dilemma of timing the trade

timing the entry in a trade is one of the most challenging things.

but this question is the second question.

the first question is deciding the direction to trade.

once the first question is answered and decided, then comes the second question - that of the right time.

just like anti-terrorist commandoes are told to aim at centre of the forehead.

but during action time, specially during chaos, many a times, it is difficult to pick the centre point to shoot.

the target is moving and you are under stress,besides the atmospheric "noise"

at that time, it is more important to shoot and "hit somewhere" than waiting to lock the centre of the forehead.

sometimes, practically speaking, it is more important to shoot and hit somewhere than to shoot only at the perfect spot.

similarly, many a times, in trading, timing is important but absolute perfect timing remains a mirage!

when you have done your homework and spotted a target

shoot at the best available spot and not keep waiting looking for the absolute best universal spot.

inertia and indecisiveness kills both the soldier as well as a trader.

however, i must end with a note of caution.

eagerness to shoot is different from the concern not to miss the bus.

if it is eagerness, you are likely to be wrong.

but if it is a question of not being able to decide the exact point of shot while being reasonably sure of the target subject, your chances of being right are good.

which chart timeline to see and when

there are generally the following timescales in charts i see
- 5 year chart with 1week least count (tick size)
- 1 year chart with 1day tick
- 1 month chart with 30minute tick
- 5 day chart with 5min tick
- 1 day chart with 2min tick

5 year chart is for overall general viewpoint and not of very much practical value except for investors.

1 year chart is very good for positional traders who take monthly positions

1 month chart is best for swing traders who take positions for a few days

5 day chart is best for intraday or 1-2 days only

1 day chart is only for finding the exact timing for intraday.

just like the maxim "boss is always right"
if the smaller timeframe chart doesn't work
look at the outer timeframe chart fort he answer.


these array of chart timelines are just like the optical zoom in your SLR.

2x, 4x, 8x, 16x, 32x, 64x, 128x zoom
the more closely you want to see.....zoom in
and farther and broader you want to see......zoom out


never follow any son chart blindly without crosschecking the permission of the daddy chart.

trading options without worrying about time decay!

options are blessings for the traders who want to trade with controlled risk.
unlike futures, options have limited risk.

but they have a serious problem
- time decay!

their premium value decays as expiry comes closer!

i always wondered if there was any way to bypass this severe limitation.

hedging a bought option with writing another was, somehow,
not a very lucrative and convincing way.

but recently i came out with a simple but effective way
to over this disadvantage.

i noticed
that 80% of the price movement
happens in 20% of the time.

the operators use the rest of time
to accumulate or distribute
within a range
thus "wasting precious time of traders"!

how about if could take a position in options
just when the price "aeroplane" is about to take off?

why take the seat while it may keep standing
at the tarmac for a few hours or even days?

this way one can use options till the last day of expiry!!!

with this idea under my belt
all i had to do was
search for probable signals
when the price is about to move big
besides the signals
when the meat of the price movement has happened
and it may enter the phase of consolidation.

i did it with rsi and william%r.
one can do this
with any indicators of choice.

what do we do for the rest of the time?

well,
we remain in the departure lounge
watch tv, read magazine, eat popcorn and sip a cola
imported from the nation of the operators!

eyepiece, trigger, shoulder and head

"use eyepiece on the gun to aim

use the trigger to shoot

stabilize the gun with your shoulder

keep your head cool and calm"

the shooting trainer told the cadets!

--

the above message

after translation

is equally valid

for a trading cadet

"use 1-month chart to aim

use 1-day chart to shoot

stabilize the trade with the shoulder of method

keep your head cool and calm"

right time to shoot

the 107 year old

96km long

serpentile

narrow gauge toy-train railway line

from kalka

to shimla

passes thru 103 tunnels

(only 102 are in actual use now).

the longest being 1.14km long.

--

the journey in this toy-train

is like travelling to heavens

while still alive!

--

over the clouds

under the clouds

over the bridges

under the bridges

into the tunnels

and out of them!

--

it is as much pleasure travelling in this train

as is there

in shooting it

with a powerful

camera

like a nikon d7000!

--

but obviously

you can't normally shoot it

inside the tunnel!

you've got to shoot it

only when it out of the tunnel!

(just like you can't take an aim at the market

inside the "overnight" tunnel!

you have to wait till it "comes out"

in the morning at the opening bell!)

--

to shoot the heavenly train

(with a camera)

you have to wait till it comes out of

one of the 103 tunnels!

even then

it is not easy to shoot it!

some times

it is behind mountains

while at other times

it gets hidden behind

cluster of deodars and pines.

at times

it vanishes in the folds of the valley!

--

you have to wait for

the suitable opportunity

to shoot

that great photo!

just like

you have to wait

for that correct opportunity

to shoot

that trade!

otherwise

while wasted photo in a digital slr

costs nothing more than a sigh,

a wasted trade in the market

costs something

even to professional

shooters!

kalka-howrah mail - 2

the youngman soon became a successful trader!

after a few months

he visited delhi

for some official work.

in the evening

after getting free

he took a taxi

to the newdelhi railway station.

--

on reaching the station

he jumped out of the car

without paying!

"just wait here and take care of my luggage, we need to go further!" he said to the taxi driver

and then quickly rushed inside the station

leaving his suitcase

and the bewildered driver

behind!

--

inside

he went straigt to the ticket counter

bought the "multi-purpose any-train-on-the-route ticket"

came out

sat in the taxi again

and politely ordered

"pl take me to the underbridge 3 kilometers ahead!"

the taxi driver gave a strange look to the youngman

started the taxi

and reluctantly did what he was told!

--

the driver stopped the taxi

under the bridge 3km ahead of the station!

the youngman was happy

the driver was confused!

--

the guy paid the fare

thanked the driver

picked his suitcase

went under the bridge

and stood beside

a dozen railway tracks

under the railway signal pillars!

--

the taxi driver

was still there!

he wanted to doublecheck

what the suspicious youngman was upto!

and then

what he saw

made his eyes pop out of the sockets

in sheer disbelief!

--

a train came

stopped in front of the youngman.

the youngman looked for his coach

climbed in

took his seat

looked out of the window

and waved at the taxi driver!!!

--

the train again started after a few minutes

and picked up pace!

the lad took out his cellphone

and called home

"mom! i've got the train! on time!!"

"don't catch the wrong one this time, son!" mom replied jokingly!

"this time it is the right one!!"

"has it left the station?" she asked again

"it must have left sometime ago, mom!"

"what do you mean?" the shocked mom asked

"i caught it in-between!"

"good lord! what do you mean by 'in-between'?"

"mom, i always noticed that all trains stop at the subzi-mandi rail lights after moving out of new-delhi railway station. every train has to make way for the next train approaching the platform irrespective of whether the line ahead is clear or not! many times, it isn't. almost all trains move out the station but pause at these lights under the subzimandi bridge till they turn green! i came till here on taxi and didn't have to wait much!"

"didn't you feel awkward?"

"no, mom! not at all! i do this every day in my stock trading!"

"how!?"

"everytime a stock moves out of a range platform i always notice that it pauses and retreats a bit after moving out to some distance. it makes a higher low or lower high and then zooms ahead! i always enter the trade at that time, mom! this way, i am always in the right trade at the right time!"