Monday, May 28, 2007

Giving calls/trading them

The more calls I give.. the easier it is to derive satisfaction from a 'successful call'.
That is in direct conflict with successful trading.
Reason is when giving calls people will judge you both on accuracy and returns.
In fact most people on yahoo etc will not even have a damn clue about the reward/risk/long term profitability of your calls.

You could keep giving calls that generate 0 % returns per year in all
and people might be impressed with your 'accuracy' (i.e you give 8 2% wins and 2 10% losses they might still think of your calls as good unless they happened to trade the two bad calls :))
You could give calls that generate 100% a year when traded perfectly and people might forget you :)

Hence if one is to become a truly good trader.
One must focus not on giving calls but on trading them.
I keep running in circles in this market.
I actually made a resolution to not give calls for a while in jan and made a lot of money. Then I made some big losses in feb/march thanks to breakout trading strategies that I was employing :).
Since then I have switched most systems to pullback mode/early entry.

Whenever I am testing/developing new systems I like to give a few more calls :)
Just a way of getting feedback.
So right now the feedback seems to be that the calls don't move quickly enough.
One person complained about losses, while 5 times as many have managed to make 10-20% gains on capital in the recent volatility.
The stops have been wide from 2-5% so it wasn't easy for most stops to get hit.
I'm going to be packing up here in Germany soon.
So I'll be on and off.
When I come to Delhi then I'll get into trading on a whole other level.
What i really want to do is either
a) start up a trading firm: hire people to trade a pooled account of money
or
b) find a way to trade signals automatically.

The gap up in nifty has almost been filled
friday's high 425x/closing 4248
now just try to trade long using narrow stops

Be careful with the doublish top pattern on nifty

Pattern: DoubleTopunc:1
Retracements :4146.75-4295
0.236:4260.01 0.382:4238.370.5 :4220.88 0.618:4203.38
0.764:4181.74
we really have no biz going under 4238/4220 if we are going to achieve the higher objectives for this fresh move.
if we start slipping could easily result in a retest of the old lows near 4160 etc
that would be a flat correction and then a fresh move up.
Anyway overall I remain bullish.
Just pick a stoploss and stick with it
Keep in mind the bullish structhre of the market is only negated below the most recent swing low of 4141 nifty.
if we close under that. then definite time to trade short.
Until then you can look to short for 3-10 hours on weaker stocks which are making new hourly lows but please avoid shorting nifty itself. As for bulls. Anything that makes a new 52 week high is always interesting when it pulls back.

Nifty is too strong and shouldn't be shorted because the discount/premium fluctuations usually kill the shorts.
Better is to short stocks where u short @ prem and cover at discount or par in a panic.

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