FROM AN EXPERIENCE
“Good judgment comes from experience, and experience comes
from bad judgment.”
-Barry Le Platner
All beginning traders lack one key ingredient for success:
experience.
Experience is simply exposure to a particular activity over an
extended period of time. Good judgment is a by-product of
experience and is necessary for success in all areas of life, from
driving, cooking, golf, to surgery, etc, as well as, you guessed it,
stock and options trading.
We can sum it up as follows:
EXPERIENCE = TIME + SPECIFIC ACTIVITY = GOOD JUDGMENT
Unfortunately, very few beginning traders have enough “education”
money to succeed at trading because good judgment requires that a
person remain focused on a specific activity long enough to draw
sound conclusions. In other words, good judgment is based on trust
in the specific activity without doubting its overall effectiveness.
A very good example is riding a bike. Once you learn to ride,
you do not have to relearn to ride again as your judgment takes
over and you trust yourself to balance, steer, brake, etc. without
having to really think about doing it. The activity itself becomes
automatic. Same with driving a car. After a while, you do not have
to think about braking, looking in your mirrors, utilizing turn
signals, etc. Driving a car becomes automatic. Good judgment
becomes automatic.
Beginning traders usually lack sound judgment because
1) they do not focus on a specific activity;
2) they do not focus on an activity for an extended period of time
(and I do not mean a few days); and
3) they do not trust themselves enough to arrive at a good,
sound conclusion about their trading method since the test
period is inadequate.
So, how long does it take for a trader to become successful enough
to practice sound judgment?
DEPENDS ON WHETHER OR NOT YOU WANT TO
DRIVE A CAR OR FLY A 747
There is much debate over how long it takes for a trader to move
from the “newbie” level to the “professional” level
(by which I mean moving from losing money to making money on
a consistent basis).
The answer really depends on the initial approach: do you want to
learn to fly a 747 or would driving a car do? In other words,
would you want your education to take an extended period of time
(and money) as you try to learn everything there is to learn about
the Market (impossible) or would you prefer the simple approach?
Remember: good judgment is based on a specific activity over an
extended period of time. You can control the experience (=time)
by focusing on a specific activity. By focusing on a specific activity
you can shorten the learning curve. It is completely up to you.
My one idea for shortening the learning curve? Keep it simple right
from the start with a set of simple rules for entering and exiting
(at a profit AND loss) the market. Period! This is much like the
trading experiment from the early 1980s known as the Turtle
Experiment as outlined in Curtis Faith’s book Way of the Turtle.
I won’t go through the details here but suffice it to say that this
experiment took a few people with a specific set of rules and made
traders out of them (and a lot of money!).
The best part: the training only took a few weeks! Why?
Because the Turtle Trading System focused on a specific set of
rules (activity) over an extended period of time and provided the
traders the self trust to make sound judgments!
nce achieved the trading became automatic.
Traders like to think that they only need to be accountable to
themselves in order to get the best out of their trading.
But it has been my experience that most traders fail miserably
at this task. So why are traders not able to do this?
They do not want to:
Be wrong
Admit that they are changing their rules
Face up to the fact that they do not have good rules
Realize that they need psychological help
Realize that they do not have what it takes
If you are committed to doing whatever it takes to follow your
rules to reach a higher level of profit, you should consider asking
someone to help you with this task if you are not doing a good job
of it yourself.
Who could take on the role of a trader’s accountability?
A significant other
A friend
A trading buddy
A teacher
A coach
What would a person need to help you be more accountable?
A clearly defined set of rules from you
Your commitment to telling the truth to them
An accounting of the trades you took
Why you think the trades you took were good opportunities
The risk/reward ratios before the trade
The money management procedure you followed
Whether or not you followed your rules
The lessons you learned
And at the four month periodical review, the changes you would
make and why
Reward or punishment
There should be a clearly defined predetermined punishment or
reward that both of you agree upon for not following your rules.
Here are some examples of punishments or rewards to consider.
Punishment
No trading the rest of the day
Walk around the block before taking the next trade
Twenty push ups
Limit the size of your trades for the rest of the week
Rewards
Ten percent of every good trade will go into a rewards account
for you
A food or entertainment treat
Time with a special friend
Any – my favorite, a black tie party
Conclusion
When you make yourself accountable in trading to someone else,
you activate that part of you that has already been
programmed for accountability.
In doing this you will be more accountable to yourself.
OUR SUCCESS STORY AND FORECAST IN NIFTY
Dear friends, traders,
At first we predict exactly the corrective wave (6338-5178)
of NIFTY SPOT upto 5916 at the beginning of this year itself..
Exactly on our predicted month (6th of APRIL 2011) Nifty
touches 5944 crossing our 5916 target
Not only that….
Exactly at the last week of APRIL and at the beginning of
MAY (when Nifty was trading between 5900 & 5800 levels)
we wrote Nifty is going to slide upto 5471 and 5380 and by
the first week of the month (MAY) our subscribers are boldly
advised to enter into PUT OPTIONS
(Even some operators mock us @ that time)
But what happened you all know..
Exactly before two days (of the contract expiry) on MAY 23rd
Nifty touches 5380 level and every (operator's) laugh turned into
great howling…
Our subscribers holding 5500, 5400, 5300 PUTS were on
money rain by the end of the contract (as usual)
After that Nifty reaches 5329 and had a small bounce back
for 200 pts and slides upto 400 pts from
5605 to 5196.
(EVEN THIS WE PREDICTED 2 WEEKS
BEFORE THE MOVEMENT EXACTLY –
Refresh your thoughts or
browse older posts pls)
SO, NOW WHAT WILL HAPPEN IN NEAR FUTURE…?
After all this happenings now Nifty is showing a bounce back
(like) movement from 5196
(like) movement from 5196
But still we insist not to believe the movement as a BULLS Ride.
MARK MY WORDS
Bulls will enter into the show only after 2-3 consecutive closes
above 5605 – Remember this point –
This is not going to change every day
SO NOW WHERE DO WE EXPECT THE RESISTANCES
OR TARGETS IN FORTHCOMING SESSIONS AND WHAT
ARE ALL THE POINTS THAT FAVOUR BEARS..?
PLS MAKE A NOTE OF ALL THESE ATTAINABLE
LEVELS OF NIFTY SPOT IN YOUR DIARY,
GIVEN BELOW
5482-97 – 5527 – 5545 – 5570 – 5593
Keep in mind - Each & every level mentioned here favour
bears for short
TODAY’S TRADING STRATEGY
OF NIFTY FUTURES – JUNE 27
Good intraday support @ 5395 & 5375
Strong resistance @ 5501
If trades above 5474 for 5-10 minutes, we can see
a sure hike upto 5500
After decisively crossing 5502 it goes
upto 5527-5543
If 5543 too broken with good volume,
see more upto 5560-76
Suppose if cuts 5473 and trades below for 15 minutes
a non-stop slide upto 5437-30-20 is possible
If breaks 5420, see more slid upto 5404-5395
Below 5395, it tends to touch 5375
SHARE TIPS TODAY (JUNE 27th)
1) Sell BEL @ 1546.50
T – 1531.50
2) Sell JINDWORLD @ 169.50
T – 167.10
3) Sell CONCOR @ 1067.75
T – 1055.80
Disclosure:
1. Stoploss levels, reverse trades are exclusively to the subscribers.
2. Solely I have all the rights to stop this free tips
at any moment.
Subscribe as soon as possible and earn more.
Join hands with us and enjoy pals.
INDIAN GOLD AND SILVER IMPORTS
SURGE BY 500% IN MAY
India’s heretofore “insatiable” appetite for precious metals will
need to find a new adjective to describe it, after it surged by an
absolutely unprecedented 500% in May MoM, and 222% compared
to May of 2010, touching on a massive $8.96 billion in imports in
the past month. Putting this number in perspective the yearly
average Indian imports are about $22 billion: in one month the
country will have imported about half its average quota for the year!
And while inflation may have much to do with it, events like the
Sensex flash crash from last night certainly are not helping matters:
“The gold story is puzzling” added financial analyst A S Kirolar.
“Consumers are shying away from stocks and bonds and heading
to safe assets like gold and real estate, but one cannot understand
this given the meagre 12% growth in imports of petroleum and oil
products.” Granted demand is not just at the retail level as ever
more institutions are buying up gold: “Analysts maintained that
India’s central bank, the Reserve Bank of India’s decision to grant
licenses to seven more banks to import bullion has helped push up
demand. Karur Vysya Bank, State Bank of Bikaner and Jaipur,
State Bank of Hyderabad , Punjab and Sind Bank,
South Indian Bank, State Bank of Mysore
State Bank of Travancore were added to the list.
As of the start of 2011, some 30 banks in India
granted permission to import gold and silver. Jewellers are getting
easy supplies which is also helping push up demand.
Moreover, the flow of scrap is also expected to fall from a yearly
average of 200 tonnes, which could again boost imports,
underlining the insatiable appetite of the Indian consumer.”
Add ongoing Chinese demand for PMs, and one can see why
calls for an imminent gold crash absent a global deflationary vortex
are largely overblown.
-‘Mineweb’has more….
“Even as inflation and a widening trade deficit to $15 billion in May
continues to weigh on the minds of Indian investors, the demand
for fresh gold has continued to grow. This is very confusing,
especially when one sees it against the backdrop of a 400% rise
in the value of the rupee over the last decade,” said bullion analyst
Anand Patnaik with a brokerage firm.
released trade figures. India
at a scorching pace of 54% mainly due to rising oil prices and a
surge in gold imports.
The country’s imports have jumped to $40.9 billion, which has
resulted in the gap between imports and exports widening to
$15 billion – a 67% increase which is the largest since August 2008,
prompting the government authorities to caution that India
deficit for 2011-12 could touch a record $145-150 billion.
Minister Sharma pointed out that exports of iron ore were down
given the ban on exports imposed by the country. Imports in pearls
and precious stones, however, have risen 24.6% to $ 5.20 billion,
gold and silver by 222% to $ 13.5 billion and iron and steel by
13% to $ 1.80 billion, he said.
But the true cause of this endless demand is and always will be
the threat of central bank hijacked purchasing power :
“People in India
said Rajesh Shukla of the centre for Macro Consumer Research.
Noting that Indians tend to use gold as a hedge against inflation,
Shukla said this would be partly responsible for the spike in imports.
He added that high imports reflected a strong demand for the yellow
metal, despite the weakening of the rupee.
The Indian rupee fell to its lowest in three weeks on Monday
weighed down by losses in domestic shares and the euro, with
dollar demand from oil companies also adding pressure.
“Bidding from oil companies is keeping the rupee lower.
All of last week, the rupee depreciated. Hiking of key interest
rates has further weakened the rupee,” said a forex dealer at a
national bank.
And that’s merely the anchor for current gold prices at over
$1500 even as stocks continue to sink. Once the Fed announced
Operation Twist 2 either on Wednesday, or in one or two month’s
time, the PM complex will explode, reaching $2000 in no time
whatsoever.
REAL ESTATE CoS SYSTEMATICALLY
FUDGING LAND PRICE TO AVAIL
BANK LOANS
Alarmed by inflated valuations of real estate properties for the
purpose of loans, the Reserve Bank of India (RBI) has asked all
banks to submit an action-taken report on the issue.
The matter was raised last week by RBI Governor D Subbarao
during a meeting of the Board for Financial Supervision (BFS).
After this, top RBI officials met representatives of the banking
industry earlier this week. The regulator reminded bankers about
the prudential norms on valuation of assets and asked them to
follow these in both letter and spirit.
Sources close to the development said the sharp spurt in such
cases pointed to a nexus between independent valuers appointed
by banks and a section of real estate developers. “RBI has come
across a high incidence of such frauds in recent times while
reviewing the annual financial inspection reports of banks.
As a result, the matter was taken up by BFS and the governor
wanted the issue to be addressed on a priority basis,” said a
banking industry official.
BFS was formed in 1994 in the wake of the Harshad Mehta scam.
Its objective is to undertake consolidated supervision of the financial
sector comprising commercial banks, financial institutions and
non-banking finance companies. BFS, which meets once a month
and discusses annual financial inspection reports and various issues
related to the sector.
The sources said banks were “reminded” that valuation agencies
indulging in such practices could be blacklisted. They were advised
to share the names of the blacklisted agencies with each other.
Such frauds affect banks when they have to liquidate a property
due to a loan default. During liquidation, it is often found that the
value of the property is far less than what was mentioned when the
loan was sanctioned. RBI has noticed frequent occurrence of such
incidents.
Confirming the development, Indian Banks’ Association (IBA) CEO
K Ramakrishnan said RBI discussed the issue with them.
“IBA has shared RBI’s concerns with the member-banks.
We have assured RBI that banks will exercise caution while
evaluating assets.”
According to a note by Macquarie India
the commercial real estate segment have increased from 1.6 per cent
to 2.3 per cent in the past one year. The absolute level of such loans
rose 70 per cent last year, particularly for state-owned banks.
In October, RBI raised the risk weightage on residential housing
loans of Rs 75 lakh and above, to 125 per cent and capped the loan
to value ratio at 80 per cent.
GUESSING OF TRADING
Trading is based on our
hypothesis. In other words trading
amounts to our educated
guesses, which means the more
you invest in your education,
the more likely you are to find
yourself on the right side of the
trade. One of the most widely
overlooked parts of trading
education by traders is the
study of past charts.
I make personal videos, so that
like a football team I can review
my plays and create better
strategies.
Your chart will tell you almost every thing you need to know to
get on the right side of the trade. The one thing it doesn’t tell you
is what is going on behind the scenes and it will even give you a
hint to that most of the time.
Your bullish/bearish ENGULFING patterns are evidence that
there are some secrets that the market keeps to itself.
Mastering your candlestick psychology, your support/resistance,
and your trendlines are things that you want to major on and learn
well. You may not win every trade, but having a firm foundation
on these simple techniques can greatly increase your odds of a
successful trade. I think the more simple your charts, the better
and easier it is for you to enter a good trade.
Sometimes you will have the perfect trade set up and all of your
analysis will be right and you will find yourself on the wrong side
of the trade. No big deal, it happens to all of us, review that trade
and see if you can identify the error. When you have reviewed it,
look for the next trading opportunity.
There is NO PERFECT TRADING STRATEGY!!!!!!!
This is only a guessing game for those of us who like to play
the odds. The better your education, the better your odds
will be against the house.
MESSAGE TODAY
The only thing we have to fear is fear itself--nameless, unreasoning,
unjustified terror which paralyzes needed efforts to convert retreat
into advance.
- FRANKLIN DELANO ROOSEVELT
RELAX CORNER
JUST SMS TO YOUR PAL
A flea and a fly flew up in a flue.
Said the flea, "Let us fly!"
Said the fly, "Let us flee!"
So they flew through a flaw in the flue.
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