December 31, 2018

BANKNIFTY monthly, quarterly and yearly chart

Monthly charts:
- trend is up
- support 23600

NIFTY monthly, quarterly and yearly chart

Monthly charts:
- trend is up
- support 10000

Market outlook

Daily charts:
- trend is up on daily charts
- today NF closed flat at 10862
- note slower pace of rally versus the prior fall
- however bias is bullish
- AD was 10:7
- option writing support 10500

December 29, 2018

Permanent cure from PREMATURE EXIT SYNDROME ( By Keshav )

 Nowadays no matter how many trading system variations i make, one thing i always make sure is to take utmost care of my losses. What i realized in trading is " Managing loss is all we can/have to do , profits are just mere consequence of that ".

When i was making only losses few years ago, I just decided to take a look at my trading statement. It had no big loss in a single trade since i was very very strict at following stop loss and 1% risk per trade rule. But still i was in net loss. What i found as the main culprit here was that the profits were also very small and mostly 1R or less than that. This is what i call as "PREMATURE EXIT SYNDROME". I call it as syndrome because it has no one point cause but many factors which plays.

I got cured from this permanently. The cure which i found has two parts. Realizing what we lack and developing lots of patience to overcome it.

Realizing is totally different from just knowing.I had read many books and watched many videos about successful trading. But unfortunately none of them improved my performance.But realizing this simple concept which KPL sir had posted regarding POSSIBLE OUTCOME OF ANY TRADE just brought that magical moment.

It simply says for any profitable outcome one must never ever allow BIG LOSS scenario. Small loss and small profits gets cancelled against each other in long run. What is left is BIG PROFIT scenario, which to attain requires lots of patience.

My previous trading statements portrayed exactly opposite of this. So i started to take small steps to overcome it. Took very small positions in commodity market and held on to it patiently. I told to myself that price should hit either my stop loss or minimum of 3-4 times of my risk and traded as many times as i can till i was comfortable holding onto it.(Please note that it was just an exercise to overcome my urge of booking profits with very small gains). At present i donot fix any R multiples for any trade.

So this is how i overcame from my inefficiency. I am sure there are many people who suffer like i did and this is just one honest attempt to share my experience in hoping that it will help someone.


My profit statement from the day i started to write this blog.



           

Trade logs by Keshav

Trades taken : Took long position in nifty jan futures at the breakout of the range. Holding it. Took 10750 put option at the end of the day for hedging. Recovered some percent of loss made from earlier trades.



















BANK NIFTY technicals

- trend is up
- support 26400
- resistance 27500

NIFTY weekly charts

- trend is down
- very good support around 10000
- possibility of H&S pattern; right shoulder being formed
- neckline around 10000

- strong resistance in the region 11000-11200

- current rally is far far slower/ time consuming than the fall

S&P 500 charts

Daily charts:
- trend is down
- resistance 2600-2525

December 28, 2018

Open positions


StockClose% ChangeBought atBuy DateRemarksTrailing StoplossReturns %
ADANIPORTS387.400.8934615/11/2018Hold long positions35011.90
BAJAJ-AUTO2717.50-0.71272429/11/2018Hold long positions2680-0.24
BAJFINANCE2634.801.84240216/11/2018Hold long positions24409.69
BRITANNIA3098.500.75297416/11/2018Hold long positions30404.19
COLPAL1320.151.52114816/11/2018Hold long positions128015.04
DABUR433.250.7741926/11/2018Hold long positions4103.39
DRREDDY2621.901.33252919/11/2018Hold long positions25603.69
HAVELLS690.100.7766613/11/2018Hold long positions6603.60
HDFC1979.951.60182513/11/2018Hold long positions18808.51
HDFCBANK2122.900.85200416/11/2018Hold long positions20605.92
HEROMOTOCO3122.60-0.20296216/11/2018Hold long positions31005.43
HINDUNILVR1822.050.39167113/11/2018Hold long positions17609.03
KOTAKBANK1241.350.09116916/11/2018Hold long positions12006.23
L&TFH154.450.1313721/11/2018Hold long positions14213.15
RELIANCE1125.550.48112716/11/2018Hold long positions1080-0.16
SIEMENS1043.351.1098116/11/2018Hold long positions9506.31

Market outlook

Daily charts:
- trend is up on daily charts
- today nifty closed 0.7% in positive at 10860
- AD was 11:6

- option writing support 10500 (why  not 10800?)

How Much of the Internet Is Fake? Turns Out, a Lot of It, Actually.

.....Views, meanwhile, were faked by malware-infected computers with marvelously sophisticated techniques to imitate humans: bots “faked clicks, mouse movements, and social network login information to masquerade as engaged human consumers.” Some were sent to browse the internet to gather tracking cookies from other websites, just as a human visitor would have done through regular behavior. Fake people with fake cookies and fake social-media accounts, fake-moving their fake cursors, fake-clicking on fake websites — the fraudsters had essentially created a simulacrum of the internet, where the only real things were the ads.

How much of the internet is fake? Studies generally suggest that, year after year, less than 60 percent of web traffic is human; some years, according to some researchers, a healthy majority of it is bot. For a period of time in 2013, the Times reported this year, a full half of YouTube traffic was “bots masquerading as people,” a portion so high that employees feared an inflection point after which YouTube’s systems for detecting fraudulent traffic would begin to regard bot traffic as real and human traffic as fake. They called this hypothetical event “the Inversion.”

Read more at http://nymag.com/intelligencer/2018/12/how-much-of-the-internet-is-fake.html

Buy and hold forever. Foolish strategy?

December 27, 2018

Trade logs by Keshav

















Todays trades : Went short and long according to the signals, both failed. I was expecting the first short position to do well since it broke day's low . The long position i took cause of FOMO. Lost around 1.7% of allotted capital.

There are no bad trades or bad decisions , they are just unfavorable outcomes out of many many possibilities.Without risk management just 2 trades are enough to get washed out. But with one a single trade can make huge gains.





Market outlook

Daily charts:
- trend is up on daily charts
- today markets closed 0.5% in positive at 10780
- gap up opening, close near low

- AD was flat at 9:8

- option writing support 10500 resistance 11000

- diametric pattern (diamond) drawn on chart... this is a crude on
- a diametric consists of an expanding triangle followed by a contracting one
- the biggest leg is the middle one
- once the first part is formed, the second part becomes very easy to trade
- break from the  contracting triangle gives a large move
- this pattern is in Neowave theory and not a part of traditional TA

- if above sounds confusing, just consider 10500 and 11000 as breakout levels

Source of risk in investing

Interesting reasons for the US market DJIA 1000 point rally

Last Friday, when stocks were tumbling, we reported "some good news for the bullswhich was lost in the overall chaos over the latest mutual fund liquidation discussed earlier.
And no, we did not anticipate that President Trump would activate the Plunge Protection Team over the weekend: the good news in question was that as Wells Fargo calculated U.S. defined-benefit pensions fund would need to implement a "giant rebalancing out of bonds and into stocks" - in fact the biggest in history - with the bank estimating roughly $64 billion in equity purchases in the last trading days of the quarter and year, prompting the banks to ask if traders are about to make pension rebalancing "great" again.
Judging by today's market action, the answer is a resounding yes, even though as Wells warned investors and traders looking for a desperately needed respite from market gyrations "may have to deal with yet one more seismic bout of volatility before Dec 31 finally pops up on their calendar dials."
To the bulls, today's rally was long overdue.
Whether today's record 1,086 point surge (and 5% jump) in the Dow was the result of Trump saying yesterday that shares present a "tremendous opportunity to buy" (so BTFD), or thanks to White House advisor Hassett's assurance that Fed Chair Powell's job is "100 percent safe", or due to a major short squeeze of CTAs all of which had just turned short on US stocks, or the result of a massive $64 billion pension reallocation into stocks, or simply a bounce from massively oversold conditions, one which saw the RSI crash to 14 on Monday and the CNN Fear and Greed index plunge to a record low...