Thursday, 25 February 2016

MCX Crude OilM 25022016


Ranges develop everywhere.  It does not matter what timeframe or market/instrument you are trading. I was luckily on front of the screen and could take BOF of LOD few minutes bcak. Expecting it to move towards HOD/PDH. Lets see.

This is how I look at it


This is how I look at the picture of wall tiles. Here every tile is like a range for me. There will be a range above the range and there will be a range below it, and prices will keep trading in those ranges.  Trending move is only a continuous breakout from one range to another.  That is the basic structure of the market for me. Here in this picture tiles are of same size.  In reality, in trading the only difference is that we will never know beforehand the size of the range.  But once the market reveals the size and character of the range, we can trade it with the help of DPs.

Share your thoughts about it.  I am very curious to know how exactly you looked at it?


Wednesday, 24 February 2016

How you look at it?


It is just a picture of wall tiles. I want to know what do you actually see there?  Just the tiles or something else?

An architect or a civil engineer will tell you something about it. An artist will say something different about the same. 

What will you say as a DP trader?

I will tell you what I see there when I look at the above picture.  Wait for tomorrow's post. Hold your thoughts till then.

Please keep sharing the posts on social media. It just requires one click.

Nifty Future 24022016


I have marked four potential good trade setups. As a range trader it was really a fun trading today. I remember what Virendra Sehwag replied to a commentator when he scored a triple century against Pakistan in Multan and became the first Indian batsman to score triple, "the ball appeared me like a football and I had no problem hitting it." Something of that sort happened to me today.  Thanks to the great ST sir.

Tuesday, 23 February 2016

Nifty Future 23022016


It turned out to be a type 1 trend day.  Could spot two trade setups.  First was BPB of PDL and BRN and the second one was BOF of Range High.

Monday, 22 February 2016

This is How I trade

Last Saturday I made a video demonstrating how a common trader would trade with the DP tactics.  Now today I recorded my trades live and made a small video demonstrating my trades and how I traded the Nifty. So today I am not posting the chart and I request you to watch the video. These three were all good trade setups, at least that is what I perceived during trading hours.

Always keep in mind "there is no replacement for knowledge, experience, and hard work.  Simply following a trader, asking for tips, and looking for shortcuts is not going to lead you to a successful trading."

Make use of mentoring and video tutorial to acquire required "knowledge and experience."


Watch video of trade 1


Watch video of trade 2 and 3



Saturday, 20 February 2016

Do you trade like this?



Today I have made a small video to demonstrate how a common trader tries to trade without knowing the system or tricks of the trade, and without any discipline and trading rules.  If you are trading this way, I want you to stop trading, spend some time on education and learn the trading. Markets are there forever.

Currently I am working on building an online medium to effectively impart all my knowledge of DP system and trading experience. There will be some sort of price tag attached to it and it will be a step forward in the direction of educating the aspiring traders.  I will make an announcement about it hopefully in next few weeks.

Click here to watch


Understanding Fake Financial Market Advisory Services in India

Today I read this wonderful article on marketcalls website.

In the internet era, it is indeed a tough job to find the right financial market advisory services in the country. The business of proffering advisory services is almost mushrooming everywhere. But if your actually looks closely to it, you will see that none of these businesses have the sound base, without even having a proper website. And the so called Tips Providers starter emerging into Social Media(Facebook, Twitter), Whatsapp, Free Blogger Blogs, Email and SMS based Tips, Tips on Yahoo Messenger.

Here is the link in case you want to read it further.

Friday, 19 February 2016

If You Are A Trader, You Will Relate

When an archer is shooting for nothing . . . he has all his skill.
If he shoots for a brass buckle . . . he is already nervous.
If he shoots for a prize of gold . . . he goes blind; or sees two targets . . . he is out of his mind!
His skill has not changed. But the prize . . . divides him. He cares.
He thinks more of winning than of shooting . . .
and the need to win drains him of power.
– Chuang Tzu, 400 B.C.

If you do not relate, then you are not likely a trader.

Nifty Future 19022016


It opened within yesterday's range.  Could spot two good trade setups.  Both were BOFs as prices remained in the range for most part of the day.

Every reader of this blog is to contribute in sharing the blog posts by clicking on Google 1+, FB and Twitter buttons below the blog posts.

Wednesday, 17 February 2016

Nifty Future 17022016


It opened above PDL but sold off.  There was one good BPB setup to initiate short and another one at minor Range High.

The ongoing volatility has benefited me a lot since I upped my trading size in options. Market is so generous in giving these days that what I used to earn in a month, now can make in a just couple of trades. There is a saying in Gujarati "jyaare laxmi chandlo karva ave tyaare modhu dhova no javai”. that means that when an opportunity knocks the doors of your life, you should not keep your doors remain closed.  Awaiting for the right opportunity and hitting right according to it is a prime important thing. Every trader should aim to take maximum benefit out of these good days.

I urge every reader of this blog to contribute in sharing the blog posts by clicking on Goolgle 1+, FB and Twitter buttons below the blog posts.

I will be back to blogging on weekend.  Happy trading!

Tuesday, 16 February 2016

MCX Crude OilM 16022016


Same price action trade setup at flip as it happened today on NF (4th one).  Holding it with trailing SL at 2004. May cover if it again fails to break PDL.

Nifty Future 16022016


Back to back type 1 trend days, yesterday and  today. It rarely happens.  Today opened at BRN above PDH. There was a quick rejection and gave a BOF as marked. Then there were three other good trade setups as marked, out of which two with-trend setups moved well, especially the last one.

Today was a DP & range trader's delight!


Monday, 15 February 2016

Nifty Future 15022016



It opened full gap up. It gave an opportunity to enter long on one candle pullback after BO of BRN. There were two other long setups at Range Low.

Friday, 12 February 2016

Nifty Future 12022016


It opened gap up within yesterday's range. Marked three potential setups.  First was a mediocre one with the belief that the prices got settled below PDL. Second one was on an exhaustion of CT move at BRN, giving the BOF pattern. Then after that the up move from BRN 6900 happened very swiftly. Then towards the fag end gave nice BOF of DO/HOD.

Thursday, 11 February 2016

Nifty Future 11022016


It opened once again full gap down. Marked two potential short entry setups. There were very few opportunities to enter into the bullet train going south. But markets are like that. Some days it would fed you up a lot and make sure you lose your focus cursing the market it is going nowhere and some days are like this where it would hardly allow you to be a part of and keep you waiting.

Wednesday, 10 February 2016

Tuesday, 9 February 2016

MCX Crude Oil

http://4.bp.blogspot.com/-zcvtkLJ-orQ/UAqGf6Gy3nI/AAAAAAAAAdY/1wYUQxXD4yY/s1600/CRUDE+OIL5.gif 



I have started trading Crude oil mini lot in evening time using DP trading tactics.  I thought about sharing some basic information on it, in case you are thinking about trading it.  It will be very convenient to the aspiring traders to day trade who want to trade but cannot trade due to their current job or business or other commitment during day time.  Here you can plan your day better, finish your work by 5 pm and get in front of the terminal by 5:30 pm and trade. You can trade up to 11:30 pm.
 
Price valuation and importance of Nymex crude and USD INR:

Our MCX market is totally dependent on International market. If in International market Nymex crude or USDINR goes up or down, here in MCX prices of crude oil will go up and down.
Now we will try to calculate the pricing for crude oil here.  Because crude oil is traded as Future in MCX, there will always be a difference of 10 to 30 Rupees between the spot price and future price.
Example:
If USDINR price is Rs. 70 and Nymex crude rate is $40, MCX crude rate will be 70*40=Rs. 2800.
So even if USDINR goes up by 1 Rupees, MCX crude price will be like 71*40=2840. So even a small fluctuation of price in USDINR will have an impact on pricing of MCX crude.

Like this gold, copper, silver, natural gas and other commodities are valued.

Important Data Release affecting prices of MCX Crude oil:


Monday
Around 7.15 p.m.  Chicago PMI

Tuesday
2 p.m- Manufacturing PMI
7.30 p.m.- ISM Manufacturing PMI

Wednesday
Around 8 p.m.- Crude oil Inventory Release

Friday
7.30 p.m.- Canada PMI

PMI data is related to manufacturing products so this will have some impact on Crude oil. Most important data release here is Crude oil inventory release on Wednesday. Prices will be very volatile upon data release. You may opt to wait for the important data release, let the prices get settled and then trade.

Also Europe market open and US market open will have some impact on prices and volatility and ongoing trading there.

Charting:

For Nymex WTI Crude oil chart for 3-minute time frame and EOD chart, click here.

To fetch real-time MCX data and plot a chart on Amibroker for free, click here.

Margin:

There is a Crude oil mini contract on MCX for the benefit of small traders.  The contract specification of Crude oil mini is similar to the existing crude oil contract on MCX. The lot size of a crude oil mini contract is 10 barrels as against 100 barrels for regular future contract. 

Current carry forward margin to trade one lot of mini is around Rs. 2800 and MIS is Rs. 1400 to trade intraday. For regular contract, multiple the same to 10 for current margin requirement.
 
Use this information as a base and explore it further to get more knowledge about it. Hand-holding program will help you trade Crude oil with DP's and ranges.

Monday, 8 February 2016

Nifty Future 08022016


It traded in a range for major part of the day creating a pattern of barbed wire around BRN. Could spot only good setup.

Sunday, 7 February 2016

Don't Be Your Own Enemy


This post is taken from optimusfutures.com where it was originally published. I am reproducing it here with some modifications. 

It is all about how biases mess with traders.

Every trader knows that emotions and psychology play an important role in trading. But the way our thinking influences our trading decisions goes much deeper than the regular talk about fear and greed. Evolution, our upbringings and day to day social interaction requires us to use psychological biases when making decisions; such biases have the goal to protect us and make the decision making process much faster. However, when it comes to trading, such biases can play against you because the way trading works is completely different from what is required in our daily lives.

Outcome bias

Let’s start with the most common bias; the outcome bias suggests that people only judge their actions based on the outcome of an event. When a trader has a winning trade, he made the “right” decision and when he has a losing trade, he made the “wrong” decision.
A trade where you violated all your principles, broke the rules, took too much risk and did not use a stop loss should never be considered “OK”, even if you ended up with a winning trade. Traders which operate in an outcome biased mindset often adopt false thinking which eventually leads to large losses and undisciplined trading.

Bandwagon Effect and Herding

Traders often flock together like sheep and it is especially common in today’s world of social media and constant interactions. Traders who exchange trade ideas with other traders in a forum, a trading chat, or through social media have a greater attachment to their trades. Especially during losing trades, such traders try to come up with reasons why it’s the right thing to stay in the trade even though it has already gone past their stop loss. They then look for other peoples’ opinion to confirm their position.
It’s OK to interact with other traders, but making decisions should be done independently and in private. The trader who asks, “why is it going down?” does not want to know why it’s going down, but he wants confirmation that the bearish move is short-lived and that his long trade is still valid.

Information bias

“More is better” isn’t necessarily true in trading. A trader in a losing position often consults other, starts using trading tools he hasn’t used before or looks for macro figures that could support his trade idea.
Once you have made a trade decision, all further decisions regarding that trade have to be made using the exact same tool-set and principles.

Ostrich effect

Smokers don’t care about the warning signs on their cigarette package enough to stop their deadly habit. The ostrich effect makes us block out negative information if it goes against our behavior; a smoker doesn’t want to feel uncomfortable every time he lights a cigarette.
Traders know that they should not keep adding to a losing position and stop widening their stop loss order. Still, they do it because it helps them avoid the realization of the loss. Staying objective and realistic is important to avoid disasters in trading.

Hindsight bias

After closing a losing trade, do you look for reasons why the trade did not work out? Making adjustments to your trading system on a trade to trade basis always leads to inconsistent results. As the outcome biases suggested, not all losers are bad and have to be avoided; the best setups will fail over and over again.

Recency bias

Risk management and position sizing mistakes are often caused by the recency bias. Traders often judge their trading system and their abilities based on their most recent trades. A trader with 5 winners in a row might get overconfident and a trader in a losing streak is more likely to risk more to make back the losses faster. It’s important to understand that trading is a long-term activity and that over the short-term, your results can undergo swings.

Psychological biases are hard to control or even change; they are engrained into our DNA throughout evolution. Unfortunately, in trading, biases work against us. Thus, you should not try to fight the biases in your trading; instead, start paying more attention to HOW you make your trading decisions and be aware of the voices in your head when you are about to make a trading decision that seems to violate one of your principles.

Friday, 5 February 2016

Nifty Future 05022016


It traded in a narrow range for most part of the day after going up. Could mark two potential setups. If you were not in hurry to book close to other range extreme, hardly anything you could have got. At last when it successfully broke, time had run out.

Thursday, 4 February 2016

Nifty Future 04022016


Opened gap up. Marked three potential trade setups. First one was a bit tricky.  Second one was a good and moved in favor some. Third setup to go long came around 3 pm. It also moved in favor.

Wednesday, 3 February 2016

5 lessons that I learned while daytrading


I have been day trading for last 3 to 4 years; first started as part-time and now a full time.  While day trading, I not only learned the day trading but also a lot about the life overall.

Here is what I learned.

1) It does not matter if a trade(or a day) is good or bad:  I was very miserable during the initial phase once I started day trading. I just focused on trading.  I stopped focusing on being a good husband, a good father, a good anything. I had nightmares. I lost sleep. I prayed almost everyday, God, please make the markets go in my direction today. But nobody answered my prayers.  Then I slowly started realizing good and bad days are bound to happen. Day trading will be the best job in the world on the days I make money and worst job in the world on a bad day. I have no control over it.  Deal it the way it comes.  Ultimately life is about a million little moments that add up to all the things around me.  I cannot let one of those moments have too much control. 
http://blogs.psychcentral.com/wellness/files/2011/08/Learn-How-to-Say-No_full_article_vertical.jpg

2) Say "no": If my trade is not working out, even if my heart wants it to work out, I have to say "no" and cut my losses.  I need to decide every moment if this is the situation I want to be in.  If it is not working out, don't need to put more time and energy into it. We think it is going to work because we have already put time and energy (or money) into it.  But this is just a mental bias. Simply say no to it. 

http://cdn2.hubspot.net/hubfs/83361/calculated_risk_pic.png?t=1449680983023

3) Taking calculated risk:  There are people who take too many risks and go bankrupt and sometimes people are too cautious and don't take enough risks. When I first started day trading, I was so afraid of risk that if I had a small profit, I would end the trade. In short I was afraid of taking the risk.  One fine day it made me realize I can take a risk without any hesitation if  I have a better way to deal with that risk and reduce that risk.  Once I have a method of dealing with the risk and reducing the risk, it is easier to make trades or decisions about anything.

I learned there are only four probabilities in trading once the trade is taken.  It can turn into a i) big loss. ii) small loss. iii) big profit. or iv) small profit. Now I just need to eliminate the big loss as much as possible to remain profitable. Once I do that, small profit will take care of small loss, and I will be left with big profit. This way I developed the right mindset to deal with the risk and take calculated risk.

http://media.tumblr.com/tumblr_mah935KYLM1qglm58.jpg

4) Hoping for something is not going to work: Hoping is not a bad thing. I hope that every day my life goes perfectly.  But if hoping is the only thing I am relying on, then it means I didn’t really look at all the possible outcomes of something that was important to me. For instance, if I plan my daughter's wedding outside and I don't have a backup plan in case it rains, then I probably mis-planned the wedding. If I get to the point where I hope I don't get ruined then I probably did something wrong beforehand.
I hope every time I take the trade that it earns me profit, but I just cannot rely on that.  If it turns out to be a bad trade, I have to accept it and be ready to execute the exit plan.

https://tifwe.org/wp-content/uploads/2013/02/Economic-Uncertainty.jpg

5) Dealing with uncertainty: Uncertainty is not my enemy. It is going to be there and we don't need to worry about it.  I just need to do my work and make sure the uncertainty does not hurt me. That is it.


Nifty Future 03022016


Today after opening full gap down it traded in a narrow range for more than half of the day in a barbed wire pattern. Marked two potential trade setups.  TST setup turned to be very good.

Tuesday, 2 February 2016

Monday, 1 February 2016

Nifty Future 01022016


Today one would have expected range-bound move because of type 1 trend day on Friday and an event upcoming tomorrow. Marked two potential trade setups. Second one did not yield because of channel move.