An Excellent Collection of ST's Posts.

[krish4166]

Our mind plays games because we dont want to loose . That is where discretion comes in.The following might help in reducing the mind influence.

1) Backtest the method and convince our inner mind that the method is profitable .

2) Have adequate capitalisation. Shoe string capitalisation is one reason for second guessing trades.

3) Make sure that we dont depend on the earning from trading to pay our monthly expenses....if we have to earn for expences, we will never be able to accept normal losses which are given in this business.

4) Keep some amount aside ( like 30-40 K ) for continuous losses and drawdowns. You may never need it but it will give a solid comfort level .

5) Be prepared to loose some accumalated profits . Systems traders dont buy/sell on the lowest/highest tick.

Smart_trade

 

[krish4166]

I request others also to post if they have any collections of ST Bro.



Regards,
krish4166

 

[candle]

An earlier thread http://www.traderji.com/members-discussion-forums/93453-important-posts-smart-trade_-part1.html

Thank you so much wisp for the wonderful thread. I was not aware of this one, else would have continued there only. Now want to include this link in the very first post, but can't edit now.

 

[XRAY27]

Thank you so much wisp for the wonderful thread. I was not aware of this one, else would have continued there only. Now want to include this link in the very first post, but can't edit now.

That thread is not only ST but also contains other member posts !!!!

 

[XRAY27]

Though a good system is essential for trading success that is not the only requirement for trading success. It requires many more things like the mindset which is in tune with the method adopted, faith on the system ( backed with backtesting and front testing both ) , discipline, MM .

Members here know what is good and we have faith on their judgement. A great method in hands of bad trader will produce pathetic results. An average method in the hands of a good trader will produce above average results.

Good trading principles like cut your losses fast, run your profits ,trade in the direction of trend, dont add in losing positions are all same for years and years...nothing new gets added but then why do we have so many losing traders ?? Good principles are known to everyone but following them is difficult.

If ready made system worked, then we will have factories producing great traders. It does not happen that way...

Smart_trade

 

[XRAY27]

Why ? If one wants to make IAS officers salary then we cannot be trading in 25 and 50 nifty...we ought to be trading in 500-1000 NF and we have to put up sufficient margins for that....that is all. Margin per NF is not increasing but lot size is increasing to 60 NF probably....for regular traders this should be of no difference.

But for beginers who are starting on 1 lot ( 25 NF ) it will make a difference as they have to trade min 60 and with higher margins...

ST

 

[candle]

Originally Posted by Cubt View Post
ST,

Currently I trade based on support n resistance, if the daily trend is positive, I enter the trade at the support level and if market moves in my direction I trail my stop loss based on 5 mins tf support level.

At any point of the day, if 5 mins bar closes below support level, I exit. I do not reverse to short. But if market resumes uptrend again after a day or two I feel hesitant to enter again fearing it will hit resistant n fall again.

But am much more comfortable in short position, I do not even give second thought to re enter if market breaks the support again. Bcoz I feel I can make a quick profits in shorts, market when moves up it goes in Stairs but when goes down it comes down in elevator.

how do you decide ur exit levels?. After all, exit point much more important than entry. Could you pls provide ur inputs on exit level?

1) The upmove builds slowly with lots of up/down....but the downmove is sudden. It is the nature of the market. The buying decision is gradual...selling is sudden, just like dumping the position.So upmove takes time to build, downmove comes tearing down, fast and ferocious.

2) If you are asking about daytrading, I use 5 min bars and I use the same chart for deciding the larger trend as well as trading the current moves. But market gives plenty of indications before it makes a move. Today from 9:40 to 12:00 Nifty was attempting to go up but every attempt its strength was falling short. Finally bulls gave up and that is where the bears seized an opportunity.

3) In trading entry is relatively easy but exit is difficult and exit is very crucial to the success or failure of a trader. The exit should be what we call "Just In Time " in management terminology ,that means not too early, not too late. This is as much an art as it is a science. I use the following to decide my exit levels.

a) Supports/resistances of hourly, daily bars.
b) Previous swing highs/lows
c) TDST Power of 9
d) VWAP Bands
e) Large bars, End of move bars
f) The bounce we get from the low
g) Overlapping bars

So based on the above the exit is taken. Booking part profits at important support levels also is a good strategy.

Smart_trade

 

[XRAY27]

How to recognise Sideways and Trending markets

Trending and sideways phases are cyclic in any market and after a trending phase expect a sideways phase and after a sideways phase expect a trending phase.....if there is anything certain in the markets ...it is this.

Traders make money in trending phase and give it back in the sideways phase....sometimes they loose more in sideways phase. Every trader has to understand how he is going to negotiate the sideways phase so that he makes some money in it or at least preserve what he has made in a trend and again ride the trend when the market starts trending again...

How do we know that we are in sideways markets ? The charts will indicate that. I have taken an example of Nifty Futures 5 min chart.....we had a nice downtrend till point A , then we had an upmove upto point B.....the first indication of sideways market came when at point C market was unable to take out point B...then D,E,F,G all sideways moves till we get a breakdown of the range.....

Traders handle sideways phase in different ways depending on what he is comfortable with ...various ways of handling sideways phase are as under :

1) If you are a range trader, trade the extremes of sideways range....buy near the bottom of the range and sell near the top....

2) Decrease your volumes in sideways phase and increase back to normal volumes when trend starts.

3) Trade on sideways market indicators, oscillators, Bollinger bands extremes etc

4) Totally stay away in sideways phase and trade only trending phases....


So in this range either trade the extremes or just stay out and dont loose your capital and energy trading sideways markets......get on to trends when they start again.....

Smart_trade

 

[Snake.Head]

Originally Posted by*Snake.Head*
Can tell us more about how you manage you psychology and hesitation way during that time.

I made a mistake of putting most of my savings from salary from my earlier job into buying a small trading office which left very little money to trade. I was on a capital of 50,000 and I used to make 5-7 K on that in a month and all that used to go to support my household expenses (this was 25 years back, today one cannot run a household in 5000-7000) . But now I think that because I invested my savings in buying a office, at least that asset was not available for funding my losses initially.

The capital generation was very slow it was 3 steps forward, 2 steps backwards kind of movement in my capital.....and a loss used to make a big hole in the capital. I am very fortunate to have very understanding and supportive family and I whatever I have achieved is 100 % because of their support in my adverse days. I could have failed in trading but the passion for the markets and determination to succeed and family support were two pillars for my survival.

But very difficult period . For new traders starting I would suggest adequate capitalisation, 8-12 months expenses kept aside, spouse working in the initial period preferably so that house expenses are taken care of , and very strong family support. Anyone starting trading on 50 K has very low chance of making it...( many will not accept this reality though but it is a hard fact )

Smart_trade

From <http://www.traderji.com/general-trading-investing-chat/96368-general-trading-chat-1791.html#post1094257>

 

[Snake.Head]

Increase of Trading capital with profit


Trade 1% of your trading capital on each trade. Increase the % only after you reach 50 % profit on your trading capital....This should take about 3 months. Then at the end of 3 months divide the profits equally between trading capital and risk capital.....continue trading 1 % of your trading capital.....and trade 4-5 % of your risk capital......let this continue for 100 % profit....then repeat the same step.....

Let us take an example...say your Initial trading capital is Rs 5 Lacs......you make 2.5 L profits divide that 50:50 ...so trading capital now becomes 5+1.25 =6.25 L and your risk capital is 1.25 L now on each trade you take 1 % of 6.25 L plus 5% of 1.25 L = 6250 +6250 = 12,500 on each trade......continue this till your trading capital + Risk capital becomes 15 L ....then same steps.....

If you find 5 % too large, then go for 3-4 % of risk capital but this compounding will increase your trading capital exponentially without taking undue risk with your trading capital which goes on increasing continuously.

Smart_trade

From <http://www.traderji.com/general-trading-investing-chat/95736-learning-group-vijaywada-121.html#post1087524>

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Trading system main components

Take 1-2 set ups with which you are comfortable and find out how the trades were in last 3 months. Make a record of all the trades, how many were successful, how many were looser, total points made, total points lost, how many consecutively loosing trades and how many consecutively winning trades....in short find out what would have happened if you traded on these set ups for last 3 months.

Intraday trading is very fast....so there is no time to think. You must have a well thought out and tested strategy and all you have to do is take trades mechanically as per the strategy. Think about entry, adds, position sizing, profit taking, stop losses, how will you trail stops .....it is a difficult task to put everything in place, but it is necessary if you wish to succeed in day trading.

Your set up could be as simple as a moving average...but when you put all the above to it, it becomes a lethal day trade method......

Good wishes for your success....

Smart_trade

From <http://www.traderji.com/general-trading-investing-chat/95736-learning-group-vijaywada-122.html#post1088302>

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Remember that we are in day trading and our action should be aggressive like a predator. We are into "sitting on the edge of the chair and ready to pounce" type of trading . Swing traders and position traders can afford to be "armchair" traders ( some are even "easy chair Traders" )...that luxury is not for we day traders. But that does not mean we should take erratic trades...the success lies in achieving a fine balance. It is controlled aggression.

Smart_trade

From <http://www.traderji.com/technical-analysis/93165-learning-catch-high-probability-breakouts-184.html#post1091349>

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