Playing since 2005 lost 13+3 lakhs
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That happens man.. I too learnt that I can't trust myself (of future) by me (of now). Stock market makes you question your sanity early. Whereas in other experiences it takes a long time. That is the beauty of stock market. It is a mathematician's and statistician's dream come true. You can scale your experiences to any time level and any amount of capital. It is like an ocean.
I experience the Dr. Jekyll and Mr. Hyde problem every single day. As of posting this, I am Dr. Jekyll. Whenever I plan to get up early in the morning, I am Dr. Jekyll. But Mr. Hyde of the early morning doesn't bother about Dr. Jekyll. So I can't trust myself. But I have also stopped beating myself up for lack of discipline.
In other experiences too, I have noticed that I can't trust people (even closest ones like sister, mother etc.) not all the time. The human nature is variegated and affected by the conditions of a given time. Different situations bring out the best and the beast in us. When people are pushed to boundaries through constraints (like time, money, power, etc.), they start showing anomalous behavior which we never had identified them with. So when someone makes an agreement on something in my relationships, I re-estimate how they might possibly violate that agreement when pressured by the constraints. I wont take their word. For that, I need to first let them fail once on their agreements, so the next time they will understand my doubts.
Same in the stock market. Before starting a trade, I will estimate various possibilities, move up, move down, move in a range (time loss) etc. I would have thought about what I will do in each of the scenarios with time. But when actual evens happen, I will be making new analysis, making new decisions and plans. As losses become larger (or missed opportunities explode), I start questioning my sanity.
I had realized that to think that I will not violate discipline is my foolishness. To think that I wont be a fool at sometime will be ignorance of real human nature. To think that I can trust myself without considering the possibility of what I will decide when pushed to boundaries by constraints, indicates lack of learning from experiences. In stock market, experience counts the most. That is, how many cycles did you survive? That too an evaluated experience. Age doesn't matter. Warren Buffet gives most value to experience when evaluating candidates to hire.
Instead of trying to make myself a person who doesn't violate rules, I realized I have to allow margin of error for violation of discipline and rules. You can find many traders who violate all the rules in the book and still be successful. However that doesn't mean they keep violating them linearly.
Statistics is something we are not taught well in our education system. Afterall when are we taught this? Most of our school time goes into studying in a linear fashion. The tests, exams are all made to promote what in essence is slavery. We think linearly and make decisions based on linear analysis. Once you come to the real world experiences (where people are involved) or to stock market, you begin to see that linear thinking wont get you ahead. We look at the history and start making cause-effect relationships. Then you see the same cause now and expect the same effect, but it won't happen this time. When I say that, there are two possibilities: it happens, it doesn't happen. With each iteration of such experiences we begin to evolve our non-linear thinking.
As long as I tell myself, that I cant trust myself about sticking to some rule in the future, I make sure that I apply that rule even with little more loss than initially estimated. I also learned that I get conditioned by past success or failure into thinking that I can repeat the same while forgetting some experiences where I had made crucial decisions while having duel between Dr. Jekyll and Mr. Hyde.
I realized that this stock trading thing is not as linear as planning and executing. We think like that when we look at history. When we read charts of stocks, quotes, market statistics, on hindsight. To get ahead in this game, we need to handle our actions while the situations are developing. I enjoy it everytime.
You are able to do a good job and also make wise investments in real estate. Naturally one would conclude why can't you go with real estate and work hard at your job to increase the pay to even higher levels. This is a logical thinking. But there is something in our mind that we tend to act in negation to our logical thinking, even while we are acknowledging that.
The simplest example of this is how many investors avoid stocks that are at all-time highs. Also everytime they experience losses and deduce that they bought a stock on dip and so got caught in never-ending dips, still they go after stocks at all-time-lows and get caught in the same spiral of never-ending dips. Everytime they are in deep losses, they conclude that they should not do that again and decide to avoid it next time. Then again, after one or two trades, they get caught up in the same sheet.
This is basically the human nature of negation. It really was amazing for me to recognize this back in 2007. Immediately I bought RNRL the next day after it made a 60% rise. When I closed the trade, I had 150% gain on back-to-back swing and 200% gain on initial capital thanks to position scaling strategy. I was a good trader back then but had decided to stop trading as all my decisions were greatly influenced by one great intra-day trade that gave 30k intra-day gain largest of my time. It can sound like boasting, but it took very powerful bearmarket to take all my profits and pull me into losses. I took my stop loss as first time net loss and stopped trading in November 2008. The market hadn't bottomed even then.
This year, I started in April and thanks to my bottom picking ability, did well with five stocks out of 8. But eventually I had to close one with loss. I accepted that possibility from the beginning, so I didn't scale my positions on the downside. Only since August, I got into shape (bottom picking has tremendous risk) and also scaled down short term trades. Ended the madness of short term trades. When losing, my portfolio lost slowly, but when recovering it is moving fast. In last two weeks, I am back into profits and happy to share that as of yesterday, captured a 48% move in one stock since July.
To make all this possible, I had to confront the problem directly. While there are lot of reasons to commit mistakes and violate discipline and all, the constrained mind is the major cause. Hence I always give myself a lot of time to think to and fro before placing orders to buy or sell. I had eliminated the time constraint. With very short term trading and options trading, I guess that wont be easy to do, if at all possible. But I expect that it should be possible once you learn the skill of this thinking without experiencing time constraints, to do that very fast. For now, okay with long term trades. Rather I would scale my capital, once I know that one big cause is eliminated, I don't have worries in scaling up capital.
The other thing is to find out how long it takes for you to experience paradigm shift. How fast is your paradigm shifting process? Did you watch the movie "The man from Earth"? You will experience paradigm shift somewhere along the time. The intensity of perceptional shift increases towards the end of the movie. There is nothing in the movie other than talk. But we experience the paradigm shift. It is a movie out of the ordinary. Same way, stock market too has a language. All stock quotes, charts, market statistics like top gainers, 52 week high/low list, gainer/loser lists etc. are a language of the market. They are speaking about something. We can experience paradigm shifts and recognize bottoms and tops as they happen or after they happen while reading this language. Sometimes ego or human conditioning by the past comes in the way of doing this fast. So I keep myself on alert for paradigm shifts (and market trend reversals). Well, some little losses happen along the way but that is the margin for error.
A simple example: selling a stock after watching it fail repeatedly attempting to go up but consistently reverse and make new lows. After few lows are breached, I will sell the stock and accept the loss. Then the stock turns around seriously. I will give it a test. I will avoid traps by not buying at the price below or close to my initial purchase prices. In case, it starts going up above my purchase price and above the high of that time, I will give it a shot. If the stock had the strength to come back fast up to this level, it could be having much more. The keyword here is fast. No stock makes new lows and new highs at the same time. Of course they all do, given a long time. But not when moving fast.
As the stock market is a non-linear profession, one needs to recognize that working hard and continuously wont matter. (They end up as financial analysts, they may not trade for themselves.) Sometimes lot of actions have to be done fast in a short time and sometimes no action in a long time. One needs to acknowledge the need to experience faster paradigm shifting process by overcoming obstacles of ego, negation, past conditioning effects and allowing margins for errors.
Keep playing at chartgame.com and studying the pattern of gains and losses in sequence and also as a histogram. You can even study individual charts you played looking for why you made buy/sell decisions. Its all there. You don't need to play too much or trade too much to learn the conclusions. The brute force strategy is not the only strategy. It is possible to learn even with lesser number of experiences. That's how the semiconductor industry contrasts with the software industry. Hardware engineers can't afford to test each possible scenario unlike software engineers who can test all scenarios and apply patches when things break. Each time silicon is fabricated it costs a bomb. So they allow for margins of errors and lot of pre-fabrication design. Dont worry, everyone gets there eventually. As someone said on TJ, it is the one who wants it bad enough, that gets there fast.
I experience the Dr. Jekyll and Mr. Hyde problem every single day. As of posting this, I am Dr. Jekyll. Whenever I plan to get up early in the morning, I am Dr. Jekyll. But Mr. Hyde of the early morning doesn't bother about Dr. Jekyll. So I can't trust myself. But I have also stopped beating myself up for lack of discipline.
In other experiences too, I have noticed that I can't trust people (even closest ones like sister, mother etc.) not all the time. The human nature is variegated and affected by the conditions of a given time. Different situations bring out the best and the beast in us. When people are pushed to boundaries through constraints (like time, money, power, etc.), they start showing anomalous behavior which we never had identified them with. So when someone makes an agreement on something in my relationships, I re-estimate how they might possibly violate that agreement when pressured by the constraints. I wont take their word. For that, I need to first let them fail once on their agreements, so the next time they will understand my doubts.
Same in the stock market. Before starting a trade, I will estimate various possibilities, move up, move down, move in a range (time loss) etc. I would have thought about what I will do in each of the scenarios with time. But when actual evens happen, I will be making new analysis, making new decisions and plans. As losses become larger (or missed opportunities explode), I start questioning my sanity.
I had realized that to think that I will not violate discipline is my foolishness. To think that I wont be a fool at sometime will be ignorance of real human nature. To think that I can trust myself without considering the possibility of what I will decide when pushed to boundaries by constraints, indicates lack of learning from experiences. In stock market, experience counts the most. That is, how many cycles did you survive? That too an evaluated experience. Age doesn't matter. Warren Buffet gives most value to experience when evaluating candidates to hire.
Instead of trying to make myself a person who doesn't violate rules, I realized I have to allow margin of error for violation of discipline and rules. You can find many traders who violate all the rules in the book and still be successful. However that doesn't mean they keep violating them linearly.
Statistics is something we are not taught well in our education system. Afterall when are we taught this? Most of our school time goes into studying in a linear fashion. The tests, exams are all made to promote what in essence is slavery. We think linearly and make decisions based on linear analysis. Once you come to the real world experiences (where people are involved) or to stock market, you begin to see that linear thinking wont get you ahead. We look at the history and start making cause-effect relationships. Then you see the same cause now and expect the same effect, but it won't happen this time. When I say that, there are two possibilities: it happens, it doesn't happen. With each iteration of such experiences we begin to evolve our non-linear thinking.
As long as I tell myself, that I cant trust myself about sticking to some rule in the future, I make sure that I apply that rule even with little more loss than initially estimated. I also learned that I get conditioned by past success or failure into thinking that I can repeat the same while forgetting some experiences where I had made crucial decisions while having duel between Dr. Jekyll and Mr. Hyde.
I realized that this stock trading thing is not as linear as planning and executing. We think like that when we look at history. When we read charts of stocks, quotes, market statistics, on hindsight. To get ahead in this game, we need to handle our actions while the situations are developing. I enjoy it everytime.
You are able to do a good job and also make wise investments in real estate. Naturally one would conclude why can't you go with real estate and work hard at your job to increase the pay to even higher levels. This is a logical thinking. But there is something in our mind that we tend to act in negation to our logical thinking, even while we are acknowledging that.
The simplest example of this is how many investors avoid stocks that are at all-time highs. Also everytime they experience losses and deduce that they bought a stock on dip and so got caught in never-ending dips, still they go after stocks at all-time-lows and get caught in the same spiral of never-ending dips. Everytime they are in deep losses, they conclude that they should not do that again and decide to avoid it next time. Then again, after one or two trades, they get caught up in the same sheet.
This is basically the human nature of negation. It really was amazing for me to recognize this back in 2007. Immediately I bought RNRL the next day after it made a 60% rise. When I closed the trade, I had 150% gain on back-to-back swing and 200% gain on initial capital thanks to position scaling strategy. I was a good trader back then but had decided to stop trading as all my decisions were greatly influenced by one great intra-day trade that gave 30k intra-day gain largest of my time. It can sound like boasting, but it took very powerful bearmarket to take all my profits and pull me into losses. I took my stop loss as first time net loss and stopped trading in November 2008. The market hadn't bottomed even then.
This year, I started in April and thanks to my bottom picking ability, did well with five stocks out of 8. But eventually I had to close one with loss. I accepted that possibility from the beginning, so I didn't scale my positions on the downside. Only since August, I got into shape (bottom picking has tremendous risk) and also scaled down short term trades. Ended the madness of short term trades. When losing, my portfolio lost slowly, but when recovering it is moving fast. In last two weeks, I am back into profits and happy to share that as of yesterday, captured a 48% move in one stock since July.
To make all this possible, I had to confront the problem directly. While there are lot of reasons to commit mistakes and violate discipline and all, the constrained mind is the major cause. Hence I always give myself a lot of time to think to and fro before placing orders to buy or sell. I had eliminated the time constraint. With very short term trading and options trading, I guess that wont be easy to do, if at all possible. But I expect that it should be possible once you learn the skill of this thinking without experiencing time constraints, to do that very fast. For now, okay with long term trades. Rather I would scale my capital, once I know that one big cause is eliminated, I don't have worries in scaling up capital.
The other thing is to find out how long it takes for you to experience paradigm shift. How fast is your paradigm shifting process? Did you watch the movie "The man from Earth"? You will experience paradigm shift somewhere along the time. The intensity of perceptional shift increases towards the end of the movie. There is nothing in the movie other than talk. But we experience the paradigm shift. It is a movie out of the ordinary. Same way, stock market too has a language. All stock quotes, charts, market statistics like top gainers, 52 week high/low list, gainer/loser lists etc. are a language of the market. They are speaking about something. We can experience paradigm shifts and recognize bottoms and tops as they happen or after they happen while reading this language. Sometimes ego or human conditioning by the past comes in the way of doing this fast. So I keep myself on alert for paradigm shifts (and market trend reversals). Well, some little losses happen along the way but that is the margin for error.
A simple example: selling a stock after watching it fail repeatedly attempting to go up but consistently reverse and make new lows. After few lows are breached, I will sell the stock and accept the loss. Then the stock turns around seriously. I will give it a test. I will avoid traps by not buying at the price below or close to my initial purchase prices. In case, it starts going up above my purchase price and above the high of that time, I will give it a shot. If the stock had the strength to come back fast up to this level, it could be having much more. The keyword here is fast. No stock makes new lows and new highs at the same time. Of course they all do, given a long time. But not when moving fast.
As the stock market is a non-linear profession, one needs to recognize that working hard and continuously wont matter. (They end up as financial analysts, they may not trade for themselves.) Sometimes lot of actions have to be done fast in a short time and sometimes no action in a long time. One needs to acknowledge the need to experience faster paradigm shifting process by overcoming obstacles of ego, negation, past conditioning effects and allowing margins for errors.
Keep playing at chartgame.com and studying the pattern of gains and losses in sequence and also as a histogram. You can even study individual charts you played looking for why you made buy/sell decisions. Its all there. You don't need to play too much or trade too much to learn the conclusions. The brute force strategy is not the only strategy. It is possible to learn even with lesser number of experiences. That's how the semiconductor industry contrasts with the software industry. Hardware engineers can't afford to test each possible scenario unlike software engineers who can test all scenarios and apply patches when things break. Each time silicon is fabricated it costs a bomb. So they allow for margins of errors and lot of pre-fabrication design. Dont worry, everyone gets there eventually. As someone said on TJ, it is the one who wants it bad enough, that gets there fast.
Last edited:
When u entered long position previously, U should have waited. Thats the place u should hold. But u exited. Now, market has come to the place where stiff resistance occurs. But u are tempted to go for long.
Every party is opposing govt's move. so, high probability of withdrawing some measures. 25 pts reduction in crr is not big one.
In my view, coming days will see correction. On 20th, nationwide strike is there. Mamtha is threatening the govt.
Even oil cos like bpcl, hindpetro are coming down which shows, diesel price may be reduced. Even fdi in retail may be deferred for some more time. Then, stocks like pantaloon will will see downward correction
So, u should have waited some more time.
Every party is opposing govt's move. so, high probability of withdrawing some measures. 25 pts reduction in crr is not big one.
In my view, coming days will see correction. On 20th, nationwide strike is there. Mamtha is threatening the govt.
Even oil cos like bpcl, hindpetro are coming down which shows, diesel price may be reduced. Even fdi in retail may be deferred for some more time. Then, stocks like pantaloon will will see downward correction
So, u should have waited some more time.
Dear stock32
Today, european markets are trading lower. Even, US market is predicted to open lower.
See the quotes in CNBC
U.S stock index futures signaled a lower open on Wall Street on Monday, after last weeks rally prompted by the Federal Reserves announcement of its third round of quantitative easing on Thursday.
European shares [EUR=X 1.3112 -0.0015 (-0.11%) ] traded lower in the morning session on Monday as fears about the euro zones indebted peripheral nations resurfaced with thousands taking to the streets in Spain and Portugal to protest against austerity measures.
In economic data, the New York Feds Empire State Manufacturing Survey for September is out at 8:30 a.m. New York time. Economists polled by Reuters expect the survey to stand at -2, up from -5.9 in August. Any reading below zero indicates that manufacturing executives in New York see business conditions worsening.
Another quote from CNBC:
ECB Rally Sputters as Leaders Fail to Act on Spain, Greece:
The European Central Bank's bond buying plan has helped spark a rally in risk assets and eased funding costs for the region's most troubled economies.
European Central Bank
But rather than taking advantage of the breathing space, European finance ministers meeting in Cyprus over the weekend suggested they were in no rush to resolve key outstanding issues.
The uncertainty is already affecting the markets, with European stocks falling on Monday from the 14-month highs reached on Friday and the euro also weaker against the dollar.
Today, european markets are trading lower. Even, US market is predicted to open lower.
See the quotes in CNBC
U.S stock index futures signaled a lower open on Wall Street on Monday, after last weeks rally prompted by the Federal Reserves announcement of its third round of quantitative easing on Thursday.
European shares [EUR=X 1.3112 -0.0015 (-0.11%) ] traded lower in the morning session on Monday as fears about the euro zones indebted peripheral nations resurfaced with thousands taking to the streets in Spain and Portugal to protest against austerity measures.
In economic data, the New York Feds Empire State Manufacturing Survey for September is out at 8:30 a.m. New York time. Economists polled by Reuters expect the survey to stand at -2, up from -5.9 in August. Any reading below zero indicates that manufacturing executives in New York see business conditions worsening.
Another quote from CNBC:
ECB Rally Sputters as Leaders Fail to Act on Spain, Greece:
The European Central Bank's bond buying plan has helped spark a rally in risk assets and eased funding costs for the region's most troubled economies.
European Central Bank
But rather than taking advantage of the breathing space, European finance ministers meeting in Cyprus over the weekend suggested they were in no rush to resolve key outstanding issues.
The uncertainty is already affecting the markets, with European stocks falling on Monday from the 14-month highs reached on Friday and the euro also weaker against the dollar.
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