Trading in the zone : Mark Douglus

Mark Doulus in this book elaborates about  getting  consistent performance ;

CREATING A BELIEF IN CONSISTENCY


Creating a belief that "I am a consistent winner" is the primary objective, but like my intention to

become a runner, it's too broad and abstract to implement without breaking it down into a step-by-step

process. So what I'm going to do is break this belief down into its smallest definable parts and then give

you a plan to integrate each part as a dominant belief. The following sub-beliefs are the building blocks.

Thinking Like a Trader blocks that provide the underlying structure for what it means "to be a

consistent winner."



I AM A CONSISTENT WINNER BECAUSE:

1. I objectively identify my edges.


2. I predefine the risk of every trade.


3. I completely accept risk or I am willing to let go of the trade.


4. I act on my edges without reservation or hesitation.


5. I pay myself as the market makes money available to me.


6. I continually monitor my susceptibility for making errors.


7. I understand the absolute necessity of these principles of consistent success and, therefore, I


never violate them.

The Mental Aspect of Trading By Linda Bradford Raschke

Many traders quickly come to acknowledge that despite being familiar with winning strategies, systems, and money management techniques, trading success is dependent on your psychological state of mind.


Trading is a performance-oriented discipline and Intellect has nothing to do with your ability as a trader.
 
This is an useful article  one can read it by visiting the link

http://www.traderslog.com/mental-aspect-of-trading/

Is gold ready to challenge its all-time high?

Adam Hewison,President, INO.com,Co-creator, Market Club presents this video on Gold movement.



http://broadcast.ino.com/education/gold412/

The World's Biggest Debtor Nations

Throughout the financial crisis, many national economies have looked to their government and foreign lenders for financial support, which translates to increased spending, borrowing and in most cases, growing national debt.

Deficit spending, government debt and private sector borrowing are the norm in most western countries, but due in part to the financial crisis, some nations and economies are in considerably worse debt positions than others.


You can know about this by watching the slide presented by CNBC.

http://www.cnbc.com/id/30308959/

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.

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

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

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

Metal stocks shine

Today market rallied again, second day in a row . Going forward 4950- 5020 are resistance for Nifty and a major resistance zone.

The chart pattern showed oversold conditions for most of the metal stocks and our earlier ideas Tata Steel and Nalco had done well.

Eveready has resumed its uptrend support is at 56 and resistances are at 76 /84.

You should also study the charts of Shivam Auto and Gujrat Alkali and we will wait for your comments on these two charts? What is the significance and what does this pattern tell us.
Your comments are welcome.

Cheers !

A bounce back is on the card ??

Yesterday Nifty surged up in the last hour of trading session. Going by the history Nifty may restest 5000-5020 , which is closer to 100 DMA.

National Aluminum seems to find support at lower levels. Support is at 356 and resistances are at 409-421.
Metal as a sector took a beating and apull back is expected .

Have fun.

Ten Core Ideas of Trading Psychology By Dr Brett Steenbarger

1) We are most likely to behave in inhibited or impulsive ways, violating trading rules and plans, when we perceive events to be threatening;

2) What we perceive to be threatening is a joint function of events themselves and how we think about those events;

3) A key to gaining control over trading and maintaining consistency is to be able to reduce the threat associated with market events and process adverse outcomes in normal, routine ways;

4) We can reduce the threat associated with adverse market events through proper money management (position sizing) and through proper risk management (limits on losses per position);

5) We can reduce the threat associated with adverse market events by training ourselves to respond calmly to adverse outcomes (exposure methods) and by restructuring how we think about those outcomes (cognitive methods);

6) Optimal skill development in trading will occur in non-threatening environments in which learners can sustain concentration, optimism, and motivation;

7) A proper mindset is therefore necessary to the development of trading skills, but does not substitute for such development;

8) The cultivation of trading expertise is a function of the amount of time and effort devoted to learning and the proper structuring of that time and effort;

9) Proper structuring of learning involves the setting of specific, doable, cumulative goals and the provision of rapid feedback and correction regarding the achievement of those goals;

10) Practice does not make perfect in trading or anything else; perfect practice makes perfect. Training must gradually build competencies and correct deficiencies in a manner that sustains a positive mindset and optimal concentration and motivation.

Nifty is near 200 DMA - Time to get in

Nify is trading near 200 DMA which is at 4657. It made a low of 4675 yesterday. This low is very close to 200 DMa. The old saying of the market is ' Bulls live above 200 DMa. '.

In bull market Index do correct to 200 DMa and these corrections offer wonderful opportunity to buy.Most of the investors/ traders tend to buy at higher levels while the idea should be to buy corrections. One can start with allocation of 30 % of capital and keep on increasing your stakes as markets goes in your favor. There are many stocks which have gone through 30-40 % below their peak price.
If one is able to select those stocks then it will reward them.
Happy hunting.

Sudden spurt in Farm land price

There is a news item on Bloomberg by Tonny Barett " Sell the Porsche, buy a tractor and reap returns. Farmland prices that more than doubled in England in the past decade may repeat the gains.

The average price of the land surged 164 percent to a record in the last 10 years, second only to gold among “major asset classes,” on demand for food commodities, it said.

You can read the complete article by visiting the link :

http://www.bloomberg.com/apps/news?pid=20601102&sid=a.kXOr_QXJf4

Last year Commodity Legend Jim Rogers has stated "farmers are going to be driving Lamborghinies"

Jim Rogers has started farming in big way . You can read about it ;

http://www.cnbc.com/id/29477080

Back home look at some of the Rice stocks. Soft commodity stocks like Tea, Coffee, are consolidating .You can keep them on your radar.

In International market Sugar futures are trading at life time high though our sugar stocks are not doing well. But related stocks like Dhampure speciality sugars ltd , CCL Products , Karuturi Global and zydus wellness are the stocks to watch . These have niche products in the market.You can visit their website and find out more .

Interest rate sensitive on radar

Interest rate sensitive related sector were hammered down in this recent correction. This is also a space where shorts have been built up. Short covering is bound to happen . Therefore, Banking, Auto and to some extent Realty will move up in coming trading sessions.


Tata Motor has support at 670 and resistance at 820. On charts it shows ready to resume its uptrend and may vroom up to 800- 820

Short Covering is Expected

After three days of downfall and looking at the expiry ahead , Nifty is expected to witness short covering. The pull back can take it back to 5080-5120. The recent low of 4950 is Laxman Rekha for short term time frame. One should keep this index level as stop for all short term long trades.

Globally US markets have started to bounce back on the back of Consumer Confidence Increase and rise in U. S. retail sales.
TCS , Rolta and Allahabad banks look strong on charts and if market pulls back then these stocks may also bounce back .
TCS has support at 730 and resistances are at 804-829.

Rolta has support at 180 and resistance is at 206.

Allababad Bank has support at 130 and resistance is at 144.

One should keep volumes low as Nifty is still trading below 50 DMA and its in short term downtrend.

PSU Sector

PSU Sector is buzzing. One should wait for pull back to ride the trend.

Rolta has given good indication on charts to go long with stop of 198 and resistance at 220-243

Trading Ideas for the week

Last week Cement and IT sector had a good run. The momentum is expected to continue further.

Ranbaxy lab is trading in a range of 505 to 527 for the past six days.If it is able to sustain above 522 then it could reach 533-538 - 563 . Chart support is at 505 and pivot support is at 498


Nagarjuna Construction is also showing strength on chart. Support is at 170 and resistances are at 184. If it is able to trade above 184 then it may face next hurdle at 205-220

Have fun and keep on reading. I have read "Super Trader By Van Tharp " this weekend and found it useful for traders.
Have fun

IT Stocks are at new high- Power of charts

Readers and followers of this blog have been reading about our view on IT sector often.
At the risk of being repetitive we would like again to emphasize the power of charts .
We are always learning about the new concepts and ideas about swing trading and its our endeavor to make retail traders and investors aware of these ideas so that they do not have to struggle the hard way which we had to face. It does not mean that success will come easily. One has to work hard . Whatever stocks we discuss here one must and should see the charts and try to understand the rationale behind it.

One can refer to our previous post by clicking this link:

http://swingtradingideas.blogspot.com/2009/12/it-stocks-at-new-high.html

Have fun

Year End ideas

The year gone by was a very good year in terms of market gain.

As the New Year is knocking at our door its time to go back and think about trading mistakes . Make a personal note of every trade and work out how you can improve further. Losses are part of our life. As a trader you should not try to score 10 out of 10 . If you are able to score 5-6 you have made it as a trader provided you have discipline to cut losses in time.

Texmaco has support at 139 and resistances are at 170-195.

Rail stocks are also showing strength. Kalindee Rail, Titagargh Wagon and Kernex Micro are buzzing.
Keep thesr stocks on radar particularly Kernex as this stock is consolidation with low volume and is trading in a range. A sharp explosive move is expected.

We wish all the readers of our blog a Very Happy and Prosperous New Year .

We would be happy to receive your comments and feed back.

Weekly Trading Ideas

Some of the weekly trading ideas are :



Stock Support Resistance

Neyveli Lignite 145 162
GSPL 90 105
Vijaya Bank 48 56
Jindal Steel & Power 650 750