My trading journey

[vagar11]

I started my journey 5 years back in stock market and I had my ups and downs. Like, most people I was also trying to find the holy grail but the truth is there is no holy grail.

First year

I came to know about the biggest and successful investor of market "Warren Buffet". He uses a fundamental approach for investing. Started using his philosophy of value investing using p/e ratio and read books from Benjamin Graham. Made some wrong calls as I was trying to catch the bottom and didn't use a stop loss as I was doing a value investing.

Then, started reading the books on how to read the balance sheet of a company. This also didn't help as there were a lot of companies and how many balance sheets can I read and I couldn't make much sense or fruitful decision out of it.

I think as a retail Investor it's hard to do "value investing" as you need to look at lot of factors. But, some people are still making money using this approach and I am not denying that.

"If you had spent Rs 55,000 to buy a Royal Enfield motorcycle in 2001, you would now have an old, rugged bike. But if you had invested the same Rs 55,000 in shares (at Rs 17.50 per share) of Eicher Motors, the company that makes Enfield bikes, your investment will be worth Rs 6 crore now."

Many companies like Asian Paints, Maruti, Tata Motors, Tech companies, Pharma companies would have made the money for you and they can still make.

Second year

Came to hear about Technical analysis i.e. reading from the chart and joined some forums like babypips, elitetrader, traderslaboratory and traderji etc. I started learning about support and resistance, bullish patterns, bearish patterns, trend lines and these things were making sense, I also read from the books like Steve Nisson candlesticks and tried to read Albrooks books and his lectures but couldn't understand. But, these things were just making sense and not money.

So, I went to the next stage of technical analysis and started learning about indicators stochastics, RSI, williams etc. They sometimes worked and sometimes they didn't. After that, I started mixing multiple indicators as I thought it if two indicators will agree on the same thing, then it's a high probabilty trade. But, that failed as the indicators were showing the similar characteristics. Started learning about EMA crossover, Bollinger bands, ichimoku trading, cowbunga trading system and a lot more systems and applied them over the charts. Now, everything was visible on the chart just not the candles. That also didn't work out. I also went through a lot of methods mentioned on forums with which people were making money.

So, finally I thought market is not for me as almost 95% of the traders lose money and I am one of those. I went onto made some investment in mutual funds which are giving me good returns today.

Third Year

Started focusing on my career and didn't look much into markets, I was making investment through mutual funds only.

Fourth Year
Totally out of touch.

Current Year

Came back in Feb. Made some investment in stocks which were really down and made some money. Started reading about technical analysis again and still I was not successful. I thought the problem was not with the strategy and it was with my psychology. So, I started reading about it but that also didn't help as the problem lied with the trading methods I was using and they didn't had an edge and I didn't back test them properly. Started going through the threads again of traderji, got some hard-copy of threads and I tried to see where would I trade and compared with them. I gave some serious thoughts to risk management and money management. Well, not much to money management as I am trading with a low capital.

I went back to indicators again but left them within a week as they didn't work out for me. Stochastics is still there but I just use them for looking divergence.

Now, I look at pure price action and also a 21 EMA/SMA is there on my chart. I go with the trend and things are making more sense to me now than my initial years. I sit with patience now and only takes the trade which gives me a good risk reward ratio as I believe on low risk reward the market won't move in that direction as smart player will not take that trade.

We need not only learn but we need to apply it too.

I feel like I am on to something good now and I can make money. May be again, I am still in one of the phases of learning. I am also learning to invest in fundamentally sound midcap companies these days.


Learning to trade is a hard process as you have to go through a lot of failures. You need to practice only one thing in market and become master of that. As Bruce Lee said "I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times." We need to practice only one trading style and follow that but first you have to find out what suits you which can you practice 10,000 times.

Thankfully, I played with small money in my initial stages, I will increase the capital once I see consistency in my profits. I hope I will be successful one day.

Thanks
Vagar

 

[karthik_sri]

Hi Vagar,
Look forward to your posts and wishing you all success!

 

[LoneWolf]

Hello Vagar, Nice to see your thread and reading about your history and experience in trading. Wishing you a lots of good luck this time, and I am sure with proper discipline and mindset you will overcome all the odds, and finally the sweet success will be in your company. Will be looking forward to your charts, and learn from you..:thumb:

Just few question though, trading in fut/cash, and intraday/swing ??

 

[vijkris]

vagar bro,

nice to know abt your past history.
I wont claim I m successful yet, but have stopped looking at indicators since your TJ joining date . :lol:

I believe price action itself is a leading indicator.

WISH U ALL THE BEST. :thumb:

 

[suri112000]

The following is very well laid out by Creditviolet.

38 steps to becoming a trader

They are as follows:

1. We accumulate information - buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realise we may need moreknowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to 'outside news' and to other traders.
9. We go back into the market and continue to 'donate'.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get 'over-confident' and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.

MOST PEOPLE WILL GIVE UP AT THIS POINT, AS THEY REALISE WORK IS INVOLVED.

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realise that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but over all we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rules and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow the rules.

30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little over-confident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.

Most traders will identify with this list and should be able to place themselves within these steps. Keep in mind that very few people progress through these steps in an orderly fashion. Developing your trading skills is an iterative process.

For example, you may reach Step 13., find that although you were making money, your basic premise for trading was flawed (you might have been benefiting from the bull market, rather than your own trading prowess and then have been rudely awakened when the market entered a bear phase) and you may drop back to Step 4. and start 'climbing' the steps again.

Having the proper mindset, attitude and psychological makeup becomes increasingly important as you progress through the steps. The focus of the earlier steps is on external issues, i.e. developing proficiency in the mechanics of trading while the focus of the latter steps (particularly from Step 30, on) is on internal issues, i.e. improving ourselves mentally and psychologically, maturing as trader.

 

[vijkris]

The following is very well laid out by Creditviolet.

38 steps to becoming a trader

They are as follows:

1. We accumulate information - buying books, going to seminars and researching.
2. We begin to trade with our 'new' knowledge.
3. We consistently 'donate' and then realise we may need moreknowledge or information.
4. We accumulate more information.
5. We switch the commodities we are currently following.
6. We go back into the market and trade with our 'updated' knowledge.
7. We get 'beat up' again and begin to lose some of our confidence. Fear starts setting in.
8. We start to listen to 'outside news' and to other traders.
9. We go back into the market and continue to 'donate'.
10. We switch commodities again.
11. We search for more information.
12. We go back into the market and start to see a little progress.
13. We get 'over-confident' and the market humbles us.
14. We start to understand that trading successfully is going to take more time and more knowledge than we anticipated.

MOST PEOPLE WILL GIVE UP AT THIS POINT, AS THEY REALISE WORK IS INVOLVED.

15. We get serious and start concentrating on learning a 'real' methodology.
16. We trade our methodology with some success, but realise that something is missing.
17. We begin to understand the need for having rules to apply our methodology.
18. We take a sabbatical from trading to develop and research our trading rules.
19. We start trading again, this time with rules and find some success, but over all we still hesitate when it comes time to execute.
20. We add, subtract and modify rules as we see a need to be more proficient with our rules.
21. We feel we are very close to crossing that threshold of successful trading.
22. We start to take responsibility for our trading results as we understand that our success is in us, not the methodology.
23. We continue to trade and become more proficient with our methodology and our rules.
24. As we trade we still have a tendency to violate our rules and our results are still erratic.
25. We know we are close.
26. We go back and research our rules.
27. We build the confidence in our rules and go back into the market and trade.
28. Our trading results are getting better, but we are still hesitating in executing our rules.
29. We now see the importance of following our rules as we see the results of our trades when we don't follow the rules.

30. We begin to see that our lack of success is within us (a lack of discipline in following the rules because of some kind of fear) and we begin to work on knowing ourselves better.
31. We continue to trade and the market teaches us more and more about ourselves.
32. We master our methodology and our trading rules.
33. We begin to consistently make money.
34. We get a little over-confident and the market humbles us.
35. We continue to learn our lessons.
36. We stop thinking and allow our rules to trade for us (trading becomes boring, but successful) and our trading account continues to grow as we increase our contract size.
37. We are making more money than we ever dreamed possible.
38. We go on with our lives and accomplish many of the goals we had always dreamed of.

Most traders will identify with this list and should be able to place themselves within these steps. Keep in mind that very few people progress through these steps in an orderly fashion. Developing your trading skills is an iterative process.

For example, you may reach Step 13., find that although you were making money, your basic premise for trading was flawed (you might have been benefiting from the bull market, rather than your own trading prowess and then have been rudely awakened when the market entered a bear phase) and you may drop back to Step 4. and start 'climbing' the steps again.

Having the proper mindset, attitude and psychological makeup becomes increasingly important as you progress through the steps. The focus of the earlier steps is on external issues, i.e. developing proficiency in the mechanics of trading while the focus of the latter steps (particularly from Step 30, on) is on internal issues, i.e. improving ourselves mentally and psychologically, maturing as trader.

this was my post in my first thread.. still I m stuck @ 20-21.

A real eye opener.....:thumb:


I think I m close to step 21. "We feel we are very close to crossing that threshold of successful trading."
Also step 22 requires to take responsibility for trades. So I hope a trading diary here serves the purpose.

http://www.traderji.com/trading-dia...d-new-way-pivot-trading-vwap.html#post1128112

 

[suri112000]

I am struck at 29 and 30.

 

[LoneWolf]

I am stuck at 30 - 31, 34 is a silent warning, and I need to keep that in mind.

 

[akza]

thanks for the post

As Bruce Lee said "I fear not the man who has practiced 10,000 kicks once, but I fear the man who has practiced one kick 10,000 times."

We need to practice only one trading style and follow that but first you have to find out what suits you which can you practice 10,000 times.

I believe the number of trading style would depend upon the instrument you wanna trade, like in options actually we trade on volatility, so here we should have at least two style to counter increase & decrease in volatility.

 

[vagar11]

While working on a strategy don't just look at the number of points that the strategy makes over a month but also take a look at the drawdown in terms of percentage.