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oilman5

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1) Target for the day is to hit trades with 10 point loss.

This should give u a reinforcement that each stoploss hit = target met. Over a period of time, your subconsious mind will be confused and start accepting stoploss hit as a neutral outcome. It will also give u practice of taking small losses and accepting them as correct outcome of trade.

Lets not forget, that when we take a trade and enter target and stoploss order, then hit of any of them should be acceptable to us. It is just another trade. Our self image, ego, esteem does not depend on this single trade.

Not sure if this approach will work for you or not, but it did help me hence sharing it here. I have recorded his type of conversation on my mobile and listened to it many times to tune the subcons mind. .............aw10
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7) Silly mistakes in placing orders and then praying if they go in loss

This is one of most famous discoveries and hope readers will use it not as a flaw but intentionally do it and benefit from the process. This is how it goes...


Practice makes man perfect - we all have read, heard this proverd hunderds of times in our lives, during our studying days, we have practices test, papers, in sports we keep on practising and so on...

In trading too, we need to practice. But practice what?? Yes apart from many things of tradings such as research, system / method, TF, MM, RM, etc, there is one focus area and to me it the most important area - cutting losses. While all other aspects of trading mentioned above, make attempt to reduce loss making trade, but reducing loss in the loss making trade can be 'praticed'. And I discovered it by the flaw highlighted in the bold above.

Few years ago, mistakenly, I entered a wrong trade, wrong in the sense, when I wanted to buy, I actually entered a sell trade. And I realised it only after 10 mins (end of my review period). The position was in loss. The moment was heartbreaking, one that I entered wrong and in loss and two, I lost opportunity to profit. Using my various 'unconventional tools', I simply exited at market price and shut down my computer for the next half day. This episode was very disheartening for me. But while I was sitting in front of my blank monitor. I just shouted ..Eureka...I have found it. I have found a system to practise how to cut my losses in a loss making trade.

In the remaining half day, I decided not to trade as per my trading method and strated entering trades at random with a minimum permissible quantity of ONE share. I entered, and hoped that the position goes in a loss, and then exited in loss. Since the trades were random, it either went into profit and sometimes in loss, I exited only my loss making trades immediately (and not the profitable ones, though they were random). At the end of the day, I would have successfully practised exiting 12 loss making trades. And I was quite satisfied. The amount of loss did not matter (as it was small due to One share position), but what I discovered was to practice how to take losses, when the trade goes wrong. And I discovered it only when I committed a silly mistake of wrongly puching a sell order instead of a buy order.

This activity (of practising loss making trades) became a regular feature of my daily activity. And when ever I was not trading i.e. my system was not giving me long or short opportunities, I used to practice 'loss taking' trades by buying or selling One share / One lot. And this really helped. Remember the proverb at the opening of this post. So effecitively for you too, you can use this as a practice sessions to cut you losses.

My entire focus has always been first, to cut losses and second, to try to undertake trades that go into profit..The point I mentioned in my last post is nothing but the topic 10) Practice defeat !
Never have extremities in life, be it trading (hence the need of portfolio allocations) or non-trading (adoring someone too much or cursing someone to the core). Be moderate and you will live a fuller and happier life.

Core philosophy of your life will dictate how you trade. And there is no doubt in my mind about that. You cannot have different values in life and different for trading. Syncronise both and there will be no one stopping you from succeeding
..................here we can see............the skill of a trader, the skill of a portfolio manager, the skill to trade different time frames, the skill to trade stock and F&O. The clarity of thought, use of shrewd adult mind and innocent childs thinking for trading profitably. You have the ability to drive people out of trading, you have ability to welcome people approach into systematic trading.
 

oilman5

Well-Known Member
further knowledge shared by tnsn2345
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..we were discussing..how to trade profitably by not changing (or our unability to change) our short comings...The process begins first by identifying your shortcomings, and this is not very difficult. List them down on a piece of paper and divide them in categories. Did I say a piece of paper?

I remember almost close to two decades ago, I went to SSB interview (to join the IAF) after clearing the CDS (Combined Defense Services) written examination. During the week long interview, apart from the physical tests there were aptitude tests. In one such aptitude test, there was a practical situation, some models of a village, some objects, the enemy, the army, ammunition, civilians, cattle, etc etc...and there was some task which was to be done using limited resources in a given time. It is a different thing that I couldn't join the IAF (obviously since I flunked the interview - the only one I flunked in my life), but again Eureka.... I could now use it to trade. I learnt one thing that all wars are fought on the paper and won on the field A worthless paper and a small pencil to scribble is good enough to make a plan - a strategy - a tactic.

By planning on paper, I do not mean paper trade (incidently I do not subsricbe to the idea of paper trading - my opinion - others may disagree).

Coming to our point of flaws in trading, listing them down on a paper is the first step. Because only if you write, you will know and remember and if you remember, you will try to address it. In the earlier posts, I mentioned not seek remedy to correct the flaws, it is a waste, you can reduce their impact with some restraint, practice but mostly most of us (me included) cannot eliminate them. They are our core beliefs, values, which we cannot change, a little twisting is possible, but a U turn is not.
Discretion is a must. Simply because we are competing against humans.

But discretionay methods can create a lot of stress and demands a quite mature mind (non trading skills) to handle the situation. To practise trading for long time using discretionary style requires a lot of patience, tolerance and self control capabilities. If not handled well, it could lead to anxiety, affect health adversely and also lead to poor trading performance.

Using non-discretionary methods (formulas, mathematical equations, etc) may lead to a good strike rate (high number of wins) but not necessaryly high profit, it also could also lead to net loss, as a few wrong trades can nullify all the gains.

There are some hybrid styles, which use both the methods, exclusive use of non-discretionary method to identify opportunities and then using discretion to take the final call.....................my personal experience and the most effective non-discretionary method (my belief and applicable to me), I use for longer TF trades is based on SMA/EMA crossovers. Additionally a few mathematical equations based on relative strength of the stocks vis-a-vis the index. This gives the macro guidance to understand the direction of the trade and stocks to trade.

Then use of discritionary skills (through VIX and CS chart of the UL) to decide on the entry timing. But these are used for mid and longer TF and not for shorter TFs trades.

Shorter TFs are based on discretionary type of trading.
Kudos to this great trader from heart
 

oilman5

Well-Known Member
trading may transform into right philosophy due to some basic truth
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1] market is flexible /changing.
2] u have to understand trade selectivity/on sp condition u enter/present condition has some bias for future direction,understood by u before others and taken entry and keeping /observing change in scenario/ur preassumption
3] If wrong dont pray, get out at first instance.
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a trade master is none but do it with longevity without deviation.With/without media hype he has 0 impact on his decision making
 
trading may transform into right philosophy due to some basic truth
......................................................
1] market is flexible /changing.
2] u have to understand trade selectivity/on sp condition u enter/present condition has some bias for future direction,understood by u before others and taken entry and keeping /observing change in scenario/ur preassumption
3] If wrong dont pray, get out at first instance.
..............................
a trade master is none but do it with longevity without deviation.With/without media hype he has 0 impact on his decision making
very good gem words
 

oilman5

Well-Known Member
let me explain further.................in trading after practicing for certain yr, we may face the truth.
truth r
1] market is flexible /changing.
2] u have to understand trade selectivity/on sp condition u enter/present condition has some bias for future direction,understood by u before others and taken entry and keeping /observing change in scenario/ur preassumption
3] If wrong dont pray, get out at first instance
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market view , market itself changes...............In layman's term.........a blind has found a pole before crossing the road,.........next day he comes..........by hitting with stick ,on that expected pole ,he finds its not there.Now the dilemma.......is the pole is removed ? or i am making wrong
One understanding ................market itself change its characteristic..........solve a lot of beginner's trouble.
2]Trade is not possible in all condition/all stock............u have to understand sp characteristic of a stock/sector. Also sp condition market like how longer its duration bullish/bearish/volatile condition,.........beforehand or at the time of its happening.
now from ur past study of market, u prevail this sp condition ,scenario shall exist for a certain time.Based on this assumption u create or visualise some stock movement ,commonly known as Target.Know at least risk pt or high probability of happening the event u enter.
Now see the info/is there any case sp macro/micro change. Shall it affect my target..........favourable.........increase holding TIME.........to get more profit out of it
3] If any were wrong, micro/company sp/govt scenario/uncertainiy........based on reflection in price(price is dropping)..........pl GET OUT.be on survival mode
.............................this is the essence of trading i found in over a decade being in market.
 

oilman5

Well-Known Member
Choice of trading ..........personal view
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my worst mistake r............when i convert my shortterm trade to investment,......instead of booking loss early, it eats away my years profit. REASON my hatred /inability to book small loss,..........so it shall mother of loss ,eradicate.........50% FUND VALUE. so when u use equity curve concept ,plotting of portfolio as chart,............u sell out totally..........to avoid further pain is a good strategy.
EASIEST trading , i found is day trading,...........may be because i trained someone early to do i.It came natural to me............the reason i found out now.........its play of chess/bridge..........nothing in trading/fundamental. As novice i see data ,eod study suggests open/high/close........moves up in day-1, from day-2,.......so bias exist..........so i trade ..........without any news on that stock. Yes based on this simple philosophy i earned,..........to run my family. So before market open, based on my bias i predict where money shall come, trade accordingly ,,,,,,,,,,,,both entry /exit same day/within hr.Presently i am slow ,the skill no more with me.
But similar concept i can use in swing,..............where money flow may come , build up of position [accumulation]............so take position , and book profit based on predetermined target,............yes this is within my comfort zone now .
.............................Numerous method /training/bookish experiment i have done including many famed traders from india and abroad,........short term with discipline i find some of them workable for me , but in LONGTERM ALL R WASHABLE,.........i what i am.
.............................Requested to readers............search & find what suits u .pl stick to it.Nothing more.ALL OTHER R RUBBISH FOR U, MAY EVEN GOLD FOR OTHERS
REQUESTED to moderators
Kindly close the thread.My personal thanks to traderji
Regards to all.
 
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