Afin's trading diary
- Thread starter afin
- Start date
Hello Afin,
Being a newbie was going through your diary and found it very apt for a newly started trader. Apart from crude you don't do much in equity. would request you to put up some trades in equity too. Also have not been able to understand your criteria for going long or short apart from the fact you are making money....
Being a newbie was going through your diary and found it very apt for a newly started trader. Apart from crude you don't do much in equity. would request you to put up some trades in equity too. Also have not been able to understand your criteria for going long or short apart from the fact you are making money....
Hi, thanks for your post.
Let me explain my rationale for trades/ investments. My trading philosophy is very simple - I would like to make money off the intraday and 1-2/ 5 days trades and take that money to the bank - to my SB account in order to pay off my outstanding debts. That would be my first goal. This is because like everyone else I ended each of my trading years in red!
I hope to remedy that now.
The second step would be to build an emergency fund equivalent to savings of 60 months salary - again this would mean that I won't be doing any investments right now until the point I make this money. I might change my mind on this and divert possibly a small fraction of my savings to medium term investments.
I would also post systematically some possible equity trades that come my way for academic interest at this point. I have also posted elsewhere on the same thread that I would like to enter into equity long only trades. I would do that soon. I have been presently vacillating between one thing and the other but hope to stick to one
The basis for entering trades - either short or long is based on a combination of fundamental and technical factors. It is mainly because I love crude oil as an instrument. It is very dynamic in nature and is influenced a great deal by global geopolitics and strategic considerations - of which I am a big fan
I cannot reveal the exact basis of my technical trades because it is something I have developed over a period of time after losing a lot of money in the past. It would be like giving away my formula for free All I can say is that it is based on a combination of Moving Averages and Stochastics at this point. I strongly believe in the concept of skin in the game (do google it up! It is a fantastic concept. Incredibly simple but amazingly effective as well!) which trained me psychologically and emotionally so far to take my trades that I have advocated. It still does not mean that I am strong psychologically to not "overtrade". I still did that and it is something I am giving my full attention right now. The reason for this is very simple - I do not want to lose on hard earned cash by entering a trade again just because I had to enter it.
Let me explain my rationale for trades/ investments. My trading philosophy is very simple - I would like to make money off the intraday and 1-2/ 5 days trades and take that money to the bank - to my SB account in order to pay off my outstanding debts. That would be my first goal. This is because like everyone else I ended each of my trading years in red!
I hope to remedy that now.The second step would be to build an emergency fund equivalent to savings of 60 months salary - again this would mean that I won't be doing any investments right now until the point I make this money. I might change my mind on this and divert possibly a small fraction of my savings to medium term investments.
I would also post systematically some possible equity trades that come my way for academic interest at this point. I have also posted elsewhere on the same thread that I would like to enter into equity long only trades. I would do that soon. I have been presently vacillating between one thing and the other but hope to stick to one
The basis for entering trades - either short or long is based on a combination of fundamental and technical factors. It is mainly because I love crude oil as an instrument. It is very dynamic in nature and is influenced a great deal by global geopolitics and strategic considerations - of which I am a big fan
I cannot reveal the exact basis of my technical trades because it is something I have developed over a period of time after losing a lot of money in the past. It would be like giving away my formula for free
All I can say is that it is based on a combination of Moving Averages and Stochastics at this point. I strongly believe in the concept of skin in the game (do google it up! It is a fantastic concept. Incredibly simple but amazingly effective as well!) which trained me psychologically and emotionally so far to take my trades that I have advocated. It still does not mean that I am strong psychologically to not "overtrade". I still did that and it is something I am giving my full attention right now. The reason for this is very simple - I do not want to lose on hard earned cash by entering a trade again just because I had to enter it.The Iran crisis is still on and with Trump at the helm of affairs, there's never a dull day on the street.
I wish for a peaceful resolution of the crisis. The Iranians can also ill afford any mistakes adventure at this stage. The US has claimed to have launched cyber attacks on some Iranian installations. This should compel them to the negotiating table.
Crude I think is still on a slight sidways to uptrend movement as of now but I see every chance that the profit taking will be limited this week. We will not see any major knee jerk movement unless there is a significant development in the Persian Gulf.
I will buy at current levels but be cautious in terms of the developments happening.
I wish for a peaceful resolution of the crisis. The Iranians can also ill afford any mistakes adventure at this stage. The US has claimed to have launched cyber attacks on some Iranian installations. This should compel them to the negotiating table.
Crude I think is still on a slight sidways to uptrend movement as of now but I see every chance that the profit taking will be limited this week. We will not see any major knee jerk movement unless there is a significant development in the Persian Gulf.
I will buy at current levels but be cautious in terms of the developments happening.
Thanks Afin for the post. Would like to know what time frame you prefer to trade in crudeoil. I understand the concept of skin in the game and yes have been watching few people on traderji to understand what needs to be looked out and by God's grace I feel I have got to a right place to learn and earn both simultaneously. I have a small kitty which I would like to keep that way and see it grow (as in with everybody). The main lesson learnt so far is to have a sureshot SL in system as you never know when the trade goes bad. Also to start slowly, no expectation just try to keep one's head above water and wait for your time.
The thing I am getting bad at is by looking at charts trending movement days are good whether up or down but sideways is what makes me question as to how to understand when we are in sideways and when trending.. Have seen and working on posts of pivot points and trend lines....
A major problem I am also facing is the stock screening part for the day. Everywhere they say look for the trend then sector, then the leader in that sector and ride it.. But how ??? So far no luck... I am shortlisting few stocks which I feel give around 20-30 rupees of movement everyday... Just working on finalizing the list. WOuld share here and get the feedback from seniors like you...
Take care..
The thing I am getting bad at is by looking at charts trending movement days are good whether up or down but sideways is what makes me question as to how to understand when we are in sideways and when trending.. Have seen and working on posts of pivot points and trend lines....
A major problem I am also facing is the stock screening part for the day. Everywhere they say look for the trend then sector, then the leader in that sector and ride it.. But how ??? So far no luck... I am shortlisting few stocks which I feel give around 20-30 rupees of movement everyday... Just working on finalizing the list. WOuld share here and get the feedback from seniors like you...
Take care..
Since crude is traded from 9 am to 11.30/12 pm India time and spanning multiple time zones, I made a set of heuristics that I follow very strictly.
I only look at the 1 hour charts and trade on full margins. Crude is a beast and reacts violently to even the slightest of global geopolitical developments. I would not look at any lower time frame at all. A 5/15/30 min timeframe would only condition you with negative validations that would likely dent your confidence, blow up your trading account.
It is probable that on many occasions you would make a decent profit by using intraday margins, but I would desist from it. There were many times in my initial trading days that I blew up accounts just because a 30point movement in the opposite direction happened If you really considered it, 30/40 points on a base of 3500 to 4000 is a small number. The ATR or the average true range of crude oil is quite large in comparison to other instruments hence trading on full margins is the best way forward for capital preservation. YOu will really notice the positive development end of month when you have made significant gains by booking timely profits and preserving your capital.
Since you say you are starting to trade crude oil as an instrument only now, forget about the trades in the evening when the New York NYMEX opens. You could in all probability do that once you have spent sufficient time familiarizing and getting a hang of the way the market dynamics work.
I would also start with a back test. This is what I did personally - went to investing.com and looked up MCX crude oil prices for the last 12 to 15 months ish data. Then divided the trading sessions into 3 time frames - Asia markets opening hours; Europe markets opening hours and New York markets open time. Reducing the data into smaller chunks of time frames enabled me to gain a more thorough understanding of the dynamics. It helps a lot if you did that and plotted your charts accordingly. I now do not trade the New York opening hours to the extent possible - because it is a wild rollercoaster ride and I go through too many emotions doing that. I finally deduced that it is in the best interest of my mental and emotional health to avoid that particular time frame it also does great damage to any mechanical trading system you have built. Because you only start to focus on the losses and to cover those losses, start to do many more trades - results in taking too many trades, driving up your transaction costs as well.
Also pay attention to the OPEC meetings, inventory trading days and other events. On those days and the ones subsequent to that, crude is like (banknifty options on expiry days) on steroids!! If you really manage to catch the trend, you can make a significant killing. But the opposite is also true. So to avoid any of these, the best would be to come up with a mechanical trading system and satisfice with a small range of profits each day/ week - it all depends on the system you build. It could be something that is also counter to this but one which rocks your boat! Backtests help a great deal. They let you arrive at insights you would have otherwise missed
And coming to screeners on stocks, try doing swing trades- lesser cognitive resources used and better results. And also stick to just 2 to 3 stocks and track its data for a year to year and a half or so and make it your baby! I have done that myself - from a trading perspective that is An investment approach would be a different one obviously! All the best.
I only look at the 1 hour charts and trade on full margins. Crude is a beast and reacts violently to even the slightest of global geopolitical developments. I would not look at any lower time frame at all. A 5/15/30 min timeframe would only condition you with negative validations that would likely dent your confidence, blow up your trading account.
It is probable that on many occasions you would make a decent profit by using intraday margins, but I would desist from it. There were many times in my initial trading days that I blew up accounts just because a 30point movement in the opposite direction happened
If you really considered it, 30/40 points on a base of 3500 to 4000 is a small number. The ATR or the average true range of crude oil is quite large in comparison to other instruments hence trading on full margins is the best way forward for capital preservation. YOu will really notice the positive development end of month when you have made significant gains by booking timely profits and preserving your capital.Since you say you are starting to trade crude oil as an instrument only now, forget about the trades in the evening when the New York NYMEX opens. You could in all probability do that once you have spent sufficient time familiarizing and getting a hang of the way the market dynamics work.
I would also start with a back test. This is what I did personally - went to investing.com and looked up MCX crude oil prices for the last 12 to 15 months ish data. Then divided the trading sessions into 3 time frames - Asia markets opening hours; Europe markets opening hours and New York markets open time. Reducing the data into smaller chunks of time frames enabled me to gain a more thorough understanding of the dynamics. It helps a lot if you did that and plotted your charts accordingly. I now do not trade the New York opening hours to the extent possible - because it is a wild rollercoaster ride and I go through too many emotions doing that. I finally deduced that it is in the best interest of my mental and emotional health to avoid that particular time frame
it also does great damage to any mechanical trading system you have built. Because you only start to focus on the losses and to cover those losses, start to do many more trades - results in taking too many trades, driving up your transaction costs as well.Also pay attention to the OPEC meetings, inventory trading days and other events. On those days and the ones subsequent to that, crude is like (banknifty options on expiry days) on steroids!! If you really manage to catch the trend, you can make a significant killing. But the opposite is also true. So to avoid any of these, the best would be to come up with a mechanical trading system and satisfice with a small range of profits each day/ week - it all depends on the system you build. It could be something that is also counter to this but one which rocks your boat! Backtests help a great deal. They let you arrive at insights you would have otherwise missed
And coming to screeners on stocks, try doing swing trades- lesser cognitive resources used and better results. And also stick to just 2 to 3 stocks and track its data for a year to year and a half or so and make it your baby! I have done that myself - from a trading perspective that is
An investment approach would be a different one obviously! All the best.Sorry not posting enough here.
Cross post from https://www.traderji.com/community/threads/day-trading-stocks-futures.89068/page-6861#post-1372951
Multibaggers will become multibeggars IMO.
I know this is a polarizing opinion and different from what is being discussed. But if I were to have 5 lakh rs right now and given a chance to, I will not. The global headwinds are bad. Other factors like climate change and etc are not being factored in appropriately and we are taking a very narrow view of the world. It is like trying to explain the exponential nature of the world in a 2 dimensional space.
The inherent assumption taken was that whatever had worked in the past will play out the same way in the future. I will not stick to the theme and if it were upto me and I had an equity portfolio, I will liquidate all of it and take it to the bank. I find safety in that
TL;DR: Not going to invest either short term or medium term or long term in equities. The rules of engagement have changed. The current mantra is trade and take money to the bank. Forget equities investing.
Cross post from https://www.traderji.com/community/threads/day-trading-stocks-futures.89068/page-6861#post-1372951
Multibaggers will become multibeggars IMO.
I know this is a polarizing opinion and different from what is being discussed. But if I were to have 5 lakh rs right now and given a chance to, I will not. The global headwinds are bad. Other factors like climate change and etc are not being factored in appropriately and we are taking a very narrow view of the world. It is like trying to explain the exponential nature of the world in a 2 dimensional space.
The inherent assumption taken was that whatever had worked in the past will play out the same way in the future. I will not stick to the theme and if it were upto me and I had an equity portfolio, I will liquidate all of it and take it to the bank. I find safety in that
TL;DR: Not going to invest either short term or medium term or long term in equities. The rules of engagement have changed. The current mantra is trade and take money to the bank. Forget equities investing.
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