Notes of a beginner ...

priyanvada

Well-Known Member
#1
Hello friends,

I am a about 3 week old day trader and I will share important points I have learned till now & from hereon right here... i am doing this so to help my colleagues who are also trying to walk first steps... If Any of my experience be of any help to anybody in any way my work will be worthy ... So if i am mistaking anywhere or every where please do correct me ... I am always open to receive...

1. First Signals : - Price, Time and Volume are the only first and most fresh things you get from exchange ... So if you can become a master of reading these things and what they "mean", then there seems to be no need to learn all the technical stuff ... So always be careful not to get lost in technical jargon ... Do travel it ... but never get lost ... i was about to get lost and fortunately RSI has pulled me on right track ...

2. Live charts on websites: - till now I have made a loss of 5 to 6000 Rs. just because of one stupid blunder. I referred price charts which are broadcasted "live" on in.quote dot com ... and based on that I have took my decisions ...and 90% of them were wrong...So past 3 weeks with fantastic consistency like a pro day trader I was i was day-trading but only difference was I was making loss and loss and loss...the day decided to stop I day trading , suddenly I found that those broadcast were delayed 15 minutes .... So please don't make mistake like me ....

"No website legally gives us Live broadcast of stock prices for free"

... I won't forget this in my whole life you also don't make this BIG mistake ...

3. the Science of probability: -
The very basic science I have realized behind all is Probability Theory.

Very Basic question is that if you take some "set of actions/decisions", what is probability of you survive long and strong in the game?
So as a quest for the right answer to this question concept of stop loss has arrived.
While taking any action in the market do ask yourself some basic questions ...Don't/Never enter blindly...
a. What loss is acceptable for me in this/any trade. what % of total capital I am ready to lose in a given trade.
b. What benefit i expect from this trade ... What benefit I am looking up to? ... Or Do I want to keep this option open? ...
So first decide on this, stick to it,do the trade, ... if things go right learn from it ... if things go wrong learn from it and find some improvement... change the plan...this way only I/we will find better and better ways to trade...
Probability Statement 1: - the probability theory says "the less you lose in any single trade and the "more" the number of trades you make in the trend, the more are the chances you will survive long and strong and you will grow up" ...
Probability Statement 2: - So taking above statement to be true, I put very very tight stop loss then another probability comes into the picture...which says if I put stop loss in the range of price fluctuations then it is more probable that I will hit it and although i am losing very less I am winning also very less ... So this way second probability will counter the first first probability ... and we won't grow ...if we increase the stoploss too much then first statement will shout at us ... "well dear trader, you are violating me, so be ready for packup"
So we need to learn to put "Right and Tight" stop loss to every trade. this way we will satisfy both of the above probabilities...and be a most "probable" winner...
Probability doesn't believe in "hoping" things to turn around ... So if stoploss price is hit just stick to your commitment ... get out of the trade and learn...Probability likes play safe ... play in more numbers ... and she will be happy if you use your common sense in addition :)

4. Actual Loss is more than double of itself : -
I get 6 times exposure of the total amount I deposit in my Demat account. I was having 10,000 Rs. in my account and On one fine day I made a fantastic Rs. 2000/- loss in one day!!! ...The next day I discovered this very very important thing ... When I saw my exposure decreased by 12000/-Rs.... And I realized that ...

a. I have already lost 2000/- this is the basic lost
b. To get to the ground level where I was a day before ( i.e. Rs. 10,000. account balance)
I have to earn profit of Rs. 2000/-
c. Earning 2000/-in one day is not a joke
d. I am not equally "Powerful" as the day before, since because of loss i have have lost
Rs. 12000 margin ... So I "have to" earn 2000/- with lesser amount than the day before...
d. Anyway with all my vigor if I became successful to earn Rs.2000/- in a day, all that good
is i have reached where I was initially ... so actually i have lost my Rs 2000/- profit too
reaching to the same place ...
e. I have lost at least two valuable days not reaching an inch ahead:mad: ..

So this way loss is always double than itself! ,...

I have found it and sharing with you ... So please take this seriously and don't reinvent the wheel ... better reinvent something like bullock cart with that wheel :)

.... So if you like my understandings please do reply ... Do correct me if anywhere /everywhere i am wrong!

Thanks n regards,
priyanvada
 

priyanvada

Well-Known Member
#2
5. I don't have infinite cash: -

No body in the world has infinite cash. This is very basic thing to remember.

If in case you have infinite cash flow, I would like suggest you a more wonderful and funny method to earn with it ...

... Go to the mataka/number lottery center ... Suppose there is a game ... You bet 1 Rs. a number from 0 to 10 and if it comes true you will win 5 Rs. for 1 Rs. ...

So I will tell you the method here ...
1. First day put Rs. 1lakh (you have infinite cash so why bother) on say No. 5... say you lost 1 Lakh that day
2. Next day go and put double the earlier days amount ...i.e. 2 Lakh on number 5 ... say again you lost
3. Next day 4 Lakhs on nuber 5 ...
4. Next day 8 Lakhs on number 5 ... (Don't bother about the cash man...you have got infinite)
If number drawing is random (which actually is not:cool:) then in very soon in 10 to 15 days you will hit that number 5 and amount that mataka king has to pay will be around 2.5 times of the total amount you have invested on till that day .. So the late it hits the target the sure he will go bankrupt!:D

So anyway please keep in mind "you don't have infinite cash flow" ... So Use it wisely! Keep a track of it! and make it grow!
 

priyanvada

Well-Known Member
#3
6. Don't try to Dominate The Market: -

It is easy for a girl like me to understand this principle...Still i am putting here just as a reminder to my strong minded friends ...
Often My brother says some stock WILL go this way ... it HAS TO go this way and like that... and as usual the market walks on its own mind ... and finally my brother gets sad ...
So I always suggest him, when you marry, Dominate your wife, she will happily follow your orders, but don't treat market like your wife ... One can not dominate it unless one has crores of Rupees ... So we are not "individually capable" of controlling the maket ... Always bear this in mind...

Mind wants a model to understand anything...So I have made a nice model to understand things...My funny Model is as below ... If you like keep it in your mind and keep your attitude accordingly towards it ...else make your own wonderland ...and enjoy it...

I am sitting on a shore of a river ... river is nicely flowing in front of me ... And there is a competition ... Not with anybody else but with myself only ... There are many ones who are playing this competition ...
I have brought some precious diamonds from my home to enter into this competition ...the competition is i put some diamonds in my boat ... Wait for the right time and just put boat in the flow ... tell the river," Ohh great river! As I see your flow, I am sure my boat will surely reach this distance and in this direction... And If I am right river will give back my boat and reward me more diamonds ... If I am wrong she will penalize me and take some more diamonds from me as a penalty for my mistake ... and there is invisible power which allows me to take part in competition ... but every time i play a game she takes some few diamonds from me ... she doesn't care whether I lose or win ...So She is a very rich power ...
... So many ones are competing with themselves like me ... some keep shouting at the river flow like this ... flow this way ...but river smiles and ignores them and flows on its own ...I tell them Don't try to dominate the flow ... better listen carefully and you can guess better ...
....and there are birds flying above our heads ... birds which tell news ... birds which tell price ... birds which tell volume ... old birds which tell support and resistance ...listening to these birds carefully can help us where the flow is going ... there are Veteran peoples sitting on the shore who are the best watchers and listeners of the flow and the birds ... they rarely fail ...Some of them are very kind and helpful ... they take their time ...they teach the art of listening and watching
... Everyday we all come here from our home at 9.55 a.m. when the competition starts and go in the evening ... everyone of us wants to go with some more diamonds in our bag ... then only our life will become easy... then only our dreams will come true ...

Nice model! isn't it? Still Please Don't forget the rule ... Don't / Never try to dominate the market ... instead become a better watcher and listeners of things and their impact on the direction ...

regards,

priyanvada
 

RSI

Well-Known Member
#4
My sincere suggestions

1. Stop immediately trading with real money. You say you are having finite source of money. You say you are having experience of trading of only three weeks.

2. If you are still itching to trade, do paper trade.

3. Donot be disappointed that you are not in the midst of action. Your time will come. Have patience. It is impatience that kills almost all newbies. Remember there are "no old and bold traders".

4. A newbie like you should not use leverage. It sounds great to make Rs.10000/- upon a margin of Rs.3000/-. But no one tells you what you have to do if you suffer loss of Rs.3000/- in the first few trades itself. That is what usually happens to a newbie starting with leveraged account.

5. Learn money management techniques. That is most essential. Without learning those aspects do not think of trading.

These are some useful tips. I sincerely hope this helps
 

WOD

Well-Known Member
#5
My sincere suggestions

1. Stop immediately trading with real money. You say you are having finite source of money. You say you are having experience of trading of only three weeks.

2. If you are still itching to trade, do paper trade.

3. Donot be disappointed that you are not in the midst of action. Your time will come. Have patience. It is impatience that kills almost all newbies. Remember there are "no old and bold traders".

4. A newbie like you should not use leverage. It sounds great to make Rs.10000/- upon a margin of Rs.3000/-. But no one tells you what you have to do if you suffer loss of Rs.3000/- in the first few trades itself. That is what usually happens to a newbie starting with leveraged account.

5. Learn money management techniques. That is most essential. Without learning those aspects do not think of trading.

These are some useful tips. I sincerely hope this helps

RSI, I dont think paper trade will help. Paper trade and real trade are entirely two different things.....Second, not matter how great TA knowledge she must be having, its only 20% part of this buiseness....

@Pv,
Dear, be prepared to lose all of your money......and back off if you can not stand again after a serious loss.......you can not get your mindset right tilll you lose some great amount of money (mindset or psychology contributes 70% part of this buiseness)....


remember, trading success = 20 % TA + 10 % MM + 70 % Psychology......a proven fomula....

Come into this Jungle only if you have resilience to face lot of pain, furstration and tears that are awaiting you......
 

priyanvada

Well-Known Member
#6
Thanks RSI for your kind suggestions ...

1. Stop immediately trading with real money. You say you are having finite source of money. You say you are having experience of trading of only three weeks.
... But just sitting on the shore and try to learn swimming by merely watching it ... No Sir it is not "priyanvada's way" ... So sorry I can't and won't be able to do that ... Let me make REAL mistakes and Let me suffer... ... Right now I am having small amount so I will try my best not to lose that foolishly ...


2. If you are still itching to trade, do paper trade.
Again as above...

3. Do not be disappointed that you are not in the midst of action. Your time will come. Have patience. It is impatience that kills almost all newbies. Remember there are "no old and bold traders".
... Time HAS come .. it is right here in front of me ... It won't kill me for sure ...It WILL teach me how to survive...

5. Learn money management techniques. That is most essential.
Yes that's what I am trying to do right now!

regards,
priyanvada
 

RSI

Well-Known Member
#7
RSI, I dont think paper trade will help. Paper trade and real trade are entirely two different things.....Second, not matter how great TA knowledge she must be having, its only 20% part of this buiseness....

Definitely. Paper trading will not address with real psychological issues that will crop up when trading with real money. As you rightly pointed out psychology and money management are more than 50% to make money consistently.

But consider the case on hand. Newbie has no experince to speak off. No strategy. Yet to study money management techniques. Trading capital is Rs. 10000/-, which is wholly insufficient.

At least let the newbie paper trade so that except psychology, everything else can be studied. If intelligent that can also be studied, but I doubt. This newbie seems to be having that instinct/intution that is required for survival. So let us guide the way for survival.

@Priyanvada

Not to attack you personally. You might have noticed that I have deliberately refrained from addressing you as a girl. Your writing style does not indicate so. Am I right?
 

Capricorn

Well-Known Member
#8
@Priyanvada

Not to attack you personally. You might have noticed that I have deliberately refrained from addressing you as a girl. Your writing style does not indicate so. Am I right?
You had better not or people are going to start screaming sexism.:D

But in all seriousness this is a profession where gender doen not matter.
 

Capricorn

Well-Known Member
#9
@Priyanvada

Not to attack you personally. You might have noticed that I have deliberately refrained from addressing you as a girl. Your writing style does not indicate so. Am I right?
You had better not or people are going to start screaming sexism.:D

But in all seriousness this is a profession where gender does not matter.
 

AW10

Well-Known Member
#10
Hi Priyanvada , great stuff. Appreciate your understanding of the subject (at this stage of trading career) and committment to learn and improve.
Way to go. Keep it up.
What I appreciate more is that u are willing to share this with others on TJ forum.
I have followed your discussion with RSI but deciding to jump in here now.

My view on paper trade - Imagin you are learning to drive a car. After 1 or 2 days, u are in the position to gears.. Are u confident of taking the car to highway and drive among all trucks / bus.
Or are u confident of taking the car to bussiest part of your city.
Same goes for swimming or any other game.. Thats exactly where paper trading helps. I know it is painful / no attractive / boring / no real action.. But it has its own advantage.
It helps u to get used to your system and rules (by repeatition),
It helps in tuning your mind, eyes, brain, thought process to meticulously look for your setup and pull the trigger(by continous practice).
It protects your capital (no real money involved)
Proves your system (if it doesn't make money in paper trade, then what makes u think that it will make money in real trading)

Imagin the case, that u are standing on 30ft diving board and taking you 3rd jump.. What are your feelings ?
And now imagin the case when you are standing at the same board but this time u have the experience of 1000 previous jumps ?

Yes, paper trading has its own limitations as well. It will not give u practice of real life emotions.. For that u have to face the mkt. But atleast when u come to the market after paper trade, you will have
less challange and just have to handle only the psychology.. not the system. Otherwise, u will double challange of thinking about system as well as your psychololgy.

Hope this helps. look at both the sides and the edge of coin before taking a decision.

Happy Trading.
 

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