Priyanvada's chit chat home ...
- Thread starter priyanvada
- Start date
I want to just put down all that has been collected in my brain so that I am free for further ... If someone new learner like me visits this thread it may be useful to him/her ... Otherwise I am sorry to all my Veteran friends here for boring them with this chit chat ...
Anyway ...
Some points I had in my mind were as follows .....
1) I am having trading capital 10,000 and why I should not use all the 10X=1,00,000 exposure for day trading???
Because if you say make a trade size 1X=10,000/- because some principles says so?1 ... But why ...
Since simple comman says that if I use 10,000 then remaining 90% exposure will decay in place uselessly waiting for next trading opportunity ... So Am I not limiting my profit making possibility by reducing my trade size by 10 times than exposure provided???
So here As I understand following points as solution to above puzzle...
A. If you are 100% sure the given trade is going to be a biggest money making opportunities available for whole day then forget all the principle and just put in all the exposure ... And earn as much as you can ...
this is as simple as that ...
... but fact is that nobody in the world is 100% sure of how much a price is going to move in a perticular stock at given instant in given time period ... No one is 100% sure ... Everybody makes only a guess, more & more perfect guess using all the knowledge and resource they have ...
B. Loss is double
: - This is sad fact of a trader ... Our brain models the game as I am gonna trade with 100 rs., I make profit then still I am gonna trade with 100 Rs. and if I lose then still I am gonna trade with 100 Rs. ... So if something is going up and down then I am going to bet with that trend ... this is so simple ...
... But this is not the case ... If I trade with 100 Rs, and make a loss of 90Rs. then Next trade can be max of 90 Rs. and my RECOVERY potential is reduced by 10% ... And my market time is also wasted ...
... So Making 1 Rs. loss and making 2 Rs. profit are same things with opposite directions ... Since loss is double since it has to be "Recovered back" ... The trading model is little strange and different than a model what my common sense creates in my brain
Anyway ...
Some points I had in my mind were as follows .....
1) I am having trading capital 10,000 and why I should not use all the 10X=1,00,000 exposure for day trading???
Because if you say make a trade size 1X=10,000/- because some principles says so?1 ... But why ...
Since simple comman says that if I use 10,000 then remaining 90% exposure will decay in place uselessly waiting for next trading opportunity ... So Am I not limiting my profit making possibility by reducing my trade size by 10 times than exposure provided???
So here As I understand following points as solution to above puzzle...
A. If you are 100% sure the given trade is going to be a biggest money making opportunities available for whole day then forget all the principle and just put in all the exposure ... And earn as much as you can ...
this is as simple as that ...
... but fact is that nobody in the world is 100% sure of how much a price is going to move in a perticular stock at given instant in given time period ... No one is 100% sure ... Everybody makes only a guess, more & more perfect guess using all the knowledge and resource they have ...
B. Loss is double
: - This is sad fact of a trader ... Our brain models the game as I am gonna trade with 100 rs., I make profit then still I am gonna trade with 100 Rs. and if I lose then still I am gonna trade with 100 Rs. ... So if something is going up and down then I am going to bet with that trend ... this is so simple ... ... But this is not the case ... If I trade with 100 Rs, and make a loss of 90Rs. then Next trade can be max of 90 Rs. and my RECOVERY potential is reduced by 10% ... And my market time is also wasted ...
... So Making 1 Rs. loss and making 2 Rs. profit are same things with opposite directions ... Since loss is double since it has to be "Recovered back" ... The trading model is little strange and different than a model what my common sense creates in my brain
... Post is getting lengthy ... so lets jump to next post
Last edited:
Q. What would be best way to day trade/trade then ...?
==> I should make optimum use of all the "Resourse"
Q. What is resource?
==> 1. My Capital
2. Market time
3. Entry Rules
4. Trade Size
5. Exit Rules
6. Rist per trade
7. Stock selection
8. Internet connection
9. At least one PC system always ready
10. Electricity
11. My presence and absence
12. trading style : - Scalpe, position trade, swing trade
13. Market Segment: - Nifty,Stocks,F&O,Commodity
14. My Broker and brokerage plans
15. Trading Friends
16. Backtesting
17. ???
Dunno ... which is resourse and what is what ...This are jsut all random things bubbling constantly in my mind ... Need to put them here ...
==> I should make optimum use of all the "Resourse"
Q. What is resource?
==> 1. My Capital
2. Market time
3. Entry Rules
4. Trade Size
5. Exit Rules
6. Rist per trade
7. Stock selection
8. Internet connection
9. At least one PC system always ready
10. Electricity
11. My presence and absence
12. trading style : - Scalpe, position trade, swing trade
13. Market Segment: - Nifty,Stocks,F&O,Commodity
14. My Broker and brokerage plans
15. Trading Friends
16. Backtesting
17. ???
Dunno ... which is resourse and what is what ...This are jsut all random things bubbling constantly in my mind ... Need to put them here ...
I have got an idea ...
1. A list of "selective" stocks for day trade needs to be made ... Say some 250 stocks
2. "A EOD manual scanner group" should be here of say 25 peoples ...
3. Each one would be assigned 10 stocks for Manual EOD scan ...
4. Scanning criteria already defined by the intra-group discussion ...
5. Every Evening till 7 p.m. each one will present any strong and sure move expetations stocks if he finds them in his assignment of 10 stocks ...
6. So all filtered stocks are there and everone will comment on anyone them if needed ...
7. Finally through discussion they will filter some 10 - 20 stocks for the next day day trade with Rules when to enter and how to trade long or short ...
8. If anyone is abscent he will tell that in advance and his work of ten stocks will be distributed among volunteers!
9. Thus all the group will benefit everyday with least stress due to ditributed work load ... !
10. Group will take a daily review of what worked and what went against and how that might have happened... Thus getting enriched day by day ...
... How is this idea?!
1. A list of "selective" stocks for day trade needs to be made ... Say some 250 stocks
2. "A EOD manual scanner group" should be here of say 25 peoples ...
3. Each one would be assigned 10 stocks for Manual EOD scan ...
4. Scanning criteria already defined by the intra-group discussion ...
5. Every Evening till 7 p.m. each one will present any strong and sure move expetations stocks if he finds them in his assignment of 10 stocks ...
6. So all filtered stocks are there and everone will comment on anyone them if needed ...
7. Finally through discussion they will filter some 10 - 20 stocks for the next day day trade with Rules when to enter and how to trade long or short ...
8. If anyone is abscent he will tell that in advance and his work of ten stocks will be distributed among volunteers!
9. Thus all the group will benefit everyday with least stress due to ditributed work load ... !
10. Group will take a daily review of what worked and what went against and how that might have happened... Thus getting enriched day by day ...
... How is this idea?!
Some thoughts on VSA: -
In Volume Spread Analysis the professional trader is an unbelievable term for me ...
I think he is also just another trader with huge sum ...
If I givent 10,000 Rs. and asked to trade and make profit then things are different and If have a capital of 10000 Crores And if I am asked to make money with this then things are different ...
So we should think has ... If you have huge and huge money to make more money, then how will you proceed ... because money is your "strength" here and also money is your "weakness" here ... So thats why I think Big money should be playing an larger time frame ... There work should be divided in few simple steps...
1. collect stocks uniformly at lower price as much as you can and
2. sell/distribute it uniformly at increasing price levels ...
3. When you are done their will be no BIG buyers like you, so price falls, So let it fall ... if possible make it arficially fall by collecting some stocks and again sell them heavily back in the market thus creting a thrust by sacrifysing some minor capital loss but supporting a downthrust ...
4. Againg price has fallen all the down to "certain" levels then start the collection work once again ...
5. Now repeat the cycle ... on and on and make money ...
I think this way should be VSA understood ...
In Volume Spread Analysis the professional trader is an unbelievable term for me ...
I think he is also just another trader with huge sum ...
If I givent 10,000 Rs. and asked to trade and make profit then things are different and If have a capital of 10000 Crores And if I am asked to make money with this then things are different ...
So we should think has ... If you have huge and huge money to make more money, then how will you proceed ... because money is your "strength" here and also money is your "weakness" here ... So thats why I think Big money should be playing an larger time frame ... There work should be divided in few simple steps...
1. collect stocks uniformly at lower price as much as you can and
2. sell/distribute it uniformly at increasing price levels ...
3. When you are done their will be no BIG buyers like you, so price falls, So let it fall ... if possible make it arficially fall by collecting some stocks and again sell them heavily back in the market thus creting a thrust by sacrifysing some minor capital loss but supporting a downthrust ...
4. Againg price has fallen all the down to "certain" levels then start the collection work once again ...
5. Now repeat the cycle ... on and on and make money ...
I think this way should be VSA understood ...
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