An Excellent Collection of ST's Posts.

[Tukka Trader]

Many new traders believe that large successful traders have some secret system or indicator which never fails. This is far from truth. Truth is these traders methods also have losing trades. But because of this false notion a new trader goes on system hopping spree and never understands that good system is just 1 part of trading. Other more important parts are Reward to Risk Ratio, MM, Trade management.

I remember having read an interview of a large US trader Paul Tudor Jones. He it seems had caught the bottom of the market ( some T bonds I think ) and the interviewer was congratulating him for being so accurate. The reply from Paul Tudor Jones was something as under :

It is true that I caught the bottom of the market and the newspaper headlines are shouting that " Paul Tudor Jones caught T bonds market at lowest tick ( at bottom) but the fact is I caught it on my 5th try.....my earlier 4 attempts failed and I had to take my loss. But newspapers and magazines will not talk about earlier 4 failures as it does not make a great eyecatching story for them."

Now think about it. A trader like Paul Tudor Jones does not have a never fail system and we average traders are running after it.

Incidently Paul Tudor Jones is believed to be trading many of De Mark systems and research.

Smart_trade
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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Why so much of negativism ? Many countries in the world have higher tax rates than us. We have a graded tax slabs of 10 %,20 and 30 % at maximum.If citizen of the country dont pay tax how will the progress of the country be financed ? If we finance it through loans from international bodies then we will have Greece like situation here.

Indian tax system is pretty good. Many countries have higher taxes than us, we have incentive for investments, we can carry forward our losses ( if we get a loss in any year) and set it off against future profits. And if one makes profit why should we feel so bad about paying taxes ? I am at the highest tax rate and I look at it from positive view that after paying my taxes honestly, I am still left with 75 % of my profits on average ( after various tax concessions and slabs ) which I can spend the way I like. I can live with pride and dignity that I am paying correct taxes and walk with my head high.No Govt babu can question you how you spend the money after paying taxes correctly and in time. Govt has never said that you dont earn profits over 10 Lakhs...make high profits, pay taxes and live happily.

Now as the lot size increase has come in SEBI circular, we have to think how we adapt ourselves to the new trading lots. Once SEBI decides anything they will not budge even an inch from their decision.

Smart_trade
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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Most of the inaction comes from lack of capitalisation and unwillingness to take a loss and looking for 100 % sure trades. I remember a quote " the real money is made between when people suspect a trend and when they get confirmed on the trend.

Initially they are in " let us wait and see what happens " mode...and then they wait till it is too late...then they enter and there smart money exits.....and our trader is in loss again though he was right on market direction.This cycle repeats..

When trend starts, dont wait for pivots etc....take a trade at best location and keep 10-12 points stop.....that may be hit but the pivot stops also get hit.

Smart_trade
__________________
While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Originally Posted by lemondew
With all respects to them. If veterans like ST, Pratapvb and so on start trading then I dont mind putting some money in their funds and share profits. Deal is open. I wont mind making money without trading

By the Grace of God, I trade my own money and I dont have a single rupee of debt/ outside funds. With my money I can take risk and not be answerable to any outsider. I cannot handle pressure of other's money and my trading performance may suffer because of that pressure.I am very happy and make a comfortable living trading my own funds so no plans of managing others' money anytime in future.

Thanks for your faith and confidence in me.

Pratap also trades his own funds and does not trade any outside funds.

Smart_trade
__________________
While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Originally Posted by wisp
Dear ST and other Seniors,

Please share your views on daytrading as a profession. how good or bad can it be if we are able to survive the initial years? Is it a futile mission? please share

Daytrading is a fantastic profession if we are able to survive through the initial years. But let me caution you....the success rate is very small...less than 5 % so it obviously wont be easy.

Initially in daytrading we start with 1-2 Lacs capital but as we become successful, we have to increase our capital by adding back the profits. Problem is that traders after 5-10 years still keep trading 2-4 lots on small capital and compare their earnings with IT professional or corporate executives....for a full time trader one needs upwards of Rs 10-12 Lacs or more as trading capital....one can trade some swing trade positions also.

I have no doubt in my mind that trading is one of the best professions.If I have to start as a 20 years young man all over again, I will definately opt for trading again, no second thoughts.

Smart_trade
__________________
While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Why do you invest in funds, what benefits do you (since you are a very successful trader) get from investing in funds?

Most new traders will have this querry. I have my investment portfolio, mutual fund portfolio,real estate portfolio and trading portfolio. All the four are independent.

Traders can make very good returns but I ask a question to me can I scale up trading ? Meaning I am suppose ok trading on 15-20 L capital but can I trade on more than 1 crore capital ??The answer for me is a bit difficult. And even if I make 20-25% return per annum, I will make big profits....so not after those 300 % return magic traders. I am not saying they cannot make high returns but for me 20 % pa is more than enough to increase my wealth.So I believe that diversification is the key.I am no more in capital generation so why take undue risks and risk my family's financial future which is absolutely secured as of now.

Smart_trade
__________________
While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

I have a friend who is a very large trader and he trades arbitrage.His capital was more than 25-30 Cr and I used to talk to him about trading.

He told me one secret which I remember till today. He says ST, we both are traders..but you try to make 15 L on 15 or 20 Lacs capital so that is 100-120 % per annum which is not easy. I on the contrary try to make just 5-7 % above my cost of capital and that gives me 1.25-1.5 Cr per annum....now tell me why should I take undue risks and put my capital in jeopardy...Sensible thought ...

His cost of capital is 9-12 % pa. and he tries to make 15-17 pa % on his capital...but on 25-30 Cr...that is huge.

He told me once that he does not do something extraordinary in trading but he trades simple things with extraordinary efficiency...meaning all his depositors are paid on exact date....not even 1 day late.Simple set up he trades.

Smart_trade
__________________
While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[vishnu_1990v]

Candle, xray, lemondew, vijayanscbe, wisp, krish4166, Snake.Head, Tukka Trader
Awesome collection thanks.
vishnu_1990v

 

[candle]

Originally Posted by amandeep86 View Post
Da,

Pls throw some light on how to identify these accelerations in price to be traded or added.

Visual chart inspection/observation.. Some of the signs are as under :

1) Important pivot low gets cracked which was earlier held as a support.

2) After the pivot low crack, the market does not go back up for pullback/test. This shows that the market is in hurry and steep accelerating move likely.

3) The fall becomes steep with 1-2 large bars....traders on opposite side of the move capitulate.

4) The move is an impulse wave and it takes much lesser time than the preceeding corrective wave for travelling distance more than that travelled in corrective wave.

After steep downmove, the market forms atleast a short term bottom and rallies. So we need to be alert to cover our short positions when steep downmove exhausts.The thrust will be fast.

Smart_trade

 

[candle]

Originally Posted by anuragmunjal
hi ST
I have found ur posts to be very informative for the simple reason that even I trade in a somewhat similar manner, although I do
not look at pivots and charts while trading, the basic essence is the same. ie. I trade on volatility based Sar with adds if the
positon goes in favour.the basic principles... trade what u see... no prediction as to where the price would go, tade with the trend,
add to a winning position and cut ur losses short.... remain the same. I have always wanted to try ur system, but could not do so
because of lack of time as I follow several different instruments and mkts. simultaneously... added with the jobbing/scalping bug
that keeps on biting me frm time to time.

I have a query..... obiviously the mkts off late have been quite good fr both these systems... but an extended range bound mkt
will definitely result in losses fr ur system as well as mine..
as of now I just treat those times as a normal 'business loss' and move on..
what do u do when the mkt goes range bound...do u cut back on size, or do u switch to a different instrument and if so do u have
a set criteria for entering a new instrument.
do u have any criteria to decide which instrument would have a higher probability of trending.....or do u also treat it as a 'normal
occurance' and live with it....

I hope I am not asking fr too much... but since u have always been forthcoming with the way u trade.... hence also added a small
discription of the way I trade.

regards

Thanks for the kind words, Anurag.
Very important question for every trader...let me share my views here .

1) Trends and rangebound markets are cyclical....after the strong trend expect the market to be rangebound before the trend resumes or
the reversal takes place....excepion is V shape reversal which is rare in any case. So after trend move, be ready for a sideways move and
after sideways move be ready for a trend move.

2) Volatility is also cyclical and mean reversing...so after volatile markets expect calm markets and after calm markets the volatility is
waiting to return...this is much more predictable than the price direction.

3) For we intraday and swing traders 3 trends exist on every timeframe....they are a) Major Trend b) Visual Trend and 3) Short term
trend....these 3 trends at any point are influencing the markets and when all 3 trends are in phase, we get a trend move......once 1 or 2 of
them get out of phase, we get sideways moves.....

4) First indication that sideways move is a about to come is when one higher degree trend fails to make new high/low....we in daytrades
trade short term trend...so when we see market is not making new high/low in visual trend, we should expect sideways phase to set in.

5) In the initial period of sideways move the maket still trends ok.....but at later stage the market goes flat....but by that time we know
that it is entering a sideways phase....here too you will get a trend on smaller timeframes....so in sideways move find out which timeframe
gives us trends and trade that timeframe.....market may not be trending on 15 min timeframe but it may be trending on 1 or 3 min
timeframes.But trading becomes tough in this period and the moves smaller...

6) In sideways markets the quantity automatically goes down as the supports/resistance do not get broken and our adds are restricted.

7) In sideways market we need to trade on selling near the resistance and buying near the supports....I have a few methods which I
monitor in such phase.....
Problem of sideways phase can be tackled in the above manner.....we cannot totally eliminate this problem.....we have to live with it....that
is the reason we should add and make maximum in trends so that we can take these sideways periods in our strides.

Hope I am able to add some value to your thought process....

Smart_trade