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Friday, 23 January 2015

Fear of Rejection



                                                                  A story
    Once upon a bright, sunny morning a man and his son left  their  farm to make a trip into town. The son rode a top their donkey as the father walked alongside. Along the road they encountered a fellow from the nearby village. "You should be ashamed of yourself!" the fellow said, admonishing the boy. "You ride comfortably while your poor, old father has to walk. You have no respect!" The boy and his father first sheepishly exchanged glances, then exchanged places.
     
      As the two continued their journey, they chanced upon another fellow. "You selfish old man!" he said. "You take the easy ride while your poor son wears himself out trying to keep up. You should at least let the boy ride also." Not wishing to offend, the old man helped his son climb aboard. The pair then continued their journey.
     
       Before long, they came upon a woman coming from the opposite direction. She, too, found  fault with their arrangement. "I've never seen such cruelty! You two lazy louts are too heavy for that poor donkey. It would be more fitting for the two of you to be carrying the animal." Not wishing to fall from favor with the woman, the man directed his son to bind the donkey's front hooves  together, then back hooves together. Meanwhile, the man himself cut a long, sturdy pole from a nearby tree. The pair laid the animal down, slid the pole through his bound hooves, then lifted the pole to their shoulders-the father on one end, the boy on the other, the donkey hanging upside- down on the pole between them. Carrying the donkey, the pair  trudged along.
     
       As they crossed the bridge that lead into town, the upside-down donkey saw his reflection in the water below from an angle that he had never before seen. The animal became frightened and suddenly thrashed about violently, causing the pair to lose their grips on the pole. Before they could grab him, the donkey fell off the narrow bridge into the water below. Still bound, the donkey was unable to swim. From the bridge, the father and son helpless donkey sank out of sight, into the deep water below.

 Moral: After a moment of silent reflection, the father turned to the boy and spoke: "Son, we learned a valuable lesson today. We learned that when you try to satisfy everyone you end up losing your ass."
       
 
      we all like to be liked, fear of rejection often becomes a dominant force in many of our lives. Unless monitored, our need for approval can put us on a long and endless fool's mission. Fear of losing favor with family, friends, employers, coworkers, or society is one of the most common blocks to establishing and pursuing personal goals.

Saturday, 17 January 2015

FOOD FOR THOUGHT

Some Time Tested Classic Trading thoughts

1 Plan your trades. Trade your plan.

2 Keep records of your trading results,trading journal is the best syllabus for trading .

3 Successful traders have a well-scheduled planned time for studying the markets.

4 Successful traders isolate themselves from the opinions of others.

5 Continually strive for patience, perseverance, determination, and rational action

6  Think stop -entry -exit  not  entry- stop -exit.

7 Enter close to the stop ,dont place the stop close to the entry.

8 You must have a program, you must know your program, and you must follow your program.

9 The key to successful trading is knowing yourself and your stress point and risk tolerance

10 Speech may be silver but silence is golden. Traders with the golden touch do not talk about their success.

11 Dream big dreams and think tall. Very few people set goals too high. A man becomes what he thinks about all day long

12 If you don’t know who you are, the markets are an expensive place to find out, first know who ur.

13 When the ship starts to sink, don’t pray – jump!

14 A fantastic sentence written on every Japanese bus stop.
    Only buses will stop here – Not your time So
    Keep walking towards your goal

17 Negative Thinkers focus on Problems
     Positive thinkers focus on result

18  Success consists of going from failure to failure without loss of enthusiasm."

19  It is not enough to have a good mind. The main thing is to use it well." - Rene Descartes

20  Experience is simply the name we give for our mistakes .

Friday, 19 December 2014

An hindsight example of supply and demand analysis

This is a Japanese candle sticks 3 minute intraday price-volume chart.


fig 1.* These are not actual live trades ,this is a   hindsight analysis for explanation.
  what we have to do?  
   
    we need to develop a system with our method which include techniques to enter and exit our trades to be consistantly profitable. in other words we need to have a complete system which include trade plan (what to do before entry, entry/skip and exit plan),risk and money management,rules and limitaions, pshycology,performance review,trading journal etc to identify the signals of right trade (short or long) opporthunity at supply demand imbalance points.
  
     In simple words when supply is more than demand , price will decrease and when demand is more than supply,price will increase(see fig 2).
fig 2. supply and demand relation
       we need to sell at areas where supply is morethan demand and we need to buy when demand is morethan supply, we need to make profit from supply and demand imbalance. now you may think that even every fool know that. what actually we need to know by our analysis is where will be the    saturation area of supply demand imbalance?. 
                                                                                                                                                             
       we need to know and develop our  system  to give signals of when to go short(sell) ,when to  go long(buy)  and even very important is to know when to do nothing.
    
     In the above chart (fig 1),

1. price opened  gap up ,what the reason? may be due to global markets cues and overnight positive sentiment.

2. After open at point A area supply increasing then demand, here supply increasing means more traders selling than buying, we need to look for short(sell) signal with risk: reward,we can entry short or skip based on R:R ratio .risk is our initial stop loss (where it proves our trade is wrong)and reward is our target(where we book profits).

3. If we entered short we need to manage the trade, at area B demand increasing than supply. we need to book profits of earlier short(sell) and look for other trade signal.
fig 3. effect of supply, demand & quantity on price.

4. We may go long(buy) at B if all other factors of our system favourable and book profit at C area, where supply and demand seems to be balance

5. In that rectangle area the supply and demand  are  almost balanced,  that is equilibrium stage(see fig 3). This is where we need to stay out.
                                                                     
         its very easy to identify trades hindsight. we need to do this on live charts, which needs time,effort,practice ,knowledge, expereince , patience and  much more.........but its very much possible, this is what basically i do and try to do every day and for every trade. so many are doing it, we can(will) do it.

Thursday, 18 December 2014

Trading and farming

Trading and farming have many similarities,  so many concepts, strategies, ideas ,philosophies, pshycology     and logics of trading works for farming  and viceversa. i do both.

1. Script selection : in trading which script to trade ex:equities or currency or commodities or derivatives etc..
                              in farming which crop to grow  ex: u know them.....

2. Method            : which method to use to trade. ex: fundamental or techincal analysis etc..
                              which method to use to grow the crop. ex: organic or inorganic etc..

3. Duration           : scalping or intraday or postional or investment etc...
                              commercial ( lessthan 3 months crops) or longterm ....

4 .Entry & Position size  :   when to enter and how many lots
                                         which season to grow and on how much of land

5 .Management     : trade management after entry ex :where to put initail SL,when to move trail S L, when
                              to book profits etc...
                              crop management to increase yield ex: water ,fertilizers etc....

6. Exit                   : when to exit from trade. no one 100% perfects the exit strategy in both trading and   farming. we cant get price as expected when we exit from both , we cant control it, what we can control is   our entry into trade or crop with risk and money management, knowledge, experience ,pshycology(mindset) etc... actually we dont  need to be right every time, we can mint money if we are right less than 50% of trades or crops with proper method , mindset, risk and position size management which suits our requirements and personality.

         These are only some of the similarities, there are still so many similarities if we think off .
the same elements of philosophy and pshycology sinks with trading, farming and human life also.off course its difficult to survive in markets but not impossible, if we are successfull in markets we will be successfull in all aspects of life.
                                   
                              
    

Friday, 14 November 2014

Email reply

This is my reply to email by one of the regular followers of my blog.
i think its worth posting.

Email::
        i'm self retired from my bank job. im interested in trading because i prefer independence and freedom( in both financially and pshycologically).
        im still struggling novice trader, im confused, i have some questions  to you, i need your explanations
 
          1. how much we can earn in a given time may be per month or per year?
          2. which stock/script you usually trade and with how many lots? and how many scripts at a time?
          3. someone said 90% of  people lose in markets, still why so many are trading?
          4. can you give me buy and sell calls?
         
   still have lots of questions i will keep mailing you later.
                                                                thanks in advance
                                                                     mahesh A

my reply:
  
        1.  The money you earn has two values the "quantity" and "time", for example person A works hard day and   night for 2  years earns 2 lacs and if person B waits for right opportunity with patience earns 00 for 1 year    5 months and earns 4lacs in 7 months then B is in more profit then A.
     
          Coming back to trading we can earn how much you can, its depends on only you, ur the employee and ur the employer,not like any other professional where ur skill worthyness is decided by ur employer. so many lose in markets bcoz of so many reasons like for example they think its easy money,they assume its gambling  dont want to spend time and money to learn a method to trade,they want to mint money from day one,lack of knowledge( so many people dont know that in trading we can earn even the price is falling) ,lack of right mindset,lack of risk and money management etc... the list goes on and on...
     
          The solution is simple find all reasons why traders fail and do opposite or find alternatives for that. actually we will learn more from unsuccessfull person than successfull one. here in market there are more unsuccessfull people to make us learning more easy.
   
       2.  Im not an expert and im not even intermediate i think im in between novice to intermediate trader, for me trading is not destination ,its a journey, its just a progress to next level,next milestone i keep on learning new things, right now im trading index futures . im a BPL trader.
       
            Right now im not a fan of trading multiple scripts at a time, again this is one of the reasons why traders fail, if we cant be consistent with 1 script then how can we handle multiple and if we cant handle 1 lot consistently, how can we handle multiple lots, we need to scaleup step by step.
  
      3.  You are wrong, i think 90% lose ,5% neither lose nor gain and remaining 5% earns consistently. why so many are trading is becoz all thinks that they are in that 5% and the same person(s) are not in the 90% or 5% all the time, people are always keep shifting randomly between 90% to 5%(breakeven) to 5%(consistent) back and forth.

      4.  I dont follow any tips and dont give any calls.
          I believe that instead of  giving fish  its better to teach them how to catch the fish so that he can survive by his own skill independently and he can use his own discretion to blend the strategy based on the situation. soon i will be posting my method, trades and analysis.

Sunday, 26 October 2014

Learn patience -part 1 :Trade Like a Sniper…Not a Machine Gunner

      Impatience has become the basic character of the generation(me too). We need everything to be instant
like Instant messaging, instant information, and of course instant food. We want everything and we want it now.
    
      We have no time to learn the method. We have no time to wait for good setups and we have no time to wait for the trade to play out.  impatience is a derivative of fear and greed, the cardinal sins of trading.

      We jump on to a mediocre trade and lose. Then hesitate to take the next best opportunity. Fear of missing out sets in and   impatiently  enters another trade and get stopped out. This cycle goes on.....

       A sniper in the military has an edge over his or her enemy; their edge is unwavering patience, mastery of their weapon, and the ability to remain consciously in control of their mind and body for long periods of time in high-stress situations. We can apply these same concepts to trading and life.

       Now, trading is as war, but it still requires conscious control of mind and body.
 
       Those traders who learn to pick and choose their trades wisely, trading like a  “sniper”, are typically the ones who succeed long-term, whereas those traders who act like machine-gun traders by shooting at everything they see (trading too much), tend to run out of ammo (money) very quickly and fail to accomplish their goals in the market.
   
       A sniper will train for years to sharpen and perfect his or her shooting skills, and a sniper knows exactly what their target looks like and pulls the trigger without hesitation.Similarly, you will need to “train” with the particular trading strategy you choose to employ in the markets so that you know exactly what you are looking for every time you open your charts. However, you will need to do more than that;  you will need to truly master the trading strategy that you choose, because if you don’t master it, you will never achieve your full potential as a trading sniper.
   
      Sometimes we may need to wait for long time without a trade opporthunity as per our method, if you are not losing money by not taking up trade as per your method then logically,
 "Not losing money is gaining money".



Crocodiles are a trader’s best role model:  (continued in Learn patience part 2)