Comfortable profits from trading Nifty.

[jamit_05]

2 evry1 here...open up EOD nifty JAN 2008 to MAR 2008..& whole of 2011...use ur curent strategy on it.,if at d end ur acount is positive..relax..u dont need anythng new..jst keep improving ur strategy..rest is all GANGNAM STYLe

Yes, both those periods are profitable. If smarter exits are used (no tinkering with the entries) the results are very good. This is a good opportunity for gmt900 to post the trades.

Keep working on improving your mental balance to avoid what happened with Rajeev. After some trades that gave him losses he skipped the next few trades, which unfolded as the best trades of the year! See how you can avoid such mistakes.

 

[jamit_05]

Beat FD by factor of 2.

Simply trading 315 on basis of SAR gives lesser sense of control. Defining exits is the solution. For that one has to define a profit target. 18% Annually or 50% or even 100%. Yes, even 100% is possible in a simple method like 315 crossover.

One could define exits to fulfill the target or learn indicators and chart patterns. TA is likely to give somewhat better returns, but nothing majorly more.

 

[gmt900]

Re: Beat FD by factor of 2.

Simply trading 315 on basis of SAR gives lesser sense of control. Defining exits is the solution. For that one has to define a profit target. 18% Annually or 50% or even 100%. Yes, even 100% is possible in a simple method like 315 crossover.

One could define exits to fulfill the target or learn indicators and chart patterns. The former is likely to give somewhat better returns, but nothing majorly more.

Every time, I want to thank, I get a message that I don't have the permission to thank. I have to post a reply. Occasionally, "Thanks" goes through.

 

[jamit_05]

Real Essence of Trading

Now, coming down to the bones.

Consider a realistic scenario where you have already taken 4 losses back to back. You have been diligent and took all your trades at 3.15 sharp at each crossover. No mistakes there. You are down by Rs.12000 per lot. This has set you 6 months behind as per the FD rates. That is quite a bit. A trader is expected to feel hesitant. Most of them do, which is why the method works (puzzling!). How you behave in this situation will define your success as a trader.

Some are able to surmount this barrier in a few iterations and for some a lifetime is not enough. So, what are you going to do different that will set you apart? That is the real essence of trading.

 

[DanPickUp]

Re: Beat FD by factor of 2.

Every time, I want to thank, I get a message that I don't have the permission to thank. I have to post a reply. Occasionally, "Thanks" goes through.

I think there is a limited amount of thanks you can give per day, as the admin had to change this in the past after the thanks button became a toy to some members.

 

[gmt900]

Re: Real Essence of Trading

Now, coming down to the bones.

Consider a realistic scenario where you have already taken 4 losses back to back. You have been diligent and took all your trades at 3.15 sharp at each crossover. No mistakes there. You are down by Rs.12000 per lot. This has set you 6 months behind as per the FD rates. That is quite a bit. A trader is expected to feel hesitant. Most of them do, which is why the method works (puzzling!). How you behave in this situation will define your success as a trader.

Some are able to surmount this barrier in a few iterations and for some a lifetime is not enough. So, what are you going to do different that will set you apart? That is the real essence of trading.

This is similar to people discontinuing SIP in mutual funds during bearish phase of the markets

 

[jamit_05]

The Real Essence of Trading--Contd.

Success or failure of a trader is decided by his mental fitness in the following two scenarios.

1) After a string of losses.

2) When the position is in profit.


-----------------------------------------------

Most of the traders have a tough time in these two spots. They are such potent situations that the mind completely blocks them out; refuses to acknowledge them. One just acts instinctively.

It may seem odd and ridiculous to you while reading, but when you are in the spot the tables are turned against you. All senses go out of the window. No clutches, advise or TA will be of any use. You will be standing all alone.

In my experience, what sets a successful trader apart is his earlier choices, How he has cultured himself.

1) Has he been in touch with and learning from the right people. Or has he been in search for a PERFECT trading system.

2) Has he read the right books on various mental aspects or has he read only about the finest trading systems from the most successful people over the world.

3) Has he realized that mental fitness is far more important for survival than an intricate trading system.

4) Has he back-tested the method is all possible scenarios and know exactly how much the system demands. Has he made the method his own.

If the trader has cultured his mind then his instincts will have evolved. In challenging times, his instincts will do the right thing, hence ensuring his survival.

 

[stock72]

Re: Real Essence of Trading

More than Arujanas arrow . exact on the point ...

Now, coming down to the bones.

Consider a realistic scenario where you have already taken 4 losses back to back. You have been diligent and took all your trades at 3.15 sharp at each crossover. No mistakes there. You are down by Rs.12000 per lot. This has set you 6 months behind as per the FD rates. That is quite a bit. A trader is expected to feel hesitant. Most of them do, which is why the method works (puzzling!). How you behave in this situation will define your success as a trader.

Some are able to surmount this barrier in a few iterations and for some a lifetime is not enough. So, what are you going to do different that will set you apart? That is the real essence of trading.

 

[jamit_05]

Importance of Exits in 315

I spend some time finding the reason behind the success of 315. I was able to pinpoint the reasons and appreciated the simplicity of the concept.

The best part about 315 is that a 7th Std kid could execute it. By the way, this is one very important condition for being a successful trader, as cited by trading gurus. Have a very simple method. In 315, important concepts like Stop Loss, Trailing Stop, Entries all get taken care of with two emas! How nice.

However, what it does not cover is exits. In this department, the trader is going to do have to do some work... for once.

Now some real numbers.

Starting in Apr '12, there were 3 whipsaws totaling a DD of 300 points. However, in May the big move came. At the highest point all loss was covered and a gain of 100 odd points was left over.

Similar story in Jun'12. After a DD of 150 points, the big move came which gave 250 points at the peak.

Month of August '12 gave straight return of 200 points at the peak.

This is pretty much the story all the time. This brings me to the point.

No amount TA or indicator study can get you to exit at the peaks. Trust me. put an end to that search. However, another approach that will work really well.... more on it in the next post...

 

[prabhsingh]

Jamit,

Are there any other indicators (RSI,ADX,MACD,Stoch's etc) which can be applied together with 315 to get much better results or reduce whipsaws?