How did I make profits after consistent loss

[Cubt]

Hi,
I have been trading since 2008, started with stocks and wiped off my account in months. Again started with Options and made my broker rich. Blown my account in few weeks.

Later started analysing, almost ordered all trading related books from flipkart. Spent the next few months only on reading markets than trading. Slowly understood what market is all about.

Again came back, , started with few 1000s. Traded purely on technical analysis, gained confidence and became good at choosing my entry points but still lagging to find when to exit a profitable trade. Later learnt 1 by 1, position size, risk reward, 2% risk rule, pyramiding profitable position etc.

Finally sold off my wife jewels n started trading again. Started with stocks futures only. With all knwoledge that I gained, my account was started growing slowly. Was happy that I was making profits with limited loss. Enrolled in zerodha 60 days chalenge and I was sure of winning it.

But things changed over night, after making consistent profits, made a huge loss, lost all my gains in single trade due to bad position size. As soon as I realized my mistake, reduced my trading size n followed my tech analysis n started off again with slow profits.

Now with 1 more day left for zerodha 60 days challenge, my equity account is up more than 80% in 60 days. Now looking back, there is nothing I did extraordinary, no complicated indicators.

Simple support n resistance based trading.
Followed 2% risk on every trade
Treat money as just numbers

If u could sleep properly with ur holding positions over night, its a clear indication that u r on right track.

Posting it for beginners to realize that trading is simple but not easy! Have the courage to do what u would love to do!

Good luck

 

[jahan]

Hello,

In Addition to ur Post Here are my few Cents in form of Images.

1).This is how Most Traders think...........

2).This is how a Sophisticated/Master Trader thinks.....

Regards,

 

[oilman5]

thanks Jahan..............excellent!!!!!!!!!!!!!!!!!!
picture speaks louder than words

 

[Tamil trader]

Hi,
I have been trading since 2008, started with stocks and wiped off my account in months. Again started with Options and made my broker rich. Blown my account in few weeks.

Later started analysing, almost ordered all trading related books from flipkart. Spent the next few months only on reading markets than trading. Slowly understood what market is all about.

Again came back, , started with few 1000s. Traded purely on technical analysis, gained confidence and became good at choosing my entry points but still lagging to find when to exit a profitable trade. Later learnt 1 by 1, position size, risk reward, 2% risk rule, pyramiding profitable position etc.

Finally sold off my wife jewels n started trading again. Started with stocks futures only. With all knwoledge that I gained, my account was started growing slowly. Was happy that I was making profits with limited loss. Enrolled in zerodha 60 days chalenge and I was sure of winning it.

But things changed over night, after making consistent profits, made a huge loss, lost all my gains in single trade due to bad position size. As soon as I realized my mistake, reduced my trading size n followed my tech analysis n started off again with slow profits.

Now with 1 more day left for zerodha 60 days challenge, my equity account is up more than 80% in 60 days. Now looking back, there is nothing I did extraordinary, no complicated indicators.

Simple support n resistance based trading.
Followed 2% risk on every trade
Treat money as just numbers

If u could sleep properly with ur holding positions over night, its a clear indication that u r on right track.

Posting it for beginners to realize that trading is simple but not easy! Have the courage to do what u would love to do!

Good luck

what is support and resistance based trading?

what is 2 percent risk on every trade?

can you explain something for the above two questions....

 

[Cubt]

Support and resistance is the very basic of technical analysis.

When a stock moves up, at certain point demand dries up and supply increases which results in stopping the price to move further up. That level is called as resistance. I wait for this level and go short if the price failed to break the resistance.

Support is, when a stock price goes down at certain level, the supply decreases n demand increases which results in stopping the price to move down further. Then the stock rebounds, this is the level I go long.

2% risk rule is commonly used risk management technique.

For any trade, you should not risk more 2% of ur capital. For example, if u have 5 lacs capital u should not risk more than 10, 000 in any single trade. So that even u make 10 consistent loss, u r still left with 80% of ur capital.

Preserving capital is much more important than anything else to sustain foe long term in trading.

 

[Tamil trader]

Support and resistance is the very basic of technical analysis.

When a stock moves up, at certain point demand dries up and supply increases which results in stopping the price to move further up. That level is called as resistance. I wait for this level and go short if the price failed to break the resistance.

Support is, when a stock price goes down at certain level, the supply decreases n demand increases which results in stopping the price to move down further. Then the stock rebounds, this is the level I go long.

2% risk rule is commonly used risk management technique.

For any trade, you should not risk more 2% of ur capital. For example, if u have 5 lacs capital u should not risk more than 10, 000 in any single trade. So that even u make 10 consistent loss, u r still left with 80% of ur capital.

Preserving capital is much more important than anything else to sustain foe long term in trading.

what about position size? is it for cash or derivatives?

 

[Cubt]

Position size is applicable for all segments

 

[eq24]

Support and resistance is the very basic of technical analysis.

When a stock moves up, at certain point demand dries up and supply increases which results in stopping the price to move further up. That level is called as resistance. I wait for this level and go short if the price failed to break the resistance.

Support is, when a stock price goes down at certain level, the supply decreases n demand increases which results in stopping the price to move down further. Then the stock rebounds, this is the level I go long.

2% risk rule is commonly used risk management technique.

For any trade, you should not risk more 2% of ur capital. For example, if u have 5 lacs capital u should not risk more than 10, 000 in any single trade. So that even u make 10 consistent loss, u r still left with 80% of ur capital.

Preserving capital is much more important than anything else to sustain foe long term in trading.

Very well written Sir, I sometimes think it is the technicians that run the market. Think about it, how magically the right doji begins a reversal, a constricted bollinger makes the market rise and the inflated one fall. How fibionacci is almost always right.
In Technicals we trust. Amen

 

[RAVINDRAN]

Very useful.
Ravi

 

[RAVINDRAN]

Very interesting.
Practical.
Useful.
Thank You.
Ravindran