First of all, let me give some background about me so that you can better understand me and my trading philosophy.
I am totally new to trading. I am an absolute beginner. In fact yesterday is when I placed my first buy order of nifty futures.
However, I am not new to stock market or investing. I have been active in the stock market for quite a while. It took me many years to hone my investing skills. I know consider myself a decent investor - perhaps even a good investor. I operate as a contrarian and buy value stocks based completely on fundamental analysis. I regularly, if not always, average down when price falls. I buy deep value out of favour stocks at 52 wk lows.
Till recently I had totally ignored technical analysis. I lived by the creed technical analysis is arrant nonsense and anyone practicing it is delusional. I had tried reading TA books many times but the lack of objectivity (in my perception) really put me off. It never let me finish the book or get any meaningful value out of TA.
What is "head and shoulders" or "cup and handle" is rather subjective and depends as much on the skill and perception of the person as on the chart. When I started looking at charts I could see head and shoulders everywhere or nowhere. So, I completely wrote off TA as not being my cup of tea. It might work for others (or so they claimed I thought) but it was definitely not for me. I had nothing but contempt for all TAs showing up on CNBC.
Nevertheless, I did read a lot of books on trading as the topic was similar or related to investing.
I was convinced of the uselessness of charts. That is till I encountered moving averages. MA, unlike many of the patterns of TA, is mathematical, absolute and precise.
I had known about MA crossover for a long time but it did not quite strike me as being something terribly important. Not till some ideas I picked up in different books came together.
I decided to give MA a try and I was absolutely amazed at its utility. The usefulness was simply mind boggling. See, I come from a background where I never time stocks. If I find value, I buy it then and there - feeling that any attempt at timing the stock is futile. I really did not care if the stock was in free fall. MA clearly showed that stocks in downtrend could be timed.
So from then on I became very interested in trading and looking for a good time to enter a stock I had been eyeing. As I read more and more, I became further interested in trading.
Some of the ideas of trading are completely opposite to everything I held dear as an investor. It took me many months to reconcile these contradictions. I now believe I am ready to try my hand at trading (as opposed to investing). I am going to trade nifty futures and see how things go. I will regular post my trades, the results and my thought process behind the trading.
I am totally new to trading. I am an absolute beginner. In fact yesterday is when I placed my first buy order of nifty futures.
However, I am not new to stock market or investing. I have been active in the stock market for quite a while. It took me many years to hone my investing skills. I know consider myself a decent investor - perhaps even a good investor. I operate as a contrarian and buy value stocks based completely on fundamental analysis. I regularly, if not always, average down when price falls. I buy deep value out of favour stocks at 52 wk lows.
Till recently I had totally ignored technical analysis. I lived by the creed technical analysis is arrant nonsense and anyone practicing it is delusional. I had tried reading TA books many times but the lack of objectivity (in my perception) really put me off. It never let me finish the book or get any meaningful value out of TA.
What is "head and shoulders" or "cup and handle" is rather subjective and depends as much on the skill and perception of the person as on the chart. When I started looking at charts I could see head and shoulders everywhere or nowhere. So, I completely wrote off TA as not being my cup of tea. It might work for others (or so they claimed I thought) but it was definitely not for me. I had nothing but contempt for all TAs showing up on CNBC.
Nevertheless, I did read a lot of books on trading as the topic was similar or related to investing.
I was convinced of the uselessness of charts. That is till I encountered moving averages. MA, unlike many of the patterns of TA, is mathematical, absolute and precise.
I had known about MA crossover for a long time but it did not quite strike me as being something terribly important. Not till some ideas I picked up in different books came together.
I decided to give MA a try and I was absolutely amazed at its utility. The usefulness was simply mind boggling. See, I come from a background where I never time stocks. If I find value, I buy it then and there - feeling that any attempt at timing the stock is futile. I really did not care if the stock was in free fall. MA clearly showed that stocks in downtrend could be timed.
So from then on I became very interested in trading and looking for a good time to enter a stock I had been eyeing. As I read more and more, I became further interested in trading.
Some of the ideas of trading are completely opposite to everything I held dear as an investor. It took me many months to reconcile these contradictions. I now believe I am ready to try my hand at trading (as opposed to investing). I am going to trade nifty futures and see how things go. I will regular post my trades, the results and my thought process behind the trading.
