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     GETTING STARTED
 
 
   GETTING STARTED || STRATEGIES || INFRASTRUCTURE ||TRAINING || FOOG FOR THOUGHT || DISCIPLINE
   PIT FALLS TRADING || TRADING ROOM || GREATEST INVESTOR || STOCK MARKET HISTORY || CHECK LIST

BULL FIGHT STARTEGIES

STARTEGIES:

A successful Trader or an Investor should have an art of interpreting, analysing and executing trades. The market changes its language day to day, and translating it is one of the most difficult task you will encounter. The use of certain tools will aid in breaking this code to increase the odds of being on the right side of a given trade. The use of key numbers, time of day, and a roadmap will facilitate your success.

"Without proper tool to determine the correct trend, you will not last long in the market arena."
Preserving capital in today's market brings up questions you may not have considered.

Many will answer it is Capital Appreciation but  very few say Capital Preservation, Capital Appreciation with proper precaution of  strict money management polices.

Investors and traders need to realize that preserving m,their money should be their top priority, rather than appreciation. Money market pundits argue that long- term investing is the only way to go. However based on the history, it's difficult to argue against such a premise. If there's one lesson to be learned from history, it's that long- term investing is not always right - it's only right at the beginning of a bull market.

Fund managers and analysts who want investors to keep their money in the stock market naturally want investors to " invest for the long term." since their assets generate lucrative management fees. You will not see or here a fund manager or analyst working for an investment bank advocating anything except what is in the interests of his/ her firm.

One fundamental lesson is that Stock Market changes, but investors don't. I am  big fan of Technical analysis, the study of price and volume to determine the likely future direction of price. What I have come to respect about technical analysis is that fundamental analysis lacks in its incorporation of the rational and irrational behavior of market participants. Discount cash flow analysis of your scripts might give you the value the company's equity shares should be trading at, but it will not give you any information about how other market participants feel about the company, nor does it incorporate their irrational behavior. Due to this  many a times valuation model may not work because it fails to incorporate the mindset of traders.

There fore one should invest with trading approach in Stock Market and we give below few of the Strategies that one should accept respect sincerely to become professional trader.

STRATEGY:
Educate Your Self
Those who put hard work into it, who strive to trade with method and discipline, are the ones who are consistently successful in the long run.  It is very important to have a solid foundation of method before you risk your portfolio. 
Educate & Experience
Success is difficult to achieve if you jump into trading without education, experience and unrealistic expectations.  Whether you are trading as a career or a part-time endeavor, it is helpful to see it as a business, develop conservative goals, and figure out exactly what is needed to achieve them.
How Much Capital To risk
It is  different for each person and it's something you must consider for yourself before you start trading. We give indicatory guideline for information only.
Catogary No of shares Capital Remark
New Comer. No restriction Nil Only Paper trade till 90% success is achieved . 

Remark:- Trade without risk and emotional attachment

Beginners 50-500 2,500- 25,000 Trade if you have risk capital and with 90% success rate on paper trading.

 Remark:-Trade with minimum risk  and control emotional attachment

Professional 500-10,000 and above 25,000 -25,000,00

and more

Trade only with stop loss and equal margin.

Remark:-Trade without emotions, greed and fear with use of stop loss as and where applicable

Above Professionals They do not trade because they have got what they need    
Get Financial House in Order
Since daytrading does come with a certain amount of risks, it's only wise to get your financial "house" in order before you begin. As such, a few basic guidelines are as follow

There are two basic categories of people  who have drastically different approach's to the market.

High net worth individuals particularly in the liquid assets :- For individuals in this category daytrading most likely is only a small part of an overall investment strategies or portfolio - and typically it's only used to further increase already solid net worth without exposing a high percentage of the individuals assets to  risks. They do little Day trading and do not get into only stock speculation. If you happen to be in this category use 10-20% of your overall liquid net worth to stock speculation, so you will not get into too much trouble.

Attempting to build their net worth strictly from day trading :-These are individuals who view daytrading  as the major way to generate and build their entire financial worth. They tend to take larger risks  using funds from a credit card and/or home equity mortgage of some form or another. When things don't go well in the markets, typically the losses tend to have a more dramatic impact on the individual's net worth and life style. If you happen to be in this category then some guidelines are in order.

Keep Record of your Trading
By keeping accurate records of your trading habits, it becomes a wonderful tool for looking back in objective reflection.
Trade on Paper
Learn, experiment, and make your initial mistakes on paper only, until your system is 90% correct.
Keep Record of your Trading
By keeping accurate records of your trading habits, it becomes a wonderful tool for looking back in objective reflection.
Trade on Paper
Learn, experiment, and make your initial mistakes on paper only, until your system is 90% correct.
Know Your Limitation
Daytrading can be a very hard road; you don't learn this stuff over night - it takes months, even years to learn the art of trading and practice it.. No one walks into this business and learns it over night, it takes time, it takes practice and it take the ability to learn from your mistakes. Each trade is different and is highly fluid type of business, it's always changing and you must adapt and change with it. What you must do, ultimately, is learn what works for you - not what works for everyone else - what works for you. Part of that is knowing your limitations.

 "A person got to know his/ her limitations"  got to be realistic about what you are , some people are just not suitable for trading. However, self evaluation can sometimes be very difficult. just because you think you will be successful at trading, doesn't make it so.  Obviously, if you didn't think you were able to be successful at daytrading, then you probably wouldn't be reading this page.

Be Confident In Your Trading.
Don't follow the crowd - follow your brain, follow facts, methods, systems and use logics and common sense. Be confident in your trading with Positive attitude a you will generally  come out on top a large percentage of the time.
Have a Complete Plan Before Entering any Trade.
Trade on solid methods and expectations, predictability and patterns, education and research, not on hope or guessing. Trade according to what you see happening, not according to what you want to happen. It is so critical ,yet many traders  rarely do I see follow it. You must have a strategy to handle not only the upside, but also the down side. The good and the bad of the trade. Where will you sell the stock should it move up and what price will you exit the trade should it move south. How long will you hold the stock if it doesn't move at all? These are all questions that should be asked and answered before you purchase any stock for a trade. This goes hand in hand with being 100% confident. You must have a plan of attack. Separate expectation from hope.
Diversify
Do not put all of your eggs in one basket, is the first step in limiting risk when it comes to trading and investment. It is very important for risk reduction. Since you aren't going to be correct in every trade you make, diversification is necessary and important as a means to risk reduction and capital preservation.
Avoid Investing Too Much in Aa Stock.
Trade at levels which you can afford and you will generally feel much more comfortable in your trading. This will generally result in much clearer thinking and smarter decisions on your part. Too much risk will result in too much fear and that will cloud your thinking and judgment.
Trade Stocks You Know.
Trade stocks you know or that are in areas you may have experience in. This will  help you feel more comfortable about the position you take up and allow you to more quickly evaluate news which may be released regarding the company. Sticking to what you know is not only a good way to start out investing and trading stocks, but it can help you feel more confident and make better decisions along the way.
Trade Popular Stocks
The more liquid the stock is (i.e. the more shares it trades) the more likely you'll get a fair price when buying or selling the stock. Also, the more likely it is that there will be a market to buy from or sell into.

If you try to buy/ sell large quantity of stock with volume less than 100000 shares, there simply won't be a seller/ buyer at the current price leading to vide fluctuation of share price which is worse for trading.

Trade Stocks That Are Making Money.
It's a good idea to trade stocks on companies which are currently showing a profit, as opposed to companies which "might show a profit someday". Sticking to companies with  consistent earnings when doing your trading as a further means to risk reduction.
Avoid Buying The " BIG EVENT"
Buying a stock ahead of what might be a "big event" can be quite risky and often times tends to delay your trading. Very often these big events get delayed for months and months. If you wish to hold a stock for weeks and weeks or months and months waiting for some big news flash, then that's perfectly okay. However, generally stocks move up on news far before the average individual hears about even the rumor of the news. As a result, you often see stocks trade down on positive news . Avoid such stocks whenever possible.
Don't Chase Stocks.
The true money in stocks is made by buying stocks prior to a sudden move, not during a sudden move. Patience in the stock market is very important; usually you'll do better by avoiding the temptation to "jump" when that impulse is largely a result of a move in the share price alone.
Don't Get Greedy.
Two of the biggest emotions a trader has to over come are fear and greed. Many traders fall victim to greed once a trade become profitable - simply by not having a firm exit point in mind. It's generally best to decide at what levels you wish to sell prior to entering into a trade to avoid this. If you feel yourself trying to justify higher levels from the stock and/or ignoring the current profit "as though it were nothing" you probably need to stop and consider not only the value of your profit, but the current risk to it by holding longer.
Contrarians Thinking.
Buy when there is blood in the streets. When the prices are falling find a good deal on the bases of methodology to buy. Stocks move up so high or so low and attracts contrarians thinking and switch the direction, at times crowds are wrong in their action and over reacts to the up or down side on intraday bases by attracting next group of contrarians thinkers and change the direction., When ever  market as a whole moves up or down  dramatically, feeling should emerge that these actions ultimately will be  wrong or will tend to reverse simply as the contrary view of things builds on each side of the move.
Trying for Tops and Bottoms.

Most of the Investors and traders have strong feeling to buy at the bottom and sell at the exact top on consistent bases  so as to get maximum out of it. However trying for exact top and bottom can be very dangerous  because nobody known at that instant whether it is top or bottom. Professional traders give away 10% at the top and 10 % at the bottom for judgment until a stock clearly signals a move either up or down before taking up the position for  remaining 80% of the move, and to be precise only 60% of it is in cashed.

Stops Loss First Gains Second.

Pay close attention to total risk. Learn to avoid high risk situations regardless of the potential. Small gains add up to much more in the long run than large-risk gains accompanied by huge losses. Professional investors use stop orders quite often to protect profit and or limit down side risk in a trade if in case it  do not act as per their judgment. Some traders hardly use them at all. Quality of placing stop  largely depends on the individual stocks, Market performance, Time period of trade, Method used and volatility of the stocks.

Emotions from trading can be separated at times by using stops because it is easier to place stop than watch it trade tick by tick and then decide to get out. Often times using stops also helps to remove some of the emotions from trading. It's far easier to place a stop on a trade than watch it trade tick-by-tick and try to decide the exact moment to get out.

Taking Profits on BIG GAINS:-
At times stocks move up sharply with multiple gains. When such  is a case  consider taking 50% of your gains right away. This allows you to continue to profit, but protect large amount of money  you have booked. You can use trailing stop loss to effectively protect balance position  and hold them indefinitely without any fear of a  loss to the original capital and profit booked from time to time.
Shorting Stocks
Professional traders do not short the stocks because it has a high share price. They look for the  fundamental reasons like sector recession, decline profit lack of management direction global trend, competition etc. When combined with this and the technical factors of demand and supply one can get a good margin out of it.

At Shorting of stocks exposes to the additional risk because stocks cannot be generated over and above the equity capital but money can be. Shorting of stocks create equal demand demand for the stocks because traders have to ultimately repurchase the security down the road to cover.

One should short the stock which have moved up rapidly without any fundamental base and that company is not known to general public at large. One can also short well known large cap stocks but their is risk associated with it when company to smaller or less well known company.

Staying on the Sideline
Cash is King, Being in cash gives you the best balance of mind to decide methodology  & strategies from which to trade. This is because one cannot take advantage of market dips if one is all ready  into the market. It is always better to be out of the market more for day trading than in the market to take advantage of the dips.  However for good investment companies it s different, try to be in the market more with your investment
React Quickly When You are Wrong.
React quickly when you are wrong:-Ninety percent of your losses can come from 10% of your wrong trades. One has to react quickly and avoid forming bad habits without any ego.
Stop Trading if You are Losing.
If you are losing, re-evaluate your method else stop trading.
STEPS IN TESTING A TRADING STRATEGY:-

Select a System and Design a test:-

  • Select a system of your choice and write down the rules to profit from Buy and Sell.
  • Select list of stocks.
  • Select the time frame for the test which can give at least 40 Signals for the stocks selected.
Perform the Test.
  • Test for optimizing the system over the middle 50% of the time period.
  • Back test for first 25 % of the time frame.
  • Forward test over the most recent 25% of the time frame.
Analysis of Result.
  • Calculate the percentage of time you win, with a minimum of 40%- 70%.
  • Average win or loss goal should be 2:1 or Better.
  • Put minimum amount of risk capital to test how you'll actually trade when your system is working.
Traders who trade a particular stock use the same indicators day in and day out, so they generally react in the same way in similar situations.