31102012

Nifty  opened within previous day range. Initial range formed. Skipped BOF of PDL as bias was bearish. IR formed. Later another range enveloped it.BOF of IRL gave a long signal. TP at Range High. Went short on BOF of Range High.Stopped out.

30102012

Nifty opened within previous day range. Did not attempt any trades till dust settled after RBI announcement. Went long on the BOF of LOD. This trade did not move . Scratched.

Reading: The Trading Contradiction

One of the real contradiction traders face is that the forces that attract people to trading are exactly what make them lose in trading.
For most traders, trading is attractive because they can:

• Make a lot of money - greedy
• Get rich quickly - impatient
• You have the best commute - lazy
• Make a good living trading only 2 hrs every day. - super lazy
• Live anywhere - mercurial
• No bosses or employees needed - poor social skills
• Be unaffected by economy, political shifts, natural disasters, etc. - fearful
• No hard assets, office space, etc needed. - unattached.

As you can see, the worst developed personalities are naturally attracted to trading and its no wonder that 80% of traders lose everything they ever put into trading. To be successful, you need to fight the very qualities that brought you to trading in the first place. This is the contradiction that traders face on the very first day that they begin to trade.

Once you acknowledge that just choosing to be a trader automatically sets you up for failure, you have the opportunity to amend the very qualities that brought you to trading and modify yourself to be the very opposite and thus be successful.

Cadver
http://ninetrans.blogspot.in/

29102012

Nifty opened near PDC. Skipped BOF of IRH as there was no space for the price to move.BOF of PDH/HOD gave a short signal.BPB of DO/IRL was another opportunity,BOF of LOD and TST of PDL gave a long signal.This one also gave some profit

Probability

“Trading is a probability game”. You might have read it a thousand times. I think many of the traders have not understood this or have misunderstood this. There is much difference between betting on the probabilities of a method with an edge and using statistical probability to find an edge.

To trade the Markets profitably, we need a method with an edge. Edge is nothing but a positive expectancy. As we all know well, there are no certainties in the Market. Anything can happen at any time. We must trade the method long enough, ignoring the individual trade results, to make this positive expectancy to work in our favor.

Working on statistical probabilities to find an edge in the market is altogether a different ball game. It is not easy as we think. For example, after an elaborate study, we find that 70% of the gap ups fill on the same day and we conclude shorting the gap ups at the open could be a profitable strategy. Sure it is not going to work.

There are many logical fallacies that could distort the studies. Many statistical tests calculate correlation between variables and in many cases correlations does not imply causation. It will be totally wrong to conclude two events that occur together are taken to have a cause-and-effect relationship. To cite an example all the momentum moves in the market will be preceded by an MA cross over. But acting on all the MA crosses is not going to make you money

Spurious relationships are much more dangerous. Some times two events or variables have no direct causal connection, yet it may be wrongly inferred that they do. This could be due to mere coincidence or there could be an unseen factor.

Market is a place where countless people executing countless strategies at any point of time. Each and every trader is a variable who can change the direction of the Market, at least theoretically. Every moment in the Market is unique and probabilities themselves shift from moment to moment.

In my humble opinion, statistical probability studies alone are not enough to find an enduring edge in Markets.

Classic Patterns

I do not trade classic chart patterns. People have written Encyclopedias on this subject. Many of these patterns can be traded, if you know where to look for them.Unfortunately many masters have no clue

Location where they occur is more important than the pattern itself. Observe closely when price hangs around a Decision Point or an important Flip Zone. You will identify many tradeable classic patterns

Frankly, yet to find a way to trade Jerry's Dragon Pattern and HPT's C&B Pattern.