Lets double the money in 40 trades

[Debarghya Mukherjee]

Re: Double The Money in Just 40 Trades

Hello r1989,
Nice to see that people are helping each others in trading. I appreciate your
nice effort. May I join here? I want to ask you something. Are you using multiframe time platform? You are looking for a trade in short term time frame and helping support form the long term time frame? What I mean is that once the short term time frame gives yo signal in favor of long term and medium term you are executing the trade.
I hope you will not mind to answer me. What ever nice approach.

Happy Trading
Debarghya Mukherjee

Now the STRATEGY:

me using 1 min chart with 5 min chart with 30 min chart...mainly using 1 min chart to trade and profit booking and 5 min chart for medium term trend and 30 min chart for long term trend in intraday set up..

Hope all are confused ...


yes you heard right ..30 min is my long term and 5 min is my medium term trend..


trade in 1 min chart in NF and BNF

NF= nifty future ..leverage 50

BNF= Bank Nifty .....leverage 25
:clap::clapping::clap:

 

[Subhadip]

Re: Double The Money in Just 40 Trades

Hello r1989,
Nice to see that people are helping each others in trading. I appreciate your
nice effort. May I join here? I want to ask you something. Are you using multiframe time platform? You are looking for a trade in short term time frame and helping support form the long term time frame? What I mean is that once the short term time frame gives yo signal in favor of long term and medium term you are executing the trade.
I hope you will not mind to answer me. What ever nice approach.

Happy Trading
Debarghya Mukherjee

Hello Mr.Debarghya

nice to talk to you my dear friend through this thread. you are most welcome to join this thread...

yes you are right in your approach...

you will see more of it in live trading..

HAPPY TRADING
:clap::clapping::clap:

 

[Subhadip]

Re: Double The Money in Just 40 Trades

Can you clarify this part? So basically not only you are putting up 11% span margin as required by the exchanges, but you are doing this on a margin account potentially increasing your return on capital multi-fold !! Is that right?

Hello Mr. SANJOSEDESI

NF=nifty future =50 NIFTY=1 lot of nifty future..

i do not understand your word clearly..

but f anyone trades NF..it is already been 50 multiple..

like if u loose 20 points in NF it is 1000 rs..and vise versa
:clap::clapping::clap:

 

[Subhadip]

Re: Double The Money in Just 40 Trades

Originally Posted by Niranjanam View Post
Hi

I would like to advice all traders to prepare two annotated charts everyday. One is for the actual trades taken and another one is for model trades. Compare these two and find out what went well and what went wrong .Learn from it.

Skill learning is not possible without trial and error. Correction process should go on till successful performance is achieved .Once this success is achieved you will forget the errors and remember only the successful action that will be imitated and initiated automatically by your brain.

Watch a baby trying to grab a toy. His brain has no stored information what to do for this . He has no proper control over his muscles .So his hand will move somewhere else and he will try to correct the wrong move. This goes on for many days and finally his brain will store the right move and he starts doing it without any difficulty

Remember how you learned to drive the car. How difficult it was to coordinate your eyes, hands and foots.How long it took you to handle the steering properly.
But once you master the right moves by trial and error these actions are taken over by your brain.

All the knowledge necessary to trade profitably is available in the posts of Saint, Raghav and ST. What we need is deliberate practice .

All the best

Here is a Model chart , I use a free software to annotate my charts. It is called Jing. Click on the chart for a detailed view

With assumed permission from Niranjanam , I am quoting an excellent post he posted in Vjay's thread and my post on that as under :

I agree with you Niranjanam......one can learn any amount of theory but the trading profits come by actually pulling the trigger, taking the trade, deciding right quantity, adds,stops, profit booking ,monitoring the trade and finally cashing out and putting money in our pockets...and this process requires tremendous practice. It is a great idea to prepare a model trades chart by EOD and compare your actual trades performance with the model trades. It may be possible that you skipped some trade, booked profits early on some trades, did not take that add.......and if you achieve 65-70 % performance ( trades wise and profit wise ) then you have traded well......pat yourself on the back.

If the model trades have profits of 70 points and we have made 35 points...then our performance is not upto the mark and we cannot live in comforting thought that the day was profitable.....and we certainly need to improve. This is how we compare our performance everyday and start on the road of perfect execution and profitable trading.

I find that going above 75-80 % mark is very difficult.....but that is how one improves, we have to set the bar a bit higher to achieve good performance everyday.

Even if it is repeating the post....I am quoting both the posts here as I think this is a great idea to improve our skills and practice in execution of trades. I have been doing this for sometime and the benefits I got are huge.....I claim no credit for this idea, this idea was picked up by me from Saint who does this excercise everyday at the end of the day and when I read it again in a brilliant post be Niranjanam.....thought of sharing the same for the benefit of all our friends here......

Best wishes,

Smart_trade

GAME OF WINNING AND LOOSING

Everyone comes to the market for winning......but most end up loosing...why does this happen ? To answer this question we need to peep into earlier part of our trading career.

We start trading most predictably on some tips given by some friends....we make some money and then some more and we get convinced that we are into world's best business.....no efforts, no work....only make money....this illusion soon vanishes as the reality dawns....

In initial period we have no method....later we latch on to some method....it may be moving averages, camerilla pivot points, indicators, swings....etc and we get into a stage when we make money on 50-55 % trades but small money as we are too scared to let the small profits turn into losses so we grab it.....our losses are also small most of the time because market gives us a chance to get out of loosing trades with scratch trade/ small loss. But very few trades the market does not favour us and kepps going against us inflicting a cripling loss on us which cripples our trading account and our confidence. This has happened to all of us.....

Just think about an imaginary opponent who is taking the other side of all our trades....this guy has made all the money we lost and he is happily smiling. Why ? because he has never lost big ( ie we never waited for our profits to grow big ) ...he has his share of small losses and small profits and few bumper profits trades ( which are crippling loss trades for us ) .So if you reverse the role and take small profits/small losses....few largish profits by allowing profits to run anf few very big profit trades then you will do much better than this imaginary opponent in his earlier role.....It is the large loss you have to eliminate and get some large profits trades in your bag and you make it.....

You need to have a competent method which need not be complicated.....it is a myth that good methods are complicated .Your method should stack the odds in your favour.It could be a simple method that you take all trades in the direction of larger timeframe moving average.....put your stoploss points, add points, profit taking points and backtest that method....if you like that method chances are that method goes well with your psychological setup and belief systems. Then you have your holy grail up and running for you.....

Smart_trade

just quoting 2 good post by mr smart trade..this is first one...

 

[Subhadip]

Re: Double The Money in Just 40 Trades

second post by mr smart trade..

Scaling in and out of timeframes

I am demonstrating the use of this important concept with the help of charts of Nifty futures for 29 th and 30 th sept 2011.

The upper chart is Nifty Futures 5 min chart . Here many trade opportunities are marked on various concepts/methods/ systems . See the elliptical areas shown on 29th and 30th. On 29th the market broke out from sideways movement and the decline after this correction did not come below the pivot high it broke and there was a gap in between. This indicated that the market is set up for an upmove. The reverse is on 30th , market broke down and the rally failed to go into the sideways area it broke ( taking candle bodies here ) and this indicated that the market is setup for a downmove.

( Nifty Fut 3 min chart )

Once we observe the trade set up on 5 min timeframe, we get down to lower timeframe of 3 min to finetune our trade entry and initial stoploss. This is done for getting more clarity and precision. We use 3 min chart only for initial entry and stoploss. Once the trade moves in our favour we scale back to 5 min which is our trading timeframe. In the 3 min NF chart posted we can take the trades with much better clarity and tighter stops......

The trades marked are on various methods ( most of them come to same location ) but observe the precision which a lower timeframe of 3 min provides with a comfort of tighter but clearly defined stops.....

Smart_trade

:clap:

 

[Subhadip]

Re: Double The Money in Just 40 Trades

another one ..

Intraday trading can be done in following ways :

1) Take all trades in the direction of the longer timeframe. So if we are trading on 5 min chart, see what is the trend on 30 min chart...if it is down, take all short trades on 5 min chart.....but your trade entry,stops and profit taking all has to be on 5 min chart.. This is relatively easy as we are trading in one direction generally unless the trend on larger timeframe reverses during the day..

2) Trade the intraday swings without any bias....trade as the price flow moves...trade from short and long both sides....this mode is bit difficult as we need to be fast in reversing our positions and we need to understand the market action well....and very rigid on stops....

Let us take the tougher part .....intraday swings. I am posting Telco 5 min chart for last 2 days with trades , adds,profit taking points marked on the chart....

[/URL][/IMG]

Smart_trade

:clap:

 

[Subhadip]

Re: Double The Money in Just 40 Trades

aha.. another one a jem of it..

Posting a chart showing how to daytrade 5 min timeframe chart in the direction of 30 min timeframe trend. The scrip is Bank Nifty Future .The chart on top is 30 min and the visual trend on 30 min has changed to DOWN at the red line marked. In 5 min chart, we take all short trades, add and take our profits......no long trade as long as 30 min visual trend does not become UP.....Both methods are baed on pure price action.....

Out of the two styles shown above which one is more profitable ?? Actually both are very profitable, the choice really depends on the mental set up of the trader....choose any style which you are comfortable with and you can handle with ease .....there should be no strain,tension while trading these charts...the moment there is strain , be sure that something is amiss.....

Smart_trade

MULTIPLE TIMEFRAMES

Multiple timeframes is a great concept even for day trading and short term trading . This concept was developed by many and Dr Alexander Elders and Robert Krauz are the two names I associate with concept of Multiple timeframes.

There are many ways multiple timeframe concept can be used in our trading.Some of the applications are as under :

1) Trade in the direction of trend on higher timeframe.....suppose you are trading 5 min bar, take all trades in the direction of higher timeframe...say 30 min timeframe. So if 30 min timeframe is in uptrend, take all long trades and no short trades.....our sequence of trades should be long...add....book profits.....stay out....again long...add....book profits. But what if the 30 min is not trending and is in sideways phase ? Either dont trade in this period or even if you take trades, be very fast to get out on first sign of trouble....We daytraders want our trades to move in our favour quickly after we enter....and we dont like hanging around in a trade which is going nowhere.

2) When longer timeframe is trending, we trade more aggressively in direction of that trend....we give bit more room for our trades to work.....but when the longer term trend is sideways.....these trades are small , choppy and frustrating ,we enter and exit fast....grab whatever profits we can.....but in trending period we play for big win.

Smart_trade

:clap:

 

[Subhadip]

Re: Double The Money in Just 40 Trades

MONEY MANAGEMENT

The entire trading is based on two very important concepts.....1) Reward/Risk ratio or R/R and 2) Money Management ( MM )or Position sizing. Both these concepts are more important than which of our trade is successful and which is not.

I read a book called " Mathematics of Money Management " by Ralph Vince. This is one of the three finest books on MM by the author and some of the concepts in that book opened my eyes to what trading really is... I am giving below a small excercise from this book to stress a point that in final results, which of your trade made money and which lost money makes NO difference at all.....

THE POSITION SIZING AND MM GAME

Make 40 small pieces of paper,on 20 write SUCCESS and on 20 write "FAIL" and fold them and put them in a glass bowl. Then ask a small child in the family to pick up each slip from the bowl and you read whether success or fail.

The sttarting capital is Rs 1,00,000/- and At each trade you will risk 25 % of the capital. If the trade is success,you make double the amount of money risked on a trade and if it is failure,you loose the amount risked on that trade. So for first trade your cum equity balance is Rs 1,00,000/- and the amount risked is 25000/- so if the slip says success,you make 25000*2 =50,000/- and your cum equity is 1,50,000/- now and on next trade you bet 25 % of 1,50,000/-. so go on like this till 40 trades are over.

The final amount you will have is not dependent on the sequence of your winning/loosing trades,consecutuve looses,wins etc and final amount is over Rs 10,50,000/- Dont believe me ? Try it out. I have spent 3 hrs on this game early in my career and tried coin toss,various sequence of alternate win/loss,10 losses and 10 wins in sequence etc…But the final wealth is same not even a rupee more or rupee less.

What does this prove ? Have a competent system,backtest,have a good mm and trade with confidence. Your sequence of losses and gains make no difference in ultimate results of building your wealth as long as your method has a positive expectancy and edge. Hope you enjoyed the game and learnt something from it…..About expectancy, we will discuss later...

I am no way advocating risking 25% on every trade. This is just illustration because optimal f for this system is 25 %. But 25 % is way tooo high. Start with 1-2 % and put your profits to work for you….


Smart_trade

EXPECTANCY OF TRADING METHOD :

The traders have a misconception that if they follow any method /system they will make money....nothing is further from truth. They will make money only if the method has positive expectancy...if it has negative expectancy, traders if they trade that system , they will loose "systematically"

Let us see what this expectancy is and how we can find out expectancy of the method we trade. I will explain the concept in practical terms and also give example of a real trading method, its parameters and how to find expectancy of this method.

The expectancy is the amount you’ll make on the average on every trade per rupee risked on your trading method . Expectancy can be mathematically expressed as :

Expectancy = ( Probability of win X Average win ) - ( Probability of loss x
average loss )

In our MM game posted some posts earlier, we had our winners making 2 times our loosers and we had 20 winning and 20 loosing trades so the probability of win/loss both are 50 % or 0.5 So let us solve this equation :

E = ( 0.5 X 2) - ( 0.5 X1)

= 1- 0.5

= 0.5

This expextancy is a positive figure....so the method will make money...and it will make more money if we take more trades on the same.

But if the loosers were two times the winners......then this equation will give expectancy as -0.5 ......so that method will loose money no matter how faithfully you follow it......

Readers can get more information about expectancy in a fine book titled "
'Trade Your Way to Financial Freedom’ by Dr. Van K Tharp

The method will have more expectancy if it has either higher hit rate ie higher percentage of winners or higher average amount made on a winning trade....this is where importance of staying with your winning trades ,adding to your winners and cutting your loosers early comes into play.....

In next post we will apply this concept to a real swing trade method, list the method parameters to understand the expectancy of the method based on actual trades generated by the method ......

Smart_trade

:clap::clapping::clap:

 

[sanjosedesi]

Re: Double The Money in Just 40 Trades

NF=nifty future =50 NIFTY=1 lot of nifty future..

i do not understand your word clearly..

but f anyone trades NF..it is already been 50 multiple..

like if u loose 20 points in NF it is 1000 rs..and vise versa

Mystery cleared anyway. You had said
NF= nifty future ..leverage 50
BNF= Bank Nifty .....leverage 25

Leverage usually means how much money you are borrowing. Leverage of 50 means you put up 1 rupee and the exchange puts up 49 rupees. What you meant was lot size obviously. Got it. Not an issue.

 

[Subhadip]

Re: Double The Money in Just 40 Trades

Mystery cleared anyway. You had said
NF= nifty future ..leverage 50
BNF= Bank Nifty .....leverage 25

Leverage usually means how much money you are borrowing. Leverage of 50 means you put up 1 rupee and the exchange puts up 49 rupees. What you meant was lot size obviously. Got it. Not an issue.

:thumb:

welcome
:clap: