FROM AN EXPERIENCE
1. THE CALM STATE
If there is an emotional state associated with successful trading,
it is the antithesis of excitement. Based on his observations, Faulkner
stated that exceptional traders are able to remain calm and detached
regardless of what the markets are doing. He describes
Peter Steidlmayer’s response to a position
that is going against him as being typified by the thought,
“Hmmm, look at that.” Basso also talks directly about the benefits
of a detached perspective in trading: “If instead of saying,
‘I’m going to do this trade,’ you say,
‘I’m going to watch myself do this trade,’ alt of a sudden you find
that the process is a lot easier.”
2. IDENTIFY AND ELIMINATE STRESS
Stress in trading is a sign that something is wrong. If you feel stress,
think about the cause, and then act to eliminate the problem.
For exam-ple, let’s say you determine that the greatest source of
stress is indeci-sion in getting out of a losing position. One way to
solve this problem is simply to enter a protective stop order every
time you put on a position.
I will give you a personal example. One of the elements of my job is
providing trading recommendations to the traders and operators.
This task is very similar to trading, and, having done both, I believe
it’s actually more difficult than trading. At one point, after years
of net profitable recommendations, I hit a bad streak. I just couldn’t
do anything right. When I was right about the direction of the
market, my buy recommendation was just a bit too low
(or my sell price too high).
When I got in and the direction was right, I got stopped
out-frequently within a few ticks of the extreme of the reaction.
I responded by developing a range of computerized trading programs
and technical indicators, thereby widely diversifying the trading
advice I provided to the firm. I still made my day-to-day subjective
calls on the market,
but everything was no longer riding on the accuracy of
these recommendations. By widely diversifying the trading-related
advice and information, and transferring much of this load to
mechanical approaches, I was able to greatly diminish a source of
personal sires and improve the quality of the research product in
the process.
3. PAY ATTENTION TO INTUITION
As I see it, intuition is simply experience that resides in the
subconscious mind. The objectivity of the market analysis done by
the con-scious mind can be compromised by all sorts of extraneous
considerations (e.g., one’s current market position, a resistance to
change a previous forecast). The subconscious, however, is not
inhibited by such con-straints. Unfortunately, we can’t readily tap
into our subconscious thoughts. However, when they come through
as intuition, the trader needs to pay attention. As the anonymous
trader in Zen and the Art of Trading expressed it, “The trick is to
differentiate between what you want to happen and what you know
will happen.”
4. LIFE’S MISSION
In talking to the traders interviewed in this book, I had the definite
sense that many of them felt that trading was what they were meant
to do-in essence, their mission in life. Recall Charles Faulkner’s
quote of John Grinder’s description of mission: “What do you love
so much that you would pay to do it?” Throughout my interviews,
I was struck by the exuberance and love the Market Wizards had
for trading. Many used gamelike analogies to describe trading.
This type of love for the endeavor may indeed be an essential
element for success.
5. THE ELEMENTS OF ACHIEVEMENT
Faulkner’s list of the six key steps to achievement based on
Gary Faris’s study of successfully rehabilitated athletes appears to
apply equally well to the goal of achieving trading success.
These strategies include the following:
1. using both ‘Toward” and “Away From” motivation;
2. having a goal of full capability plus, with anything less being
unacceptable;
3. breaking down potentially overwhelming goals into chunks,
with satisfaction garnered from the completion of each individual
step;
4. keeping full concentration on the present moment-that is,
the single task at hand rather than the long-term goal;
5. being personally involved in achieving goals
(as opposed to depending on others); and
6. making self-to-self comparisons to measure progress.
6. PRICES ARE NONRANDOM = THE MARKETS CAN BE BEAT
In reference to academicians who believe market prices are random,
Trout says, ‘That’s probably why they’re professors and why I’m
mak-ing money doing what I’m doing.” The debate over whether
prices are random is not yet over. However, my experience with the
interviews conducted for this book and its predecessor leaves me
with little doubt that the random walk theory is wrong. It is not the
magnitude of the winnings registered by the Market Wizards but the
consistency of these winnings in some cases that underpin my belief.
As a particularly com-pelling example, consider Blake’s 25:1 ratio
of winning to losing months and his average annual return of
45 percent compared with a worst draw-down of only 5 percent.
It is hard to imagine that results this lopsided could occur purely by
chance-perhaps in a universe filled with traders, but not in their
more finite numbers. Certainly, winning at the markets is not
easy-and, m fact, it is getting more difficult as professionals
account for a constantly growing proportion of the activity-
but it can be done!
(to be contd)
TODAY’S TRADING STRATEGY
OF NIFTY FUTURES – AUG 1st
If trades above 5588 for 10 minutes Nifty Futures hikes upto 5505-5513
Good resistance @ 5514 today
If crosses 5514 and sustains above the level for 15 minutes
then it goes to 5536-49
Surely we recommend to go short around 5550-60 levels
On the other hand,
Crucial Support is found @ 5471
Below 5488 it tends to touch 5471
If breaks 5471 with good volume see a non-stop slide
upto 5449-41
One side movement is expected after 1’O’Clock in NIFTYSHARE TIPS TODAY (AUG 1st)
1) Sell PANASONIC @ 150.75
T – 144.85
2) Sell RSWM @ 117
T - 113.80
3) Sell JAICORPLTD @ 99.45
T – 96.10
4) Sell GMBREW @ 104.80
T – 101.95
5) Sell ORCHIDCHEM @ 202
T – 197.20
6) Sell CANBK @ 456
T – 448.25
7) Sell STER @ 159.25
T – 156.15
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 pals.
TRADING ALMOST IS LIVING
The market is always
right–except at
significant tops and
significant
bottoms.
Keep and open and
flexible mind.
When in doubt, get out.
If you must have a guru,
take him or her
with many
grains of
saltDo not add to losing positions.
Try every day to make yourself stronger, better and more integrated
as a person.
Stay true to yourself. Lying to yourself and others, and trading
on hope and prayer do not work
Most importantly, accept and recognize that you are not perfect.
You are human and are going to make mistakes.
Trading is the only profession where losing is actually winning.
BUT— unless you accept mistakes as mistakes and learn from them,
you will not progress and be upside down. Unless you are able to get
your trading brain out of the cave you will not accumulate
regret. It is only through the true acceptance of a mistake as a
mistake that we accumulate regret.
This is how we learn and grow as traders and human beings.
# Time is always on the side of the patient. Study, learn, absorb all
you can. You are waiting for the next opportunity to make your
bones, your fortune, your reputation. It will come along eventually
— if you wait for it and are in a position to take advantage
when the moment arrives. As Pasteur said,
“Chance favors the prepared mind.”
You must become a philosopher, a historian, a statistician, a trial
lawyer, and a psychologist when looking at Mr. Market. Simply
reading the data and trying to trade/invest off of it is a sucker’s
game. The noise so totally outweighs the signal that it is easy
to caught up in distractions.
(Refer to ‘OUR POLICIES’ in blog archives
if you have any queries)
For further details,
Contact Admin (Analyst) @
(0)9788563656
MESSAGE TODAY
Fear not, but trust in Providence
Wherever thou may'st be.
-THOMAS HAYNES BAYLY
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