Hello everyone,
Its nice to see some fellow traders from the state I come from.
Perhaps you all might start studying Saint's thread. Contains all the nuts and bolts. Lot of trading knowledge there. Not sure whether he's covered money management , trading psychology and self discipline aspects in that thread. I'm going through that thread little by little because there's so much to learn.......and I tend to study a book or someones thread at least once a day.
Here's something I can tell from experience.....trading can be broken down into
1. Psychology of Awareness
2. Self discipline
3.Technical and/or fundamental analysis
4. Business admin including routines and rituals, record keeping, yada yada yada.
Most newbies immediately jump to picking stocks either through someone's tips or get into charting like I did..........I fell so many times but had the guts to get back on the horse again......If were to do it all over again(and never ever forget this).....
I would start the above four in the following order
1. Psychology of Awareness - Being aware of who you are as person and how do you relate to the markets; are you a breakout trader or a swing trader?; are you long term position trader or an intraday trader; whats your risk tolerance level? I can recommend a few books here which are golden. I would plan daily meditation, visualization sessions because just like you brush your teeth every aspect of trading should become second nature for us. We have an intellectual center, an emotional center, an instinctive center and a mechanical center in our personality. When you are placing orders, emotional, instinctive and intellectual centers must be shut and mechanical center take over.
To give you an analogy - If Tendulkar is batting, the moment he sees a ball to be hit for a straight drive, he wont be thinking where the ball is going to pitch, whether his feet is facing midon or midoff, etc. He just ACTS, He goes through the motion.......in a mechanical way....just one ball at a time....so staying with price action is the key..living in the present...and not having any preconceived notions or judgement as to price are heading....of course you have to have a roadmap in your head...for every day.
2. Self Discipline - You have to have a business plan, a trading plan or plans for each of your strategies, with clear cut entry and exit rules, rules for when to stay in the market, when to quit trading for the day if you are a day trader, rules for when to stay out of market.....for example if Im day trading and I suffer two consecutive losses I shut my pc off for the day.....
3. Technical Analysis: All you need is one pattern, one simple pattern which gives you a statistical edge to make a living. Of course you have to become familiar with the pattern and make it your own.
4. Develop sound routines and rituals that will put you in the right frame of mind every single day.
The first two items, btw, accounts to more than 90% of your trading success.
I'm intending to start a thread that will cover the everything but # 3; partly to improve myself and partly to share what I know soon.
Hope this helps
Shreenath
I am also from bangalore, learning and doing trading. If you would like to learn together, pls contact