I have been in the market for a few years and have managed to blow away 4Lakhs so far.
Although thats not in 1 go, have managed to get wiped out many times. Net result - 4 lakhs loss
A few months back i took a break from market and made an analysis of the trades made.
After doing analysis and drawing conclusions, have learnt the lessons and would like to start afresh with a trading plan
I would request all the seniors on the forum to help me to learn, to improve myself and finally achieve the aim to not only make up the lossess but also to
start making profits
However first I would like to post my analysis of my trading activities so far:
Mistakes Made:
---------------
1) Traded based on tips
2) Traded in multiple segments at a given time, long term equities, short term, intraday, futures, options
3) Overtrading
Then started trading with Technical Analysis, traded every possible combination of indicators. That would work for a while and would eventually end in losses. The common mistakes made in all these were:
4) Trading with mental stop losses
5) Holding onto losing trades with the hope that it would reverse. Some did, most didnt, heavy losses
6) Cutting winning trades too soon, then cursing luck for not holding onto those
7) Over confidence - If a strategy gave winning streak for a while, then would trade without following rules.. just for once and that wud result is giving up all the gains made in the winning streak
8) Bending rules, throwing caution to wind and going for broke--- this was done more in options trading
9) Entering into trade early or too late
10) Even with trading using technical analysis, repeated mistakes 2 and 3
CONCLUSIONS:
-------------
After realising the above, have come to a few conclusions. It would be of great help from seniors to guide me if I have made the right conclusions and also if there is anything obvious that I havent yet realised
1) From the mistakes made using the TA approach, it was clear that the approach or the system was not at fault. The reasons none of the trading strategies worked are as follows:
a) Most important- No money management
b) Stop loss needs to be put into the system and should not be a mental stop loss
c) Bending/breaking rules--- Too many time traded with mindset" Lets break the rule.. just for once, no harm in taking one risk". This according to me was a major factor in the losses
2) Stress: I found that intraday trading either in equities or in F&O segment was very stressful. Well..., positional trading in F&O was much much more
stressful. I would spend the entire day in front of the terminal looking at each tick and with each tick
For the moment, it will be good for me to stay away from intraday in equities and entirely away from F&O.
3) Trading System: I dont need to have the most complicated trading system to be successful. Nor do I need to invent a new strategy or indicator. There are enough of these already
Every trading system has its positives and negatives. It is important to stick to a strategy with following the rules. Fine tuning a strategy based on analysis will help rather than switching a strategy.
4) Money management: A simple strategy will give give good results with proper money management. i.e protecting capital first and then trying to increase it. Every strategy will give losses. To be successful, net gains have to outweigh the net losses.
5) It is difficult to elmininate greed, fear, hope and anxiety from trading. However I need to learn how to control these to be successful
WHAT NEXT:
----------
After the above, here is my plan:
1) Start trading in equities with Rs 20k for short term trading.
2) Use some basic indicators such as EMA/MACDto set entry and exit rules. Focus more on money management i.e decide hw much to risk per trade.
3) When to exit will be a tricky. Focus on improving this.
Requesting all seniors for inputs
Although thats not in 1 go, have managed to get wiped out many times. Net result - 4 lakhs loss
A few months back i took a break from market and made an analysis of the trades made.
After doing analysis and drawing conclusions, have learnt the lessons and would like to start afresh with a trading plan
I would request all the seniors on the forum to help me to learn, to improve myself and finally achieve the aim to not only make up the lossess but also to
start making profits
However first I would like to post my analysis of my trading activities so far:
Mistakes Made:
---------------
1) Traded based on tips
2) Traded in multiple segments at a given time, long term equities, short term, intraday, futures, options
3) Overtrading
Then started trading with Technical Analysis, traded every possible combination of indicators. That would work for a while and would eventually end in losses. The common mistakes made in all these were:
4) Trading with mental stop losses
5) Holding onto losing trades with the hope that it would reverse. Some did, most didnt, heavy losses
6) Cutting winning trades too soon, then cursing luck for not holding onto those
7) Over confidence - If a strategy gave winning streak for a while, then would trade without following rules.. just for once and that wud result is giving up all the gains made in the winning streak
8) Bending rules, throwing caution to wind and going for broke--- this was done more in options trading
9) Entering into trade early or too late
10) Even with trading using technical analysis, repeated mistakes 2 and 3
CONCLUSIONS:
-------------
After realising the above, have come to a few conclusions. It would be of great help from seniors to guide me if I have made the right conclusions and also if there is anything obvious that I havent yet realised
1) From the mistakes made using the TA approach, it was clear that the approach or the system was not at fault. The reasons none of the trading strategies worked are as follows:
a) Most important- No money management
b) Stop loss needs to be put into the system and should not be a mental stop loss
c) Bending/breaking rules--- Too many time traded with mindset" Lets break the rule.. just for once, no harm in taking one risk". This according to me was a major factor in the losses
2) Stress: I found that intraday trading either in equities or in F&O segment was very stressful. Well..., positional trading in F&O was much much more
stressful. I would spend the entire day in front of the terminal looking at each tick and with each tick
For the moment, it will be good for me to stay away from intraday in equities and entirely away from F&O.
3) Trading System: I dont need to have the most complicated trading system to be successful. Nor do I need to invent a new strategy or indicator. There are enough of these already
Every trading system has its positives and negatives. It is important to stick to a strategy with following the rules. Fine tuning a strategy based on analysis will help rather than switching a strategy.
4) Money management: A simple strategy will give give good results with proper money management. i.e protecting capital first and then trying to increase it. Every strategy will give losses. To be successful, net gains have to outweigh the net losses.
5) It is difficult to elmininate greed, fear, hope and anxiety from trading. However I need to learn how to control these to be successful
WHAT NEXT:
----------
After the above, here is my plan:
1) Start trading in equities with Rs 20k for short term trading.
2) Use some basic indicators such as EMA/MACDto set entry and exit rules. Focus more on money management i.e decide hw much to risk per trade.
3) When to exit will be a tricky. Focus on improving this.
Requesting all seniors for inputs