My Journey In Technical Analysis

[XRAY27]

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EMOTIONAL CONSISTANCE

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Becoming a consistently profitable trader is the goal of all traders. Let’s assume you a have a methodology with an edge and you apply it consistently. Let me ask you something… Is your emotional state consistent each and every time you place a trade? An automated system run by a computer places all trades under a consistent “emotional state”. The PC is emotionally consistent. How about yourself?

For the purpose of this article, I will assume that you already have a methodology with an edge and confidence on it, which is the first prerequisite for consistency.

Maybe you have that system with an edge and still, despite having it, you are not consistently profitable yet. Why? Do you maybe fail at executing it? And if so… why do you fail at executing it?

Does it happen to you that you place stupid trades, then analyze them after closing, realize that they were invalid and why they were invalid, promise yourself not to do it again, and then you do it over and over again, sabotaging yourself and committing the same mistakes over and over again?

When trying to dissect this problem into pieces myself I came to the concept of “emotional consistency”. I realized that sometimes I would be placing my trades being in a collected and composed state (for instance, outside of regular trading hours). Other times I would be placing my trades under a stressed state of mind. Other times I would be doing so impulsively, or in a rush. Other times I would be desperate, or hoping (e.g. to recover previous losses of the day) or revenge trading. Under these different and extreme emotional states, things get blurry, rational analysis is distorted and execution errors arise.

Suddenly something became very clear to me. Despite the quality of my system, the outcome of my trading would never be consistent if my emotional state was not reasonably consistent along the way. I was working my issues at a technical level (e.g. “why was this trade invalid?”) and not at their root (“why was my emotional state not valid?” -which is what prompted me to take an invalid trade in first place-). This was eye opening for me. I stopped thinking so much about charts (of which I already knew enough) and started to pay more attention to my emotional state, continuously.

Now, why your emotional state is not optimal and how to fix this, is a different chapter. More to come on this in future articles… But for now I want you to understand that the problem is not technical but emotional.

For the time being, I want you to think if your emotional state is consistent when you place your trades. Write it down before or after each trade. Write how you felt. What were your emotions when placing the trade? Fear to miss the move? Craving to trade? Fear to lose in an open position? Greed? Revenge trading? Where you collected? Where you in a rush?.

Bear in mind that the first step to fix these kind of issues is awareness. So this exercise is extremely useful. Pay more attention to your emotional states.

__________Martin Trader @ EminiSurf

 

[XRAY27]

Started my trading with Demand and supply ,,,adoption of MP/VP has improved a lot ,but watching obv ( which is volume study based of closing ) can that address smart money answer ?? and no is the answer ,but found answer in VSA …july series nothing good as a combo of all made me to land in no mans area .after rules are framed, now bit relaxed in Aug series

Thought to start a thread raised in my mind ,but cannot spare such a time as of now..if people are interested can do there work. Three big names in VSA ..Jesse Livermore, Richard Wyckoff ,Tom Williams

Bottom line: combo of MP/VP with VSA along with OBV…striking will improve…as you are with big boys …

MP... high point price ,OBV support of volume for this high point price ..with VSA ..area of entry of smart boys can be noted ..

 

[XRAY27]

 

[XRAY27]

------------------------------------------SURVIVAL------------------------------------------------

You got to fight for your survival here. The market (that is the crowd out there) is ruthless and wants every penny (or drop of blood) out of your veins. It checks for one small mistake or misstep to drag money out of your PnL. Yes it cannot take it directly. That is the reason it takes the money through you – no one else. That is why market is powerful. You won’t know that the market is taking money, but you will give your money with your bare empty hands.
That is why it is a fight to survive in front of the market. The only way to survive is in three steps:

1) Give it in small drops, whenever it troubles you.

2) To keep a small amount on the table, so that you can bluff the market to look at the small amount and take only a minuscule out of that.

3) Tell the market that you need its help, and hear what it says – agree with it and go with it, rather than against it.
Despite this there is no guarantee that you can survive, but you can certainly lengthen your stock market career if you follow the above steps.

Else, you will see, that you will have to struggle to earn to give money to the market. It may lead first with your own bank account, then with debt and then – in extreme cases – with life too.

Yes, it can be that bad. So, get used to survival before earning any drop from the market.

Yours,
Edgemonk

 

[XRAY27]

Traders Life Cycle

 

[XRAY27]

Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.

Jesse Livermore, Reminiscences of a Stock Operator

 

[XRAY27]

During this long course of journey (10 years) enjoyed initial luck phase at start

, later burnt fingers in FNO,

,but earning from same product

,making me happy

from intraday only trader ( D and S with MP), now trading swing/positional with MP/VP...

All in all completely moved to Mechanical ...( which i never thought i can achieve that),Role of TJ in this cannot be ignored ,ST da, Saint,Manoj borle,Raamakanth,vjay,subhadip ,varun ,Happy bro helped a lot with his AFL side of knowledge..

What i understood in this journey is

1) Your competition spends hundreds of hours perfecting strategies and you’re in for a rude awakening if you expect to throw a few darts and walk away with a profit. It’s even worse if you cut corners in the rest of your life because that bad habit is much tougher to break.

2) Profit rarely follows the majority. When you see a perfect trade setup, it’s likely that everyone else sees it as well, planting you in the crowd and setting you up for failure.

 

[XRAY27]

Diminishing Future turnover,also effecting options,listen to the market and don't impose your will on it,we traders should be above all for survival, added equity for intra along with FNO

Self: in words of Alexander Elder

Remember your goal is to trade well,not to trade often

 

[XRAY27]

The weakest part of any trading system is the trader that is suppose to follow it.

If you do not put in the work to develop a trading plan that fits you, develop and keep discipline, manage your risk, and stick to the plan regardless of how you feel then no trading system will work for you.

Always remember :self

Trader has to reduce the time it takes to analyze,react and recover.

The best traders do this effortlessly after much thought,experiment,and practice.

 

[XRAY27]

Discipline, while necessary for success, is never sufficient. Discipline does not substitute for skill, talent, and insight. Strict, disciplined adherence to mediocre plans can only lock in mediocre results.

If it were otherwise, there would be no losing automated trading systems