WELCOME TO THE WORLD OF TRADING, A WONDERLAND OF ALICE - Mahindeesh (a) Sathish: 2010-10-17

Thursday, October 21, 2010

DEVILISH THURSDAY FOR INDIAN MARKET?

FROM AN EXPERIENCE

As traders try to improve performance, the one piece of knowledge that is often overlooked, is self-knowledge. Most traders would benefit by simply focusing on doing more of what works and less of what doesn’t, which sounds obvious, but the reality is that most do just the opposite. Learning to identify which behaviors work and which don’t is not as fun or interesting as learning a new trading strategy or set-up.; and awareness of one’s internal state is just as critical, but that is typically not dealt with. As a result, most traders focus outward and ignore their inner process. And the way this often plays out for a trader is they trade their emotions and not the market.
Every winner needs to master three essential components of trading; a sound individual psychology, a logical trading system and good money management. These essentials are like three legs of a stool – remove one and the stool will fall, together with the person who sits on it. Losers try to build a stool with only one leg, or two at the most. They usually focus exclusively on trading systems. Your trades must be based on clearly defined rules. You have to analyze your feelings as you trade, to make sure that your decisions are intellectually sound. You have to structure your money management so that no string of losses can kick you out of the game.”

-If you are hesitating to take a position, that indicates a lack of confidence that is not necessary. Just get into the position and PLACE A STOP. Day Traders lose money in positions everyday. Keep them small. The confidence you need is not in whether or not you are right, the confidence you need is in knowing you will stick to your stop no matter what. Therefore you can actually alleviate this hesitancy to pull the trigger by continually sticking to your stops and reinforcing this behavior.

-You want to own the stock before it breaks out, then sell it to the momentum players after it breaks out. If you buy breakouts, realize that professional day traders are handing off their positions to you in order to test the strength of the trend. They will typically buy it back below the breakout point which is typically where you will set your stop when you buy a breakout. (In case you ever wondered why you get stopped out on a lot of failed breakouts).

-Embracing your opinion leads to financial ruin. When you find yourself rationalizing or justifying a decline by saying things like, “They are just shaking out weak hands here,” or “The market makers are just dropping the bid here,” then you are embracing your opinion. Don’t hang onto a loser. You can always get back in.

-Professional day traders focus on limiting risk and protecting capital. Amateur traders focus on how much money they can make on each trade. Professionals day traders always take money away from amateurs traders.

-In the stock market, heroes get crushed. Averaging down on a losing position is a “heroic move” that is akin to Superman taking a spoonful of Kryptonite. The stock market is not about blind courage. It is about finesse. Don’t be a hero.

(to be contd)

TODAY’S DAY TRADING STRATEGY

OF NIFTY FUTURES – OCT 21

Strong Resistance exists between 6088-96

If trades above 6000 a hike upto 6033-48-61

is possible on cards.

Otherwise,

A slide upto 5954-36-25 is for sure after breaching 5982

Final support @ 5910

BANK NIFTY

Buy btwn 12288-308

T1 – 12339-55

T2 – 12365-71-91

Sell btwn 12222-202

T1 – 12170-54

T2 – 12144-38-18

Nifty, Bank Nifty levels and intraday news updated here gives astonishing success rate (more than 95%) that is more than enough for the readers to attain a decent profit daily.

To mint much more money pls subscribe our service and

enjoy daily market with our guidance.

Thank you.

SHORT TERM TRADERS CAN EXIT FROM ALL YOUR LONG POSITIONS AND NO BUYING IN ANY STOCKS

SHARE TIPS TODAY

Sell HDFC @ 693.4

T1 – 688

T2 - 682

Sell JINDALPOLY @ 1132

T – 1122

Sell SBIN @ 3090

T1 – 3080

T2 – 3070

Sell TATASTEEL @ 610

T – 604

WHY SHOULD FOLLOW THE TREND?

It is a statistically valid concept to have a “bias” in the otherwise random drift or a series of numbers.

It is as simple as Newton’s Law of Physics, a body in motion tends to stay in motion, a body at rest tends to stay at rest. A trend is nothing more than a momentum in a series of price movements.’

The markets only allow a few people to make money, and the majority of traders, regardless of what they might think, or say, do not know how to do it correctly (trend following).

The markets exhibit maximum perversity. This means that the trends will only come about after most of the people have lost most of their money and have already given up in disgust. Then, when they do come, and nobody believes it anymore, eventually these people have to start chasing the market, and that’s what makes the trend continue.

TRADING MISTAKES

1. Refusing to define a loss.

2. Not liquidating a losing trade, even after you
have acknowledged the trade’s potential is greatly
diminished.

3. Getting locked into a specific opinion or

belief about market direction.

From a psychological perspective this is equivalent

to trying to control the market with your expectation

of what it will do: “I’m right, the market is wrong.”

4. Focusing on price and the monetary value of a
trade, instead of the potential
for the market to move
based on its behavior and structure.

5. Revenge-trading as if you were trying get back
at the market for what it took away from you.

6. Not reversing your position even when
you clearly sense a change in market direction.

7. Not following the rules of the trading system.

8. Planning for a move or feeling one building, but
then finding yourself immobilized to hit the bid or
offer, and therefore denying yourself the opportunity
to profit.

9. Not acting on your instincts or intuition.

10. Establishing a consistent pattern of trading
success over a period of time, and then giving
your winnings back to the market in one or two
trades and starting the cycle over again.

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MESSAGE TODAY

Art is a jealous mistress.

-RALPH WALDO EMERSON, Conduct of Life

RELAX CORNER

JUST SMS TO YOUR PAL

Keep the school clean ... stay home!
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Wednesday, October 20, 2010

WELCOME WEDNESDAY

FROM AN EXPERIENCE

Have you ever experienced doing well for a period of time and then something just snaps and you end up losing a significant amount of money? It happens in a variety of ways and for different reasons, but what typically follows is a self beating-up process, and/or a promise that you will never do THAT again!

Sound familiar? It’s a very common phenomenon.

Unfortunately, the promise you make to yourself typically gets broken again…and again…..and again. As the pattern continues, the potential for more psychological damage becomes very real.

Over many years as a clinical psychologist people have come to me who are struggling with repetitive problem behaviors. Many of them previously tried various forms of ‘willpower’ without any long-lasting success.

As a trading psychology coach and consultant I can tell you that most traders see the solution as an act of willpower or “trying harder next time”. But I have news for you. Although willpower is certainly necessary to be a good trader, it alone will not break a deeply rooted problematic pattern. If it was simply a matter of ‘doing it differently next time’, then many traders would of already done that and the pattern would never appear again.

So, how does one break the pattern? I suggest that the ‘promise’ you make to yourself is not only about willpower, but also a promise to learn about what makes you tick, such as your emotions and your sub-conscious process.

If we look into some of the characteristics of profitable traders, we notice....

They are experienced – Probably the most horrifying and worst myth shot out to anyone considering trading for a living is that you will compound millions in an extremely short amount of time. The only true way to make every day profitable comes through experience, and countless hours learning is crucial to longevity of success.

They know the damage they are capable of – Notice I didn’t say potential or profits here. The best traders I know of understand their limits, and seem to focus more on what can go wrong than what can go right. They are not easily convinced of lucrative outcomes, and have a very high sense of self-awareness.
They trade to make money, not to be right – They understand the strengths and possible pitfalls of what it is they do for a living, and use that knowledge to curb their emotional output.
They have an edge and know how to use it – They understand that without it they wouldn’t last long
They have a gameplan, and follow it explicitly – Each trade is planned and opportunities are scouted for before any trading takes place. They steer away from the killer of all killers: overtrading.
They manage risk – Regardless of how much conviction they have on a trade, they will still do what they can to avoid the potential of any losses and understand rule #1 about trading: anything can happen.
They work obsessively – They follow each turn, each piece of info that comes out in regards to their trade, and follow any underlying information relevant to failure or success.
They only access the best information – Information rules in trading, and having some of the best translates to money. Using the wrong information leads to failure.
They think about the trade, not the money behind it – Focusing on money can destroy your means to objectively assess the trade itself.
They are constantly learning – Just when you think you know it all about trading, a new curveball gets thrown your way, not to mention there are continued means and methods to be learned about making money. Even the most highly successful trader I ever knew, a multi-billion dollar portfolio manager, has a team of fundamentalists and technicians come in to train and retrain himself and his traders.
They are active – Activity sparks creativity, a very crucial part of trading.
They have patience – They understand that the money will come, but everything needs to be in place, first.

ADVANCE-DECLINE LINE -- MYSTERY ??

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

TODAY’S DAY TRADING STRATEGY

OF NIFTY FUTURES – OCT 20

Strong resistance between 6141-52 for now.

If trades above 6042 for 15 minutes

Watch a hike upto 6058-78-92

If 6090 is crossed with good volumes

see more hike upto 6111-6122

Otherwise, if breached 6001 watch a non-stop slide upto

5981-71 & even more upto 5955-40 in panic with

volumes.

BANK NIFTY

Buy btwn 12299-319

T1 – 12352-68

T2 – 12379-85-406

Sell btwn 12231-11

T1 – 12177-68

T2 – 12151-44-23

Nifty, Bank Nifty levels and intraday news updated here gives astonishing success rate (more than 95%) that is more than enough for the readers to attain a decent profit daily.

To mint much more money pls subscribe our service and

enjoy daily market with our guidance.

Thank you.

SHARE TIPS TODAY

Sell BANKINDIA @ 518.70

T1 – 515

T2 - 511

Sell BHARTIAIRTEL @ 326.75

T – 323.75

Sell BHEL @ 2499

T – 2489

WHAT IS DISCIPLINE?

A day trader should leave no room for fear and greed to take over, otherwise, this will be the key to your losses. A good trader should be disciplined, make discipline a habit, and act in accord with trading systems/strategies. You can do your trade in a consistent and reliable manner this way. Certain situations require an individual to make decisions based on their pre-set criteria and parameters.

You should make it a point to habitually follow your trading system/plan. When you’re making trading decisions, don’t let your emotions rule you. A day trader should always be disciplined, and once you attain your objective, leave the market first. Oftentimes people plunge in deeper because they are influenced by greed and fear.

There are also day traders who are quite reluctant to lose money. For instance your stock goes down,and you’re still hoping that after some time it will rise again. And to your surprise, the share price goes further down. If only you were not reluctant to lose money, you could have sold it the first time its price went down, and prevent further loss.

Day traders need to make fast executions and confirmations of the trade, so you must have a fast internet connection. They also need to receive and deliver quotes, news, and other pertinent market data. A fast internet connection allows you to make your day trading in a timely fashion. If you’re serious with your day trading. You would need hardware and software requirements to put a sufficient platform at home for online trading.

You can practice through simulated trading before using real money. Here you can incorporate all your trading techniques and see if they actually work. Don’t be a scared to lose a certain amount of money. But it doesn’t mean that you should not limit your losses. Most importantly, you should learn from your past losses. Becoming a day trader is a simple thing. But in any case it requires dedication, time and effort. You will reap profits that you’ve never imagined, if you are able to put all of these things together.

WHAT ASTROLOGY SAYS THIS WEEK?

Free Daily and Weekly Stock Market Prediction

and Forecast for October 2010 : 18th October 2010 to 22nd October 2010

Planetary position during October 2010
Sun will transit from Libra sign.
Mercury will transit from Libra sign.
Venus will transit from Libra sign, Venus would retrograde.
Moon will transit from Aquarius and Pisces sign.
Mars will transit from Libra and Scorpio sign.
Rahu will transit from Sagittarius.
Jupiter will transit from Pisces. Jupiter will retrograde.
Saturn will transit in Virgo.
Ketu will transit in Gemini.

Stock Market Prediction for 20th October 2010

Transiting Moon will be passing through Pisces Zodiac sign. Transiting Moon will be in applying aspect with Transiting Jupiter, which indicates Market may volatile during first trading session, but as sessions progress, Market may gradually go up, at the same time some profit booking would be seen at higher levels. Market may go up between 10:38 and 11.10. Market would gradually go up during last trading session.

Disclaimer

On repeated requests of the readers this astral prediction is started.

Traders are advised to attain some technical knowledge before they get into trades anyway

-EDITOR

WATCH IT GUYS

This AEI seminar from last week is highly worth watching on the next wave of the financial crises as it ripples through currencies, mortgage markets, and the banking system.