Mar 12, 2017

What golf teaches us about trading- 14 Points

 What golf teaches us about trading- 14 Points
Lessons from gold for traders

1. Each golf shot/trade is a learning opportunity. 
2. In golf you play the ball where it lies.  You can hit a great shot and find it in a divot and you must play from there.  In trading you can make a good trade, find yourself underwater in losses, and must trade out of the position. 
3. Golf is an individual sport and trading is an individual occupation, which you must learn to accept. 
4. In golf/trading you must eliminate big numbers. 
5. Golf/trading are skills based sports.  How well you play/trade is determined by your skill level, which you only develop over time. 
6. You, and only you, are responsible for your mistakes. 
7. You will hit bad shots and make bad trades.  You must learn to forgive yourself. 
8. Golf is a game you will never and can never master.  There is a just a continual journey to improve.  Kinda sounds like trading to me. 
9. There are ebbs and flows to the game of golf, where you play well and poorly.  For most, the same is true of trading.  You will have stretches where you trade and see screens well and periods where you trade like a hacker. 
10. The best golfers grind. The best traders grind it out.
11. In golf you are challenged to contain your emotions.  In trading you must contain your emotions.  
12. In golf ever great player has a pre-shot routine.  Every great trader has a process to find excellent trade setups that are best for them. 
13. Golfers visualize success.  Traders should visualize pulling the trigger on good trades. 
14. Practice, practice, practice. Are you willing to put in the work to become great?  

10 Ways to Become a More Consistent Trader

10 Ways to Become a More Consistent Trader
1) Visualize yourself trading consistently.
2) Set realistic goals for your trading. 
3) Do not spread yourself too thin.
4) Prepare consistently.
5) Keep a live trading journal. 
6) Develop clear exit rules for your trades.
7) Always know how much you are willing to lose on a trade.
8) Develop a trading PlayBook of your best setups and trade those plays. 
9) Keep trading statistics of what you trade well. Verify your best trade setups with statistics. 
10) Wait for a fat pitch (trade). 

Unpublished Interview Of Legendary Trader Jesse Livermore Conducted by Edwin Lefevre 1922

Unpublished Interview Of Legendary Trader Jesse Livermore Conducted by Edwin Lefevre 1922 
What follows is a never before published “interview” with Jesse Livermore.
Conducted by Edwin Lefevre, dated circa 1922, this “interview” reveals great insights into the mind of the famous trader. As we will see, the wisdom imparted here could change our entire perspective on the speculative game we love and enjoy.  It might even change our lives.  I took the liberty of editing it due to its length.
Lefevre:  Hello Mr Livermore.  Thank you for taking the time to conduct this series of interviews with me.  It is my understanding that you do not grant many interviews, so I am honored.
Livermore: You are very welcome.  I appreciate the respect but you do not have to address me as Mr.  Jesse, or my nickname, the boy plunger, will suffice.
Lefevre: And where did you get the name boy plunger?
Livermore: It was during the early days when I was trading small lots in the bucket shops, where the man who traded in twenty shares at a clip was suspected of being J.P. Morgan traveling incognito.  I didn’t have a following.  I kept my business to myself.  As it was, it did not take long for the bucket shops to get sore on me for beating them.  I’d walk in and plank down my margin, but they’d look at it without making a move to grab it.  They’d say nothing doing. That is when they started calling me the boy plunger.  I had to move from shop to shop, even to the point of changing my name.  I couldn’t put trades on without getting cheated on the quotes.  This was in Boston, so I then moved to where the real action was, to New York.  I was 21 at the time.
Lefevre:  Were you making money?
Livermore: My plan of trading was sound enough and won oftener than it lost. If I had stuck to it I’d have been right perhaps as often as seven out of ten times. In fact, I always made money when I was sure I was right before I began. What beat me was not having brains enough to stick to my own game – that is, to play the market only when I was satisfied that precedents favored my play. There is a time for all things, but I didn’t know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class.There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying or selling stocks daily or sufficient knowledge to make his. play an intelligent play. The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money every day, as though they were working for regular wages. Getting sore at the market doesn’t get you anywhere. I was only a kid and had a lot to learn.
Lefevre:  Sounds like you were learning some valuable lessons.
Livermore: There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!
Lefevre:  So, you have learned a few lessons about losing?
Livermore: I could write a book on losing.  It takes a man a long time to learn all the lessons of all his mistakes. My losses have taught me that I must not begin to advance until I am sure I shall not have to retreat. But if I cannot advance I do not move at all. I do not mean by this that a man should not limit his losses when he is wrong. He should. But that should not breed indecision. All my life I have made mistakes, but in losing money I have gained experience and accumulated a lot of valuable don’ts. I have been flat broke several times, but my loss has never been a total loss. Otherwise, I wouldn’t be here now. I always knew I would have another chance and that I would not make the same mistake a second time. I believed in myself. A man must believe in himself and his judgment if he expects to make a living at this game.
Lefevre:  Sounds like losing is a good way to learn about speculation.
Livermore: Speculation is a hard and trying business, and a speculator must be on the job all the time or he’ll soon have no job to be on.   There is nothing like losing all you have in the world for teaching you what not to do. And when you know what not to do in order not to lose money, you begin to learn what to do in order to win. Did you get that? You begin to learn!  If I learned all this so slowly it was because I learned by my mistakes, and some time always elapses between making a mistake and realizing it, and more time between realizing it and exactly determining it.
Lefevre:  What have you learned about winning?  Is there a particular strategy or market you prefer to trade where you win more than you lose?
Livermore: I NEVER hesitate to tell a man that I am bullish or bearish. But I do not tell people to buy or sell any particular stock.  But the average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think. It is too much of a bother to have to count the money that he picks up from the ground.  THE average ticker hound or as they used to call him, tape-worm goes wrong, I suspect, as much from over specialization as from anything else. It means a highly expensive inelasticity. After all, the game of speculation isn’t all mathematics or set rules, however rigid the main laws may be. Even in my tape reading something enters that is more than mere arithmetic. There is what I call the behavior of a stock, actions that enable you to judge whether or not it is going to proceed in accordance with the precedents that your observation has noted. If a stock doesn’t act right don’t touch it; because, being unable to tell precisely what is wrong, you cannot tell which way it is going. No diagnosis, no prognosis. No prognosis, no profit.
Lefevre:  How is a stock or market suppose to act for you to recognize a pattern of behavior?
Livermore: All a trader needs to know to make money is to apprise conditions.  The big money was not in the individual fluctuations but in the main movements that is, not in reading the tape but in sizing up the entire market and its trend. And right here let me say one thing: After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting. Got that? My sitting tight! It is no trick at all to be right on the market. You always find lots of early bulls in bull markets and early bears in bear markets. I’ve known many men who were right at exactly the right time, and began buying or selling stocks when prices were at the very level, which should show the greatest profit. And their experience invariably matched mine –that is, they made no real money out of it. Men who can both be right and sit tight are uncommon. I found it one of the hardest things to learn. But it is only after a stock operator has
firmly grasped this that he can make big money. It is literally true that millions come easier to a trader after he knows how to trade than hundreds did in the days of his ignorance.  Basically I watch the price of the stock.  If it falls a few points but then begins to rise higher I know there is interest in its going higher.  If it falls and does not recover then there is not enough interest for it to continue its rise.  But in starting a movement it is unwise to take on your full line unless you are convinced that conditions
are exactly right. Remember that stocks are never too high for you to begin buying or too low to begin selling. But after the initial transaction, don’t make a second unless the first shows you a profit. Wait and watch. That is where your tape reading
comes into enable you to decide as to the proper time for beginning. Much depends upon beginning at exactly the right time. It took me years to realize the importance of this. It also cost me some hundreds of thousands of dollars.
Lefevre:  What causes you to be bullish or bearish?
Livermore: Obviously the thing to do is to be bullish in a bull market and bearish in a bear market.  Sounds silly, doesn’t it?  But I had to grasp that principle firmly before I saw that to put it into practice really meant to anticipate probabilities.  When I am long of stocks it is because my reading of conditions has made me bullish.  But you find many people, reputed to be intelligent, who are bullish because they have stocks.  I do not allow my possessions to do the thinking for me.  That is why I never argue with the tape.  To be angry at the market because it unexpectedly or even illogically goes against you is like getting mad at your lungs because you have pneumonia.
Lefevre:  Would you say that there is much the market can teach the trader about making mistakes?
Livermore: The recognition of our own mistakes should not benefit us any more than the study of our successes.  But there is a natural tendency in all men to avoid punishment.  All stock market mistakes wound you in two tender spots- your pocket book and your vanity.  Of course, if a man is both wise and lucky, he will not make the same mistake twice.  But he will make anyone of the ten thousand brothers or cousins of the original.  The Mistake family is so large that there is always one of them around when you want to see what you can do in the fool-play line.

Mar 10, 2017

Chart Of The Day : AMARA RAJA BATTERIES LTD Buy/Sell/Hold? Short - Mid Term View 10 March 2017 For Trading Positional Technical Analysis Recommendation

Amara Raja Batteries Ltd
Recommendation- Sell

Below 800, the stock will slide down below 700 which is its 200 DMA on weekly chart.
The stock does not seem like going above 950 and likely touch lower level as given only.

In monthly chart you can clearly see, how the stock has been moving within a narrow range of 800 and 1050 in the last 2 years which were very volatile for the entire stock market.

A daily chart is given here for you reference. In weekly and daily chart we can clearly see a highly reliable multiple head and shoulder patter being formed which made it a sell on every rise stock within the symmetric of the pattern.
The stock is right now at the breaking point from the pattern as it seems.
Also, on the fundamental level, the company is not in a business which is in anyways a darling of the investors or an interesting sector as an investing theme in market.
Another pessimistic aspect is regarding company specifics, which is that its peer Exide Industries Ltd. share price has been surging and making new life time highs which the stock of the company in question has lacked to perform; hence the recommendation.
Those who don't want to take risk in futures, can buy put options or sell call options and liquidate delivery based investment holding.

Relevant Charts are given for your reference. Click on the charts for bigger view.

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This is only a brief commentary, you can contact us for complete research, analysis and view on the stock.
Views on stocks and market as a whole may change at any time, on account of changes in various types of macro related factors, company specific factors and such other news, events. So please do not hesitate to contact us in case you are following any of our research.

Mar 4, 2017

Here Is What To Watch For Next Week Market Movement

China’s National People’s Congress gets underway this weekend, and investors will get an update on the health of the US labour market.

Here’s what to watch in the coming days.
 Li Keqiang, China’s premier, delivers the country’s proposed economic targets on Sunday at the opening of the fifth session of the 12th National People’s Congress, the country’s top legislature.
While much of the discussion takes place in closed-door meetings, economists are paying attention to the Government Work Report and the 2017 growth target. Jian Chang, economist at Barclays, said their base case is for 6.5 per cent growth. He also expects the government to maintain the budget deficit at 3 per cent and inflation target at 3 per cent.
On the politics front, China-watchers will keep their eyes peeled for clues on who could make it to China’s 25-member Politburo and possibly the Politburo Standing Committee (PSC), following a reshuffle of some senior provincial and central government leaders, particularly with the 19th Party Congress scheduled for this fall.

UK budget
UK chancellor Philip Hammond will present his first budget on Wednesday, and economists expect it to show a decline in gilt issuance.
“The UK economy has outperformed earlier forecasts, and so there should be a bit more revenue to play with, leading to the first decline in borrowing in 3 years,” strategists at TD Securities said. “But we see a cautious budget with few giveaways as the UK approaches Brexit.”

European Central Bank
Even as investors prepare for the US central bank to tighten monetary policy, the ECB is expected to leave rates unchanged when it meets on Thursday.
“The focus instead is likely to be on possible changes in language, with a number of voices since the last meeting calling for a change to the ECB’s forward guidance,” said economists at RBC Capital Markets. “An updated set of staff macroeconomic projections, which are likely to see an upward revision to inflation estimates in particular, will add weight to those calls.”

US jobs
The key US event comes at the end of the week as investors look to see whether Friday’s US jobs report will cement the Fed’s case for raising rates, on the heels of hawkish remarks from chair Janet Yellen and a handful of other Fed officials, alongside a string of upbeat economic data.
The report, which comes during the central bank’s communications blackout period, is expected to show the US economy added 190,000 jobs last month, compared with the 227,000 jobs added in January. They also expect the unemployment rate to slip to 4.7 per cent, from 4.8 per cent previously.
But even if payrolls turn up light, Tom Porcelli, economist at RBC Capital Markets, argues that “wages will be the lynchpin to whether the Fed ‘likes’ this report enough to vindicate hiking in March”. Economists expect that wages will have improved.
Average hourly earnings are projected to rise 0.3 per cent in February from the previous month, when they climbed 0.1 per cent. That would leave earnings up 2.8 per cent from a year ago, compared with 2.5 per cent in January. And an uptick in wage inflation would certainly help strengthen the case for a March move, as the Fed’s preferred inflation measure is near the central bank’s 2 per cent target.
With Fed fund futures currently pointing to a 96 per cent chance that the central bank lifts rates in two weeks, a better-than-expected jobs report could bolster those odds further.

10 Thoughts for traders, 10 Points for traders

10 Thoughts for traders
10 Points for traders

1. OPPORTUNITY. There are dozens of these every day, unfortunately you can’t buy them all, so only pick the top 10 and then narrow them down to 2 to 3.
 This is done by using your buying criteria which is part of your trading plan which you already have written down. (Hopefully you have one?)

2. BUYING and SELLING. I have a pre planned strategy which I have developed by trial and error; this was achieved by learning by my trading mistakes  and the mistakes of others.
 3. PATIENCE.This is definitely a virtue worth developing. Sometimes the market is going up in the right direction, but is not going as fast upwards as you  would like.  Be patient and use a “stop loss” to lock in those profits. However small they may be.  Also don’t always be in a hurry to “buy that next share” just because you have that money burning a hole in your pocket.  Do your homework and then you have chosen the right share for the right reasons and not just because it looked good 

4. STRESS.If it is hurting! Don’t do it, cut your losses or be content with a small profit and get out.
5. THINK and PLAN AHEAD. After I have bought a stock and once it has been cleared. I immediately put a sell order in at the price/ percentage that I had  previously worked out using my trading plan.
This trading plan is not set in concrete as it is revised usually on a monthly basis. And always be prepared to improve on it where necessary.
Depending on the volume and the stock’s volatility I occasionally vary my profit margin upwards. If I do this, I always keep a watchful eye on its movement  and put in a stop loss to lock in those precious profits.
6.HOPE.This has no place in a trader’s plan, as Hope leads to procrastination (putting thing off).And this will lead to losses which you can ill afford.
7. WORRYING. The same thing applies as above; if you are worrying about a stock then it is time to sell it.
8. FUN. You should enjoy trading for if isn’t fun then it’s time to put your money into managed funds and quit trading.
9. RESPONSIBILITY. Take responsibility for your trading mistakes and learn from them. No one else made you buy that stock.
10. CONFIDENCE.Have faith in your abilities. At all times be a “Student” for you never know it all. And the minute you become complacent, something  nasty comes along to bring you back to earth with a thump. I hope these tips will give you some assistance in finding you profitable shares and improves your trading skills.

Mar 2, 2017

Chart Of The Day : AXIS BANK LTD Buy/Sell/Hold? Short - Mid Term View 2 March 2017 For Trading Positional Technical Analysis Recommendation

Stock : Axis Bank Ltd.

Recommendatino : Buy
View : Short to Mid Term
Strategy : Strong Buy with SL. Profit booking advised.
CMP : bse cash 513.30
The stock was depressed for a very long time.
Even pre-note ban period, when most private sector banks were surging, this stock underperformed on account of a couple of depressing news, uncertainties and hang over thereof.
The stock is not ripe for upsurge and ready to again visit its September 2016 high or 600 and then go beyond.
However, we advice to keep booking profits on the way up and buying on dips that come after surges.
The stock move will become swifter above close of 560.
RSI and MACD, as well as major moving averages picture is also looking favourable.
The stock movement has made a bullish bowl pattern from which 550-560 will be a huge break out point.
Even PSU banks now looking pretty positive from the kind of move they have shown, and Bank Nifty Index at new high and Nifty looking at touching life high, this stock has more positives than negatives and more upside relative to other PSU banks. We also like Kotak bank which is about to start its new bull market in new price range above its life high of around 835.

Intraday Chart is given for your reference.

Subscribe to for proper buy/sell, Stoploss, Target Levels and timely updates regarding actual trading in the recommended stocks. 
This is only a brief commentary, you can contact us for complete research, analysis and view on the stock.
Views on stocks and market as a whole may change at any time, on account of changes in various types of macro related factors, company specific factors and such other news, events. So please do not hesitate to contact us in case you are following any of our research.

Mar 1, 2017

Chart Of The Day : ADANI ENTERPRISES LTD Buy/Sell/Hold? Short - Mid Term View 1 March 2017 For Trading Positional Technical Analysis Recommendation

Adani Enterprises Ltd.
Recommendatino : Buy
View : Short to Mid Term
Strategy : SL and Buy on Dips both
CMP : bse cash 98.50

Commentary :
The stock has come back to 100 levels after 2 years of consolidation.

The major problem with the stock's drastic under performance was the huge debt the group holding company is carrying, which it still is and the nature of business it was in, which was commodity heavy. However recently the company is looking at better prospects in its commodity (coal mining business) as well as the group is gaining renewed momentum in its profitability due to the fruits that it has started to earn in its ports (only listed port on Indian Exchanges) and gas distribution businesses which is an outperforming sector and likely to do better in coming years as well.

In last quarter, the company reported a profit which is also a good sign. If someone wants to trade, it is recommendable for short to medium term.

The stock has still not made a position where we recommend to buy for long term investment or for persons who are investing for serious assured returns. This at this stage is a short term swing call.
Technically, the stock is looking ripe for good move up to 150 due to the way it moved up in November 2016 and stayed up on monthly chart since then.

A fast run up above 130 will take the stock to a new bull territory, albeit short term, which must be kept in mind. And profit must be booked at higher levels.
RSI and MACD as well as major Averages picture is also favorable to the stock price movement.

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This is only a brief commentary, you can contact us for complete research, analysis and view on the stock.