New Intermed Uptrend!!

ravi t · #**791** 20th September 2005, 08:13 PM

Quote:

Originally Posted by saint

Hi Ravi,

Bug still in........

.But overall feeling better

......Ravi,you started this bug thing ,then Amit,myself,nkpanjiyar......

Hope you are fine now and rearing to go!!

Saint

ya man fine!!!! but still not fit

just getting along...
ok on to the business now!!!!
there has been lot of talk on air and in media regarding this penny stock thing. lot of paniking and fretting in all circles. CNBC ran a complete show on that. Papers are full of it?? seems everybody is calling these so called penny a fake.. I myself is confused... the panick is seen on almost all the counters. almost all of them suffered a beating. Now when i see the ones i had evaluated i don't find anything wrong on TA..i don't understand..are we on the other side of the fence saint??? are we missing something big here??? Cautious is alright but jealousy by those so called big ones, is it justified???
or to put it straight here, am I doing anything wrong here in suggesting these small ones when I find them of higher worth on most of the counts????????
what you say??????
AMIT are you here?Please add-on
regards
RAVI T

Saint · #**792** 20th September 2005, 09:38 PM

Quote:

Originally Posted by naga2054

Saint!..
I couldnt understand todays Titan Move.. Any reason.. or just a coincidence.. The volume came in early but there was no FollowuP.. and then there was the final drop to the opening price , mostly might be the day Traders..
Is that to it.. or nething more..?

And about Garden Silks.. got in at 87.90 yesterday.. shall i hold on to it..?

Also pls. look at SRF - made good moves today..

India Infoline has got back its losses.. ne call on that..?

Nagzu

Hi Nagzu,

SRF:Yep,looking good.......now raise the stop loss to 303.Nothing else to be done.

Garden Silks:Put a stop at 85......get out if stopped,and reenter later.

Titan:Still ahold for now......let's wait n watch on this one.

IndiaInfoline:If not in,wait for apullback.....If this runs up without us,let it.Don't chase it.Let it come to us.If in already,great stuff.....is a hold.

All the best!!
Saint

Saint · #**793** 20th September 2005, 09:44 PM

Quote:

Originally Posted by roneeth

At the Weekend Also will be fine.

Regards

Roneeth

Hi Roneeth,

Looks like Amit 's reply and Phoenix's articles should do the trick.......

Like I said before,Always great to see that hunger for knowledge and that thirst for success.

All the best!
Saint

avinash · #**794** 20th September 2005, 10:05 PM

Hi Saint and others,

I notice this article by Credit Violet hardly has any views in the other section.I think this is the most important from newcomers perspective about trading rules.

Just reposting it here......hope many more newcomers will see this post and get benefit

Quote:

Originally Posted by CreditViolet
Money management is the process of analyzing trades for risk and potential profits, determining how much risk, if any, is acceptable and managing a trade position (if taken) to control risk and maximize profitability.
Many traders pay lip service to money management while spending the bulk of their time and energy trying to find the perfect (read: imaginary) trading system or entry method. But traders ignore money management at their own peril.

The importance of money management can best be shown through drawdown analysis.
Drawdown
Drawdown is simply the amount of money you lose trading, expressed as a percentage of your total trading equity. If all your trades were profitable, you would never experience a drawdown. Drawdown does not measure overall performance, only the money lost while achieving that performance. Its calculation begins only with a losing trade and continues as long as the account hits new equity lows.

Suppose you begin with an account of 10,000 and lose 2,000. Your drawdown would be 20%. On the 8,000 that remains, if you subsequently make 1,000, then lose 2,000, you now have a drawdown of 30% (8,000 + 1,000 - 2,000 =7,000, a 30% loss on the original equity stake of 10,000). But, if you made 4,000 after the initial 2,000 loss (increasing your account equity to 12,000), then lost another 3,000, your drawdown would be 25% (12,000 - 3,000 = 9,000, a 25% drop from the new equity high of 12,000).

Maximum drawdown is the largest percentage drop in your account between equity peaks. In other words, it's how much money you lose until you get back to breakeven. If you began with 10,000 and lost 4,000 before getting back to breakeven, your maximum drawdown would be 40%. Keep in mind that no matter how much you are up in your account at any given time--100%, 200%, 300%--a 100% drawdown will wipe out your trading account. This leads us to our next topic: the difficulty of recovering from drawdowns.

Even worse is that as the drawdowns deepen, the recovery percentage begins to grow geometrically. For example, a 50% loss requires a 100% return just to get back to break even (see Table 1 and Figure 1 for details).

Professional traders and money mangers are well aware of how difficult it is to recover from drawdowns. Those who succeed long term have the utmost respect for risk. They get on top and stay on top, not by being gunslingers and taking huge risks, but by controlling risk through proper money management. Sure, we all like to read about famous traders who parlay small sums into fortunes, but what these stories fail to mention is that many such traders, through lack of respect for risk, are eventually wiped out.

Guidelines that should help your long-term trading success.
1. Risk only a small percentage of total equity on each trade, preferably no more than 2% of your portfolio value. I know of two traders who have been actively trading for over 15 years, both of whom have amassed small fortunes during this time. In fact, both have paid for their dream homes with cash out of their trading accounts. I was amazed to find out that one rarely trades over 1,000 shares of stock and the other rarely trades more than two or three futures contracts at a time. Both use extremely tight stops and risk less than 1% per trade.

2. Limit your total portfolio risk to 20%. In other words, if you were stopped out on every open position in your account at the same time, you would still retain 80% of your original trading capital.

3. Keep your reward-to-risk ratio at a minimum of 2:1, and preferably 3:1 or higher. In other words, if you are risking 1 point on each trade, you should be making, on average, at least 2 points. An S&P futures system I recently saw did just the opposite: It risked 3 points to make only 1. That is, for every losing trade, it took 3 winners make up for it. The first drawdown (string of losses) would wipe out all of the trader's money.

4. Be realistic about the amount of risk required to properly trade a given market. For instance, don't kid yourself by thinking you are only risking a small amount if you are position trading (holding overnight) in a high-flying technology stock or a highly leveraged and volatile market like the S&P futures.

5. Understand the volatility of the market you are trading and adjust position size accordingly. That is, take smaller positions in more volatile stocks and futures. Also, be aware that volatility is constantly changing as markets heat up and cool off.

6. Understand position correlation. If you are long heating oil, crude oil and unleaded gas, in reality you do not have three positions. Because these markets are so highly correlated (meaning their price moves are very similar), you really have one position in energy with three times the risk of a single position. It would essentially be the same as trading three crude, three heating oil, or three unleaded gas contracts.

7. Lock in at least a portion of windfall profits. If you are fortunate enough to catch a substantial move in a short amount of time, liquidate at least part of your position. This is especially true for short-term trading, for which large gains are few and far between.

8. The more active a trader you are, the less you should risk per trade. Obviously, if you are making dozens of trades a day you can't afford to risk even 2% per trade--one really bad day could virtually wipe you out. Longer-term traders who may make three to four trades per year could risk more, say 3-5% per trade. Regardless of how active you are, just limit total portfolio risk to 20% (rule #2).

9. Make sure you are adequately capitalized. There is no "Holy Grail" in trading. However, if there was one, I think it would be having enough money to trade and taking small risks. These principles help you survive long enough to prosper. I know of many successful traders who wiped out small accounts early in their careers. It was only until they became adequately capitalized and took reasonable risks that they survived as long term traders.

10. Never add to or "average down" a losing position. If you are wrong, admit it and get out. Two wrongs do not make a right.

11. Avoid pyramiding altogether or only pyramid properly. By "properly," I mean only adding to profitable positions and establishing the largest position first. In other words the position should look like an actual pyramid. For example, if your typical total position size in a stock is 1000 shares then you might initially buy 600 shares, add 300 (if the initial position is profitable), then 100 more as the position moves in your direction. In addition, if you do pyramid, make sure the total position risk is within the guidelines outlined earlier (i.e., 2% on the entire position, total portfolio risk no more that 20%, etc.).

12. Always have an actual stop in the market. "Mental stops" do not work.

13. Be willing to take money off the table as a position moves in your favor; "2-for-1 money management1" is a good start. Essentially, once your profits exceed your initial risk, exit half of your position and move your stop to breakeven on the remainder of your position. This way, barring overnight gaps, you are ensured, at worst, a breakeven trade, and you still have the potential for gains on the remainder of the position.

14. Understand the market you are trading. This is especially true in derivative trading (i.e. options, futures).

15. Strive to keep maximum drawdowns between 20 and 25%. Once drawdowns exceed this amount it becomes increasingly difficult, if not impossible, to completely recover. The importance of keeping drawdowns within reason was illustrated in the first installment of this series.

16. Be willing to stop trading and re-evaluate the markets and your methodology when you encounter a string of losses. The markets will always be there. Gann said it best in his book, How to Make Profits in Commodities, published over 50 years ago: "When you make one to three trades that show losses, whether they be large or small, something is wrong with you and not the market. Your trend may have changed. My rule is to get out and wait. Study the reason for your losses. Remember, you will never lose any money by being out of the market."

17. Consider the psychological impact of losing money. Unlike most of the other techniques discussed here, this one can't be quantified. Obviously, no one likes to lose money. However, each individual reacts differently. You must honestly ask yourself, What would happen if I lose X%? Would it have a material effect on my lifestyle, my family or my mental well being? You should be willing to accept the consequences of being stopped out on any or all of your trades. Emotionally, you should be completely comfortable with the risks you are taking.

The main point is that money management doesn't have to be rocket science. It all boils down to understanding the risk of the investment, risking only a small percentage on any one trade (or trading approach) and keeping total exposure within reason. While the list above is not exhaustive, I believe it will help keep you out of the majority of trouble spots. Those who survive to become successful traders not only study methodologies for trading, but they also study the risks associated with them. I strongly urge you to do the same.

Saint · #**795** 21st September 2005, 11:13 AM

Thx Avinash!

Saint

Saint · #**796** 21st September 2005, 11:17 AM

As expected,this correction has come.Does not mean we are at market tops,but this correction will hurt if you do not stick to your stops.Take all stops if triggerred.........no thinking now that this market is going to 10000 or 25000 anyway,so might as well hold,then hope and pray,etc.

Get out if stops hit......Reenter later if the patterns look juicy again!

All the best!!

Saint

Saint · #**797** 21st September 2005, 11:30 AM

In abull market,a correction is most welcome...........we buy weakness,and sell into strength.A pullback is what we are looking for to enter...........but please do not buy over here.Much more of a p/b left.....then it'll be a juicy time to enter.Much more for daily charts to correct......once done,we'll be all over it.The Great Indian Bull Run is far from over.......

Happy Trading(or rather Happy Sitting on Hands!)

Saint

karthikmarar · #**798** 21st September 2005, 11:35 AM

Hi Saint

The way it is falling ... I hope we dont end up with a BLACK WEDNESDAY...

regards

karthik

roneeth · #**799** 21st September 2005, 11:44 AM

Hello Karthik!

Do you use icicidirect?Just wanted to know as i am based in u.a.e.
They have closed the site due to some technical reasons till 12.

Regards

Roneeth

vinsu · #**800** 21st September 2005, 11:51 AM

Quote:

Originally Posted by roneeth

Hello Karthik!

Do you use icicidirect?Just wanted to know as i am based in u.a.e.
They have closed the site due to some technical reasons till 12.

Regards

Roneeth

Roneeth .
Me too facing the same problem , from Japan .
Vinsu

Similar Threads for: New Intermed Uptrend!!
Thread	Thread Starter	Forum	Replies	Last Post
Bank Stocks beginning NEW INTERMEDIATE UPTREND	Traderji	Position Trading Stocks	73	11th July 2005 09:33 AM
PSU Bank Stock Break out to begin new uptrend	TATrader	Current Affairs	1	26th February 2005 10:16 AM
New Intermediate Uptrend	TradersEdge	Position Trading Stocks	6	16th November 2004 02:26 PM
BPCL breaksout to begin new intermediate uptrend	Traderji	Stocks & Shares	5	11th November 2004 10:08 AM
NSE Nifty - New Intermediate Uptrend ??	Traderji	Position Trading Stocks	11	11th August 2004 04:02 PM