Re: For My Moneycontol friends
Today i will teach u all about 2 more v important candlesticks patterns and i wnt to talk about stock and sector phycology aswell, and how to find stock setups for u. You dnt hve to beg anyone or tke anyones help to gve u stock tips, i wnt to mke all of u proffesional traders and investors, u can always discuss wth your seniors and take help but when u will learn phycology about stocks and markets then u will be able to find yur own trades, you dnt need to tke any paid service or run after anyone to tell u which stock to buy, if u will act smart and discipline then u will be able to work better then anyone who gves u free tips, i knw people who gves free tips to anyone, they dnt even knw about when to exit or buy exactly they just tke paid services of multibaggers and they get a list every 3 months of good stocks reserched by that company and sometmes those work sometmes they dnt work, positional traders will never get any benefit from any kind of tips becz if u hve to mke tradng stocks as yur profession then first thing is stop askng for free tips to anyone and even if anyone gves u free tips then cross check those stocks wth yur knowledge and then trade. Trading stocks or any other financial markets is a business, so always learn everythng about yur business first and stop running after people to get tips.
Now lets start wth Phycology, i will teach u all about 2 more chart patterns later tonght.
PHYCOLOGY
I knw u all must be aware of this word, phycology is v important in every aspect of our life, if u wnt to becum professional cook then u hve to be aware the phycology of all veggies and masalas and there combinations, if u put little extra salt in yur food then its entire taste can get spoil aswell so thats how tradng is, if u over trade or try to run after trades and people everytme you will not be able to get that success in a long run.
Now how is phycology important in stock markets,
Phycology can be of 2 types, first is human personal mental condition his or her discipline and there perspective to see things, every human thinks different from each other about different things, everyone has there own views about things in lfe, in stock markets v important thing is that we as retail traders and investors needs to think same as big players who hve the overall control of stock markets, big institutions which we call FII or DII , now i wnt u all to think lke foreign investors and traders , the way they trade, and how can u think lke that, the only way is by looking candles, candles will tell u what they are doing and how we can read there language of tlkng to each other through candles and we can also tke advantage of that to earn our profits, to read candles we hve to now focus on overall markets and then sectors and then from those sectors we hve to choose right setups of stocks, now i will gve u few examples aswell about phycology of markets.
Lets take any sector first, lets start wth IT and PHARMA
Now lets think as a trader i wnt to mke position in IT or PHARMA sector. So first i will check and read the phycology of this sector, now i will see how IT and PHARMA sector runs and why it runs why big institutions will put there money in this sector, i noticed that this is the only sector which gets benefit of dollar strength, if dollar will rise then Most IT companies and most PHarma companies profits will rise aswell becz they mostly hve there business in united states, so now i see dollar index chart or read most economists theorys which shows me that yes in 2014 Dollar index will be strong as compare to other currencies, so that gves me a clear idea that ok so now i knw that these 2 sectors why they will run up, so after that i will try and find a nice IT or pharma company which is in uptrend or gvng me good price action signals or patterns on charts , so that i can read on candles now how and in which IT or pharma companies big foreign instituions are puttng there money so after finding those signals i will find a ryt setup for me wthin my rules, which has good risk reward for me and good uptrend for me in larger way, so thats how i will choose my setups finally and mke a position wthout anyones help and mke my mind earn for me, u hve to be smart always and see , find the reasons why some stock or sector performng so good then others, news effects doesnt matter for a price action trader, news effect can stay for 1 to 3 days but the overall phycology of that stock and sector is main, keep in mind always that it doesnt mean if u knw that overall dollar will stay strong so its not neccessary that dollar will just stay strong everyday, there must be some days when it will be weak aswell , so it doesnt mean u go n mke trade everyday in IT and pharma sector now, be intelligent ok , we r just discussing overall phycology
Now lets tlk about Gold sector stocks phycology
Now we all know that Gold get weak if dollar becomes strong and vice versa, so what if wnt to mke position in any Gold sector stock, first we will find few stocks of golds and then select which is hvng uptrend and when it will come to its nearest support and then we will wait that dollar shld be weak those days aswell and we buy that stock which gves us good upmove and 10 to 20 percent as a positional trader, now recently i was trackng pc jeweller from 75 levels, i made a buy position in it at 75 becz i noticed that dollar will not rise now for few weeks as they were not doing any major event lke fed taper that month so i bought pc jeweller at 75 and exit around 93 , though stock is above 100 now as it showed a v strong strength and dollar weakness also supported it, now when usually dollar has more chances of being strong, wheenver there fed is about to come they usually comes in the middle of the month , durng those times dollar start to gain strength becz it always think that taper will happen and it will get some support, there are many other factors also by which whole forex markets run but i dnt wnt to go deep in it now , for next few months u can just hve an idea whenever fed of america is about to come then dollar starts gettng strong and the stocks and sectors which get effect by that in india start to get weak or corrects but after those events again strong uptrend stocks continue there journey,
Now lets see about auto sector phycology
If u notice all majors lke tata motors and mahindra and mahindra were in an uptrend but they were consolidatng a lot and even tata motors got good correction aswell frm 400 it fell down till 330. Now around 330 to 340 it made a v good bullish engulfng pattern also on its 200sma where i persoanlly had bought it aswell, as i already taught u all about those things , then after 2 or 3 days of that in budget some reform happened aswell for auto sector by govt and entire sector got big boosts, any trader who was aware of patterns then he or she wld hve made an entry wthout even knowing about any news , news will always come automaticlaly after those strong patterns and those patterns get complete wth little booster frm those kind of news, now if soemone wld hve not bought seeing that bullish engulfng pattern he cld hve bought wth the booster by govt reform for that sector and wld hve get good 20 percent return in few days, now i see in moneycontrol people are sayng buy tata motor, now a smart trader shld hve already earned its 20 percent and now people screamng on tata motor board on moneycontrol oh buy now buy now,
Now if u see elections are comng so media sector will get lot of benefit of it, so frm last 1 month all media stocks lke PTC or tv today or sun tv all r running up, some stocks lke zee entertainment still they hve to catch up , so this is howu see sector phycology and find ryt stocks for u wthin yur rules.
Rest always mke sure u dnt over trade and run after any trade to catch up, if u cant find good setups for u then leave it do somethng else apart frm lookng at markets everytme,
The best traders I know don’t bother analyzing the market or watching their charts all the time. They know they can’t change where the market is headed, so they just set orders/alerts when certain prices are reached or they look at the market in the morning and in the evening briefly. Successful traders take a relaxed and no-stress approach.
The most profitable traders and investors don’t addictively watch their positions all day or think about them durng sleep aswell, They make a decision and let the market determine the outcome without interruption or interference. Some might call this “lazy”, I call it “smart” because it works and it’s the foundation of the set and forget mentality that I believe in.
To be a good trader, we almost have to do the opposite of everything that feels “right”. It feels “right” to sit there and watch the markets and watch your trades tick away. But this really accomplishes nothing except making you more likely to do something stupid like enter another position, close your position before it really gets moving, etc. It seems like you need to sit there and “analyze” the market for a long time, and especially after you enter a trade, but you don’t need to do this, actually you really need to do the opposite. Just leave your computer, be “lazy” about your trades and forget about them for a while, this way you really give your trading edge a fair shot to play out.
Putting pressure on yourself to make a lot of money from your trading right out of the gate is going to flood your mind and body with emotion and adrenaline which is naturally going to cause you to do stupid things like over-trading and over-leveraging your account. Whereas, if you take a smart trader approach and just check the market before and after work each day, you will slowly but surely gain confidence and also have better longer-term results since you will have largely eliminated emotion from the mix.
