tools of a trading pro

good stuff here...keep going...I have added to your reputation points...Its high time we start this to reward good posts.

Oilman,
Your post 59 ,clearly depicts how a man has digested the reasons of Sucess in 1 field ,the philosophical part, & then implementing that in Trading field.
Many of us including self gets 'indigestion',becoz at philosophical level (the cognitive/deductive knowledge) is shallow.
Gr8 , looking forward for more such posts.

Asish

Some nice posts from you,Oilman....Great Stuff,and keep 'em coming!!

All the best!
Saint

thanks to SAINT,UASISH and BEGINNER AV for ur encouragement.
u r all * in wwf trade arena.
hope i shall join after combat training in 2010.till then an experimental trader.

still lot to learn from u seniors.
with regard
oilman5

sorry friends,
i find nothing to write[as extremely exhausted due to project completion final stage].so before driver is coming i am copy paste my discussion with ss[sunil]...i consider its useful and not out of context.
question by ss.'How can a stock have a buy and a sell at the same time, irrespective of the price levels? This whole logic is flawed '
ANSWER BY ME 'no ss, the logic is always right. u have played enough chess trap ..opponent understand your original intention later...so u win by winning in thinking...planning..better than in higher time frame.
only idea to play to make money...wherever u buy u have to sell higher.
so when we buy ...hoping now it shall move up.suppose i play 10min. chess against u [ur time limit 1hr]...still i shall win..as i have practiced it more than 6yr....so amateur shall lose unless unless ..within 1st ten of a state..with rating higher than 2200.same case in trade...i novice must lose against good pro SS ...as i fumble before entry...where as u know actual move ....

bookish idea has given clearly by dr elder.BUT I BELIEVE ALL BIG MOVE MUST START WITH SMALL ONE.....AFTER X...3-5% VALUE IT HAS SOME TENDENCY TO CONTINUE...MANY A FAIL...THATS RANDOM MOVE...

so predictive resistance is a profit booking idea for support buyer...and x pt is nothing but oppurtunity for break out player..
as a pro since u play both ...u know ...i am right...

however monumental works done by j m hurst........

also at www.ino.com....regarding which time frame to choose....for formless trading

Q.'when somebody goes against the trend on Daily charts, ie let us say the trend is up, and you sell, will it not be a blunder? Remember, you are initiating a trade in the wrong direction in the first place and then you hope to cover!?

ANSWER 'on purity basis against primary wave..intermediate term ..short move occurs which utilise wisely by pro like u.so the person knows bothside of story...when to feed ...when to ride.SIGNAL MUST LITTLE DIFFICULT TO EMPLOY...HOWEVER..those who have seen enough[by staying in mumbai..nearby sea and financial capital can react quickly enough to earn..
for fool like us ..its a losing game...winning little,lose more...out of frustation missing the big oppurtunity.

basis of profit is how many fools r after u...the story of catching bear before it catches u..suddenly gun found locked...its ur turn to run...hoping u run faster...and bear catch ur friend who is not so expert in flying away...i see this analogy on regular basis on tv...telling to HOLD..BY SUITED BOOTED PRO...SO THAT THEY CAN GET OUT...OR SHORT WELL...

TRUE STENGTH...SEE THE BIGGER WAVE ..BEFORE ITS FORMING...
THE PROBABLE PT WHERE IT CAN FORM...
READY WITH MONEY TO TAKE POSITION..
ALTERNATE SCENARIO...[AS SUGGESTED BY GREAT CV]...KEEP EYE..JOIN WHERE AND WHEN BIG WAVE IS FORMING...OTHERWISE SIT IDLE.

note: on a trade basically u r trading an openion [bullish or bearish] with money......always ready to be wrong[being humbled by market]and occasionally u shall be correct...but when right bet big,..BIG ENOUGH to run your family expediture on a single trade. price confirmation is the only condition for holding a trade.

with thanks
oilman5

oilman,
'''How can a stock have a buy and a sell at the same time, irrespective of the price levels? This whole logic is flawed '''
Yes it can ,thats why my orders are filled,becoz there is a counter party doing the exact opposite.
Price ,displays a value perception in human mind,these individual perception translated in buy or sell orders ,exerts an inertia to price , to move kinetically.Hence at SAME PRICE a buy & sell is simultaneously generated in 2 human mind .


Asish

yes asish,
its a two way percept..unfortunately various timeframe viewing by others with biased openion made it complex. next the fear if i wrong..dilemma
create situation an abrakidabra........ur vision /sense/price direction guidance
............with the help of experience can keep u in right track....analyst does the thing after..only a trader can move through by balance,indicator is nothing but an approach to rationalise it.
..............
btw i enjoy ur philosiphical analysis on ewt...
the question is asked ..which i answered..so we r on same boat brother.

oilman5

just i write a joke ...i write nearly 4hr ...and after powercut ..while clicking 'post quick reply'...it suggests to relodge...again putting my name ..
but things vanish...may GOD dont want to show in public...the conclusive view on TOOLS OF A TRADING PRO.
IN JOURNEY OF A TRADER'..interest approach is given...whether u r ready for trade?...and element of it...loosely written .
IN TRADING SYSTEM FOR BEGINNER'.........beginner has been defined...and various experimental useful tool with back testing approach on some fact outlined
in the present one TOOLS OF A PRO'...THE COVER IS OPENED.
ARTICLE NO 28 AND 46 AND 58 R FACT.
first step necessity to avoid self sabotage clarified
Poor money management
Trading against the trend
Over reliance on discretion for entries and exits
Failure to confirm trends and setups on longer timeframes
Poor use of stop loss orders (too close, or too far away) - placing them for the wrong reasons
Overtrading
NEXT WE GO TO LEARN
Identify the trend, and trade with the trend
Confirm setups with multiple timeframes (5min, 30min, and daily for intra-day trading)
Keep a full record trades taken, MONEY won/lost, reasons for entering and exiting, and thoughts
Keep small stakes for the time being, until consistent profits can be achieved
Avoidance of "gamble entries" and high risk trades

THEN ONLY LOOK FOR HIGHER LEVEL
1. DEVELOPMENT OF A TRADING PHILOSOPHY
2.DEFENSIVE TRADING STYLE
3.DEFINE RISK AND YOUR RISK TOLERANCE LEVEL AND TIME FRAME U NORMALLY TRADE RIGHT
4.PRINCIPLE VS ACTUAL TRADING RESULT
5.LOOK FOR THE SIGNIFICANT FACTOR ..HOW TO DO NEWS TRADING
6. CAN U LEVERAGE IN REAL SENSE? CONCEPT OF USE MORE MONEY TO WINNER.......CONCEPT TO USE TIME BY TAKING PAID CALL...CONCEPT OF BACKTEST TO USE TO WHAT WORKS IN PAST FOR CONFIDENCE BUILD UP
7. BELIEVE IN PROBALISTIC THEORY , YET A FEEL FOR PRICE...BUT CONTINUE TO TRADE AND HOLD ONLY IN THE DIRECTION OF TRADE...KEEP FAITH AS PRICE IS SUPREME.

.................
SO THE TOOL IS NOTHING BUT HIMSELF BY WHICH PLAYING IN HIS STRONG ZONE HE CONSISTENTLY MAKES MONEY OUT OF MARKET [ANY INDICATOR OR INDICATORS WHICH SIGNAL CONFIDENT RATIONALISED BUY AND SELL]HE KNOWS HOW TO HANDLE SUBJECTIVITY..RUMOR...LOSS AND PROFIT...

PS. i have professional operational research background...presently given a complex risk analysis for a project...so i have to move out before inauguration of my present project.[ i believe in hard work philosophy....so the load comes to me ...its 14 month project...real swot and actual implementation.i traded @2002-03 with earning 50000pm-salary cut 30000=20000pm...hence only swing trading possible.Offerred job 1yrback @60000, but i decline.my long association with chess reflected .in last 4 yr of testing and trading with real money...many a system checked based on metastock /omnitrader....only some useful one in beginners term ...i write it in trading system of beginner'
without mathematical jargon[ GOD knows how difficult to control my mathematical inclination....regularly abused by GM[ a qualified engineer with versatile project depth,of course an MBA...'who can follow this 3vector nonsense risk analysis and profitability.......make it simple so CA can sanction
...give him only bep....+3month pert [OR term]...............i can take credit..
my boss never believes...i can write in plain and simple english.
traderji.com...an excellent forum for budding trader ....these are my 3 gold coins..
HOWEVER 1 HAS TO READ TO FIT JIGSAW PUZZLE...another hints read /use dynamic trading ...use price , volume and time element.

with thanks and friendship to all members
adieu

oilman5[may come back aug08]

sorry..i get another day to leave.so why not copy paste?
.................................................. ...........................
u must have some method to understand price increament shall continue
and then another when price dilution coming.
high probable trade
............................
its the directional bias...where most waiting watchers r ready to join..
market buying r coming...big volume r increasing

concept is use momentum ...act now.

another concept a trend started yesterday 3pm..hence further steam left.
scan at night for candidate.

without any news. on real time..sudden volume surge..price is also moving up.
ACT NOW ..NO TIME TO THINK make money
shortterm trade/ swing trade
............................................
here u must reqd eod . a software ..preferably some risk reward analysis
some low risk entry tactics and stop-umbrella to save from rain.

u have to define entry characteristic .
1. entry after break out over longterm resistance zone
2. after twice bounce in support ..price just starts moving up.
3. sector starts moving up..stock has good rel strength comparison within sector.

stop
......below 5% of last week low
if not 4% up move occurs within 5 trade days..use time stop

profit target 8-10% from entry..however after 5-6% price is NOT HOLDING
....get out with small profit...than turn profit into loss

for momentum base swing trade..refer david landry and crabel works
for system study see beyond ta..by tusher chande
for me some% up with volume increase...in metastock RSC EXPLORER candidate must be in upperside.
yes i use eye ball technique and pattern failure[ in h&s when instead of fall price starts move up and w.pattern price slowly starts moving..acceptance of price]

however .if u see eod chart + 7 month weekly chart u can see
reason behind . call and exit..by the way my system has subjective criteria. and i actually trade in position size higher on winner

position trade contd
...............................
most imp part of position trade is stock list...here u know from back ground move shall continue..further..as u try for bigger profit ,failure rate is high.
hence u must have inbuild mmsystem to get out with small loss and addon winner....mark boucher course is very helpful.

say being in known field i must track some news on company..
also result out of infy ..how + affect midcap computer company..

as position trade is a judgement game..hit of the moment decision should NEVER be taken..infact temporary fall is a great buy oppurtunity

strength indicator on 2week chart basis [ ie converting data on 10day high-low-close basis available in metastock] is good way to see.
in rangebound market...willium%r at oversold zone good indicator
in trend market , i use aroon .
after long fall, weekly chart engulfing bull i use for entry+ bill williums chaos entry signal
.......for stop simple sar as available in metastock...apart form subjective pattern stop and time stop.
profit booking ...50% quick booking
if however quickly price moving up .instead of sell i buy double as its low risk trade[ in the language of traderji confirmation by price]
--------------------------------------------------------------------------------

-momentum short plan
.............................
this condition to be created by media..rumor of market shall goup ..vs pro have already sold..now some -divergence can be seen ...price slowly starts falling..now tv must speak again and again ..threat percept...more sell order coming in nifty future...NOW ONLY THE TIME for short...hence its a short term quick execution ..a bull market top trade ..with propaganda from media
otherwise harsh bad news....when most participant prefer to sit on cash[bulls r running away]

with hold ing stock its a conflicting trade..better sell holding first.
system implementation
..............................
1. assumption .....condition of trade....if it does not exist no trade
2. entry..particular signal
3. holding profit one...give time.
4. exit..with profit target
with loss.
5. contingency plan..to save skin.
6. write after complete..of trade what i learn ..implementation vs. reaction of me based on fact.

this all elements r clearly written ..what actually works.
OTHER ELEMENT
........................
u factor..how to be neutralised so that i can think right.before taking position i must have an openion but PRICE must confirm my openion otherwise i must use stop and book loss to throw away openion.
.MARKET HAS TRENDINESS AND ALSO UNPREDICTABILITY ELEMENT. NEWS AFFECT MARKET [UNKNOWN EVENT]....MAJORITY TRIES TO GUESS WHAT MAJORITY MAY DO , TAKING RISK OF PREDICTION BY PUTTING MONEY BUT READY TO RETREAT IF WRONG........PUT MORE MONEY WHEN RIGHT.

since u have asked i place my personal openioned model
.................................................. ...........................
u have to work on prediction model in which chance of RIGHT/BEING WRONG has to evaluated.

a. company result..good business../..20% weightage
b. macro economy + moneyflow....40% weightage
c.sector business ..priority 20% weightage
d. other factor..operators game/random factor ..20% weightage

total 100%
ALWAYS TAKE CHANCE OF BEING WRONG 40%...SO THAT IF WRONG ...MUST BE PREPARED

by the chart , i SEE how others r viewing..ready with my move ..tv news guide me how fools shall behave,..many a time i am wrong ..but i stick to it.
as trading is not a game of perfection , 50%accuracy sufficient.

IT IS THE DAYTRADING..UR ULTIMATE SKILL WILL BE TESTED
UNLESS EXECUTION MASTER..AND GREAT SURVIVAL SKILL'DONT COME'...however its a reality checking m/c to know where u stand in trading arena.
so from beginner u r moving on top...here u atleast know how to survive..irrespective of market u can run ur family by winning against other traders.
........................
so u r developing trading philosophy...plan new arsenal...to fight better.
so it is trade universe.3terms i introduce...exhausive, exclusive and intersection ie. interrelation between 2 element.
EXHAUSIVE..U HAVE TO GO INTO DETAIL
EXCLUSIVE..NO RELATION EXISTS..INDEPENDENT ELEMENT
INRERSECTION;INTERRELATION BETWEEN 2 ELEMENT...INTERRELATIONSHIP BETN MARKET...INTERRELATIONSHIP BETN MANY COMPANY IN A PARTICULAR SECTOR.
exhausive gives micro view.

so before reaching to become a master...one goes through various way to question and answer this 3 element...[may be in different name].he knows how far he understands...his limit..so now practice on regular basis[system]

and follow it diligently[discipline]
so i use 3 statistical term....

now u see all good thread ..search mode..nothing but ..can be expansion of 3 idea.

any other idea....yes EXECUTION.I DONT UNDERSTAND AS SLIPPAGE A BAD ELEMENT..BUT CV OPENS MY EYE,...i miss 3trades for slippage in intraday.
also some profit booking idea in real sense...so the difference with beginner and pro clearer to me..its IMPLEMENTATION.

...................................
trading must be treated as business ..not hobby
its the dream .. supplier of new fool..
all mf r waiting../.
you must know how to handle business venture...dream vs. REALITY
MUST KNOW A/C...
PROFIT/LOSS..
WHAT MAKES A BUSINESS CLICK?
BREAK EVEN ANALYSIS
A-B-C ANALYSIS..
SWOT...[FOR YOU]
DETERMINATION & PERSEVERENCE..come back next day attitude
no of stock to watch
.............................
4-5 min each chart...if u have 2 hr..20-25 stock

alternatively scanner helps to find particular conditional filter.
then watch them thoroughly for next day..hence more candidate for prelim.scan list..however nifty must be studied..
compare nifty with that stock..better strength in last 2day must

pl prepare the condition of filter carefully..u shall hit or miss because of this
tradersedgeindia....is good.
rbi policy is imp now..economy/rain prediction shall show its headline..
personally price i like ..its naked truth..but in india so many funda-hype. trader...i must see their view and conviction..its the subjective judgement when to follow trend and when to be contrarian

however live with uncertainity. position management and risk control..can make u a trader.
subjective view
......................
preview...before an insident u r taking a view..what may happen.
review....after an insident u analise.
proview..while insident is happening ..u r taking decision[pick among best alternative]..acting in your best interest.
this PROVIEW is the aim of a successful trader.use preview.do review later...
follow proview to get money...avoid danger
do u find difficulty ? think of childhood..writing essay...introduction...
body[proview]...
conclusion[review]..

leading indicator must be used for preview..idea..fundamental estimate..
a trade plan...but on actual market ..only proview..lagging indicator on intraday chart basis...observe and act....at 17-30hr.review of trade..
if u r like me..review in end of week.
never ever introduction to get highest priority..hence openion always comes last....this order should never be broken[if u want to money out of market]

bullish view.....how far market can go up ..at what time limit..
an analyst writes tcs price target 1650..it means 1sigma.66% chance of reaching tcs 1650 within a yr of time..if present condition [linear interpolation] prevails
if he writes conservative target 1600...itmeans 95%[2sigma]
chance of achieving that target within a yr

now again on new quarterly result out/review of company this may be edited depending on prevailing market condition

however conviction is rare in analyst ..to put big money...WHY?

HE KNOWS THE RISK/ASSUMPTION..which rarely get published..
the trick of management ...promotion sell

sentiment change..alternate scenario..how far market can fall?
at what duration it shall continue...nobody knows..but fibonacci definitely helps the trader..where is support...commit little money..commit and see
price reversing ..hey u get it right..buy more now!

hence market movement offers enough oppurtunity to active observer
methodical man can make money out of it.
TIME FRAME....
it takes time to understand..realisation of capability ..dream vs. reality

patience to bloom oppurtunity[let profit run]

time to observe[search mode] and right time to implement[execution]

but we forget TIME TO LEARN..

DIFFICULT ONE.. time to check own performance[what i am]
tree must be seen before branch...bigger picture must be taken first.
economy/world view/political position ..ofcourse..fii cash flow at present
...understand my view..its not bullish/bearish ..nor goal..
upbeat on economy..
funding
stability or continuity...this 3 element only....

for fii cash flow...a comparative base 10 days ago[2week]

this is only tool i use for fundamental element
only timeframe that suits u. where u can think/visualise .
visualise what may happen .....that is happening later..

can u execute ?another critical question!
if not, place order on phone..allow others to place order..
let other may see the screne...
but decision making process should not be faught with internal dilemma

its a known fact in chess..half hr chess is better than 5min..1 hr rapid is better .2hr is further better..classic chess brings out of a champ...

definitely time to think improve quality...quality of selection and timing...

and see the ploy/decoy..so called news trap and marketing/gimic...
foolish greedy bull trap...
fortunately u , trader has another weapon..time out....stop loss

I dream, so I do. When I do, I don't dream!

Regards

P.S. Thanks for your writeup