iCharts Discussions

[umesh1]

I'm sure you've heard countless of the so-called "experts" and "gurus" tell you "discipline is important".

This is the same old mantra I've been hearing since I started trading and yet today, the vast majority of traders are still losing their shirts and blowing up their accounts.

Now if this isn't an ineffective way to teach trading, I don't know what is.

Telling people not to be emotional is like telling a fish to live on land.

People are by their very nature, emotional beings. If you think you can avoid being emotional when trading like 99.02% of the traders out there, you're just kidding yourself.

Don't believe me? Let me ask one question:

Have you tried being "disciplined" in your trading?

How's that working out for you?

Chances are, it's something that you've been struggling with, even after months or years of trading.

but here's the truth: you're going to struggle with "discipline" for as long as you're trading, because traditional trading methods make "discipline" a requirement to make money.

When we get angry or upset, the best solution is to let these emotions out.

Yell at a wall or scream into a pillow - this is the fastest and most natural way to eliminate these negative emotions. The more you suppress these feelings, the worse you'll feel and act.

In the same way, more you suppress and force yourself to be disciplined, the more difficult it will be for you to trade with a clear, unbiased mind.
Say Cheers

[vishyvaranasi]

[rk_a2003]

[rk_a2003]

Umesh

Thanks for your contribution. It is a nice piece, though can be discussed endless. It was widely accepted that Long term investment (Buffet method) guarantees success. What exactly it does is keeping your actions out of emotions.

So, the best way to keep your trading out of emotions is decide a Method/Strategy in an emotion free environment, brainstorm/back test it in numerous ways, try to make it pitfall free as much as possible and deploy it in your actual trading and follow that like a machine.

In case you feel to change / switch your strategy do it again in an emotion free environment. It’s a continuous process. If you let your emotions decide your course of action in trading, it’s going to be a disaster. All of us know it.

The question is what course of action has to be adapted for keeping our trades out of emotional influence? It will vary from person to person.


The following post of mine may help in this discussion further.

"All of us knew that being objective with the market will pays off. And also it’s almost equal to achieving highest level of consciouseness.Which is really really a difficult task if not impossible. Look at us.... We are Full of GREED,FEAR, AGONY,DISTRESS, JEALOUSY and ENVY, RIVALRY ,OVER CONFIDENCE, UNDER CONFIDENCE,ANGER.... with all these instincts How can we be objective?!.

If it needs decades of interactions with the Market , If it needs assimilating the market with you , If it needs that some one has to say Hey! Look at this man he is the market! and market is him.. If it needs overcoming and mastering all your interfearing instincts, if it needs strengthening and elevating your positive instincts like love, sympathy, modesty, sociability, constructiveness, acquisitiveness.

What is the use even after achieving it?!. Once you achieve that stage you may no longer need the benefits you will get out of it. What a parodox?! To get some thing you need to achieve a stage and after achieving that stage you may no longer need that thing.

Still, there could be an intermediate stage.And we need to move ahead what so ever may happen in future."

[vishyvaranasi]

[rk_a2003]

The Essentials of a successful trader

MATCH THE TRADING METHOD TO YOUR PERSONALITY
It is critical to choose a method that is consistent with your own personality and comfort level. If you can't stand to give back significant profits, then a long-term trend-following approach-even a very good one-will be a disaster, because you will never be able to follow it. If you don't want to watch the quote screen all day (or can't), don't try a day-trading method. If you can't stand the emotional strain of making trading decisions, then try to develop a mechanical system for trading the markets. The approach you use must be right for you; it must feel comfortable. The importance of this cannot be overemphasized. Remember Randy McKay's assertion: "Virtually every successful trader I know ultimately ended up with a trading style suited to his personality." Incidentally, the mismatch of trading style and personality is one of the key reasons why purchased trading systems rarely make profits for those who buy them, even if the system is a good one. While the odds of getting a winning system are small-certainly less than 50/50-the odds of getting a system that fits your personality are smaller still. I'U leave it to your imagination to decide on the odds of buying a profitable/ moderate risk system and using it effectively.


IT IS ABSOLUTELY NECESSARY TO HAVE AN EDGE
You can't win without an edge, even with the world's greatest discipline and money management skills. If you could, then it would be possible to win at roulette (over the long run) using perfect discipline and risk control. Of course, that is an impossible task because of the laws of probability. If you don't have an edge, all that money management and discipline will do for you is to guarantee that you will gradually bleed to death. Incidentally, if you don't know what your edge is, you don't have one.


DERIVE A METHOD
To have an edge, you must have a method. The type of method is irrelevant. Some of the super traders are pure fundamentalists; some are pure technicians; and some are hybrids. Even within each group, there are tremendous variations. For example, within the group of technicians, there are tape readers (or their modem-day equivalent-screen watchers), chartists, mechanical system traders, EIliott Wave analysts, Gann analysts, and so on. The type of method is not important, but having one is critical-and, of course, the method must have an edge.


DEVELOPING A METHOD IS HARD WORK
Shortcuts rarely lead to trading success. Developing your own approach requires research, observation, and thought. Expect the process to take lots of time and hard work. Expect many dead ends and multiple failures before you find a successful trading approach that is right for you. Remember that you are playing against tens of thousands of professionals. Why should you be any better? If it were that easy, there would be a lot more millionaire traders.

[ajayhkaul]

the EDGE !

Great reality check , RK .

[rk_a2003]

The Essentials of a successful trader

LOSING IS PART OF THE GAME
The great traders fully realize that losing is an intrinsic element in the game of trading. This attitude seems linked to confidence. Because exceptional traders are confident that they will win over the long run, individual losing trades no longer seem horrible; they simply appear inevitable-which is what they are. As Linda Raschke explained, "It never bothered me to lose, because I always knew that I would make it right back. “There is no more certain recipe for losing than having a fear of losing. If you can't stand taking losses, you will either end up taking large losses or missing great trading opportunities-either flaw is sufficient to sink any chance for success.


THE VIRTUE OF PATIENCE
Waiting for the right opportunity increases the probability of success. You don't always have to be in the market. As Edwin Lefevre put it in his classic Reminiscences of a Stock Operator, "There is the plain fool who does the wrong thing at all times anywhere, but there is the Wall Street fool who thinks he must trade all the time. “One of the more colorful descriptions of patience in trading was offered by Jim Rogers in Market Wizards: "I just wait until there is money lying in the comer, and all I have to do is go over there and pick it up." In other words, until he is so sure of a trade that it seems as easy as picking money off the floor, he does nothing. Mark Weinstein (also interviewed in Market Wizards) provided the following apt analogy: "Although the cheetah is the fastest animal in the world and can catch any animal on the plains, it will wait until it is absolutely sure it can catch its prey. It may hide in the bush for a week, waiting for Just the right moment. It will wait for a baby antelope, and not Just any baby antelope, but preferably one that is also sick or lame .Only then, when there is no chance it can lose its prey, does it attack. That, to me, is the epitome of professional trading. "As a final bit of advice on the subject of patience, guard particularly against being overeager to trade in order to win back prior losses. Vengeance trading is a sure recipe for failure.


THE IMPORTANCE OF SITTING
Patience is important not only in waiting for the right trades, but also in staying with trades that are working. The failure to adequately profit from correct trades is a key profit-limiting factor. Quoting again from Lefevre in Reminiscences, "It never was my thinking that made big money for me. It was always my sitting. Got that? My sitting tight!" Also, recall Eckhardt's comment on the subject: "One common adage ... that is completely wrongheaded is: You can't go broke taking profits. That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits."


SCALING IN AND OUT OF TRADES
You don't have to get in or out of a position all at once. Scaling in and out of positions provides the flexibility of fine-tuning trades and broadens the set of alternative choices.Most traders sacrifice this flexibility without a second thought because of the innate human desire to be completely right. (By definition, a scaling approach means that some portions of a trade will be entered or exited at worse prices than other portions.) As one example of the potential benefits of scaling, Lip-schutz noted that it has enabled him to stay with long-term winners much longer than he has seen most traders stay with their positions.

[ajayhkaul]

Patience as a virtue is a vital input for beginners who tend to jump right back into another trade.

[rk_a2003]

Today at some point of the day I saw ST's post in Market Direction thread in reply to my post saying something similar to this “you have not read what Ajay Posted......... RK, it's better if you don't push this any further!”.

As I was busy with my work I decided to reply later. Now when I logged in I could not see the Market Direction thread. So I decided to post this in my thread.

**************************************************************

ST! without reading Ajay’s post I could not comment that” I don’t see any garbage in Ajay’s post”, and may I ask you what do you mean by “it’s better not to push this any further”?!.Such things won't work atleast with me.

Have you ever heard the famous quotation of philosopher Voltaire which is considered as the core concept of democratic system i.e “I disapprove of what you say, but I will defend to the death your right to say it”.

I am reposting Ajay’s Post here. I don’t see any ‘garbage’ in this. If you have any respect for Democratic values and traditions. Let people read it and decide for themselves whether it is a garbage or actually exposing the garbage. "It is dangerous to be right in matters where established men are wrong".


**************************************************************



Hi All ,
This what Ajay posted in Market direction thread. One may disapprove it but cannot say it as Garbage.

“I can see that the forum is unblocked ...thanks ST. Is that a bait or you really enjoy another point of view ? I do ...so no offense meant and here goes :


QUOTE : ‘Do remember that given the all round bearishness, any price strength shown here and the one breaking bearish trendline can result in a sustainable upside move. Until this happens sideways to down move could continue.

READ : Duh !? if doesn’t go up , then it will go down or sideways ? Are there any other possibilities? It is definitely not EVER going to jump out of the page at the reader


QUOTE : *** ALL THIS ANALYSIS IS MORE RELEVANT FOR POSITION TRADERS AND LONG-TERM INVESTORS ***
[DISCLAIMER : What I am posting here is my personal opinion. This information is provided for educational purpose only.]

READ : If I didn’t make money for so long from this ,how can you?


QUOTE : NSE Long term sentiment CHART
READ : Oops, that was an angiogram/heart rate monitor like … how depressing Hey, is it coming or going ?

QUOTE : A more significant market bottom seems to be a bit more lower but we have to see how far this particular up move/consolidation will take us. So let us see....
READ : Save us the trouble… we know that if fundamentals get worse , you will see a lower bottom. And if market men are waiting in anticipation for fundamental events to occur, the market consolidates .No rocket science.

QUOTE :On the sentiment front, intermediate term sentiment is nearing its oversold level of -80%. A move up to test the long term bearish trendline is possible. What happens there is the key for any serious future move up. Long term sentiment has taken a serious hit and will now need to decisively break above 0 for any serious sustained/long move up.

READ: GDP is declining QoQ . If it doesn’t improve(stimulus) , we stay bearish. Don’t sit and stare at the chart …get a life …..like chetan did
‘Thanks ST Sir, Do post the chart, as and when -80% levels is breached and reversal happens (I am headed for OOty) aapka Chetan.


Quote : May 12 ,2012 NSE long term sentiment too is declining fast. Intermediate term sentiment hiitting -80% would be a good place to reverse which is not far away. Serious money should go into longs only after long term sentiment recovers and moves above 0. Position traders can look to get long after intermediate sentiment bottoms out.

READ : April 30, 2012 …sell in may and go away!

The jury is out as to which of the above is detrimental to health.

Riots are happening across europe. One can face it or be an ostrich...No chart showed that, but the crappy thread forewarned months in advance.

We can go on.. but what is the point ? Readers are mature enough to decide for themselves, aren’t they? Else what are they doing on this adults only site?”

[vishvesh2001]

Thanks RK_a2003 for posting Ajay's comments for every one to read. To me it looks like someone was not able to swallow realities due to the presumption of being experts. Oh ! What a biased and one sided dictatorial behaviour in a public forum where others are not allowed to voice their opinions.

Long Live the DICTATORS

[ProTrader]

Folks:

You are all for a reason here. Making noise won't help anyone. Criticism is welcomed, Opinions are welcomed, Sarcasm not.

The reason forums were opened for posting to non-subscription members was to have a democratic forum for everyone to share their knowledge, learning, view and what not. It is due to our democratic values that you can abuse us right in a public forum.

Coming to the point, I have advised Ajay and many other not to jump into each and every conversation between two people. It is just not healthy. If you can't contribute positively or constructively to any conversation, then please keep it to your postings.

I would expect that you would respect each others contributions and keep the glorious tradition of knowledge sharing alive, else we all can keep poking (aka Facebook style) .

So let's close this argument here and start fresh (like lime n soda). There are many battles to be won by being united!

Regards,
ProTrader

[SwingTrader]

I think I should have done what I did a lot sooner....

Democracy for us is to drink, barge into the neighbour's house and create a ruckus and accuse the neighbour if we get kicked out.

There are certain rules you need to stick to. Democracy does not mean you do whatever the heck you want.

rk, you should really have left this discussion alone. You should not have pushed this further as none of this was related to you. Interfering into other matters is not a good idea. You are poking your nose in a matter that is none of your business.

[rk_a2003]

"Democracy for us is to drink, barge into the neighbour's house and create a ruckus and accuse the neighbour if we get kicked out"

Nothing such sort happened ST. My acts and deeds are guided by the following teachings of the Greatest Philosopher ‘BUDDHA’ .

Do not believe in traditions because they have been handed down for many generations.
Do not believe in anything because it is spoken and rumored by many.
Do not believe in anything simply because it is found written in your books.
Do not believe in anything merely on the authority of your teachers and elders.
But after observation and analysis, when you find that anything agrees with
Reason…then accept it and live up to it.
-The Buddha

I act accordingly. If I feel it’s none of my business, I would not have touched it even with a barge.

However, I should respect PT words.” So let's close this argument here and start fresh (like lime n soda). There are many battles to be won by being united!”.

[SwingTrader]