Trading Journal based on "Teach a Person to fish ..."

Saint · #11 10th October 2007, 12:54 AM

Hi Newbee,

First of all, a very warm welcome to you.......

If you don't mind, afew comments on your post.

Quote:

Originally Posted by newbee

Hello,

Had some one told me this can happen I would never have believed it. I was actually frozen out, could not think, and did not see what I can see on the charts now. Wow what a day.

I realise you are new at this and will figure things out in course of time,.......but as you go along,you will realise that you are at your calmest best while trading.No question of getting frozen,could not think,could not see,etc.......yes,I understand getting mortified when you have a monster gap down or up,and you are at the wrong end of the trade.But in the intraday scenario,it's all about being nimble ,flexible..........Definite entry point,stop loss,and possibly going the opposite direction if that's the way the market is headed.All about going with the flow .......

Quote:

My first day at day trading (mock) and we have had a monster.

I guess I was already biased on the short side

, so i took a short at 5087 (1 lot). After that round 11:23-24 there was a spurt of 20-30 points and i knew i have to square, but decided to hold on.

The market does its thing,you try to gauge its direction and make sweet moolah off it.........no reason to be mad if your bias is incorrect.The mistake was that you did not have a definite set stop loss,and then ended up in hope-pray-plead mode.The whole game is in setting that point where it's definite you are wrong,and then try to go with the direction that the mkt is moving in.

Quote:

The market opened up and I registered the price being quoted (at which i could have squared) in my log (5140). I had planned to have a stop of about 30 points. (I learned today that even if i had the SL in the system it may fail to square the trade, the SL jumped is what they say

).

The market again showed a dip and the price had to retrace just about 10 points to convince me its time to get my money back, so i logged another short trade (5130, this time with 2 lots).

Second blunder..........don't try to average a loser,worse double-averaging it.Have a stop,take it if hit,reassess........dollar cost averaging may make some gains in investments,but in trading,it's gonna finish you off in record time.

Quote:

To my horror, the price kept going up from there as if it went down to just con me into taking that revenge trade. This time i decided firmly to take my 30 points stops, but seeing the price movement i could not log the price, i kept waiting for a 4-5 points retrace, finally had to log the price of 5190.

Then something happened that i would have never ever believed, i just sat there watching the ticker running away, don't know what happened, just sat there frozen, every 5-10 points retrace looked a very good selling point to me, did not short as did not have guts for it.

But the worst part is never ever during those 4 -5 hours it occurred to me that i can take up a long position, it’s just so wired, can’t think of another word for it.

Not to worry,my friend.........am sure the majority of us,if not all,have had similar experiences.Important thing now is to learn from the above experience.In real trading,this one trade could inflict deep pain.......especially when you are dealing in 50-100 lots.

Quote:

So today’s trades

Short @ 5087, squared @ 5140 ==> - 60 * 50
Short @ 5130, squared @ 5190 ==> - 65 * 100

Nett loss Rs. 9500

Gosh, it’s so easy to lose 10 Gs in a day!

I am mad at myself, will not get into could have/would have, but should have …… anyway, thinking I should take a break, maybe for a month

Learned a lot, will take some time to assimlate and make notes.

Thanks
nb

Thought you were mock trading,why the month break.............throw that attitude down the drain.Get some sleep,come back tomorrow,and try to make the mock losses back......Today does not exist tomorrow.Tomorrow is a brand new day with brand new opportunities.

All the best!
Saint

ps:Hope that you have some sort of definite rules for entry,and exit,and when you reverse,and posn sizing,etc

newbee · #12 10th October 2007, 08:27 AM

Quote:

Originally Posted by Saint

Hi Newbee,

First of all, a very warm welcome to you.......

If you don't mind, afew comments on your post.

I realise you are new at this and will figure things out in course of time,.......but as you go along,you will realise that you are at your calmest best while trading.No question of getting frozen,could not think,could not see,etc.......yes,I understand getting mortified when you have a monster gap down or up,and you are at the wrong end of the trade.But in the intraday scenario,it's all about being nimble ,flexible..........Definite entry point,stop loss,and possibly going the opposite direction if that's the way the market is headed.All about going with the flow .......

The market does its thing,you try to gauge its direction and make sweet moolah off it.........no reason to be mad if your bias is incorrect.The mistake was that you did not have a definite set stop loss,and then ended up in hope-pray-plead mode.The whole game is in setting that point where it's definite you are wrong,and then try to go with the direction that the mkt is moving in.

Second blunder..........don't try to average a loser,worse double-averaging it.Have a stop,take it if hit,reassess........dollar cost averaging may make some gains in investments,but in trading,it's gonna finish you off in record time.

Not to worry,my friend.........am sure the majority of us,if not all,have had similar experiences.Important thing now is to learn from the above experience.In real trading,this one trade could inflict deep pain.......especially when you are dealing in 50-100 lots.

Thought you were mock trading,why the month break.............throw that attitude down the drain.Get some sleep,come back tomorrow,and try to make the mock losses back......Today does not exist tomorrow.Tomorrow is a brand new day with brand new opportunities.

All the best!
Saint

ps:Hope that you have some sort of definite rules for entry,and exit,and when you reverse,and posn sizing,etc

Hello Saint

Thanks a billion for your guidance.

I realize the first thing i should have done here is listed the set of rules i wanted to follow. Its something that you have been teaching in your thread. Buy an (confirmed) uptrend and Short a (confirmed) downtrend (2HHs & 2 HLs define an uptrend etc..).

Today after markets I would try and list them here.

Its quite obvious, that i did not follow any of those on my very first day at trading.

The taking the break thing was said in a jest or a kinddof self ridicule, guess am not good at humor.

I am looking forward to continued guidance from you, i know you are busy and many members on this board look towards you for guidance, so will be happy with whatever i can get.

Thanks
nb

newbee · #13 10th October 2007, 08:40 AM

Quote:

Originally Posted by hari09omkar

Well,I think you have some misunderstanding here with this term of 'backtesting'.
Firstly tell me what is your idea of a 1."system" and then
2.what is "backtesting a system"?

Hello

Maybe you are right. I know I do have lack of understanding of many aspects on trading. Hope I overcome them due to this exercise and help i am getting from people like you.

I think you missed my query regarding the time required for learning and the road map for it. (heard it takes anywhere between 4-5 years and infinity) Please do give your opinion on it.

As per my current plan, I will be doing paper trading ID on Nifty for minimum 3 months, during which time i would fine tune the rules. After which will trade with a small account only if my paper trading shows promise

Thanks
nb

newbee · #14 10th October 2007, 09:01 AM

Hello

I am stating a set of rules for interaction for myself.

No Posts during market hours
No IMs
No SMS
Pre-market views if any, before 9 AM
No arguments (i.e. not using more than 2 replies to discuss / debate the same point, I either get it or loose it)
Always remember I am here to learn trading and not semantics

These are rules to be followed by me, any more suggestions most welcome.

Have a Profitable Trading Day

Thanks
nb

newbee · #15 10th October 2007, 03:38 PM

Hello

Uploading charts from the days work. Just charts for now. Will post comments after some time.

Thanks
nb

I have uploaded 3 charts so can think of them as 3 session during todays day.

As expected we had an opening with a gap on upside

Took my first trade as long @ 5425 around 10:12 am
SL set @ 5400, as price shifted up moved SL to 5410 and then to 5420.

Got stopped out as price reversed sharply, as price continued to move down and broke down the recent low took a short @ 5400. All trades 1 lot

Sold another lot @ 5390 around 11:15, as price moved further down, put in buy SL @ 5390 for 2 lots and 5400 for 1 lot each. All 3 triggered.

Decided to have a target of 5438 for this long trade, eventually stopped @ 5414.

All in all the results broker happy, me sad. Too much trading, as if i was trying to find reasons to trade rather than having reasons to trade.

Copying and saving the chart, gave me an opportunity to reflect on this, Did quick review and was ready for more.

Around 12.20 Bot a break of previous high @ 5413.5 (the spot nifty was around 5419). Booked at predetermined target of 5439, my first limit order square off.

felt good about that, wanted to archive it so copied and saved the chart.

Refer to chart 3 for next trades

Around 1:55 took a short trade was waiting on it actually, break of previous lows (support area), the price reversed and squared off did not wait for SL to hit.

Did not take a long trade, should have done that, next time

Wanted to quit for the day here, its such a tiring job. But remembered the advice & encouragement of SAINT, savantgarde, hariom and others and decided to keep trading.

Next three trades were another first for me, consecutive wins, too good to believe and just when i wanted to quit for the day.

Over all good day, learned a lot. Specially the difference in price/movement of spot nifty and futures. The futures is supposed to follow the price, but to my eyes it looks as if the dog is following its tail.

It seems, its because of faster rate of data refresh for the quote terminal against slower updation of charts, don't know much about that, should remember to study that.

Lesson Learned: Trade less often and look for better setup / entries.

Thanks
nb

newbee · #16 10th October 2007, 04:10 PM

Quote:

Originally Posted by uasish

1) Plz concentrate on 2-3 stocks ONLY.
2) In the tape there will be some Que,if along side you observe 1 min Vol.
3) Reduce your Qty & plz shift to Cash Mkt.
4) Never take any Delivery.
5) Think deeply to zero in at what Price you are going to enter & instantly if it goes against upto what Price you will wait & then Reverse.
6) Remember with photographic memory at what Price the Stock reacted yesterday/ day before yesterday / few Hrs ago.
7) Never quit for a single day ,if necessary reduce the qty to 50 shares,all those so called friends looking over your shoulder & whispering about your trades with Awe are bystanders will instantly forget you after few Hrs,you dont have to prove them anything NOW,they will eventually KNOW you after few yrs.
8) Never leave your Trade open & take a Break (smoking break/ tea break / etc).
9) Never listen to anything TV / Other people's Winning trade / euphoria ,shouts for break outs/ except what Your Scrip's Price & Vol telling you.

This was posted on other thread, thought will make a good start for list of rules that i needed to compile.

Thanks
nb

newbee · #17 10th October 2007, 07:12 PM

Hello

Here are the set of rules that I would like to trade with. They can be considered as work in progress or a draft copy.

Quote:

Concept

There is only one way to make money trading, buy low and sell high.

If we deduce that the probability of price trending up is better first buy and look for an opportunity to sell higher.

If we deduce that the probability of price trending down is better, we first sell and look for an opportunity to buy lower.

There would be three kinds of trend.

An uptrend,
A downtrend and
A sideways one

We look for buying opportunity in a confirmed uptrend.

We look for shorting opportunity in a confirmed downtrend.

We try to keep out of the sideways trend.

Experienced/expert traders would look to fade the S/R in a side ways market, but that’s not for us newbie’s

What defines an Uptrend?
2 Consecutive higher highs and higher lows define the uptrend for us. Refer to the image attached.

What defines a Downtrend?
2 Consecutive lower highs and lower lows define the downtrend for us. Refer to the image attached.

Entry and SL as per shown in the images attached.

When would we exit the trade?
Exit is the toughest part to define.

The images show an initial SL point, as the trend continues we will get new swing highs and lows, we keep moving the SL along the trend.

The question about having a defined target or exiting at known S/R levels is open, I do not have answers for that yet. But one thing is sure when the trend we are trying to ride is in doubt get out, close the trade.

Thanks
nb

hari09omkar · #18 10th October 2007, 07:29 PM

Quote:

Originally Posted by newbee

I think you missed my query regarding the time required for learning and the road map for it. (heard it takes anywhere between 4-5 years and infinity) Please do give your opinion on it.

LOT OF IFS ARE THERE:
1.IF SMEBODY IS TRYING TO LEARN FROM THE BOOKS,ONE BY ONE,FROM MURPHY,PRING...TO THE LARRY WILLIAMS,BILL WILIAMS,LINDA......TO THARP,STEENBERGER.... SUBSCRIBING TO A REAL TIME DATA VENDOR AT THE SAME TIME.....WITH A VERY GOOD SOFTWARE....SUBSCRIBING TO THE BEST TRADING MAGAZINES IN THE WORLD.....NOW STARTING TO TEST THE IDEAS DEVELOPED BY READING BY DOING A RESEARCH ON THE DATA OF PAST.....THEN SELECTING THE BEST SYSTEM(S) FOR TRADING...THEN STARTING TO TRADE IN THE LONGER TIME FRAME......LIKE HOLDING THE POSITIONS FOR 15 TO 20 DAYS....DELIVERY BUYS AND SHORTS.....
FROM HERE STARTS A NEW JOURNEY......U R TRADING IN THE MARKETS AND LEARNING TO TRADE ALSO....WHAT IS THE SUBJECT HERE?
THE SUBJECT OF LEARNING HERE WILL BE HOW TO TRADE SUCCESSFULLY IN THE SHORTER TIME FRAME...i.e. IN TAKING POSITIONS FOR 5 TO 10 DAYS NOW.BUT AT THE SAME TIME U R WATCHING UR TRADES ALSO,WHICH IS A DELIVERY TRADE,BUT OF LONGER DURATION.
U SUDDENLY COME OUT WITH TWO OR THREE IDEAS TO TRADE A SHOTER TIME FRAME.U START TAKING POSITIONS IN SMALLER QUANTITY,FOR THIS SHORTER TIME FRAME TRADES.UR BELIEF IN UR SYSTEM STRENGTHENS AFTER FEW CHANGES U MAKE FOR A PROFITABLE TRADE.
BUT FROM HERE ON U START TO WORRY ABOUT ANOTHER THING,WHICH WAS OF A LESSER INTENSITY IN 15 TO 20 DAYS DELIVERIES.
THAT IS "WHEN TO BOOK PROFIT"?
EXITS BECOME A HEADACHE HERE.AND CONTINUES TO BE IN THE FUTURE TOO.MONEY MANAGEMENT NOW NOT ONLY BECOMES A MERE TOOL FOR POSITION SIZING AND STOPLOSS CALCULATIONS.EXITS BECOME CRUCIAL FROM NOW ON.
U CONTINUE TO SHORTEN UR HOLDING TIME FRAMES TO 2 TO 1 DAY NOW.
U ENTER IN THE TRADES WITH SOME SHAKINESS FROM THE DAY U QUIT FULLY THE LONGER TIME SWING TRADES AND START SHORTER TIME SWING TRADES.
U CONTINUE TO DO MISTAKES.U REINVENT THE PITFALLS OF UR TRADING.NOW PSYCHOLOGICAL ASPECTS CREATE DISGUST IN U.HOW TO DO BETTER? UR NIGHTS BECOME UR FRIENDS.
SEARCHING FOR NEW STRATEGIES.BACKTESTING IDEAS AFTER IDEAS.
HOURS SLIP IN NO TIME.DAYS AND NIGHTS PASS THROUGH U AND U ONLY CONCENTRATE ON THE NEWER IDEAS,FROM THE MAGAZINES,FROM THE FORUMS,AND FROM THE ONCE IN A WHILE GENEROUS BUT GENIUS TRADER,IF U AT ALL HAVE THE LUCK TO COME ACROSS WITH SUCH A GUY.

NOW YOUR TRADING BECOMES AN EASY JOB TO U.JUST FOLLOWING UR SYSTEM.U EARN HANDSOMELY.U START TO TAKE PARTICIPATION IN THE PUBLIC FORUMS TO ENJOY THE OFF HOURS FOR RELAXATION.
BUT U DON'T QUIT FOR NEW IDEAS.
FROM THE FORUM MEMBERS AND FELLOW TRADERS,U COME ACROSS WITH OCCASSIONAL GOOD INSTRUCTIONS,WHICH U INCORPORATE IN TRADING SYSTEM TO TAKE ADVANTGE.
LIFE IS EASY NOW.
U SUDDENLY START TO THINK ABOUT AN IDEA SO THAT U ENTER IN THE MARKETS AFRESH EVERYDAY.....NO OVERNIGHT POSITIONS.
START DAY TRADING PLANNING.
TILL NOW TO TAKE LONGER TIME POSITIONS,U WERE USING INTRADAY DATA JUST AS A GUIDANCE.
TO TAKE SHORTER TIME FRAME TRADES OF 5 DAYS TO ONE DAY U WERE HEAVILY DEPENDENT ON INTRADAY DATA,WITH DAILY DATA AS GUIDANCE.
BUT TO TAKE A TRADE AND SQUARE IT OFF IN A SINGLE DAY,THAT TOO PROFITABLY?
U FIND IT DIFFICULT NOW. BECAUSE THERE ARE SO MUCH DATA TO DEAL WITH....U START WITH THE BASICS....GO TO COMPLEX......BACKTEST IDEAS.TIME CONSUMING STAFF.
U FIND WAYS.
BUT ARE U SUCCESSFUL OR NOT OR TO HOW MUCH EXTENT?
GREATLY.WHY? UR LEVERAGED ACCOUNT.U DEFEAT OTHERS IN SCALPING BY UR SHEER TRADING FLAMBOYANCE.
BUT R U QUITTING STUDYING NEW BOOKS AND THEORIES? GUESS THE ANSWER.
U SHOULD REMAIN IN TOUCH WITH THE WORLD OF UR BUSINESS BY CONTACTS OF FELLOW TRADERS.U FIND GREAT TRADER FRIENDS.

THIS IS A ROADMAP OF A TARDER WHO HAS THE HARD WORKING WILL OF 10 TO 12 HOURS PER DAY.....WITH A MINIMUM TRADING CAPITAL OF 5 LAKH RUPEES.THEN TO BE A PROFESSIONAL SUCCESSFUL DAY TRADER WHO EARNS NOT LESS THAN 1.5 LAKHS PER MONTH, IT IS JUST 5 TO 6 MONTHS JOB.
THIS TIME FRAME OF 5 TO 6 MONTHS WILL BE MORE IF HE/SHE WORKS LESS THAN 10 HOURS FOR STUDYING AND BACKTESTING.MAY BE TWO YEARS IN THAT CASE.

2.IF SOMEBODY IS LEARNING FROM HIS MISTAKES ONLY BY TRIAL AND ERROR,THEN ALSO IT CAN BE A YEAR AND A HALF.
3.IF SOMEBODY THINKS I WILL BE A TRADER IN 5 YEARS,AFTER I WILL LEARN THAT AND I WILL BUY THAT SOFTWARE,HE WILL ONLY BE AN OBSERVER,NEVER CAN EARN REGULAR MONEY.
4.BUT TRADING CAN BE LEARNT IN ONE WEEK ALSO,IF U CAN GET A TEACHER OF SUCH A QUALITY,WHO WILL NOT MAKE U ANY ACADEMICIAN,BUT TEACH U THE ESSENCE OF THE BUSINESS IN SIMPLE TERMS.WHO WILL B THIS PERSON? HE SHOULD BE A REAL PROFESSIONAL TRADER WHO HAS EARNED MILLIONS FROM THE MARKETS.
BUT IT IS EASIER TO DEVOTE 10 HOURS FOR SELF STUDY THAN TO FIND SUCH A PERSON.

P.S. PLEASE EXCUSE THE SPELLING MISTAKES IF ANY.

oilman5 · #19 10th October 2007, 07:46 PM

hari09omkar,
good to read!!
...........................................
nb, just follow uasish.......he has commented around 200 good post, himself an intraday player with mind boggling equity return .
.........................................
but follow from saint,traderji first........after 2yr if u think capable contact cv......
the best known daytrader.....with av 6digit return per week!!!!!!!

newbee · #20 10th October 2007, 07:54 PM

Quote:

Originally Posted by hari09omkar

lot of ifs are there:
1.if smebody is trying to learn from the books,one by one,from murphy,pring...to the larry williams,bill wiliams,linda......to tharp,steenberger.... subscribing to a real time data vendor at the same time.....with a very good software....subscribing to the best trading magazines in the world.....now starting to test the ideas developed by reading by doing a research on the data of past.....then selecting the best system(s) for trading...then starting to trade in the longer time frame......like holding the positions for 15 to 20 days....delivery buys and shorts.....

from here starts a new journey......u r trading in the markets and learning to trade also....what is the subject here?

the subject of learning here will be how to trade successfully in the shorter time frame...i.e. in taking positions for 5 to 10 days now.but at the same time u r watching ur trades also,which is a delivery trade,but of longer duration.

u suddenly come out with two or three ideas to trade a shoter time frame.u start taking positions in smaller quantity,for this shorter time frame trades.ur belief in ur system strengthens after few changes u make for a profitable trade.

but from here on u start to worry about another thing,which was of a lesser intensity in 15 to 20 days deliveries.
that is "when to book profit"?
exits become a headache here.and continues to be in the future too.money management now not only becomes a mere tool for position sizing and stoploss calculations.exits become crucial from now on.
u continueto shorten ur holding time frames to 2 to 1 day now.

u enter n the trades with some shakiness from the day u quit fully the longer time swing trades and start shorter time swing trades.

u continue to do mistakes. u reinvent the pitfalls of ur trading.now psychological aspects create disgust in u.how to do better? ur nights become ur friends.

searching for new strategies.backtesting ideas after ideas.

hours slip in no time.days and nights pass through u and u only concentrate on the newer ideas,from the magazines,from the forums,and from the once in a while generous but genius traders,if u at all havethe luck to come across with such a guy.

now your trading becomes an easy job to u.just following ur system.u earn handsomely.u start to take participation in the public forums to enjoy the off hours for relaxation.

but u don't quit for new ideas.

from the forum memers and fellow traders,u come across with occassional good instructions,which u incorporate in trading system to take advantge.
life is easy now.

u suddenly start to think about an idea so that u enter in the markets afresh everyday.....no overnight positions.

start day trading planning.

till now to take longer time positions,u were using intraday data just as a guidance.

to take shorter time frame trades of 5 days to one day u were heavily dependent on intraday data,with daily data as guidance.

but to take a trade and sqare it off in a single day,that too profitably?
u find it difficult now. because ther eare so much data to deal with....u start with the basics....go to complex......backtest ideas.time consuming staff.

u find ways.

but are u successful or not or to how much extent?

greatly.why? ur leveraged account.u defeat others in scalping by ur sheer trading flamboyance.

but r u quitting studying new books and theories? guess the answer.
u should remain in touch with the world of ur business by contacts of fellow traders.u find great trader friends.

this is a roadmap of a tarder who has the hard working will of 10 to 12 hours per day.....with a minimum trading capital of 5 lakh rupee.then to be a professional successful day trader who earns not less than 1.5 lakhs per month, it is just 5 to 6 months job.

this time frame of 5 to 6 months will be more if he/she works less than 10 hours for studying and backtesting.may be two years in that case.

2.if somebody is learning from his mistakes only by trial and error,then also it can be a year and a half.

3.if somebody thinks i will be a trader in 5 years,after i will learn that and i will buy that software,he will only be an observer,never can earn regular money.

4.but trading can be learnt in one week also,if u can get a teacher of such a quality,who will not make u any academician, but teach u the essence of the business in simple terms.who will b this person? he should be a real professional trader who has earned millions from the markets.

but it is easier to devote 10 hours for self study than to find such a person.

p.s. please excuse the spelling mistakes if any.

Thanks for the answer, i liked point 4, as i already done 2 days worth trading.

I will need time to go through it and try to absorb it, made a copy and archived it, once again thanks for sharing.

I had to convert the caps to be able to read it.

What about other things like apptitude, skills ?

If you don't mind, how many months/years you are at it?

Thanks
nb