Reasons to incur losses
Many people think trading in the stock market is the easiest way to make money. Especially now a days young generation think so and does not want to change their ideology. They want easy and quick money without any painstaking…., and ultimately it results in to heavy losses.
Of course as per my opinion, trading and making money in stock market is easy…..provided one possesses “3D” and “3M” factors.
“3D” Factors are : Discipline…., Determination ……and Dedication
“3M” Factors are : Mind ….., Method…..and Money.
In the
absence of any one factors it is natural that a trader would get
negative results in his trades committing certain mistakes. Below are
some of the ways of undisciplined trading. Have a guard against them
otherwise market will wipe you out completely.
Trading during first 15 minutes of the session:
The
first 15 minutes of the trading day is mostly driven by emotions of
the traders affected by overnight movements in the global markets and
hangover of the previous day’s trading. Also this period is used by the
entry of novice traders in taking new entry which might be contrary
to the real trend which emerges only later in the day.
Mostly
experienced traders simply watch price movement during first 15 minutes
to study intraday patterns of the trend and subsequent break outs.
Similarly
last 15 minutes the trend is not real due to squaring off of positions
by the intraday traders. And hence new entry should be avoided during
last 15 minutes too.
Failing to reduce the position size:
A
trader should be flexible in reducing his position size whenever
market is not giving clear signals. For example if he takes an average
position for 10 lots in nifty futures, he must be ready to reduce it
to
2 lots
only if situation of price movement arises so. This can happen either
when a trader wants to trade counter trend or when market is not
displaying a strong trend remaining in very narrow range. The size of
exposure should be as per the market mood at the given point and
partial profits should be booked as soon as the trades starts earnings
two or three times the average risk taken. Undisciplined traders
driven by their ego mostly do not reduce their positions nor become
ready to book partially and ultimately put their trade into more risk.
In fact a trader should be firm determined to book partially so as to
reduce the risk factor. It creates confidence and faith in the trade
taken, protects the employed capital.
Over Trading:
In
most of the cases intraday trades lose money in over trading. They
use the exposure given by the brokers for intraday trading. But when
trade goes wrong they lose their most of the part of their capital due
to over trading. In fact a disciplined trader creates position size
as per his own financial capacity. And as a result he has not to lose
and waste unnecessary time in search of finance when his capital gets
reduced due to hitting of stop losses. When a trader uses exposure
given by the broker, the broker earns his brokerage, but trader earns
only if the trade goes in his favor. If the trade goes against him, he
has to incur loss for the whole trade. Let us take example, if a
trader has 35k for trading, he is capable to trade only one lot of
nifty future with the general rule of stop loss of 20 points. Now if
he trades only for one lot, he may have to lose 20 * 50 = 1000. But if
his broker gives him 4 times exposure and if he trades for 4 lots
…and if the trade goes wrong, he would have lost 200 * 20 = 4000.
Means his risk become four time more and it reduces his capital from
35 k to 31 k only …more than 11% loss. Of course, one may argue that
if the trade goes in his favor, he would have earned more due to large
size of position. But this may lead to conversion of trading into
gambling in the long run. And at that time he will lose more and more
due to over trading, getting not any help from any side. The market
has no mercy for any mistake made by the trader.
The disciplinary rule says:
“Don't
judge the success of anyone in the trade by the amount of money he
has made. Judge the success by his trading strategy. Money can get
made and vanish in the blink of an eye. A good strategy stays with you
for a long period of time and success becomes enduring.”
Today most of
the young traders have got such type of mentality to over trade with
only token money, but mostly 90% failed in such trading. The pity is
that they even do not accept the reality, but go on finding excuses.
When they get success, their feelings for winning become so much
powerful that they lose control for taking new right decisions for the
new trades and ultimately wipe out their entire capital funds only due
to over trading.
Failing to treat each trade as new one:
Every
trade should be considered new trade and only normal profits should
be expected from that new trade. Generally after losing money in the
first trade of the day, an undisciplined trader expects some more
profits over and above his loss incurred in the next trade. Say if he
loses Rs.1000 in the first trade, for the second trade, his
expectations become to earn more than Rs.1000/- without considering the
exposure and price movement trend whereas in real sense the normal
profit would be less than Rs.1000….And here he fails by joining new
trade with the old one.
Every trade
is to be considered new independent trade and only normal profits
should be expected every time. Super normal profits should be
considered as bonus when they occur, but should not be expected every
time.
Over eargerness in booking profits:
Traders should not be over eager to book profits so long as the market is acting right in favor of
Trade.
Most of the traders tend to book profits too early in order to enjoy
the winning feelings, and thereby letting go substantial trends even
when they have got a good entry. If at all, profit booking should be
done in stages, always keeping some position open to take the advantage
of the rest of the trend. A disciplined and determined trader knows :
“His trading should consist of small profits, small losses and big
profits….and big losses must be avoided.”
Lack of self confidence and self judgement:
Lack
of self confidence mostly shakes the faith of the trader for his
decision. Being ignorant of technical knowledge and other disciplinary
rules, generally traders have tendency to wonder for better trading
system, better scrips, better trades. They go on asking for trades to
their relatives, friends etc. go on hearing media, go on reading tips in
newspapers, magazines, web sites etc. And all these noise create
confusion in traders’ mind, do not allow them to take right decision at
right time, in short creates psychological pressure which ultimately
result into losses either due to fear or greed factor.
In
fact a trader should not talk to a lot of people during the trading
hours. He can talk to experienced traders, but after market hours, and
talk should be for methodology instead of individual trade. And such
talk will improve his trading ability in the long run. In short, a
disciplined trader fully follows the Disciplinary Rules of Three Monkeys……of Mahatma Gandhiji.
Do not hear evils
Do not see evils
Do not speak evils.
Following
the disciplinary rules, a trader should constantly try to improve his
trading skill. By trading skill I mean not only charting skill, but
also position sizing and money management skills. Successful traders
recognize that money cannot be made equally easily all the time in the
market. They back off for a while if the market is too much volatile or
choppy. He accept this truth of maket.
He never blames the market …whatever the result market may give him, particularly in the case of losses. For him Market is supreme…..and Price is God. He accepts the market and price as it is.
Even if he incurs losses in some trades, he believes that negative
results arise due to his own faults, and not because of market. And such
acceptance creates faith - fearlessness sooner or later in his mind
and results in gaining in the long run.
My teacher once said me, “Gauresh, in this stock
market there is always a battle between bulls and bears. And you are one
of the worriers in it…may be bull or may be bear….but being a worrier
you must be well equipped before entering into a battle.”
I seen so many traders trading on intra day
basis, but have not any facility of real time data, have not capacity
to sit tight in front of computer during the market hours, have too much
less capital and using exposure given by brokers, lacking basic
knowledge of stock marketing etc…..and ultimately wipe out their most of
the capital funds. How a worrier without any equipment can fight….?
Even wrestlers must have some basics with them to wrestle…….
Wish you all happy and profitable trading ahead……… |
 |
|||||||
Today’s
Trading potentialies (breakout
system) for 13th January
Nifty Future above 6210...may reach 6225/6240/6255/6270/6285/6305/6320/6335
Nifty Future below 6155...may reach 6140/6125/6110/6090/6075/6060/6045/6030
Bank Nifty future above 10930...may reach 10965/10995/11030/11070/11110/11150/11180/11225/11260
Bank Nifty future below 10820....may reach 10780/10740/10710/10675/10635/10610/10575/10535/10495
|
|||||||
For
Positional traders : For those who trade like Investors
RELinfra in cash can be bought @ around 390 with sl of 381 ....may reach 414 and 424 HDFC in cash can be bought @ around 790 with sl of 781 ...may reach 819 and 828 TataSteel in cash can be bought with support of 376 and 369 ....may reach 395 and 404 BataIndia in cash can be bought with sl of 1001 ....may reach at 1037 and 1048 Reliance in cash can be bought with sl of 740 ...may reach 878 and 888 AxisBank in cash can be bought with support of 1151 ....may reach 1179 and 1189 Maruti in cash can be bought with support of 1780 and 1766 ...may reach 1810 and 1823 
Following are the levels for intraday trading only
 |
|||||||
-----------------------------------------------------------------------------------------
 |
|||||||
Weekly Pivot Levels
|
|||||||
Security
|
W-S3
|
W-S2
|
W-S1
|
W-Pivot
|
W-R1
|
W-R2
|
W-R3
|
Nifty
(Future)
|
5975.08
|
6088.08
|
6133.17
|
6201.08
|
6246.17
|
6314.08
|
6427.08
|
BankNifty
(Future)
|
10059.58
|
10515.08
|
10675.67
|
10970.58
|
11131.17
|
11426.08
|
11881.58
|
Daily
MySAR Levels For Future Segment :
Daily
MySAR Levels For Cash Segment :
---------------------------------------------------------------------------------------------------------------
Don't miss to watch: updated upto 14th November
To watch the performance of MySAR : click : http://mytrading4mystocks.blogspot.in/p/performance.html (updated upto 14th November) |
|||||||
For other
Nifty 50 (future) scrips click link
:
Do not enter into a trade without referring
past data. It will save your trade from catching the running train.
If
the price of the scrip ran up or down too much during last few days, please
please do not take fresh entry either of short or long otherwise it will be
considered as catching of running train and in such cases price in near
future may move against expectations resulting into losses. Better wait for
breach of MySAR_A level for fresh trade......
|
|||||||
Patience pays...........
Presently holding Position :
NF long (6085) (3L) : Booked at 6125, 6100, 6110 (fully booked at
expiry)
(Booked 80 points)
BNF shorts (10890)(3L) : Booked
at 10975, 11135, 11020 (fully booked at expiry)
(Booked 440 points)
NF long (6155) (1L+ 2L @
6175) : 6220, 6265, 6320 (fully booked)
(Booked : 300 points)
BNF shorts (11015, )(1L +
2L @ 11155) : 11220, 11400, 11660 (fully booked)
(Booked : 955 points)
NF shorts (6220) (3L) : Covered at 6201, 6170, 6210 (Fully
covered)
(Booked 79 points)
BNF shorts (10520)(3L+1L @ 11390) : Covered
at 10451, 10390, 11240, 11440 (Fully covered)
(Booked 429 points)
NF Long (6225) : Booked
at 6190 (loss of 35 points)
BNF Long (11445) : Booked
at 11370 (loss of 75 points)
NF short (6190) (2L) : Covered 6170, 6220(Fully Booked)
(Booked -10 points)
BNF shorts (11370) (3L) : Covered at 11250,
11150, 11320 (Fully booked)
(Booked 390 points)
NF Long (6220) (3L) : Booked
at 6260, 6290, 6285 (Fully Booked)
(Booked 175 points)
BNF Long (11320) (2L): (2L Holding) Booked at 11450, 11395 (Fully Booked)
(Booked 205 points)
Dec. series closed and entered into Jan series
NF Long (6331) (1L+1L6351): Booked at 6371, 6370 (Fully booked)
(Booked 59 points)
BNF Long (11485) (2L): 11610, 11620 (Fully booked)
(Booked 260 points)
NF short (6280) (2L) : Covered 6251, 6220 (covered fully, but shorted again as mentioned below)
(Booked 89 points)
BNF shorts (11360) (2L+ 1L@ 11220) : Covered at 11260, 11151, 11295 (Fully booked)
(Booked 234 points)
Today covered positional shorts near to MySAR at 6220 fully, gone long for intraday only and when it breached MySAR again at 6208, taken shorts at 6201 Similarly fresh positional shorts taken in BNF also at the breach of MySAR again 
NF short (6201) (2L) : Covered 6271 (1L holding)
(Booked 30 points)
BNF shorts (11040) (3L) : Covered at 11940, 11860, (1L holding)
(Booked 280 points)
-----------------------------------------------------------
Trades
triggered on 10th January
1.
LT (F) shorted at 974………………covered at 969
(2500 profit)
2.
RELinfra (F) shorted at 403………….covered at
401 (2000 profit)
3.
LT (F) shorted at 969………………….covered at 9656
(2000 profit)
4.
ICICIBank (F) shorted at 1049 ………..covered at
1035 (3500 profit)
5.
TechM (F) long taken at 1844………….covered at
1854 (2500 profit)
6.
Axisbank (F) shorted at 1081………….covered at
1071 (2500 profit)
7.
M&M (F) long taken at 881.50………….booked
at 885 (875 profit)
8.
TCS (F) long taken at 2255…………….booked at
2268 (1625 profit)
9.
TCS (F) long taken at 2271……………..booked at
2285 (1750 profit)
10.
HCLTech (F) long taken at 1292………..booked at
1313 (5250 profit)
11.
TCS (F) shorted at 2285…………………..covered at
2275 (1250 profit)
12.
TechM (F) shorted at 1881………………..covered at
1887 (1500 loss)
13.
KotakBank (F) shorted at 707…………..covered at
702 (2500 profit)
14.
RelCap (F) shorted at 350………………covered at 347
(3000 profit)
15.
BNF STBT at 11035………………….covered at 10931 (+
104 points)
16.
BNF (4L) shorted at 11061…………covered at avp 10931
(+ 520 points)
17.
NF STBT at 6185……………………covered at 6170 (+ 15
points)
18.
NF (2L) long taken at 6205…………booked at 6245
(+ 80 points)
19.
NF (2L) shorted at 6201 ……………covered at 6172
(+ 58 points)
20.
BNF STBT at 10851……………carried
21.
NF STBT 6185………………….carried
Following table clarifies today's triggerred trades
 
-------------------------------------------------------------------
Three Thumb Rules :
(1) Always trade only at the
levels given.
(2) Keep booking profits without
missing a winning opportunity.
(3) And once in profit, trail stop
loss to the entry level to protect the capital funds.
Wish you all happy and profitable trading ahead……
==============================================================
|
|||||||
Have you incurred loss in Stock Market...?
Are you disssatified with the earnings in the Stock Market...
Can stock market give enough for livelihood...?
Are you confused ...
Here is the solution
For more information
<><><><><><><><><><><><><><><><><><><><><><><><><>
Many Many thanks for Inspiration.....Motivation ....
 |
|||||||