My Journey In Technical Analysis

ncube

Well-Known Member
Brain is filled with fear ,greed when money is involved,which tends to bring us into cycle of guessing or gut feeling .. this is what i understood.
I am not contradicting Madan as I know the context of his tweet, since the context was not mentioned I tried to clarify the terms as stand-alone. These are basic common terminologies taught in engineering curriculum.

If you doubt me you can confirm it with Madan as he also comes from engineering background and would be aware of it. BTW I can also tell what his reply would be.."It does not matter what or how ncube or anyone else interpret, what matters is making money from the market!! there are n number of ways to skin the cat"..:)

Ok ok fine...I will mind my own business...pun intended..:)
 
Let us have some peace in this thread....
 
Sir I think its fine..just some harmless bantering...nothing personal.
No no...that was not harmless discussion..let us not kid ourselves..some post were outrightly arrogant ,personal and undesirable.....and hence stand deleted....

ST
 

XRAY27

Well-Known Member
Risk of Ruin

By JAMES CHEN
Updated May 28, 2019
What Is Risk of Ruin?
Risk of ruin is the probability of an individual losing substantial amounts of money through investing, trading or gambling, to the point where it is no longer possible to recover the losses or continue. Risk of ruin is typically calculated as a loss probability, also known as the "probability of ruin."

Understanding the Risk of Ruin
Risk of ruin can be identified through advanced financial modeling and expressed as a probability. The complexity of the financial modeling methodology involved in calculating risk of ruin will typically depend on the number and variety of investments involved in a comprehensive trading portfolio. In basic terms, the risk of ruin in gambling and investing is not so different as it depends on how many bets (investments) are placed and how much capital there is to cushion probable losses. The main difference being that investments are not zero-sum bets. Each investment has different risk profiles and payout probabilities, with some risking all capital and some guaranteeing a return of principle regardless of performance.

Controlling the Risk of Ruin
The concept of diversification was developed, in part, to mitigate the risk of ruin. Multi asset portfolios can be extremely difficult to build risk management strategies for because of the infinite number of scenarios involved with investments across a portfolio. Some investments, such as bonds and funds, have a great deal of historical data to allow for extensive analysis of the probability given a wide range of parameters. Others like custom derivatives are often unique and sometimes hard to properly analyze for exposure. On top of this, there are always the black swan events that can upend even the most complex risk management model. For this reason, most investors rely on asset allocation models that invest a base level of capital in risk-free or very low risk assets while taking higher risk bets in other areas of a portfolio.

Risk management programs can be customized to the investor and type of investments involved. Risk management programs will vary across disciplines with some standard practices in the financial industry developed for investment management, insurance, venture capital and so on. Institutional risk management is typically required by regulation for all types of investing scenarios in the financial industry and best practices such as actively monitoring areas like counterparty risk are widely used. Personal risk management in an investment portfolio, however, is often overlooked or miscalculated.


Source :
Risk of Ruin

By JAMES CHEN
Updated May 28, 2019
What Is Risk of Ruin?
Risk of ruin is the probability of an individual losing substantial amounts of money through investing, trading or gambling, to the point where it is no longer possible to recover the losses or continue. Risk of ruin is typically calculated as a loss probability, also known as the "probability of ruin."

Understanding the Risk of Ruin
Risk of ruin can be identified through advanced financial modeling and expressed as a probability. The complexity of the financial modeling methodology involved in calculating risk of ruin will typically depend on the number and variety of investments involved in a comprehensive trading portfolio. In basic terms, the risk of ruin in gambling and investing is not so different as it depends on how many bets (investments) are placed and how much capital there is to cushion probable losses. The main difference being that investments are not zero-sum bets. Each investment has different risk profiles and payout probabilities, with some risking all capital and some guaranteeing a return of principle regardless of performance.

Controlling the Risk of Ruin
The concept of diversification was developed, in part, to mitigate the risk of ruin. Multi asset portfolios can be extremely difficult to build risk management strategies for because of the infinite number of scenarios involved with investments across a portfolio. Some investments, such as bonds and funds, have a great deal of historical data to allow for extensive analysis of the probability given a wide range of parameters. Others like custom derivatives are often unique and sometimes hard to properly analyze for exposure. On top of this, there are always the black swan events that can upend even the most complex risk management model. For this reason, most investors rely on asset allocation models that invest a base level of capital in risk-free or very low risk assets while taking higher risk bets in other areas of a portfolio.

Risk management programs can be customized to the investor and type of investments involved. Risk management programs will vary across disciplines with some standard practices in the financial industry developed for investment management, insurance, venture capital and so on. Institutional risk management is typically required by regulation for all types of investing scenarios in the financial industry and best practices such as actively monitoring areas like counterparty risk are widely used. Personal risk management in an investment portfolio, however, is often overlooked or miscalculated.

Source:https://www.investopedia.com/terms/r/risk-of-ruin.asp
 
Last edited:

XRAY27

Well-Known Member
Traders are the new alchemists. Our job is to predict the unpredictable. Day after
day we attempt to turn lead into gold. When we fail to predict the unpredictable, we
stress and we worry. After all, the near impossible task of forecasting financial markets
is our job.

If readers retain one idea after reading this book, it should be that practically
everything can be analyzed with numbers. Integers and digits make the world go
round—not only in markets, but in every facet of life. Rarely does a situation present
itself where quantitative analysis cannot help explain an event or predict an
outcome. Numbers may not explain everything, but when analyzing financial data,
this analysis can lead to trading success. Hopefully, the contents of this book have
convinced you not to take anything at face value—certainly nothing that can be tested
or solved mathematically.

We’ve examined trading stocks, financial futures, metals, meats, grains, petroleum
products, cotton, cocoa, sugar, currencies, interest rate term structures, credit
spreads, volatility, and even the relationship between stocks and commodities. If
trading cheddar cheese futures becomes the next hot market, I will be there to analyze
it and trade it using the exact same approaches I described in this book. Therein
lies the beauty of quantitative trading: the portability of strategies and methods.

My years of experience have taught me that nothing in trading comes easy.
There will always be profits, but you have to work hard to stay ahead of others.
Growing up in Louisiana, I had a tennis coach who made us work on our physical
conditioning, often spending over 20 minutes at the end of the day sprinting around
the court. We all hated this workout and sometimes questioned its merits. I vividly
recall his screams, “You know what they are doing in New Orleans right now? They
are doing sprints! If you want to beat them, then you have got to outwork them!”

He was right. In every profession, sport, and academic discipline, people are
working to improve themselves. They’re becoming faster, stronger, and smarter as
every day goes by. Heed these works of advice—if you want to beat your competitors,
you need to outwork them.

I want to leave readers with one thought. In The General Theory of Employment,
Interest, and Money, John Maynard Keynes writes: Worldly wisdom teaches us that it is better for reputations to fail conventionally than to succeed unconventionally.

Keynes suggests that those who succeed are more likely to do so unconventionally.
However, those who choose the path of unconventional methods will have their success dismissed by others as chance and will be disparaged in their defeat.

I urge anyone attempting to thrive in such an inclement endeavor as trading to follow Keynes’s advice. Think for yourself and travel on paths never journeyed before. I hope that trading success will bring you personal satisfaction and that your failures will cause you to rise and try again.
Best wishes and good trading.

QUANTITATIVE TRADING STRATEGIES-LARS N. KESTNER
 
No play area

In continuation of grinding market.. today nifty was with in the tight area offering no play in TTF...which i don't trade



Today nifty fut..(charts are from previous posts

hi brother.. do you have pdf of this thread..
as usual ..old images are gone
 

XRAY27

Well-Known Member
Last edited:

XRAY27

Well-Known Member
6 Traits You Need to Develop as a Day Trader

BY
CORY MITCHELL

Updated April 30, 2020

Day trading is not just about finding a strategy, practicing it, and then making oodles of money. Day traders develop certain traits, which in turn allow them to implement a strategy effectively, in all market conditions. When someone starts trading, it's unlikely they will possess all these traits. They may be strong in one, two, three, or even four of them, but might need to work on the other traits. That's good news. It means successful traders aren't born; they develop through arduous work that includes these traits.

1. Day Trader Discipline
Discipline is a key trait every trader needs. The market gives you infinite opportunities to trade. You can trade thousands of different products every second of the day, yet very few of those seconds provide great trading opportunities. If a strategy provides about five trades a day, and stop losses and targets are automatically set for each trade. There are only about five seconds of actual trading activity during the day. Every other second is a chance to mess up those five trades, taking more trades than you should, getting distracted or skipping trades, prematurely exiting the trades you are in, or holding trades too long.

That doesn't mean your trades only last five seconds. Five seconds of activity means it only takes one second to place an entry order, and then you need to sit on your hands again. If you adjust your stops and targets, this may take another second.

The bottom line, though, is that your actual trading time is minuscule each day, even if you're an active day trader. The rest of the time, you need to sit there, disciplined, waiting for trade signals. When a trade signal occurs, you need to act without hesitation, following your trading plan.

Traders require the discipline to do nothing when there are no opportunities present but must still stay alert for potential opportunities. Then, they need the discipline to act instantaneously when trading opportunities occur. Once in a trade, traders require discipline to follow their trade plans.

2. Patience
Patience is related to discipline. As discussed above, day trading (and trading of all types) requires a lot of waiting. When a trader is entering or exiting the market at inopportune times, they will often say, "My timing is off." One could also say, "My patience is off." Jumping into, or out of, trades too early or too late is a rampant problem among new traders.

They simply haven't developed their patience enough to wait for the great entry and exit. This trait goes hand in hand with discipline, and you need to be patient until there is a call to action, then you need to have enough discipline to act without hesitation.

Traders require patience in waiting for their ideal entry and exit points—based on their strategy—but when the moment calls for it, they need to act swiftly. There is a constant seesaw between prolonged periods of patience, followed by split-seconds of action, which are then followed by patience, and so on.

3. Adaptability
You will never see two trading days that are exactly alike. This constant difference poses a problem when someone only looks at textbook examples of a strategy. When they go to implement it, everything looks different than it did in the example. Maybe there is more volatility, less volatility, a stronger (or weaker) trend, or a range.

Successful traders implement their strategies in all types of market conditions and know when they shouldn't use their strategies—for example, during a range if they use a trend following strategy. This need for quick changes requires mental flexibility. A trader must be able to look at the price action of each day and determine the best way to implement (or not implement) their strategies, based on the conditions that are present that day.

Traders must be able to implement their strategies in real-time, in all market conditions, and know when to stay away. Not adapting to current market conditions will often result in a swift drawdown of capital.

Conti....
 

Similar threads

Broker Special Offers

Zerodha – Open Paperless Account

Open online account with Zerodha. Free delivery trading and Max Rs 20 for Intraday, F&O, Currency and Commodity Trading. Intraday High leverage with MIS, CO and BO.

Name:Phone:
Email:City:
State:
Are you a day trader?