By rkarora

Is this market of bulls or bears? Its neither of bulls nor of bears. Its market of those who are of adjusting nature.

Until you change your thinking, you will always recycle your experiences.

Wisdom lies not in the amount of knowledge acquired but in the degree of its application. (Apply what you learn religiously)

 

Biggest mistake we do is look an opportunity to buy in falling market, and selling opportunities in bullish market. (Why we are always against the flow.)

 

Some people change their ways when they see the light ; others when they feel the heat. (Change with trend- don’t hold your position against the trend)

 

There is no substitute for accurate knowledge, know yourself, know your business, know your men. (know your resources, appetite, nature, emotions and broker)

 

Success is life consist of going from one mistake to the next without losing your enthusiasm. (forget your loses in 3 minutes otherwise will be trapped in series of losing trades AND don’t repeat your mistake.)

 

Stop blaming others, take responsibility for every area of your life. (Afterall it’s your trade, you have to pay for it, no one else will. It’s your baby.)

 

When you realize you’s made a mistake, take immediate steps to correct it. The tragedy of life is not that it ends so soon, but that we wait so long to begin it.

 

Time is very important. Ask the value of one millisecond to the person who won silver in OLYMPICS. (Minute price is above zero degree go and buy)

Now very important :

Only a fool listens to the words of the fool.  A fool is stupid ;
he dies of false ego-sense ( his spiritual life is dead).
(In intoxication of Maya and egotism, whatever he does) his actions always bring him pain; he lives in pain (sggs 953).

Thus, the Moorakh is one who is bound, and his Moorakhtaa or foolishness is bondage (Mayaic efforts), which invites misery. He imprisons himself in the cage of self-limitation or conditionings, which grows stronger with time. Therefore, foolishness is the head of all sorrows and suffering. It expands beyond imagination and expectation as one becomes firmly gripped in it.

Foolishness promotes psychological distress. To the contrary, liberation from foolishness confers inner Peace. If, after knowing this truth, one does not grind his teeth and strive for liberation from foolishness is certainly the Mahaamoorakh (greatest fool)!

Foolishness indicates false wisdom in the mind. Incited by such empty wisdom, a fool’s actions inspire useless disputes. He annoys others with his words, thoughts, actions and feelings. If someone tells him the truth, he looks upon that as poison. In this ignorance, he falls in love with that which wears out, breaks down, and dissolves. Since he is intoxicated with the wine of delusion (Maya), he cannot tell victory from defeat, good from bad, Real from unreal, and Truth (Sat) from falsehood (Asat). Through his affinity for Kusang (bad association), he gets plundered and ruined by the evil passions. Along the way, he commits countless foolish actions and mistakes. This is a fool’s way of life. (source: Gurbani)

Now learn who all are winners:-

  1. those who DO NOT BROADCAST THEIR TRADES

  2. they don’t  imagines water in the mirage, and snow on the sun, like fools.   means they just don’t imagine bull or bear trend.

  3. they always work according to their system.

  4. they never see waves instead of ocean, bracelet instead of gold, pots instead of clay, rays instead of Sun, and beads instead of thread. They focus on primary trend, but not misguided by secondary or minor trend.

  5. A fool refuses to flow with the life — he does not accept life as it comes. He thus gets stuck in the mud of emotional attachment. Instead of observing the passing show as a passing show (up or down trend) with non-attachment, he gets stuck to objects and move along with them, whereas winners are ready to accept bull trend as it is and bear trend as it is. they flow with the trend (life). They never ask why bull or bear.

We have a pattern of trading inbuilt within our self. What that pattern is buy cheap and sell expensive. Now if we learn whatever technique, if that is not changed we can’t be winner.  What we do – price start moving up we sell, price move higher we sell, price move in a trend, price move further high either we sell more or hold our shorts till the time, trend change. When trend change say downward, we start buying and keep buying till downward trend get exhausted. Minor/secondary corrections WITH IN MAIN OR PRIMARY TREND boost our idea to sell at high and buy at low.

1st thing first: we need to change Buy high sell low. No student is ready to absorb or adopt this idea.  Hold I am not saying buy at highest and sell at lower, simply saying buy high and sell low. It’s just opposite what all investors / traders do.  Whenever market is sideways, it work very well sell high buy low, but when there is trend all traders are trapped and lose not only earnings but capital too.

Fig .1 :NIFTY CHART FROM November 2016 to July 2017 Price moved 7880 to 10100 (2220 points )   (chart is available on net.)

Now look at the chart, Nifty moved 2220 points, where low was formed on Dec. 26, 2016. If you would have not bought at 8000 (its high to 7900) or at 8200 (its high to 8000) or at 8600 ( its higher to all lower levels) 9400 even or 9600. Now you might have understood what I want to point out. Simply want to convey buy at higher price if trend is up, and sell at lower price if trend is down.  Now back to chart Fig. 1, Most of the participants where selling Nifty. They had many reasons to sell

  1. Demonetarization
  2. GST implementation
  3. US President vs FBI chief
  4. Interest rate hike
  5. North Korea
  6. China – India boarder
  7. Contraction of book of US
  8. NPA of PSB.
  9. Delay in tax reforms in US

And there is long list. Reality is every trader is tempted to sell at higher rates, and tempted to buy at lower rates. Its natural inbuilt phenomena. Now if Nifty or any other index moves in one direction by 2000 plus points, even strongest player will announce after the jump of 1500 points, its time to sell. You need to develop working nature, “I will buy high, sell low.”  Again reminding, not asking you to buy at highest, and selling at lowest.

Point 2 : We all are keen to find reversal, in bull market, at every higher point, we take it a reversal point. Whenever trend slow down, or rest after a fast move, we strongly recommend sell all your positions. One of my friends, recommended sells to all long positions at every jump of 300 points. What it means, he recommended 7 sells in move of 2200 points. He used to say, he has booked all profits. This is foolishness.  He claim that he is an expert analyst. In up move when Index hold and form triangle or flag pattern, probability is that it may give breakout upward only. In falling market, Index hold and form triangle or flag pattern, probability of downward breakout is very high. But we as investor assume rest as reversal only.

 

Fig. 2 : Continuation of trend after a sideways move  Dow chart 2009 – 2017 July 30.       

Look at the chart of Dow above after every up move, price rest in a range for some time and then continue trend (up move). Dow Theory tell us clearly that there are secondary moves within prime trends, so must take secondary moves as an opportunity to initiate position in favour of primary trend. But we as investors consider secondary trend as reversal. Trend last for very long period, say 8 to 10 years. Now look at Fig. 2 again, highlighted areas are consolidation phase (secondary trend and minor trends within secondary trends), clear opportunities to buy, but what we do, look for opportunities to sell and get trapped. Dow Theory clearly tell don’t sell your position easily in bull market, until there is reversal. Dow Theory state many methods to identify reversals.

Point 3 :  When will we learn, to identify trend and reversal? What else we need to identify?

I tell you a simple but strong method. Take High Low and Close of month. Today is last day of July 2017. Low 9540 High 10110 Close 10000 (approx. Rates taken for example), now add all three and divide with 3.  (9540+10110+10000)/3 = Pivot Point = 9923 Now our monthly trend decider is 9923. Buy above and sell below, plus minus 15 points.

Now calculate Resistance and Support.

Resistance 1 = 19846 – 9540 = 10306

Resistance 2 = 9923 + (10110 – 9540) = 10493

Support 1 = 19846 – 10110 = 9736

Support 2 = 9923 – (10110 – 9540) = 9353

In next 3 months, either support 2 or resistance 2 can be achieved. Trade in small quality and have patience. If you don’t have patience, can play on weekly levels. If you are aggressive trader that can take daily levels for your targets and stop losses.  Now don’t tell you are very aggressive, so can take hourly levels? Not advisable but yes, if you can handle it.

Weekly levels for this week:

Pivot Point = 10048

Resistance = 10144 – 10245 – 10341

Support = 9946 – 9850 – 9749

Note here, for pivot point = last week’s, Open High Low and close are taken and divided by 4.

By using above method it’s very easy to play. This method keep you with trend and clearly speak loudly of reversal. Here we pay small losses and gain big profits. That what we need. Principle of stock trading is to make small money into big money. NOW QUESTION COMES, why we don’t trade on it? Answer is, because we make profit on it. We want excitement of roller-coaster. In systems that fun is not there, we don’t follow it. We come for fun, entertainment, enjoyment but not to make money. We all are of same material. We may follow for sometime, but very soon will get bored. We want new study, new method and new ways to lose in market.

 

 

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