Well, I've been a lot busier with a lot of things lately, which gave me less time for updating the blog regularly.
I also traded a lot lesser, but managed to lose a lot more. The same old things continue to haunt me. Bad entry, bad money management and of course, not having good discipline.
The Pink Floyd line comes to my mind, "Steps taken forwards, but sleep walking back again."
If I made decent profits in 2 trades, then I would end up painfully losing all of it in the subsequent 3-5 trades. My portfolio looks like a chart making lower tops and lower bottoms. Hope there is a reversal in my fortunes. Or else, it could be bye bye to my trading capital.
I dont want to talk much about my trades, as some of them were news based trading. I mean, when a particular company that I track comes up with good or bad results, I take up a position based on the results. The profits are good, but the problem is that one can earn money with such trades in only 4 months of the year. For the rest, a lot more is needed.
Maybe for a change, I'll tell you what I learnt from my mistakes.
1. Always cut your losses.
There were trades in which I seemed to be so sure of my analysis, that I didn't close my loss making position. And the result, I had to take the mother of all losses.
2. Let the winners run.
Tata Motors got pummelled just after its quarterly earnings. I got a slightly later entry in a short sell trade, which was very close to a very strong old support. And since it was a friday and since I was nervous to keep the position open over the weekend and risk a gap up opening on the next monday, I just closed it.
It turned out that the stock tanked close to 15% from there within 2 weeks time.
I was reading a book called "How I trade for a Living", written by an author who has been trading for a living for the past many years. I was truly inspired to see how he turned around his account from USD 2500 to USD 650,000 in a reasonably short period of time. Mind you, its not so easy to learn his way of trading, as he seems to have a button for the market, and knows how to trade it by just looking at the ticker and the news.
But there were 2 big things that inspired me .
1. He was able to start making consistent profits after losing money for 19 years. That's some perseverance.
2. Once he started to make profits, he has not had a single loss making month for some 6-7 years in a row. That's some consistency.
After reading a few sections, I also understood the importance of weekly time frames and trend line analysis. All the while I was wondering why a lot of stocks reverse where there was no obvious support or resistance around there. Once I switched to the weekly view, I understood the game a lot better. Supports and resistances on weekly charts tend to be a lot significant than the ones we see on the daily charts.
I was also reading about the various chart patterns. Its very tough to identify these patterns on the daily charts. But on the weekly charts, its on your face. You only need to spend time in order to find what chart a stock fits into. Also, we can keep Elliot waves aside for stocks in a downtrend.
Some of the notable chart patterns are : Flag, Pennant, Triangles (Ascending, Descending, Symmetric, Expanding, Contracting), Wedges(Ascending, Descending). There are many more, but these tend to be the most common. There are various websites that explain these.
Most of the stocks that I'm following seem to be moving in a narrow range, and with great amounts of indecisiveness when seen from the daily charts. And I'm getting more and more convinced that swing trading technique is best applied when stocks are in a strong trend - upward or downward. Other techniques need to be applied to trade in a non trending market. I'm yet to figure it out.
I just hope all that I learn someday translates into good profits on my portfolio. Till then, I need to try and pay the lowest fees to the market.
Hope to come back with more updates shortly.
Bye for now, Happy Trading!
I also traded a lot lesser, but managed to lose a lot more. The same old things continue to haunt me. Bad entry, bad money management and of course, not having good discipline.
The Pink Floyd line comes to my mind, "Steps taken forwards, but sleep walking back again."
If I made decent profits in 2 trades, then I would end up painfully losing all of it in the subsequent 3-5 trades. My portfolio looks like a chart making lower tops and lower bottoms. Hope there is a reversal in my fortunes. Or else, it could be bye bye to my trading capital.
I dont want to talk much about my trades, as some of them were news based trading. I mean, when a particular company that I track comes up with good or bad results, I take up a position based on the results. The profits are good, but the problem is that one can earn money with such trades in only 4 months of the year. For the rest, a lot more is needed.
Maybe for a change, I'll tell you what I learnt from my mistakes.
1. Always cut your losses.
There were trades in which I seemed to be so sure of my analysis, that I didn't close my loss making position. And the result, I had to take the mother of all losses.
2. Let the winners run.
Tata Motors got pummelled just after its quarterly earnings. I got a slightly later entry in a short sell trade, which was very close to a very strong old support. And since it was a friday and since I was nervous to keep the position open over the weekend and risk a gap up opening on the next monday, I just closed it.
It turned out that the stock tanked close to 15% from there within 2 weeks time.
I was reading a book called "How I trade for a Living", written by an author who has been trading for a living for the past many years. I was truly inspired to see how he turned around his account from USD 2500 to USD 650,000 in a reasonably short period of time. Mind you, its not so easy to learn his way of trading, as he seems to have a button for the market, and knows how to trade it by just looking at the ticker and the news.
But there were 2 big things that inspired me .
1. He was able to start making consistent profits after losing money for 19 years. That's some perseverance.
2. Once he started to make profits, he has not had a single loss making month for some 6-7 years in a row. That's some consistency.
After reading a few sections, I also understood the importance of weekly time frames and trend line analysis. All the while I was wondering why a lot of stocks reverse where there was no obvious support or resistance around there. Once I switched to the weekly view, I understood the game a lot better. Supports and resistances on weekly charts tend to be a lot significant than the ones we see on the daily charts.
I was also reading about the various chart patterns. Its very tough to identify these patterns on the daily charts. But on the weekly charts, its on your face. You only need to spend time in order to find what chart a stock fits into. Also, we can keep Elliot waves aside for stocks in a downtrend.
Some of the notable chart patterns are : Flag, Pennant, Triangles (Ascending, Descending, Symmetric, Expanding, Contracting), Wedges(Ascending, Descending). There are many more, but these tend to be the most common. There are various websites that explain these.
Most of the stocks that I'm following seem to be moving in a narrow range, and with great amounts of indecisiveness when seen from the daily charts. And I'm getting more and more convinced that swing trading technique is best applied when stocks are in a strong trend - upward or downward. Other techniques need to be applied to trade in a non trending market. I'm yet to figure it out.
I just hope all that I learn someday translates into good profits on my portfolio. Till then, I need to try and pay the lowest fees to the market.
Hope to come back with more updates shortly.
Bye for now, Happy Trading!
