5 candles of profit

dear buddies,

those who love candle sticks and want a power technique for trend trading, i strongly suggest studying
CHAOS THEORY by Bill Williams

he uses a combination of 5 consecutive candles to find "fractals" which, if broken or crossed, may indicate the start of a trend

subject to the position of price and fractals wrt "jaws" "teeth" and "lips" of what he calls "alligator" setting of sma 13,8,5.

it seems complicated but, believe me, is easy if u r determined to learn it.

use it in conjunction with what u already know and see the magic!

i am giving below a few links of the same.

you can also check youtube forexplanation of the same in bills' own voice in his recorded lectures.

http://codebase.mql4.com/4488

http://www.alpari.co.uk/en/market-analysis-guide/chaos-theory/alligator-and-gator.html

http://mises.org/books/chaostheory.pdf

for trades and nifty levels on the basis of this "chaos theory", pl let me know.

Js (09418037474)
(niftyshots.blogspot)

gtalk

JP :
Banta Singh went to an eye specialist to get his eyes tested and asked "Doctor, will I be able to read after wearing glasses?"
Yes of course, said the doctor, why not!
"Oh How nice it would be I have been illiterate for so long" replied Banta with joy.
Me:
Ha ha....same thing happens when people enter stock market, wear technical glasses and expect to read profit without getting literate about trading psychology \
SA:
sir i am not active trader
guide me where can i learn technical analysis?
Me:
let me give u a different advise. don't learn technical analysis. observe price movement for many days and ur own methods will pop in ur head.

SA: ok
you mean i have to observe after trading hours?
Me:
observe before during and after trading hours, gradually ur trading gut will get subconsciously programmed. just like some of the best auto mechanics in my town are illiterates but are most educated by their experience and observation
SA:
ok sir
sure
thank you very much for your guidance
observing NIFY only enough right?

Me:
u r welcome!
yes observation is the best education. killer training!
=============================================
u can gtalk with me @ jagmohanshan@ g mail.com
for my view on nifty keep track of my updates in mudraa.com
for my nifty views and links to articles in mudraa send ur cell no. to 09418037474
Js (niftyshots.blogspot)

the risk of not taking risk

as they say
not taking risk
is the biggest risk!

u r saying no to the opportunity?

thereafter u can't complain that u didn't get the opportunity!!!

u got one (rather u get many)
but the trouble is
that u want opportunities
without risk.

stock market it not a restaurent
where u can order for boneless fish or chicken.

there is nothing called risk-less opportunity.

risk and opportunity are inseparable.

in reverse all this means is
that wherever there is risk
there has to be an opportunity!!!

further,
it is only one small thing that you decide to take risk.

what's most important is

a) when to take the risk

b) and how much.

take risk at the edge of a pattern

and take that much beyond which the pattern which formed the basis of the trade, nomore holds

true!

there are only two ways a price can go
- either up or down

there is no third way.
so, you already have 50% chance of winning under your belt
now all you need to do
is to find ways to increase that probability!


(niftyshots.blogspot)

self talk

i generally try to take and share trades with stoploss of 10-15 points.
like the last one where the stoploss is just 11 points away.
if one trades in nifty futures and trades with 1 lot (say), then the max risk in a 11 point SL is of 550 rupees. add another 150 rupees as brokerage (majority brokers charge less), this adds up to 700 rupees.
if the trade goes in the desired direction and gives a profit of 30 (say) points, the benefit amounts to 30x50=1500 rupees. minus brokerage of 150, it comes to 1350 rupees.
if one trades with mini-nifty, all this gets reduced proporationately.
if one can't take this much of risk with this much of potential for profit, one should not consider taking up trading. instead he or she can opt for occasionally buying lottery ticket.
otherwise, it can be a pretty decent self-employment.

only 3 conditions : a) i am assuming that the trader has got basic trading skills, b) he ruthlessly and strictly uses stop loss preferably using bid option, so that no time is wasted if SL is hit, c) re-enter the trade if price crosses back the SL (preferably in the same session).

the only game spoiler can be = a sudden sharp move that jumps the stop loss bid range.

this may happen occasionally. this is stock market - a semi-war zone!
this is why it is so important that we lose small and profit max possible - to build a buffer for such occasions.
trading is simple but not simplistic! 


(niftyshots.blogspot.com)

the great tamasha!

a madaari was amusing the non-traders
by making the captive monkey
dance to his tunes.

he was shaking the dugdugi of technicals with one hand
and beating the stick of fundamentals on the ground.

all the while
the poor simian
was being held from the neck
by the long rope of his own money
held firmly
under the foot of the madaari!

the non-trader public
instead of getting amused at the dance of the monkey
stood shocked to see him amused
at his own plight!

the fellow monkeys at some distance
see their buddy dancing.

they also see bunches of bananas
in the madaari's bag.

they too are dying to come
dance
eat the bananas
and join the party!

(niftyshots.blogspot)

no gains, without (the right type of) pains

risk can't be separated from trading.
a trader must accept this fact.
once you accept this, it will be prudent to understand that there are four choices of trading risk you can take
1. small risk taken, small gain booked
2. small risk taken, maximum gain booked
3. large risk allowed, small gain booked
4. large risk allowed, large gain expected.
while type 4 risk remains a dream, rather a nightmare,
type 3 risk is what amateurs do on the way to becoming pro's (provided they survive)
type 2 risk taker is a pro
and type 1 risk is the sign of a maturing amateur.

(niftyshots.blogspot.com)

my views on stop-loss

below, i share my notes about "stop loss".

- any trade is based on probability and not on certainty. so there is always a chance of the
trade not going the intended way. (however, better the trade anticipation theory, higher the
percentage of trades going the intended way)

- stop loss is not a irritant, it is not a necessary evil as well. it is, infact, the most potent
profit yielding tactical tool. you can take any promising trade with intelligently decided
stoploss. without stoploss, all trades are risky and with it, no trade is risky. since risk is a
perception, it is linked to fear. and fear kills more traders than loss. fear cripples your
ability to react to adverse market moves. stop loss is like the rope in the neck of a fierce
hound tied to a pole and threatening you. with that stop loss rope, u r always safe from that big
bite. stop loss is a safety assurance which invites you to take any trade. just as they say that
courage is the fear whose prayer has been said, profit is a trade whose homework has been done
and stop loss cleverly decided.

-personally, i don't use the word "stoploss", i call it "stop chase". this nick name is based on
the reason and logic behind my definition and usage of the stop loss. here is it = i take a trade
on the basis of a formation/indication. just at the time of entering the trade, i decide as to
what will be the point where the formation/indication to take the trade can be considered as
having been destroyed/disturbed/spoiled/over. that point i take as the stop loss (in my language
= "stop chase"). why stop the chase? because there is no point chasing when you realise that the
chase was false!!!

- one more thing, if the stoploss (or the stop-chase point) is too away, i tell myself that it is
not the best time to start the chase (i.e. to take the trade). i wait. this is what i call
setting an "intelligent" stop loss (stop-loss chase point)

- after breaking my head for months and years against market theories, indicators and tactics, i
have realised that a trader's edge depends as much on deciding the stop-chase pole location as
much as on his or her ability to identify trading opportunities. the successful and profitable
trader may not necessarily be more intelligent or knowledgable, but definitely smarter in picking
the chase and stop-chase points.

- a time comes in a trader's professional journey when there is little scope of further improving
the skill of identifying credible, dependable and sure trading oppotunities in an
ever-treachorous operator-driven markets, the only way to become a still better trader is by
practicing and improving and mastering the art of chosing better and intelligent and clever
stop-chase pillars!

www.niftyshots.blogspot.com