Well, this was my first month as a serious trader on the new demat account. I traded mostly in Futures and Options. I had a lesser liking towards options, main reason being the low liquidity in options of the stocks which I wished to trade.
Maybe I need to look at trading Nifty Options. Its a good idea to do trade in options, when there aren't good stocks to pick for trading- both on the long and short side.
I had a few hits - LT, IDFC, Titan(short), Syn Bank(short).
I had quite a few misses too - Infy, Axis Bank, ABB (short) and SBI.
Infy and Axis Bank - bad analysis and bad entry points. Instances where I tried to force a trade.
ABB - analysis was right, but entry was wrong. Another instance of trying to force a trade.
SBI - pattern gone wrong, or my understanding of Bullish haraami pattern was wrong.
In all these cases, I had a 1:3 risk to reward ratio, i.e. for every 3 rupees that I was prepared to earn, I was prepared to lose only 1 rupee. I ensured that I kept strict SLOs(stop loss orders). So the profits outweighed the losses at the end of the month.
I also suggested some trades to my friends and my wife. They got good profits in Shree Renuka Sugars, Sydicate Bank(both on long and short side) and Tata Steel.
In this month, Nifty has touched a high of 6338(Diwali time) and a low of 5780(today - 25th Nov). I'm happy that I am still surviving this market correction, and my trading account is in green for this month.
Some great trader has said, "Its not important in what direction the markets are going. What's important is a trader's response to it."
Thursday, November 25, 2010
Wednesday, November 24, 2010
Syndicate Bank
Scrip: SynBank(NSE)
Shorted one lot in Futures.
Pattern: Shooting star on a Tall Building with heavy volumes.
Wave: end of 5th.
William %R: Overbought.
Support: 142 - wick of long white candle
Entry Price: 154.25 (155 in futures)
Resistance: 158.5
Planned exit point : 138.5 (140 in futures) - target achieved
Well, this one was another easy short trade to take up. I happened to see Syndicate Bank rally around 8%, and I even got a call from my broker to buy Syndicate Bank. I waited for 2 days, and then shorted the same.
Reason: I saw a shooting star falling from the sky onto the big white building. This was at the end of the 5th wave and in overbought condition.
The outcome: the white building got burnt.
In this trade, I tried to keep my emotions in control, something which had made me lose a golden chance in Titan (Titan sold off a further 300 rupees from where I closed the trade).
I had kept the 50% fibonacci retracement point as my target. Once achieved, I just closed the trade.
But then, the news of a housing scam broke out, which led to a further selloff in most of the banking stocks.
Though it was target achieved in this case, maybe I should have just held on to my shorts :).
Btw, this was a very profitable trade. And for the first time me, my wife (she had bought a 150 PUT OPTION) and my friend Manju made money on the same stock.
Shorted one lot in Futures.
Pattern: Shooting star on a Tall Building with heavy volumes.
Wave: end of 5th.
William %R: Overbought.
Support: 142 - wick of long white candle
Entry Price: 154.25 (155 in futures)
Resistance: 158.5
Planned exit point : 138.5 (140 in futures) - target achieved
Well, this one was another easy short trade to take up. I happened to see Syndicate Bank rally around 8%, and I even got a call from my broker to buy Syndicate Bank. I waited for 2 days, and then shorted the same.
Reason: I saw a shooting star falling from the sky onto the big white building. This was at the end of the 5th wave and in overbought condition.
The outcome: the white building got burnt.
In this trade, I tried to keep my emotions in control, something which had made me lose a golden chance in Titan (Titan sold off a further 300 rupees from where I closed the trade).
I had kept the 50% fibonacci retracement point as my target. Once achieved, I just closed the trade.
But then, the news of a housing scam broke out, which led to a further selloff in most of the banking stocks.
Though it was target achieved in this case, maybe I should have just held on to my shorts :).
Btw, this was a very profitable trade. And for the first time me, my wife (she had bought a 150 PUT OPTION) and my friend Manju made money on the same stock.
Monday, November 15, 2010
Titan
Scrip: Titan (NSE)
Short Sell in Futures
Pattern: Shooting star after a strong upmove.
Wave: 5th.
William %R: overbought
Support: 3822 - lower edge of long candlestick
Entry Date: 12-11-2010
Exit Date: 15-11-2010
Entry Price: 4120 in futures.
Exit Price: 3940 in futures.
This was my first short sell trade. The markets were weak in the last week. But Titan rallied a good 10% in 1 session. The very next day, there was a nice shooting star, in the overbought condition.
The trade lasted just 2 sessions,I imagined this black hammer kind of thing that suggested selling might have stopped.
But it still gave me more profits than any of my previous trades. That's because
1. Fear is a more powerful emotion than greed.
2. It might take a million shares to be traded for the prices to go up. But it takes only a tenth for it to push it down.
3. Gravity pulls down almost any stock. Even if its Titan.
Short Sell in Futures
Pattern: Shooting star after a strong upmove.
Wave: 5th.
William %R: overbought
Support: 3822 - lower edge of long candlestick
Entry Date: 12-11-2010
Exit Date: 15-11-2010
Entry Price: 4120 in futures.
Exit Price: 3940 in futures.
This was my first short sell trade. The markets were weak in the last week. But Titan rallied a good 10% in 1 session. The very next day, there was a nice shooting star, in the overbought condition.
The trade lasted just 2 sessions,I imagined this black hammer kind of thing that suggested selling might have stopped.
But it still gave me more profits than any of my previous trades. That's because
1. Fear is a more powerful emotion than greed.
2. It might take a million shares to be traded for the prices to go up. But it takes only a tenth for it to push it down.
3. Gravity pulls down almost any stock. Even if its Titan.
IDFC
Scrip : IDFC (NSE)Pattern: Swing (Bear) trap.
Wave: Wave C completed. Wave 1 to start.
William %R: Nearing -80. Very close to oversold region.
Support: around 196.
William %R: Nearing -80. Very close to oversold region.
Support: around 196.
Resistance: 205
Entry Date: 1-11-2010.
Entry Price: entered at 206 in futures.
Exit Date: 4-11-2010.
Entry Price: entered at 206 in futures.
Exit Date: 4-11-2010.
Exit Price: 210.
For some reason, I like this stock a lot. And I got a chance to trade this again.
While looking for new trades, I chanced upon a nice swing trap completed in IDFC. I was skeptical trading this, as the quarterly results were to be announced in a week from the day of my entry into trade. This played on my mind. Though I had got a good entry point, I bungled on the exit. Had I closed my position in the afternoon instead of in the morning, my Diwali bonus would have been even better.
Well, though I didn't make a lot of money in this, trade.
I wanted to show 2 things in this.
1. A good pattern in Swing trap(or bear trap or ABC pattern) - though it didnt occur in between the 10 EMA and 30 EMAs.
2. Lesson that one should play it safe and exit the position atleast a day before the results are announced. One can see how the stock sold off in the next few sessions.
L&T
Scrip : LT(NSE) - Larsen and Toubro
Pattern - T-30. Long tail of hammer. Heavy volumes seen.
Results : much better than market expectations.
Wave - Wave 1.
Williams %R - 95 on the day before entry.
Support - 1928 : tail of hammer.
Entry Date: 19-10-2010 and 25/10/2010 in futures.
Entry Price: 2040.
Exit Price: 2200.
Exit Date : 4/11/2010
This was a tricky stock to trade. I had to have a lot of patience on this one. I closed my position in cash and entered a position in Futures, as futures trading got enabled on my new account. But I had to do some running around to do that.
I also had a major scare when there was a risk of getting stopped out, as some big time players decided to go in for a vertical selloff on a late Thursday afternoon on the day of Futures Expiry.
Once that was through, it was all smooth sailing.
The final outcome, a nice Diwali bonus. From my old company. L&T ki Jai :).
Pattern - T-30. Long tail of hammer. Heavy volumes seen.
Results : much better than market expectations.
Wave - Wave 1.
Williams %R - 95 on the day before entry.
Support - 1928 : tail of hammer.
Entry Date: 19-10-2010 and 25/10/2010 in futures.
Entry Price: 2040.
Exit Price: 2200.
Exit Date : 4/11/2010
This was a tricky stock to trade. I had to have a lot of patience on this one. I closed my position in cash and entered a position in Futures, as futures trading got enabled on my new account. But I had to do some running around to do that.
I also had a major scare when there was a risk of getting stopped out, as some big time players decided to go in for a vertical selloff on a late Thursday afternoon on the day of Futures Expiry.
Once that was through, it was all smooth sailing.
The final outcome, a nice Diwali bonus. From my old company. L&T ki Jai :).
Saturday, October 9, 2010
Tata Global Beverages
Scrip: Tata Global Beverages(NSE)
Earlier this was known as Tata Tea.
Trade Enter Date : 4/10/2010
Trade Exit Date : 7/10/2010
Options : Call
Strike Price : 130
Bought 1 Lot.
Pattern : Swing Trap Pattern
This is more famously known as ABC wave (Elliot Wave Theory).
On seeing the hammer in the marked area, a lot of traders are deceived to feel that selling has stopped.
But this is a swing trap. This wave doesn't go as high as the previous one.
And now when it falls again, a lot of traders have to take a loss. The black hammer in the focused region just shows all the stop loss orders that might have got triggered before buyers pushed prices back to near the day's open.
Now that all the sellers are gone, this stock can rally. And boy, did it rally.
I entered this trade a bit later for many reasons.
1. The liquidity in Options was not very high just after the black hammer day.
2. The sellers were all quoting very high prices, since the time value of the option was high (beginning of the month) .
Ideally, since this was the breakout wave, I could have held on my position a bit longer. But since Options contracts lose value in time, I just took the profit taking decision, and took pretty decent profits on this one.
But there is still money to be made in this stock for now, as its still in the breakout wave. Watch the stock for a pullback, and see if this can be a profitable trade.
Update : I planned to re enter again in the third wave. But got stopped out as the pattern broke down from there. The quarterly results that were announced also didn't give enough trigger for a major rally.
Earlier this was known as Tata Tea.
Trade Exit Date : 7/10/2010
Options : Call
Strike Price : 130
Bought 1 Lot.
Pattern : Swing Trap Pattern
This is more famously known as ABC wave (Elliot Wave Theory).
On seeing the hammer in the marked area, a lot of traders are deceived to feel that selling has stopped.
But this is a swing trap. This wave doesn't go as high as the previous one.
And now when it falls again, a lot of traders have to take a loss. The black hammer in the focused region just shows all the stop loss orders that might have got triggered before buyers pushed prices back to near the day's open.
Now that all the sellers are gone, this stock can rally. And boy, did it rally.
I entered this trade a bit later for many reasons.
1. The liquidity in Options was not very high just after the black hammer day.
2. The sellers were all quoting very high prices, since the time value of the option was high (beginning of the month) .
Ideally, since this was the breakout wave, I could have held on my position a bit longer. But since Options contracts lose value in time, I just took the profit taking decision, and took pretty decent profits on this one.
But there is still money to be made in this stock for now, as its still in the breakout wave. Watch the stock for a pullback, and see if this can be a profitable trade.
Update : I planned to re enter again in the third wave. But got stopped out as the pattern broke down from there. The quarterly results that were announced also didn't give enough trigger for a major rally.
IOB
Scrip Name : IOB(NSE)
Trade Enter Date : 29/09/2010
Trade Exit Date :7/10/2010.
Buy Price : Rs.132.5
Pattern : Spinning Top seen after a strong downtrend.
Oversold condition confirmed by William%R.
Entered trade in anticipation of a trend reversal. Profit taking:
a. Sold some at Rs.140.56 on 4/10/2010.
b. Exited at Rs.148 on 7/10/2010.
Looking at the volumes and the short time in which IOB has gained more than 10%, it looks like a breakout wave. I guess there is more opportunity to make money in this stock once a pullback occurs.
I would want to hold this position a bit longer, but had some other money management activities lined up. So closed the position.
IDFC
Scrip Name: IDFC(NSE)
Pattern : Bought at the end of pullback after rally. Spinning Top seen.
Bought Call Option.
Lot Size: 2000.
Strike Price: 210.
Still learning the tricks of the trade you see!
Trade Enter Date : 30/09/2010
Trade Exit Date : 4/10/2010
Pattern : Bought at the end of pullback after rally. Spinning Top seen.
Bought Call Option.
Lot Size: 2000.
Strike Price: 210.
Since it was entering into the last motive wave, the upward move didn't look strong. So I decided to close the position and took a decent profit.
Had I traded it a week or 10 days earlier, it would have been a far more profitable trade.Still learning the tricks of the trade you see!
My First Swing Trade
Scrip: Yes Bank(NSE)
Trade Enter Date : 13/09/2010
Trade Exit Date : 4/10/2010
Pattern : T-30.
Since Yes Bank had retraced more than 50% in its corrective phase, this was a slow trade.
Initial buy price :Rs. 324
Profit Taking:
a. Sold Some at 335
b. Sold some at 343
c. Exited at 357
This trade was so slow that it began to test my patience. Finally, I decided to exit with a decent profit.
Trade Enter Date : 13/09/2010Trade Exit Date : 4/10/2010
Pattern : T-30.
Since Yes Bank had retraced more than 50% in its corrective phase, this was a slow trade.
Initial buy price :Rs. 324
Profit Taking:
a. Sold Some at 335
b. Sold some at 343
c. Exited at 357
This trade was so slow that it began to test my patience. Finally, I decided to exit with a decent profit.
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