LOVE SEX AUR DHOKHA, that2in trading.
Absolutely yes my friends. Love sex & dhokha is my new finding in equity trading. Its another matter that this terminology is known as LIMIT, LEVERAGE & LOSSES to us. L8 me try & explain how it goes.......................
L8 us all discuss about d LOVE first :
Le8 us all first try & understand How does share market attracts a common man.No doubt v all got a deep desire 4a quick & easy money n v keep searching all d time 4d same. Media plays a significant role 2make a common man think that share market is an easiest place 2make quick money. well, 2me its a hidden agenda. Hidden agenda of newspapers, business channels, tv analysts ( or ne kind of analysts ), brokerage houses, tips providers,operators, lead managers, FIIS, DIIS, advisory service providers etc etc. This cartel gets benefited only if fresh money keeps kicking in2 share markets as v all know game remains d same only players change. Media plays d role of creating d hype about the rise of already inflated share market with d headlines like " XXX points rise in share markets ", ABC company mcap rose _ _ _ crores in a single day ", " XYZ company investors made rich by !@#$ Crores in a single day ", " IPO lists with XX % premium on first day " etc etc. They all somehow create a scene like this all will keep going like this & share market is never gonna fall . This hype produces a LEFT OUT kind of feeling in a layman , thus making him entering d share market in a hurry without proper guidance, understanding & preparations.
This is how LOVE develops in a common man.
Let name our lay man as pappu. Pappu after establishing share market as a place2 fulfill all his dreams, plans 2start trading. Through all d inadequate information he gets from all d "pappus" around him, he starts searching 4brokers 2start his innings. Following are d points he considers important 4his broker.
1. Brokerage - pappu, in the initial stages of trading thinks lower my brokerage is, higher is my earning . Looks 4a low brokerage broker.
2. Leverage - Pappu always wanted 2hold 10 rs. stock with only 1 rs. in his kitty.As he thinks with a rise of 5 % in a stock his 10 rs. holding can give him a profit of 50 % on his 1 re capital. That s why first thing ( preferred even over d brokerage ) which matters for pappu is leverage. & he would always chose a broker who provides him rich leverage ( even upto 10 X ).
3. Holding period - Pappu dreams, the longer his broker let him hold d stock, more would b his profit. So, d third point matters 4him, is d cycle being facilitated by his broker 2him. It varies from T + 1 to upto T + 7 with broker 2broker. .
4.Tips - With a no no knowledge of share market, pappu always looks 4a broker who can lead him with " ready 2eat " kind of tips, which can fulfill his fancies with ease.
As soon as pappu's hunt 4a broker of his kind finishes he starts trading with a nominal margin amount he has......
This is how Pappu's AFFAIR 2wards share
market starts taking shape...........
P.S. - BEL - forgot 2mention in last post, a handsome 7 % return already, more2come, hold now with a TSL of 1750, conservative keep a sl of 1785
P.S.2 - As this is too long a story that how pappu's love 2wards market turns into SEX & then a DHOKHA, it would be presented before all of you in several episodes.
P.S. 3 - Related articles ( pl go through following relevant write ups also ):
1.-http://stock2gains.blogspot.com/2010/06/what-is-your-trader-type.html
2.-http://stock2gains.blogspot.com/2010/06/why-to-put-stop-loss.html
3.-http://stock2gains.blogspot.com/2010/06/trade-summary-functioning-of-volume.html
Till then HAPPY SAILING.
Om Sai Ram.
Showing posts with label stop loss. Show all posts
Showing posts with label stop loss. Show all posts
Wednesday, July 14, 2010
Tuesday, July 6, 2010
Trade updates !
Hello friends
here is a latest update on my ongoing trades.
UTV SOFT - Agressive stopped out. ( i hope friends remember conservative made money )
IFCI - Conservative tgt completed, booked out. agressive keeps carrying sl 55.5.
BEL - B/o above 1860 ( mentioned in earlier post ) but since conservative & agressive both have a convenience of buying at lower level, i recommend to carry, else conservative can pocket this handsome profit of 5-6 %.
WWIL - Stopped out.
OFSS - Stopped out ( just by 5 rs, but discipline is discipline ).
ABAN - Agressive also stopped out @ 822 ( just 1/2 % above the level where conservative pocketed a handsome 8 % profit )
Indian hotels - Agressive keep carry with a SL of 102, conservatives already had a handsome 4 % profit.
We are gifted with following valuable lessons from above trades. ( learning is an ongoing process. In trading not only failure but successful trades also carry vital lessons )
1. Lesson from UTVSOFT, ABAN, IFCI,Indian hotels - conservative approach has an edge over agressive approach, as conservative gets out with a 4-6 % profit in a shorter time frame, wheareas agressive kept carrying either to stopped out at cost to cost or a profit which is not handsome than conservatives in comparison to time frame they hold.
2. OFSS & WWIL - Even if a volume & price B/O occurs, its worth waiting for a dip to enter to maintain the disciplined approach of making risk reward ratio in our favour, so that even if we stop out, we exit with a minimal loss.
Would like to put up a fact, which is from my heart before my readers.
Data from my sitemeter suggests that my fellow readers keep visiting my blog for an updation. But they would have disappointed for the same. Let me put up valid reasons for the delay in updations.
1. My commitment to the stationery business i own.
2. As i wont let my readers to be indulged into over trading.( its worth having a lesser no. of 4-6 % profit trade rather than numerous other trades to balance our pocketed profit. )
3. My commitment to my readers doesnt allow me to come up with a trade until i see a favourable opportunity.
I hope my readers agree with me & keep co operating.
Dont forget to tune into my blog for a Saibaba Bhajan & most probably with a block buster trade on SAI VAAR.
Till then happy sailing.
Jai sai ram.
here is a latest update on my ongoing trades.
UTV SOFT - Agressive stopped out. ( i hope friends remember conservative made money )
IFCI - Conservative tgt completed, booked out. agressive keeps carrying sl 55.5.
BEL - B/o above 1860 ( mentioned in earlier post ) but since conservative & agressive both have a convenience of buying at lower level, i recommend to carry, else conservative can pocket this handsome profit of 5-6 %.
WWIL - Stopped out.
OFSS - Stopped out ( just by 5 rs, but discipline is discipline ).
ABAN - Agressive also stopped out @ 822 ( just 1/2 % above the level where conservative pocketed a handsome 8 % profit )
Indian hotels - Agressive keep carry with a SL of 102, conservatives already had a handsome 4 % profit.
We are gifted with following valuable lessons from above trades. ( learning is an ongoing process. In trading not only failure but successful trades also carry vital lessons )
1. Lesson from UTVSOFT, ABAN, IFCI,Indian hotels - conservative approach has an edge over agressive approach, as conservative gets out with a 4-6 % profit in a shorter time frame, wheareas agressive kept carrying either to stopped out at cost to cost or a profit which is not handsome than conservatives in comparison to time frame they hold.
2. OFSS & WWIL - Even if a volume & price B/O occurs, its worth waiting for a dip to enter to maintain the disciplined approach of making risk reward ratio in our favour, so that even if we stop out, we exit with a minimal loss.
Would like to put up a fact, which is from my heart before my readers.
Data from my sitemeter suggests that my fellow readers keep visiting my blog for an updation. But they would have disappointed for the same. Let me put up valid reasons for the delay in updations.
1. My commitment to the stationery business i own.
2. As i wont let my readers to be indulged into over trading.( its worth having a lesser no. of 4-6 % profit trade rather than numerous other trades to balance our pocketed profit. )
3. My commitment to my readers doesnt allow me to come up with a trade until i see a favourable opportunity.
I hope my readers agree with me & keep co operating.
Dont forget to tune into my blog for a Saibaba Bhajan & most probably with a block buster trade on SAI VAAR.
Till then happy sailing.
Jai sai ram.
Wednesday, June 30, 2010
Trade summary + functioning of a volume-price trader(VPT)
Hello friends
Its been over a week now that i started blogging. Today being a month end decided to put up a quick summary for trades initiated so far. This will also make my reader familiar with volume-price trader ( VPT ) so that i may not have to put up a detailed following on for all my future trades.
U might find it bit stretched but focused reading is highly recommended.
*** bold & italics --- please pay special attention ***
V started trading with UTV SOFT & Dhanlaxmi Bank.
UTV SOFT ( success, 4 % gain ) - Recommended to buy in a range of 398-395. since it has been trading around that band for more than 2 trading days, then only i assumed that its bought ( i would restrain myself from a BLA BLA kind of attitude if scrips i recommended doesnt provide us an opportunity to buy @ desired levels ). Along with initiation of trade SL( All my trades wud always be given with a SL, most of the times trading SL rather than a sl on closing basis ) & targets ( Always take a pre assumtion that trade initiated on the basis of price to volume are meant to be booked partially if not fully @ appreciation of 4-6 %. )were also given. It tested our patience ( Dont ever let PATIENCE TESTING close the trade untill either a SL is hit or a TGT is met i.e. dont ever let a running trade be intervened by market mood ) staying rangebound for more than 3 trading days ( 396-404 ) but finally broke out & hit a high of 414.75 ( our recommended booking level was 414-416 ). I feel glad that it respected both my levels. Low was exact a 395.25 & high an exact 414.75. Conservative ( conservative VPT trader trades prefer capital preservation over illogical profits ) traders were asked to book, whereas agressive ( agressive VPT trader is a greedy trader, he is ready to give up the lil profit offered by markets to gain higher profits ) traders were suggested to carry with a SL of 398 , then 400 & 401 resp.( This is why trailing is meant for , trailing lets u expect more if scrips overshoot if not at least helps u cut the trade cost to cost. )
2.Dhanlaxmi Bank ( trade not initiated )- Clearly mentioned to initiate a trade only @ 168-169, also mentioned not to buy even @ 168-169 if a high of 177-179 is already made. ( Clarity wud always b there in my recos,i know clarity doesnt augur good for report card of a analyst but i am ready to accept a failure rather than cheating my readers with a " read between the lines " kind of attitude. as my readers' trust is more worthier for me than a brighter report card )
3.Mcdowells ( cut cost to cost ) - It was a short call ( like my mentor Nooresh i find myself uncomfortable with short calls untill more than sure ). & i term it as a success as i was able to let my reader come out of the trade cost to cost.
4.Tech mahindra ( Cut cost to cost ) - That trade was initiated for a quick 15-20 points of a gain in dieing ( a big no no for such trades, i avoid initiating or monitor our positions in initial or dieing minutes of trade ) minutes of the trade . If i recommend such kind of trade, please pre assume that trade has either to be closed if tgt/sl hit or the time ends.
5.Indian hotels ( success, 4 % gains ) - This is a perfect example , what VPT trades for. Volume erupted, b/o happened, we awaited for a certain level( whichever analysis u use, always wait till risk reward ratio comes into your favour, make it a golden rule, ur successes would be more than the failures ) to enter. & booked out @ 4 % ( a conservative VPT places the sell order @ 4 % if a buy is initiated, wheareas a agressive VPT places a sell order of at least a 50 % or more quantity @ 4 % to maintain the comfort level to carry the rest for a bigger target, until da trailing sl hits ).
6. PFC, FED BANK ( Failure, SL hit ) - These both were neither a conservative or agressive trades but a IMPULSIVE trade. & taking lesson ( always keep a trade record of ur failures and successes, this habit lets u not to repeat the same mistakes in ur future trades & boosts ur confidence in testing times ) from the same i have decided to control my impulses ( readers are also suggested the same ) to create wealth for my readers.
Even then these 2 traders were not a complete failures, since we awaited till risk reward ratio comes into our favour ( make urslf a set of rule and always follow it ) before initiating our trades & we not always knew our sl's ( Sl is to trading what contraceptives are to love making ) but also placed them as soon as the buy was initiated.
7.-BEL ( Trade is still on ) - This trade awarded us a label of PATIENT TRADER as we awaited it to come down 8-9 % from a high of 1860 to 1695 ( or we would have avoided it ) to initiate a trade.
8.-Grasim ( Fail , SL hit ) - VPT identified that it has got a supply in the band of 1840-45 and patiently awaited for it to come down to level of 1795 to initiate a trade or rather he would wait for it to cross that resistance band to take position. But we bought it & as a matter of discipline our SL hit.
9. Aban ( most successful VP trade so far, over 10 % gain, that too within specified time period ) - VPT identified a supply @ 760 band, and awaits it to cross this resistance. It gave us ample of opportunity to enter the trade and since it was a B/o we always believed it should not come back into this range ( else we would have squared it off ). Conservative already booked @ 818 ( as disciplined trader the sell order was placed @ 818, our target, as soon as buy was initiated ) & agressive ( always books 50 % @ 4 % or a desired target ) is trailing it with a SL of 822. ( 794 & 807 earlier TSL, it keeps trailing following the share price )
So, what are the inferences drawn from trades so far to describe the characterstics of a volume/price trader :
1. VPT ( volume price trader ) identifies the volume b/o in a stock.
2. If range b/o also happening that is a merit to VPT.
3. VPT awaits to initiate a trade till risk reward ratio comes into his favour.
4. As soon as the buy initiates, VPT places a SL.
5. VPT tries to identify a supply band & places a sell order @ band.
6. If supply band is not identified, conservative VPT places a sell order @ 4 %.
7. Even a Agressive VPT books out 50 % quantity @ 4 %/identified resistance .
8. Agressive VPT trailing sl follows the share price movement.
9. Conservative VPT doesnt mind if scrip overshoots as he has pocketed the desired profits.
10. Agressive VPT doesnt mind to cut the trade cost to cost in expectation of a bigger profit.
11.VPT doesnt let market sentiment intervene to close its running trade before either a SL is hit or target is met.
12.VPT has got a bottom up approach as he believes there is always a bull market everywhere, so he doesnt short untill he is doubly sure.
13.VPT places SL & sell order as planned, moreover he doesnt gets excited during initial and dieing hours of the trade except the planned trades.
This is how a VPT trades & i hope my attempts were sufficient enough to clarify any doubts about volume price trading, even if some doubts are there , my readers are more than welcome to put them up before me. i would try my best to clarify the same. also looking forward for the modifications/criticism suggested from my readers to bring upon mandatory improvment in me not only as a vpt but a blogger and a human being also.
wishing u all the very success in all ur trades.
happy sailing
please find a SAI NATH bhajan in the following link, i hope u people are enjoying it.
http://www.4shared.com/audio/SUfWcM2B/Ab_Samjhe_.html
SAI NARAYAN NARAYAN HARI HARI
P.S. - Why i chose only HAPPY SAILING as my tagline, please answer through comments to speculate. i am sure most of you people wud easily make the right guess.
Its been over a week now that i started blogging. Today being a month end decided to put up a quick summary for trades initiated so far. This will also make my reader familiar with volume-price trader ( VPT ) so that i may not have to put up a detailed following on for all my future trades.
U might find it bit stretched but focused reading is highly recommended.
*** bold & italics --- please pay special attention ***
V started trading with UTV SOFT & Dhanlaxmi Bank.
UTV SOFT ( success, 4 % gain ) - Recommended to buy in a range of 398-395. since it has been trading around that band for more than 2 trading days, then only i assumed that its bought ( i would restrain myself from a BLA BLA kind of attitude if scrips i recommended doesnt provide us an opportunity to buy @ desired levels ). Along with initiation of trade SL( All my trades wud always be given with a SL, most of the times trading SL rather than a sl on closing basis ) & targets ( Always take a pre assumtion that trade initiated on the basis of price to volume are meant to be booked partially if not fully @ appreciation of 4-6 %. )were also given. It tested our patience ( Dont ever let PATIENCE TESTING close the trade untill either a SL is hit or a TGT is met i.e. dont ever let a running trade be intervened by market mood ) staying rangebound for more than 3 trading days ( 396-404 ) but finally broke out & hit a high of 414.75 ( our recommended booking level was 414-416 ). I feel glad that it respected both my levels. Low was exact a 395.25 & high an exact 414.75. Conservative ( conservative VPT trader trades prefer capital preservation over illogical profits ) traders were asked to book, whereas agressive ( agressive VPT trader is a greedy trader, he is ready to give up the lil profit offered by markets to gain higher profits ) traders were suggested to carry with a SL of 398 , then 400 & 401 resp.( This is why trailing is meant for , trailing lets u expect more if scrips overshoot if not at least helps u cut the trade cost to cost. )
2.Dhanlaxmi Bank ( trade not initiated )- Clearly mentioned to initiate a trade only @ 168-169, also mentioned not to buy even @ 168-169 if a high of 177-179 is already made. ( Clarity wud always b there in my recos,i know clarity doesnt augur good for report card of a analyst but i am ready to accept a failure rather than cheating my readers with a " read between the lines " kind of attitude. as my readers' trust is more worthier for me than a brighter report card )
3.Mcdowells ( cut cost to cost ) - It was a short call ( like my mentor Nooresh i find myself uncomfortable with short calls untill more than sure ). & i term it as a success as i was able to let my reader come out of the trade cost to cost.
4.Tech mahindra ( Cut cost to cost ) - That trade was initiated for a quick 15-20 points of a gain in dieing ( a big no no for such trades, i avoid initiating or monitor our positions in initial or dieing minutes of trade ) minutes of the trade . If i recommend such kind of trade, please pre assume that trade has either to be closed if tgt/sl hit or the time ends.
5.Indian hotels ( success, 4 % gains ) - This is a perfect example , what VPT trades for. Volume erupted, b/o happened, we awaited for a certain level( whichever analysis u use, always wait till risk reward ratio comes into your favour, make it a golden rule, ur successes would be more than the failures ) to enter. & booked out @ 4 % ( a conservative VPT places the sell order @ 4 % if a buy is initiated, wheareas a agressive VPT places a sell order of at least a 50 % or more quantity @ 4 % to maintain the comfort level to carry the rest for a bigger target, until da trailing sl hits ).
6. PFC, FED BANK ( Failure, SL hit ) - These both were neither a conservative or agressive trades but a IMPULSIVE trade. & taking lesson ( always keep a trade record of ur failures and successes, this habit lets u not to repeat the same mistakes in ur future trades & boosts ur confidence in testing times ) from the same i have decided to control my impulses ( readers are also suggested the same ) to create wealth for my readers.
Even then these 2 traders were not a complete failures, since we awaited till risk reward ratio comes into our favour ( make urslf a set of rule and always follow it ) before initiating our trades & we not always knew our sl's ( Sl is to trading what contraceptives are to love making ) but also placed them as soon as the buy was initiated.
7.-BEL ( Trade is still on ) - This trade awarded us a label of PATIENT TRADER as we awaited it to come down 8-9 % from a high of 1860 to 1695 ( or we would have avoided it ) to initiate a trade.
8.-Grasim ( Fail , SL hit ) - VPT identified that it has got a supply in the band of 1840-45 and patiently awaited for it to come down to level of 1795 to initiate a trade or rather he would wait for it to cross that resistance band to take position. But we bought it & as a matter of discipline our SL hit.
9. Aban ( most successful VP trade so far, over 10 % gain, that too within specified time period ) - VPT identified a supply @ 760 band, and awaits it to cross this resistance. It gave us ample of opportunity to enter the trade and since it was a B/o we always believed it should not come back into this range ( else we would have squared it off ). Conservative already booked @ 818 ( as disciplined trader the sell order was placed @ 818, our target, as soon as buy was initiated ) & agressive ( always books 50 % @ 4 % or a desired target ) is trailing it with a SL of 822. ( 794 & 807 earlier TSL, it keeps trailing following the share price )
So, what are the inferences drawn from trades so far to describe the characterstics of a volume/price trader :
1. VPT ( volume price trader ) identifies the volume b/o in a stock.
2. If range b/o also happening that is a merit to VPT.
3. VPT awaits to initiate a trade till risk reward ratio comes into his favour.
4. As soon as the buy initiates, VPT places a SL.
5. VPT tries to identify a supply band & places a sell order @ band.
6. If supply band is not identified, conservative VPT places a sell order @ 4 %.
7. Even a Agressive VPT books out 50 % quantity @ 4 %/identified resistance .
8. Agressive VPT trailing sl follows the share price movement.
9. Conservative VPT doesnt mind if scrip overshoots as he has pocketed the desired profits.
10. Agressive VPT doesnt mind to cut the trade cost to cost in expectation of a bigger profit.
11.VPT doesnt let market sentiment intervene to close its running trade before either a SL is hit or target is met.
12.VPT has got a bottom up approach as he believes there is always a bull market everywhere, so he doesnt short untill he is doubly sure.
13.VPT places SL & sell order as planned, moreover he doesnt gets excited during initial and dieing hours of the trade except the planned trades.
This is how a VPT trades & i hope my attempts were sufficient enough to clarify any doubts about volume price trading, even if some doubts are there , my readers are more than welcome to put them up before me. i would try my best to clarify the same. also looking forward for the modifications/criticism suggested from my readers to bring upon mandatory improvment in me not only as a vpt but a blogger and a human being also.
wishing u all the very success in all ur trades.
happy sailing
please find a SAI NATH bhajan in the following link, i hope u people are enjoying it.
http://www.4shared.com/audio/SUfWcM2B/Ab_Samjhe_.html
SAI NARAYAN NARAYAN HARI HARI
P.S. - Why i chose only HAPPY SAILING as my tagline, please answer through comments to speculate. i am sure most of you people wud easily make the right guess.
Sunday, June 27, 2010
What is your trader type ?
Trader type ???????? ( now, what the hell is this )
Yes friends, trader type.
Its very important to know what type of trader u r before u start ur trading.Its exactly like knowing ur destination before u start a journey. Just like u start a journey u prepare a hell lot of you to make sure that the journey remains safe,pleasant and insulated from an unexpected accident. Same is the case in trading. But in a journey by chance if u meet some unfortunate accident, u might find some unexpected external help. But in trading my friend, under such conditions one and only one thing which is gonna help you or rather save you & that is ur own preparations. And to prepare yourself as a trader, u must know what type of trader you are.
Now, in share market, there remains as many type of traders, as you would find a dishes in a wedding menu. This consists of Scalpers, swing traders, momentum traders, investors, PE players, intraday traders, momentum traders, arbitrage players, value buyers, & many more. But its u and only u, who have to decide who you are.
The reason being you are starting your trading journey with the limited resources & moreover limited CAPITAL you have, in competition to the bunch of traders who are well equipped with their trading tools in hunt of your hard earned money.B coz money is the same, u cant be all type of traders with the limited capital u have. Under such condition( without setting yourself your trader type ) u end up losing your capital ( thus ur confidence ) bit by bit by bit trying to be a scalper, intra day trader, momentum trader, swing trader, bargain hunter at a same time. u want all the profits out there. So, first of all friends, know what your goal is...........
Now, let me introduce u with the tools a trader require on the trading battle field:
1. Broker - Not only cheaper brokerage rates but more than that our relations with our broker in case of a market swing againgst our leverage positions matter most.
2. Trading terminal - Faster & real time rate changes + quick & prompt services in case of a break up
3. P.C. - Faster & proper configurations
4. Telecommunications sources - Mobile, landline, ISP and quality of their services.
5. Power back up - Many a time a loss arise due to market swing against our positions during 30-60 minutes of a power break is more than the cost of a power back up equipment.
6. Charting tools - they must be easy to understand, renowned & highly reliable ( as our trading decisions are associated with them )
7. Source - u select for share market related news.
These all above being external factor there are some internal factors also which affects your trading style.
1. Your physical fitness ( it seems silly but mind u it matters )
2. Your frame of mind ( any doubt about this )
3. Your approach ( most important aspect )
4.-Discipline as a trader ( Your only saving grace in this jungle )
5.-Quality of the capital infused ( You must exactly know the strength of your capital, as its firmly believed that not only for investment but for trading purpose also only those portion of your capital should be used which is not required for a certain timeframe.)
6. Your risk apetite - Its a very old say " Its not important that how much u earn, but how much u r willing to loose."
I hope i have communicated my message appropriately before all of you , if not let me know through your comments so that i may improve in my coming posts and also if u would want me to change my way of expressing as my readers are whom for i am putting up my write ups.
In my next write up i would try to put some limelight on the importance of trading discipline, trading approach, till then HAPPY SAILING.
Dont forget to tune up every thursday morning for a wonderful Saibaba Bhajan right here.
SABKA MAALIK EK
Yes friends, trader type.
Its very important to know what type of trader u r before u start ur trading.Its exactly like knowing ur destination before u start a journey. Just like u start a journey u prepare a hell lot of you to make sure that the journey remains safe,pleasant and insulated from an unexpected accident. Same is the case in trading. But in a journey by chance if u meet some unfortunate accident, u might find some unexpected external help. But in trading my friend, under such conditions one and only one thing which is gonna help you or rather save you & that is ur own preparations. And to prepare yourself as a trader, u must know what type of trader you are.
Now, in share market, there remains as many type of traders, as you would find a dishes in a wedding menu. This consists of Scalpers, swing traders, momentum traders, investors, PE players, intraday traders, momentum traders, arbitrage players, value buyers, & many more. But its u and only u, who have to decide who you are.
The reason being you are starting your trading journey with the limited resources & moreover limited CAPITAL you have, in competition to the bunch of traders who are well equipped with their trading tools in hunt of your hard earned money.B coz money is the same, u cant be all type of traders with the limited capital u have. Under such condition( without setting yourself your trader type ) u end up losing your capital ( thus ur confidence ) bit by bit by bit trying to be a scalper, intra day trader, momentum trader, swing trader, bargain hunter at a same time. u want all the profits out there. So, first of all friends, know what your goal is...........
Now, let me introduce u with the tools a trader require on the trading battle field:
1. Broker - Not only cheaper brokerage rates but more than that our relations with our broker in case of a market swing againgst our leverage positions matter most.
2. Trading terminal - Faster & real time rate changes + quick & prompt services in case of a break up
3. P.C. - Faster & proper configurations
4. Telecommunications sources - Mobile, landline, ISP and quality of their services.
5. Power back up - Many a time a loss arise due to market swing against our positions during 30-60 minutes of a power break is more than the cost of a power back up equipment.
6. Charting tools - they must be easy to understand, renowned & highly reliable ( as our trading decisions are associated with them )
7. Source - u select for share market related news.
These all above being external factor there are some internal factors also which affects your trading style.
1. Your physical fitness ( it seems silly but mind u it matters )
2. Your frame of mind ( any doubt about this )
3. Your approach ( most important aspect )
4.-Discipline as a trader ( Your only saving grace in this jungle )
5.-Quality of the capital infused ( You must exactly know the strength of your capital, as its firmly believed that not only for investment but for trading purpose also only those portion of your capital should be used which is not required for a certain timeframe.)
6. Your risk apetite - Its a very old say " Its not important that how much u earn, but how much u r willing to loose."
I hope i have communicated my message appropriately before all of you , if not let me know through your comments so that i may improve in my coming posts and also if u would want me to change my way of expressing as my readers are whom for i am putting up my write ups.
In my next write up i would try to put some limelight on the importance of trading discipline, trading approach, till then HAPPY SAILING.
Dont forget to tune up every thursday morning for a wonderful Saibaba Bhajan right here.
SABKA MAALIK EK
Wednesday, June 23, 2010
THANK YOU ALL + trade updates
I am actually overwhelmed by the visits, wishes mentioned and moreover responses towards my initiation to blogging.
THANKS ALL OF U.
Its specially an honour having I Lango sir, Javed sir, Nandi sir, Jagmohan sir visited my blog within 24 hours of its initiation.
And its only due to all of u that i am really feeling responsible towards posting anything on my blog. Blogging is a huge responsibility as u really dont know how many people would have followed u. And all of u guys have realized me about this responsibility.
This weekend i would be posting an article about my trading experience , style and my approach to trading.
For the meantime please find follow ups for the trades shared by me
1.Dhanbank- did not initiated.
2.UTV SOFT- trade initiated, volumes not encouraging, moreover is making LH & LL pattern. If hold delivery, put a SL of 394.90 on a trading basis if conservative trader OR a trading sl of 389.90, if an agressive trader. Moreover tomorrow look forward towards a volumes>25000 @ NSE before 11.30 am, if not, dont hesitate to wind up ur positions.
3.MCDOWELLS - Since trade was initiated for intraday only, i hope people would have offloaded their positions 2day itself. If somebody had taken a positional stand, humble request, please dont convert ur intraday positions into positional untill and unless specified, be it suggested by anybody.Now please strictly follow a SL of 1281, and if opened gap up above 1281 unwind the trade immediately.
4.Tech mahindra- since it was an impulsive trade, and was taken for intraday only, i assume, trade has been sqaured up cost to cost again 2day itself.
I have been asked a question by Ushabalaji asking about how to place a stop loss on trading terminal. I really feel a pleasure to reply to this question.
We take 2 types of trades, either long trade or short trade. Now different trading terminals have different ways to put Sl. Here i am mentioning about odin diet.
1. If a long trade has been taken, we got to place a selling SL. For example, if today u would have taken a long trade, i.e. u bought UTV soft@ 396.50, putting a SL of 393.90 means, as soon as it trades below 394 ur bought positions would be squared off.
to put a SL for long trades, u got to hit sell button on ur terminal. On the first tab, there are options of RL=regular trade, SL = Stop loss. When u buy , u choose RL, but while putting a trade for SL, please make selection for SL. Put desired quantity. But, a lil difference in putting a RL and a SL. While putting a RL u got to put only a BUY PRICE u want to buy, but while putting a SL, u also get to put a Trigger price also. So, in first place , put ur trade price i.e. in our case it is 393.90, and then trigger price which is lower to the trade price u would have put. If 393.90 is a SL price, trigger price can be anything lower to 393.90, i.e. either a 393.50 or 393 or 392 or even 391. The difference between SL price and trigger price varies from trader to trader. I prefer to put a difference of at least 1/2 % of share price, so as to it doesnt jump while triggering it. So in my case, trigger price would be at least a 392.50. now my SL price is 393.90 & trigger price is 392.5. That indicates whenever UTV soft dips and trades below 394 my trade would be squared of if a buyer is there between 392.50-393.90. This is how SL is placed.
2. Now in SHORT trade, take example of MCdowells, we shorted it means we sold it @ 1273. now putting a SL @1281 means if it trades above 1281 our sold position would be bought.
For placing a SL for shorted position , we got to place a buying SL. Simply put a BUY order, and instead of selecting RL in the first tab, select SL. follow the above procedure, put in no. of shares in quantity, then put a sl price as 1281. Now a lil differnce, in case of a SHORT trade, since sl placed would be a buying SL. so the trigger price this time would be a value higher than 1281, in my case i would put a trigger price of 1287.
So, ushabalaji, this is how SL is placed on a trading terminal.
Sorry friends, u all might actually find it silly to answer the above question this much in details, but i thought since this kind of minute information is not available everywhere, so taking chance, assuming it might be a help for my readers. Thanks for ur patient READING.
Shri sadguru sainath maharaj ji ki jai.
Leaving u guys with a Saibaba bhajan , since today is a SAI vaar.
http://www.4shared.com/audio/00OjzqTb/ab_too_hi_dekhe_bhale.html
THANKS ALL OF U.
Its specially an honour having I Lango sir, Javed sir, Nandi sir, Jagmohan sir visited my blog within 24 hours of its initiation.
And its only due to all of u that i am really feeling responsible towards posting anything on my blog. Blogging is a huge responsibility as u really dont know how many people would have followed u. And all of u guys have realized me about this responsibility.
This weekend i would be posting an article about my trading experience , style and my approach to trading.
For the meantime please find follow ups for the trades shared by me
1.Dhanbank- did not initiated.
2.UTV SOFT- trade initiated, volumes not encouraging, moreover is making LH & LL pattern. If hold delivery, put a SL of 394.90 on a trading basis if conservative trader OR a trading sl of 389.90, if an agressive trader. Moreover tomorrow look forward towards a volumes>25000 @ NSE before 11.30 am, if not, dont hesitate to wind up ur positions.
3.MCDOWELLS - Since trade was initiated for intraday only, i hope people would have offloaded their positions 2day itself. If somebody had taken a positional stand, humble request, please dont convert ur intraday positions into positional untill and unless specified, be it suggested by anybody.Now please strictly follow a SL of 1281, and if opened gap up above 1281 unwind the trade immediately.
4.Tech mahindra- since it was an impulsive trade, and was taken for intraday only, i assume, trade has been sqaured up cost to cost again 2day itself.
I have been asked a question by Ushabalaji asking about how to place a stop loss on trading terminal. I really feel a pleasure to reply to this question.
We take 2 types of trades, either long trade or short trade. Now different trading terminals have different ways to put Sl. Here i am mentioning about odin diet.
1. If a long trade has been taken, we got to place a selling SL. For example, if today u would have taken a long trade, i.e. u bought UTV soft@ 396.50, putting a SL of 393.90 means, as soon as it trades below 394 ur bought positions would be squared off.
to put a SL for long trades, u got to hit sell button on ur terminal. On the first tab, there are options of RL=regular trade, SL = Stop loss. When u buy , u choose RL, but while putting a trade for SL, please make selection for SL. Put desired quantity. But, a lil difference in putting a RL and a SL. While putting a RL u got to put only a BUY PRICE u want to buy, but while putting a SL, u also get to put a Trigger price also. So, in first place , put ur trade price i.e. in our case it is 393.90, and then trigger price which is lower to the trade price u would have put. If 393.90 is a SL price, trigger price can be anything lower to 393.90, i.e. either a 393.50 or 393 or 392 or even 391. The difference between SL price and trigger price varies from trader to trader. I prefer to put a difference of at least 1/2 % of share price, so as to it doesnt jump while triggering it. So in my case, trigger price would be at least a 392.50. now my SL price is 393.90 & trigger price is 392.5. That indicates whenever UTV soft dips and trades below 394 my trade would be squared of if a buyer is there between 392.50-393.90. This is how SL is placed.
2. Now in SHORT trade, take example of MCdowells, we shorted it means we sold it @ 1273. now putting a SL @1281 means if it trades above 1281 our sold position would be bought.
For placing a SL for shorted position , we got to place a buying SL. Simply put a BUY order, and instead of selecting RL in the first tab, select SL. follow the above procedure, put in no. of shares in quantity, then put a sl price as 1281. Now a lil differnce, in case of a SHORT trade, since sl placed would be a buying SL. so the trigger price this time would be a value higher than 1281, in my case i would put a trigger price of 1287.
So, ushabalaji, this is how SL is placed on a trading terminal.
Sorry friends, u all might actually find it silly to answer the above question this much in details, but i thought since this kind of minute information is not available everywhere, so taking chance, assuming it might be a help for my readers. Thanks for ur patient READING.
Shri sadguru sainath maharaj ji ki jai.
Leaving u guys with a Saibaba bhajan , since today is a SAI vaar.
http://www.4shared.com/audio/00OjzqTb/ab_too_hi_dekhe_bhale.html
WHY to put a STOP LOSS
Many a traders feel themselves quite uncomfortable while putting stop losses, due to their several infavourable experiences in their past trades or due to their own reasons ( why to book loss, SL's are seen across all terminals and meant to hit, we would keep deliveries if trade goes against us, cumm on i know its gonna bounce back into my favour ETC ETC. )
But, stop loss is the most favourable tool of a trader. Believe me its meant for u.
Its there to save ur capital for next favourable trade, if ur current trade goes against u.
There are two ways to trade in share markets.
To trade long
or
To trade short ( in FNO stock)
just putting few examples before u, what would have happened in SL would have not been placed in following trades.
1. Go through RDB industries yest. it fell more than 50% on a single day, i.e. if u would not have put a SL while taking long trade, u would have lost half of ur capital.
2.Go through RNRL on 22jan. 2008, it fell more than 50 % from its intraday high.
3.RELCAPITAL on 22nd jan. 2008, made a high of 1912 & a low of 1311, with a close of 1824, down 4 % odd. just think of a buyer @ 1912 & a short seller @ 1311 without a SL.
4.Check out WWIL on 4 rth feb. 2009, with a low of 9.70, made a high of 19.58. Just think of a short seller @ 10rs. or a buyer @ 19 rs.
5. Hexaware on 12 th feb. 2009, with a low of 20rs. and a high of 42rs.
Similarly u would find many such examples of eroison of 50% or more on a given single day of a trader's capital.
And then these examples also show that even u were on a right direction in above trades, u would have exited early to loose all the extravagant profits which would have been pocketed by you, if u had a disciplined approach in ur trades.
That is called trailing stop loss, if u would have trailed ur profit in above trades if they were in right directions you would have doubled your capital on a single day.
One more thing, i would wanna add is that, all of above trades seems to be result of deleveraging of a leveraged trader's position. So, leveraging at the same time , has got a sharp advantage, it has got huge disadvantage also. So, at least avoid leveraging unless u r very very sure about ur direction and positions in a trade. But, even if u r fond of a leverage and very sure about ur positions, u should always keep a valid SL for your trades.
All i mean to say is that SL's and Trailing Sl's are meant to preserve a trader's capital and hence his confidence and existence in share market. So, even if u r not comfortable to put a stop loss or a trailing sl, u should keep monitoring ur trades on ur own screen so as to get rid of ur trades as early as it signals an exit. But if u can not remain on screen u should and always keep a valid stop loss on all your trades, be it a intraday, positional or a investment trade always.
Bcoz in this huge jungle of share market u really dont know which scrip turns out to be a WWIL or a RNRL or a REL CAPITAL or a HEXAWARE or a RDB INDUSTRIES on a given day .
So, better safe than sorry my friends after all its ur money who is being followed by smart people out there.
HAPPY SAILING.
JAI SAIRAM
But, stop loss is the most favourable tool of a trader. Believe me its meant for u.
Its there to save ur capital for next favourable trade, if ur current trade goes against u.
There are two ways to trade in share markets.
To trade long
or
To trade short ( in FNO stock)
just putting few examples before u, what would have happened in SL would have not been placed in following trades.
1. Go through RDB industries yest. it fell more than 50% on a single day, i.e. if u would not have put a SL while taking long trade, u would have lost half of ur capital.
2.Go through RNRL on 22jan. 2008, it fell more than 50 % from its intraday high.
3.RELCAPITAL on 22nd jan. 2008, made a high of 1912 & a low of 1311, with a close of 1824, down 4 % odd. just think of a buyer @ 1912 & a short seller @ 1311 without a SL.
4.Check out WWIL on 4 rth feb. 2009, with a low of 9.70, made a high of 19.58. Just think of a short seller @ 10rs. or a buyer @ 19 rs.
5. Hexaware on 12 th feb. 2009, with a low of 20rs. and a high of 42rs.
Similarly u would find many such examples of eroison of 50% or more on a given single day of a trader's capital.
And then these examples also show that even u were on a right direction in above trades, u would have exited early to loose all the extravagant profits which would have been pocketed by you, if u had a disciplined approach in ur trades.
That is called trailing stop loss, if u would have trailed ur profit in above trades if they were in right directions you would have doubled your capital on a single day.
One more thing, i would wanna add is that, all of above trades seems to be result of deleveraging of a leveraged trader's position. So, leveraging at the same time , has got a sharp advantage, it has got huge disadvantage also. So, at least avoid leveraging unless u r very very sure about ur direction and positions in a trade. But, even if u r fond of a leverage and very sure about ur positions, u should always keep a valid SL for your trades.
All i mean to say is that SL's and Trailing Sl's are meant to preserve a trader's capital and hence his confidence and existence in share market. So, even if u r not comfortable to put a stop loss or a trailing sl, u should keep monitoring ur trades on ur own screen so as to get rid of ur trades as early as it signals an exit. But if u can not remain on screen u should and always keep a valid stop loss on all your trades, be it a intraday, positional or a investment trade always.
Bcoz in this huge jungle of share market u really dont know which scrip turns out to be a WWIL or a RNRL or a REL CAPITAL or a HEXAWARE or a RDB INDUSTRIES on a given day .
So, better safe than sorry my friends after all its ur money who is being followed by smart people out there.
HAPPY SAILING.
JAI SAIRAM
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