March 24, 2018

My daughter just did her first trade... or investment

Today I did my first trade in the stock markets.

My father opened my trading account when I turned 18. The trading account was opened with Upstox; a low cost brokerage. Due to market conditions we did not invest earlier and in hindsight, it was a good decision. But now that the markets (NIFTY) have dropped from 11,000 to 10,000, my father thought it appropriate to invest in the stock market. After a lot of study we came to the conclusion that the best instrument to invest would be an exchange traded fund; in our case it was NIFTYBEES.

What I learned today was:
  • Customizing my Upstox trading account.
  • Adding funds via logging in from my bank account.
  • Placing a buy order. (I attempted twice but the buy order failed. The third time it went through properly.)
Note that I'm investing in an ETF (Exchange Traded Fund) and not in a particular stock but if the market does well, I will benefit. 

My holding period will be in the region of a few years at the very least. And my targeted rate of return in 18% - 20% CAGR. 

Read more about her blogging at

Engineers, post graduates apply for peon jobs in Bhatinda

NIFTY weekly charts

- trend is down
- next supports 9600-9000

BANK NIFTY weekly charts

- trend is down on weekly charts
- next support 20600

March 23, 2018

Market outlook

Daily charts
- trend is down on daily charts
- today, NF opened gap down but closed flat at 9998
- AD was 1:5
- option writing support 10000 resistance 10500
- difficult interpreting high OI at 10000 put
- does this mean a bottom is in place? I don't know

Fund managers bullish on Indian markets?

Has the market bottomed out?

For the 3rd time in March, I feel the market has bottomed out; Can we make it final, today? 😀 Many investible quality stocks are priced very attractively today. Ignore a dozen negatives that you hear - trade tariff, politics, bank frauds, LTCG, rate hike etc.

How trailing SL helped in this correction

Markets started correcting from FEB this year. But just because NIFTY gives a sell signal does not mean you sell the stocks. So I keep a trailing SL for all stocks and this gets continuously shifted up.

The last open position was in ASHOKLEY .. incidentally the stock made a lifetime high just few days ago even as NIFTY made a low for the year.

Open positions as of 12-JAN

March 22, 2018

TATAMTRDVR at 3 year low and at previous resistance

Market outlook

Daily charts
- trend is down on daily charts
- today NF closed 0.4% in negative at 10115
- AD was1:4
- option writing support 10000 resistance 10500

March 21, 2018

Market outlook

Daily charts
- trend is down on daily charts
- today NF closed 0.3% positive at 10155
- AD was flat
- VIX dropped 3%
- option writing support 10000 resistance 10500

Nifty can Bounce by 300-400 Points from 10141-10083 Range

Nifty opened lower at 10345, decline sharply just after opening and traded with huge negativity for rest of the day. Nifty declined by about 180 points to register day’s low 10180 and closed 165 points down at 10195.

Yesterday, I expected an Ending Diagonal Triangle in progress and a decline below 10141 was expected without breaking above 10631 to complete this pattern. 10420 was immediate breakeven point and stoploss for shorts.

Short term trading strategy was Selling on Rise with stoploss of 10421. And I also suggested holding hedge trade taken on Monday/Tuesday by buying 10600 Call and 10300 Put in equal quantity till further update. Hedge trade was giving 60-70 points profit on Friday. Let’s have a fresh look at latest charts for further scenario.


March 20, 2018

NIFTY hourly charts

- trend is down
- bullish on breakout above 10200 F

Same chart with kplswing indicator

BANK NIFTY hourly charts

- trend is down
- bullish on breakout above 24420 F

Market outlook

Daily charts
- trend is down on daily charts
- today NF closed 0.3% in positive at 10124
- AD was negative
- option writing support 10000 resistance 10500

People fail in trading because they search for certainty which does not exist in markets

As a human being, we are conditioned and trained to search for certainty and have evolved as such. This is for our protection and safety.

But markets are anything but predictable. And when we suddenly come to face with uncertainty, we look for certainty and fail. So people try to look for more certainty, more clarity, more predictability .. we see more patterns, try more indicators or change time frames  etc. One may even introduce effects of planets and moons and so on..

On a even worse level, we seek advice of others while completing forgetting they make the same mistakes and suffer from the same biases as you.

Basically we are seeking some assurance that this has happened in the past and hope that we know it will happen in the future.

Indirectly they are searching for a better success rate and in my opinion these traders are likely to fail every time or never grow up big with their trade position sizes.

The key to profitable trading lies within you while you have looking outside you all along.

I will tell you what has worked for me... I have 2 belief systems.

First that the outcome of any trade is uncertain (or random). This belief will force you to learn to manage losses and accept that nothing is certain or in your control. It will also help stop wasting your time trying to reinvent the wheel or improve a system which needs no improvement. This also means you will be a process or a systems driven trader and not an emotional one.

The second belief is that intelligence is not required to make money in the markets. Any system which generates a success rate of 40-50% is more than enough. You should just have the discipline and strength to cut losses fast and hold to winning positions as long as possible. This is like a casino which may lose small amounts every now and then but over a large sample size they make fantastic money.

This transition from looking for certainty to accepting uncertainty happily can take anything from few minutes to years. But you should be willing to change.

If you are not willing to change, you will be better off investing in index funds (SIP). You will earn far more than what you are earning now (remember it is the process).

March 19, 2018

12 Trading Mantras from Trading Legend Mark Douglas

Fill the “profit gap” with the right things…
In his books and seminars, Mark Douglas often refers to something he calls the “profit gap”. What he is talking about is basically the difference or “gap” between the potential profit you could achieve if you had just followed your trading method and what your actual bottom line results are.
Traders often begin trading a method with very high hopes. They want to produce an income they can rely on and get consistent results from their trading. However, this is only possible if you are trading an effective method with discipline and consistency, which most people simply do not do and as a result, they experience the profit gap that Mark refers to.
The key point that Mr. Douglas makes about this profit gap is that traders typically try to fill the gap by learning more about the market, changing methods, spending more time in front of their computers etc. However, what they really need to learn is more about themselves and how they interact with the market. Essentially, they need to acquire the “proper mental skills” to trade their method as they should and to get the most out of it, in order to properly fill the profit gap.

Winning and being a winning trader are two different things…

Anyone, and I literally mean anyone, even a 5-year-old child, can find themselves in a winning trade. It does not require any special skill to get lucky on any particular trade and hit a winner. All you have to do is open your trading platform and push a few buttons and if you get lucky, you can make a lot of money in a short amount of time.
As a result of the above, it’s natural for a trader who has not yet developed his or her trading skills to take the leap from “it’s easy to win” to “it can’t be that much harder to make a living from this”.
This is how many traders’ careers get started. Needless to say, it is also how they get on the path to losing a whole lot of money just as fast or even faster than they made it.
A winning trader has the mental skills to realize, understand and utilize the FACT that any particular trade he or she takes has basically a random outcome. That is to say, they cannot possibly know the outcome of that trade until it is over. The winning trader knows this and they also know that they must trade in-line with this belief over a large series of trades and ignore all the temptations and feelings that get kicked up on each trade they take. They are able to do this because they keep their eyes on the bigger picture. That bigger picture is the fact that IF they execute their method flawlessly, over and over, over a long enough period of time / series of trades, they will come out profitable.
Thus, do not mistake a winning trade for you being a winning trader, yet. A very easy trap to fall into.

Mental skills are the key to trading

A key point that Mark Douglas really seems to want to drive into people is: Even if your method is a high-probability method, it’s the proper execution of that method that you need proper mental skills for. If you don’t have those mental skills, even a winning strategy will lose.
Mental skills are things like; staying focused on the process, on your method, and not worrying about the consequences if this trade goes wrong. If you don’t have the proper mental skills to stay positively focused on the process of trading; on doing exactly what you need to do when you need to do it without reservation, hesitation or fear, you will not make money in the market.
It’s critical to remember that no matter how good your technical method is at generating wining trades, turning those winners into a consistent income takes the ability to do or not do some things that the method can’t help us with. The method can’t force us to pre-define our risk, or with making the mistake of moving our stop closer and stopping us out prematurely, it can’t stop us from hesitating and getting in too late or from over-trading or from getting out too soon and leaving money on the table. No matter how good the method, if you make mental errors you will lose.
If you really boil down what Mark is saying by his comments on “mental skills”, it basically comes down to having ice-cold ‘blood in your veins’ discipline. Mental skills like discipline essentially means the ability to control yourself and especially your behavior / actions in the market against the CONSTANT TEMPTATION the market gives us. Essentially, as a trader, you are fighting against yourself to see which part of your brain has more control; the older, emotional and more primitive part or the more advanced logic and planning parts.

Trading rangebound stocks

Sometimes a stock tends to trade in a range for extended periods of time. This can happen in any timeframe... intraday, daily, weekly and so on.

Whatever trading system you are using, there will be a whipsaw in a particular timeframe. This will not be apparent immediately but 2 consecutive loss making trades should alert you to the event.

See this chart of ULTRACEMCO where the first two whipsaws (highlighted region) point to a rangebound market. At this point, you should ignore all signals till the stock breaks out from the range.

Note that while the stock is rangebound in one timeframe, you can make good money by trading in the next lower degree timeframe.

Market outlook

Daily charts
- trend is down on daily charts
- today NF closed 1% in negative at 10094
- AD was 1:6
- note that the region of 10000 to 10100 is strong support area
- option writing support 10000 resistance 10500
- next support 9500

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