An Excellent Collection of ST's Posts.

[Tukka Trader]

For people who have guilt in their mind about trading and who feel that they are not adding any value there is no point discussing in this thread. This thread is for professional traders who have taken up trading by choice and not by compulsion. Also for guys who are convinced that no one can make money in trading, they can quit trading and do whatever they feel they are good at.

Anything if done in excess is bad. A doctor starting to see patients at 8:00 am and continuing till 11 pm is most likely to fall sick himself but can we say that practicing medicine is hazardous to health and all doctors have troubled lives ? Certainly not.

Same goes for trading...a trader can live full healthy and meaningful life.He can take 1-2 holidays (8-12 days) in a year with family, give quality time for his family, have plenty of friends from different walks of life, meet up all the friends groups on weekends, attend to all social meetings, marriages in the evening or on weekends ( on weekdays his spouce can attend) . He can do good excercise,have healthy diet and food habits,attend theatre or musical concerts( even classical music or dance concerts) in the evening and on weekends, take the family out for lunch/dinner and also have "Men Only" outings with his friends. Trader can have his own timings, his own holidays,have good money to spend, build assets and also build happy life.

Trading if done in healthy perspective allows a trader to do all the above and live a full life. All depends on a trader whether he wants to live like a trade junkie or a happy and balanced life.

Smart_trade


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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

There are 3 types of markets and the market moves as under :

1) We understand the market moves and we trade and make money.

2) We think that we understand the market moves but market goes opposite our view...so we make a small stoploss.

3) There are some periods where we have no clue ,we dont understand what the heck the market is doing....in this period dont force our views on the market....step aside and let market do its own things till it becomes clear to you.

Most traders have problems with type 3...they insist that they should understand what the market is doing all the times....this is not possible...even the best traders are clueless in some period of time.

Smart_trade
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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Originally Posted by amandeep86-I have Jotted down few reasons of my present trading scenario ,Please help out how i can improve these areas :

Looks like a case of scared money . You cannot digest the idea of loosing on some trades which is essential part of trading.Does your family/household depend on trading income and you have to make money to pay all the monthly bills ? Keep 12 months expenses aside and then trade so that you are not trading with scared money.

Read a quote somewhere : "If you dont risk, you cannot win...and if you loose all your chips, you cannot risk".

( Note : I know how painful this stage is as I have gone through this stage myself few years back at the start of my trading )

I made a mistake of putting most of my savings from salary from my earlier job into buying a small trading office ( which had a loan installment to pay ) which left very little money to trade. I was on a capital of 50,000 and I used to make 5-7 K on that in a month and all that used to go to support my household expenses (this was 25 years back, today one cannot run a household in 5000-7000) . But now I think that because I invested my savings in buying a office, atleast that asset was not available for funding my losses initially.I always throught in those days that why do we need capital for trading ? 50 K is enough...but 50 K is absolute shoestring capital for trading full time.

The capital generation was very slow it was 3 steps forward, 2 steps backwards kind of movement in my capital.....and a loss used to make a big hole in the capital. I am very fortunate to have very understanding and supportive family and I whatever I have achieved is 100 % because of their support in my adverse days. I could have failed in trading but the passion for the markets and determination to succeed and family support were two pillars for my survival.

But very difficult period . For new traders starting I would suggest adequate capitalisation, 8-12 months expenses kept aside, spouce working in the initial period preferably so that house expenses are taken care of , and very strong family support. Anyone starting trading on 50 K has very low chance of making it...( many will not accept this reality though but it is a hard fact )

Smart_trade
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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Originally Posted by candle

ST sir,

A valid point. Until now I had an opinion to start with 50k. With 1% per trade risk, trading just 1 lot NF initially, I thought there is a good margin of 20 point SL to take a risk. But after reading your post, I am now replanning my strategy...Do I need 1L to begin with?

If someone is trading full time and supporting a household expenses then on 50,000 he can make 5000-7500 pm ( 10 -15% pm which is a good return) but for running a house very economically also one will need min 25-30 K these days...so Rs 3-4 L is min capital needed . If not supporting a house expenses then 50 K to 1 L is ok to learn the craft.

ST
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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

On our evening walk on a rainy day we decided to have hot Vada Pav and went to a nearby joint. It is a joint which serves only Vada Paav and and has no chairs , tables etc...just a counter selling the eatables...as it was raining we started talking to the owner.We told him that he has got a very good site , a shop in busy college crowded road . The owner remarked " yes but the rent also is very good" . He pays Rs 80,000 pm as a rent ...I was so surprised....then asked him how much is his collection per day ?? His daily collection selling a vada paav at Rs 12/- is between Rs 25 K to 40 K...assuming the mean collection of 30 K and 50 % profitability, his daily profit is Rs 15 K or monthly Rs 4.5 L...from that the rent, payoffs to police, local dadas ( goons) , local corporators etc...still he makes a good money at the end of the month.

The roadside businesses give good profits with low investments but it requires different skills to do such businesses. In normal business ( like chemist shop etc), the investment is also fairly large to get good returns.

Smart_trade
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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Instead of running after 1000 points a month system traders will do well to understand that they dont have to understand each and every move in the market. No one understands all the moves...but try to trade the moves which we understand and which trigger a trade on one's system.

Smart_trade
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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Originally Posted by XRAY27
ST da !!!

Over the years i have seen lot size decrease in nifty fut. this is the first time size is going to increase ..margin is ok no problem..but what are the steps we should take to counter the decrease in volatility due to lot size... increasing time scale of trading for intra or have to shift to swing trading for the movement...

Please answer this !!!

Inspite of the increase in lot size, the markets are going to trend so for trading I dont think it will make a long term effect. Traders will get accostomed to new lot size.Initially there could be some buy/sell depth issue but that will get adjusted quickly.

Swing trading and daytrading both modes will be profitable in my view. If one is making money in daytrading, there is no reason to shift to some other mode. There is a possibility that we get more durable trends during the day, we have to see how it works but a temporary issue in my view.

Smart_trade
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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Though a good system is essential for trading success that is not the only requirement for trading success. It requires many more things like the mindset which is in tune with the method adopted, faith on the system ( backed with backtesting and front testing both ) , discipline, MM .

Members here know what is good and we have faith on their judgement. A great method in hands of bad trader will produce pathetic results. An average method in the hands of a good trader will produce above average results.

Good trading principles like cut your losses fast, run your profits ,trade in the direction of trend, dont add in losing positions are all same for years and years...nothing new gets added but then why do we have so many losing traders ?? Good principles are known to everyone but following them is difficult.

If ready made system worked, then we will have factories producing great traders. It does not happen that way...

Smart_trade
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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Pro traders can take various types of trades like continuation, tests, retracements,breakout/down from tight range,failures etc. But a new trader finds very difficult to trade on so many critaria and from both directions so for them 1-2 good trade identification and practice managing those trades well.New traders mostly find it very difficult to manage if the market changes its direction during the day or it is volatile giving large range moves but no trend.

Even for pro traders also a good day gives 2 or max 3 trades. More than 3 trades means we are either scalping or the market is directionless.

Smart_trade


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While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards

 

[Tukka Trader]

Originally Posted by eku
Smart Dada,Pls answer whenever free-

My Concern-
I am small trader so trading Cash Market with 1L capital.

Monitoring many stocks is the hardest part in intraday trading. Today I was looking at Tatamotor and missed a fall in Bhartiartel,then I was very late to catch it.
Then some other stocks were nice and I was confused which stock to enter as few of them were giving the entry signal.

There wasn’t any move in Tata Motor today,but Tata steel was yummy.But I catched it very late as there were already 15 scrips were running and I was madly monitoring

My Query is-
Is it good IF I just follow 2 scrips only? Like Reliance Infra and Tatasteel or any 2 Scrips?
Or what IF I just trade Tatasteel?
Or being a small trader with 1 L cap,is it necessary to monitor 10-15 scrips?

I really wonder how few guys here trade/monitor 10+ scrips.

In short-I am not able to monitor more than 2-3 scrips.Pls suggest what to do.

For active daytrader it is impossible to view charts and trade in all 15 scrips simultaneously. Many traders who trade multiple scrips have a 25-30 scrips on their watchlist but they monitor only 3-5 scrips in which the desired setup ( such as breakout from sideways consolidation ) has happened and then they monitor only those scrips and ferget the rest. One trader I know does a scan on his 45-50 scrips after every 30 min interval and the scrips which have given breakout in desired direction in that 30 min time slot only those are monitored for trade, entry, stops,profit taking etc. In 30 min 1-2 of his scrips give desired breakout and he monitors only those for rest of the day...he does that after every 30 min so he gets 6-7 scrips which are at various stages of trade development...in some the entry is just coming in some the market has moved in his favour so he has to think about trailing profit taking levels, and in some his stops are hit...so the monitoring becomes effective and manageable.

You may try the above , it may help you.....

Smart_trade
__________________
While amateurs go broke by taking large losses,professionals go broke by taking small profits...... William Eckhardt in New Market Wizards