Cairn and Torrent Pharma Hits Target

Our Stock Ideas Cairn and Torrent Pharma which we discussed on 28-03-10 and 11-03-10 respectively hits its target .One can book partial profit and for remaining position trailing stop is 518 and next target is 580-600.

This stock is trading is at new high and is unlikely to face any resistance.

If you look at the chart you can see a clear uptrend.

This week is going to be a short one on account of holiday on Friday. Trade light with low volume as Nifty is trading near its resistance . We will watch the intermediate top of 5330 closely and will step up on long side only when Nifty trades above it for a few trading session.

Till then trade less and have fun

Fortis moves up : book partial profit

Our last week idea Fortis Healthcare has moved up its time to book partial profits.

This weeks ideas Yes Bank, India Bull Real Estate and Cairn has also done well.


Trade well and have fun

Our Ideas : Polaris Software, Mind Tree, Bio Con has done well

Hope you had a nice weekend.

You must have watched the chart action of Kotak Bank.Till now it has behaved as per our expectation.

Our Ideas Polaris Software, Biocon, Mind Tree has done extremely well.
Now its time to book profit.Those of our ideas which have not done well did not hit our stops and at the most are ranged-bound.Overall on net - net basis we are in huge profit.

India Bull Real Estate has support at 141 and resistances are at 165 -170

Yes Bank has support at 236 and resistances are at 260-276-285.

Cairn has support at 289 and resistances are at 302-309.

On sectoral front Cement stocks are looking exhausted on charts. Nifty is also at crucial resistance levels therefore, one should exit from cement stocks on rallies.

Be relaxed and trade well

Trading Psychology: Not Dead, Can't Quit, No Limit Thinking with Navy Seal Vet Richard Machowicz

For our weekend reading we are reproducing here Interview of Richard Machowitz navy seal future weapos interview.

The interview was taken by Larry Connors , an established trader and writer.You will find that what type of mindset is required for trading.

Richard Machowitz has written a book " Unleashing the warrior within : using the 7 principles of combat to achieve your goals."

The warrior knows if he chooses the weakest path,the only person he truly cheats is himself. -- Richard Machowicz, "Unleashing the Warrior Within".

http://www.amazon.com/s?ie=UTF8&rh=i:stripbooks,p_27:Richard%20J.%20Machowicz&field-author=Richard%20J.%20Machowicz&page=1

We thought that we would provide a special interview for readers just in time for the Independence Day holiday weekend: Richard Machowicz.

Richard Machowicz is a 10-year Navy SEAL veteran and was a fighting instructor while he was with the SEALs. Machowicz is the author of Unleash the Warrior Within: Develop the Focus, Discipline, Confidence, and Courage You Need to Achieve Unlimited Goals.
He is also host of the wildly popular Future Weaponsshow on the Discovery Channel.

Here is how Larry Connors, who spent some time training with Machowicz, described the man in introductory notes before an interview back in November 2002:

"Richard is someone who has lived his life on the extreme edge of personal achievement and who has a philosophy that's the backbone of that achievement. Richard only moves in one direction and that is dead straight ahead. He's intense, extremely focused and highly intelligent. You only need to spend a few hours with him to know why major figures in the entertainment industry, business world and now an NBA team rely upon his training to help them achieve further success in their professions."

With that endorsement, TradingMarkets presents a real-life American Warrior: Richard "Mack" Machowicz. The interview was conducted with Larry Connors in the fall of 2002.

Larry Connors: Welcome, Richard. I have a number of questions for you, and our main focus in this interview will be on extreme achievement. Our members tend to be type A individuals, many of whom have been successful in a previous profession and are now trying to succeed in the trading industry, which is a very, very difficult game. It is an extremely mental game which has less to do with having the ability to get in and out of positions than being able to sustain losses and handle chaos in those positions. Most people can't handle it. The failure rate in the industry is high. And it's high with people who are incredibly intelligent. It also has to do with the fact that trading tends to be counterintuitive. That confuses people because they have previously succeeded by being intuitive and logical. Trading is just the opposite.

What we're going to try to do here is focus on achievement -- why people achieve great success -- not only in trading, but in all walks of life.

Richard Machowicz: Sounds great.

Connors: The main thing that people are interested in is the fact that you were a successful Navy SEAL. Let's talk about the extreme training process that one has to go through to become a SEAL. As I see it, it becomes a mastery over two things. The first thing is the mastery over the SEALs which is one skill set, and the other thing is the mastery over yourself, which is harder to do. Do you want to talk about that and take it from there?

Machowicz: Sure. What it takes to make it as a SEAL and to achieve extreme success in anything in life really comes down to one thing: How bad do you want it?

There are times when you think that the SEAL instructors are literally trying to kill you. You have to be able to generate the capacity to keep moving forward in spite of that fact. Or at least in spite of that belief. I think that's the real challenge, but I also think that it translates to everything you want to do really badly in life.

It's not some magic formula that's going to allow somebody to go after the thing they want to do. It's the consistent progress or moving toward the thing they want to do, regardless of whatever thing comes up -- and I call that thing "quitting." That quitting conversation will show up a hundred different ways. You can say, "This thing is bullshit. This thing is crazy. I can't believe I'm doing this." Or you can create things like, "Well, that person's just trying to hold me back," or "I'm just not good enough." Whatever... I'm telling you, quitting sounds very reasonable. Literally, it's a very simple process of getting on target and moving forward vs. the conversation that leads to quitting. And those conversations show up every day for people. And really, that's the battle. That's the war. If there's a war going on, really the war is within yourself and one you have to confront day after day.

The majority of people who get selected to SEAL training will quit, drop out or simply go away. You've got to be able to generate within yourself the mind frame that you must always be going forward. And you've got to want the thing bad enough to be willing to do anything to get there, regardless of and in spite of all the obstacles, in spite of all the hurdles, in spite of all the doubts that get in...the stress and the pain, you've got to keep going forward.

Connors: Is it necessary to have the mind frame to reach extreme goals that you are either going to achieve the goals or die? Because that seems to be the common characteristic for many people, such as Navy SEALs, who achieve extreme success. It's tough for somebody to sustain that type of mind frame, but is that the type of mind frame it takes to get there?

Machowicz: Well, it makes it very binary. You're either going forward and accomplishing or you're not. It's very clear under pressure, under stress, under doubt, under hesitation, under pain, under intense fear, to make that clear decision. You're either going forward toward it, or you're not. It gets all the excuses out of there.

I'm telling you: Quitting is very reasonable. I can have a million reasons to quit. But can you find the one reason to keep going forward? And literally, by saying, "Well, I'm going to keep going until I die." As long as you're still breathing, as long as you have a single pulse in your body, you can still go forward. I think it just makes it very easy to distinguish whether you're going forward or you're not.

Under stress and pressure, you think about the doubt... and it's just self doubt. I think everybody has self doubt. Everybody has those things that occasionally creep in. I don't care how strong you are. You've still got to be able to go one step further. And as long as you can breathe, you can still go one step further. You're not dead. And so I live by the axiom, "Not dead. Can't quit."

I got a quote that really drove me forward when I was trying to get ready for the SEAL team and getting ready for BUD/S. It's a six-month course and people get badly injured. We had four broken necks, broken legs, broken arms in the class. It's a severe, intense course. And they have this thing everybody knows about called Hell Week in which 80% of the participants fail. I think we had a class of about 140 people and eventually we finished with 23 or 24 people graduating. That's a significant drop off, especially considering the screening process you had to go through just to qualify for the class. I was like 150 lb. soaking wet at 6 ft. I was desperate to have some kind of advantage. Some kind of thing that would give me an edge. When it was going bad, I needed something to keep me going forward.

I was fortunate to have a friend whose brother had made it through SEAL camp. I didn't know the guy personally, but what happened was he sent me a picture. On the picture was his platoon jumping out of an airplane. It gave me a visual representation of what I wanted to be able to accomplish. But more importantly, when I turned the picture over, there was a quote. On the back of this picture was a quote that said, " A man can only be defeated in two ways: if he gives up, or if he dies."

That radically shifted where I was ever going to come from that day to the day I die. A man can only be defeated in two ways -- he gives up or he dies. I carried that quote with me until the ink disappeared off that piece of paper.

Connors: Great mind frame.

Your means of execution to achieve your goals is centered around a phrase you coined: "targets, weapons, movement." You choose your target, which is basically what you are trying to accomplish. This target will dictate what weapons you will use to achieve the target. And your movement will be based upon the weapons you will be using. I know this concept is new for many people who are reading this for the first time, so let's walk through it.

Machowicz: Yeah. I created this thing called the play dynamic for combat. Basically, it's: Targets dictate the weapons. Weapons dictate movement. As long as you are very clear on what your target is, you don't even have to think, and weapons will show up. You don't have to think and the appropriate movement will show up.

That way, you see the things that matter vs. all the things that don't. That's what we're competing for on a second-by-second basis, especially under stress and pressure. You're competing with all the information that doesn't matter vs. the specific information that does. And what happens is most people fixate on the minutiae that doesn't matter vs. the one laser point that will drive them to the thing they want to accomplish.

Let me give you a specific example: Let's say I'm coming directly at you to kill you. At that brief second, you have a target. And what is your target? You sure as hell better take me out. And the specific targets to take me out are my groin, eyes or throat. So depending upon which target you have chosen (groin, eyes or throat) will dictate which weapons you will use. For example, your knee for my groin, your hand for my throat, or your fingers for my eyes. And after you decide which weapons you will use, the movement becomes automatic. During that brief second of time, nothing else matters. It doesn't matter how you look. It doesn't matter if you're late for an appointment. I doesn't matter if somebody stiffed you for $20. That's all bullshit! The only thing that matters at that second is targets, weapons, movement.

Otherwise, you're dead.

Connors: The target applies to everything in life. For the SEALs, you guys went quickly into a foreign country to execute a mission. That mission became your target.

That's all that mattered. But that same focus applies to everything in life. I recently read an article by a professor from Harvard Business School. His research found that there is no formula to business greatness. There are, however, themes, and the number one theme was a clear mission. So essentially, the people who achieved greatness in their businesses had a clear mission. They had a clear target. And when it comes down to trading, it is the same thing. A clear target can be wanting to earn $1 million a year, or wanting to become the #1 hedge fund manager in the world. That becomes a clear target.

Machowicz: Yes, for sure. You just talked about big targets. I also categorize targets as primary and secondary... Once you get a target that big, I call it the mission. Inside of that mission, there have to be incremental targets. In other words, there is a target before the next target. I call that target the primary target which will, if you hit it and knock it down, set up the secondary target.

Connors: Give us some examples. Let's say we know what the ultimate target is, what the mission is. What are examples of the primary targets here within this mission?

Machowicz: In a SEAL team context, what is our mission? Let's say, we're supposed to do a kidnap, what they call a body snatch. In other words, we need to collect the general. We go to grab a specific person because that person has intelligence and we need to capture that person alive. That is the mission. There can then be literally a hundred or two hundred different targets inside that mission. Now all that matters is accomplishing the mission, but before you can accomplish the mission, you have to do planning. You make a target of setting up a good plan. In other words, creating a time, a very specific time frame where we've got to have a good plan by this time. Period. The end. Now that's the target. Now you start to break up little things. Ultimately, inside of a mission you have insertion -- you could be jumping out of an airplane or coming in by a boat or being inserted via submarine. Then you have infiltration -- the process of getting to the target, the main objective. And then you have the actions you do, what they call actions on the objective. What specifically are you going to do on the objective? Then you have to leave the objective and exfiltrate, in other words get out of that dangerous territory now that you've told everybody in the world that you're probably in that town --

Connors: So are these all targets on the way?

Machowicz: Yes, because if I started focusing on exfiltration before I actually got the guy, what are the odds of me being able to get the guy, or to actually infiltrate?

Connors: So it's one step at a time?

Machowicz: You've got to.

Connors: Let's talk about this in trading terms then. In trading terms, your first target would be to identify the setup. Then it would be to properly get into that setup. Then it's to properly put in your stops. Then from there it's to properly start taking profits on your position and move your stops. You're going one step at a time. You're not thinking about losing money or how you're going to spend the money or whether or not this is your third win in a row. You're not jumping ahead four steps -- your total focus is on simply executing the next step.

Machowicz: Exactly. Which helps you stay focused on the main target.

Connors: And it takes the chaos out of the situation.

Machowicz: Exactly! In other words, thoughts or feelings or things that don't belong get thrown by the wayside and only what is essential to accomplishing your overall mission is kept in the mix.

Connors: So targets dictate weapons; weapons dictate movement. We've talked about the targets, let's talk about weapons. How does this all work?

Machowicz: Really, when we talk about weapons, when I use it as a physical metaphor because usually I try to teach it through a physical metaphor, I want you to develop weapons that easily knock down the target without you getting hurt. And that's real important, for example, when you talk about using stops in your trading. Minimizing losses is one of the steps in helping you hit your target, and one of the weapons you use to do this is to use stops. What you're trying to do is use specific weapons to maximize a profit or maximize an income without putting yourself in major jeopardy.

Connors: Go further...

Machowicz: The weapons are... let's call it a skill set. The weapons could be skills, they could be strategies. They could be actual tools. They could be the technology you are using. It depends on how you're looking at it. What your target is. Again, it really depends on what your target is. But most likely it's skills or equipment, gear... whatever it is that helps you knock down the target. And movement is simply the act of making the weapon hit the target.

Connors: I see this a lot where traders will not pull the trigger on a trade... they have a movement problem. They have everything put together, they know they're supposed to take the trade, they know where the entry is and then when it comes time to pull the trigger, they won't do it. That's the movement you're talking about. They become paralyzed.

Machowicz: Well, that's what happens. Somewhere in this chain of "targets dictate weapons, weapons dictate movement," some place between target and weapon, the whole world can fit in there. When I say the whole world -- your whole world of doubt, second-guessing, hesitation, fear, the unknown. And the longer it takes for you to pull the trigger -- like you said -- the more that doubt, second-guessing, hesitation, pain and fear creep in to that mechanism

Connors: How do you get them to not creep in?

Machowicz: Go back to the target! Focus only on this one thing. Just ask yourself, "What is the target? What is the target?" This incredibly reduces the chaos and brings everything back into focus.

Connors: Always focus on the target.

Machowicz: Yes. And the second half of this is having guts.

What I like to do -- basically it's a really simple question. I do this thing called the "gut check." I was really trying to find out what it was going to take for me to be able to just really handle BUD/S and become a SEAL. What it was going to take for me? Was it going to be the kind of shorts I wore that would reduce chafing? Would it be some kind of socks I wore to reduce some of the chafing or maybe try and keep my feet warm? Was it going to be some kind of supplement that was going to help me? It turned out that all that stuff just was garbage. That didn't matter. The one thing that kept coming back to me when I would check in, trying to find out what that secret was, was you have to have guts. You've just got to have guts. I got the experience of learning what guts was by sticking through to the end. I got that visceral feeling of what "guts" was. So what I wanted to do was develop a very simple way so that you could get a "gut" check. If you could answer yes to these three questions, you have the guts you need to take on anything in life.

Connors: What are those three questions?

Machowicz: The first question is: Are you willing to make a choice?

Now, a lot of people make choices every day. They choose to watch TV, or to do something else, or they choose to be nice to somebody or they choose not to be nice to somebody. But rarely do they make a choice that would substantially improve the quality of their lives. I'm willing to give the benefit of the doubt to the person willing to play the game, and yes, a lot of people are willing to make choices. But when we come to the second question, we start losing people.

We probably lose half the people on the second question: Do you have the courage to start?

A lot of people talk the talk, but when it comes to walking the walk, they disappear. Really, that's it. Are you willing to step up and show up and get the work done?

Connors: Why do you think half the people stop?

Machowicz: I think people are afraid.

Connors: Why?

Machowicz: Why? Number one, I think people don't think they're good enough, for the most part. People think there's something inherently wrong with themselves.

Connors: Self doubt.

Machowicz: Yes, they just don't feel they're worthy. They're afraid to even try. They're so sure they're going to fail. They're so sure they're going to get screwed. They're so sure it's going to fall apart that they refuse to even show up in the first place.

Connors: How do you overcome that?

Machowicz: How? Recognize you don't even know what's going to happen. You do not know from second to second what is going to happen in your life. You've got an idea. You think you know. But the reality is what's going to happen ten seconds from now, you really don't know. What's going to happen an hour from now?

You really don't know. A year from now? You really don't know. That's the state, that's the condition of our lives.

Connors: So, if you don't try, you do know that you're not going to succeed.

Machowicz: But you know what? You didn't even have an opportunity. The mind doesn't want to even go there. It will just assume that it knows that you can't succeed, so it validates the fact that, guess what? "I know everything."

Connors: How do you trip the mind up to make it believe it will succeed?

Machowicz: I don't think you have to trip the mind up. I mean you can do that. You can short-circuit that process. You can use fear to manipulate you and drive you, but your results tend to be overblown and out of control. What I'm more interested in is seeing guys be able to say, "Listen, this is the target, and the fact of the matter is that I don't know if I can accomplish it or not, but I am going to try. I'm just going to go one step further, I'm going to go one little foot at a time, inch by inch if I have to. But I'm just going to keep going forward and stay connected to the target. Whatever that target is. I'm just going to take one more little tiny step, one more breath in that direction."

Connors: And the third question is...

Machowicz: Do you have the guts to finish? Do you have the guts to succeed at the mission you set out to achieve? Do you know what the only common

characteristic there is amongst the thousands of people who haven't made it through Hell Week?

Connors: What's that?

Machowicz: They quit.

Connors: So the things that you're teaching here are not just appropriate for Navy SEALs, they are appropriate for any walk of life, no matter what you're doing.

Machowicz: That's absolutely correct.

Connors: You've obviously been around extremely successful achievement-oriented people who have achieved extreme levels of success in their field, including your teammates in the SEALs. I've read that from application time to the finish of BUD/S only one in 6000 get through the process. So these are people who are executing at a level in life beyond what most people can comprehend. You also work directly with individuals who are professional athletes, top names in the entertainment industry and some very successful businessmen. If you could state a single characteristic, common theme, what would it be for their success?

Machowicz: A very clear target and perseverance.

When I look at the guys I've worked with that have been successful, the one thing I see consistently is the commitment to finish. Yes, they were willing to make a choice, they had the courage to start, but the thing that made the difference was the commitment to finish no matter what. Even if they were going to finish dead last, they were going to finish. I think that's the big thing. People do not finish what they start. A lot of people will start things but never see it through to the end.

Connors: These guys pick a target and are always moving forward to that target. Is that correct?

Machowicz: Absolutely. If you're at least going forward to the target, you're always moving forward in your world. And that's the most important thing. You have one life. You've got to play it full out. If you play it half-assed, if you play it partially, I'm telling you, on your deathbed, you'll be wondering why you ever were born.

Connors: Going back to the SEALs, had that become the mind frame, you'd be killed, you'd be out immediately?

Machowicz: Oh, yeah, I mean what happens is -- Vince Lombardi had a great quote, "Fatigue makes cowards of us all." Literally, what happens with BUD/s, you will have work that will have mentally and physically fatigued you to the point where you only have to blink for a second, when you're on your third or fourth day of
Hell Week, and you're freezing cold and you're miserable and you just saw three other people quit. You only have to have one moment... it only takes you 30 seconds to quit, and you've destroyed all that time that you've put in. You lose sight of the target, and it is over.

One of the things I did early during Hell Week was I would say, "Well, I made it through one evolution, I can make it through one more. I made it through two. I can make it through one more. I made it through three, I can make it through one more. If I made it through four evolutions, I can make it through one more. If I made it through four, I could probably do another four. If I did eight, I could probably do another eight. Oh, I've got one day down, let me try another day. I got two days down, I bet I can do one more day. I got three days down. You know what? I know I can do three more days."

Just let it go. And next thing you know, you start building this motor of momentum, this engine of momentum that just keeps driving you forward, keeps driving you forward, keeps driving you forward. Because I'm telling you, that conversation is not a conversation you're going away from. That is a conversation of moving forward. And moving forward toward a target that you set for yourself and refusing to quit. People say, "refuse to lose." I say "refuse to quit." Recognize the dialogue that leads to quitting and you won't have to worry about losing.

Connors: Paul "Bear" Bryant's famous quote, "The first time you quit it's hard, the second time is a little easier, and the third time you quit, you don't even have to think about it."

Machowicz: Perfect.

Connors: You talk about this in your book. Act as though it is impossible to fail.

Machowicz: Act as though it is impossible to fail. If you are doing these things, if you are clearly on your target, if you are persistent and committed to finishing and you are really committed to results vs. reason, you will succeed. Success is not some magic mystery out there. It is clear connection to the target.

Connors: Let me go back and ask you a question regarding chaos. During your combat missions, your life was very much on the line. If something goes wrong, you're dead. How do you eliminate the stress of that knowledge?

Machowicz: Stay focused only on the target, that's how!

Connors: And they teach you that in the SEALs? They teach you how to --

Machowicz: It's not even "teach," it's just "stay focused." What is the target? You may have to ask yourself that moment to moment. What do I have to do now?

What's the target now? This moment, this moment, this moment...

Always come back to the target. I can't stress that strong enough. I don't care what's happening...the universe could be falling apart around you. As long as you keep going, "What's the target? What do I have to do right now? What's the target right this second?" The results will take care of themselves. And to the outside world it will look like nothing ever phases you.

Connors: Summarize your message to us.

Machowicz: A single-minded focus on hitting the target and never quitting. It worked for me in my 10 years with the Navy SEALs, it works for the professional athletes I work with, and it works for the other successful people I work with. Live with the mind frame, "Not dead. Can't quit."

Connors: Thank you, Richard.

Machowicz: My pleasure. Thanks for having me.

Chart Pattern for Kotak Bank

We are reproducing chart of Kotak Bank. Most of the private banks are out performing the market. HDC bank is trading at life time high and so is Axis Bank, but Kotak Bank is not showing signs of strength.

It is evident from the chart that it has found support at 200 EMA after falling from intermediate top of 820 made on 08-03-10. Its 200 EMA is at 717 . The are around 700-710 is also a historical support area. Oscillating indicator Stochastics is also at oversold position.

Now lets us discuss about possibilities:

A- The stock may breakout from this channel on the upside , in larger time frame it can be considered as bullish flag.The breakout area is about 750 . It means if the stock is able to trade above 750 with good volume its correction will get over and it may retest its intermediate high of 820.Given the present market conditions this seems to be the likely case.

B- stock may not breakout from this channel and may remain sideways.It may not fall below 200 EMA .

C- It may break below 200 EMA and if this happens then the stock may remain in bearish .

As a trader you must plan for your trade .We have created three possible scenes.

In our trading life we have often experienced the fourth possibility . We went long with breakout but stock came crushing down took our stop of close below 200 EMA , traded a while below 200 EMA then surged up and hit the target we mentioned the possibility of scene A.

This what trading and traders life is all about. We learn our lessons take our loss , write it down in our trading journal and move ahead in search of our next trade.

Lets see what happens with this trade.

Have fun and trade well.

HCL Technology

Market is expected to remain volatile on the final day of settlement of Futures and options expiry.

April series will also see readjustment of lot sizes .

HCL tech is in consolidation phase . It can be a buy only above 370. 370 is the upper band of the range it made in most part of Feb and March. If its able to trade above 370 then retest of intermediate high of 388 is possible.

One should keep the volume lows to avoid getting whipsawed in this ranged market.Keep on booking profits at regular intervals.Exit early from those positions which are not working even if they have not hit your stops. In this kind of market a trader should not remain invested all the time, one should have enough dry gun poweder in reserve to catch opportunities.

Have fun and trade well.

Biocon Hits Target

Our previous week trading idea Biocon ltd has achieved it first target. One should book partial profit.

We used yesterday dip to buy.

Fortis Healthcare has support at 166 and resistances are at 190-200. One should use dips to buy this stock.

Have fun and trade well

Market may give you dip

With the rising Inflation concern RBI has tighen the liquidity . Greece fiscal woes still persist and this week we may start with uncertainity .
Market may start with gap down opening on Monday.

Our last week idea Torrent Pharma has done well. One should focus on defensive sectors like Pharma

FDC has support at 75 and resistances are at 100-120. Its chart patttern is similar to that of Torrent Pharma . Both of them are trading at new high and are unlikely to face stiff resistance . Every dips should be used to buy these two stocks.


Trade well and have fun

Break Your Trading Routine :David Varadi

The answer to successful trading cannot be found in any coach, book, or system. Success is something that is cultivated over time, with directed effort.
- Brett Steenbarger

The biggest secret about success is that there isn’t any big secret about it, or if there is, then it’s a secret from me, too. The idea of searching for some secret for trading success misses the point.
– Ed Seykota

To anticipate the market is to gamble. To be patient and react only when the market gives the signal is to speculate.
- Jesse Livermore

"Every once in a while you must go to cash, take a break, take a vacation. Don't try to play the market all the time. It can't be done, too tough on the emotions." - Jesse Livermore

This week we are reproducing here an article by David Varadi . Hope you find it useful

Routines are what define many of us as people. They can be defined as a group of habits and tasks that are often bounded by time intervals. Routines are the great stabilizers in life, and help us to preserve precious mental and physical resources. When times are tough, they allow us to coast on autopilot. They bring an element of certainty and regularity in an unstable world.

In my profession which entails building models and systems, routines are impossible– I am always forced to do new research or solve new problems. I am paid for approaching things in a novel way, sophisticated clientele don’t need me to find a boxed solution. Rather than operating 9-5, my hours can range from 8am-5am to accomodate overseas clients or tight deadlines– and it all revolves around what needs to be done. On the one hand, I wish my life involved more routine– I am always running in third gear and cannot risk slipping into cruise control (ie mediocrity). Its often difficult to plan to do ordinary activities. Many times to keep my edge, I will simply take some time off to go for a walk–especially in the spring and summer–just to think about how to solve various issues. Sometimes, I will go to a coffee shop without a book and a computer and just reflect on some ideas.

I notice that when I do not have the time to do these things, my creativity suffers and I am often approaching problems in a circular manner—like a dog chasing its tail. I notice the same effect when I am forced to stick to a structured schedule, or am overloaded with correspondence via modern communications. I often marvel how anyone in this century gets anything done at all of tangible value since the advent of email and the blackberry. The cynical side of me believes that people have allowed themselves to confuse activity with actual work. According to my friends in the corporate world, if you are not going to meetings or answering emails you apparently aren’t getting anything done.

Trading is the same way– its easy to think of yourself as a pro trader simply because you get up every day in the morning and follow the news on Bloomberg or Reuters before the open. Its easy to think you are a pro simply because you have your own proprietary tools, and you have a cool workstation. Maybe you think that you will be successful simply because you are diligent and have a disciplined routine. Perhaps you fancy yourself a player because you place dozens of trades a day. Well the truth is that many of these activities are potentially positive, but the real trick is to recognize that it is not enough to look and act the part of a trader. It is not enough to just try to stay unflinchingly consistent in executing your gameplan. You have to sometimes shake things up, and think of new ways to make money–because the truth is, while you are settling into your comfort zone, someone else is trying to figure out a plan to eat your lunch.

Every week you should try to make some time to think outside of the box. Read or re-read a new trading book (note I re-read my books sometimes 4-5 times). Spend some time on system design- but force yourself to tackle something new or something that you have had trouble solving in the past. Try to learn a new instrument, or search for a new type of trading setup to compliment your most reliable methods so you having something to fall back on if things get tough. Trading is like nature–always evolving and different species thrive or die off as environments change. I can recall many “pros” in my poker playing days that wanted to always play the same way and were often in denial when their drawdowns lasted much longer than luck would dictate. They resisted change right up until the bitter end–until even the weakest players figured them out and milked them dry. Friends of mine who survived and even went on to win major tournaments were always looking to improve and try new strategies–while respecting that they would not completely re-define their game in doing so. They focused on figuring out how to win in the most efficient manner even while being very efficient winners.

Think of some of the pioneers in the trading world: 1) Jesse Livermore 2) Nicholas Darvas 3) William O’Neil 4) Paul Tudor Jones. All of these people approached the market with a unique insight that allowed them to reach levels far beyond anyone else. They all worked hard and tried to constantly re-invent or re-invigorate their methods with sometimes costly experiments. Its not enough to just be discipline, and its not enough to just be smart or knowledgeable. Universities these days are teeming with people like that. You need to step away from your routines and away from the crowd and be different. Treat your most reliable trading methods as part of a discplined routine–like flossing your teeth. But take some time to think carefully outside of the box and add to your strategy mix, otherwise you face two possible undesirable outcomes: 1) you may get bored and find diversions through impulsive and costly mistakes 2) you may face a sudden struggle for survival if your bread and butter trades are no longer working.

http://cssanalytics.wordpress.com/2010/03/18/break-your-trading-routine/

Have a nice weekend

Time to take some money off the table for weekend.

Our pre -budget trading view to go long on IT and Mid cap pharma stock has resulted in good amount of profits in our trading account.

Our individual stock specific ideas like Polaris , Biocon Ltd and others have reached their first price target.

Its time to book partial profits and take some money off the table to enjoy the weekend.

Markets are moving up and Nifty has now support at 5130.Next week if global cues are also supportive then we may see some action in Mid cap space. Keep financial stock on your radar , Oil and gas is another space to watch for.

Will post our weekly reading material soon.

Have a nice weekend ahead.

How to trade this breakout ??

Today Nifty has broken out of range it has been trading for past one week. 5180 was a major resistance and today Nifty has breached this resistance and closed above it. Now another major resistance is at 5310; the recent high made by Nifty in January .

Now as a trader the question comes should one buy this breakout ? Well, most of the automated systems has given a screaming buy signal .But trades should also look at the trading environment . There is still lot of uncertainty at global front , rising inflation will result in higher interest rate regime. We have often experienced many failed breakout and one should trade them carefully and not become complacent.

There are two ways to trade this breakout - one should have gone long when Nifty broke out above 5158 the high of the range with low volume another way is to wait for retracement / pull back.Markets have tendency to pull back to 20-50 Dma . This will offer low risk entry as far as Index trading is concerned. It may so happen that sometimes market may not pull back quickly and may form another trading range at higher levels. That what trading is all about . Make your own rules and trade accordingly by judging the risk and trading environment.

Our another trading idea Polaris Software is achieved it first target.

http://swingtradingideas.blogspot.com/search?updated-max=2010-03-02T22%3A25%3A00%2B05%3A30&max-results=5

Biocon Ltd has support at 266 and resistances are at 283 -298 If it is able to trade above 273 then it may retest the 298- 304.

Book Partial Profit in Mind Tree

Our Ideas to remain long on IT stocks and Mid Cap Pharma right before the budget has worked well.

Our stock specific idea Mind Tree has moved up. One can book partial profit and for remaining position buying price ( break even price) is stop .

In this market trade light , exit early from what is not working , keep on booking partial profit on what is working , follow stops - price stops / time stops .

Do not jump the gun, wait for the opportunity, trade less and with low volume.

Have fun and trade well

Ideas for the week

Hope you had a nice weekend and enjoyed our post on reading.

Some of the swing trading ideas for the week are given below:

Indraprashta Medical corporation : Support 42 .70 , Resistances 49-53

Amar Remedies : Support 58 , Resistance 72.

Sunil Hitech : Support 212 , Resistance 232-254

Have fun and trade well

All About Being A Good Trader -By: Evan Lazarus

Meet Trader "X" , By: Evan Lazarus

I know and have worked with many traders around the world. Over the years, I met one individual who is by far, the best trader I have ever met. He is very consistent and makes an incredible amount of money as an active intraday trader. For the sake of anonymity, I will call him “Trader X.”

I still remember the day that I realized just how successful Trader X was at trading. Today I must admit that although I have met traders that make considerably more money, I still hold him in the highest regard as a trader and personal mentor, as he has never deviated from his path. I am lucky to know Trader X and have reaped many benefits from incorporating the lessons I have learned from him into my own trading over the years, so that now I play the part of mentor to many novice and even seasoned traders. I would like to share with you some of the lessons I have learned from him. Although he has never taught me formally (in a teacher/student capacity) as I do with others, these are lessons that I have acquired from observing him trade, that I continuously teach in our T3Live education classes.

1. Patience is Paramount

An important lesson learned from Trader X is that patience is everything. Profitable traders, like Trader X, wait for the perfect trade setup. 90% of all traders who do not consistently make money trade for the sake of trading, as I used to do. I used to look at the markets and ask myself "which way is market/stock going to go?" Now I look at the markets and say "Is there a low risk trading situation developing?" I have learned to be patient, and my profit factor has been consistent over time.

2. Never Follow the Herd as the Herd Consistently Gets Slaughtered

If you think about it, it makes perfect sense - the very best time to buy something is when everyone is convinced that the price is going to fall lower, and the very best time to sell something is when everyone is convinced the price is going to shoot to the moon. Trader X taught me the importance of trading against the crowd. The crowd is reacting to the market, and that is exactly why you must react to the crowd. This simple change in mindset can produce incredible profits if you are willing to look like a fool (in the eyes of others). Now, this is not code for counter-trend trading as a means to success, but rather a mentality I implore the same as when shopping for a car. When you go to a dealership or a car show, the cars all look beautiful and pristine. New car smell, nice paint job, shiny tires, but do you ever kick the tires or look under the hood? Is that beautiful car as healthy on the inside? Being a good technician means not getting caught up in the superficial.

3. Do One Thing, and Do It Well

If there is one simple thing that I have learned from my Trader X, the best trader I have ever known, it is this: to make money trading you only have to become an expert at one type of trade. There is no need to do ten things, or yet worse, ten things at once. Simply concentrate on one thing, and if you trade it well, you can become a very successful trader. Too many traders (especially the day traders) think they need to make multiple trades in a day, or to trade multiple stocks over the course of a day in order to make money. Chances are that the more you try to do, the less successful any of those trades will be--a “jack of all trades but a master of none.” As I tell all of my trading students, “it only takes one lemon to make lemonade.”

4. What’s YOUR Style?

How many times have you heard some expert say something like "technical analysis doesn't work" or "never trade on options expiration" or "scalping is impossible." One thing I have learned from my trading mentor (and from working with traders all over the world) is that the very best traders create their own trading style. This doesn't mean that you must reinvent the wheel to become a successful trader; it simply means that many successful traders have found their way to success by adapting trading strategies and making them their own. It is not important that you trade precisely as other successful traders do, but it is important that your style of trading makes sense to you, as this will ensure that you stick with it over the long haul.

Trader X has a completely unique trading strategy that he has crafted over time by exposing himself to many different ideas and many different traders. His system is unique because it is his, and it makes sense to him. This is important because it means that he is better able to maintain confidence through the drawdowns that inevitably occur.

5. Have An Extremely High Win Rate

There has been a lot written about win rates (what percentage of your trades are profitable), but what some traders do not seem to understand is that it is possible to have an exceptional win rate. 70%, 80%, even 90% is possible. This I have learned from Trader X- he has an incredibly high win rate, and I do too now because I have learned so much from him.

Trader X is continually improving as a trader. He is constantly figuring out ways to get better at what he does. He uses every loss as an educational experience - that is how he sees them. Every loss is a lesson that the market has handed him. I would not say that he embraces losing trades, but he certainly does learn from them.

6. Everyone Has a Bad Streak

Even my Trader X will have the occasional unlucky streak with several losses in a row. This is not that interesting to me, but what interests me is how he deals with these streaks. He does not lose confidence and continues to take the next trade setup, as it occurs, and never questions his strategy. He knows that anyone can flip a coin and get "tails" 4 times in a row, and that is precisely how he views a non-winning streak. He knows that in the long run he will make up the lost money, and then some, so there is no need to panic. He knows with the utmost of confidence that he “is an earner.” Over the long run, he will continually just earn.

7. Being Wrong is Being Human

Trader X taught me that even the best traders, like him, are sometimes caught on the wrong side of the market. There is no need to panic when this happens, but once it does, a very good thing to do is to simply get out. Once you realize that your trade was not a good idea, there is no need to wait for your stop loss to get hit. When you know you have made the wrong move you can simply get out of the market and wait for the next trade. While I always preach about managing risk and evaluating stops, remember, you are a professional speculator and if it seems apparently clear that something with your trade is obviously wrong don’t be afraid to pull the plug early.

8. Let the Trades Come To You (Be Patient)

If there is one thing I have noticed about how Trader X trades (and this is not a unique characteristic, many of the very best traders I have ever traded with also have this characteristic) it is that he does not go looking for trades, he waits for them to jump out at him. This may seem like a weird way to trade, but it is precisely how he takes so many profitable trades. He waits and watches, and when the market gives him an opportunity to jump in to a good situation, he strikes. He never trades simply because the market is open, and he sometimes sits in front of his charts for hours without making a single trade.

I have learned from him that successful trading means being ready for the market to offer you "easy money" - or ideal trading setups. When these setups come along, I know it because I feel like I must take advantage of the opportunity the market is offering. Remember though, these setups come along infrequently and most of the time Trader X spends trading is NOT TRADING. This is very counter-intuitive to what most traders do and how they act. This is also the reason I believe that the trading profession is “hard.” Most traders feel compelled to trade the same way sports gamblers can’t watch a football game without having “action.” In the end, it’s a losers game.

9. Continue The Educational Journey

Trader X has such a high win rate, and is so good at picking high probability trade setups that some people may assume that he knows that he has the markets "figured out." Not so. He is constantly learning, he has many trading books, trading magazines and we are constantly talking about trading strategies. He learns from some of the best institutions and research centers around the world because he has a constant thirst for knowledge. The fact that he is open to new ideas and the fact that he is an exceptional trader is probably not a coincidence. I think that many successful traders are open to new ideas. This doesn't mean that successful traders switch trading strategies every month (Trader X has been trading the same trading strategy for years), it simply means that many successful traders are open to new ideas and new ways of profiting from the markets.

I hope that you have learned something from Trader X, I know I have.

You can see the full post on

http://blog.t3live.com/2010/02/meet-trader-x.html

Weekend Reading - SUN TZU ART OF WAR

We are giving you the link for your weekend reading .

http://www.thecrosshairstrader.com/2009/05/sun-tzu-and-the-art-of-stock-traders-patience/

“THERE ARE ROADS WHICH MUST NOT BE FOLLOWED, ARMIES WHICH MUST NOT BE ATTACKED, TOWNS WHICH MUST NOT BE BESIEGED, POSITIONS WHICH MUST NOT BE CONTESTED, COMMANDS OF THE SOVEREIGN WHICH MUST NOT BE OBEYED.” SUN TZU ART OF WAR VIII.3

Why does SUN TZU go into such detail here about what NOT TO DO? Is it just semantics? I think not. I believe SUN TZU is wanting his listeners to know that in battle patience is just as important as the attack itself, if not more so.

Th quote above is taken from the chapter entitled VARIATION OF TACTICS, which, in military terms, refers to the techniques for using a combination of weapons in various situations for defeating the enemy. One of the general’s, and the trader’s, most effective weapons is patience. Simply put, there are trades that should not be entered, stocks that should not be traded, markets that should be left alone, areas of strong defense that should not be challenged, and restrictions placed on the commander himself.

THERE ARE ROADS WHICH MUST NOT BE FOLLOWED

There are trades that should never be taken no matter the set up. If your trade decisions are based on technical analysis as mine are, you patiently wait for the trade to set up, then you enter the trade as planned. When you are given a signal you trade. However, there are times when you are given a signal and you decide to patiently wait for the next signal. Why? Because the proper use of tactics implies a combination of weapons. Profitable trading systems are not designed to work in a vacuum, which can help explain why a handful of traders can take just about any trading system and make money whereas most others consistently lose money trading the same system! The successful trader knows that factors other than the technical contribute to the success of their system. These factors include knowledge of the following: the general market condition (TERRAIN), the strength of the sector traded, the upcoming major market moving news events (such as FED statements, economic announcements, etc.), and the earnings date for the stock you trade, among others. We should all patiently wait for our set-up with the understanding that the set-up itself may have to wait. There may be dead ends but there are other roads to take.

Book Profit in Mcleod Russel

our Idea Mcleod Russel has done well. Its time to book profit.

Nifty is still ranged bound though 5180-5200 is stiff resistance.Market is also cautious ahead of IIP numbers.

Most of the traders loose money in these kind of markets.One way to tackle this market is to reduce volume , trade less -most of the breakout patterns fail so change strategy according to the market phase and buy pull back .
On the budget day our view was to long IT and Mid Cap pharma stocks.

You can see our post



http://swingtradingideas.blogspot.com/2010/02/buy-when-others-are-fearful.html


Mind Tree has support at 515 and resistances are at 567 / 596



Torrent Pharma has support at464 and resistance is at 550. This stock is trading at life time zone and may go up to 600

have fun and trade well

Nifty is stuck in range

Nifty is trading in a range for the past five days. 5180 is stiff resistance .There are no domestic triggers and a lot will depend on global cues.This year we will see various phases of the market hope, despair, euphoria, denial, fear and panic.

This year instead of stock market its going to be ' market of stocks' therefore, its going to be stock specific year.

One has to look for Alpha investing this year as range bound market do not offer much in terms of beta returns.

Kernex Micro has shown an island reversal on charts and is finding support at 200 dma. It has support at 108 and resistances are at 128 -142.

Jim Roger has commented on his blog :


Watch The Whole World
"I’m trying to watch the whole world. We cannot be very successful investors if we don’t know what’s going on everywhere. All of a sudden something like Iceland will show up and you’ll get killed because you didn’t know that Iceland even existed."

http://jimrogers-investments.blogspot.com/2010/03/watch-whole-world.html

have fun and trade well

Book Profits

Most of our Ideas - Whirl pool, Ruchi soya, Aptech, Essar Oil , Essar shipping have done extremely well.
Along with the chart patterns the market was also supportive. The buy signal generated from our system have performed well .
One should also book profit from time to time.

Nifty will face hurdle at 5180-5230.If you want to develop a trading system you have to decide on the following parameters;
1 On what conditions you will buy or sell.

2 What should be the entry signal.

3 What should be the initial stop.

4 What should be the trailing stop.
5 when you will book Profit, partial profit or add .

Have fun trade well

Automated trading

Rule based trading require certain steps to follow :

The broad idea can be divided into the following steps;

1 Selection of testing period ( ideally it should cover bull, bear and sideways periods) and also know split between in and out of sample data;
2 Optimizing the system and selecting the best combination of parameters;
3 Building on walk forward back testing ;
4 Assessment of probable equity curve scenarios six months forward through Monte Carlo simulation on out of sample equity curve.
5 Dont lay over emphasis on curve fitting on recent data.

Once you have selected a trading system that suits with your trading style you must be patient and trust your system and wait for the signal to enter the trade.
You should always analyse your risk and reward before entering into the market.
Cut your losses and let your profits ride.
Never trade against the trend

Coming back to the markets global markets are trading firm FTSE is trading above the recent high.

Some of the trading ideas for the week are :

Essar Oil support 135 resistance 150-157

Mcleod Russel support 224 resistance 270

Voltas support 162 resistance 182 -187

Vijaya bank support 49 resistance 56

Read a lot and do paper trading. Do not quit your job and take trading as monthly income generation source .

For some practice you can see charts on

http://www.freestockcharts.com/

http://stockcharts.com/index.html


Have fun and trade well

Keep Shipping stock on your radar

We are purist ie we don't go for fundamentals and rely on Technicals only. That's why we did not went went short pre - budget and were busy shopping for strong stocks.

Shipping sectors seems to be coming out of long consolidation. They should be on your watch list.

Essar shipping has support at 66 and resistance at 81 -88.

Have fun.

Trading Systems

We have learnt over the years through practice and experience that rule - based trading also requires some subjective rules like- we do not trade any signal when the Nifty is ranged . Another rule is we do not take any sell signal if Nifty is trading above 180 DMA, we also have our own set rules for position sizing ie; when to trade with full quantity , when to trade with half or one fourth and when to add, when to take partial profit , when to exit early, when to ride etc . Sometimes we don't take breakout signals and we buy only on reactions.
Lesson is one has to be flexible - its very similar to game of cricket where one has to adjust according to pitch , weather conditions, type of bowlers etc. There is no holy grail.
Remember despite all this flexibility and adjustments some trade do not work out . We take out our losses learn from the trade and then move on.
We always figure out - when to buy weakness and sell strength and when to buy strength and sell weakness , when to trade in Index, when to trade in Individual stocks and that too when to trade in large caps / Mid Caps/ small Caps. Sometimes we do not trade for weeks.

This all require hard work and very simple down to earth analysis. Chart says all. Don't let your personal bias , media hype come into your analysis.Look at the patterns.

HEG has support at 33o and resistances are at 368 / 380.

Have fun and trade well

Know your profile

This long weekend had given us time to relax , reflex and revisit our trading methods.

There is no right or wrong way to trade. You must decide what is best for you, which method suits you best depending upon what type of person you are.Therefore, its is necessary to take some time aside to think , understand and know yourself. Once you know yourself then finding a trading method becomes easy.
Whether you use automated ( rule-based ) trading or a discretionary method ( subjective) or a combination of both , what is required is that you must have a trading plan and adhere to it.

Budget hype is over now and we are back to global cues now. We used the budget day to buy and we are well positioned to take advantage of short term up move.

Banking and Auto sectors are expected to see some upward swings .

Polaris software has been hammered a lot and is finding support at 200 DMA.
Its support is at 140 and if it trades above previous high of 150 then targets could be 168 and 180

Trade well have fun