Can We follow System Religiously?

Though our Short Trade is going from 6025 level of Aug Future, Many of my new trader friends joined the party from 5915 level, And on 30th Jul near the closing bell of market, They were getting 110+ points in paper profit though Trailing Stop Loss was at 5860.

When Today on 31st July, Nifty opened with gap down and fell further and made a low of 5715, I asked my subscribers one question, How many of you still have the shorts open? And I was NOT surprised when only 40% of them said "Yes". Most of them booked the shorts on 30th July itself a day before when they were getting 110 plus points.

My reply to them, "See, There will be times when we will get whipsaws and will loose points. To make up for those days, we have to take full advantage of this trend and should not book prematurely against our trend following system. I want some more "Yes" next time, if I ask the same question."

Now I can be wrong by not booking profit until my TSL/SAR hits, because of gap-up.

But I know one thing - Following system and making loss is better than violating system and book profit.

My IT Friend gave me analogy for my above statement - Its better not to be able to fix the bug in code but knowing the root cause , than to fix it by hit and trial without actually knowing the root cause, He made a very solid point here.

Kudos to those 40% subscribers who are still holding shorts without worrying about gap up. Here is not the question of who made more points, the question is - who followed the system?

I can also avoid interaction with my subscribers the way other service provider avoid, But to me, the one of the motive of my service is to make them emotional ready to trade markets so that one day they can make their own system and follow it without any psychological issues. Because its the emotions only, which stop many of them to not able to follow calls, even if they have confidence in my calls.

Cheers

Pawan

Do Not Predict , Just React.

Me and my many Trader Friends are Short in Nifty Aug Futures on the expiry day from 6025 level and currently we have locked more than 100 points with one Whipsaw of 20 points on the way down.
update - Market tanked further and we have locked around 175 points of profit.

Yesterday when few new friends joined me - I asked them to go short and lets sync with my system at around 5915 level, I know it was not a very good entry, but to me if system is short then we have to be short, no matter what the level is. If i can not buy it, it means that i have to sell it. (SAR System with few Exceptions when SAR level is too far from the current market price, we keep TSLs)

One of my trader friend replied when i sent the short call- "With Due respect my view - NF premium of 50 points. Govt determined to bring down Rs. and hence restriction on new position and increase in margin for currency trading suggests market will move up, Pl note nifty is at this level in spite of banks are weak. "

My reply to him - "I don't predict, I only react and my reaction point is at 59** and I will take long only when Nifty moves above 59**, And I do not mix fundamentals into my system and will suggest the same to you. Govt was still doing the same thing when Nifty was at 6100 days a few days back, But market do what they want to do"

I hope I made my point clear.

Cheers
Pawan/Shahii

Let The Game Begin - Resigned From My Job Today

Finally, The day has come for which i was waiting for many years and I am very happy to write that i resigned today from my well paid IT job. Many of my friends are not happy with my decision. They advice me to do it parallel with my job. But to me, it will be injustice to both my trading and my job. Now the volume of my trade is not the same as I used to trade it a year or two before. 10 mins of delay to change my order due to some meeting or interruption can affect my ledger in a significant way.
This is the high time for me, If  I could not quit now, I could never quit. Now Working Full time in this Trading Field will open many doors of opportunities.

Today I am feeling like a free bird with no boundaries. This calls for a celebration :)

Self Confidence Is The Biggest Asset

Worth Reading..Too Good..        
A Businessman was deep in debt and could not see any way out.

Creditors and Suppliers were demanding payments. He sat in the park, deep in thought, wondering if anything could save his company from bankruptcy.

Suddenly an old man appeared before him and asked,
"I can see that something is troubling you seriously".

After listening patiently the old man said,
"I believe I can help you".
He asked the man his name, wrote out a cheque and put it into his hands saying,

"Take this money, meet me here exactly one year from today... and you can pay me back at that time".

Then he turned and disappeared as quickly as he had come.

The businessman saw in his hands a cheque for $ 500,000... signed by Warren Buffet, one of the richest men in the world.
"I can erase my worries instantly" he realized.
But instead, the man decided to put the uncashed cheque in his safe, knowing that it might give him the strength to work out to save his business and to use this only in case of dire emergency.

With changed thinking he negotiated better deals,restructured his business and worked rigorously with full zeal and enthusiasm and got several big deals.
Within few months, he was out of debt and started making money once again.
Exactly one year later he returned to the park with the uncashed cheque.

As agreed, the old man appeared.

But just as the businessman was about to hand him back the cheque and share his success story, a nurse came running up and grabbed the old man.
"I’m so glad I caught him" she cried.
"I hope he hasn’t been bothering you much.
He always escapes from the mental hospital and tells people that he is Warren Buffet",
saying this she took the old man away.

The surprised man just stood there, stunned!
All year long he had been dealing thinking that
he had half a million dollars behind him...

Its not the money, real or imagined that turns our life around.
It is our Self-confidence that gives us the power to achieve anything & everything that we want.

SAR Vs TSL

SAR Vs TSL

Most of the traders know about it, But let me re-iterate again for my new trader Friends:

SAR - Stop and Reverse - It means that if a particular level of nifty is violated, Not only we have to stop(exit) our current trade, but also need to open a reverse trade. e.g - We have a long position, and SAR is 5097, and nifty is currently trading at 5120. So as soon as Nifty breaks 5097, not only we will exit from our long position but also we will initiate Short trade from 5097.

TSL - Trailing Stop Loss - It means that we want to lock profits in a particular trade, if a particular level is violated. Lets take 11 June real example, I posted to move TSL to 5097, and when the level was broken my long was just booked without opening a new short trade.

TSL is just to protect profits, there is no Trend change sign. But SAR also signifies the Trend reversal.

Winning over the emotions of greed and fear

Hello Guys, 

People want to know my system, But to me, making Profit from markets is not about the system, Its about winning over your own emotions,its about the commitment, the determination and some motive behind it. Find some motive, give your sweat and blood to it, Success will come for sure. 

I found my motive from somewhere - will tell you my story - When I was In 12th standard, I came to know about IIT, I dropped one year after 12th, joined one coaching institute, tried my best but couldn't go past preliminary round. Second Attempt means waiting for one more year.. So I joined a PVT Engg College in a city near my hometown. My dream was shattered. I knew that I was just near the success, but due to societal pressure, I didn't drop one more year and failed to get into IIT. Then came 3rd year of Engineering, I thought, Lets try IIM now :), wrote CAT.. couldn't crack it. I used to get good score in Quants in Mock Tests but my verbal was not up to the mark due to my schooling from small town. In the mean while I joined an IT company after finishing my college. After few years, I wrote CAT again that too when I was married, had daughter and had a home loan. But again couldn't crack :(

That unfulfilled desire to get into IIT/IIM was always there in some corner of my mind. Then One fine day I thought  -"I am bad in verbal, so what.. but I am good in Quants, Let me work on my strength than to crib about my weakness. Moreover, Many of the Guys from IIT/IIM get into number crunching game and work as Investment banker only. Let me try something of this sort. So what - If I don't have formal degree" I knew that there is unlimited potential in financial markets which can be tapped.Why shouldn't I excel in this field to satisfy my burning desire to do something for which even IITian and IIM guy will look me with respect. I found my motive that day, and started working on my goal. I had trading account opened few years ago, which I had blown up a couple of times. I started trading again with my new motive to excel in this field. 

One key point which I kept on reminding myself - "CAT/JEE aspirants have to wait for one year to improvise to write CAT or JEE exam again. You have this market open everyday. you can learn from your mistakes everyday.  I was fully determined this time . No matter what - I wont give up." I had met one full time trader named Speculator("ichart handle") with help of Rainbow("Ichart handle"). There were many other examples ( to name a few, "Twist", "Jimmie" from icharts) who were working full time in trading. So I had the evidence that yes its possible to be profitable even if the odds are against the trader. I kept on working and working trying to learn something new everyday. In the process I started treating money as number, Yes its purely a number.  Even its a money making game, Detachment from the money is necessary to win this game. 

Many times I am up M2M with 50k-60k, while my TSL locks only 20k, I am ready to give back my 30-40k to the markets and wait for my stop loss to be hit. And many times, this 50-60k M2m reaches to 80k-100k M2M and my TSL moves up and locks up 50k, and then further M2M reaches 140k , My TSL locks up 100k. How many of us can do it comfortably. If we can do this and ready to give some paper profit back to market -> We can win this market over long run. That's why I said its not the system, its the winning over the emotions of greed and fear.

One Last piece of advice - Don't give up, There will be times when you will feel like giving up, but Just don't give up.The only problem with the Financial market is that "not giving up" means burning some more money.. But remember we can not just come and straight away making money from very first month. It took me 5-6 years to start making me money. So You have to understand that you will have to pay tuition fee. The cycle has to be completed.The steps are - Blow up your account for few times ->  Break even for a couple of years - >Start making Profit. You can not directly jump to third step, no matter how many seminars you join, how many books you read.

In my personal opinion - if one is ready to invest 5-6 years in this field and ready to blow up his account a number of times then only he should invest time and money in this. otherwise there are many other fields, where you can excel.

I believe - One will be successful or not ? It just depends upon how strong one's desire is. 

Having said all this - I am still a learner. There are many better traders than me who trade in Zerodha itself, but by God's grace I was given a chance to be profiled first. I have a very long way to go to become a better trader.

Happy Trading And All The Best

Pawan