A plunge in Indian Stock market

[amitrandive]

Sspms2002

Its better if you don't take delivery in stocks which you have selected for day trading.

Day trading means that you should have an exit plan for the same day.

Even I've traded this way by taking delivery of stocks in a HOPE that they will show strong movements the next day but i failed most of the time. And I've learnt from my mistake. Now i make sure that when I'm taking intraday trades i exit the same day.

My utter frustration has inspired me to write Trading rules for me , I am writing these trading rules for my self to see how many i breach/follow each day.


Day Trading rules:

1. Enter at or near Consolidation area or else have very tight stop out.

2. When in PROFIT , book 50% at 50% retracement of price from HIGHs/LOWs or near the Target price and rest at next good move below that 50% retracement point or Target Price.

3. Never ever let Decent profit turn into a loss.

4. When in LOSS, book when loss is at MAX Rs 500-800.Watch for 2-5 min before entering again.

5. Slow down after 3 continuous LOSSES & reduce size to become comfortable.

6. Add position in Profitable position at Consolidation area and rarely to loss.

7. Watch out after a Home run..take singles before going for a boundary again.

8. Review the trades to see the good/bad focus areas.

Trading without Rules and stop loss are financial suicide.Also taking delivery of stocks which are loosing is a sure shot way to bust your account.One must have a strategy for entry and exit or frustration is bound to creep in after sometime.

http://www.marketwatch.com/story/10-rules-for-rookie-day-traders-2011-05-03
http://www.investopedia.com/article...ay-trading-rules-rookies-dont-play-it-ear.asp

 

[amitrandive]

Today was a bad bad day of trading for me..i am utterly frustrated with my trading of today...

I had 200 shares of TATA Motors of yesterday , the stock opened strong..and as it was moving up i bought another 200 at 586...so my Average price now became 585 for 400 shares...

the stock had strong buying and it swiftly went to 591+...The Open Profit was around 2400 +....But i didn't book a penny there as i was thinking that it is strong and it may strive to reach 600..or its 52 week high...

It started back from 591...and i did nothing but to watch it fall...i covered 200 at 586....

After playing there at 586-587..it gave a big spike down and breached 582-583 price...and i just did not covered the rest 200 shares..(just in HOPE of it going up again)

After that i watched it go heavily down till 572.....and then by day end retraced back till 576-578...

I am still holding it..with an Open loss of around 2000..

Stocks Traded: TATA Motors
P&L : Open Loss of around 2000...carrying the position for delivery again..


Till now may major losses are when i had taken stocks for delivery..
The day when i take them for delivery they look very strong...but the next day the story reverses...

TATA Motors today may be bad trading from my side as it gave a good profit for me to book..but i couldnot materialise it..

Stocks perform differently on different timeframes.One must be able to understand price action to see whether the day is bullish or bearish for a certain stock.Though TataMotors is bullish on a daily chart,taking delivery for a loosing trade is the worst kind of strategy to have.It is like refusing to accept our mistake and averaging loosers.

Also attached a 5 min chart of TataMotors with support/resistance and trendlines which show the bearish trend of the stock in Intraday.

Daily Chart of TataMotors

5 min Chart of TataMotors

 

[sspms2002]

Today was another Bad day as per my expectations...

Started with TATA Motors..Today it opened strong..i added another 200 to my old 200 shares at 578..and cleared off at 582...i missed booking profit when it first made its high of 583..when it again started coming near its high after a retrace...I booked Rs 1200 in that...

So effectivelly a loss of Rs 800 for the total position in TATA Motors..

Then i took some other small trades and went till rs 1890 in profit..

Till here i think i was happy with my trading and followed the rules..

Then after some time in afternoon , i started watching reliance it was already down Rs 25 and it had started making it back...I LONGed 200 at 581..that was the High of that time (around 12PM)...

(Rule No -1 Broken here - Entered at HIGHs and not at consolidation area..and also didnot had tight stops)


It went till 882 and then started coming down again...
It held at 879 first and then at 877..i was seeing a loss of around Rs 800..I didnot booked it..

(Rule no -4 broken here , book Loss when rs 500-800)..

after trying to break 877 with very heavy volume but failed to do so, it started going down..may have taken more than 1 hr at 877...

Also at that point i kind of revenge trading it ,that how far can it go...it has to come back up...but it soaked up all my peace and i exited at 874...
A total loss of around 1600...

I took now a SHORT Position at 875..
(Rule No -4 Broken again - Wait/watch for at least 2-5 min before entering)

It went till 877 and then retraced back to 875-874...I booked flat...

At the end i took a LONG position in JET AIRWAYS and made around 600 back..


Stocks Traded: TATA Motors , JET AIRWAYS , RELIANCE ..etc
P&L : Green 580 after commissions

Lessons: Discipline , Discipline , Discipline .
One badly managed position ruined all the good work..
If i would have followed rules , i would have saved around Rs 1000 in profits.

 

[sspms2002]

I was just thinking over my trade in Reliance today and thought of putting the analysis forward and ask Seniors here if they also feel the same...

The Stock was weak and it went down Rs 25 by 10- 10.30AM...There was a bad news in it...

It went down very fast and then started coming back up in a sideways kind of move..ie at an angle less than 30 degrees...It means that Buyers were just able to control Sellers but were not able to push the price up...so may be with time it may get strong....overall momentum is still down but short term may be up...

The stock slowly rose till 880 - 882 price...from low of 872....it seemed like stock is getting strong...it gave its first good move down from 883 level..coincidentally the 882-883 price is around 50% retracement from Low...

it went little down but always showing strength..sweeping the offers in a moment...but then slowly sliding a little lower..

It then went till 877 and struck there...

Peculiar thing was happening there which prevented me to hit my out..

The offer was showing small size at 877 but continuously big buying was happening...the buying pressure was so huge that it seemed that if 877 gets out it may reach 883-884 in a moment...

But after a lot lot of pressure 877 offer didnot bulge....
the stock went little down and then came back to 877 again to try to remove 877 again...after a lot of heavy buying 877 vanished for a moment.and the stock showed 877.50...878..but then no one tried to push it further and it came back to 877...

and then the down fall started...

@Senior : Is the pattern mentioned in words above a familiar pattern..and can it be shorted with confidence?

 

[amitrandive]

I was just thinking over my trade in Reliance today and thought of putting the analysis forward and ask Seniors here if they also feel the same...

The Stock was weak and it went down Rs 25 by 10- 10.30AM...There was a bad news in it...

It went down very fast and then started coming back up in a sideways kind of move..ie at an angle less than 30 degrees...It means that Buyers were just able to control Sellers but were not able to push the price up...so may be with time it may get strong....overall momentum is still down but short term may be up...

The stock slowly rose till 880 - 882 price...from low of 872....it seemed like stock is getting strong...it gave its first good move down from 883 level..coincidentally the 882-883 price is around 50% retracement from Low...

it went little down but always showing strength..sweeping the offers in a moment...but then slowly sliding a little lower..

It then went till 877 and struck there...

Peculiar thing was happening there which prevented me to hit my out..

The offer was showing small size at 877 but continuously big buying was happening...the buying pressure was so huge that it seemed that if 877 gets out it may reach 883-884 in a moment...

But after a lot lot of pressure 877 offer didnot bulge....
the stock went little down and then came back to 877 again to try to remove 877 again...after a lot of heavy buying 877 vanished for a moment.and the stock showed 877.50...878..but then no one tried to push it further and it came back to 877...

and then the down fall started...

@Senior : Is the pattern mentioned in words above a familiar pattern..and can it be shorted with confidence?

I have added my views on Reliance chart with all markings.

5 min Chart of Reliance

 

[kiran_thiru]

as learner below was my trades in reliance. this chart may give some thoughts about yesterday marked with my trades.

as per my chart there are only shorts not longs. i missed starting moves, but in middle took short though it was late, and hit sl. after again chance came to enter short, exit with profit. in final again has chance to short, but it reaches eod time, so did not took.

 

[sspms2002]

Today was a tough day again and i realized that i am doing the same mistakes again and again...

At just Open i shorted Reliance...it went 3-4 rs in my favour in that very minute and then sharpely came back up...i neither booked profit and not booked LOSS...

It went up and i booked 1600 in LOSS...
(Rule no -4 broken here , book Loss when rs 500-800)

I then shorted it at that HIGH and it came back down and i covered my losses with profit of 1500+.

I then skipped seeing the stock...That was one of the biggest mistakes today...as i was sure that this will definitely go down...


I then started looking at TATA Motors..it was up and holding on to 580...

I LONGED 400 at 580...at around 11 AM...and as it was holding up i went relax...

and in that relaxing moment..i slept again and got awake at around 2.30PM...

I saw it in HUGE RED...and covered it then...a total loss of around 2200+ in that single trade...

My negligence costed me around 2000 + 1000(at start) loss today...

Stocks Traded: TATA Motors , RELIANCE
P&L : Red 2231 after commissions

Lessons Learnt: This is real money which i am losing , don't treat it as just a
game..treat it as a business...

Discipline ..Discipline...Discipline..Follow the rules.
Skip the Open for a few days..

 

[amitrandive]

Today was a tough day again and i realized that i am doing the same mistakes again and again...

At just Open i shorted Reliance...it went 3-4 rs in my favour in that very minute and then sharpely came back up...i neither booked profit and not booked LOSS...

It went up and i booked 1600 in LOSS...
(Rule no -4 broken here , book Loss when rs 500-800)

I then shorted it at that HIGH and it came back down and i covered my losses with profit of 1500+.

I then skipped seeing the stock...That was one of the biggest mistakes today...as i was sure that this will definitely go down...


I then started looking at TATA Motors..it was up and holding on to 580...

I LONGED 400 at 580...at around 11 AM...and as it was holding up i went relax...

and in that relaxing moment..i slept again and got awake at around 2.30PM...

I saw it in HUGE RED...and covered it then...a total loss of around 2200+ in that single trade...

My negligence costed me around 2000 + 1000(at start) loss today...

Stocks Traded: TATA Motors , RELIANCE
P&L : Red 2231 after commissions

Lessons Learnt: This is real money which i am losing , don't treat it as just a
game..treat it as a business...

Discipline ..Discipline...Discipline..Follow the rules.
Skip the Open for a few days..

You are not looking at charts during trading.

5 min chart of Reliance

No words needed,downtrend.

5 min chart of TataMotors

 

[sspms2002]

You are not looking at charts during trading.

5 min chart of Reliance

No words needed,downtrend.

5 min chart of TataMotors

Yes you are right....I am not looking much at the charts...and during that moment's order flow may be strong on buy side for that stock...and it may go up in that very time frame....but i am not seeing the big picture to have a logical entries..

So order flow is getting me into a stock and i am seeing a profit for that minute or 2....But than the over all big time frame comes into pictures which is down and i forgo my profits and the stock slides in negative territory...
and on losses i tend not to BOOK...another blunder...

One question to you: Are you looking at 2-3 days of charts on a 5 Mins TF...it seems only that way we can make rational decisions...

I most of the time only see that very 5 mins to 1 min chart and get caught on wrong side on higher TF..

 

[amitrandive]

Yes you are right....I am not looking much at the charts...and during that moment's order flow may be strong on buy side for that stock...and it may go up in that very time frame....but i am not seeing the big picture to have a logical entries..

So order flow is getting me into a stock and i am seeing a profit for that minute or 2....But than the over all big time frame comes into pictures which is down and i forgo my profits and the stock slides in negative territory...
and on losses i tend not to BOOK...another blunder...

One question to you: Are you looking at 2-3 days of charts on a 5 Mins TF...it seems only that way we can make rational decisions...

I most of the time only see that very 5 mins to 1 min chart and get caught on wrong side on higher TF..

Yes , I do look at the previous 2-3 days of price action and also the daily charts.

How do you decide the order flow?Is it on the basis of bid/ask quotes?
If it is ,those quotes can change in a fraction of a second.Also does your broker provide you more than the best 5 bid/ask quotes?