M6 - Man, Mind, Money, Markets, Method & Madness

[DSM]

Oops!! Have booked at MTM 2K/Lot. Since I am taking a highly leveraged position, decided to get out, though the crude data was very bullish. Crude took a lot of time to react so exited. Had I held on for another 2-3 minutes the MTM would be almost double to 3.9K/Lot and I expect to it trade higher still. Will look at the chart at closing and study learning.

One thing that I have decided to focus on is to keep booking sure profits and not look at the optimal exit. Will have to fine tune this strategy.

So the hit rate on Crude Wed. Inventory trade is now 6/6.

Seems way to go! Added equal position, on upswing. So will have to be careful of SL.

 

[Rish]

Bought Asian Paints CE 500 @ 13.95 Its a directional call, and risky, since the script traded -2.40% today. The reason for buying is that I expect it to hit 550 which depending upon time factors should value call @ 25-27. Will use SL of 6.50 to exit. Let's see what happens....


Asian Paint Future and Call Option Chart.

 

[DSM]

Thanks Rish for the chart. Appreciate if you post your analysis to make it easier to understand. While I think that there is danger of downside, I consider Asian Paints to be a very strong blue chip. So buying now is surely risk, but am considering the fact that the market is quite bullish, so any fall, is opportune time to buy. I could watch and keep tab but with options, since the max damage is known, I am o.k with it.... Lets see.

Bought Asian Paints CE 500 @ 13.95 Its a directional call, and risky, since the script traded -2.40% today. The reason for buying is that I expect it to hit 550 which depending upon time factors should value call @ 25-27. Will use SL of 6.50 to exit. Let's see what happens....


Asian Paint Future and Call Option Chart.

 

[Rish]

Asian Paint is a falling knife......moreover always trade liquid option....

You are going to hold option for a limited period, so, no question of Bluechip and fundamental...always go by technical when you buy option.

At least i will not buy Asian Paint Now.....I will wait for support level at 520, then i will wait for reversal....if reversal happens... My target will be 542 and s/l will be 520 (EOD Closing)....

Anyway it happens, let us see how it behaves.....

I feel for your option s/l is 5.70 (EOD closing Basis).......

Also, regarding Crude.....Don't go by Inventory (does't have any meaning-Temp. reaction for 30 minutes, then original main trend resumes)....My view Crude main trend is sell.....Trend reversal may be above 6158...

 

[DSM]

The tale of the jailed Goldman Sachs programmer in Michael Lewis’s ‘Flash Boys’

http://blogs.marketwatch.com/thetel...achs-programmer-in-michael-lewiss-flash-boys/

The book “Flash Boys” by Michael Lewis has generated intense debate about the merits and flaws of high-speed trading, as the CNBC shouting match on Tuesday attested to. But one of the more compelling stories is the tale of Sergey Aleynikov, the programmer who was arrested and then jailed for taking code from Goldman Sachs.

Lewis’s account makes clear that Aleynikov did indeed take code from the bank, albeit code that was mostly open-source in origin. But one of the more interesting things Lewis does is convene a “jury” of Wall Street programmers to listen to the case, and they were astounded at Aleynikov’s unwillingness to abscond with the firm’s high-frequency-trading strategies.

“But that’s the secret sauce, if there is one,” said the juror. “If you’re going to take something, take the strats.”
“I wasn’t interested in the strats,” said Serge.
“But that’s like stealing the jewelry box without the jewels,” said another juror.
“You had superuser status!” said the first. “You could easily have taken the strats. Why didn’t you?”
“To me, the technology really is more interesting than the strats,” said Serge.
“You weren’t interested in how they made hundreds of millions of dollars?” asked someone else.
“Not really,” said Serge. “It’s all one big gamble, one way or the other.”

Not only that, but the firm Aleynikov was due to join, Teza Technologies, didn’t even use the same programming language Goldman had employed. Plus, the programmers said, it would have been quicker and better for Aleynikov to construct the code he did take from scratch than to employ the Goldman language. The other interesting element of Aleynikov is just how accepting he was of his fate. He told his lawyer after his guilty verdict: “You know, it did not turn out the way we hoped. But I have to say, it was a pretty good experience.” Aleynikov also took his time in prison in stride. “He would say: People in jail have the best stories,” said Masha Leder, who visited him there. “He could have considered himself a tragedy. And he didn’t.”

 

[DSM]

Thanks Rish, Much appreciate your view on Asian Paints as well as crude. I agree on both counts as Asian Paints seems risky bet, but any trade I consider in terms of RR, and while taking a trade while it is 'falling' is risky, I am going more by the general tone of the market. So let's see tomorrow. If the open and or chart is not as per expectation, will reconsider. As you rightly said Asian Paints options are not very liquid..... Crude, inventory data has for me been a 100% hit trade 6/6 so far. The least I have made (today) is 2k/lot. Not bad for an entry and exit in about an hour. I usually dont carry overnight positions. So for crude tomorrow is another day. Let's see what happens.

Asian Paint is a falling knife......moreover always trade liquid option....

You are going to hold option for a limited period, so, no question of Bluechip and fundamental...always go buy technical when you buy option.

At least i will not buy Asian Paint Now.....I will wait for support level at 520, then i will wait for reversal....if reversal happens... My target will be 542 and s/l will be 520 (EOD Closing)....

Anyway it happens, let us see how it behaves.....

I feel for your option s/l is 5.70 (EOD closing Basis).......

Also, regarding Crude.....Don't go buy Inventory (does't have any meaning-Temp. reaction for 30 minutes, then original main trend resumes)....My view Crude main trend is sell.....Trend reversal may be above 6158...

 

[DSM]

12 pieces of sound trading advice - — Howard Abell

http://www.futuresmag.com/2013/06/10/12-pieces-of-sound-trading-advice

"Markets can remain irrational longer than you can remain solvent."
Although the above quote may not be from John Maynard Keynes as is widely attributed, it nonetheless is a great reminder for traders. Although everyone wants to be then next great trader, this is a tough business and very few are able to profit over time. So, we gathered the best trading advice from some of the most iconic traders. Throughout the years, we have written about most of the things they discuss, so be sure to check out those longer pieces.

***

"Rule No. 1: Never lose money; rule No. 2: Don't forget rule No. 1"
“Investors should be skeptical of history-based models. Constructed by a nerdy-sounding priesthood using esoteric terms such as beta, gamma, sigma and the like, these models tend to look impressive. Too often, though, investors forget to examine the assumptions behind the models. Beware of geeks bearing formulas. ”
― Warren Buffett, CEO Berkshire Hathaway

“The four most dangerous words in investing are: ‘this time it’s different.’” "Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell. If you want to have a better performance than the crowd, you must do things differently from the crowd."
― Sir John Templeton, Founder The Templeton Mutual Funds

“People are too quick to accept conventional wisdom, because it sounds basically true… It's a basic fact of life that many things ‘everybody knows’ turn out to be wrong.”
― Jim Rogers, Chairman of Rogers Holdings and Beeland Interests, Inc.

"One common adage about trading that is completely wrongheaded is: You can’t go broke trading profits. That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits… The success rate of trades is the least important performance statistic and may even be inversely related to performance"
― William Eckhardt, Founder Eckhardt Trading Company

"Traders should avoid putting stops in the obvious places… If you’re going to use stops, it’s probably best not to put them at the typical spots. Nothing is going to be 100% foolproof, but that’s a generally wise concept."
— Monroe Trout, Founder Trout Trading

"I think paper trading is the worst thing you can do… It’s like shadowboxing and then getting in the ring with a professional boxer. What do you think is going to happen? You’re going to crawl up into a turtle position and get the crap beat out of you because you’re not used to really getting hit. The most important thing to becoming a good trader is to trade."
— Gil Blake, Inventor of mutual fund timing strategies

"My weakness has always been being a bit premature on entering positions. I’ve learned to think to myself, 'Patience, patience, patience.' I try to wait until things set up just right before I take a trade. Then, when I am ready to take the trade, I slowly count to ten before I pick up the phone. It’s better to have the wrong idea and good timing than the right idea and bad timing."
— Linda Bradford Raschke, President of LBRGroup, Inc.

"Risk control is the essence of my trading style and success. I never think what I might make on a given trade, but only what I could lose. I mentally mark each of my positions to market. No matter how large a profit I may have in a position, in my mind my entry price is always the previous night’s close. This approach allows me not to get complacent about my positions."
— Paul Tudor Jones, Founder of Tudor Investment Corporation

"A peak performance trader is totally committed to being the best and doing whatever it takes to be the best. He feels totally responsible for whatever happens and thus can learn from mistakes. These people typically have a working business plan for trading because they treat trading as a business"
— Van K Tharp, Founder of the Van Tharp Institute

“What sets successful traders apart?... Most people think that winning in the markets has something to do with finding the secret formula. The truth is that any common denominator among the traders I interviewed had more to do with attitude than approach.”
— Jack Schwager, Author of "Market Wizards" series

"The best fertilizer is the farmer's shadow. This adage applies equally well to trading as it does to farming. Trading profits are cultivated in the rich soil of market discipline, strict money management and consistent adherance to a proven trading strategy."
— Howard Abell, Author of "The Day Trader's Advantage"

 

[amitrandive]

Trading Mistakes

 

[amitrandive]

Nial Fuller's favorite trading set ups

 

[Snake.Head]

Re-posting So you don't have to turn head around