies. They have held on to them like family treasures — for decades. The long association and huge cache of shares make them influential on Dalal Street. Promoters dread their unwavering gaze. They can turn AGMs into circuses with hard questions

Read more at:  here

 

Friday, 7 August 2015

Free calls from PC to mobile

Unlimited free calls from PC to mobile on iEvaPhone

Few days back I came to know about this site which allows making calls from PC to mobile without any requirement for opening or maintaining an account or sign in or even the details of credit and debit. Free local or international calls can be made using their service.  I thought about sharing this info in case you want to make use of it over the weekend.

Click here to make a free call.


07082015


Today again Nifty traded in the range. In the morning session I thought BRN was the key level and took one trade when price came back above it.  It ended as scratch.  Later could not get any other good setup to trade.

Thursday, 6 August 2015

06082015


Nifty today continued its range-bound move till afternoon, then broke out of it.  I was away when there was BO.  Later got TRAP entry to go long.  Did not gain much as it seemed to reverse from NS BRN.   No other trades.
Please note there is a poll at bottom. 

Wednesday, 5 August 2015

05082015


Nifty broke the PDH in open and traded above it whole day.  Took first trade as BPB of BRN and PDH.  It did not move well. Scratched it.  Then it traded in the narrow range for long time. Took BOF of Range High. Could capture this quick down move to Range Low.

Added a poll at the bottom.  Please take a part.

Tuesday, 4 August 2015

04082015

RBI announcement day today.  Looking at the Big Picture it seems there is a range between PDH and PDL at the top. 


Today's chart,


It seems it traded mostly below the PDL in Range 2 (R2) as marked.

Sunday, 2 August 2015

Ranges & DP's - Another Example

Here is another example demonstrating the ranges (color coded) and DP's (in violet).  Price action involves date 27, 28 and 29 July 2015.

Rang B is stacked below Range A and Range C is below Range B.  Range D and Range E are range envelopes, overlaps.


There always be ranges forming.  What we need to do is to identify them correctly in live market and correlate them with the DP's.

Saturday, 1 August 2015

Ranges & DP's - An example

Here I am posting the real time chart of Nifty to demonstrate how wonderfully the concept of Ranges & DPs help us take trades at the extremes and at the lowest risk.  The chart comprises the price action of three days, 22nd, 23rd, and 24th July 2015.

I have marked the ranges only in the first chart.  Ranges are marked in numbers 1 2 3 etc for uptrend and A B C for downtrend.  Here it is,





Now the chart with ranges and DPs (purple).  I have taken a liberty of few points for drawing some DPs just to demonstrate their correlation with the range extremes.


Always pay attention to ranges and their confluence with DPs to trade at the best possible location.