Trader's diary - Inspiration for the one who lost hope...

[Czar]

For those who have lost hope in the markets, some inspiration:

market_looser,

Any body making Huge Loss ,truly aches my heart.Memories etched are so deep inside me that that even while typing this letter i shudder,at those times it was like stuck in quick sand,plz dont allow the stark reality over power your emotions,very easy to preach,absolutely difficult to achieve.

Plz provide few more details,if you are in Mumbai (or nearby & having a staying facility at Mumbai then avail Savant's offer,he has also come out from that dark phase),or if you are at Kolkata then will try to share your anguish & walk with you for few weeks.

Trading is a gruelling tough excercise in the initial phase it requires a Monk type utmost devotion with a single Focus,where some times even family becomes 2nd priority.

WITHDRAW from Futures Mkt this instant,if we can get the direction right with right entry & defined rock solid Stop & practise it in Cash Mkt with actual money,after some weeks/months we can always go to Derivative Mkt,infact Mkt will be there all through out our Life.So quit Derivative ,not even Options,becoz we must get first the Direction & second the Stop & 3rd Entry.

Believe in Human beings latent power which when in distress the true colors unfold,it happens only with human beings,we have humongous unexplored latent capabilities.

Cheers

Asish

I learnt 1 imp. thing after loosing continuously in Daytrading,i sent an email to Larry Williams few years back (as Larry Won the World Championship in trading consequtively & he responds to all e-mail personally).He wrote me back WHY DONT YOU DO THE OPPOSITE.

By that time i was few Lacks minus & was in the verge of collapsing,suddenly with this mail i just cursed him....... is this any type of Strategy ?? ,NO formula ,as he has attained so now he is showering all type of Craps.

After few Hrs,i suddenly thought if only if all my Longs/Shorts where truly opposite then i would be now few Lacks (+)ve.My actual Ledger which was then (-) could actually had been (+) WoW ! Bingo MONEY can be made!!!!!!! i the Gr8est Dumb of ths Earth if only if could have just done the opposite only then this very Dumb could EARN !!!!!!!!!!

So 1st & foremost is to get the DIRECTION right.

Then my only quest at those time is how to get the direction Right.Searched Net from evening 4.00 pm to 11.00 pm (as the cyber cafe used to close at 11pm,at that time i did'nt had a computer & internet connection at home & was going to 'Chadni-Chowk' area everyday to do Dabba Trading).On Sat / Sunday morn 9.30am to 11.00 pm with few mins break for Lunch & tea.Probably i went through ALL type of Sites & suggestions to get the Direction right.Not being statisfied,becoz i use to see charts in Bse/Nse sites,mostly Bse (as they used Metastock so later on i went for MS only),and in those past charts i could not find those suggestions to be fruitfull.
Then i went to Vision Book distributor of Kolkata,(8 yrs back this online Book purchase was not so popular),bought few books & read many standing there (the store manager was very friendly,when his daily tea & fag needs where being taken care of & where can he get a mad who stays from 9.30 till 8.00 pm days together).On my way back used to go to the cyber cafe to see past charts about what they preach in books,nothing no significant way to find what the Next bar is going to do.

After 2 months was frustrated ,there was a new building under construction beside that Book distributors building,1 day while taking a break to take Tea & snacks,i found the masons where constructing a stairway,you know how they build staircase with equal height one above the other.Bingo !! it Hit me like a thunderstorm,if the Range of previous Bar's certain % is Up then Price is going Up the staircase if certain % of previous bar's range is crossed downwards then Price is going Down the staircase.

This became my 1st LOGIC to understand Price's Direction.

There are thousands of mistakes that one can make in markets and there are equal no. of solutions, these are some of the mistakes and solutions that I went through my trading career :-

Problem 1) Started as an investor and then was afraid when I saw 25% of my account evaporate into thin air

Solution 1) Read some technical analysis and found out the stoploss is the most important thing even for an investor


Problem 2) Even after putting my stoplosses I was down 10% next month, reason, I had no money management in place so whatever I was earning was turning to losses with few bad trades that had larger positions.

Solution 2) Divide my money equally into 6 different trades with equal risk but complete money management was still lacking


Problem 3) Was trading futures with all the leverage available and the movement of stocks made me look like a crazy man who watched the computer till markets close and then till they opened again

Solution 3) Put 1% risk rule for each trade and suddenly I felt like a man just getting out of jail, money management at its full use was the biggest forward step for me.

Problem 4) Was trying to make money from dozens of systems and was confused which system to be used at which time

Solution 4) Got it thoroughly drilled into my mind that no system makes money all the time and I am bound to bear some losses everytime hence started using only 4 systems

Problem 5) I was ok with putting stoplosses but was never able to Let the profits run, always became afraid and took small profits

Solution 5) I thought in my mind that If I am ready to give the markets all that I have then I should not be afraid to take what all market has. Hence I get out only at my initial stoploss or trailing stoploss never take profits off the table.

Problem 6)Was making money but not propotionate to the amount of time I spent

Solution 6) Met a wonderful person named SAINT who guided me to knew world of trading and now I cant find a way how to thank him as much as he has done for me.


I know there are hundreds of problems still to come but the only hard thing is to first recognize them, accept them and then they almost automatically solve themselves.

Only one line to wrap it up " Darr ke aagey jeet hai"

Happy Trading

 

[Czar]

At that time i was 47 yrs old having an academic back ground of Graduating with
Statistics as major from Guwahati University (eventually was amongst first five
in that year)with a MBA from Xaviers Ranchi in 1975,also had a career of 10 yrs
in Pharma Industry,rose from ranks to Head the National Desk from Mumbai.Also a
Business carrer of 10 yrs,an ISO 9000 Manufacturing unit producing B&W TV for
'ONIDA'brand under the FGP (Finished Good Purchase) outsourcing Plan.There i was
exposed to computers,(in pharma we only had Telex ,not even Fax),every day all
Inventories on road /at stores(there also 2 sub stores 1 for tested & shifted
to Bin the other to be tested)/on Belt(2 type 1 already installed other at on
line Bins etc.Each detail Model wise Planning was to be communicated to Onida HO.
Mr Gullu Mirchandrani was very meticulous on Planning & my computer teacher was
my Son.

A family of wife,mother,1son & 1 daughter,who where at colleges,every month had
to foot all the expenses from the bank balance (left after selling my share of
the Manufacturing Unit to my then partner) which was depleting every month.

This back drop may seem to highlight myself but is neccassary to understand the
mental & financial agony i was going through.In lay man's term at 47 i did ARRIVE
in Life,no way i was a Looser,my corporate cridit card was in 1978 (we only had
2 companies then Diners & Visa was catching up in Mumbai).

There at that time i was struggling at Cyber cafes my companion to way side Tea
stall was a Book-Distributor's Manager & my Trader friends at Chadni Chowk where
mostly like me from middle class back ground.
There i found 1 Molybabu,who used to trade mostly in Polaris some times in Hero
Honda.That guy was making Money at the end of the week.I keenly observed him
i was trading mostly in Infy (those days the Range was minimum Rs100 ) SBI / RIL
& Satyam.As i was sitting on the right side of the monitor hence on my request the
LTP coloum was at right extreme end ( Last Traded Price).I started observing the
LTP for say 10 price fluctuations & write down the 11th one in a note book like
this after few days it became cumbersome & tedious,so i shifted to writing down the
LTP at end of each 2 min,i found that the next one is never same either up or down
but if i take a block of 5 such then in down/up slide it less frequently came to
test it's 1st entry in the 1st block.Bingo!! i could get some pattern.Then i started
observing the 'Average Price' col. & found that after 2 Hrs if Price is below Avg by
say Rs2.00 in SBI (in those days) & my note book says that this Block is below then the earlier one then
Shorting with Rs 2.00 + Rs 2.00 (wiggling space) Stop i can earn few hundred Rs.

So my 2nd Lesson was TREND is a Friend.

N.B. Moloybabu still mantains his family by Daytrading & now he stays at Dankuni,his
son has become an Engineer,he cant speak or write english fluently never went beyound
School,i deeply respect him from my Heart,few people close to me at Kolkata
(from Traderji) knows how emotionaly i am attached with these non-descript guys ,they
have never gone through any Book they try to understand Mkt by common sense only.
Moloybabu had to sell out his house but now he has built a nice abode at Dankuni.

I have gone through most of the acclaimed good Systems / Indicators / Osc. Read many ;seen many ;worked many & found still 1 of the the Best is Saint's Method.
Can debate eye to eye with all System Trader (know the basics correctly not any book's preface reading knowledge) still i feel Saint's is a method very easy & comfortable for newbies & pros.

I always discussed with Moloybabu after Mkt Hrs over samosa & tea and found out he always keeps track of Nifty & many a times he changed to hero Honda or RIL from Polaris after wtaching Nifty.
So this relation of a particular stock going in sync with Nifty that day was a factor to be considered,months later in my learning phase i came to know about Correlation.
From Moloybabu i learnt my 3rd Lesson always consider the PREVALING BROAD MKT SENTIMENT,to get the Maximum.

Interestingly,i had many such Gurus in past & also have in present.Most of them actually did not knew or where aware of the fact that i was picking up some very important aspect from them or from their practises.
Whenever we try to get a solution for a particular problem even a single post or few words narrated can spark of an idea.Later pondering on that & practising that in Mkt we get a workable solution later we build around that.

After few months we ,myself & molybabu,where not allowed to trade at that Chadni Chowk Dabba,we migrated to Dalhousie area Dabbas.
Then 1 day i thought of migrating away from these Dabba & opened a trading A/C in Indiainfoline.My 1st Demat & Trading A/C.At that time Infoline was a Pvt. Ltd Co. 1 Mr Venkat used to come to Kolkata from Mumbai every month end (who happens to be ED now).
5 paisa allowed us to trade from their office & Big Volume Traders had seperate Desk with computers dedicated telephone line & could avail the secreterial service Free.
Here i was assigned to 1 Mr Palbabu's desk,who was in true sense an HNI & somehow he liked me & allowed to sit beside him in his dedicated enclosure.Still today NOBODY is allowed to trade from Palbabu's Desk.My RM repeatedly warned me not to speak or disturb Palbabu but just see his screen to decide & place orders at the comanies dealer
terminal in my ID.

I was awaed to see these bunch of HNI's Trading,seen literally Qty's like 10000 Zee
5000 Satyam .I doubt whether these guys ever knew what is being advised in the book.

I learnt 1 very imporant lesson,Daytrading can not be Learnt from a Book.

1 Gujrati guy a very high volume trader used to Trade in Zee Sail sometimes literally got all our attentions becoz his 10000 Zee buy was Rs 1.20 Down & he is STILL BUYING & the end of Hour when he closed with 20000 in Rs 1.60 profit all of us used to feel happy.
Futures Mkt was unknown to me in those days.

I learnt immensely just WATCHING Palbabu's trade.Our way of Trading was totaly different i was basically a scalper where as Palbabu a Trader.Many many things i have learnt from him,he was 1 Yr elder than me,he used to come from Chinsura & carried a Tiffin box & carry drinking water (those days Packaged water was NA).

Everyday Palbabu used to place offline order for 1 stock Long & 1 stock Short before going Home,after few weeks i learnt the benifit.Later on months afterwards i read in book what is Hedging ,i have seen these guys unknowingly doing it in those days.
Palbabu taught me many facets of Tape reading,i still SALUTE him,respect him from the core of my heart.In my daughters wedding when i went to invite him ,heard he was ailing with a Cardiac attack.A Gr8 teacher.

He taught me the basics of Money Management,how Risk & Money Mangement is an ABSOLUTE must,he taught me how to decipher Order Book.

So my most important Lesson was Money Mangament.

http://www.traderji.com/futures/23866-lost-too-much-money-5.html#post221161

If for debates sake let us assume one has a Secret Formula,will even a complete insane person give you & me the ATM pin & the Card ....... BOTH.

One can catch hold of your hand & travel through the journey along with you that is the Maximum you can expect,but then also YOU have to fight it out YOURSELF only.
Expecting FREE Lunch is not only foolish but a sin... i believe.

......................

All Asishda's post carried forward due to this reason: http://www.traderji.com/futures/23866-lost-too-much-money-8.html#post234053

 

[ARMHM]

I can't think of a better word. You are just great Czar. Taking so much pain for people who lost hope.

 

[faith]

ASHISH DA

 

[cheeku]

Thanks Czar for taking so much pains. Your efforts show your admiration and regards towards a great teacher, a friend, a preacher who enlightens our heavy hearts in the time of distress (when we loose money in the market), Inspiring in plain simple words.
Thanks again.

 

[Czar]

All Thanks please to dada, I am just a messenger boy... don embarrass me...

 

[uasish]

Feeling embarassed to continue this Thread,most of my personal idea/thought process ,in terms of Day Trading is already buried somewhere in this forum in many different threads.

One very important aspect of Price's Flow path i understood quite early,which any body can still find it to-day.
As in initial days i was noting done Price in a scribbling pad at a gap of 2 mins & used to make a cluster of 5 such to put in the 2nd col.,plz forget charts for a moment & try doing this even today with only a broker's terminal without charts,& just concentrate at your scribbling pad not the Bid/Ask col.
then ALL of us can understand that Price comes down upto certain point & again go upto certain point & repeat this process EVERYTIME EVERYDAY.
Price always moves in Wave like pattern.
This specific aspect of Price's Flow path has to be understood to USE that in our Quest.

Go to any sea shore the 1st wave which when marked in the sand with a stick & the 2nd Wave never is the same either greater or smaller than the 1st stick.
So mother Nnature even follow this,we have many such example.

 

[Laksh]

Please do continue in the earlier vein with your real life experiences; not the current dry advice of the last post. Your real life experience is very enlightening and very inspiring. Don't mind the one fellow who refuses to learn from your experience.

Laksh

 

[Czar]

Easy Laksh, its not easy to do that, the flow once stopped takes time to come... Sir what ever you feel this post is like your Diary, does'nt matter what it is we are all ears...

In fact I request you to remove your post if possible & if you agree Laksh & so will I...

 

[pkjha30]

Easy Laksh, its not easy to do that, the flow once stopped takes time to come... Sir what ever you feel this post is like your Diary, does'nt matter what it is we are all ears...

In fact I request you to remove your post if possible & if you agree Laksh & so will I...

Czar, there is a sea change in the attitude of members, thanks to all the big hearted people who post their wisdom and knowledge here selflessly. Last crash resulted in bewildering cry and agony at what happened. Now people discuss it with understanding , learnt much of ups and downs of market to take it in their stride and become more disciplined in investing/trading.

People like asishda are rare and one should treasure their knowledge.

thanks czar for compiling gems for guidance of members in times of turmoil

pk