29112013

Nifty opened above 6150. Went long above the first candle even though it was not a correct IR. The move surprised me. I expected a channel move till BRN only. Then it was a tight trading range rest of the day. Shorted BOF of range high. This did not move as expected.

28112013

Nifty gaped up above PDH and broke BRN. IR formed. Skipped the BPB of BRN as my bias was not bullish. Shorted the FTC. closed the trade at BRN. Did not attempt any other trades being expiry day.

27112013

Nifty opened above PDC and sold. Skipped the BPB of PDL /PDC as 6050 of NS was very near. Shorted the BOF of MSP and TST of PDL. Covered this when price refused to go below the range low. Went long on the BOF of LOD. ( wronly marked as HOD) scratched when it bounced back from PDL. Long on the BO of PDL . Covered at HOD. Another short on BOF of HOD. TP at PDL.

Trading Course

Adam Grimes has launched his FREE trading course. Week 1 videos are now live. There are three videos. It will take you nearly two hours to watch these videos. I have gone through them and they are excellent.

Adam Grimes is a well known author and his book "The Art and Science of Technical Analysis" is a best seller. The course is based on the original training material he developed for "Waverly Advisors" an investment research firm. According to Adam Grimes the course will be structured in four parts

• The Foundation of Profitable Trading: (3 weeks) focuses on the math behind profitable trading, and different ways to find an edge in the market.
• The Patterns of Profitable Trading: (5 weeks) each week focuses on a specific trading pattern with the student doing testing and analysis to verify the pattern in live market data. This is also a critical part of developing your own system and approach based on these patterns.
• The Skills of Profitable Trading: (6 weeks) extends the work of the previous section by drilling deeper into some patterns, looking at ways to combine tools, screen for trades, and working to understand the consequence of decisions in the marketplace.
• Special Topics (5 weeks): This is the section that may be expanded or, perhaps, delayed, depending on how complicated production turns out to be for the rest of the course. Currently, I plan to do a week on these topics: daytrading, system development/system-assisted discretionary trading, options I, options II, and long-term investing.  

Do not miss this opportunity to go through professional training  material. You can also interact with Adam Grimes through the forum. Register here to access the material. This is a life time opportunity for a Retail Trader.Please do make use of it participating actively at the forum.

26112013

I was totally confused and did not know what was happening. In hindsight, I suspect it was a wide channel down. First trade was the BOF of IRH. target was IRL. TP when the break of BRN failed. Shorted when the low of MC broke. I think I was the last man to sell there. Went long on the break of the range high. Two trades ended as loss. Price was chopping around. So did not attempt any other trade.

25112013

Nifty gaped up and spiked. First trade was a BPB of PDH. TP at BRN. There was a FTC above the spike high. I did not attempt it. I was ready to long on TST or BOF of PDH . But market reversed before that,fooling me. BPB of HOD/BRN gave a long signal. Was not confident about the trade as I was trading into BRN 6100 of NS. Still I could make 20 points.

22112013

Nifty opened above PDC. IR formed. Skipped the BOF of IRL ( I came late Otherwise I would have shorted the IR low and lost ). Long on BPB of IRH. .This  trade did not move.Scratched. Shorted when price reentered the lower range as BOF of IRH.Stopped out. short below PDC/MSP . Covered at BRN 6000.Did not take the final BOF of PDL/BRN

21112013

Nifty gaped down below PDL. First MC acted as IR. Short on BPB of BRN below IRL. Tp around 6050. Did not get any other reliable entry. All the day Nifty was slowly drifting down.

20112013

Nifty opened near PDL. First candle acted as IR.Went long on BOF of PDL. I thought the previous day range will continue. Stopped out. Missed the up move. Short on BOF of IRH and TST of PDC. This trade did not move. scratched. Another BOF  at PDC/HOD. Went short below MSP. Price broke MSP/BRN/LOD and went south. TP at 6140.

19112013

Nifty opened near PDC. Skipped the BOF of PDC/PDH   as IRL and MSP were below it. Attempted two trades. BOF of IRL and BOF of HOD. Both the trades did not move as expected. Nifty traded in a 25 point range the whole day.A barbed wire around PDH/PDC

18112013

Nifty gaped up above PDH. IR formed. Nifty was trading in IR and an envelop range for four hours. TST of DO-LOD-IRL-DB gave a long signal. Closed the position at BRN. Could have stayed a little more time

Observe the Obvious

If you are a regular reader of this blog , you might have noticed the market respects  the Decision Points repeatedly. Almost always the price stalls at a decision point and decide about its new direction. Most of the time these levels are very accurate and they  work like charm.

What is so special about these levels ? In fact there is nothing magical . It is all simple common sense.Let me explain.

A lot of traders use moving averages to trade the markets. They identify locations to initiate their trades in many ways. Some people enter on price crossover and some others on average crossovers. These traders use different moving averages to make decisions . This varies from 3 period to 200 period. Further,some of them use simple averages and others stick to  exponential moving averages. In short these traders are identifying different locations to enter and exit their trades.

Story is not yet over. Traders are using these method on different time frames. Day traders normally use 1,2,3,5,10,15 minute charts. Try to mark all these levels on a chart. It will cover the entire chart space.

Now think about other methods like trend lines, Fibos, EW , and many other indicators. These people use different settings on different time frames. All these traders  are divided and identify and trade different levels. In short there is no unity only diversity.

Now coming back to the Decision Points.These levels are fixed and visible to all the traders. There is no confusion or ambiguity about the levels. Previous day high is the previous day high for all. A BRN is a BRN for all. So all the traders monitoring these levels are going to act at the same level. Decision Point traders are united and they rule the divided rest.

Decision points are not my invention. Traders were using the levels for long. I just gave them a name. That is all. Decision Point traders are a few in numbers, I agree. But they are able to move the market because they trade big. They trade big because they are profitable.Most of the time they win because others are divided.

Do not trade what "you" see on the chart, trade what "all " see on the chart.

14112013

Nifty opened below PDH and spiked. Expected a channel move. Long above IRH. Scratched the trade. Went short when price broke below IRH. I was expecting a move till DO/PDH. Covered on BOF of BRN. No other trades today

13112013

Nifty gaped down below PDL. Almost all the day it was in a broad channel. Without knowing it, attempted two shorts and lost money. Last BO trade of IRL was also a scratch. 2 in 1 pattern. A channel and Barbed wire

12112013

Nifty opened near PDL and spiked. IR formed. Went long on the BOF of PDL/BRN. TP around 6140. BPB of BRN was another short signal. I skipped it as price was moving down in a channel.But it moved 30 points.

11112013

Nifty gaped down below PDL. Totally messed up the morning session. Hesitated to short on BOF of IRH. Bias was bearish so went short on break of IRL. Got stopped out and missed the long trade. Went short on BOF of PDC-PDL. closed the trade near IRL. Another short on BOF of range high. Covered at LOD

Six Blind Elephants

In a forest, there lived six elephants. These elephants were blind by birth. They heard a lot about men and were wondering what men were like. After arguing a lot, they decided to find one and determine it by direct experience.

One day a poor man stranded into the forest losing his way. The blind elephants caught him. The first elephant felt the man with its trunk and front leg. He declared “Men are flat”. One by one, the other elephants felt the man. They too agreed.

Elephants left the place, happy with their new discovery, leaving the dead man aside.

You know this man and the elephants well. Who are they?

If you want to know the answer, click here and find out.

Free System Testing

Many traders think their trading system will lose its edge if they disclosed it. They keep it secret as if it is some nuclear bomb code or cryogenic engine technology. I can understand, if it is some High Frequency Trading algorithm they developed after spending a few million dollars. But almost always it could be a crappy curve fitted Amibroker code based on some indicators every Tom Dick and Harry is well aware of.

Unless we are operating on a millisecond timeframe and attempting to exploit a wafer thin edge with an automated trading system, there is no point in keeping the method secret. That is all beyond the reach of a retail trader. Even billion dollar funds are struggling with it.

I think, there are two reasons for keeping the system a secret. The first one is they want to sell it and make some money. Otherwise the system could be so crappy that they themselves have no confidence to share it and they are not able to defend it on public scrutiny.

It is always better to share your system publicly, I feel. The system need not be profitable. Do it even if you find something potentially profitable. Market is so deep that it will not be affected by few people trading your method.

Sharing it publicly will have some huge benefits. Other traders trying your method will prove its worth fast. You will always get feed backs so that you will have a better idea about the positives and short coming of the method. Then you can focus on its strengths and modify it to eliminate the shortfalls.

Even if your system is crappy, don’t worry. You will understand it is not viable much earlier without you having to waste a lot of precious time on it, so that you can move on to something else.

Share your system. It is as good as hiring a few system testing professionals to evaluate it, and it is free.

08112013

Nifty gaped down below PDL and made a range between BRN and PDL. Went short on the break of range low. Covered when second push down failed. Another range move. BOF of range low gave a long signal. I was not comfortable trading into BRN which was a strong flip zone. Entered above BRN and got stopped out.

07112013

Nifty opened near PDC and went down breaking PDL. IR formed as a barbed wire around PDL. Went long above the IRH . I was expecting a move to BRN. But price broke BRN and PDH. Covered on FTC. Tried another long trade on BOF of MSP/PDH and test of BRN. Target was HOD. But it suddenly reversed with a big bearish bar. Scratched. Went short below BRN into the fluid area. Nice move down to LOD.

06112013

Nifty Opened near PDC. The first two candles of the day acted as the Initial range. There were too many levels inside the range. BRN,PDC,and PDL. Attempted a long trade on BOF of IRL. Long above MSP. I expected it to go to IRH atleast. Scratched it. No other trades today.

05112013

Nifty gaped down below PDL/PDC. BPB Short below IRL. TP at BRN. BOF of BRN after a range move gave a long signal. Bought above MSP. Exited the trade at DO. Nifty went up further and BO of PDC-PDL/DO gave another  short signal. Shorted below MSP.My target was BRN or LOD. But the trade did not move. Scratched.Did not attempt the last down move as there were too many levels around

Reading:The Four Poisons

The Four Poisons

 

There is a Korean martial art called Kum Do. This is a brutal game that involves a fight to the death with very sharp swords. The way it is practiced today is with bamboo sticks, but the moves are the same. Kum Do teaches the student warriors to avoid what are called “The Four Poisons of the Mind.” These are: fear, confusion, hesitation and surprise.

In Kum Do, the student must be constantly on guard to never anticipate the next move of the opponent. Likewise, the student must never allow his natural tendencies for prediction to get the better of him. Having a preconceived bias of what the markets or the opponents will do can lead to momentary confusion and—in the case of Kum Do—to death. A single blow in Kum Do can be lethal, and is the final cut, since the object is to kill the opponent. One blow—death—game over.

Instead of predicting, anticipating, and being in fear and confusion, you must do exactly the opposite if you are to survive a death blow from the market movements. You must watch with a calm, clear and collected attitude and strike at the right time. A few seconds of anticipation, hesitation or confusion can mean the difference between life and death in Kum Do—and wins or losses in the stock markets.

 If you are not in tune with the four poisons of fear, confusion, hesitation or surprise in the markets, you are at risk for ruin. Ruin means that your money is gone and the game is over.

How can you avoid the four poisons of the trading mind: fear, confusion, hesitation and surprise?

Replace fear with faith—faith in your trading model and trading plan
Replace confusion with the attitude of being comfortable with uncertainty
Replace hesitation with decisive action
Replace surprise with taking nothing for granted and preparing yourself for anything.

Success in trading is a long journey with many twists and turns. You can and will get there if you are patient, watchful, non-anticipatory and always on guard for the exact moment when you can strike. Trading is a game of survival and the spoils are money. It’s your money, your life and your future. You have the power to survive and flourish if you remember the lessons from  Kum Do.

By Janice Dorn, MD, PhD

Link to the original article

Work in Progress

01112013

Nifty moved within  a 30 point range the whole day. Attempted a BOF of Range High. Scratched it later. Price was hanging around 6300 of Spot Nifty. NF was trading at a premium of 50 points.I think  there was a BPB of PDH/PDC for those who traded NOV contract chart. Levels may differ as I was trading the continuous current chart.Wish you all a happy Diwali and profitable Samvat 2070.