Important Posts by Smart Trade_ Part1
- Thread starter Gaur_Krishna
- Start date
As traders we should concentrate on trading. Chit chat in this thread only when market is sideways or we have booked profits.But in trending market when we see long posts, one wonders whether traders trade or just watch the prices move and spend time in long posts, arguments, fights. Any number of intelligent posts will not help us increase our trading profitability if we dont trade and keep chitchatting.
Smart_trade
Smart_trade
Sudarshan Sukhani is a short term( day trader) as well as swing trader ( 2-3 days to 2 weeks holding ) . So nothing wrong if he changes his views depending on trend change in the markets.In fact that is a sign of a trader who adapts to changing market conditions and not saying I will keep buying no matter what market does.
I find Sudarshan Sukhani very consistant in his views..and if he is wrong he admits that he is proved wrong and now he is changing his position.Every trader has to change his views as per market moves.
Smart_trade
I find Sudarshan Sukhani very consistant in his views..and if he is wrong he admits that he is proved wrong and now he is changing his position.Every trader has to change his views as per market moves.
Smart_trade
Originally Posted by niftytaurus View Post
Thanku very much for ur prompt & compprehensive reply...
I think I will experiment with those methods....& will use which best suit for me..
but there is another confusion in my trading....I generally trade stock futures.I choose 5 stocks every morning .& mostly which has lot of 500 or 1000...& my object is to get quick 1000 per trade ..means 1 or 2 rs appreciation on each trade...so my reward is very low ..so I cant take big risk...so my mistake is i dont put sl on system...i put 500 rs stoploss in my mind..but if scrip doesnt go instantly in my direction..& whipsaw 500 rs( 1 point or 0.5 point scripwise) easily..& then it goes in my direction..my entries are 90% times right & at right direction..but i has to bear loss..as market take my sl & goes in my direction..
I know this way is not right..but what to do? my psychology doesnt allow me to take big losses..so I couldnt take wide sl..
as I know,I should put sl on any minor pivot low...but I dont have himmat to put my sl there...as my target is very low..so R:R Ratio is not favourable...
please put light on this..& ST da & other senor members please help me in it..
please give ur suggestion on this...
thanks again
Your trading reminds me of a real life example of one of my trader friends. He was a dare-devil and he will sell/buy 10000 no of shares and his profit target used to be just 0.50 or 50 paise...so if he makes 50 paise it used to be Rs 5000 and that used to be in less than a minute. He would always tell me..." yar Rs 5000 in less than a minute is not bad....." I told him that I can mathematically prove that you will go bankrupt. How ?? Asked him if the trade goes against him then how much he will loose....he said hmmm may be 3 or 4 Rs ...then I told hin that suppose you do 10 trades...70 % of them is right...so @ 0.5 you collect 3.5 x10000 =Rs 35000 on your successful trades and on 3 loosing trades you loose 3x3x10000= 90,000....and we are taking 70 % success rate which is very high and not considering brokerage taxes etc.....so you make 35000 on right trades and loose 90000on wrong trades in every batch of 10 trades...and it is mathematically certain thet you will soon go bankrupt......
Same thing happened..he actually went bankrupt and had to sell many of his assets to fund the continuing losses.....finally gave up trading................
This is a real example....
Smart_trade
Thanku very much for ur prompt & compprehensive reply...
I think I will experiment with those methods....& will use which best suit for me..
but there is another confusion in my trading....I generally trade stock futures.I choose 5 stocks every morning .& mostly which has lot of 500 or 1000...& my object is to get quick 1000 per trade ..means 1 or 2 rs appreciation on each trade...so my reward is very low ..so I cant take big risk...so my mistake is i dont put sl on system...i put 500 rs stoploss in my mind..but if scrip doesnt go instantly in my direction..& whipsaw 500 rs( 1 point or 0.5 point scripwise) easily..& then it goes in my direction..my entries are 90% times right & at right direction..but i has to bear loss..as market take my sl & goes in my direction..
I know this way is not right..but what to do? my psychology doesnt allow me to take big losses..so I couldnt take wide sl..
as I know,I should put sl on any minor pivot low...but I dont have himmat to put my sl there...as my target is very low..so R:R Ratio is not favourable...
please put light on this..& ST da & other senor members please help me in it..
please give ur suggestion on this...
thanks again
Your trading reminds me of a real life example of one of my trader friends. He was a dare-devil and he will sell/buy 10000 no of shares and his profit target used to be just 0.50 or 50 paise...so if he makes 50 paise it used to be Rs 5000 and that used to be in less than a minute. He would always tell me..." yar Rs 5000 in less than a minute is not bad....." I told him that I can mathematically prove that you will go bankrupt. How ?? Asked him if the trade goes against him then how much he will loose....he said hmmm may be 3 or 4 Rs ...then I told hin that suppose you do 10 trades...70 % of them is right...so @ 0.5 you collect 3.5 x10000 =Rs 35000 on your successful trades and on 3 loosing trades you loose 3x3x10000= 90,000....and we are taking 70 % success rate which is very high and not considering brokerage taxes etc.....so you make 35000 on right trades and loose 90000on wrong trades in every batch of 10 trades...and it is mathematically certain thet you will soon go bankrupt......
Same thing happened..he actually went bankrupt and had to sell many of his assets to fund the continuing losses.....finally gave up trading................
This is a real example....
Smart_trade
Originally Posted by DanPickUp View Post
@ST
Would it make sense to open a new thread about new dangers we face in trading? Did you follow this or did you even hear about this: Velocity Logic?
It may have not reached your market, but it will. So a thread about such critical events are needed to inform new traders in advance about it. Do we open such a thread now?
http://www.zerohedge.com/news/2014-0...ty-logic-event
================
Dan,
Not familiar with this but if someone can start a thread on it, it will be informative.
ST
================
Done and will continue to do:
http://www.traderji.com/derivatives/...tml#post922780
@ST
Would it make sense to open a new thread about new dangers we face in trading? Did you follow this or did you even hear about this: Velocity Logic?
It may have not reached your market, but it will. So a thread about such critical events are needed to inform new traders in advance about it. Do we open such a thread now?
http://www.zerohedge.com/news/2014-0...ty-logic-event
================
Dan,
Not familiar with this but if someone can start a thread on it, it will be informative.
ST
================
Done and will continue to do:
http://www.traderji.com/derivatives/...tml#post922780
Originally Posted by oilman5 View Post
Further i SEE opportunity ???
Let us see some skill developed by trader - all maggie trader/market specialist can understand really order flow , flow with the trend - whenever strength in BUY or SELL side order comes , Quickly they join in MOMENTUM of that direction and EARN.
An excellent discussion is given for trade by one boarder (PRIDE in price action thread) - at 3pt , yesterday's CLOSE, HIGH - LOW , also VWAP- somebody suggested similar idea @ imp PIVOT - support/resistance pt.
Most imp garbage i see idea behind sell at support expecting further down - as well as buy @ resistance , believing price will continue to move up(trend). Simple idea of TRADE business - buy low, sell HIGH- so u r supposed to buy at low (support) and SELL at Resistance- not any other way . I am certain because of vested interest SPECIALIST Market maker / broking industry through Writer/ pseudo academician develops the theme to make MONEY - so that the fool must buy at high & sell at low.
SO its momentum - but it changes or diminishes after hitting higher time frame pivot .
........so in shortest possible micro trade idea is momentum. The same gigantic idea - can be played played in higher timeframe - but easier is REVERSAL. So question boils down to
which u may prefer vs what market is doing now , as well as going on in particular stock/instrument. Only 2 approach has soln
case 1] Define you- your comfort . IF u define u can handle MOMENTUM , pl learn to play trend continuation, breaking of 1st higher high is trend confirmation - so join then - if wrong ( probabilistic event of a particular event simply get out as per your stop).....
Again Define you- your comfort . IF u define u can handle Reversal , pl learn to play trend termination,- take action at OVERSOLD /overbought. Again activate stop when (the random event of wrong trade)market /price goes against u.
So a mechanical system should be as simple as that - any of the two decisive idea.So based on observation trend continuation max strike rate is 2/5 and reversal is about 0.7. - risk/ reward favoured former ie. trend continuation.So small stop is must whatever u choose.
Unfortunately we are never happy with simple system, instead search for holy grail. so we believe in both we can work - trend continuation as well as reversal idea.......that is increase our strike rate by assumption that whenever price moves up - i will play momentum and whenever it fails or show Reversal - i will take reversal trade. So theoretical devel0pment of Price cross MA or dual MA X developed to join both side of trade.But actually as per event unfolds in future , due to natural random factor some trade is RIGHT ,some trade is wrong.
So earliest we learn , loss trading is part of system, unpredictability is part of market - u only can manage trade - is better .
So we come to conclusion - the other factor MARKET is more imp. So we now believe /realised -MARKET CAN BEHAVE WHATEVER IT LIKES , MOMENTUM (CONTINUATION) reversal OR SIDEWAYS - out of these 2 we shall join , either continuation or reversal- sit idle in 3rd(sideway).We r now FLEXIBLE - if momentum shows , we join accordingly.
So our entire objective is what market is going to do by DECIPHERING price. So all price action theory develops- if this- then THAT .
Soon we realise its not random - at some particular pt/ price zone market participants behave like herd , so as an individual i must take the action earlier than them and make money for follow up..........this i call Anticipatory Trend.
So based on chart- see right , think LEFT and what will happen this time at MOB - is actual opportunity.
Yes understanding economy / sector rotation /company result - all may be reflecting in price - only u should know =how to read it.
Pl study MARKET INTERNAL and keep u stoic in mind- with time u master your destiny.
.............
gift to fellow traders
Very good post bringing out the essentials of good trading.Traders will do well to think on the points in this post.
================
It is my firm belief that the market is not always random and in some periods of time, it is non-random because of predictable action of participants in the market. It is for the trader to recognise this non-random zones and take advantage of the same.
Smart_trade
Further i SEE opportunity ???
Let us see some skill developed by trader - all maggie trader/market specialist can understand really order flow , flow with the trend - whenever strength in BUY or SELL side order comes , Quickly they join in MOMENTUM of that direction and EARN.
An excellent discussion is given for trade by one boarder (PRIDE in price action thread) - at 3pt , yesterday's CLOSE, HIGH - LOW , also VWAP- somebody suggested similar idea @ imp PIVOT - support/resistance pt.
Most imp garbage i see idea behind sell at support expecting further down - as well as buy @ resistance , believing price will continue to move up(trend). Simple idea of TRADE business - buy low, sell HIGH- so u r supposed to buy at low (support) and SELL at Resistance- not any other way . I am certain because of vested interest SPECIALIST Market maker / broking industry through Writer/ pseudo academician develops the theme to make MONEY - so that the fool must buy at high & sell at low.
SO its momentum - but it changes or diminishes after hitting higher time frame pivot .
........so in shortest possible micro trade idea is momentum. The same gigantic idea - can be played played in higher timeframe - but easier is REVERSAL. So question boils down to
which u may prefer vs what market is doing now , as well as going on in particular stock/instrument. Only 2 approach has soln
case 1] Define you- your comfort . IF u define u can handle MOMENTUM , pl learn to play trend continuation, breaking of 1st higher high is trend confirmation - so join then - if wrong ( probabilistic event of a particular event simply get out as per your stop).....
Again Define you- your comfort . IF u define u can handle Reversal , pl learn to play trend termination,- take action at OVERSOLD /overbought. Again activate stop when (the random event of wrong trade)market /price goes against u.
So a mechanical system should be as simple as that - any of the two decisive idea.So based on observation trend continuation max strike rate is 2/5 and reversal is about 0.7. - risk/ reward favoured former ie. trend continuation.So small stop is must whatever u choose.
Unfortunately we are never happy with simple system, instead search for holy grail. so we believe in both we can work - trend continuation as well as reversal idea.......that is increase our strike rate by assumption that whenever price moves up - i will play momentum and whenever it fails or show Reversal - i will take reversal trade. So theoretical devel0pment of Price cross MA or dual MA X developed to join both side of trade.But actually as per event unfolds in future , due to natural random factor some trade is RIGHT ,some trade is wrong.
So earliest we learn , loss trading is part of system, unpredictability is part of market - u only can manage trade - is better .
So we come to conclusion - the other factor MARKET is more imp. So we now believe /realised -MARKET CAN BEHAVE WHATEVER IT LIKES , MOMENTUM (CONTINUATION) reversal OR SIDEWAYS - out of these 2 we shall join , either continuation or reversal- sit idle in 3rd(sideway).We r now FLEXIBLE - if momentum shows , we join accordingly.
So our entire objective is what market is going to do by DECIPHERING price. So all price action theory develops- if this- then THAT .
Soon we realise its not random - at some particular pt/ price zone market participants behave like herd , so as an individual i must take the action earlier than them and make money for follow up..........this i call Anticipatory Trend.
So based on chart- see right , think LEFT and what will happen this time at MOB - is actual opportunity.
Yes understanding economy / sector rotation /company result - all may be reflecting in price - only u should know =how to read it.
Pl study MARKET INTERNAL and keep u stoic in mind- with time u master your destiny.
.............
gift to fellow traders
Very good post bringing out the essentials of good trading.Traders will do well to think on the points in this post.
================
It is my firm belief that the market is not always random and in some periods of time, it is non-random because of predictable action of participants in the market. It is for the trader to recognise this non-random zones and take advantage of the same.
Smart_trade
Originally Posted by arcus View Post
Does the broker have the right to take personal assets if the losses exceed the amount in the trading account?
================
No. He has to file Arbitration proceedings against a defaulting client in Stock Exchange and later proceed in Civil Courts for recovery of dues.
Smart_trade
================
Originally Posted by arcus View Post
I see. So, the court can order the liquidation of personal assets in case of a defaulting client? Hmm, I guess we need to create an LLC or something in order to protect personal assets.
================
Best is to avoid getting into anywhere near default situation...
ST
================
Originally Posted by arcus View Post
I agree.
All I have traded, since I started trading has been options spreads & naked long options.
I can't get myself to trade futures. The idea of losing more than what is there in my account scares me.
Forget stock/index futures, I cant get myself to trade currency futures (which are known to be extremely low volatile compared to equity) even on 2:1 leverage. Just a few days back, the Argentina Peso fell 11% in one day.
Not sure if it is some sort of a phobia I have.
================
Such price "shocks" do take place once in 2-3 years. So it is always better to have a position which will not give more than 25 % loss of capital if the market opens 8-10 % down. Also when major news/data /announcement is expected, we must hedge our futures positions particularly long positions as they are more prone to such price shocks.
One has to decide whether to trade futures positions and be exposed to 10 % price shock once in 2-3 years but make good returns per month or fergo the returns and avoid the price shock. If the 25-30 % loss of capital ( it is a big loss, no denying that) is going to put a trader in financial difficulties, then it is better to either daytrade so that he has a control on losses or take spread positions.Keeping futures positions without sound finances, is highly dangerous.
Smart_trade
================
Originally Posted by arcus View Post
I see. So, the court can order the liquidation of personal assets in case of a defaulting client?
Hmm, I guess we need to create an LLC or something in order to protect personal assets.
================
Brokers ( not all ) resort to unlawful means of recovery which I have seen threatening, taking help of recovery goons , even kidnapping etc...so things can become pretty messy , so dont even think of any such possibility.We are law abiding people ,aren't we ?.
ST
Does the broker have the right to take personal assets if the losses exceed the amount in the trading account?
================
No. He has to file Arbitration proceedings against a defaulting client in Stock Exchange and later proceed in Civil Courts for recovery of dues.
Smart_trade
================
Originally Posted by arcus View Post
I see. So, the court can order the liquidation of personal assets in case of a defaulting client? Hmm, I guess we need to create an LLC or something in order to protect personal assets.
================
Best is to avoid getting into anywhere near default situation...
ST
================
Originally Posted by arcus View Post
I agree.
All I have traded, since I started trading has been options spreads & naked long options.
I can't get myself to trade futures. The idea of losing more than what is there in my account scares me.
Forget stock/index futures, I cant get myself to trade currency futures (which are known to be extremely low volatile compared to equity) even on 2:1 leverage. Just a few days back, the Argentina Peso fell 11% in one day.
Not sure if it is some sort of a phobia I have.
================
Such price "shocks" do take place once in 2-3 years. So it is always better to have a position which will not give more than 25 % loss of capital if the market opens 8-10 % down. Also when major news/data /announcement is expected, we must hedge our futures positions particularly long positions as they are more prone to such price shocks.
One has to decide whether to trade futures positions and be exposed to 10 % price shock once in 2-3 years but make good returns per month or fergo the returns and avoid the price shock. If the 25-30 % loss of capital ( it is a big loss, no denying that) is going to put a trader in financial difficulties, then it is better to either daytrade so that he has a control on losses or take spread positions.Keeping futures positions without sound finances, is highly dangerous.
Smart_trade
================
Originally Posted by arcus View Post
I see. So, the court can order the liquidation of personal assets in case of a defaulting client?
Hmm, I guess we need to create an LLC or something in order to protect personal assets.
================
Brokers ( not all ) resort to unlawful means of recovery which I have seen threatening, taking help of recovery goons , even kidnapping etc...so things can become pretty messy , so dont even think of any such possibility.We are law abiding people ,aren't we ?.
ST
Originally Posted by The Monk. View Post
are you sure, that nifty will bounce, then i will also think of buying more ...anyhow position is deep in water..
================
Trade on your own reading of the trend. No body on the earth knows what the market will do next.Bank Nifty closed 100 points below the level where you posted this. Trend is definately down and buying before market gives indication of trend change is sure way to loose money.Never add to your loosing positions. Dont depend on anyone's views(or hopes)....
Smart_trade
are you sure, that nifty will bounce, then i will also think of buying more ...anyhow position is deep in water..
================
Trade on your own reading of the trend. No body on the earth knows what the market will do next.Bank Nifty closed 100 points below the level where you posted this. Trend is definately down and buying before market gives indication of trend change is sure way to loose money.Never add to your loosing positions. Dont depend on anyone's views(or hopes)....
Smart_trade
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