Monday, September 29, 2014
HAVE A ROCKING MONDAY
BUILDING THE PERFECT MASTER PLAN
What are the components of a good trading plan? Here are 10 essentials that every plan should include:
Skill Assessment
Are you ready to trade? Have you tested your system by paper trading it and do you have confidence that it works? Can you follow your signals without hesitation? Trading in the markets is a battle of give and take. The real pros are prepared and they take their profits from the rest of the crowd who, lacking a plan, give their money away through costly mistakes.
Mental Preparation
How do you feel? Did you get a good night's sleep? Do you feel up to the challenge ahead? If you are not emotionally and psychologically ready to do battle in the markets, it is better to take the day off - otherwise, you risk losing your shirt. This is guaranteed to happen if you are angry, hung-over, preoccupied or otherwise distracted from the task at hand. Many traders have a market mantra they repeat before the day begins to get them ready. Create one that puts you in the trading zone.
How do you feel? Did you get a good night's sleep? Do you feel up to the challenge ahead? If you are not emotionally and psychologically ready to do battle in the markets, it is better to take the day off - otherwise, you risk losing your shirt. This is guaranteed to happen if you are angry, hung-over, preoccupied or otherwise distracted from the task at hand. Many traders have a market mantra they repeat before the day begins to get them ready. Create one that puts you in the trading zone.
Set Risk Level
How much of your portfolio should you risk on any one trade? It can range anywhere from around 1% to as much as 5% of your portfolio on a given trading day. That means if you lose that amount at any point in the day, you get out and stay out. This will depend on your trading style and risk tolerance. Better to keep powder dry to fight another day if things aren't going your way.
How much of your portfolio should you risk on any one trade? It can range anywhere from around 1% to as much as 5% of your portfolio on a given trading day. That means if you lose that amount at any point in the day, you get out and stay out. This will depend on your trading style and risk tolerance. Better to keep powder dry to fight another day if things aren't going your way.
Set Goals
Before you enter a trade, set realistic profit targets and risk/reward ratios. What is the minimum risk/reward you will accept? Many traders will not take a trade unless the potential profit is at least three times greater than the risk. For example, if your stop loss is a rupee loss per share, your goal should be a Rs 3/- profit. Set weekly, monthly and annual profit goals in rupees or as a percentage of your portfolio, and re-assess them regularly.
Before you enter a trade, set realistic profit targets and risk/reward ratios. What is the minimum risk/reward you will accept? Many traders will not take a trade unless the potential profit is at least three times greater than the risk. For example, if your stop loss is a rupee loss per share, your goal should be a Rs 3/- profit. Set weekly, monthly and annual profit goals in rupees or as a percentage of your portfolio, and re-assess them regularly.
Do Your Homework
Before the market opens, what is going on around the world? Are overseas markets up or down? Are index futures such as the Nifty or Sensex exchange-traded funds up or down in pre-market? Index futures are a good way of gauging market mood before the market opens. What economic or earnings data is due out and when? Post a list on the wall in front of you and decide whether you want to trade ahead of an important economic report. For most traders, it is better to wait until the report is released than take unnecessary risk. Pros trade based on probabilities. They don't gamble.
Before the market opens, what is going on around the world? Are overseas markets up or down? Are index futures such as the Nifty or Sensex exchange-traded funds up or down in pre-market? Index futures are a good way of gauging market mood before the market opens. What economic or earnings data is due out and when? Post a list on the wall in front of you and decide whether you want to trade ahead of an important economic report. For most traders, it is better to wait until the report is released than take unnecessary risk. Pros trade based on probabilities. They don't gamble.
Trade Preparation
Before the trading day, reboot your computer(s) to clear the resident memory (RAM). Whatever trading system and program you use, label major and minor support and resistance levels, set alerts for entry and exit signals and make sure all signals can be easily seen or detected with a clear visual or auditory signal. Your trading area should not offer distractions. Remember, this is a business, and distractions can be costly.
Before the trading day, reboot your computer(s) to clear the resident memory (RAM). Whatever trading system and program you use, label major and minor support and resistance levels, set alerts for entry and exit signals and make sure all signals can be easily seen or detected with a clear visual or auditory signal. Your trading area should not offer distractions. Remember, this is a business, and distractions can be costly.
Set Exit Rules
Most traders make the mistake of concentrating 90% or more of their efforts in looking for buy signals, but pay very little attention to when and where to exit. Many traders cannot sell if they are down because they don't want to take a loss. Get over it or you will not make it as a trader. If your stop gets hit, it means you were wrong. Don't take it personally. Professional traders lose more trades than they win, but by managing money and limiting losses, they still end up making profits.
Most traders make the mistake of concentrating 90% or more of their efforts in looking for buy signals, but pay very little attention to when and where to exit. Many traders cannot sell if they are down because they don't want to take a loss. Get over it or you will not make it as a trader. If your stop gets hit, it means you were wrong. Don't take it personally. Professional traders lose more trades than they win, but by managing money and limiting losses, they still end up making profits.
Before you enter a trade, you should know where your exits are. There are
at least two for every trade. First, what is your stop loss if the trade goes
against you? It must be written down. Mental stops don't count. Second, each
trade should have a profit target. Once you get there, sell a portion of your
position and you can move your stop loss on the rest of your position to break
even if you wish. As discussed above, never risk more than a set percentage of
your portfolio on any trade.
Set Entry Rules
This comes after the tips for exit rules for a reason: exits are far more important than entries. A typical entry rule could be worded like this: "If signal A fires and there is a minimum target at least three times as great as my stop loss and we are at support, then buy X contracts or shares here." Your system should be complicated enough to be effective, but simple enough to facilitate snap decisions. If you have 20 conditions that must be met and many are subjective, you will find it difficult if not impossible to actually make trades. Computers often make better traders than people, which may explain why nearly 50% of all trades that now occur on the New York Stock Exchange are computer-program generated. Computers don't have to think or feel good to make a trade. If conditions are met, they enter. When the trade goes the wrong way or hits a profit target, they exit. They don't get angry at the market or feel invincible after making a few good trades. Each decision is based on probabilities.
This comes after the tips for exit rules for a reason: exits are far more important than entries. A typical entry rule could be worded like this: "If signal A fires and there is a minimum target at least three times as great as my stop loss and we are at support, then buy X contracts or shares here." Your system should be complicated enough to be effective, but simple enough to facilitate snap decisions. If you have 20 conditions that must be met and many are subjective, you will find it difficult if not impossible to actually make trades. Computers often make better traders than people, which may explain why nearly 50% of all trades that now occur on the New York Stock Exchange are computer-program generated. Computers don't have to think or feel good to make a trade. If conditions are met, they enter. When the trade goes the wrong way or hits a profit target, they exit. They don't get angry at the market or feel invincible after making a few good trades. Each decision is based on probabilities.
NIFTY FUTURES UPDATE (SEP 29)
Last week Nifty Futures made a high of 8057, low of 7897 and closed @ 8033
If trades above 8030 for 20 minutes
see an
intraday hike upto 8068-87
Suppose if trades below 8028 (without
touching 8050)
for 20 minutes
See an intraday slide upto 7995 – 80
A GAP DOWN OF 30-40 POINTS EXPECTED TODAY
INTRADAY RESISTANCES @ 8069 – 88
INTRADAY SUPPORTS @ 7991 – 75
Trade carefully with the time and levels
ALL THE BEST
(By the time this post was updated
S&P CNX Nifty Futures was trading @ 7989)
இன்றைய சந்தை அடிப்படை
(செப் 29)
இந்திய நேரப்படி இன்று மாலை 7:30 மணியளவில் வெளிவர
இருக்கும் அமெரிக்க நாட்டின் மீத வீட்டு விற்பனை (மாதாந்திர அறிக்கை) மற்றும் அதன்
முகப்பு விவரங்கள் சந்தையில் முக்கியத்துவம் வாய்ந்ததாகக் கருதப்படுகிறது!
National Association
of Realtors வெளியீட்டின்படி சென்ற மாதம் 3.3 சதவிகிதமாக வெளியான தகவல் இம்முறை -௦.6%
ஆக குறைந்து வெளியாகுமென அனுமானிக்கப்படுகிறது!
புள்ளிகள் அதிகமாக
வெளியாகும் பட்சத்தில் டாலர் மற்றும் கச்சா எண்ணெய் வலுப்பெற்று தங்கம் சரிய ஏதுவாகும்!
சந்தையில் இன்று தங்கம்,
கச்சாஎண்ணெய், இயற்கை எரிவாயு, வெள்ளி மற்றும் காப்பர் அதில் கவனமாக
செயல்படவேண்டிய நேரம்....... 7:30 – 8:05 PM
வெல்க!
DISCLAIMER
THE RECOMMENDATIONS MADE HERE DO NOT CONSTITUTE AND OFFER TO SELL OF A SOLICITATION TO BUY ANY OF THE SECURITIES/COMMODITIES OF ANY OTHER INSTRUMENTS WHATSOEVER MENTIONED. NO REPRESENTATIONS CAN BE MADE THAT THE RECOMMENDATIONS CONTAINED WILL BE PROFITABLE OF THAT THEY WILL NOT RESULT IN LOSSES. READERS USING THE INFORMATION CONTAINED HEREIN ARE SOLELY RESPONSIBLE FOR THEIR ACTIONS. SURFING OR USING ‘tradersharmony.blogspot.com' DEEMS THAT THE SURFER ACCEPTS AND ACKNOWLEDGES THE DISCLAIMERS AND DISCLOSURES.THE INFORMATION PUBLISHED ARE FOR EDUCATIONAL AND INFORMATIVE PURPOSE ONLY AND THE USER/READERS SHOULD TAKE ADVICE OF HIS/HER ADVISER BEFORE TAKING ANY DECISION FOR BUYING, SELLING OR OTHERWISE DEALING WITH SECURITIES/COMMODITIES OR ANY OTHER INSTRUMENT WHATSOEVER.
Friday, September 26, 2014
DOLLAR HOLDS NEAR 4-YEAR HIGHS AS YIELD ADVANTAGE LURES FUNDS
The dollar held near a four-year
high against a basket of major currencies on Friday, and further gains looked
likely for the US currency as it boasted its the biggest yield advantage over
the euro in 15 years.
The dollar index is on track for its
11th successive weekly rise, a feat it hasn't achieved in four decades, as
investors prepare for an eventual rate hike in the United States
The European Central Bank and the
Bank of Japan, in contrast, are seen as likely to offer more stimulus to
support their flagging economies in coming months.
"At the moment, the economy
with strong business sentiment is that of the United States
The dollar index stood at 85.136, little
changed from late US
The yield premium US Treasuries
offer over German Bunds stood near 15-year highs on Thursday as markets weighed
the prospects of US
High bond yields tend to attract
more fund inflows as bond investments account for a big chunk of international
capital flows.
The euro traded at $1.2758, having
fallen to a 22-month low of $1.26955 on Thursday, breaking below an important
support around $1.2750 from triple bottoms hit in March-July 2013, pointing to
the chance of further declines.
The common currency also slumped to
a two-year low against the British pound on Thursday, falling as low as 77.855
pence . It last stood at 78.105.
Against the yen, it dropped to 138.43
yen in early Friday trade, its lowest level in two weeks.
The yen recovered slightly as a
sharp fall in Wall Street shares on Thursday sapped risk appetite and drove
demand for the safe-haven Japanese currency.
The dollar stood at 108.61 yen, having
lost a bit of momentum after hitting a six-year high of 109.46 yen a week ago.
The Australian dollar was another
casualty of the broad US dollar gains, trading at $0.8795, just above Thursday's
low of $0.8774 - a level not seen for nearly eight months.
The New Zealand
The kiwi traded at $0.7948, near a
trough of $0.7912 hit on Thursday, when the Reserve Bank of New Zealand
Subscribe to:
Posts (Atom)