I reproduce here the two mails sent to
Mr.RajaGopal who feels this has helped him a lot and I sense a tremendous rise in his confidence level.
The follower becoming "The following" is happening here. This post is for those who are quietly following this space and I am hoping this will benefit them in sincere humility.
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Hi..Rajagopal,
Happy Pongal to you & your family members.
Your success in stock market speaks volumes of your capability. As Lord Hanuman Himself had doubts and had to be reminded of his strength regularly, we mortals need to follow a
"affirmation routine" on a regular basis and pep ourselves up.
The secret lies in keeping our emotions under wraps and acting professionally by
increasing our consciousness levels. This is possible only if we do not allow ourselves to get carried away by news and sundries.
"Water on a lotus leaf"(Non-attachment) - the one major thing I learnt in "Vivekananda Vidyalaya".
Now to some nuts & bolts:
Whenever you initiate a trade,
write down the key parameters that compelled you to do so. Also write down an approximate time to achieve this..(Like
an expiry date).
As long as the parameters are intact, and progressing as you expected, you hold your position for the target you outlined to your self in your trade plan. Your trade plan also should have provisions for corrective scenario during this progression. Raise your stop loss(Trailing stop loss) as the price unfolds in your favour. This is called
"Managing your position". Most take a position and forget about it but it requires constant participation.
What is the system/ method you use to identify a trade set up?. As your trade is in progress, can you convince another trader about the merit of that trade based on the current position in the system/ method?. If you can convince another and also feel confident yourself, then the trade should be working well. The moment you are not convinced yourself fully, act promptly based on this new found evidence.
Finally, Post election results and the black swan day, our markets have been choppy and unpredictable. Even then also, if one
follows a method consistently, the profits would be good with few small losses because of SL.
If you are trading, leave the news out. That is for the "fundamentals-following guys". For a trader, prices alone matters and your actions should be based on that alone. As a true trader, keep your losses to a minimum by acting at the right moment.
Take a small break to step back and look at the market afresh. The moment a trader takes a position in the market, his views of the market changes. He/she starts to look at the market based on his/her positions. If it is long, your mind zooms in on only those bullish news and vice versa. The moment "bias" comes into your mind, you have lost your ability to comprehend the market in its true form. This is where "Water on a lotus leaf" approach finds its immense utility.
I talk to
my critics at crucial junctures and I need to convince them of my convictions and at the end of that discussion, if they have convinced me/ am not confident, then a change is underway in the market and I am failing to feel it. So I take a step back and look at the market from the other angle.
You should
look at the market at all times like a BULL and like a BEAR and this will keep you vigilant and allows you to book profits and reverse your trades or simply stay off the markets. Sometimes
"Doing nothing" is the best thing. I am seriously considering to include that doing nothing in the trade reco. Infact, we have had many "No Conservative trade" days.
So affirm to yourself, often, that you are a good trader..confident one.
Look at both bull & bear angle.
Read the expiry date on your trades(Hour trade should not become day and day should not become week, etc)
Price , being supreme, should be your guide all the time.
And keep your trade notes(plan) handy at all times.
Wishing you, again, happy Pongal and more prosperous and satisfying times ahead.
Best regards.
ilango
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2nd Mail.
Hi..Rajagopal,
You must feel wonderful for those achievements. Thats it. Now to the next job in hand.
Your TCS short of Feb will be profitable. Hold it. I will update the charts.
Position sizing: My view on position sizing is different from the usual one that is posted if you search for. I feel holding positions should be like driving a vehicle in a lane or highway or in dense traffic.
In a lane, I mean in a "Sideways market", it should be 25% of total and for 50 to 100 points as per the trading range expected or already established and you should initiate trades based on the levels with discipline and never in the middle of the range. Above all "trade" during this period.
In Highway, I mean in a "Trending market"(Either up or down), it should be 75% of total as positional and for maximum gains till the market shows overbought or oversold with negative or positive divergence upon which 50% of the holding may be booked out and remaining till a target is reached or a "reverse signal" is generated.
In dense Traffic, I mean in a "Narrow choppy market" when volatility is at its lowest, trade for 25 to 35 points and at times you may be holding positional during such periods and it will be a testing time but you must sit through this.
Our
ability to discriminate these three different periods and the courage to act on such a knowledge will make the difference from an average trader to an outstanding one.
Aggressive trades are always an intraday one and very rarely a "overnight holding". Most often in downtrends, a day trader gets to trade longs only due to gap downs and intra rally to correct the "oversold' nature of the market and holding "overnight longs" is against the daily downtrend. Inspite of many asking for overnight long, I resisted. However, I did say OK if it was created @ 4790. Even that view is not acceptable. The positive divergence developed when nifty fell from 4930 to 4766 in the "Hourly time cycle" and the same has nearly been corrected on Friday to 4893 and the immediate upsides seem limited. Will update on Monday morning based on Asian Cues.
Whatever I say or do both at work & in personal life is intense, sincere and truthful and it limits my sphere of activity and when ever I take on more than my time permits me, the overall quality of works suffers and hence I abandoned aggressive calls. I hope you understand this. This way the pace is normal and navigating the markets becomes fun. As you know, as long as there is fun in doing whatever you do, you succeed.
Appreciate your contributions in the comments section with an array of subjects and keeping the atmosphere a lively one.
Warm regards to you and your family.
ilango
