Tuesday, 31 January 2017

Nifty and Bank Nifty Future 31012017

It was a news flow heavy day.  I could find trade setups both in Nifty and Bank Nifty today.  As marked there was direct BO trade setup in Nifty which yielded some.  In Bank Nifty there was a good BOF of Range low which because of news flow moved very well.

Trade cautiously tomorrow on Budget day.  Trading DPs with usual price action will not work on a day which is full of big news flow.  Better to trade only after the Budget announcement is done in the afternoon.

Friday, 27 January 2017

Nifty Future 27012017

It continued from where it left.  In the afternoon once it started ranging, attempted a long trade which reached to the target.

Wednesday, 25 January 2017

Nifty Future 25012017

It opened above all the DPs and could trade above them. It traded in the narrow range in the morning session.  After breaking out of that morning range, it lacked momentum and again traded in the range above it. By the afternoon, it was very much apparent that the prices were moving in a trend day fashion.  With this information, going long above RN on direct BO was possible which yielded well. 

Monday, 23 January 2017

Nifty Future 23012017

It opened below PDL.  I waited for the prices to get accepted below it for some time.  It did not get accepted below it and reversed in V shape and moved in a straight line without allowing me to enter in the long trade.  It got resisted at BRN, then failed to break it and presented a nice short trade setup.  It moved well.  At around 2 pm there was a setup to go long but it did not convince me much.  It looked more like a TST setup which I did not prefer to take and missed the up move.

This week expiry is on Wednesday and Union Budget is on 1st Feb.  Expect some volatility.

Sunday, 22 January 2017

Mentoring Works

Today I thought let me share my recent experience with all of you about the mentoring program that I conducted with Sunil, Saurav and Rekha.  I believe “when you have an honest desire to give back, mentoring is an obligation, a responsibility.  This is the only reason I put lot of efforts in that direction even after achieving what I ultimately wanted to achieve.

Profitable trading is hard.  It requires four times more effort than you expect.  You need to focus on mastering the basics. Without a solid foundation in core principles, trading mastery will be challenging.  Remember, learning how to trade is simple.  You can watch videos on YouTube here and there, can read books written by failed traders, and try to learn on your own doing trial and error method, jumping from one method to another.  After paying lot of tuition fees to the markets and spending years after years in frustration, one fine day you may realize it will never work that way.
Day trading is perceived to be the most difficult job in the world. As per data, only 3 to 5% of the traders who attempt day trading eventually get success here. To compete with professional and experienced traders and to get the success here, we have to be well knowledgeable, well skilled and well experienced.  We will never get success trading only with the patterns without understanding the context, internals, and the reasoning behind it.

Like other mentees, Sunil, Saurav and Rekha started the process with getting a basic education on trading and later to fine tune their thought process and put all the things together they decided to go for mentoring with me.  They wanted to day trade full time, for their living.  We started spending time together, not only during the market hours but also during the weekends.  We utilized this time period of almost 3 months to its fullest.  We discussed everything about the markets and day trading including reading market internals, stock options, finding good trade setups, handling emotions and lot more.

Now I feel very proud to say that like other traders they also benefited from the mentoring program very much.  In a very short span of time, after spending time with me they could transition from the phase of making losses to making small profits consistently.  This is a very big achievement for a trader.  Now no one will be able to stop them and they will trade for living for rest of their lives.  For most of traders, unfortunately trading success always remains an illusion.  I remember it took me more than 10 years to turn profitable consistently and this is what I don’t want other traders to go through.  I do my every bit to help others shorten this long, never ending frustrating period of finding success in the trading.

Mentoring program is a step toward helping you become financially independent.

Saturday, 21 January 2017

Trading Versus Gambling

I would like to tell you without a doubt that trading in the markets is not like gambling at all.  Trading is simply a vehicle to generate cash flow just like a business, whereas gambling has a fixed odds system for all major games.  The market does not have any unfair advantage as with casino style games, card games or racing.

Many gamblers visit casino or casino like place, step up to a table to play a game with money on the line and hope to earn a fortune.  However, these gamblers fail to understand that the massive casino that they have stepped into was built with the money lost by people before them who didn't understand the odds that the casino that hosts the game makes sure the odds are tilted in their favor, in the favor of “house”.

Unlike gambling, in trading the traders will be dealing with markets that do not ultimately care whether they win or lose.  With enough knowledge about the markets and trading, expertise on the trading method, extreme discipline, dedication and honest and genuine efforts, traders can profit in the market.  However, if traders approach the market with random abandonment, then the market can and will cause serious pain.

Now let me try to help you recognize if you are displaying characteristics of a gambler and not a trader.

1.  Trading without proper understanding of markets and trading system.

Few weeks back I did a small quiz to help traders test whether they have a sound understanding of the trading system that they trade with.  If you have not been able to test your existing knowledge yet, click here.  The eye-popping results were like this,

Less than 10% of the respondents scored complete marks.
More than 60% of the respondents scored less than 50% marks.

The results proved that majority of traders were trading without enough knowledge of the trading system.  They lacked even the basic understanding of how the system works.  By looking at the results one would never wonder why they were still losing money while trading.  They took it as a sort of gambling and that is the main reason, they did not seriously think about educating themselves first and do all the preparation.

If you do not know how to drive the car, will you attempt driving it?   If you do not know how to operate a patient, will you dare to do a surgery?  If you do not know how to fight with the professional boxing champion, will you show courage to jump into a boxing ring?  You will obviously not do it.  Then why in trading, you start trading without knowing how to trade.  Why do you treat trading differently?  If you start trading without knowing how to trade, you will for sure harm yourself very badly, simply because you do not know how to do it.  You will ruin yourself financially and emotionally.

2.  Going all-in or taking large trading bets on small capital.

If you find yourself going all-in on trading positions, this is a sign that you are taking unnecessary risks for the hopes of a windfall profit.  For an example, you would be doing this if you have 100k cash, you use 400k margin on that and you are using all 400k for one day trade.  If you like to take large option trade positions in the hopes of making 10x of your money, what you are doing is, just gambling.  So if you find yourself occasionally or worst frequently going all-in on a sure bet, this is a clear sign that you are crossing the line from a good trader to characteristics of a gambler.

3.  Overtrading.

Gamblers will often try to bet themselves out of a hole, which most times leads them further into the ruin.  As a trader, you can too display similar behavior with the market if you go on a bad run.  No matter how good you are as a trader, you will encounter dry spells.  It will feel like the market is against you and you are unable to pick a winner.  Smart traders will either stop trading for a period of time or will start to take smaller positions until they are able to sort through their slump.

I remember a time where I was day trading and the market had given me a few losses by noon time. Instead of trading smaller or stopping altogether for the day, I decided to “beat” the market.  I considered myself like a hero Rajnikant who can handle any worst situation and fight and beat hundreds of people.  So I began taking on position after position, so much so that by the end of the day I felt like I had been through a mixer grinder.

Same way if you are becoming somewhat of a gambler, you will notice that the majority of the time you are overtrading.  This need to overtrade is the same thing a gambler feels when they need to place more bets to “fix” the problem.

4.  Overleveraging or using credit for trading.

Under no circumstances should you be using credit cards or taking out loans or borrowing money from the loved ones to place money in the market.  Think about it, the market already provides you margin which allows you to trade above the available cash on hand.  Why would you need more money?

It is one thing to lose your own money, but you should never allow the market to place you in a position where you are going in debt due to your trading.  If you can’t turn a profit with your own cash, what makes you think you will turn a profit with borrowed money?  It’s not about trading larger in order to make money; it’s about trading smarter with what you have on hand. So if you are surviving on a borrowed capital, stop whatever you are doing and replace these funds immediately.

5.  Mental stability.

A major sign that someone is a gambler and not a trader is when they lose their mental stability. They will have mood swings that start to fly all over the place.  They will be high as a kite one day and then completely depressed the next day.  Trading if not treated as a business can have the effects on your relationships.  You will find yourself avoiding your loved ones because you don’t want to face if they ask you how your trading is going.  You will start to find time with your family as a distraction from your very important task of performing more and more market analysis.

Trading should have no impact on your emotions.  You should remain as calm and as composed as ever.  This is always the first sign of a good trader, the ability to stay completely flat in an environment that is filled with emotions such as winning and losing, fear and greed.

6.  Trading rules.

If you are finding yourself abandoning rules in order to place random bets in the market, you are not a trader.  This is a clear sign that you are no longer concerned with establishing a rationale for your trades and have instead opted for the ability to place trades whenever and wherever you want.  This sort of behavior is similar to the gambler who is not concerned with calculating odds, but would rather just stay in the game and place bets.

In trading, you have to have a number of fixed rules that govern how you do your trading and conduct your business.  You require to make your own rules for identifying the trade setups, for entry and exit, for money management, etc.  You also need to understand the rules of the market and you need to abide by those rules.  There should not be any scope for deviation from these rules.

7.  Record keeping.

Are you keeping your trading records?  Are you aware of your current profit or loss situation?  If your answer is yes, then you are a good trader. If your answer is no, then you may be more inclined towards gambling rather than trading.

Good record keeping helps us measure our performance as a trader, rate our progress, and learn from our mistakes.  If we do not learn from the past, we are doomed to repeat it.  If someone wants to become a better runner, keeping records of speeds is essential for designing better workouts. If money is a problem, keeping and reviewing records of all expenditures is certain to uncover wasteful tendencies. Keeping scrupulous records turns a spotlight on a problem and allows us to improve.

8.  Risk management.

Before you enter each trade, do you determine where you will exit a position if you are wrong?  Only traders will do this.  Gamblers do not have that luxury.  Having a stop is critical in every trader’s career; because it is your way of saying I am wrong in this particular situation.  In fact stop loss is the only expense that we incur in trading.  Brokerage or taxes are not the real expenses to run the trading business.  Rather our loss is the only expense that we have to pay to successfully run the business. The chaos in the market can drive a trader insane if he does not know how to engage with the market and control the risk.  Proper position sizing is also the essential part of risk management and all efforts need to be done there in order to minimize risk and ensure survival into the market.

In conclusion,

Most people who attempt trading, do it very sloppily.  Many a times they are not even aware of what actually they are doing, whether they are trading or gambling.

You have to be honest with yourself.  If you are day trading and you tend to violate in any of the topics as discussed above, you will fail at trading.  I know that sounds harsh, but it is the grim reality of the market.  Market has a crazy way of separating people from their money when they do not follow discipline and refuse to remain within their limits and act erratically.

Help yourself become a good day trader by subscribing to video tutorial and mentoring program.

Friday, 20 January 2017

Nifty Future 20012017

There was only one tradable setup today as marked on the chart which moved very, very well.  If you remember last Wednesday's (18th Jan) price action of Nifty, you would realize the script for the film was written that day, the film got produced today and got released in noon time.  How?  Have a look at the chart to understand price action of last few days,

Once we start connecting ourselves with the prices, prices will start revealing...

We just need to make an effort.  That is all.

Wednesday, 18 January 2017

Nifty Future 18012017

It opened within yesterday's range and started moving up and broke out PDH. By this time it had already moved a lot, so with lot of hesitation took a long trade on BPB setup.  It refused to move and had to scratch it.  Looking at the price action, anticipated a break below PDH.  After waiting for some time, it did eventually break it and moved very well.  At the fag end, did not trade the BOF of DO setup with the expectation of rangebound movement and it did in fact remain rangebound.

Tuesday, 17 January 2017

Nifty Future 17012017

After the open, it attempted to break the PDH but failed and gave a BOF setup which moved well.  After reaching to BRN it consolidated for some time and even after that consolidation it could not break BRN and gave a BOF of BRN.  But the markets refused to reverse and instead remained range bound for rest of the day.

Monday, 16 January 2017

Nifty and Bank Nifty Future 16012017

(Nifty Future)

It opened gap down but found support at PDL.  It gave the BOF of BRN PDL.  Space was an issue as PDC was close but I was ready to handle it.  It got resisted around PDC and started ranging creating a barb wire.  Attempted one more long as BPB of this tight trading range. Expected it to move towards PDH but it did not and ended as a scratch.

(Bank Nifty Future)

There was one good setup as marked for direct BO of range high.  It moved well.

Friday, 13 January 2017

Trades 13012017

(Nifty Future chart)

It opened full gap but could not sustain above PDH.  Entered on BPB of PDH setup which moved some.  After that it started ranging.  Towards the fag end, given its inability to fall and break LOD, entered long on break of swing pivot which moved some.

(Bank Nifty Future chart)

There was one good BOF setup at PDL on Bank Nifty.  There was quick rejection from the level plus volume plus trend in favor. It moved well.

(Infosys Future chart)

In the morning today Infosys announced its quarterly results.  Decided to trade that.  Looking at the chart it seemed like markets did not like the results.  It came as a shock to the markets.  I have learned that whenever the news flow surprises the markets or gives a shock, markets are going to react to it strongly.  The same has been discussed in detail in my video tutorial and in the mentoring program with other traders.  It presented the opportunity, took the BPB of PDH setup and got rewarded very handsomely immediately.

Thursday, 12 January 2017

Nifty Future 12012017

I expected it to remain rangebound after the type 1 trend day yesterday and in fact it did remain rangebound the whole day without giving any good setup to trade.  No trades.

Wednesday, 11 January 2017

Bank Nifty and Nifty Future 11012017

It opened full gap up and I took a BPB long trade with the expectation of today being a type 1 trend day.   It lived up to the expectation and moved very very well.  This trade rewarded very handsomely and covered up for no-gains in last two days.

Nifty too moved in a type 1 trend day.  There was also a good BO setup with less risk as marked which moved well.

Markets had given all the clues for today being a type 1 trend day well in advance as explained in my video tutorial. 

Tuesday, 10 January 2017

Nifty Future 10012017

After breaking yesterday's range at open it again traded in the narrow range.  Attempted a BOF that range which ended as a scratch.  No other trades.

Friday, 6 January 2017


Good traders keep good records. They keep them for learning and discipline.  Without the good record-keeping, it is not possible to measure our performance as a trader, rate our progress, and learn from our mistakes.  If we do not learn from the past, we are doomed to repeat it.  If someone wants to become a better runner, keeping records of speeds is essential for designing better workouts. If money is a problem, keeping and reviewing records of all expenditures is certain to uncover wasteful tendencies. Keeping scrupulous records turns a spotlight on a problem and allows us to improve. 

I always keep a record of all my trades in a spreadsheet. It helps me analyze my profits and losses.  I also try to regularly post my charts on the blog to keep track of my entries, exits and what made me take those entries and exits.  

Whenever I open my spreadsheet to put new entries, I force myself to face the reality, the reality of my performance as a trader.  Sometimes this reality is very ugly to face, especially during the losing streak. But there is no other alternative but to face it, accept it and keep reminding myself of it every time I put new trade entry so that I become more cautious of it, reduce the trade size and take even less risks.   

If you are a trader like me and want to improve, I encourage you to develop this good habit of record-keeping.  You do not need any fancy software for that. Just a simple spreadsheet or a handwritten diary will serve the purpose of record-keeping. Click here to view mine.  

Traders fail because of impatience and lack of discipline. Good records set you apart from the market crowd and put you on the road to success.

Bank Nifty & Nifty Future 06012017

It broke out PDH in the opening candle.  Attempted a BPB long trade which turned out to be a very good trade.

It opened above PDH but soon started trading below it.  There was not any proper setup to short below PDC.  Later it formed a barb wire range and traded within it for majority of the time.  Waited for a good BOF setup which did not happen.

Proper understanding of "move and rest" concept and barb wire is very much essential in price action trading.  Only pattern trading is not going to work. 

Thursday, 5 January 2017

Nifty and Bank Nifty Future 05012017

It opened full gap up.  There were all the signs of today being trend day at open but doubted it because of lack of momentum and hence avoided BPB of PDH. Later once it started ranging, gave a TST setup at range low which reached the range high.

Bank Nifty was not as strong as Nifty but the up move of Nifty was playing in my mind.  Took the direct BO trade as marked expecting prices to reach to at least PDH which it did.

Wednesday, 4 January 2017

Bank Nifty Future 04012017

I took one trade as marked.  It was BPB of range low which yielded very little profit.

In Nifty there was no good setup to trade.  It traded in roughly 30 point range whole day.

In a lull period like this where prices refuse to move, it is very much essential to learn how to skip mediocre kind of setups, sit tight doing nothing and trade with the less risk.  

Tuesday, 3 January 2017

Nifty Future 03012017

I took 2 trades as marked.  First was BPB of PDH.  Looking at strength of the trend and momentum, thought this was a good setup but it did not turn out so.  In afternoon attempted BOF of BRN which ended as a scratch.

Monday, 2 January 2017

Nifty Future & Nifty Bank Future 02012017

Nifty Future opened full gap up but immediately sold off.  I did not consider BPB of PDC as good setup to trade into the prior congestion area.  After that prices traded in a narrow range for long time.  I liked this consolidation and attempted BPB long trade on break of Range High.  PDC was just above it but I ignored it as I had more confidence on the breakout after proper consolidation.  The trade worked wonder and moved very, very well.  I don't trade back to back hence avoided the BOF setup of BRN/PDH/HOD.

There were two good setups on Nifty Bank Future as marked.  Unfortunately, I could not trade them as I was busy with something else.