Markets & After hours

Pivots (Source : Investopedia/others)

Pivot Points are an efficient method of predicting support and resistance areas for the trading day, using the high/low and close of the previous day. It is one of the few strategies that project support and resistance areas.

Calculation of Pivot Points

• A technical analysis indicator used to determine the overall trend of the market.
• The pivot point itself is simply the average of the high, low and closing prices from the previous trading day.
• On the subsequent day, trading above the pivot point is thought to indicate ongoing bullish sentiment, while trading below the pivot point indicates bearish sentiment.
• In a pivot point analysis, the first support and resistance levels are calculated by using the width of the trading range between the pivot point and either the high or low prices of the previous day. The second support and resistance levels are calculated using the full width between the high and low prices of the previous day.

Central Pivot Point (P) = (High of previous day + Low of previous day + Close of previous day) / 3

First Resistance (R1) = (2*P) - Low
First Support (S1) = (2*P) - High
Second Resistance (R2) = P + (R1-S1)
Second Support (S2) = P - (R1- S1)

Types of Pivot Points
• Pivot Points
• Camarilla Pivot Point
• Fibonacci Pivot Point
• Woodie Pivot Point

(More on these later)

Some more true trading stories shared by traders (Source : Elite Traders)

I know a guy who made 350K+ in one day... About a year later he lost 1+ million in one day.

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A buddy of mine from school used to trade Eurodollar options. He had a massive guts on the market around the time a big number was coming out. The expectancy was for the Fed to remain unchanged - but it didn't - for the worse. He lost $500,000 and had to sell his house.

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The CTA (Commodity Trading Advisor) had 75%+ returns for 4-5 years before he blew out his pooled accts in 1 trade. He exclusively wrote premium and he had somewhere around $15 million in managed accts. One overnight session in NatGas led the exchange to double the daily price limit move and greatly increase margin requirements. Then the next day the price of the calls he was selling went from a couple of thousand to upwards of $15,000-$20,000 each. His pooled accts went totally bust and his individual managed accts were left with something like .20 cents on the original $1

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A woman I knew back in college bought PUMA at $5 back in '99 then sold it near 100. Then she reversed her long and went short and covered it near $5. She made about 190 point x 2000 shares ($380k) on PUMA. Not bad.. she does'nt even know what a p/e ratio is... she told me it was pure luck!!

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Don't remember the guy's name, but his play:
1. Divide capital by 5
2. Wait until market oversold or overbought, then start fading on a scale-in.
3. Set wide stop... such that "market has never moved that far before".

In '85 or '86, as I recall, market got overbought and he started scaling into SP Futures... and in... and in. Long story short, he got 5 positions short... AND was stopped out by broker. (Check the charts if you got 'em.)

Perspective... if $100,000 represented the sum of 20 years gains in client accounts before the fateful play, they lost all of that plus a $75,000 margin call deficit!!

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This guy and his family came to the U.S. as immigrants in early 1980's. In my school, he would learn that, by maxing his student loans & credit cards to trade, he would be able to afford certain living expenses which included a nice DC suburb condo and a BMW. After grad school, he spent a few years on Wall St. and found a niche in trading. After leaving his last employer with almost half a million dollar in bonus, he started a small, aggressive hedge fund and grew it to almost 40M. The stock picking fund operated during the 2000-2002 bear market. It beat benchmarks very handily in the first 2 years. The poor use of leverage however blew up his account in 2002.

F&O Results for next two days :

Asian Paints 21-Oct-13
Karnataka Bank 21-Oct-13
Zee Entertain 21-Oct-13

Cairn India 22-Oct-13
Indiabulls RealEstate 22-Oct-13
Wipro 22-Oct-13
Yes Bank 22-Oct-13

P.S : E&OE.

Name changed but end results same.
blew up !! blew up !! blew up !! blew up !! :lol:

Ravi Bro,

Look to read something like this next : blew up !! blew up !! blew up !! blew up !! and then quadrupled the capital in the next bull run of 2013-14. Nothing is impossible!

So true......