TAKE POSITION IN FUTURE MARKET

INFOSYSTCH-1M-FUT: Go long if it trades above 1800 with stoploss 1769.75. Set profit target 1835, 1875 & 1903.

SBIN-1M-FUT: Go short if it breaks 2400 with stoploss 2430.75. Set profit target 2367, 2351, 2340 & 2323.

8 reasons why stock market traders lose money:Ashwani Gujral

Many people think trading is the simplest way of making money in the stock market. Far from it; I believe it is the easiest way of losing money. There is an old Wall Street adage, that "the easiest way of making a small fortune in the markets is having a large fortune." I discuss below eight ways of undisciplined trading which lead to losses. Guard against them, or the market will wipe you out. I am qualified to speak on this subject because I was myself an undisciplined trader for a long time and the market hammered me into line and forced me to change my approach. 1. Trading during the first half-hour of the session The first half-hour of the trading day is driven by emotion, affected by overnight movements in the global markets, and hangover of the previous day's trading. Also, this is the period used by the market to entice novice traders into taking a position which might be contrary to the real trend which emerges only later in the day. Most experienced traders simply watch the markets for the first half of the day for intraday patterns and any subsequent trading breakouts. 2. Failing to hear the market's message Personally, I try to hear the message of the markets and then try to confirm it with the charts. During the trading day, I like to watch if the market is able to hold certain levels or not. I like to go long around the end of the day if supported by patterns, and if the prices are consistently holding on to higher levels. I like to go short if the market is giving up higher levels, unable to sustain them and the patterns support a down move of the market. This technique is called tape watching and all full-time traders practice it in some shape or form. If the markets are choppy and oscillate within a small range, then the market's message is to keep out. Hearing the message of the market can be particularly important in times of significant news. The market generally reacts in a fashion contrary to most peoples' expectation. Let us consider two recent Indian events of significance. One was the Gujarat earthquake that took place on 26 January 2001 and the other the 13 December 2001 terrorist attack on the Indian parliament. Both these events appeared catastrophic at first glance. TV channels suggested that the earthquake would devastate the country's economy because Gujarat has the largest number of investors and their confidence would be shattered, making the stock market plunge. Tragic as both the events were, the market reacted in a different way to each by the end of the day. In both cases the markets plunged around 170 points when it opened, in both cases it tried to recover and while it managed a full recovery in the case of the Gujarat earthquake, it could not do so in the Parliament attack case. The market was proven correct on both counts. The Gujarat earthquake actually held the possibility of boosting the economy as reconstruction had to be taken up, and also because most of the big installations, including the Jamnagar Refinery, escaped damage. In the case of the attack on parliament, although traders assessed that terrorist attacks were nothing new in the country but the market did not recover because it could see some kind of military build-up ahead from both India and Pakistan. And markets hate war and uncertainty. In both these cases what helped the cause of the traders were the charts. If the charts say that the market is acting in a certain way, go ahead and accept it. The market is right all the time. This is probably even truer than the more common wisdom about the customer being the king. If you can accept the market as king, you will end up as a very rich trader, indeed. Herein lies one reason why people who think they are very educated and smart often get trashed by the market because this market doesn't care who you are and it's certainly not there to help you. So expect no mercy from it; in fact, think of it as something that is there to take away your money, unless you take steps to protect yourself. 3. Ignoring which phase the market is in It is important to know what phase the market is in -- whether it's in a trending or a trading phase. In a trending phase, you go and buy/sell breakouts, but in a trading phase you buy weakness and sell strength. Traders who do not understand the mood of the market often end up using the wrong indicators in the wrong market conditions. This is an area where humility comes in. Trading in the market is like blind man walking with the help of a stick. You need to be extremely flexible in changing positions and in trying to develop a feel for the market. This feel is then backed by the various technical indicators in confirming the phase of the market. Undisciplined traders, driven by their ego, often ignore the phase the market is in. 4. Failing to reduce position size when warranted Traders should be flexible in reducing their position size whenever the market is not giving clear signals. For example, if you take an average position of 3,000 shares in Nifty futures, you should be ready to reduce it to 1,000 shares. This can happen either when trading counter trend or when the market is not displaying a strong trend. Your exposure to the market should depend on the market's mood at any given point in the market. You should book partial profits as soon as the trade starts earning two to three times the average risk taken. 5. Failing to treat every trade as just another trade Undisciplined traders often think that a particular situation is sure to give profits and sometimes take risk several times their normal level. This can lead to a heavy drawdown as such situations often do not work out. Every trade is just another trade and only normal profits should be expected every time. Supernormal profits are a bonus when they -- rarely! -- occur but should not be expected. The risk should not be increased unless your account equity grows enough to service that risk. 6. Over-eagerness in booking profits Profits in any trading account are often skewed to only a few trades. Traders should not be over-eager to book profits so long the market is acting right. Most traders tend to book profits too early in order to enjoy the winning feeling, thereby letting go substantial trends even when they have got a good entry into the market. If at all, profit booking should be done in stages, always keeping some position open to take advantage of the rest of the move. Remember trading should consist of small profits, small losses, and big profits. Big losses are what must be avoided. The purpose of trading should be to get a position substantially into money, and then maintain trailing stop losses to protect profits. Most trading is breakeven trading. Accounts sizes and income from trading are enhanced only when you make eight to ten times your risk. If you can make this happens once a month or even once in two months, you would be fine. The important point here is to not get shaken by the daily noise of the market and to see the market through to its logical target. Remember, most money is made not by brilliant entries but by sitting on profitable positions long enough. It's boring to do nothing once a position is taken but the maturity of a trader is known not by the number of trades he makes but the amount of time he sits on profitable trades and hence the quantum of profits that he generates. 7. Trading for emotional highs Trading is an expensive place to get emotional excitement or to be treated as an adventure sport. Traders need to keep a high degree of emotional balance to trade successfully. If you are stressed because of some unrelated events, there is no need to add trading stress to it. Trading should be avoided in periods of high emotional stress. 8. Failing to realise that trading decisions are not about consensus building Our training since childhood often hampers the behaviour necessary for successful trading. We are always taught that whenever we take a decision, we should consult a number of people, and then do what the majority thinks is right. The truth of this market is that it never does what the majority thinks it will do. Trading is a loner's job. Traders should not talk to a lot of people during trading hours. They can talk to experienced traders after market hours but more on methodology than on what the other trader thinks about the market. If a trader has to ask someone else about his trade then he should not be in it. Traders should constantly try to improve their trading skills and by trading skills I mean not only charting skills but also position sizing and money management skills. Successful traders recognise that money cannot be made equally easily all the time in the market. They back off for a while if the market is too volatile or choppy.

Track the following scrips on 17th Dec'2007

1. AXISBANK : Go long with stoploss 969.90.
2. ARVINDMILL : Go long with stoploss 73.95.
3. SBIN : If it stays below 2400, go short with stoploss 2420 / 2476.
4. KANORICHEM : Go long with stoploss 125.85.
5. GUJALKALI : Go long with stoploss 199.95.
6. INFOSYSTCH-1M Future : If goes below 1650, go short with stoploss 1680, otherwise go long with stoploss 1643.85.

Track Future Market on 13/12/207

INFOSYSTCH-1M FUTURE : Go long as long as it trades above 1700. Keep stoploss 1665 and profit target 1749, 1760 & 1795.

TCS - 1M FUTURE : Go long with stoploss 1025 and set profit target according to the entry point. Targets are 1057, 1072 & 1087

HINDUNILVR - 1M FUTURE : Go short with stoploss 215.10 and profit target 208.50, 206, 202 & 200.50

Track the following scrips on 10th Dec'2007

1. Go long with 21ST CEN.MGM (BSE Code: 526921) with stoploss 49.95 and set profit target 63, 65 & 76
2. Observe CENTBOP & UTVSOF as they have made breakout of late. May go for momentum trading with thin stoploss.

Track Infy, Patel Engg etc on 06th Dec'07

INFOSYSTCH-1M Future : Go long as long as it stays above 1615. Keep stoploss 1603. Set profit target 1650, 1673, 1697 & 1724.

PATELENG : Go long if it stays above 805. Keep stoploss 793 and set target 825, 845 and 870.

TRIVENI : Go long with stoploss 139.75. Set profit target 150.75, 155, 158 & 163.

Action for 28th November'07

TRACK NIFTY

If market behaves with negative bias, then go short as long as it ( Spot Nifty ) stays below 5730. For Nifty- 1st Month, go short with stoploss 5795 & set target 5702, 5690, 5675.

Action for 23rd November'07

RNRL : Go long as long it stays above 145. Maintain stoploss 138.90. Profit target 154.25, 177.

TRIVENI : If it goes above 129, go long with stop 122.90. Profit target 135, 141, 147
Go short if it stays below 128, keep stoploss 132.10, set profit target 123, 119, 112.
PATELENG : Go long with stoploss 730. Set profit target 755, 765, 785
INFOSYSTCH: Go short as long it stays below 1550 with stoploss 1561. Profit target 1528, 1520.

Action for 22nd November'07

TRIVENI : Go short if it stays below 132 ; with stoploss 135.10 and set profit target 117.

PATELENG: Go short if it stays under 775. Keep stoploss 795. Set profit target 730.

INFOSYSTCH : Go short if it stays below 1557. Keep stoploss 1575. Set profit target 1527.

Action for 8th November'2007

SCRIP POSITION ENTRY TARGET 1 TARGET 2 TARGET 3 STOPLOSS
NIFTY-1M - FO : Buy > 5705 5786 5806 5826 5694
HUL - 1M - FO : Short <200 192.25 190.5 185 205
INFOSYSTCH : Buy >1700 1749 1784 1798 1695

Action for 6th November'2007

TRIVENI : If it trades above 132.35, go long with stoploss 129.85 and set profit target 136, 137.80 and 142 for trading intraday. Do position trading, if it goes above 138.5 with stoploss 123.85 and profit target 146, 149.25 and 156.

But, if it trades below 130.75, take short position with stoploss 132.55 and set profit target 128, 125.25 and 120.45.

INFOSYSTCH - 1M - FUTURE : As long it trades above 1850, go long with stoploss 1824.75 and profit target around 1875, 1891 and 1919.

But, if it trades with negative bias and below 1849, go short with stoploss 1862.25 and profit target 1837, 1827 and 1808.

More action on 29th October'07

POSITION TRADING

IOC - 1M - FUTURE : As long it stays below 461.00, go short with stoploss 474.15. Set profit target 444.25, 438.45, 428.50 and 423.50. But, if it goes above 461 and stays there sometime with upward bias, then go long with stoploss 434.85 and set profit target 471.75, 492.50, 498.75 and 507.45.

TRACK FUTURE MARKET ON 29/10/07

INFOSYSTCH - 1M - FUTURE : Go long, if tech sector improves further, with stoploss 1848.75 and profit target 1898.25, 1918.75 in case of intraday trading. For position trading, hold with stoploss 1824.75 and profit target 1918.75, 1946.25.

Action for 23rd October'2007

TRIVENI : Go long with TRIVENI as long as it stays above 107 with stoploss 105.95 and set profit target 114.95, 118.95, 121.2 and 124.5. If it opens with negative bias i.e < 113.8, go short immediately with stoploss 115.10, set profit target 110.25, 108.10, 105.20 and 103.50.

INFOSYSTCH - I M FUTURE : As long as it stays below 1879.75, go short with stoploss 1890.05 and set profit target 1865.75, 1858.15, 1841.25 and 1834. But, if it trades with positive bias i.e above 1887.15, go long with stoploss 1864.25 and set profit target 1898, 1908.75, 1919.15 and 1929.85.

In both of the above cases, instead of booking profit at last target, position may be carried forward for next days.

TRACK FUTURE MARKET ON 22/10/07

INFOSYSTCH FUTURE -OCT'07 : Watch 1st 15 minutes of mondays opening carefully. If IT sector shows strength, then maintain long position with stoploss 1879.75. Set profit target 1909.75, 1919.75. If it crosses 1921, then hold it for few more session for profit target 1950, 1997. But, if follows southward direction and breaks 1880, then reverse position and go short as long as it stays below 1897 with stoploss 1908.75 and set profit target 1858.15, 1841.25. If it breaks 1840, then hold for days with profit target 1808.15, 1798, 1789.

TRACK FUTURE MARKET ON 19/10/07

INFOSYSTCH : Go long with INFOSYSTCH-1M future if it stays above 1869 with stoploss 1854.75 and maintain profit target 1897, 1907, 1919 and 1930. If it trade below 1860, go short with stoploss 1873.15 and set profit target 1841, 1819, 1805 and 1795.

TRACK FUTURE MARKET ON 18/10/07

INFOSYSTCH : Trade this future-1M and go short if it breaks 1860 with stoploss 1870.10 and set profit target 1850, 1840 and 1805. But, if it trades with positive bias and above 1869, then go long with stoploss 1859.75 and set profit target 1897, 1908, 1930.

ANSALINFRA : Go short if it trades below 260 with stoploss 262.10 and keep profit target 254, 247, 241 and 231. But, if it goes above 260, reverse the trade i.e. trade long side with stoploss 253.45 and maintain profit target 267, 272 and 279.

POLARIS : Go long if it goes above 117 in future market with stoploss 114.95 and set profit target 119.75, 121.50 and 125

Action for 17th October'2007

HOTELEELA : Go short with this future of near month with stoploss 48.40 and set profit target 46.50, 45.50 and 44.35

HINDUJATMT : Ad long as it stays below 444.25, take bearish view and go short with stoploss 449.15 and set profit target 437, 432 and 425. May go for position trading if it breaks 432 convincingly with stoploss 456 and profit target 410.

INFOSYSTCH : If it breaks 1850, go for shorting this future with stoploss 1965.15 and set profit target 1822, 1806 and 1798. If tread stays below 1840, then go for position trading with stoploss 1905.25 and profit target 1753.

Shared Items

Trade future market on 16th Oct'07

POLARIS : Go short POLARIS FUTURE with stoploss 121.10 and trade intraday with profit target 115.5. Go for position trading, if trade breaks below 115, reset stoploss 122.15 and set profit target 112, 108.

HOTELEELA : Go short HOTELEELA FUTURE with stoploss 47.75 and trade intraday with profit target 46.50. Go for position trading, if trade breaks below 46.5, reset stoploss 48.50 and set profit target 45.50, 44.25 & 43.45.

INFOSYSTCH : Market as well as IT Sector trading with negative bias, go short, if it stays below 1950 with stoploss 1962.10 and set profit targets 1922 and 1905. If it breaks 1900, take position for days with stoploss 1972 and extend profit target 1853.

TRACK FUTURE MARKET ON 15/10/07

ANSALINFRA : Market showing negative bias, go short if it trades below 272 with stoploss 275.15 for intraday trading and 281.10 for position trading. Set profit target 269 for intraday and 262 for position trading.

HTMTGLOBAL : Market showing strength and IT sector going in tandem, go for momentum trading and buy HTMTGLOBAL future with stoploss 501.85 and set profit target 514.85. If it goes above 515.10, then go for position trading with stoploss 498.10 and set profit target 532.25.

INFOSYSTCH : If IT sector shows strength, go long with stoploss 1898.25 and profit target 1962. If it breaks above 1970, then go for position trading with stoploss 1848.25 and profit target 2000, 2050.

If IT continues negative bias, go short with stoploss 1940.25 and profit target 1903. If breaks below 1900, then go for position trading with stoploss 1971 and profit target 1850.

Action for 15th October'07

POSITION TRADING

ANSALINFRA : First confirm market environvent with negative bias. Then go short if it trades below 274 with stoploss 280.10. Set 1st profit target 267.9. Optimise profit with placement of suitable stoploss.

MOMENTUM TRADING

HTMTGLOBAL : If it trades above 510 for some time, go long with stoploss 504.95. Set 1st profit target 516.5. If trade goes above 517, then take position with stop loss 499.25 with profit target 534.25.

INTRADAY TRADING

INFOSYSTCH : If it does not go above 1938, go short with stoploss 1950.15. Set profit target 1915, 1908, 1899. If it goes below 1900, go for position trading with profit target 1853.

Action for 24th September'2007

Position Trading

Go long with PANTALOONR if it goes above 550. Keep stoploss 540.85 and set profot target 615. For intraday trading, keep profit target 563.50, 575.25, 578.75 and 592.45.

Action for 29th August

Go for INTRADAY

LITL: Buy LITL as it goes above 300 with stoploss 294.25 and set profit target 305.45, 308.75 and 312.45.

BALRAMCHIN: Go for momontum trading if continues to show positive strength and treads above 60.00 and breaks 60.90 with stoploss 57.65 and maintain profit target 62.80, 64 & 66.45.

Action for 28th August

Go Bearish & Trade Intraday/Swing Trade

BHARATFORG: Sell it as it opens negative and add position when it breaks 265 with stoploss 270.10 and set target 260, 255 & 250.

INFOSYSTCH: Go short with stoploss 1897 and fix target as 1850, 1830, 1816 & 1797.

Shorting Scope for next week

Short Term Trading

HCLTECH: Either sell it near 290 with stoploss 296.25 or take bearish action immediately if it trades negative during opening 30 minutes trade with stoploss 286.25. In 1st case, set target 277, 266 & 258. In case of 2nd situation, set target 266, 258 & 252.

GO SHORT for INTRADAY

MOMENTUM TRADING

HINDUJATMT: Take bearish position i.e. sell if either it goes upward near 351 with stoploss 367.10 or it goes below 340 with stoploss 351.25. Set profit target 341 in first situation and in other case 330, 326 and 320.

MOSERBAER: Go short if it breaks 260 with stoploss 271.85. Set profit target 250, 245 and 237.75.

Trading Opportunity on 23rd August

Intraday or Swing Trading

GMRINFRA: If it trades above 745.00, go long with stoploss 721.75. Set profit target 766.25, 773.75 and 800.20

CUMMINSIND: As soon it crosses 352, go long with CUMMINSIND with stoploss 339.80. Profit target may be set according to the holding period of trade. Target should be around 361, 375 and 384.

EDUCOMP: If it opens positive, go long with stoploss 2379.75 with target 2444. Add position if trades above 2450. Set profit target 2494.25, 2505, 2535 and 2565.

SHORTING opportunity

Short Term Trading / 21st August

POLARIS: Go short if it goes below 115.00. Keep stoploss 118.05. Set 1st profit target 112.25, 2nd target 109.25 and final target 106.5.

AIAENG: Go short if it comes near 1375 or goes below 1336 with stoploss 1381. Set profit target 1300, 1280 and 1250.

Action for 14th August

Position Trading

Power stock is getting bullish favour. So, Go for value buy with CESC. For the purpose of swing trading, keep stop loss below 440 on closing basis. Set 1st profit target 488.40, 2nd target 500 and 3rd one as 517.25.

Track it!

Trading Strategy/ Banking Stocks

KOTAKBANK: Watch 15 minutes of trading tomorrow and if it trades with positive bias, go long with immediate stoploss of day's low in case of intraday trading. Go for position trading if market shows positive strength and keep stoploss 728.75. Stay invested further if Bank Index takes highly bullish turn with final stop loss 694.95.

Action for 13th August

SWING TRADING

If market bucks the global trend or Asian market trades with positive bias, go long with Punjloyd. Keep stoploss 257.95 and set 1st profit target 301. Optimise profit by placing suitable trailing stoploss.

Trading Systems

Volatility Breakout Systems
by Linda Bradford Raschke

Breakout systems can actually be considered another form of swing trading, (which is a style of short term trading designed to capture the next immediate move). In other words, the trader is not concerned with any long term forecast or analysis, only the immediate price action.

Volatility breakout systems are based on the premise that if the market moves a certain percentage from a previous price level, the odds favor some continuation of the move. This continuation might only last one day, or go just a little bit beyond the original entry price, but this is still enough of a profit to play for. A trader must be satisfied with whatever the market is willing to give.

With a breakout system, a trade is always taken in the direction that the market is moving at the time. It is usually entered via a buy or sell stop. The bit of continuation that we are playing for is based on the principle that momentum tends to precede price. There is also another principle of price behavior that is at work to create trading opportunities. That is, the market tends to alternate between a period of equilibrium (balance between the supply and demand forces) and a state of disequilibrium. This imbalance between supply and demand causes "range expansion", (the market seeking a new level), and this is what causes us to enter a trade.

There are several ways to create short-term volatility breakout systems. I have found that different types of systems based on range expansion test out quite similarly. Therefore, whichever method you choose should be a matter for your own personal preference.

In designing a system, one can choose to place an entry stop off either the opening price or the previous day's closing price. This entry stop can be a function of the previous day's range or a percentage of the previous 2.10-day range, etc. Mechanical exits can range from using a fixed objective level to using a time function such as the next day's open or close. Most of these systems function best when a very wide stop is used.



Training Benefits for the Novice Trader
Derived from Trading a Volatility Breakout System:
Trading a short-term breakout system can be one of the best exercises to improve your trading.

First, it teaches you to do things that are hard to do - buying high or selling low in a fast moving market! For most people, this feels quite unnatural!

Second, it always provides a defined money management stop once a trade is entered. Not adhering to a defined money management stop is the most common cause of failure among traders.

Third, it teaches a trader the importance of follow-through once a trade is entered, as most breakout systems perform best when the trade is held overnight.

Last, it provides a great means for traders to improve their execution skills. Most volatility breakout systems are fairly active compared to a long-term trend following system. A trader can gain skill in placing orders in a diverse number of markets. Having a mechanically defined entry point is sometimes just the thing needed to overcome a trader's fear of pulling the trigger. The order is placed ahead of time and the market then automatically pulls the trader into a trade if the stop level is hit.
Even if a person prefers to ultimately enter orders using discretion, trading a mechanical volatility breakout system can still be an invaluable exercise. It should at least increase a trader's awareness of certain types of price behavior in the marketplace, especially if one is conditioned to entering on counter-trend retracement patterns. It can't but help impress upon one the power of a true trend day.

Pros and Cons of Trading a Breakout System:
Like most systems, volatility breakout systems will clean up in volatile or runaway markets but tend to thrash when conditions get choppy or volume dries up. I believe they are still among the most profitable type of system to trade, and I also feel they will continue to be profitable in the long run. They are "durable" and "robust", though they tend to deteriorate when too large of an order is placed (i.e., greater than 50 contracts). However, so that you do not get the impression that there is a Holy Grail of systems, the following considerations should be kept in mind:

Entries can be nerve-racking, especially when the market is in a runaway mode. The best breakouts won't give you retracements to enter on. You are either on board or you are not! If you conceptualize that the best breakouts turn into trend days, and are most likely to close on the high or low for the day, then it is not so difficult to enter. Usually it is best to have a buy/sell stop already resting in the marketplace.

Sometimes a market gaps open outside your initial entry level. These often turn into the best trades. They can also turn into the most aggravating whipsaws. Big gaps test out that one should still take the trade, but they will definitely add more volatility to your bottom line. If your trade gets stopped out and an new signal is given in the opposite direction, this reversing trade usually more than makes up for the first loss.

Whipsaws are a drag but they are also inevitable when trading a breakout system. Many times I have bought the highs and sold the lows. It takes a great deal of "confidence in the numbers" to trade this type of system. System testing should always be done for a minimum of 3 years, preferably 10. Be sure to then examine out of sample data to see how the system performed.

On balance, a volatility breakout system can be traded on most all markets. However, a market might be very profitable one year and yet perform mediocre at best the next. A portfolio of 10 to 12 markets seems to work well. The problem with trying to trade too many markets at once is that it can become quite difficult to keep up with the activity level if your parameters are fairly sensitive. Many times in systems development, people overlook what one person can realistically manage.

Enhancing a Basic Volatility Breakout System:
Adding filters can sometimes create further enhancements. Examples of types of filters include: indicators to determine whether or not a market is in a trending condition, seasonality, days of the week, or degree of volatility contraction already present in the market. Periods of low volatility in the market can be defined by a contraction in true range, a low ADX, or a statistical indicator such as a low historical volatility ratio or a low standard deviation.

A system then might look something like this:

Initial volatility condition = true

Buy or Sell on a stop based on the current bar's open, plus or minus a percentage of the previous day's range.

Initial Risk management stops once a trade is entered.

Exit strategy.

Types of variables which can be used in a simple range expansion breakout system:

Period - is the breakout based on a function of the previous day or the previous 10-day period, for example?

Range - does it use the average range for that period or the largest, smallest, or total range?

Percentage - what percentage of the range is used? It is possible, for example, to use 120% of the previous 3-days' total range.

Base - is the range function added to the previous day's close or the current day's open. This function may also be added to the high or low of the previous bar or a previous period such as the last 10 days.
As a general rule of thumb, the greater the percentage factor used, the greater the percentage of winning trades will be. However, the overall system may be less profitable because fewer trades are taken.

Once again, an example of an initial condition might be: Enter a trade only on a day following the narrowest range of the last 7 days. Or, take a trade only if the market has made a new 20-day high or low within the last five trading days. Whenever you add a filter to a system, be sure to compare the results to a baseline and examine the difference in activity level.

EXIT STRATEGIES:


Time based (2nd day's close, 1st day's opening)

First profitable opening (Larry Williams)

Target or objective level (1 average true range, previous day's high/low)

Trailing stop (displaced moving average, parabolic, 2-day high/low)

RISK:
Controllable Risk - the amount of risk which can be predetermined and defined by a money management stop.

Types of money management stops:

fixed dollar amount

function of average true range

price level (i.e., bar high/low)
Uncontrollable Risk:

Overnight exposure (close to open risk). You cannot exit a position when the market is not trading. Thus, you are subject to adverse gaps, which can be exaggerated by news or events.

Slippage risk. Fast market conditions or thin, volatile markets often cause a trader to get filled at prices much worse than expected.
In general, the numbers behind most systems are very dependent upon capturing a few good trades. You can't afford to miss the one good trade that can make your month.

Here are some tips for trading this or any other system:

1.Gain confidence by first trading a system on paper.

2.Make sure you can successfully trade a system mechanically before attempting to add any discretion.

3.Track your actual performance against the mechanical system at the end of each day, rating your success by whether you can match the system's performance.

4.Monitor performance over an adequate sample, perhaps 100 trades or a set number of weeks. Do not let a down week or trade deter you.

5.Manage the exits rather than filter the entries. It is impossible to tell in advance which trades will be the good ones. The one entry skipped might be the BIG ONE, and one can't afford to miss it. Managing the exit means two things: The first, learn when it's okay to let that occasional great trade run an extra hour or two before getting out; the second (which really depends on one's skill level), learn to recognize a bit sooner when a trade is not working and exit just before the stop is hit.
All systems display subtle nuances and insights into the market's behavior over time.

6.Keep a notebook of your observations and patterns you notice. In this way you truly "make the system your own".

7.Never be concerned about how many other people are trading systems. If slippage seems excessive, it often suggests a significant breakout from a triangle or period of congestion. Remember: Something had to drive the market far enough to penetrate the breakout point in the first place!

Trading Strategy

POSITION TRADING

ITC : Provided market sentiment remains bullish, if it crosses 169.7, go long with stop loss 164.85 and set profit target 179.oo.

REL : If it opens positive i.e above 753.00, go long with stop loss 734.80 and set profit target 766.5 and 791.75.

Rediff.com

THE WRONG E-MAIL

A man left the snow-filled streets of Chicago for a vacation in Florida. His wife was on a business trip and was planning to meet him there the next day. When he reached his hotel, he decided to send his wife a quick e-mail.
Unable to find the scrap of paper on which he had written her e-mail address, he did his best to type it in from memory. Unfortunately, he missed one letter and his note was directed instead to an elderly preacher's wife, whose husband had passed away only the day before. When the grieving widow checked her e-mail, she took one look at the monitor, let out a piercing scream, and fell to the floor in a dead faint. Hearing the scream, her family rushed into the room and saw this note on the screen:
"Dearest Wife,
Just got checked in. Everything prepared for your arrival tomorrow.

Source: http://www.funmunch.com/

Tips for 21st June'07

If market changes gear and fans bearish mood.......

1. TATASTEEL : If it breaks 606.00 convincingly, then go short with stop loss 613.10. Keep profit target 599.25, 594.50, 590.25.
2. TVSMOTOR : If it goes below 65.5, then go short with stop loss 66.65. Keep profit target 64.25, 62.25, 61.5.

If market maintain momentum or trade with positive bias.......

1. RELIANCE : If it goes above 1736.25, go long with stop loss 1719.75. Keep profit target of 1747.75, 1777.25, 1794.5. Go for position trading if it crosses 1798.75. Maximize profit by keeping trailing stop loss.
2. AIAENG : Buy AIAENG with stop loss 1584.25 and keep profit target 1648.80, 1685, 1694.90

Kabiguru, Our Pride

Quote of the Day:

A great many people think they are thinking when they are merely rearranging their prejudices.
--William James

EOD Chart of Nifty

Bombay Stock Exchange

Quote of the Day:

Every successful enterprise requires three men - a dreamer, a businessman, and a son of a bitch.
--Peter McArthur

THE SEVEN HABITS OF HIGHLY EFFECTIVE PEOPLE

Habit 1: Be Proactive -- Principles of Personal Vision

Habit 2: Begin with the End in Mind TM

Habit 3: Put First Things First TM -- Principles of Personal Management

Habit 4: Think Win-Win TM -- Principles of Interpersonal Leadership

Habit 5: Seek First to Understand, Then to Be Understood TM

Habit 6: Synergize TM

Habit 7: Sharpen the Saw TM

Tips for 18th June'07

If market remains bearish or trades with negative bias...

1. ESCORTS : Go short if it goes below 112.3 with stop loss 113.5 or days high whichever is less. Keep profit target 110.5, 109, 107.
2. EKC : Go short if it goes below 984.20 with stop loss 1004.25 or days high whichever is less. Keep profit target 960.5, 935.25.
3. IDEA : Take bearish view if it breaks down 115.2 ( previous day's low) and go short with stop loss 116.5 and keep profit target 113, 112, 111.15 and 110.6

If market remains bullish or trades with positive bias...

1. RELIANCE : Buy RELIANCE and take position intraday if it trades above 1680 with immediate profit target 1694, 1699 and 1708. If it crosses 1711 or closes above 1701, add further position and go for swing trading with trailing stop loss.
2. SBIN : Go long on intraday basis if it trades above 1335.1 with stop loss 1319.75. Keep profit target 1352, 1469, 1387 and 1400. If it stays above 1349 for some time, position trading is also possible and profit may be optimised by placement of suitable stop loss.

Today's World View

Shared News Items

Action for 13th June'07

Day/Position Trading

• STER : Say, overall market environment remains negative. Go Short with STER if it breaks 529 with stop loss 543.25. Keep profit target 515, 508.
• AUROPHARMA : If market shows positive bias and AUROPHARMA crosses 728, then Go Long with stop loss 713.75 and profit target 744.5, 760, 768.

Tips for 11th June'07

Position/Day Trading

1. PETRONET : If it opens positive i.e above 55.4, go long with stop loss 54.1. Keep profit target 56.8, 58, 59. If it crosses 60 and stays above 59 for some time, go for position trading and keep profit target 65 and stop loss 51.15.
2. AIAENG : If it trades above 1570, buy AIAENG with stop loss 1539.15. Keep profit target 1602.75, 1641, 1682. If AIAENG crosses 1605, go for swing trading with stop loss 1529.25 and profit target 1704, 1751 and 1798.

Vir Sanghvi, Editorial Director, Hindustan Times

ON CALCUTTA

Most modern Indian cities strive to rise above ethnicity. Tell anybody who lives in Bombay that he lives in a Maharashtrian city and (unless of course, you are speaking to Bal Thackeray) he will take immediate offence. We are cosmopolitan, he will say indigenously. Tell a Delhiwalla that his is a Punjabi city (which, in many ways, it is) and he will respond with much self-righteous nonsense about being the nation's capital, about the international composition of the city's elite etc. And tell a Bangalorean that he lives in a Kannadiga city and you'll get lots of techno-gaff about the internet revolution and about how Bangalore is even more cosmopolitan than Bombay.

But, the only way to understand what Calcutta is about is recognize that the city is essentially Bengali. What's more, no Bengali minds you saying that. Rather, he is proud of the fact. Calcutta's strengths and weaknesses mirror those of the Bengali character. It has the drawbacks: the sudden passions, the cheerful chaos, the utter contempt for mere commerce, the fiery response to the smallest provocation. And it has the strengths (actually, I think of the drawbacks as strengths in their own way). Calcutta embodies the Bengali love of culture; the triumph of intellectualism over greed; the complete transparency of all emotions, the disdain with which hypocrisy and insincerity are treated; the warmth of genuine humanity; and the supremacy of emotion over all other aspects of human existence.

That's why Calcutta is not for everyone. You want your cities clean and green; stick to Delhi. You want your cities, rich and impersonal; go to Bombay . You want them high-tech and full of draught beer; Bangalore's your place. But if you want a city with a soul: come to Calcutta.

When I look back on the years I've spent in Calcutta - and I come back so many times each year that I often feel I've never been away - I don't remember the things that people remember about cities. When I think of London , I think of the vast open spaces of Hyde Park . When I think of New York , I think of the frenzy of Times Square . When I think of Tokyo , I think of the bright lights of Shinjiku. And when I think of Paris , I think of the Champs Elysee. But when I think of Calcutta , I never think of any one place. I don't focus on the greenery of the maidan, the beauty of the Victoria Memorial, the bustle of Burra Bazar or the splendour of the new Howrah 'Bridge'. I think of people. Because, finally, a city is more than bricks and mortars, street lights and tarred roads. A city is the sum of its people. And who can ever forget - or replicate - the people of Calcutta?

When I first came to live here, I was told that the city would grow on me. What nobody told me was that the city would change my life. It was in Calcutta that I learnt about true warmth; about simple human decency; about love and friendship; about emotions and caring; about truth and honesty. I learnt other things too. Coming from Bombay as I did , it was a revelation to live in a city where people judged each other on the things that really mattered; where they recognized that being rich did not make you a better person - in fact, it might have the opposite effect . I learnt also that if life is about more than just money, it is about the things that other cities ignore; about culture, about ideas, about art, and about passion. In Bombay , a man with a relatively low income will salt some of it away for the day when he gets a stock market tip. In Calcutta , a man with exactly the same income will not know the difference between a debenture and a dividend. But he will spend his money on the things that matter. Each morning, he will read at least two newspapers and develop sharply etched views on the state of the world. Each evening, there will be fresh (ideally, fresh-water or river) fish on his table. His children will be encouraged to learn to dance or sing. His family will appreciate the power of poetry. And for him, religion and culture will be in inextricably bound together.

Ah religion! Tell outsiders about the importance of Puja in Calcutta and they'll scoff. Don't be silly, they'll say. Puja is a religious festival. And Bengal has voted for the CPM since 1977. How can godless Bengal be so hung up on a religions festival? I never know how to explain them that to a Bengali, religion consists of much more than shouting Jai Shri Ram or pulling down somebody's mosque. It has little to do with meaningless ritual or sinister political activity.

The essence of Puja is that all the passions of Bengal converge: emotion, culture, the love of life, the warmth of being together, the joy of celebration, the pride in artistic ex-pression and yes, the cult of the goddess.

It may be about religion. But is about much more than just worship. In which other part of India would small, not particularly well-off localities, vie with each other to produce the best pandals? Where else could puja pandals go beyond religion to draw inspiration from everything else? In the years I lived in Calcutta, the pandals featured Amitabh Bachchan, Princes Diana and even Saddam Hussain! Where else would children cry with the sheer emotional power of Dashimi, upset that the Goddess had left their homes? Where else would the whole city gooseflesh when the dhakis first begin to beat their drums? Which other Indian festival - in any part of the country - is so much about food, about going from one roadside stall to another, following your nose as it trails the smells of cooking?

To understand Puja, you must understand Calcutta. And to understand Calcutta , you must understand the Bengali. It's not easy.

Certainly, you can't do it till you come and live here, till you let Calcutta suffuse your being, invade your bloodstream and steal your soul. But once you have, you'll love Calcutta forever. Wherever you go, a bit of Calcutta will go with you. I know, because it's happened to me. And every Puja, I am overcome by the magic of Bengal. It's a feeling That'll never go away.

Action for 4th June'07

MOMENTUM TRADING

1. BEL : If market environment remains positive, Go long with BEL with stoploss 1847.25 with profit target(1) 1900. Add position, if it stays above 1901.25 for some time, and manage position with placement of trailing stoploss.
2. SATYAMCOMP : If it trades above 480.1, Buy SATYAMCOMP for intraday trading with stoploss 466.45 and profit target 495. If it crosses 501, go for position trading with stoploss 445.75 and profit target may be optimised by suitable placement of trailing stoploss.

Tips for 1st June'07

If market environment remains negative............

1. Go short with HINDLEVER with stop loss 205.5 with profit target(1) 199.45, target(2) 198.45. Profit may be optimised, if it goes down below 198 with suitable placement of trailing stoploss.

Today's market tips

POSITION/DAY TRADING

SBIN : Go long if it opens positive i.e. above 1324 and add position further, if it goes above 1330, with stop loss 1319 (for intraday) and 1297 (for position trading). Profit target (1) 1342, target(2) 1350, target(3) 1361 and maximum target 1400 for position traders.

TATASTEEL : Go long if it trades above 633.5 with stop loss 617.85 and Profit target (1) 638, target(2) 651, target(3) 661. Position may be increased if it crosses 639.25.

Strategy for 28th May'07

Position/Day Trading

IDFC : Go long if it goes above 113.5 and stays some time, with stop loss 110.50 for intraday trading and 106.85 for position trading. Profit target(1) 115.05, target(2) 119.15. If it goes above 119.5, then take it in delivery for short/medium term.

BHARTARTL : Go long if market environment remains positive and as long as it stays above 820 and maintain stop loss 799.75. First profit target 837. If it crooses 838 i.e. previous day high, add position further and go for next profit target 866. Either intraday or swing trading may be done looking at overall market sentiment.

Strategy for next session

MOMENTUM TRADING


AIAENG: Go long with AIAENG and ride with momentum with stop loss 1455.75 and add position if it stays above 1503. Profit target 1524.25, 1548.75, 1578. Profit should be optimised with judicious utilisation of trailing stop loss.

Action for 23rd May'07

Market continues to make new high, World market showing no sign of weakness, go long with every opportunity of correction even on intraday basis, but always maintaining stop loss.

Position trade/Day Trade

1. Buy TVSMOTOR and take position if it stays above 63.00 with stop loss 61.85 and profit target(1) 68.00 and target(2) 70.00

2. Buy ABIRLANUVO, if it stays above 1265 with stop loss 1244.25 and profit target 1315. Profit potential may be optimised with intelligent use of trailing stop loss.

Tested Strategy of Market

Pl visit this link STRATEGY and comment. Exchange of views is cordially invited.

Strategy for 16th May'07

If market environment stays with negative bias.............

CIPLA: Go short if opens negative with stop loss 213.45 and keep profit target (1) 208.85 and profit target (2) 206.25 and target (3) 201.20.

If market environment continue with positive bias go for momentum trading.............

BHEL: Go long if it stays above 2500 with stop loss 2483 and profit target (1) 2570, target (2) 2590.

Tips for 15th May'07

Day Trade

BANKRAJAS: Trade long if it stays above 52.75 with stop loss 51.85 and profit target(1) 54.75 and target(2) 56.5. However, trade should be avoided or observed cautously if overall Bank Sector remains weak.

SBIN: Trade long if it stays above 1201.75 with stop loss 1196.75 and profit target(1) 1212.75, 1233.
Trade SBIN short if it goes below 1196.5 with stop loss 1204.15 and profit target(1) 1181.25, target(2) 1167.

Some more for 14th May'07

Market may open positive and would continue showing strength.

ZEEL : Trade long if it stays above 280 with profit target(1) 299 and target (2) 303 and stop loss 269.5. Profit may be optimised by adopting incremental stop loss.

VOLTAS : Trade long if it opens positive and add further if it crosses 93.6 with stop loss 89.75. Profit target (1) 96.5, target (2) 98.5.

VIJAYABANK : Swing trade long on Vijayabank with stop loss 45.85 and profit target (1) 49.75, target (2) 52. Position may be incresed if it crosses 54 and trade should be managed with trailing stop loss.

Market on 14th May'07

Bank to enter private equity, venture capital. The State Bank of India (SBI), India’s biggest lender, plans to raise Rs 15,000 crore within the current financial year to bolster capital and meet the growing credit demand. : Courtesy Business Standard

State Bank of India (SBI) has informed BSE that the meeting of the Central Board of the Bank held on May 12, 2007, inter alia, has declared a dividend of Rs 14 per share for the year ended March 31, 2007. : Courtesy Bombay Stock Exchange.

Strategy on SBI : Take position on SBI as long as it trades above 1150 with stop loss 1108 and profit target (1) 1250 and target (2) 1300. Further position may be added if it continues to trade above 1200 more than two days.

Strategy on SAIL : If metal sector shows strength then swing tarde on SBI if it stays above 135 with profit target 144 and stop loss 132. Position may be increased on closing basis if trade crosses 144.4.

Action for 9th May'07

Market most probably will remain weak. If global cues stays weak, our market even would open gap down. In this aspect, some action may be taken with strict adherence to stop loss.

1. BALRAMCHINI: Go short if trades below 63.1 with stop loss 63.9 and profit target 61.35.
2. SBIN : Go short if it trades below 1095 with stop loss 1108 and profit target (1) 1079 and target (2) 1055

If market gets support at down level....

1. IDEA : Go long if it trades above 113 with stop loss 112.35 and profit target (1) 115.8 and target (2) 117.15
2. SAIL : As long as it trades above 135, go long with profit target(1) 138.5 and target (2) 144 and stop loss 132.

Tips for 8th May'07

Day Trade

TVSMOTOR : Go long if trade above 64 with stop loss 61.75 and profit target 67.25. Profit may be optimised with the use of trailing stop loss.

POLARIS : Go short if trade stays below 166 with stop loss 168.1 and profit target (1) 163.1 and target (2) 155.

Some more for 7th May'07

Position Trade

VSNL : If trade stays above 450, position may be taken for medium term with profit target of 509 with stop loss 430.

Day Trade

VSNL : 1. If it trades above 450, go long with stop loss 444.15 and position may be increased if it goes above 455 [swing high]. Profit may be optimised by managing the trade with trailing stop loss.
2. If overall market sentiment is weak, then go short with stop loss 455 and profit target 445. Position may be increased if VSNL goes below 444 and manage the trade with trailing stop loss with ultimate target of 431.

Tips for 7th May'07

Day Trade

PUNJLLOYD: If trades break out above 196 with volume and stays for some time, then go long with profit target 210 and stop loss 193.10.
If market shows weakness, then reverse trade is possible if it trades below 193 with profit target 183.5 with stop loss 196.5

Market for next week

US Market is creating new high almost every day. Metal, Bank, IT sectors are in positive mood. Though traders are confused or cautous rather to take fresh position fearing May Crash sooner than later, market is slated for touching previous high. However, morning session on Monday will be interesting to watch and Global Cues, mainly Asian Market would have bearing on the early direction of our market.

So, friends, make your own study this weekend and take bold step to extract gain from the market next week.

Traders cum Investors are requested to participate and make comments to help me in enriching this blog.

Tips for 4th May'07

POSITION TRADE
1. BHARTIARTL: Take position as long as it trades above 820 with profit target of 898 and stop loss 799.25. Trade must be sqared off if Nifty/Sensex closes red after touching new high.

2. GNFC : Trade long if it stays above 100 with profit target of 108 and stop loss 95.10.

DAY TRADE
1. SAIL: If trades above 135, the go long with stop loss 131.75, profit target 144.1, add further if trade further crosses 144.5 with stop loss 135.
2. SBIN : Go long if it trades above 1128 with stop loss 1115.75 and profit target should not be less than 1151.

Some more for 3rd May'07

In Telecom Sector LONG position may be taken in IDEA, if it trades positive with tight stop loss of 110. 85 and add more stocks if it crosses 115.75 with profit target 124.75.

Action on 03/05/2007

Market has made sound recovery after going into red in the morning session particularly due to tumbling of bank and metal stocks.
Some possible action for 3rd May

If overall sentiment remains positive
1. SBIN : Go long if it stays above 1100 with profit target of 1160. Keep stop loss 1098.
2. Infosys : If Dollar continues to appriciate, Go Long with Stop Loss 1992.

If overall sentiment remains negative
1. Hindalco : Go short as long as it trades below 148 with stop loss 149.7 with profit target of 123 if market sentiment remains bearish for next few days.

ACTION ON 30/04/2007

1. NTPC : Buy if opens positive and stay with Stop Loss 154.45. Profit target 174.45 Option trade possible for CA 160

2. GMRINFRA : If opens positive and overall market positive and trades >400, then trade long with stop loss 391.95 and option trade is ossible.

3. SAIL : Buy if opens positive and crosses previous high (134.95) , then stay with Stop Loss 130.95. Profit target 146.40 Option trade possible for CA 135.

4. HINDALCO : Buy if opens positive and crosses previous high (149.5) , then purchase CA 150 with Stop Loss 140.50. Profit target 165.35.

5. SBIN : CALL Option may be purchased if opens positive and stay as long as trades above 1098 with profit target 1199.

Bank Sector

Variuos scripts of Bank Sector have been appriciated of late. Are they worthwhile now to get into portfolio anew. Come on... investor or trader and give your views.

Today's Market

Today's market surrenderred almost all of its gain due to possible announcement on REPO rate by RBI. Now, considering hefty gain in other market specifically in United States, it will be interesting to see erratic behaviour of our maekt. Ensuing expiry of current month may contribute extreme volatility of Indian Share Market. Behaviour of Metal, Auto and Bank Sector should be keenly observed. I have holdings in SBI, HINDALCO and JSTAINLESS.

Interested persons are requested to offer their view and their strategy on the above subjects.

On Line Trading

Popularity of ON LINE TRADING is gathering momentum. While it's an innovative way to make money, many retailers are lossing their wealth in a hurry. So, it's paramount now to make a worthwhile community inviting all retail investors cum traders to come together and share their mutual views and understandings on Indian Share market particularly. It has now become need of the hour to take every steps methodically and strategically.