BNF Trading Dairy... Trying to become disciplined

Could not trade today for fear of lossing. Need to discard greed and fear. So will backtest one strategy today with April BNF data and apply this in May with out fear.

Which strategy can give consistant profit in long term? need to find out. So will test with the visual pivot first on 5m chart.

Will get out of trade once i get a small profit and close down the terminal to avoid over trading....this will also calm down the greed factor

Thanks Vijay for the confidence building words.

From yesterday onwards started trading again. Small proft of 40 points made. System is still discretionary looking at 20m BNF chart and profits are fixed at 40 points.

I know the fixed point system is wrong, when there is a big move you are out with a small profit. But to build confidence what i require is consistent green days.

Reading Dr. Alexander Elder - Trading for a Living.

Thanks Vijay for the confidence building words.

From yesterday onwards started trading again. Small proft of 40 points made. System is still discretionary looking at 20m BNF chart and profits are fixed at 40 points.

I know the fixed point system is wrong, when there is a big move you are out with a small profit. But to build confidence what i require is consistent green days.

Reading Dr. Alexander Elder - Trading for a Living.

its a nice book. i read it long back.

BTW profit is fixed 40 pts, wat abt SL. how much pts it is fixed.?
according to ap* fixed profits is confidence booster. but it will be useful only if u have high accuracy.

Like you have mentioned above Sir. High accuracy is a must if you want to trade with fixed profits.

Hope your sl is 20 atleast when targeting 40 points. That way can manage to be net profitable.

This is the problem which every new trader has to face. What % to reinvest depends on whether one is in capital building stage or capital preservation stage. In capital building stage of a new trader his capital is small, household expenses and housing loan installments take away major chunk of the profits leaving very little for capital formation. This happens with every new trader. It happened with me too and the capital formation is slow. But one should invest back 50 % of the profits in capital formation stage. Once capital acquires a critical mass, then the profits increase rapidly and our expenses dont increase in the same proportion and then the capital formation process becomes faster.

In capital preservation stage all financial needs, present and future , are met and the trader trades not for making more money but he trades because he enjoys it and that gives him occupation and income apart from fulfilling his passion. In this stage money ,though important, assumes lower priority. In that case he may take out all 100 % of profits and invest it elsewhere.

I too used to have same questions when I was in capital formation stage, I was into trading full time, no other income source,no inheritance in terms of money, and household expenses and HDFC housing loan installments to be met from trading income....but after a few years the capital grows in exponential proportion....so just concentrate on trading well and making consistant profits...all other things will fall in place .

Smart_trade

Between Capital formation and Capital Preservation there is one stage of Capital Growth. In this stage trader adds 80-85 % of his profits ( after taxes) into his capital and trades aggressively. This is the stage where the capital is grown exponentially,as the profits are much bigger than the withdrawal for expenses.

Every trader has to walk this path in his trading career.

Smart_trade

When I started trading, there were no futures and options. That time we used to trade Reliance,Tisco ,Orkay both intraday and positions. That time weekly options unofficially were there ( they were called Phatak in local language) ,I used to trade those Phataks also. There used to be unofficial Badla in the market where one can hold positions in Badla. There were Dabba trades...I have traded all.I have used leverage as that time margin rules were not that strict and settlement was on 15 days period.

But all trading positions. Nothing in delivery. I have almost blown this initial capital couple of times and had to put additional money selling my stocks which were bought when I was in a job. Those were crazy days...

Smart_trade

Was a chart trader all along. But that time intraday charts were not available on any chart data service. So used to plot reliance chart on a graph paper by hand...graph paper,a pad and pencil....1 point change and we used to plot it. Very tedious process but it gave me great advantage in chart reading.We used to keep those graph sheets, put them on the dining table and look for long term trends and S and R levels on weekends.

People used to look at us chart traders as some kind of black magicians or Whoo-doo artists....few used to make fun saying " chart seedha pakadna hai ya ulta" or " chart dekhkar koi rupiya kama sakta hai kya....." but soon they realised that we were few profitable traders in the market.

Smart_trade