The Day a Winner turned into a Looser

jlmalhotra

Active Member
#1
Hello All,

I am a day trader for past 11 months now, I started with an initial investment of Rs 3000. I learnt my way up the ladder losing and now able to manage, if not handsomely, a neat average on my present invesment of Rs 10000. (For past 3 months).

The reason for my writing is that I am unable to understand the trades I entered yesterday ie 31-12 2009 and would appreciate if some senior would come forward and explain.

I was having a nice day until I shorted 50 shares of LITL @ 571.5 (Total investment of Rs 28575) with a stoploss of 574.The stoploss was triggered and I got the message for the same at the bottom bar of my ODIN.

My second trade, which was SBIN 25 shares was again a loser.

However, to my horror, when I checked my net position after this trade, the LITL trade was not squared off and the stock was trading at 581. (Leading to an excess loss of Rs. 7 per share.)

My next trade was L&T which I shorted 30 shares @1686 @ 2:45 PM with a stop loss of 1695 which was later modified to 1689.

At 3:01.24 PM the stop loss was triggered BUT the share price did not go above Rs. 1688 on my terminal, neither the tick charts on the ODIN, nor the tick charts on the NSE show that it even touched 1688 at that given point of time.
As soon as my stop loss was triggered, the stock went on to touch a low of Rs. 1674.

I am enclosing a chart for your reference.

(Please note that I place stop loss orders after entering into the trade and modify it to book profits)

CAN SOMEBODY PLEASE EXPLAIN THE FOLLOWING:

With a capital of Rs. 10,000 (I withdraw anything above 10,000) and a trading limit of Rs. 50,000, how could the system approve the second trade, SBIN trades upwards of Rs 2250)??

If on an order of 50 shares and good volumes being traded in the market, the stop loss doesn't gets executed, what extra precautions do I need to take in future when I trade higher no. of shares.

What led to the failure of L&T trade (and a loss when I could have exited at a profit)

I just want to know, was it an unlucky day or I am a conspiracy theorist blaming my ill luck on my broker???

Also do let me know if a better platform than ODIN is available in the market?
 

MurAtt

Well-Known Member
#2
1. LT
You may not have seen it on your terminal but the price could actually have been breached. Would have been fast .. the next set of bid/ask replacing the traded one so fast you are unable to see it, add to it the Net Connection slowness (sometimes at your end, sometimes at brokers server) and bcoz of it the traded prices are never in the bid/ask and the nxt set replaces them.

2. LITL
When your SL triggered, the price may have moved up so fast that there were no sellers at the rate which you wanted to buy your shares back at .. like say your SL was 574, assuming your trigger was same too i.e. SL is 574 and cover at 574. Now once LITL breached 574 the next seller was at 577 and higher .. how can a trade take place and your order remained in the pending ...
Broker terminal showed a prompt saying SL triggered and buy order placed...

Happens sometimes ...

:)
 
#3
Enter the subsequent trade only on confirmation of the previous trade execution.For your Size of Capital one loss per day is sufficient,I think.Why go on shorting all the time.A failure in one strategy(i.e.shorting) might have clued you that the market is not on the sell side.
You might have gone with the longer time frame trend.Further a general strategy is if your trade fails for day keep you away from the market as your not in harmony with the market.
Keep it in mind to take only small loss per day.
 

netman

Active Member
#4
I think you need to change the software.
does ODIN shows your current obligations, I've just installed ODIN for commodity and don't have much idea about how it handles open possitions

I use power indiabulls and when i do intraday i always double check the open positions in "current obligations" this helps me prevent any accidential trade.
Also the "square off" option gives me a single click option to exit from all open trades.
 

MurAtt

Well-Known Member
#5
Negative thinking .. why think of losses ... Think profits and BIG profits .. try to work your way out to those BIG profits ...

SLs are a necessity to protect your capital which JM is doing properly .. only accidentally his strategies are not working in this market ...

:)

Enter the subsequent trade only on confirmation of the previous trade execution.For your Size of Capital one loss per day is sufficient,I think.Why go on shorting all the time.A failure in one strategy(i.e.shorting) might have clued you that the market is not on the sell side.
You might have gone with the longer time frame trend.Further a general strategy is if your trade fails for day keep you away from the market as your not in harmony with the market.
Keep it in mind to take only small loss per day.
 

kainiteh

Well-Known Member
#6
you should double check your orders whether position is closed/active

if price fall sharps your SL and Trigger price fails to execute! it happens
rarely so i always provide a reasonable gap between SL and Trigger Price!
 

rajputz

Well-Known Member
#8
Stoploss is a good practice.....a habbit worth developing, which some traders does not develop out of greed.

in your case i have some things to mentions: -

1. try to change from ODIN. i have seen simmilar problems with odin where the price tick stops and user thinks that his position is secured, where as the price has slipped far then his imagination.

2.

also in stoploss there are two value to be entered. one is your "limit price" and the other is "trigger price".

the trigger price should be exact upto limit u can take loss. but the limit price should be taken in consideration, according to Scrip. for eg: -
1. Liquidity of scrip
2. what happens if breakouts occur in the direction of stoploss and difference between trigger price and limit price is so small that stoploss target either hits executing only or with none at all.

keep these things in mind...


i am providing some more on stoploss....read themm




Monetory Stop: - This is the least effective method and used by most. This involves choosing
an amount of money, points or percentage of account value to determine
a stop loss level. The problem is that stop losses should be based on
technical indications not a monetary value. These are the type of stops that
get stopped out most frequently and are based on emotions rather than
technical analysis.

Bar Stop: - This is a form of trailing stop. E.g. as a stock moves in the intended direction,
the stop will trail with it. The strategy involves placing your stop 10
points below the low of the two most recently closed candles. Remember the
candles must be closed, do not use open candles. As the next candle closes
move your stop loss accordingly. For example if you were long then determine
the low of the two most recent candles. If the stock moves up reallocate
the stop loss 10 points below the low of the previous two candles. As
the stock increases, move the stop accordingly but NEVER lower the stop. If
the stock moves down leave the stop where it is. If you were short you place
your stop 10 points above the high of the two bar candle.

Candle Stop: - If you are entering a trade on a candlestick signal then you can use the
open, high, low, close to determine your entry point and stop. If you are entering
a long position after a hammer and confirmation, place your stop loss
5 points below the low of the hammer. Ask yourself at what level is my original
analogy wrong. If it comes below the low of the hammer it is probably
not a reversal and a good place to stop out.

Support and Resistance Stop: - As Market Makers are aware that people place stop losses just below and
above support and resistance, you need to be one step ahead of the game
when using this strategy. To prevent Market Maker manipulation adopt the
following strategy when placing stop losses at support and resistance levels.
Measure the range between the support and resistance. Place your stop loss
10% of the range either beneath support if long, or above resistance if
short. If there is too much risk then reject the trade.
 

rajputz

Well-Known Member
#9
Stoploss is a good practice.....a habbit worth developing, which some traders does not develop out of greed.

in your case i have some things to mentions: -

1. try to change from ODIN. i have seen simmilar problems with odin where the price tick stops and user thinks that his position is secured, where as the price has slipped far then his imagination.

2.

also in stoploss there are two value to be entered. one is your "limit price" and the other is "trigger price".

the trigger price should be exact upto limit u can take loss. but the limit price should be taken in consideration, according to Scrip. for eg: -
1. Liquidity of scrip
2. what happens if breakouts occur in the direction of stoploss and difference between trigger price and limit price is so small that stoploss target either hits executing only or with none at all.

keep these things in mind...


i am providing some more on stoploss....read themm




Monetory Stop: - This is the least effective method and used by most. This involves choosing
an amount of money, points or percentage of account value to determine
a stop loss level. The problem is that stop losses should be based on
technical indications not a monetary value. These are the type of stops that
get stopped out most frequently and are based on emotions rather than
technical analysis.

Bar Stop: - This is a form of trailing stop. E.g. as a stock moves in the intended direction,
the stop will trail with it. The strategy involves placing your stop 10
points below the low of the two most recently closed candles. Remember the
candles must be closed, do not use open candles. As the next candle closes
move your stop loss accordingly. For example if you were long then determine
the low of the two most recent candles. If the stock moves up reallocate
the stop loss 10 points below the low of the previous two candles. As
the stock increases, move the stop accordingly but NEVER lower the stop. If
the stock moves down leave the stop where it is. If you were short you place
your stop 10 points above the high of the two bar candle.

Candle Stop: - If you are entering a trade on a candlestick signal then you can use the
open, high, low, close to determine your entry point and stop. If you are entering
a long position after a hammer and confirmation, place your stop loss
5 points below the low of the hammer. Ask yourself at what level is my original
analogy wrong. If it comes below the low of the hammer it is probably
not a reversal and a good place to stop out.

Support and Resistance Stop: - As Market Makers are aware that people place stop losses just below and
above support and resistance, you need to be one step ahead of the game
when using this strategy. To prevent Market Maker manipulation adopt the
following strategy when placing stop losses at support and resistance levels.
Measure the range between the support and resistance. Place your stop loss
10% of the range either beneath support if long, or above resistance if
short. If there is too much risk then reject the trade.

Parabolic SAR: - Parabolic SAR is not just an indicator; it is a complete trading system. It is
an always in system, meaning if you follow the method you are always long
or short. It works best in trending markets. SAR stands for Stop And Reverse.
When putting SAR into charting software, it gives you a stop loss levelrepresented by a dot on the chart. As each candle closes, the stop is moved
closer to the price. When the stop is hit, the trader reverses direction. When
using SAR, remember the Market Maker diary, you do not want to use SAR
unless there is a good trend. It is not very useful during the Market Makers
lunch period where there is little volatility.
 
#10
Hi,

I am very new to this business, anybody please explain, how to understand double top, triple top, double bottom and triple bottom, please help me! Thank in advance
 

Similar threads