ALL IS WELL & GOOD

FROM AN EXPERIENCE

To dream anything that you want to dream. That's the beauty of the human mind. To do anything that you want to do. That's the strength of the human will. To trust yourself to test your limits. That's the courage to succeed.

                                                                                                                                                 -Bernard Edmonds

PLS ALWAYS DO REMEMBER THESE

# Kill your greed

# Isolate yourself from the opinions of others

# Never chase stocks

# Always strive for emotional detachment

# Focus on proper execution

# There is never a shortage of opportunities

# Never make excuses

# Stay in control

# Don’t compare yourself to others

# Always use stop losses

# Standing aside is a position

# Money comes in bunches

# Never add to a losing position

# Stay calm and focused

# Don’t believe the hype

# Cultivate independent thinking

# Be ready for worst case scenarios

# Nosce te ipsum - Know thyself 

Know what the expected value of the trade is.Good traders do not fly by the seat of their pants. They develop a set of rules and then test those rules to determine the expected value of trades using that strategy.The expected value of a trading strategy is the probability of being right times the average profitability when you are right minus the probability of being wrong times the average loss when you are wrong. Using this equation you should see that success trading is not just about whether you are right or wrong but how much you make or lose when you are right or wrong.A trader can make a lot of money only being right 10% of the time if they capture very large gains when they are right and only small losses when they are wrong. In the same way, a trader can lose money even if they are right 80% of the time if they have big losses on individual trades.

- Know that the media knows nothing of value.While there may be entertainment value in the media, using it as an information source is doomed for a couple of reasons.First, the media tends to react rather than predict. Trading the stock market well is far more lucrative than reporting on it so it should be difficult to trust the analysis provided by financial reporters.However, to be fair, there are some financial reporters who are able to uncover valuable information that could be lucrative if only you and a few friends knew about it. The reality is that the media is speaking to a large audience which means the information that they distribute will be priced in to the stock almost immediately.It may be interesting to hear some like CNBC’s David Faber report on a merger of two companies but capturing the value of the trade around that transaction will be difficult because the market will move so fast once he announces his discovery. The market is efficient, making the media’s voice merely entertainment.

                                                                                                                          (to be continued)

TRADING NIFTY - LEVELS FOR MAY 14

Day’s Resistance @ 4964                      

Day’s Supports   @ 4908-4896-65

Above 4928 for 5 minutes means non-stop hike upto 4964 is possible – Above 4964 for 10 minutes means 4999 is possible

Suppose if trades below 4927 for 5 minutes see a slide upto

4908-4897-66

MAJOR DECLINED INDICES

The chart above summarizes when and by how much major international equity markets have declined from their 2012 peaks.  Not surprisingly, Spain was the first to peak and now leads the list of international markets highlighted with a decline of 24% from its peak.  Although its peak came more than a month later, Italy has been playing catch up with Spain and is now down 19.7% from its high.

Although US equities are down close to 5% from their highs in April, compared to the rest of the world, things looks pretty good here.  The only other country that has seen less of a decline than the US is China.  In terms of timing, while most countries saw their year to date peaks in early to mid-March, US equities held out the longest and didn’t peak until April 2nd.

         EXPECTANCY

E= [1+ (W/L)] x P - 1

where:

W = Avg Winning Trade

L = Avg Losing Trade

P = Percentage Win Ratio

If you made 10 trades and six of them were winning trades and four were losing trades, your percentage win ratio would be 6/10, or 60%.

If your six trades made Rs2,400 total profit, then your average win would be Rs2,400/6 = Rs400.

If your losses were Rs1,200, then your average loss

would be Rs1,200/4 = Rs300. Apply these results to the formula and you get: E = [1+ (400/300)] x 0.6 - 1 = 0.40 or 40%. 

A positive 40% expectancy means that your system will return 40 paisa per Re over the long term.

'STRANGE BUT TRUE' TRADING ERRORS

1)Refusing to define a loss

2)Not Liquidating a losing trade ,even after you had acknowledged the trades’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 behaviour and structure.

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

6) No reversing your position even when you clearly sense a change in market direction.

7)Not following the ruled 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 there after 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.

INDIAN ECONOMY - REFORM or PERISH?

Not surprisingly, the government of India’s public relations machine continues to predict blue-sky growth rates in the mid-seven per cent range – claiming that the current policy paralysis in the country is temporary – even against the backdrop of an anaemic global economic recovery and a continuing European crisis.

In fairness to these spin doctors, looking back 20 years, the current political challenges in India appear as a mere blip on a very impressive, upward trajectory. That said, the country needs a trillion dollars worth of infrastructure over the next five years, has no long-term debt market to fund this, foreign institutional investors are fleeing as a result of recent retrograde tax pronouncements, and India’s fiscal deficit is steadily rising.

Eighty per cent dependent on hydrocarbon imports, a mere $10 spike in oil prices spoils India’s fiscal consolidation.

India is between a rock and a hard place. The incumbent coalition government, already beleaguered by scandals, straddles the tight rope of choice between reverting to populism ahead of 2014 national polls and taking on tough economic reforms, which are bound to offend major vote banks.

Like Greece and other countries in Europe, India is at a historic inflection point. What sets it apart are India’s extraordinary fundamentals: a young and eager workforce, a functioning civil service, an impressive savings rate, and “rule of law” guided by an autonomous judiciary.

If only politics could be temporarily tamed, India needs to demonstrate persuasively that reforms are on track: that organised retail will be invited to invest in India’s farm-to-market supply chain, that global capital and expertise will be welcome to participate in India’s insurance and pension sectors, that tax policies will be aligned with international best practices and that tax changes, if any, will be prospective and not retroactive.

What disappoints is that the government has not effectively leveraged the country’s IT prowess to fix the leaky public welfare system and broadened the tax net, into which only 10 per cent of the population pays, and instead is fixated on squeezing more revenues from the private sector that has single-handedly powered India’s economy to world-class status.

The biggest challenge: India’s mega-infrastructure and education build-out must be converted into opportunity. This will require massive domestic as well as foreign investment, and skilful implementation.

India, therefore, needs to be mindful of declining investor sentiment and take all the necessary steps to create a welcoming environment that attracts investment. The myth of single-window clearance and speedy implementation requires honest introspection. Multi-year gestation of important projects warrants a serious review in which the Centre-state dysfunction can no longer be excused. Mandating manufacturing in a command-control fashion, taxing transactions retroactively, compulsorily licensing intellectual property, re-opening long-closed legal settlements, abrogating contracts, eliminating competition, stipulating price controls, barring foreign law firms from assisting in cross-border transactions, and insisting on local sourcing and content are all measures that send chilling signals.

India’s leadership must acknowledge that globalisation now presents investors, including domestic multinational corporations, with myriad alternatives. India must compete for capital. It is not enough this time to assume that the investment community will suck it up and persevere because of their hunger for India’s market.

The hunger is now with India’s youth, and youth will not be patient as growth slows and unemployment rises. Gone are the days when seven per cent growth was good enough. India’s youthful population has little memory of India’s economic past and will not be assuaged by any comparison.

The blessing of this fact is that the majority of India’s population, which is all under the age of 25, feels rightfully entitled to a bright future thanks to their awareness aroused by the internet.

Self-awareness can avert a second macroeconomic train-wreck.

Clearly, democracy is no cake walk, but is the very essence of India’s ascendancy. How triumphant!

Now, no political leader can take for granted that voters have any gratitude for the vision and fortitude exerted these past two decades supporting economic liberalisation. Now, people expect opportunity and insist on progress. And progress will only come as a result of effective governance and genuine economic reform.

iPHONE 5 FEATURES

Amazing Concept iPhone 5. This CG iPhone 5 has advanced iPhone features such as a sleeker iPhone design, a laser keyboard & holographic display all rolled into this iPhone 5 video.

The computer generated Concept iPhone 5 features is an exponential leap from the iPhone 4S with Siri, iPhone 4 or iPhone 3gs of today.

We hope you enjoy this iPhone 5 video more than the current trend of iPhone 5 rumors such as iPhone 5 leaked and iPhone 5 unboxing videos. Apple is yet to make the iPhone 5 announcement. So have your fill of this new iPhone video before the iPhone 5 release.

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ONE OF THE BIGGEST TRADING LOSSES IN THE HISTORY OF J.P.MORGAN