Saturday, 27 May 2017

Being honest as a trader

The most critical concept that has helped me become a good trader is being honest with myself as well as others around me. I always try to be honest because I believe honesty always develops trust better than anything.... trust in my trading method, trust in my trade plan and If I am honest with you, you will also develop trust in me as a trader. The things to success are simple but we make them look complex which is why staying honest with oneself helps trader realize his/her mistakes and improve trading capabilities, clear dusty cloud off the mind, think straight and clear and keep on learning and improving oneself to climb the ladder of success. This is very simple thing but still not understood by human psych.

Also being honest with oneself helps practice discipline....again the most critical in trading.  Once I have made my trading rules, I just need to be honest in following them.  If I need to exit out of the trade on the break of certain level, I need to be honest and exit at that level.  If I need to stop trading after certain loss making trades, I need to be honest with myself and stop trading.  I cannot cheat myself by allowing myself to widen the stop loss or continue trading with consecutive losses.  If I start doing that, I know for sure it will only lead me to disaster.

As you all know, I regularly post end-of-day Nifty future charts along with little bit of thought process involved in spotting a setup. The trading may look very easy to you by just going through those charts but in reality trading is not that simple. As a trader, we have to deal with different trading situations and these situations make the trading complex. Let me give you few examples.  We will be often put into the situations where it will just trigger the entry and after triggering the entry prices will never move in our favor.  Prices will start to move only once we exit the trade.  After hitting the stop loss, it will only move in favor.  Prices may move very quickly in favor but we cannot profit out of it because it may retrace quickly too vanishing all the profit. It may so happen we wait for the prices to reach the target but prices reverse without reaching the target and take away majority of profit.  We keep on looking for the setups but they either do not appear or get missed.  The list will go on and on like this.  Also there will be lot of stress and emotions involved which too make trading difficult.  So what I try to do in my posts is I try to present the charts demonstrating how best one could have followed the trading method and benefited from it by being honest to the trading method. It never reflects my actual trading.

Of late I have started trading stocks.  I have not kept it only to myself but also made an effort so that it becomes possible for you to copy my trades and to learn how I trade the stocks too. I trade systematically and share my stock trading performance with all the transparency.  If you closely go through the stock trading performance, you will realize how I have managed to be honest, not only with myself but with you too.  If I had to stop trading after 2 consecutive losses, I had stopped trading for that day.  I never widened the stop loss.  I was in front of screen and be ready all the time before the market open.  I never allowed the fear of losses or stress or emotions to gain control over my trading.  I also shared with all the honesty whatever trading I was able to do without worrying about the end result.  I am able to do that because I am aware in short term, there will be lot of things happening which will affect the trading performance but in the long run everything gets even out. Sometimes there is high volatility, sometimes less, sometimes there is heavy news flow driving the prices, sometimes very dull markets. So these are things which is not in our control and we cannot let them dictate the trading performance.

Trading, blogging, educating others on trading and even allowing them to trade with me, all became possible because I have full faith in my trading method and I am honest as a trader.

6 comments:

  1. Hi Uday,
    very relevant post for discipline. However in order to understand in correct spirit, i find one section a bit confusing..(Pardon my poor brains :-P )
    with reference to your last statement in this quote " So what I try to do in my posts is I try to present the charts demonstrating how best one could have followed the trading method and benefited from it by being honest to the trading method. It never reflects my actual trading."
    Hope you don't mean it literally especially for entries / trades and actual means you are not mentioning "performance" in terms of sizing.But if its not actual, how can a reader learn about DP trading and application in real time?

    How should we learn from the markings made in EOD post ? Compare with our trades / save it for reference/ or what should we do...
    Thanks for your efforts and wisdom.

    ReplyDelete
  2. Anand

    EOD charts mark mostly the trade setups per the DP trading system and the thought process involved with the valid reasons and price reading. If you want to learn this wonderful system to day trade, there is everything available for free. please read this blog,
    http://niftynirvana.blogspot.in/
    Also you can go through these posts at your leisure to understand my perspective also,
    https://charttechnicals.blogspot.in/p/blog-page_2.html

    I have also put lot of efforts time to time demonstrating the whole trading process through videos, posts, ppts, etc. Some examples are here,
    https://charttechnicals.blogspot.in/2016/08/way-to-do.html
    https://charttechnicals.blogspot.in/2016/05/trade-example.html
    https://charttechnicals.blogspot.in/2015/08/can-trading-be-taught.html

    Now after having understood the trading system, you can also go through the EOD charts, 4 years of EOD charts at niftynirvana blog and 3 1/2 years of EOD charts at my blog. These charts will help you connect the dots together and rationale behind taking the trades from different traders.

    Once you understand everything and learn the basic reasons of price moves, you will be able to trade on your own. You do not need to compare your charts with anyone else. It is a discretionary system to trade and everyone will have their own reasons to trade. As a learner your job is to find what works majority of the time. For an example, if you learn following the trend makes money, find how best you can follow the trend. What methods or tools you can use for that. That is it. What else you need? Now you just need to put whatever you learned into the practice and learn from your own experiences.

    URD

    ReplyDelete
  3. Thanks a lot. Truly, you intend us to learn fishing- in an honest way. :-)

    ReplyDelete
  4. URD,

    Do you have any plans for helping newer folks with nifty trading? Like how you doing for stocks.. I am looking for something like live interaction instead of just calls or just mentoring offline.. hope you got my point... Learn while earning.

    ReplyDelete
    Replies
    1. Rose

      In stock trading, I am ready to share and discuss all the trading strategy if someone shows willingness to learn. If someone needs support only in trading, they can copy my trades.

      If I remember correctly, I have already discussed with you regarding Nifty. Will send you a mail to discuss it further.

      URD

      Delete
    2. URD,

      I am yet to connect with you regarding nifty.. will drop an email.. please keep me informed

      Delete