Learning to catch High Probability Breakouts

[revendar]

Entered 17500PE. Came after a long vacation and work related things.
Happy to be back

FYI: No trading call.

 

[amitrandive]

Entered 17500PE. Came after a long vacation and work related things.
Happy to be back

FYI: No trading call.

Any specific reason for taking a put , not a call?

Please explain with chart if possible.

 

[revendar]

Any specific reason for taking a put , not a call?

Please explain with chart if possible.

Deep SL hit in minutes.

Seen some exits in 17500CE as profit booking.

Bad trade.

 

[amitrandive]

Deep SL hit in minutes.

Seen some exits in 17500CE as profit booking.

Bad trade.

I have also taken such bad hits many times earlier due to the highly volatile price action on such days.

So nowadays I just wait and watch.

Better be in "No profit and No loss" rather than being in "Deep loss".

Remember during such days,there are huge candles in Intraday ,which mess up all the price action and indicators along with them.

 

[mindgames]

Yes Anil Sir

It is not split,it is actually demerger of business.

http://www.business-standard.com/ar...-ex-scheme-of-arrangement-116012000210_1.html

http://articles.economictimes.india...nuvo-ltd-equity-pantaloons-fashion-retail-ltd

NSE site shows closing of 2065.65 on 19th Jan 2016 and 882.15 on 20th Jan.

Charts on some sites like Moneycontrol and Economic times show this drop in the charts.

Charts on http://chartink.com/stocks/abirlanuvo.html showing the ratio adjusted .



Thanks for pointing this out.Need to check at other few locations.

Ideally for checking chart patterns etc for us , think it would be helpful to use the spilt/demerger adjusted chart as the original chart would be highly skewed.

Same issue with Adani too. LT averages might be impacted as well.

 

[revendar]

I have also taken such bad hits many times earlier due to the highly volatile price action on such days.

So nowadays I just wait and watch.

Better be in "No profit and No loss" rather than being in "Deep loss".

Remember during such days,there are huge candles in Intraday ,which mess up all the price action and indicators along with them.

Yes. Amit bro. Well said. Should not have taken the trade.
This is my second trade after vacation and both lost it.
Need more patience.

 

[amitrandive]

Same issue with Adani too. LT averages might be impacted as well.

http://www.financialexpress.com/art...justing-to-demerger-amid-heavy-volumes/79945/

I would generally adjust the chart ,if we want to analyse the scrip again without any bias.

Or else deal with a skewed data.

Amibroker has an option to adjust the split manually.While doing so it shows the ratio also.

Think most of the software's would do the same.

 

[amitrandive]

Yes. Amit bro. Well said. Should not have taken the trade.
This is my second trade after vacation and both lost it.
Need more patience.

Suggest you to watch this video by Madan Kumar.

http://www.traderji.com/technical-a...high-probability-breakouts-2.html#post1160973

The other day , I was watching trader's carnival on CBNC TV ,interview of a great trader,James Dalton.

https://www.youtube.com/watch?v=29PkDDUw-Jo

He beautifully put it all up in one sentence,

" We should wait for the trade to come to us as per our system and setup rather than run after any trade".

 

[amitrandive]

Hi,

If I tell you to take any 100 random trades, winning ratio is 30-40%, Either come out at Re.1 loss or book profit of Rs.3.

Will you take the bet?

If your answer is 'Yes' then congratulations..!! You have already mastered the market.

Now add one or two basic indicators like EMA crossover etc instead of random trades and you are ready to go and trade in real life.

It that simple.!!

Now some detailed part -

1. Never try to increase your winning trades percentage -

Lets say you have very good indicators and best trading system in the world. Now when it gives you buy or sell signal and the moment you actually enter the trade, There are equal chances of market going up or down next moment. This can not be predicted by anyone. It is not possible at all. Nobody can control this. So accept the truth and move on. basically trying to increase winning percentage is like fooling ourselves. We can not predict tossing coin for more than 50% probability so how can anyone design a system to predict market. Theoretically winning percentage should be atleast 50% if not more because you have so many systems predicting the market but this doesn't work in real life. So even 30-40% wins can make you good amount of profits.

2. Winning secret is in money management.

Everyone talks about money management but what does it mean actually? Its very simple. 1. Keep Stop loss value less than profit target. 2. Follow Stop loss every time as it hits without a miss. Even when you have no willingness to do so.

3. Repeat.

Now on a lighter note - Have I tried above random game in real life? Answer is 'Yes' and with real money. In the initial years when I was frustrated with always facing losses, I had tried another game also i.e. inverting trades. I was so angry that whatever I did I used to end up in loss, So one day I inverted the signals. When my system gave me buy signal, I used to short and vice versa. But this thing also doesn't work. Ultimately everything goes in loss most of the time no matter what you do. The only thing that works is money management. One more reason for money management to work is because market is not aware of your existence. Its random, and even randomness follows a random path by giving you 30-40% of winning trades. Just make most of it from those trades.

Beautiful post !!!
:clapping::clapping::clapping:

 

[amitrandive]

This is the problem which every new trader has to face. What % to reinvest depends on whether one is in capital building stage or capital preservation stage. In capital building stage of a new trader his capital is small, household expenses and housing loan installments take away major chunk of the profits leaving very little for capital formation. This happens with every new trader. It happened with me too and the capital formation is slow. But one should invest back 50 % of the profits in capital formation stage. Once capital acquires a critical mass, then the profits increase rapidly and our expenses dont increase in the same proportion and then the capital formation process becomes faster.

In capital preservation stage all financial needs, present and future , are met and the trader trades not for making more money but he trades because he enjoys it and that gives him occupation and income apart from fulfilling his passion. In this stage money ,though important, assumes lower priority. In that case he may take out all 100 % of profits and invest it elsewhere.

I too used to have same questions when I was in capital formation stage, I was into trading full time, no other income source,no inheritance in terms of money, and household expenses and HDFC housing loan installments to be met from trading income....but after a few years the capital grows in exponential proportion....so just concentrate on trading well and making consistant profits...all other things will fall in place .

Smart_trade

Another gem from ST sir !!!
:clapping::clapping::clapping: