Archives of “January 8, 2019” day

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Advance Decline -Line and the Mystery

  
Analysis, Education

What the hell behind the AD-line which keeps on declining continuously for more than a year in this rising market? If you check the NSE stock most of them are either moving sideways or trending downwards only the Nifty 50 pack is moving up rest are still in the silent mode. What could be a possible reason for this kind of action. Definitely it doesn’t sounds like euphoria in the market. But market is moving upside in rotational trading fashion.

 

Think it over………..In need of Comments from Intelligent Traders,Investors & Readers

Updated at 12:43/19th Oct/Baroda/India

Mark Douglas : Trading in the Zone

  
  Education
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Without doubt the foremost reading, it seems, in trading circles. Douglas’ book, in my view, deserves its place at the top of a traders reading list. Whether you are trading currencies, commodities, stocks or futures this book will have something for everyone. The book tackles the psychology involved in being a successful trader. The book attempts to give the reader the tools to develop the Confidence and discipline to become and consistent winner.

I think the book is a superb read and although I cannot say right now how succesful it has been, it is one of the few books that I pick up nearly every day and read another chapter again and remind myself of some of Douglas’  inspiring ideas and thoughts.

The book ends with a great 20 trades learning excercise that is a must.

The key learnings I get from reading this book :

1)The market is random; you cannot predict it. Unless you know every individual who has a position in the market and you know their strategy for each trade it is impossible to know what will happen next.Give up trying to predict, and focus on the now moment and managing yourself , your money and your strategy.

2)The Power of Association. Douglas uses throughout the book a story about a boy and his fear of  dogs. He uses this analogy to describe how previous experiences that have given pain, or expected pain, to us will mean that our mind will do everything possible to protect itself from future pain when it is exposed to similar circumstances at some point again in the future. i.e. If you recognise a market pattern where previously you lost a trade you will be compelled to exit the trade at that point or not take that trade on; because you will not want to experience pain. Douglas again talks about the here and now and describes how we can overcome these internal obstacles.

101%….Don’t miss to Read this Book !!!!

A FAIR APPROXIMATION FOR A SUCCESS FORMULA

  
  Education

A fair 
approximation for a success formula would be:

  1. Pursue multiple sources of well-being and success;
  2. Express those through activities that bring favorable returns with minimal wear-and-tear;
  3. Stay flexible and rebalance your life periodically as needs and circumstances change.

In other words, life success requires savvy asset management. It’s not about pouring yourself into the next big opportunity or going with a consensus flow. Rather, success hinges upon deeply understanding the factors that create returns and finding the right expressions and blendings of these.

Life is more than a succession of unconnected trades. At its best, life is a portfolio of investments that generate positive and meaningful returns. That can only happen, however, if we take the reins and thoughtfully manage our life’s assets.

10 Bad Habits of Traders

  
  Education
  • Give up your need to be right: The market is always right, do not strive to be right in your predictions and opinions. Strive to go with the flow of the market.
  • Give up control: No matter how long you watch a live stock stream, you have no power over the movements. Save your emotional energy by not trying to cheer on your positions and get wrapped up in every price tick.
  • Give up blaming other factors for your losses: There is no mysterious ‘They’ causing you to lose money. Your choices cause you to lose money, or your system just had a losing trade. It is a free country and free market.
  • Give up beating yourself up for losing trades: If you followed your trading plan, then there should be zero regrets involved in a losing trade. If you did not follow your plan and lost, then money was the tuition and you paid  to learn the lesson. You must move on to the next trade. 
  • Give up your own opinions: If you took a trade based on your own opinion, you have to give up your opinion and get out if the trade moves to a place that proves you were wrong.
  • Give up your inability to change your mind: The more you believe a trade just can’t miss, the more dangerous it is. It will cause you to trade too big and stay in too long. You have to always be ready to be wrong.
  • Give up your past trades: Each trade is a new trade. Do not hold grudges against stocks and think they ‘owe’ you for past losses. Do not fall in love with a stock and hold it as it falls lower and lower.
  • Give up letting your trading define your self worth: Do not let your trading define you. Diversify your life with friends, family, hobbies, and other interests. It is not healthy to become overly obsessed with the markets.
  • Give up on losing trades quickly when your stop is hit: Your best trades will be the ones that are profitable from the start. If they immediately go against you, be prepared to be stopped out. You can destroy your trading account when you start the “It will come back, I just have to wait” chant in the midst of a death spiral.
  • Give up on price targets let your winners run as far as they will go: In the right market conditions trends can go on to unbelievable levels. The big wins during these trends can make your entire career. If you set a predefined profit target, you will not miss the opportunity when it comes. Let a trailing stop take you out.

Instead of giving up on the markets, give up on these bad habits instead.

10 Trading Thoughts

  
  Education
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1. You only have three choices when you are in a bad position, and it is not hard to figure out what to do:
(1) Get out
(2) Double up, or
(3) Spread it off.

I have always found getting out to be the best of all three choices.

  1. No opinion on the market or you are doubtful about market direction? Then stay out. Remember, when in doubt, stay out.
  2. Don’t ever let anyone know how big your wallet is, and don’t ever let anyone know how small it is either.
  3. If you snooze, you lose. Know your markets, when they trade, and what reports will affect the market price.
  4. The markets will always let you in on the losers; the market’s job is to keep you out of winners. Dump the dogs and ride the winning tide.
  5. Stops are not for sissies.
  6. Plan your trade, then trade your plan. He who fails to plan, plans to fail.
  7. Buy the rumor and sell the fact. Watch for volatility in these situations; it usually marks tops or bottoms in the markets.
  8. Buy low, sell high. Or buy it when nobody wants it, and sell it when everybody has to have it!
  9. It’s okay to lose your shirt, just don’t lose your pants; that is where your wallet is.

One last thought to leave with you. It applies not only to every-day life but to trading the markets as well:
Success is measured not so much by the wealth or position you have gained, but rather by the obstacles you have overcome to succeed!

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