Learning Delivery Trading and Investing

[rajputz]

Hi guys

I have been trading on intraday and swing basis for last couple of years. But every other day, i still feel that there is some thing missing. There is more to be explored. There is more that i should know. I should learn. I should implement. Some thing new. May be that missing some thing is knowledge. In institutes we have pre planned syllabus and teachers to help learning, but most of us in trading world explore the resources and percieve or understand it our own way.

Same happened with me too in my early days. I hitted search button everywhere to find some thing usefull. But all was either scattered in an unordered way to grasp any thing from it. All the information that i found usefull, I got after the practical experience. Practical Trading. After months of practical application i came to understand, why was that thing emphasized in thw book there, in that article, in that thread.

Same phase is once again under processing with me. Now my topic of learning was to chosing and finding out good shares for: -

1. Delivery - When to buy and when to sell
2. Portfolio
3. Uncertainities in stock prices/Reason for there under and overperformance

And some other topics like what to consider while building a portfolio.

So after hitting some threads and some books came with idea of starting a thread for learning.

Here in this thread i will try to explore the various shares, will look into why to buy them, when to enter, when to exit, how to determine target price stoploss(if to be considered), y a stock is under/overperforming/rangebound, what fundamentals to be considered while exploring a stock, looking at balancesheet or earnings of the company if necessary.

For the learning process to be efficient, it is my heartly request that one topic should b opened at one time, and issues regarding it should be cleared first. May it be theory, stock discussion or some other, but one topic at a time. let it end, let the conclusion be there and then move to next.


I will be farwording the link to some members to whom i want to dedicate this thread, and will consider them as the teachers/mentor in this learning process. I will be thankfull if they keep a close watch to the thread and regularly input there view regarding this as this will be there thread and not mine.

Any new member or visitor has any querry can ask directly here, but as mentioned let the first topic finish first.

Looking farword for the inputs.

 

[alroyraj]

By all means carry on. We spend disproportionate time on intraday trading yet delivery based trading is more profitable in todays bullish market conditions.
An important consideration would be dividing the trades based on the type eg swing,fundamental calls based on some news warranting a re-rating,breakout trades etc.

 

[crown]

Rajput bhai,

Thanks for opening the thread.

I am struggling to find the answer of the following:

"How to find out the resistance in advance"

i.e. without taking into consideration the previous high and only analysing the present scenario, how can we guess/find that the stock has become weak and very likely to go down in very recent future. What tools should be used in this analysis like momentum, volatility, volume etc.

Thanks

 

[oilman5]

Thanks for ur call Rajputz
................................
Trading is a jigsaw puzzle.Persons reqd exceptional ability to persevere.......discipline....patience.
Clarity of thought process another key theme.
Prerequestee........knowledge on TA -FA, business,sector,economy,psychology,Self,oppurtunity analysis,closing a position in contingency
...........................................
With this i am coming back to topic 1
Delivery - When to buy and when to sell
....................
Being in practical trading u may have use concept of Investment
Where Future is bright........How much present market has discounted it.
So std FA is used what to BUY
Since........delivery play is holding for long haul, u must define.........holding period that suit u.
So result play/order play......economic change.......these r key background strength of a positional trader.
Let me explain by simplicity......a trader plays on technical chart.......though positional trader........u try to copy him,........learn from him.Ask simply .....how he trades....But u can not follow his logic[his inner core heart/experience, unless u know.......he has dual degree of MBA-finance & CMT]......so learner has to put that HAT to understand the thinking process of being RIGHT by the man when he is seeing CHART......what he is interpreting in price.
So simply its BUY........when market condition is greedy......Reflected by NIFTY study.
The candidate is showing better strength.........3rd factor........Money is entering in that stock.Higher level expert also try to confirm........whether is strong Hand buying.........so that its for Long haul.
When to sell.........a particular profit target.......a SAR to allow profit run.
If fundamental for 2 quarter turn -,Entire sensex......showing big possible downtrend.
..............................................

Tools........Use weekly chart always for........to study strength
Use a momentum tool which suits u for entry,.......alternatively Buy on pullback or Cup & handle pattern.
Another one Break out trade.........play for continuation with strict stop.
........
Hope it helps

 

[rajputz]

Thanks for ur call Rajputz
................................
Trading is a jigsaw puzzle.Persons reqd exceptional ability to persevere.......discipline....patience.
Clarity of thought process another key theme.
Prerequestee........knowledge on TA -FA, business,sector,economy,psychology,Self,oppurtunity analysis,closing a position in contingency

Crown's querry for support and resistance....

Thanks for the input oilman. I have been reading your posts for quite a long time and find them logical and knowledgable. Thanks for being around. Will look farword to learn from you.

Crown, as far as i know the way to know about the resistance and support can be: -

1. Using pivots on weekly monthly or daily charts.
2. Finding the regions or price points where price always resisted the upmove and pulled back, or from where always the support comes and price bounces back. For understanding i am posting a image below: -



Hope it helps....

 

[rajputz]

By all means carry on. We spend disproportionate time on intraday trading yet delivery based trading is more profitable in todays bullish market conditions.
An important consideration would be dividing the trades based on the type eg swing,fundamental calls based on some news warranting a re-rating,breakout trades etc.

I thing ATR can be used for this purpose. Some outline can be that we should diverse our money in such a way that a single change in tick over price brings equal change to the money. Based on volatility. Less volatile and constant gainers with less nuances to be purchased more then the one who are volatile and subjected to market manipulations...

Well for the time being lets stay with the question raised by crown on supports and resistane. Once that is finished alroy we will go for next.

 

[vssoma]

dear raj,
thanks for opening this thread with good and educational topic.

 

[vssoma]

dear,
for tatamotors....for me it seem bit easy to draw R and S's but i am feeling bit difficult with this chart, can you pls. exlain, how to draw.

 

[oilman5]

Dear Rajputz,
Weekly chart ........pivot is very good for........postional play.
Just understand coincidence of June2010...result out with 2;nd Aug'10...Just see the candle @ resistance........key bar,........then Big volume splash..........Result is 150/- profit.
Yes a theoritical discussion.........i could not trade as presently i am not this sector.
moreover..........i miss it.
But its an excellent approach for positional trade.
Key pt........Result/greed/moneyflow........at resistance Break clearly SEEN
...........
thanks again

 

[AW10]

All the best Rajputz for your new learning. You are on right path..
While daytrading/ swing trading is good for earning the living income to monthly expense, delivery based long term positions should be part of your wealth accumulation for any trader. Your income stream would dry-out if u don't sit infront of the terminal and trade actively, but wealth stream keeps flowing even when you are not so actively involved in it.

Personally, I use technical analysis, risk mgmt, position sizing, instrument allocation, concept of short term trading, for longer term as well.. It is important to capture big picture, change in socio-economic dynamics, inter-market analysis etc for this.

I don't use fundamental analysis, company balace sheet analysis for this cause (as per my belief and I might be wrong)
- balance sheet is subjected to accountant's creativity to serve the purpose of mgmt and accountants are expert in that
- when mkt is bullish, mgmt, analayst, accountant, all human being are bullish. majority of them will break the ice and dare to show earning downgrade in growing market even if that is reality of the company. And that is what is reflected in media and other communication.
- I am trader, and my skills as fundamental analyst is limited. So I would rather encash on my existing strength, and outsource the fundamental analysis to someone else. I do check stock recommendation from broker/analysts to flag some growing companies. and then I filter them thru my selection criteria.
For me it is easier way to build watchlist of fundamentally good companies.

While you are reading on this, i would suggest to start making your trading plan for wealth accumulation and start writing your rules there as u learn. Give it a timeline, and within one or two months of the time, u will have a document that hardly 2/3% of investors would be having.

ofcourse this trading plan is living doucment and will keep changing with your experience.
Focus on position sizing, risk mgmt, Exits, read the litrature of successful hedge fund managers, inter mkt analysis, make your info database (far beyond the ohlc price data of stock), and develop some strategies.

All the best.
Happy trading.