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Trading Psychology

Evening Star - A Typical ExampleEvening Star Evening star patterns are associated with the top of a price uptrend, signifying that the uptrend is nearing its end The evening star pattern is considered to be a very strong indicator of future price declines. Its pattern forms over three days: The first day consists of a large white candle signifying a continued rise in prices. The second day consists of a smaller candle that shows a more modest increase in price. The third day shows a large red candle that opens at a price below the previous day and then closes near the middle of the first day
NSE:PPLPHARMAEducation
by Ashiq996
5
Hathway - Inverse/Reverse Head and ShoulderCMP - 23 TGT - 42 ⚡️Disclaimer: Any of my posts should not be considered as a Buy/Sell/Hold recommendation. This analysis is for educational and learning purpose only⚡️ Description: Reverse head and shoulders chart pattern is a bullish chart which signals a potential reversal of a downtrend. It is the opposite of the head and shoulders chart pattern (which is a bearish formation) The reverse head and shoulders chart pattern consists of three (3) troughs (u-like chart formation): 1) The first is identified as Left Shoulder 2) The second and deepest is called Head 3) The Third is called Right Shoulder 4) Neckline is the zone where the price has hit a resistance and corrected multiple times (as seen in the chart) Target Measurement: Draw price range from the lowest point of the Head to the Neckline and place it at the neckline. (the points measured in the depth is target from the neckline)
NSE:HATHWAYEducation
by Imran_I_Ahmed
Alkyl Amines - Descending ChannelA descending channel is a chart pattern which indicates a downward trend in a stock price. Visually, a descending channel angles downward, from a high point to a lower point. It is drawn by connecting the lower highs and lower lows of a security's price with parallel trend lines. This should have at least 2 resistance and 2 support zones to establish a channel-like pattern Usually traders wait for a breakout to signal an entry point, which is when the stock price breaches an established channel's boundaries, either on the upper or lower side. Target - Target could be placed at a recent high, Since this type pf chart pattern may have multiple lower highs. One could look for a lower high with good consolidation. This is where most buyers would be stuck and may want to exit as soon as the stock price reaches that price. For example: Below mentioned is one such price zone. CMP 2124 TGT 3203 (50%) ⚡️Disclaimer: Any of my posts should not be considered as a Buy/Sell/Hold recommendation. This analysis is for educational and learning purpose only⚡️
NSE:ALKYLAMINEEducation
by Imran_I_Ahmed
4 STEPS FOR A BETTER TRADERHello Guys according to mine experience and knowledge Some things I think are necessary to become a Better trader, so I am sharing all of them with you. ⚡⚡TRADING TOOLS-: (Contains Indicators & Other Soft tools like Screeners Or other software) So as we all know that a after a good Physical Setup (internet connection, Computers or other gadgets) we also need some other tools like indicators or screeners and alerts in our system for better trading and quick executions. So these all things should be Good and make sure that the indicators which you are using are Backtested properly by paper trading or by virtual trading. KEY TAKEAWAYS -:Technical traders and chartists have a wide variety of indicators, patterns, and oscillators in their toolkit to generate signals. -:Some of these consider price history, others look at trading volume, and yet others are momentum indicators. Often, these are used in tandem or combination with one another. ⚡⚡TRADING SYSTEM-: A trading system is a set of rules that can be based on technical indicators, chart or candlestick pattern where a system tells the trader when and how to trade, likewise a long term trader or investors taking trades or doing investments on fundamentals basis and so it is known for sure that the more familiar a trader is with their trading system, the better their odds at being consistently profitable so always try to learn more than trade for getting a good trading system. ⚡⚡RISK MANGEMENT-: Risk management includes the Stop loss, portion size of trade and capital allocation in trades from which you can define how much risk you can take in any of trade or investments which are pre-defined according to you trading system and the basis of identified stop losses for entry or exits which helps cut down losses. It can also help protect traders accounts from losing all of its capital. KEY TAKEAWAYS -:Trading can be exciting and even profitable if you are able to stay focused, do due diligence, and keep emotions at bay. -:Still, the best traders need to incorporate risk management practices to prevent losses from getting out of control. -:Having a strategic and objective approach to cutting losses through stop orders, profit taking, and protective puts is a smart way to stay in the game. ⚡⚡MINDSET-: (LAST BUT NOT THE LEAST, MOST IMPORTANT) The correct mindset in trading is one that is dedicated, focused, disciplined, confident, has no ego, has no fear of losing, and has detachment to money. For those not into trading, this might sound a little weird. Most traders focus on developing strategies in order to make money. If you have developed profitable trading edges and trading strategies, it’s time to move on to the next level, which is developing a good mindset for trading. The correct mindset in trading makes you follow your trading edges and strategies! When you get experience in day trading or other time frames in trading you’ll discover that trading is certainly not as easy as it seems. Quite the opposite. If you can’t follow the rules of the strategies, you simply have no trading strategy. Trading discipline is what most traders need. The correct mindset in trading is what separates good and bad traders! SOME ADVICES-: A trader needs to be dedicated. A trader must know himself/herself. A trader stays focused all the time. Disciplined Trading always avoid compulsory or impulsive trading. Always separates confidence and overconfidence like a good Trader. 𝐑𝐞𝐠𝐚𝐫𝐝𝐬-: 𝐀𝐦𝐢𝐭 𝐑𝐚𝐣𝐚𝐧
NSE:NIFTYEducation
by AMIT-RAJAN
26
Emotions should not affect our trade management systemTrader should identify emotions that are affecting our trading management decisions, and find genuine solution to over come from the same to become a better trader. Most investors treat trading as a hobby because they have a full-time job doing something else. However, If you treat trading like a business, it will pay you like a business. If you treat like a hobby, hobbies don't pay, they cost you...! Disclaimer. I am not sebi registered analyst. My studies are for educational purpose only. Please Consult your financial advisor before trading or investing. I am not responsible for any kinds of your profits and your losses.
NSE:NIFTYEducation
by RK_Chaarts
4
The Ultimate Rules for Options Day Trading SuccessNSE:BANKNIFTY Introduction If you want to be a successful options day trader, it's not just about having a good strategy. You also need to develop your expertise, seek guidance when needed, and be dedicated to your goals. To do this, you need to be disciplined and follow some options day trading rules. These rules can help you avoid common mistakes and take away the guesswork. Here are some rules that every options day trader should know and if you use them in a disciplined manner then they have been proven to help beginners become winning options day traders. Some important rules are :- Rule 1 Setting Realistic Goals for Options Day Trading One of the most important rules for success in options day trading is to have realistic expectations. Options trading is not a way to get rich quickly, but it can be a profitable career if you put in the time and effort to learn and master the craft. You need to be prepared for a learning curve and be willing to stick with it even when it gets tough. You should also expect losses, as no strategy can guarantee gains all the time. Good money and risk management can help minimize losses. Rule 2 Start Small to Grow Big When you're new to day trading options, it's important to be cautious. You're still learning about options trading and the financial market, so take your time. Don't rush into things, even if you're excited. Start by practicing with paper trading and then move on to smaller options positions. Gradually increase your positions as you become more familiar with day trading options. This approach helps you minimize your losses and develop a systematic method for entering positions. Rule 3 Know your limits You may be tempted to trade as much as possible to develop a winning monthly average but that strategy will have the opposite effect and land you with a losing average. Remember that every options trader needs careful consideration before that contract is set up. Never overtrade and tie up your Capital. Overtrading will make money for your broker not you. Rule 4 Get Prepared Mentally, Physically, and Emotionally for Options Trading To succeed in options day trading, you need to take care of your mental, physical, and emotional health. This means getting enough sleep, eating a healthy diet, exercising regularly, avoiding excessive alcohol and smoking, and reducing stress in your environment. These habits will help you stay alert and focused throughout the day. So, take the time to care for yourself and perform at your best every day. Rule 5 Do Your Homework Daily – Plan your day Before the market opens, study the financial environment and news to develop a daily trading plan. This is called pre-market preparation and it's essential to stay competitive and align your strategy with the day's conditions. Develop a pre-market checklist that includes evaluating support and resistance, checking the news, assessing volume and competition, determining safe exits for losing positions, and considering market seasonality. Rule 6 Analyse Your Daily Performance Track your options day trading performance daily to notice patterns in your profits and losses. This will help you understand why you're gaining or losing money and fine-tune your processes for maximum returns. Reviewing your daily performance will also help you make long-term decisions for your options day trading career. Rule 7 Pay Attention to Volatility Volatility is how likely the price will change over time in the financial market. It can be good or bad for an options day trader, depending on their goals and position. Many factors affect volatility, like the economy, world events, and news reports. Straddle and strangle strategies are helpful in volatile markets. There are three types of volatility: price, historical, and implied. Price is based on supply and demand, historical looks at past performance, and implied predicts future performance. Rule 8 Use Option Greeks Greeks are measures that help to determine an option's price sensitivity in relation to other factors. They are represented by letters from the Greek alphabet and are used in complex formulas to determine option pricing. Despite their complexity, Greeks can be calculated quickly and efficiently, allowing options day traders to use them to improve their trades for maximum profit. Delta, Gamma, Vega, Theta, Rho Learn about option greeks from here I hope you found this helpful. Please like and comment. Keep Learning, Happy Trading!
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NSE:BANKNIFTYEducation
by SANJAYPATIDAR_
4
'Shades' of 'Trades' - color of the marketIn this color season let's have an insight into how the market plays 'Holi' with traders with its binary colors. The above line sounds fascinating but it's not let me elaborate a bit more. Yes, the market plays with colors with traders but the market uses only binary colors. Many of you may think of white and black as binary colors, but this is not the case here. The market only uses two primary colors green and red to play with traders but we play with colors only on 'Holi' it seems that markets are very fond of playing with colors so it does probably every trading day it either colors the trader's position page with the green of red. Though we have only two colors in markets which can be divided into four shades which are the following:- -> Light Green - symbolizes a small profit -> Dark Green - symbolizes a big profit ( Trader's Favorite ) -> Light Red - symbolizes a small loss -> Dark Red - symbolizes a big loss ( Hazardous to account ) In this article let's dive into the depth of these colors and the reason for incurring such colors on your position page. -->How to get light green color -- Aimed for steady and regular profits . -> Trader can incur this only if they are consistent and aims for regular profit cause markets aren't trending every day. -> Discipline is the key to consistency. I think many of you have heard of the story of sage Vishwamitra who was meditating for a purpose and Menka was used to break the meditation and misguide him from his path. The same is the case of markets if you are in the market to generate regular profits then you must be disciplined as markets have negative behavior of creating illusions to trap the traders just like Menka . -> I suggest developing a trading system or set of rules on which you are going to take the trade if you want to generate regular and steady profits cause if the system is profitable you will also be profitable. Don't rely on price action on an intraday basis unless you're a champ in the same. -->How to get dark green color -- Aimed for sporadic and occasional profits. -> Though everyone wants profits it's not obvious as said earlier markets aren't trending every day. -> But if you are keen on watching market movements, you could probably catch these sporadic days and generate big profits. -> Fear should reside out to ride big profits. I think why many of us aren't able to ride big profits because of the opulence of loss that has developed fear in our minds due to which we try to book profits early without getting any sign of weakness in our trades. Our mindset says to us "Something is better than nothing". -> To overcome this fear I suggest backtesting your trades which can help you in gaining self-confidence if anyhow you can develop faith in yourself then fear naturally resides. -->Reasons to get light red color -- Quite obvious as a part of the game. -> It's quite obvious if you getting small losses as loss is a part of the trade game. -> There is nothing to be stressed about or to ponder upon these small losses if it comes along with profits as there is no such trading system or trader which only gives or generates profit. -> This usually happens when stop-loss is hit and you must be thankful to yourself that you had placed a stop and accept the small loss. Markets reward traders who admit their errors and change their ways whereas punish traders who are obstinate and won't change. I think everyone must check the reason for each loss they incur if it's due to the system you are following and the system is profitable in long run then the loss is fine but if it's due to your own mistake, learn from it and rectify the same as quick as possible. -->Reasons to get dark red color -- Hazardous and may lead to termination. -> One must avoid these big losses at all costs; otherwise, you may find yourself in a situation where you are unable to pay any costs. -> Most hazardous and may sometimes lead to the termination of your trading journey. -> This usually happens due to the stubborn nature of traders where they don't accept that they are wrong or don't have the guts to book their stop losses. I think why many of us incur big losses because of neglecting the use of system stop-loss. Traders have realized the significance of stop-loss hence they decide on the sl before entering into the trade but what they do is keep sl in mind rather than the system and when the price reaches the sl level they don't have the guts to book the loss due to which small loss turn into a big loss. This is the reason why everybody should place system stop-loss as a computer doesn't have emotion. As stated earlier Markets reward traders who admit their errors and change their ways whereas punish traders who are obstinate and won't change. That means that if the trader does not recognize their mistake and book, the sl market will penalize them with a large loss. I suppose that all of you have got great knowledge of the 'Shades' of 'Trades' and an insight into all outcomes of a trade. And I think that I was able to explain to you how the market also likes to play with color and now the first line doesn't seem to be fascinating but obvious. I hope this 'Holi' market colors you all with dark green, and wish you all a 'Happy Holi'.
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NSE:NIFTYEducation
by Chaser30
6
10 Reasons why Most traders lose moneyHey everyone!👋 Trading & investing is not easy. If it were, everyone would be rich. Here are a couple of time-honored tips to help you get back to basics. Lack of knowledge 📘 Many traders jump into the market without a thorough understanding of how it works and what it takes to be successful. As a result, they make costly mistakes and quickly lose money. Poor risk management 🚨 Risk is an inherent part of trading, and it's important to manage it effectively in order to protect your capital and maximize your chances of success. However, many traders don't have a clear risk management strategy in place, and as a result, they are more vulnerable to outsized losses. Emotional decision-making 😞 It's easy to feel strong emotions while trading. However, making decisions based on emotions rather than rational analysis can be a recipe for disaster. Many traders make poor decisions when they are feeling overwhelmed, greedy, or fearful and this can lead to significant losses. Lack of discipline 🧘‍♂️ Successful trading requires discipline, but many traders struggle to stick to their plan. This can be especially challenging when the market is volatile or when a trader is going through a drawdown. Create a system for yourself that's easy to stay compliant with! Over-trading 📊 Many traders make the mistake of over-trading, which means they take on too many trades and don't allow their trades to play out properly. This leads to increased risk, higher brokerage costs, and a greater likelihood of making losses. Clearly articulating setups you like can help separate good opportunities from the chaff. Lack of a trading plan 📝 A trading plan provides a clear set of rules and guidelines to follow when taking trades. Without a plan, traders may make impulsive decisions, which can be dangerous and often lead to losses. Not keeping up with important data and information ⏰ The market and its common narratives are constantly evolving, and it's important for traders to stay up-to-date with the latest developments in order to make informed decisions. Not cutting losses quickly ✂️ No trader can avoid making losses completely, but the key is to minimize their impact on your account. One of the best ways to do this is to cut your losses quickly when a trade goes against you. However, many traders hold onto losing trades for too long, hoping that they will recover, and this can lead to larger-than-expected losses. Not maximizing winners 💸 Just as it's important to cut your losses quickly, it's also important to maximize your winners. Many traders fail to do this, either because they don’t have a plan in place, telling them when and how to exit a trade. As a result, they may leave money on the table and miss out on potential profits. Not Adapting 📚 Adapting to changing market conditions is paramount to success in the financial markets. Regimes change, trading edge disappears and reappears, and the systems underpinning everything are constantly in flux. One day a trading strategy is producing consistent profits, the next, it isn't. Traders need to adapt in order to make money over the long term, or they risk getting phased out of the market. The majority of traders can improve their chances of success by educating themselves, developing a solid trading plan, planning out decisions beforehand, and avoiding common pitfalls. I hope you enjoyed this post. Please feel free to write any additional tips or pieces of advice in the comments section below! Happy learning. Cheers! Rajat Kumar Singh (@johntradingwick) Community Manager (India), TradingView
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NASDAQ:TSLAEducation
by johntradingwick
9
Education About Bearish Rising WedgeHey there! Lets Learn About bearish rising wedge A bearish rising wedge is a chart pattern that often appears in the stock market and is seen as a bearish signal. It occurs when the price of a stock moves up and down, forming a wedge-like shape that is inclined upwards. The pattern is considered bearish because it signals that the stock's upward momentum is losing steam, and that there may be a price decline in the near future. The pattern is formed when the stock's high and low prices move closer together over time, creating the wedge shape. Investors and traders watch for this pattern as a sign that it may be time to sell their stock, or to short sell the stock, meaning to bet on a price decline. However, it's important to remember that a bearish rising wedge is not a guarantee of a price decline, and it's always wise to consider multiple indicators and factors before making any investment decisions. Here in my example as we can see s and p 500 is forming bearish market structure and forming lower highs and lower lows. In conclusion, a bearish rising wedge is a useful tool for investors and traders to keep an eye on, but it's only one of many factors that should be taken into consideration when making investment decisions like I used another indicator to confirm my analysis. So, keep an eye out for this pattern and stay informed, but always remember to do your own research and make informed decisions. Bye Have a nice day
SP:SPXEducation
by D3ffyDuck
How to select the Right Time Frame for Day Trading (Intraday) ?The selection of right time frame for day trading (Intraday) is a very subjective question and is frequently asked by the novice traders. The selection of the time frame depends on many parameters. But according to my experience it depends on mainly two parameters. 1. Stoploss 2. Signal strength of your trading strategy. The time frame from 1 minute to 1 hour is best for day trading. Let us discuss these parameters in detail. 1. Stoploss: Each time frame has a different stoploss level. The higher time frame has a deep stoploss level as compared to the lower time frame. So, we have to select the time frame according to the stoploss or we can say that the right time frame depends on the amount of money you afford to lose in one trade . Before entering into the trade, check the stoploss for different time frames and then choose the time frame according to the bearable amount of money to lose in one trade. 2. Signal strength of your trading strategy: Whatever strategy you choose to trade, the entry and exit signals are always strong on the higher time frame as compared to the lower time frame because the lower time frames has high volatility as compared to the higher time frames. It means the success rate is high on the higher time frames as compared to the lower time frames. Both of these parameters are directly proportional to each other. So, the selection of the time frame for day trading must depend on both of these parameters. We have to select the time frame on which our signal strength is good and also the comfortable amount of money which we afford to lose in one trade. Thanks
NSE:NIFTYEducation
by ssvirdi
5
What a professional trader think. ?For every trade we have a reason, when the trade works, we naturally think our reason was right but here is a catch, there is no way to determine the intentions of all traders. Yet the typical trader executes his methodology as if he is being told what those intentions are the professionals does not. Disconnect any reason from the results of a trade because it is impossible to get an exact reason why the trade worked or failed. Many will disagree with me on this but believe me there are traders (Mota Bhais) even a single order from them can drag a shooting price down back to floor or even hell, and they to do it occasionally. Just see the past charts you will get what I am trying to say. Prices are random guys, yes believe me or not it applies to every trade you take. Let me ask you a question. What trading skills required to experience a winning trade.? - Do you need an edge.? - Do you need a plan.? - Do you need the discipline to execute the plan.? - Do you need a good reason to enter a trade.? Answer: Nothing just a click of your mouse, yes that's it. but what if you want it to make your consistent source of income.? Now here comes the difference only few traders get those correct belief system which keep them above others. Pro trader belief 1) On a random outcome, I do not have to know what is going to happen next. 2) There is a random distribution between wins and losses. 3) There is no point to find a reason why price movement happened, it is the task of media let them take care of that. 4) There is no connection of my last trade to the current one, so it is very foolish to trade for loss recovery. There is nothing like loss recovery, every trade is unique. 5) On a particular trade I can fail or win but I have to think with a large number of trades, on overall profitability, over a long term. 6) My work is to execute the plan with full efficiency rest is not in my hand. 7) I do not predict price move it is not my task I focus on process. Nobody wants to Chang the way they think. I am also not telling you to make a v curve you just need to adjust something within, and everything get sorted by itself. Thanks for reading this out.
NSE:BANKNIFTY1!Education
by TRADEWITHFUN247
4
'SANTA' of the 'TRADERS'This publication is dedicated to thanking the 'Santa' of the ‘Traders’ i.e. the 'Stock Market'. The lessons given to us as a gift of the market, not only help us to succeed in the stock market but also helps us throughout life. This 25th December i.e. Christmas let’s thank our 'Santa' and have a detailed look at 5 Great Gifts of the Stock Market and thank her for these life-awakening gifts. -> Discipline: The most important teaching in markets is discipline. As the wording of Jim Rohn states “Discipline is the bridge between goals and accomplishment” stock market develops that bridge. The market has its way of teaching and punishing, I think all of us had witnessed its punishment whether in form of not keeping stop loss or not following your trade system. Discipline plays a vital role in an individual’s life. As said by Horace “Rule your mind or it will rule you. ”The disciplined person has the power to rule his mind whereas others lack this ability. -> Patience: Another gem cultivated by markets in our personality and harvested by us throughout life. One of the familiar names of our school time Benjamin Franklin says “He that can have patience can have what he will.” market first teaches this gem to us and then offer us what we wish. We all have at least once missed taking the real profit by not waiting till the target is achieved but leaving the trade in midway though it was moving in our direction the reason is we lack patience and the market gives profit only to eligible ones so, either you be eligible or market will make you fit for it by its way. -> Ability to conquer 3 gateways of hell: According to ‘The Bible’ there are 12 gateways to hell and among them, the most dangerous are Lust, Greed, and Anger. The market helps its students in conquering those strong emotions. The beginner in the stock market has a strong lust for making money very quickly and greed for making lots of money without that kind of effort and when he fails in his motive anger gets born in his personality from where degradation or hell starts. Those few people who still have not left the hands of the market get the knowledge to conquer those emotions throughout their journey in markets. -> Faith in yourself: One of the famous quotes by Ralph Waldo Emerson is “The best lightning rod for your protection is your spine.” market strengthen that spine so that we as its student can withstand any kind of storm in our life. Taking any trade based on your analysis requires self-belief on the early days people hesitate but later they rely on their analysis because the market has taught them self-belief. -> Crush your arrogance: Market is popular in crushing the arrogant guy along with this removing any trace of arrogance in his personality. The famous wording says “Close some doors today. Not because of pride, incapacity, or arrogance, but simply because they lead you nowhere.” market as a kind teacher keep a keen eye on her student for arrogance as she knows that as soon as arrogance arises person starts his fall. All of us had witnessed that whenever we start thinking that we have mastered markets and try to neglect discipline market slaps us badly to awaken us that we are still newbies and still had to learn a lot. I believe these 5 are the most valuable gifts of the market but if you have any gift of the market much valuable in your life please mention it in the comments. Finally, Merry Christmas to all my trader mates. The stock market gives success only to eligible ones so, either you be eligible or the market will make you fit for it in its own way.
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NSE:NIFTYEducation
by Chaser30
6
When to know the market is going to bullHello Everyone, So after a very long time i am publishing a new educational idea on how can we catch such bull trends like this to make ourselves profit and also we will see how to know that a rally is ending or 5 signals to a bull market so let's go But before we start we should know what is a bull run or bear run means So a bull run means that it may feel you like prices are at the sky and not ready to come downs and in long-term in this investors love to see their portfolios during a bull markets because their stocks run like a jet in the sky. However, since markets are fluctuating, nobody knows when it will end also some investors are fearful when they see bull markets as a sell signal at anytime to take the maximum profit while others feel it very comfortable buying in a bull trend and "warren buffet" has said " Be Fearful When others are Greedy and be Greedy when others are fearful ". Do the following analysis to predict these bulls :- 1. Always seek for high trading volume and demand in markets:- It will feel like everyone is just in the market to buy up and no one is ready to sell their stocks as the market continues to climb upwards. Bull markets always have greater demand compared to supply, high trading volume, and next level liquidity touching the sky. 2. Lower interest rates :- Like whenever Banks interests are low there is the sign that the market is bull. 3. High Growth Rate :- Bull markets are often seen when low unemployment is and so for people have money to spend, and when people spend their money and buy their products so their profits increase and their stocks increase and so for the market increases. 4. Growing Economy :- Bull markets are also seen when the economy is growing. 5. Divergence:- When the market is up even indicators and other metrics are showing down even through. Thank you
NSE:NIFTYEducation
by MAYANKTECHRESEARCHING
Consistent Trader - Chapter 1Market has opened. Price is moving. You are watching the market. The question is, “do you live in present, understand the market or living in the present or future?” Everybody enters in to trading, thinking that it is easy to make money in share market. They never think to make easy money, one has to be a consistent trader and it takes time. The phases of a trader are Newbie – no knowledge, lot of expectations Senior newbie – Gain knowledge, less expectations. Intermediate – Unable to manage emotions during trading, good knowledge about trading. Expert – Good emotional & trade management skills. In these 4 stages, most people get stuck in intermediate phase. Why they get stuck there? How to cross that phase? This intermediate phase is important as it decides whether a person will become a consistent trader or not. The longer a person stays in this phase, the chances of him becoming a profitable trader reduces. Why ? Because the person will be repeating the same mistakes again & again creating it as a habit strengthening the neural pathways in brain and make it as a habit. People who do revenge trading, impulsive trading, over trading for many years enter in to this category. Can you avoid it? No. Every trader undergoes this phase. And in this phase only he learns the way to become a consistent trader. Do you have self destructive bad trading habits? What factors decide the duration of the intermediate phase? Exercise : Note down your self destructing trading habits. Review your trades to know it. (To be continued next week...)
CEducation
by vanathi
37
10 things to remember about bear markets, volatility, and panicTrading & investing is not easy. If it were, everyone would be rich. One of the most difficult moments for all traders, and especially investors, is when markets are abnormally bearish, trending downward or in a direction that goes against their positions. Adding to that difficulty is when volatility is rising and when uncertainty is high. These events have occurred throughout market history and should be expected. Every trader or investor should remember a simple truth: markets will go against you at some point. Be prepared. Learning to trade or invest in bearish and volatile markets requires great skill, experience, and composure. The last 12 months have demonstrated that. Stocks, bonds, forex, crypto, and futures have seen heightened volatility over the last 12 months. So what should we do? What now? Let's revisit the basics - the skills, traits, and mindset that are required to survive these moments. 1. Plan ahead 🗺 Plan your trade, trade your plan. Every trade, and every investment, should have an underlying plan. Write out the basic questions before you buy or sell. For example, what is your desired entry price? What is your desired exit price? What is your stop loss? How much money are you risking? Why are you making this trade or investment in the first place? In times of volatility, these questions matter more than ever. Get back to the basics. 2. Don't rush 🧘‍♂️ Volatility, and especially market panic, cause people to make quick reactions. The pressure, the fast price action, often forces people to act without a moment to revisit their original plan. Don't do this! Take your time. Stay composed and deal with the hand you have been dealt. 3. Be patient with entries 🎯 Many traders & investors speak of buying dips, but this phrase does explain the steps required. You don't buy dips without a plan. You plan out your strategy, you wait for the perfect entry, and you let the market come to you. When the market is in a downtrend, and volatility is high, it is paramount that you remain patient, waiting for the perfect entry. Use limit orders wisely. 4. Know your timeframe ⏰ Are you trading for one day? One month? Or 5 years? These basic questions will remind you of what you're trying to accomplish and how rushed or patient you should really be. They will also remind you about the chart you should be looking at, whether you should be zoomed in to a 30-minute chart or zoomed out to a weekly chart, showing years of price history. 5. Have an exit strategy 🚨 An exit strategy means that no matter what happens, you know where your stop loss is and you know where your profit target is. No matter what happens, up or down or sideways, you have an exit plan. Do not leave any entry or exit up to chance. Create your exit strategy before you place the trade and follow it. 6. Tighten position size 💪 Added volatility and uncertainty need to be factored into your game plan before it begins in the first place. However, many new investors and traders forget to do this. If that's you, it's time to adjust your strategy, and your plan, for larger trading ranges, and volatility. The year-long trends that defined a previous market are now less valid. 7. Zoom out for historical context 🔎 Zoom out on your charts. Then keep zooming out. And now zoom out some more. Circle the latest candle, line, or price movement and let it serve as a reminder about where the price is today vs. where it came from. There's a saying: when in doubt, zoom out. Do not get lost in the moment, looking only at the day or week, but instead go research the entire history of price. Learn about what has happened in the past. 8. Cash is a position 💸 Want to dollar cost average into a trade? Want to buy more? Want to trade more? You need cash to do that. There is comfort in being able to participate in the volatility whenever you want. Cash is a position and guarantees this. 9. Avoid panic, FUD, and FOMO 😳 When emotions are running high, some of the biggest psychological mistakes can occur. FUD stands for fear, uncertainty, and doom. FOMO stands for fear of missing out. These are two common emotions in crashing markets. On one hand, everyone thinks the end is near and then on the other hand every little up move is the next bull run. Do not let these emotions take you. 10. Take a break 😀 Sometimes it helps to step away. Log out, close your apps, get outside and get some exercise. Come back to the markets when you're ready. Your mind will also be well rested now. We hope you enjoyed this post and we hope it helps you as you navigate the markets. Please feel free to write any additional tips or pieces of advice in the comments section below! See you all next week. 🙂 – Team TradingView Do check us out on Instagram and YouTube for more awesome content! 💘
Editors' picks
BITSTAMP:BTCUSDEducation
by TradingView
9
Traders Queries - October 2022Query 1 I have bought nifty 17750 CE 27th October @ 158 and when market fall, I again bought it @ 48. Can I hold till the month end? Query 2 : I shorted nifty @ 17200, but market is moving up. Can I carry forward my position as I expect market to fall from 18,000. Answer for query 1 : Option value erode each and every day. Even though the market went up, the predicted direction is right, because of decay it didn’t give profit as 17750 CE 27th October is trading at 40 now. Lesson : Option buying gives profit when the movement has momentum in it. During sideways market, option value wont gain, so we have to trade accordingly. We have to think about time decay when we trade in options. Answer for query 2 : Every trade should have stop and the amount of risk you can take. When we did not respect stop and get out of the trade when the market is moving in opposite direction of the trade, the loss increases and the capital has the risk of getting wiped out. This happens when we have a biased view about the market. Here the bias is market will fall and we look for the things which support it, which makes us unable to accept the real facts like 18000 is so far away from 17200 and its not worth taking the risk. Lesson : Bias formation affects our trade. These are different types of bias, but when we are concentrating on the facts, then it will become visible that our views are biased and we can rectify it.
NSE:NIFTYEducation
by vanathi
3
A beginner's guide to trading - Chapter 6On this day let us take an oath to fight and conquer our bad trading habits. Let us take a look about the most important bad trading habits. Un prepared for the market : Never start a trading day without having a plan or doing analysis on the stocks/index you are trading. Stop loss : Always place stop order once you entered a trade. Over thinking : When your strategy gives entry, take entry. Dont hesitate. Your stop order will save you if anything went wrong. Uncertainty : Accept the fact that market don’t give any strategy 100 % success. Dont look for the wholly grail methods which will give you certainty. It don’t exist. Patience : Market gives reward to the people who wait for their trade set up to form and who trade with patience. Ego : Share market is an entirely different domain where you face the strongest opponent “You”. Make yourself to understand your inner demons, so that you wont have too much ego which can affect your trading unknowingly. Addiction : Once in a while check whether you are passionate about trading or addicted to it. Fear of missing out : Market always gives opportunities to all. The opportunities which you missed in life will be trying to come out during market hours to take trade when there is no trade set up. Journaling : Keep track of your trades and improvement . The things which can not be measured can not be analysed. Less capital : Dont try to get big profits from small capital as it will make you to take huge risks. Note : Fear & greed is not in the top ten list as they are out dated :) Our brain makes us to repeat same mistakes. You should be conscious about your actions to avoid it. Good luck !
NSE:CNXSMALLCAPEducation
by vanathi
2
NIFTY IS AT CRUCIAL LEVEL, Support Become Resistance NowIt is important to check swing lows and swing highs for analysing prices for short term trading, this concept of price which tells us that the support becomes resistance after breakdown, can be understood by this chart analysis. But why this happens ? See we often use this concept in our daily trading the logic behind such pattern and price behaviour lies in the crowd psychology when anyone buy a stock he sees the recent swing low and thinks that what if I bought here I would be sitting in a profit of this and that, he may also put a stop loss below the swing low. This is the most common think a trader does. Because he thinks prices should not trade below this low. Swing highs or lows are those points where either buyers exhausted (in case of swing high) or sellers ( in case of swing lows) , so such price zone deeply affect the crowd decision making when price again trade at those levels, either buyer start leading over sellers or sellers punch out the buyers , these are turning points. That is why we see a sharp breakout or a sharp reversal. We can benefit from such behaviour as we know something is going to happen so 1) keep an alert by using TradingView Alert 2) As you get an alert see price action on those zones, trading on such crucial spot results in a good risk to reward situation. Note : Prices are random and sideways most of the time, if you have a way to filter those times where prices probably not behave randomly than it gave an edge over your trading.
NSE:NIFTYEducation
by BusyBhai
1
Why It Is Hard To Hold A Winning Position. ?Why It is hard to Hold a winning position. ? ---------------------------------------- Suppose You took a trade ,bought 100 quantity at price 100 , with a SL : 80, and Potential target of 120, Now what happens it goes up to 105 (you think your analysis is good let us wait) Then it come back to 100 went further down till 90 (you thinks it is ok we have to give it room) Then it went up above your buying level till 115 (now your target is 120 you are just 5 points away, what will come into your mind?) Then suddenly sharp selling starts and you got your SL triggered. More or less the PnL whipsaw, take you to the moon and within seconds, it drop you down. The PnL whipsaw creates dynamic changing emotions into your mind. Am I correct or not till now, feel free to comment. ? --------------------------------------------- Let us more about some pre-set emotions which comes out and affect our decision making with open position. 1) Fear of Losing the open position’s profit : See everybody want to win nobody want to see himself of herself as a Loser in the mirror , when you take a trade you always think that it is going to give you profit (subconsciously), with such a biased mind the open position PnL affect your decision making. You get so much attached with the running profit that you start thinking like that it the profit you have already booked and feeling that it is your released profit, now you are “not willing to let it go” because you now attached to it emotionally (psychologically). This type of fear arises from our belief system and past experience developed over previous trades. The social culture, family atmosphere also can be the reasons. “If You think you are a risk taker than you must thanks God , because everybody do not have such brave heart.” Advice: “Let it go”, the open position’s PnL, is not yours, it is the released one that counts. Believe in your system and let the target hit or trailing SL get triggered (SL according to your strategy). 2) Past Experience (Fear intensifies when have a very bad experience earlier) Students approaching me for learning trading psychology ask me why you ask us about our past experience and track sheet, they do not want to recall, but their past experience and the track record tells their complete story , it tells everything what is the problem with their trading , what need to correct immediately what are the strong weak part of their psychology. But why: Because past experience shapes our psychology. If you have witnessed a series of trade where your target is missed by few ticks and you have to book SL. Then you start thinking about your exit style, you think is there any improvement needed. At this point of time you again shift from this strategy to that strategy. If you are trading from a while then you can understand the gains we make are not smooth sometimes great sometimes they are worse. If you think there is a holy grail strategy you will spent whole life searching it, but still remain empty hand. Advice: You have to realise that having continuous losses in a row can happen frequently as, you cannot avoid losing streak, even the professional traders have their losing streaks going for 2 , 3 weeks. You came here not to trade 1 week , 1 month or 1 year , you must have a long term view. 3) Lack Of Clarity : If you are among those traders who always have a very sceptic view about trading, have knowledge and experience but , do not see it as a sustainable business, thinking that you cannot rely on trading income. You will develop a tendency to book early. Because holding a winning position requires a courage which comes from clarity. I met a research analyst managing his client’s portfolio giving trading and investing recommendations to his clients on regular basis for more than 5 years. I asked him why you selling your valuable advice when you can profit from it. You know what he said to me, it is shocking for me he said , Nobody make money in trading. He do not believe in trading business even though having his bread and butter by selling his advice. It is worst how you can sell your recommendations when you personally feel that nobody can make money. Is it not contradictory? Advice: If you do not have clarity about your trading system, you cannot trade confidently and this one thing alone can derail you from your trading plan. So spent time reading, listening to various successful trader, know their story their style, the more you read listen the more you will get the knowledge and clarity. 4) Complacent with the Current profit : I think this is the worst problem happening with you because if you are very complacent you will end up booking very small and losing big ultimately your equity curve will go down slowly. This happen to novice traders who want to make some extra income, they see that open position profit is enough for their one day or two day expenses they close their positions immediately. Note: Have you seen people doing a mediocre job or their father’s small business even they have the potential for a bigger goals. Booking small profit frequently makes us convinced that what we are doing is great because we see a streak of winning trades. Reason: Simple reason of it is than, we tend to apply our day to day life logics here, we are unable to see the potential and avoid systematic approach. Advice: Your strategy is developed according to the profit potential, risk management not for your day today expenses or complacency level. Stay goal oriented make small, short duration goals and see a series of trade at a time not stuck your mind in single trade. 5) Lack of acceptance: When you do not accept loss you will always try to avoid it this is the main reason why people sit tight will their losing position but cannot hold their wining positions. Reason : Arrogance, Confusion, less belief. Advice : You can make profit or loss on a particular trade depends on market situations. Recall this before creating every new position. Just follow you system.
Editors' picks
NSE:BANKNIFTYEducation
by TRADEWITHFUN247
26