Hello from a technical analyst

[mbsingh]

Hello Every one!
This is M.B.Singh from NOIDA. By profession I am a technical Analyst maintains my company "Technical Traders of India" also having association with NDTV PROFIT and CNBC.

Trading & Investing in stock market can be a profitable and enjoyable proposition. It requires a great deal of patience and discipline.

Right attitude and having proper tools is a must in the financial markets. Most traders loose because they do not do their homework and they dont plan their trades.

They also dont realize that they are playing against the best brains in the business. One win alone force them to shed their skepticism and next trade comes out of a jubilant but ignorant and biased mind. To understand the result, one need not to study rocket science.

Most dont understand the value of having proper tools of the trade. Some play on inside information some play on fundamentals and few play on technical. Total percentage of all these together is not more than 15%. Rest play on their whims and fancy.

Thats why only 5 to 7% make money trading. I often ask traders if they have studied any book on trading or traders psychology or any other relevant subject? Shockingly 95% says no and most are not willing to buy and read.

To control greed and fears one must understand the traders or gamblers psychology. Books give you wisdom and one can become a better trader or investor by applying knowledge.

YOU DONT KNOW WHAT YOU DONT KNOW. Knowing and applying is the key.

That's enough for now.
with regard,

M.B.Singh

 

[beda]

good statistics mb singh
keep it up

 

[gopii]

dear Mb singh
hi, that was good writing but my friend, could we have some more concrete suggestion of what you want these 95% of people should do. bcause eg me a textile trader i just buy/sell on fundas and instincts, i now cannot find time to go and learn applied finance.
ofcourse i am willing to put few hours to study, so could i have some good guidlines on stock anaylsis.

its great that you are sharing your knowledge and appreciate some more please.
rgds
gopii

 

[mbsingh]

Hi

I would love to see those 95% do what they do when they start any other business venture. They do some market research about of the field concerned. They build or rent a shop or office. They buy furniture and stationary appoint some help and do many more things required to run that shop / office efficiently.

But would like to point it out once again "See around you. You know many of these guys. What infrastructure do they have for this business? My experience is that they have (most of these if not all out of those 95%) a copy of the pink paper in their hands every day. It is their total net worth as far as infrastructure for the trading is concerned.

One important aspect they do not realize about losing money is Draw downs. It is simple math unknown to them. Draw downs are the biggest enemy of traders. Let me explain the term draw downs and how it is one of the most important facts of trading to know.

Suppose one start trading with a capital of Rs 100000 and looses Rs 40000. It means that he lost 40% of his capital. Right. There is nothing special here but point to know and remember is coming now. You ask him how much he must win in percentage term to break even? I am sure he would think about how stupid the question is because even a child would know that a gain of 40% would be required to break even.

Unfortunately it is not the reality. I wish it was. Actually he needed to win 66.66 percent to break even of the remainder capital. Now lets examine different scenarios.

% loss of capital % of gain required to recoup loss
10% 11.11%
20% 25%
30% 42.85%
40% 66.66%
50% 100%
60% 150%
70% 233%
80% 400%
90% 900%

Losses grow exponentially. I have been asked what these 95% traders should do. An answer is nothing but keep loosing so that remaining 5% can enjoy life and secure their future. Its another cruel fact of life. Let me elaborate. There are two categories of people in life not only in financial markets. Winners and losers. Who fits where depends on the attitude and attitude only. Only those can move out of the bigger lot who were ignorant about the requirement and once they realize what is to be done and actually they take corrective steps. Just plain lip service would not do. Knowledge is power. How many believes is a powerful statement. To me it is incomplete and as it is it is of no use. The complete phrase is Applied knowledge is power.

Winner would do whatever it takes to be successful. Looser will find excuses that books are costly. Softwares and data cost are too high and who has time to read books or scan through charts. You suggest that why you dont take services of a professional. He would find another excuse here too, saying if I have that much money why would I need to trade? Or surely I would take his services but let me make that much money from the market. List never ends and soon enough his trading account ends.

On the contrary winners think otherwise. He think that I am new or I dont know all the things and I must invest in his services and evaluates if they are useful to grow in the market. He always thinks long term. He knows that these are tools of the trade and must have these in his ****nal before start trading or in his initial days of learning.

Let me give you a very straight forward example of importance of tools of the trade. Imagine yourself as a brand new dentist. You are ready to setup your dental clinic. You have taken a shop and put up a sign board so your first patient drops in with a cavity. You ask him to sit on a stool and examine his cavity and ready to fill that one. But you have to drill a bit. Now you take out a hand drill (BURMA in local carpenters jargon) your patient get up asking what you are up to Doctor Sahib. Dont you have a proper machine? What would happen if you tell him that I am a new doctor and would setup my clinic when I earn enough money? Here it looks funny but it happens in the market every day and every where. Every nook and corner of the street you can meet such traders.

In general if one has to setup a conventional business they know tools are required first. Employees have to be hired and machinery must be commissioned first before they get even a single order. But they do not treat trading or investing money as a business. Most loose money elsewhere and come to the stock market for the want of available leverage. Pay 5% margin and trade for 100% value.

In a setup like that where you play for leverage, odds are stacked always against you. You have to do lot of preparation to get trading odds in your favor. That cost time and money. When it comes to putting time and money, traders avoid them and put themselves in the category of the losers. It is again an attitude problem.

Many people ask me for tips and I give them too. But GOD has a rule. There is no free lunch. Information that is available free often looses value and conviction. If there is no conviction you would not act or not act timely in a market where time is money. If you have paid for the information or you have put in efforts to get that piece of information you would have conviction and courage to act on it. Profit can not be made on sitting on that info. One has to act on it.

Money management strategies are not on the priority list of this group. List is quite long. Why they remain where they are and than they vanished cribbing the market for their misfortune.

I am confident that this information would throw some light on the issue discussed.
Wish you and readers good luck. Invest in the tools of the trade before you trade if you are not getting desired results and keep evaluating your policies. PLAN YOUR TRADE AND TRADE YOUR PLAN.

 

[gopii]

dear mbsingh
hi nice to read all that writing, and still could you be more concrete in what should we be doing.
rgds
gopii

 

[4candles]

Dear mbsingh,

excellent thought there about human psychology & money management, both very difficult to master & needs daily re-learning. Like to hear from you regularly.

regards

4candles

 

[kkz59]

Dear Mr.Singh

Your first innings was like scoring 50, whilst you have scored a double century in your second innings.

Good and patient write up.

I belong to that tribe of nomads of the Investing public that do not understand the 'a' of technical analysis.

Based on your experience and analysis, could you post on this forum (obviously, at your liesure) some scrips exhibiting strong buy signals on the charts. Similarly, you may also keep us informed about scrips that suggest immediate selling.

Regards and welcome

Kamalesh

 

[anmoljain7]

Hi All,

I am a new member in this grup and have been investing in stocks specially in secondary market for almost an year and a half.

I completely agree with Mr. M.B Singh and I strongly believe that to really earn in stock market, we must apply all our senses and brains and just not go ahead with our 6th sense.

I am sure we together will be able to use this forum as an interactive way of learning and sharing of experiences for great benefits to all.

Thats all to start with.

Regards

Anmol

 

[thomsv]

nice reading

 

[padma]

hello sir,

I am new in your coomunity. I am started trading recently. I am interested in

trading in futures and options market. pls. guide me about that.

I am very much excited that I am talking one of the experienced technical

analyst.

thank you.