FROM AN EXPERIENCE
Trading can be mastered if you concentrate your efforts on how you
will react to price rather than desiring to predict it. Reacting is a
business decision, predicting is an ego play.
will react to price rather than desiring to predict it. Reacting is a
business decision, predicting is an ego play.
Traders want to make money. Losses in the long run don’t matter.
Forecasters (prophets) want to be right(ego). And that’s all that
they are concerned about.
Forecasters (prophets) want to be right(ego). And that’s all that
they are concerned about.
Don’t decide anything (ego), let the market do that job for you
(business).Like any other business you have a business plan and
the financial portion of that plan is the most important.
In this business your inventory is stocks, bonds, futures or options.
Like any other business you define what an acceptable loss is on
an item and what is an acceptable profit for the risk undertaken.
Like any other business you define what an acceptable loss is on
an item and what is an acceptable profit for the risk undertaken.
Like any other business if the item of inventory doesn’t do what
you expectedit to do, you put it on sale and liquidate it to raise
capitalto purchase inventory that will do what you want it to do.
you expectedit to do, you put it on sale and liquidate it to raise
capitalto purchase inventory that will do what you want it to do.
Your acceptable loss is your stop. Your money management
system tells you how much that is. Your mark up is dependent
upon your trading systemand trading style. It doesn’t make any
difference if youare a day trader or an investor. Like any business,
some turn their inventory 10 times a day, some 20 times a year
system tells you how much that is. Your mark up is dependent
upon your trading systemand trading style. It doesn’t make any
difference if youare a day trader or an investor. Like any business,
some turn their inventory 10 times a day, some 20 times a year
and some only twice a year. Your trading style andinventory
volatility will tell you what your turnover rate
volatility will tell you what your turnover rate
will be.Trading is a business and if you treat it as
anything else you will be a loser.
“If you were in a leaking boat,” Leslie N. Masonson writes,
“you’d have three choices:
“you’d have three choices:
1. Stay in the boat and
stop the leak = Go short.
2. Get out of the boat = Switch to cash.
3. Go down with the ship = Buy-and-hold.” (p. 60)
In this second edition of All About Market Timing:
The Easy Way to Get Started (McGraw-Hill, 2011)
Masonson explains why market timing is superior to buy-and-hold
and describes some timing strategies that have been profitable in
the past.Most people, I assume, would prefer market timing to
buy-and-hold—if it really were a viable strategy.
and describes some timing strategies that have been profitable in
the past.Most people, I assume, would prefer market timing to
buy-and-hold—if it really were a viable strategy.
The main argument against timing is that it can’t be done.
The investor will end up being out of themarket on the best days,
in on the worst days, and poorer for his efforts. Better just sit
there, say the critics, take your lumps in bear markets, and trust
The investor will end up being out of themarket on the best days,
in on the worst days, and poorer for his efforts. Better just sit
there, say the critics, take your lumps in bear markets, and trust
that the market will eventually power ahead, taking you along
with it. Unfortunately the market can be very slow to
recuperate from downdrafts, as the author documents in
several tables.
with it. Unfortunately the market can be very slow to
recuperate from downdrafts, as the author documents in
several tables.
(to be contd)
RELIANCE GAS OUTPUT FALLS – GOVT WORRIED
Power Ministry has
expressed concern over
the fall in natural gas
expressed concern over
the fall in natural gas
production at Reliance
Industries’ eastern
offshore KG-D6 fields
Industries’ eastern
offshore KG-D6 fields
as the shortfall may hit
electricity generation
this summer.
electricity generation
this summer.
Earlier this week, the
ministry had written to
the Oil Ministry
pointing out that power plants are getting less than allocated
gas from KG-D6.
“The short supply of gas by Reliance to the power projects is a
matter of great concern mainly due to the huge requirement of
electricity during summer season,” it said.
Natural gas production from KG-D6 has fallen to 47.5 million
standard cubic meters per day from 61.5 mmscmd output the
block had achieved in March 2010. This fall has led to Reliance
making a pro-rata cut in supplies of all its customers.
The power ministry said only 24.5 mmscmd of gas was supplied
to power plants in February as against allocation of 33 mmscmd
on firm as well as fall back basis.
The short supply, it said, may be “construed as non compliance
of the decision of the EGoM.”
An Empowered Group of Ministers (EGoM) has allocated
natural gas from KG-D6 fields to users in sectors like power
and fertilizer. Based on the EGoM allocation, Reliance has
signed up contracts to supply 60.76 mmscmd of gas on firm
basis to users in fertilizer, power, steel, LPG and city gas.
“It is requested to kindly furnish the report of supply of KG-D6
gas by Reliance to existing power plants on firm basis and also
on fall back basis as decided by EGoM,” the Power Ministry said.
“The reason for short supply may also be given for the same and
also take remedial measures to restore the supply as approved.
TODAY’S TRADING STRATEGY
OF NIFTY FUTURES – APRIL 11
Already written in the very same space
that Nifty futures would
turn around 6000 which is what now you all
see since 5th of April.
So What will happen today..?
If crosses 5862 and stays for 15 minutes see
a hike upto 5880-90
Suppose if cuts 5844 and trades below the level
see a non-stop slide upto 5811-5798 in a hour or two
Mild support seen @ 5821
SHARE TIPS TODAY (APRIL 11 )
1) Sell HINDALCO @ 208.70
T1 – 206.75
T2 – 204.75
2) Sell RAJVIR @ 159.50
T1 – 157.60
T2 – 155.60
3) Sell ONMOBILE @ 268.85
T1 – 265.85
T2 – 264.10
4) Sell A2ZMES @ 292.95
T1 – 288.85
T2 – 285.85
5) Sell INDIANB @ 232.10
T – 229.10
Our positional calls (BIOCON, LICHSG, AREVAT&D, SUZLON, ROLTA) given last week
all went to the targets convincingly despite
the slide of the market.
Check it out guys…(ESCORT still to go – Yes our subscribers holding
long in it..)
and make money
every day in Indian stock market very safely.
Disclosure:
1. Stoploss levels, reverse trades are exclusively
to the subscribers.
to the subscribers.
2. Solely I have all the rights to stop this free tips
at any moment.
(Refer to ‘OUR POLICIES’ in blog archives
if you have any queries)
For further details,
Contact Admin (Analyst) @
(0)9788563656
S&P WARNS INDIA
A day after the Reserve Bank expressed concern over rising
inflation, global credit ratings agency S&P warned today
that the high rate of price rise could derail India’s growth.
inflation, global credit ratings agency S&P warned today
that the high rate of price rise could derail India’s growth.
“High inflation could derail India’s stable macroeconomic
and interest rate environment”, Standard & Poor’s said
and interest rate environment”, Standard & Poor’s said
in a statement.
The agency, however, retained India’s long-term rating outlook at
‘stable’, citing strong external position and positive investment
trends.
‘stable’, citing strong external position and positive investment
trends.
“The ratings on India reflect the country’s good economic growth
prospects and its fairly strong external position,”
S&P said, adding that positive investments in the form of
foreign direct investments and portfolio capital further strengthen
the ratings.
prospects and its fairly strong external position,”
S&P said, adding that positive investments in the form of
foreign direct investments and portfolio capital further strengthen
the ratings.
The report said that even as the government follows the
path offiscal consolidation, rising oil prices could lead to slippages.
path offiscal consolidation, rising oil prices could lead to slippages.
Food inflation was 9.5 per cent for the week ended
March 19. The overall inflation in February was 8.31 per cent.
“Although the government has started to tackle the problem
of inflated subsidies, these remain high and prone to the
volatility in global commodity prices, especially that of fuel,”
S&P said.
It said high fiscal deficit and debt burden remain the most
significant negative rating factor.
“The country’s weak fiscal profile and structural problems
temper its strengths. Structural problems not only constrain
efficiency but also preclude a large share of the population
from benefiting from the country’s rising prosperity,”
S&P added.
S&P added.
It said India remains vulnerable to international commodity
prices and the monsoon. These two factors have led to a
substantial increase in inflationary pressure.
The Reserve Bank has already hiked key policy rates eight
times since March 2010 to tame inflation.
S&P said the rise in the food prices also represents structural
changes, such as India’s growing middle class and the
resulting shifts in diet patterns.
“Despite the government’s effort to address the logistical
bottlenecks in the distribution system, it could take time
to control inflation,” S&P added.
S&P said India’s ratings could be revised upwards if the
government deficits are reduced significantly. Conversely,
loose fiscal policy that may lower India’s medium-term
growth prospects could result in a downward pressure on
the ratings.
SURVIVAL OF THE FITTEST
When he hear the term ‘survival of the fittest’ bandied about, people
are usually referring to contests of absolute strength and think of the
Darwinian struggle for life. Trading is often thought of in a similar
light.
It’s interesting to note that while Darwin came up the idea of
natural selection, the term ‘survival of the fittest’ was coined
by economist philosopher Herbert Spencer. What is more, both
Darwin and Spencer were not referring to competitions of brute
strength, but of best fit. That is, the survivors were those who
best fit in to the environment around them. Brute strength is an
aspect of this, but it is only half the story. Adaptation to the
environment is also required.
Chance and randomness plays a big role in natural selection,
Chance and randomness plays a big role in natural selection,
as it does with trading success, but we can be sure that regardless
of how strong we are with respect to risk management, discipline
etc, if we don’t have an edge then we will likely die out. Likewise,
an edge and no strength could prove equally fatal. Because the
environment of the active investor is dynamic and forever
changing, it may be useful to think of the circles below as
constantly moving around about other, only rarely intersecting.
A BOOK REVIEW
David Linton’s Cloud Charts provides a good introduction for
new traders seeking to learn more about Ichimoku (or Cloud Charts).
It is divided into 3 sections with a total of 16 chapters.
The first section (comprising of 7 chapters) deals with general
Technical Analysis
The second section (comprising of 5 chapters) introduces the reader
to Ichimoku
The last section (comprising of 3 chapters) discuss more about
Advanced Cloud Chart Techniques.
For the experienced traders, it is possible to skip the first
7 chapters and head straight to the second section where it
introduces the Ichimoku indicators, the constructions of the chart
and the various signals for trading.
In my opinion, the author (David Linton) is able to depicts pretty
clearly on the construction of the charts; how various Ichimoku
indicators are constructed and how it is represented on Ichimoku.
As a trader, there are times where we choose to neglect the
construction of the indicators. On hindsight, I am glad that the
chapters reinforce my understanding of the charts and its possible
implications when I am looking for support/resistance and the
possible change in trend.
One important aspect of Ichimoku charts is the use of colours
to differentiate different ‘moving averages’ and the change in cloud
direction (or kumo twist). The book did not fall short in this
area with all the charts in colour.
I believe this is an important part of Ichimoku. If the charts
are in black and white, it would have fall short on the visual
display and its ability to explain Ichimoku easily.
This book is not without negatives.
Like the book from Nicole Elliot, I find that it falls short in
its explanation of ‘wave’, and ‘timeframe’ analysis.
In the chapter, Japanese Patterns Techniques, there are a few
references to Hidenobu Sasaki’s book. However, it is not able to
go beyond that and highlight how a trader can benefit from it.
In the last section, the author attempts to mix Ichimoku with other
indicators. It could have been improved by providing more
in-depth examples and walking the reader through how a trade is
executed. For example, a more detailed discussion on the setup
of the trade and how at trader will anticipate the trade as it
breakout while observing its interaction with other indicators will
be more useful.
For traders new to Ichimoku, this book will be a good introduction. However, I do not think it will be the ‘definitive’ guide
10 THINGS WE LEARN FROM JAPAN
HOW GOOD IS OUR 'WHY' ?
I’ve been taking a minor natural break in trading over recent weeks,
and in the meantime I’ve been pondering the power of the “WHY”
I have when entering trades. You need a good why, no matter what
you are doing in life, but especially when you walk into one of the
toughest and most volatile markets in the world and put your money
on the line.
What’s your WHY?
I can see looking back that the vast majority of my trading had a
feeble why behind them; no wonder I lost cash hand over fist.
Really my reason for entering was that I just wanted to enter,
thats all. The second problem most likely is that even when I
THOUGHT I had a good reason, the idea behind it was faulty.
So you can have no reason to enter, or you can have a wrong reason
to enter.
Also I notice on the forums that the VAST MAJORITY of
newbie / semi newbie traders there are trying to formulate their
own personal why. Their own UNIQUE system, inventing unique
indicators.
They think that the idea of the game is to outsmart everyone else
in the market; to be unique. The obsession with system creation or
inventing new indicators has being unique and outsmarting
everyone else behind it as a hidden motivation. The thing with
markets though is that its not about you, its about consensus.
If you invent your own amazing oscillator and you are the only
person in the world looking at it, then how good a reason is this
to enter the market?
How much consensus do you have behind you?
Who supports your decision? Who agrees with you?
Probably nobody, except a handful by pure chance.
There’s more to say on this, but ponder your WHY when you pull
the trigger. How good is that why?
10 THINGS WE LEARN FROM JAPAN
1. THE CALM: Not a single visual of chest-beating or wild grief.
Sorrow itself has been elevated.
2. THE DIGNITY: Disciplined queues for water and groceries.
Not a rough word or a crude gesture.
3. THE ABILITY: The incredible architects, for instance.
Buildings swayed but didn’t fall.
4. THE GRACE: People bought only what they needed for
the present, so everybody could get something.
5. THE ORDER: No looting in shops. No honking and no
overtaking on the roads. Just understanding.
6. THE SACRIFICE: Fifty workers stayed back to pump sea
water in the N-reactors. How will they ever be repaid?
7. THE TENDERNESS: Restaurants cut prices. An unguarded
ATM is left alone. The strong cared for the weak.
8. THE TRAINING: The old and the children, everyone knew
exactly what to do. And they did just that.
9. THE MEDIA: They showed magnificent restraint in the
bulletins. No silly reporters. Only calm reportage.
10. THE CONSCIENCE: When the power went off in a store,
people put things back on the shelves and left quietly.
HOW GOOD IS OUR 'WHY' ?
I’ve been taking a minor natural break in trading over recent weeks,
and in the meantime I’ve been pondering the power of the “WHY”
I have when entering trades. You need a good why, no matter what
you are doing in life, but especially when you walk into one of the
toughest and most volatile markets in the world and put your money
on the line.
What’s your WHY?
I can see looking back that the vast majority of my trading had a
feeble why behind them; no wonder I lost cash hand over fist.
Really my reason for entering was that I just wanted to enter,
thats all. The second problem most likely is that even when I
THOUGHT I had a good reason, the idea behind it was faulty.
So you can have no reason to enter, or you can have a wrong reason
to enter.
Also I notice on the forums that the VAST MAJORITY of
newbie / semi newbie traders there are trying to formulate their
own personal why. Their own UNIQUE system, inventing unique
indicators.
They think that the idea of the game is to outsmart everyone else
in the market; to be unique. The obsession with system creation or
inventing new indicators has being unique and outsmarting
everyone else behind it as a hidden motivation. The thing with
markets though is that its not about you, its about consensus.
If you invent your own amazing oscillator and you are the only
person in the world looking at it, then how good a reason is this
to enter the market?
How much consensus do you have behind you?
Who supports your decision? Who agrees with you?
Probably nobody, except a handful by pure chance.
There’s more to say on this, but ponder your WHY when you pull
the trigger. How good is that why?
MESSAGE TODAY
To rectify past blunders is impossible,
but we might profit by the experience of them.
-GEORGE WASHINGTON
RELAX CORNER
WORD CHANGE IS A WORLD CHANGE
JUST SMS TO YOUR PAL
Your mind is so open - so open that ideas simply pass through it.
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