TaiChi Price Action - Intraday Trading Strategy

[Taiki]

Trading Psychology - Having the Right frame of mind

Be it any task in the world, Without right approach one is bound to fail. And the same goes for intraday trading as well. One need to develop the right attitude and belief in his/her system. I am just mentioning the key guidelines that I follow and try to implement.

1. Trading is the game of probability.

This is quite easy to say than accept. When position goes in to loss, or by seeing a favourite setup to fail, it becomes difficult to accept that anything can happen in the market. Market has no obligation towards anybody, and it does not owe anyone any profit/loss. So we need to accept that profit and loss are just part of the game, while the real secret to success lies in proper money management which will allow us to loose less in loosing trades and win more in winning trades.

Trading is not an intellectual game. You can’t “out-think” the market. Analyzing and predicting the markets is not nearly as important as learning how to react to what the market actually does. Stay involved in the process of making the right decisions at each moment, and let go of worrying about the outcome. - Linda Bradford

2. Every moment in the market is unique and making money is more important here than it is to be right.

3. One should not be overjoyed after few consecutive wins or be disheartened after a loosing streak. Treat all the trades irrespective of the outcome of the previous trade. You never know which trade is gonna give you a super big return.

4. Never play with your rules, thinking to out-think the market. One can play with your rules, and get away for a awhile. But one day market will play with you and will show you your position.

5. The study of price action only focuses on the effects, completely ignoring the cause. A charted history of price action is nothing but a cumulative story of millions of trading decisions from past. The study of price action has no magic power which can predict the future, but it keeps the odd in our favour by trading with a perception that the trend will most likely continue.

6. Trading price action is not only about trading chart patterns and doing candlestick analysis, but it is also about to be able to successfully read and understand what the chart is trying to communicate.

7. Finally, believe in your system completely and whole heartedly.

Regards
Taiki

 

[Taiki]

Trading Psychology - Setting the Goal

Goal is simple objective that you are trying to accomplish which gives you direction and a purpose. Setting a goal is nothing but writing down what do you expect out of your activity. Planning and staying committed to accomplish your goal is equally important as setting a goal is. And it seems especially hard if our goals are more intangible.

Like any other projects, whenever you decide to trade in financial market, you need to sort out your priorities, your intention and your reason for trading. It does not matter if you are trading full time, or just trying your hand for the first time. Without goals your journey will be like a ship without its captain. You will be more determined and inspired to work when you start with the end in your mind.

I personally very much like and believe in Lance Begg's style of setting process oriented goal. As these types of goals are more directed to control your own behaviour rather than trying to control the market. Money oriented goals like " I want to get a xyz% of return every day/week/month" carries a sense of urgency or pressure for accomplishing the goals, because anything less than the desire is not acceptable. And this urgency will make you look for a trade setup which is not there and overtrade and thus planting a seed for loss.

But with process oriented goals you are being committed to manage your own behavior and focusing on the process and monitoring how you do them. All your attention and energy is given to control yourself rather than controlling the outcome a trade which is probabilistic and uncertain.

The market cannot take anything from you that you do not allow; the market cannot give you something unless you allow it too. If you are willing to admit that the battleground is not the market, but it is within you, then all your attempts will be directed to control you and your trade, not the market.

Secondly set your goals in such a way that a goal can be easily broken down in to smaller units, and thus emphasize on accomplishing a particular task at a given time. This gives you a sense and satisfaction of working regularly towards your bigger goals. So split your monthly goals in to daily achievable units, or split your quarterly goals to weekly achievable units.

Examples of Process Goals

1. I will trade only as per my trading system's written trade setups and rules. I will not trade out of my own emotion. I will trade as per what my chart is saying now what I believe market will do.

2. I will always trade with stop loss. I will book profit whenever market makes it available to me. I will not interfere with my trade without any cause.

3. I will be watchful and will put constant effort in learning/practising my system's trade setups, so that I can recognize them well during the live market when the charts are developing. Its very easy to point out a trade setup or chart pattern after the day closes. But its an art to anticipate the trade setup or pattern as they are being developed during live market on the right hand side of your chart.

4. I will always follow my money management rules. I will never build a position which I can not afford. I will always define my risk before I take any trade.

Setting these types of goals with a checklist of evaluating them at EOD help myself becoming more disciplined and systematic in my approach.

And finally, Remember setting a goal is just a starting point. You goal should always motivate and inspire you to work harder for achieving them. If you feel discouraged and starts doubting then it is for sure that you are making an unrealistic goal, which does not match your future projection and current mental alignment.

Compete with yourself. Try to be a better yourself than you were yesterday. Ultimately when you start making everything right throughout your path, your end result cannot go wrong.

Regards
Taiki

 

[XRAY27]

Taiki ji

Please Update this thread... if your time permits ... hope every thing is fine in personal life.

 

[Taiki]

Hello Everyone and Happy New Year to All,

Sorry for the discontinuation in middle, But planning to resume this thread on intraday price action trading..

Regards
Taiki

 

[raj_jain1]

taiki sir just continue this thread...I am eagerly to learn price action for intra day trading not positional..so startttttttttt nwww

 

[candle]

Welcome back Taiki,

I really learnt a lot from your earlier thread. And would like to mention that you are doing great at your task. Would enjoy your posts and learn a lot ....again !

regards

 

[bunti_k23]

Welcome back taiki hope u will hit bulls eye in every trade like your avtar convey's

 

[vssoma]

welcome back dost...... i am eagerly waiting for your updates...

 

[arcus]

Welcome Back Taiki and Happy New Year.

 

[Taiki]

Proper Money Management Plan

1. Defining Trade Risk

Once you accept that trading is just a game of probability, and with every trade there is this factor of risk to our own pocket, then its always better to think about your own safety first before going in to the battlefield. The greatest warrior also first wears the armour plate and then picks up the bow and arrow. So we need to ensure our own survival first. And also this is the reason for which there are so many blown away accounts in initial years. I have blown out my account twice before learning this fact and calculating the risk associated with every trades.

So your trade risk is actually the amount of money that you are willing (in other word, you are comfortable) to loose if the trade goes against you. A nice analogy can be made here from my own experience.

"One day, I and one of my friend was coming out of a restaurant after having lunch, and outside there was a beggar, asking for some money. When I gave him a 10rs note, my friend was carried away that day, and gave him a 100 rs note, and told him to go and have some food. Though I appreciated him and his act, but that made me think and ask this question to myself. "How many days can I give a 100 rs note to a beggar and be comfortable" ?

I asked the same question to my friend also, and he told its only a matter of once. He can give a 10 rs everyday and can get away with it. But 100 rupees everyday is definitely a NO. So I realized even I am not comfortable in risking 100 rupees everyday and give it to someone just like that. But everyday I am doing intra-day trading and risking much higher money. Where as my true risk - comfort level stays below 100 rs. !!!"

So if I can bring down my risk per trade factor to such a level where the negative outcome of trade (loss) wont bother me at a personal level, and I can again come to trade next day comfortably letting go the previous trade's outcome. No loss can throw me out of the game as long as I am comfortable with it. And then I realized that one of the key secret to success in the business is to let go of the loosing trades. And knowing the trade risk is the first step here.

Regards
Taiki