loosing streak....!!
- Thread starter mr. looser
- Start date
Do you understand that i have not win any good trade in this 2013...how frustated and miserable i wud b feeling....I feel like a misfortune....
but honestly iss saal thoda dur tak chada tha, may be I sud shift to nifty futs, nifty options capital kha jaate hain..........:annoyed:
I will be happy if I end this 2013 with no profit no loss...........:clap:
jaise chinti deewar par chadti hai phir gir jati hai, but phir bhi chadna nahi chorti, waise hi mein bhi har mahine gir jaata hun, but phir next month wapis lag jata hun trading mein...:rofl::rofl:
but honestly iss saal thoda dur tak chada tha, may be I sud shift to nifty futs, nifty options capital kha jaate hain..........:annoyed:
I will be happy if I end this 2013 with no profit no loss...........:clap:
but honestly iss saal thoda dur tak chada tha, may be I sud shift to nifty futs, nifty options capital kha jaate hain..........:annoyed:
I will be happy if I end this 2013 with no profit no loss...........:clap:
Do you understand that i have not win any good trade in this 2013...how frustated and miserable i wud b feeling....I feel like a misfortune....
Several forum members have given good suggestions. But you shouldn't beat yourself up in the name of discipline and rules. You only need to follow rules and discipline to some extent. Beyond that its only a constraint.
We need to understand the non-linear nature of the stock market and always keep track of the broader movements. Since December the mid caps took a huge beating and are on the net in downtrend till now. Sure nifty went up, they keep changing the index constituents though.
A trader with stop loss makes gains and avoids losses in trending markets only which are things of the past. They may happen again long time in the future or soon. But in times like now, in see-saw markets stop losses get you butchered.
Even then one is better off with stop losses and money management rules than as a primitive trader.
The non-linear nature of the market means that one should not expect to make money from the market at all times. The big misconception and wrong pursuits are those to make profits on a consistent basis. That is illusion. You make lot of profits sometimes and nothing other times and big or small losses sometimes. This is the way this business works and one has got to live with it rather than try to squeeze the market to one's own specifications. When you squeeze too much, it backfires and all your profits will be gone and get worser than before.
The best way to assess a trader's performance is to look at the distribution of gains. When you plot it you shouldve skewed distribution to the right (right side being profits). Even if you don't have the median shifted to right rather to left, you should have uneven distribution of big vs. small - profits and losses skewed to shift the "mean" to the right. Mean is average, median is middle point in a sorted sequence.
Here is another non-linearity a trader needs to look into: big vs. small in profits and losses. It doesn't matter how many times you make profits.. small or big. If your strategy is prone to make big losses even rarely, your trading account will be ruined some day. One must have a robust strategy to cut short the losses in a non-linear manner. Like hard stops in first series, then reduced exposure after first series of stop losses, etc. Time will bring change. During those times when you had to reduce exposure due to losses already taken and market still in downtrend or not showing momentum, you should remember the non-linear nature of reality and wait it out.
No matter how much you talk about discipline and rules, you are likely make mistakes (actually mistakes after the fact, if there was no loss would you call it a mistake?). Mistakes are what make trading exciting. But the thing to worry about is how much does it cost.
Certain costly mistakes can be avoided with simple steps. Like avoiding small caps (market cap < 5k cr) altogether becoz there are many such stocks that fall non-stop by 90%. Once you lose 90% you are out of the game (I once did 90% and took break for 2.5 years, the stock is still languishing anyway at another 95% down).
Another simple step is to avoid FnO altogether. FnO in India is only there for show. Time constraints eat up your capital. If I can buy an option for a 6 month or 3 year contract, then only it is a matured market. We can't do that in India. It is there only for suckers. See it simply: FnO accelerates (or magnifies) your trading results. If you aren't good in equity, you will be much worse with FnO. If you are good in equity, you may do much better in FnO. But then again, FnO is in derivative domain. Which means they have value only when things are changing in equity domain. They gain only when the change is high, that is when trends are strong. Other times they suck. While in equity you will make money even with less % movements. Now tell me how much nifty is changing these past few years?
I don't denigrate the options market. The simple point is that we can't perform well with too many constraints. Options put a time constraint (expiry date). Over that there is always premium. The only benefit you get is optionality but at what cost. NIFTY option premium is 105 at the beginning of the month. How can I ever buy that option? That means we can't simply simply buy an option once and sell once and expect to do well, esp. in Indian market with too many constraints to suck traders and help trading houses and exchange make money at accelerated pace.
You see our strategies are becoming "fragile" to market fluctuations. It is as simple as that. Last year, with trend trading, I thought I was doing pretty good in the 3rd quarter. Despite taking stop losses over and over again, I only needed one good trade (shasunpharma) to reverse them all and add extra. But then, I failed to see I was fragile to trend reversal as I was scaling position for even more profit (got attached) without noticing the pace of the downtrend in it. The stock is now at even low price and am also not devastated. It was a hard stop though. My mistake was to miss this rule: one should never let a profit trade turn into loss. Atleast close at ~0% loss.
Though losses are under control, I was losing hope as all my trades are hitting stops just due to up and down fluctuations. I had a fragile strategy.
Since Jan'13, I adopted a non-fragile strategy and recovered lot of losses in one trade only (two days when HUL jumped 23%).
I too am on low capital compared to other traders I am getting to know (like TraderRavi), but having a job that provides recurring flow of cash, I have a systematic plan to scale up capital. My capital now almost doubles in next month to what was in December. I don't put big amount of my salary, nor do I avoid altogether. Its easy to allocate future money to these ventures than what I have in pocket (I am risk averse also). This systematic scaling ensures I have good enough capital to experiment, yet have enough ready in the future as time passes fast. Believe, you have passed 3 years right, I have passed 6.5 years already. As you gain experience, you will stand outside of time and see things differently. But always track markets, again non-linearly. Track broader market trend regularly and specific stocks rarely.
Stock market is not like a job where you can take paycheck regularly. Appreciate the non-linearity and try to remove constraints from your trading. Lesser the constraints, less fragile you will be. Wish you many exciting trades ahead.
P.S. my posts get very big. Well, you can't talk about complexity of stock trading in few lines. Also its a pleasure to share my learning in long essays.
I feel sorry for you for losing a humongous amount recently. I have a close friend who had also lost humongous amount since March this year. It feels very sad everytime I think about such losing streak.
You have put up a really long diary. I will go through it.
There is difference in what we learn:
1) when we watch a stock without making profit in it
2) when we watch a stock while making profit in it
3) when we watch a stock go up a lot after we booked little profits in it
4) when we watch a stock go down terribly without making losses in it
5) when we watch a stock go down terribly while making terrible losses in it
6) when we watch a stock go down terribly just after we closed it with some stop loss
Some traders experience few of above situations and make wrong conclusions that put them back into any of the same set of situations and the cycle goes on again. Perhaps upto some time.
You have put up a really long diary. I will go through it.
There is difference in what we learn:
1) when we watch a stock without making profit in it
2) when we watch a stock while making profit in it
3) when we watch a stock go up a lot after we booked little profits in it
4) when we watch a stock go down terribly without making losses in it
5) when we watch a stock go down terribly while making terrible losses in it
6) when we watch a stock go down terribly just after we closed it with some stop loss
Some traders experience few of above situations and make wrong conclusions that put them back into any of the same set of situations and the cycle goes on again. Perhaps upto some time.
I went through the entire thread just now, yaar tum itne lakhs lasted kahan see how? :O trade with smaller money before lacs. 1 ke peche jitne zero laga lo, one toh one hi rehta hai then. Varna try fundamental analysis , less risk and good return for life without raising even a finger. (Don't dissemination fundamental analysis, I'll become a lion then)
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