“Investment is like a stair case, trading is like a lift, lift may fail, but stair case is sure to take you to top."
Hello All,
I hope everyone had a great weekend.
Did you know that emotion plays a huge part in your success with trading?
That's because when it comes to trading live, and pulling the trigger, so many of us just don't have the confidence and trust in what we're doing.
That is a big problem!
Maybe it's because you're new and feel you simply don't know enough to make all the right decisions.
Maybe it's because you haven't been consistent and you are struggling to get there. Whatever the cause...
We then become that 'Roller Coaster' trader who is struggling to just break even.
I don't know about you, but I don't trade to just break even.
Watch some of the easiest trading here:
It's time to get off the roller coaster...
Today is a DHRUVE DAY.
NIFTY remain in a NRB for at least 8 week with a range between 100 to 140 in weekly time. During this time it was getting resisted near its upper resistance area of channel. Now this channel has acted as strong resistance during last week and on Friday a clear “exit long signal” observed. After the market hours US market was very strong and Dow closed firm with 164 points gain. (infect 10300 is its major and important level. Unless it close and mange to sustain above that we cannot have faith in rally). Here at domestic front NIFTY is difficult to cross 5555 while on intraday level 5495 and 5520 are strong resistance for intraday player.
 |
| Nifty DOHLC with Swing, D Channel, EMA and ADX |
NIFTY/SENSEX failed to break above the CHANNEL resistance of 5550/18634 and infact made a WEEKLY DOUBLE TOP with reversal formation on last week.
1. The drop in domestic markets was led by the REALTY stocks.
2. For the week, NIFTY/SENSEX has multiple supports placed near 5350/17838 level. If NIFTY/SENSEX breaches the said support, a year‐long consolidation phase would resurface and the next support would be found at 5187/17296 zone. In the event NIFTY/SENSEX manages to take out the resistance level of 5555/18454, the fresh upward move will began of the index towards the targeted level of the January 2008 gap. However position of daily and weekly OBOS oscillator indicates it is very difficult to sustain rally at higher level. Before making a fresh strong up move we need one breakdown in which almost all the novice long holder will exit from long. Market is not ready to take them in upward move.
3. Stock of OIL pack is looking very strong and one can have in their position portfolio or investment portfolio. They are expected to outperform. On the other hand Metal index which made a high at 18736 followed by lower top at 15930 3 week before and now turning more weak needs to be closely watch.
As SGX nifty is trading +50 points above but I consider 5495 as important resistance. Unless this resistance is crossed rally is difficult to sustain. Also today is a DHRUVE day hence need to be closely watch and trading below open will have a tough time for long trade.
Stock which are good for short term buy are EID parry, Gail, Jind Drill and Shlakshmi.
KNOWLEDGE IS POWER.
SWING TRADERS
Fast becoming the trading style of choice, swing trading offers the greatest opportunities. The markets have changed and big moves no longer take weeks or months. Ten-point moves are quite possible in two to six-day periods. Adapting to this style of trading allows a trader to reap huge gains quickly, because he does not allow volatility to eat away his profits in longer-term positions. This is just simply smart!
Swing traders usually hold onto positions over a period of two to six days, trying to pull out a minimum of one to three points. Targets can be three points and higher. The swing trader has the option of adding to his position if his entry point is not quite exact, as long as the stock does not go beyond its predetermined stop-loss.
The swing trader usually trades stable $20 to $50-priced stocks in well-established companies that have the potential for three-plus point moves. Because of the reputation of the companies, a twenty-point gap the following morning should be low risk but still possible. Swing traders with less experience should use smaller-share lots than the 300 to 600 a swing trader normally uses. Some swing traders will use a starting position size of 100 to 200 shares to get a hands-on feel about how their stock is behaving before adding any size to their holdings.
Swing traders focus on daily charts, although they may use weekly charts to see the bigger picture and help with choosing market direction. They also use sixty, thirty, fifteen, ten, and five-minute charts. Swing traders gain advance knowledge and technical analysis by focusing on Japanese candlesticks, moving averages, volume and stochastic studies, as well as candlestick patterns and support and resistant areas.
The swing trader is a true professional with knowledge in many areas, including market psychology and market sentiment.
TOO MUCH TIME TRADING
Now that you know it is sometimes wise to stay on the sidelines, you should only trade high risk-reward ratio plays, and you must always use a stop-loss, let’s move on our next topic: spending too much time staring at Level 2 screens, examining charts, and trading.
Are you constantly trading after the closing bell and pre-market? Some traders dedicate all of their time to reading fundamentals, checking the news, and looking at charts. Every trader needs to do these things, but you must allocate a small portion of your time to these matters, not all your time.
You should try to avoid listening to the media, especially the analysts who lie, and you must try to ignore stock tips from your local banker. All of these different opinions can cloud your better judgment. Many traders become frustrated because they work so hard and still lose money. Some work 18 hours a day or more, trading during lunch, watching CNBC while eating dinner, asking everybody for stock tips, etc. This is a common mistake by beginning traders. They do not focus their time on doing the things that will help improve their trading.
Traders should be printing out charts of the stocks they traded that day, labeling the entry and exit points, and documenting their reasons for entry and exit. By doing this, a trader can find out what his common mistakes are as well as his strong points. By reviewing these notes on the chart, the trader can clearly see if he is getting a bad entry, getting shaken out of position, taking a stop-loss of 2 cents only to see that he was actually right after-the-fact, or, more commonly, taking profits way to early.
Traders must discover their worst habits and spend their time correcting them. They should also calculate their commissions at the end of every day, including SEC fees, pass-through fees, and any other charges. This gives the trader time to reflect on the cost he is actually incurring when he gets into low risk-reward ratio positions and makes him think twice about doing it again. Every trader should devote more time to reviewing and correcting errors instead of spending their time actually trading.
.
No comments:
Post a Comment