Rip07- Notes

[rip07]

Interesting setup by Karthik--Thanks Karthik bro!!

No Trade for me on 23.05 & 24.05...
I was analysing/studying PIVOT method yday and today did a paper trade on SBIN Future...

I have used 20SMA to gauge the trend. I have adopted that if a price close above/below 20SMA i will mark that as High/Low with a normal line. The entry and exit are as usual the break of high/low. The dotted lines are minor high/low which are getting formed within or inside the normal line of High/Low.

TSL/SL is UP line/dotted line in case of trade taken in Short Sell. TSL/SL is Down Line/dotted line in case of trade taken on Buy. I will buy/short sell only when the candle completely close above or below the high/low line.

There were 3 trade oppertunities...
1st trade - Short sell (entry: 167.75, Exit: 167.40 = 0.35 points)
2nd trade - Long (entry: 167.80, Exit: 168.25 = 0.45 points)
3rd trade - Long (entry: 169.20 , Exit: 170.20 = Re.1)

Thanks
rip07

 

[rip07]

Good advice by Manish--Thanks Manish

You remind me of days when i started options trading.lol.There is really no need to give all away.

Here is a trick for you.
when you buy option buy it with some initial stoploss.As soon as trade goes in your favour set stop to cost + small profit and now you wait,Either market comes back and hit your stop or market runs away.... depending on momentum and trend.You will miss some moves.But dont worry...those many small profit will add up and once in a while you will hit a home run.If your trend analysis skills/market reading skills are upto it...you can set profit target also.
Dont allow a trade to stay against you after some initial time say 5 or 15 min.IF 5-15 min pass and you still not in profit and stop also not hit start looking for BE or small loss exit.Always try to play defensive and protect your account.

You dont need to make 10000000% return in a day. 20% /month adds a zero to your account in a year.(with some compounding).Do this for 2 year
and 10000 turns into 10 lakh.Start small and build your trading skill as you grow your account.Plan for longer period ...stop looking at options as get rich quick scheme.

Thanks
rip07

 

[rip07]

Example of Consistency---Thanks ST sir

Even the best traders make wrong trades,they have their stops hit. Those loss trades are few but they are certainly there. Just train your mind that you will not see the trade going against you for a long time and you will cut your losses short and also train the mind to hold your winners.

I am not a very high hitter meaning you will never see 80 % or 100 % return in one month in my account but I am a very consistant trader ....I have not had a loosing month in last 18-20 months , may be more and 75-80 % of weeks are profitable....and I make boring 8-25 % per month returns...so slow,steady and rock solid in consistancy.That will lead you much ahead in this game.

Smart_trade

Thanks
rip07

 

[rip07]

capital building or preservation?---Thanks --ST sir

This is the problem which every new trader has to face. What % to reinvest depends on whether one is in capital building stage or capital preservation stage. In capital building stage of a new trader his capital is small, household expenses and housing loan installments take away major chunk of the profits leaving very little for capital formation. This happens with every new trader. It happened with me too and the capital formation is slow. But one should invest back 50 % of the profits in capital formation stage. Once capital acquires a critical mass, then the profits increase rapidly and our expenses dont increase in the same proportion and then the capital formation process becomes faster.

In capital preservation stage all financial needs, present and future , are met and the trader trades not for making more money but he trades because he enjoys it and that gives him occupation and income apart from fulfilling his passion. In this stage money ,though important, assumes lower priority. In that case he may take out all 100 % of profits and invest it elsewhere.

I too used to have same questions when I was in capital formation stage, I was into trading full time, no other income source,no inheritance in terms of money, and household expenses and HDFC housing loan installments to be met from trading income....but after a few years the capital grows in exponential proportion....so just concentrate on trading well and making consistant profits...all other things will fall in place .

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rip07

 

[rip07]

Bank nifty Hourly and Daily Chart, for understanding only.

http://imgur.com/a/Ds86r

rip07

 

[rip07]

If you put in stops and run your profits and trade randomly you make money; and if you put in targets and no stops, and you trade randomly you lose money. So the old saw about cutting losses and running profits has some truth to it.--David Harding


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rip07

 

[rip07]

This is the another reason why we should place stop loss, no matter what.

"The protective stop order will also serve to prevent losses in the event of a disastrously timed internet connection loss for online traders."

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rip07

 

[rip07]

All patterns fail, and the failures often fail, but a failed failure is a secondary entry in the original direction and has a high probability of success.--Al Brooks

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rip07

 

[rip07]

A good trader knows pros and cons of his system. If he is comfortable with cons, means that system suit to his personality.

If you are trading a system which match with your personality, chances are high that you will not do mistakes. If trade hit your SL, still it will be a good trade as your system already measured the risk and you were comfortable with it.

Most of the traders blow their accounts, because they are not comfortable with Sl, either take bigger losses or over trade (overlook the system, because does not suit the personality).

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rip07

 

[rip07]

"People start to average down, sometimes all the way down. It might work a few times if you are lucky, but for just one time when it doesn’t work out, you are done the journey of a trading dream." --Phantom of the Pits

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rip07