May 2009


MAY 6TH,2009:A Start………

One wonders how this blog's start should be,what its contents should be,and what needs to be conveyed or expressed……and yet,at times,it is more important to make a start than none at all.With that said,this blog makes its start…………….It will not be limited to just thoughts about trading alone,more of a mixture of many things,some psychological stuff,some observations,etc.Basically,it has no boundaries or limitations.And therefore it is not focussed…..Just a whole lot of blabbering with no clear aim or objective,probably a total waste of time for many,…………..but there is a few,a very small group, that will derive benefit from reading some of the stuff here,……………This blog is dedicated to that few.


Like the Sunrise above,we have ourselves something resembling a Start…..and let's see how this journey unfolds.

MAY 8TH,2009:The Trader is King

This has been a great week,a fulfilling week.It always is when all goes to plan.There are weeks that meet a desired target,there are weeks that don't.But there is nothing more irritating and frustrating than going over the trades of the past week and to one's horror of all horrors,one realises that one has done exactly the opposite to what was supposed to be done.And that is bad,it is indiscipline,an inability to adhere to the plan,something akin to trading suicide.

Knowing what is to be done post market is not good enough.Becoming a Guru and flashing charts post market is not what makes you great.In the world of trading,the Trader is King,not the Success Coach,not the Guru,not the Author of many a trading book,not the Guy who wears an Armani Suit in the Grand Ballroom of the Super Plush Hotel giving Trading Discourses……………No,in this world of Trading,the Trader alone is King.He is the very Top,he is the most admired commodity.Even if the Trader is a recluse,a practical hermit,the satisfaction that he is able to generate wealth and income from Trading makes him walk with his head held high,a person proud of himself.Even if the world never came to know about him,he cares a hoot.He might choose fame,or he might not,but the immense satisfaction and gratification that Trading can give,none of the auxilliary stock market professions can give…………..Indeed,in the World of Trading,the Trader is King.

There is no harm at all making money off these other professions,it's your call to make………but since I am not any of these guys,I would best prefer to focus on the Trader.It basically is very simple.As had been mentioned before,there is no use in knowing about the trade after it has already happened,there really is no use in sounding super intelligent at the end of the event.The Trader,simply put,does what the Analyst at the end of the day says he does.What the Analyst spews out to sell himself,his newsletter,his software,………the Trader goes about and does it.What the Analyst knows in his heart as something that cannot be done in reality,but says it can, to make a buck of a poor unsuspecting soul……………..the Trader believes it can indeed be done and simply goes about the task of doing it.

While the World throws a 1000 reasons how something cannot be done or achieved,………the Trader knows a couple of reasons how it can indeed be done and goes about achieving it.While these very naysayers will throw up another 1000 ways to fail,the Trader finds that one way to succeed and goes about achieving it.

And so,if it truly is a Trader that one wants to be,one must have a Plan and believe that the Plan can indeed be followed.One must have targets and believe that one can reach them every single time.One must believe that one can indeed make a great income and wealth from Trading alone.One must believe that one can persist on this Path despite its various trials and tribulations.One must believe that great heights can be reached………One must believe…One must believe that every trading related goal lies in the realm of possibility.

And when the Trader is able to couple his processes with the belief that every success in trading,every goal set in trading is a stepping stone to a greater goal and it all lies in the realm of possibility…….ah,such a Trader is King of his World!!

MAY 11th,2009:That's only a Prelude……….

To those who are new in the world of Trading,look for a Method that is the very best…..and once backtested,and paper traded and all the initial steps,trade it ruthlessly with your minds shut…….That very best method among all the hundreds of thousands of methods is that method that best suits your personality and creates no conflict between you and yourself.Remember:There is no one Ultimate Path to the Trading Truth,there are as many paths as there are traders.

So,without much ado,look for something that suits you best and proceed on the Path…….Too much time and energy is spent on scholarly debates as to the superiority of one method over another,when the focus should be to find that best method that works for each individual and then go about trading it.To find the right method is only the first amongst many other trading puzzles that have to be solved,so please do get a move on.

These very people who would debate that Method 1 made $1500 in the month of April,Method 2 made $3500 and Method 3 made $5000(this is very simplistic,there are other reasons to come to a decision about which is better,but this is just as an example),these very people who would be scratching each other's eyeballs out as to which is better,……..would have lost $2000 in that month.Now why is this so?Concentration of energies on the wrong areas,perhaps……..

So,it is very important to remember that finding the correct method is very important but only a prelude to Trading,so don't get caught up with that stage and be a Master at it…….Instead do move on to the Trading bit and yes here,be a Master at it!!

MAY 16th,2009:The Youth

I received an email from one of our members at TS recently,he had been trading the Intraday Ambush Methods for the last month,….being more of an intraday Swoop Trader,he was happier with this than the Flow Methods……..he had casually asked some time back whether we needed to set Goals for this type of trading and I had answered in the affirmative.He then prodded further to find out if earning 2-3% in a month was good enough,as that worked out to a rough yearly gains of 25-35% on the capital set aside for trading the Ambush methods.Although it was indeed a great amount to make at the end of the year,I told him to set aside thinking of the yearly goals,and focus instead of daily,weekly,monthly goals………He then wanted to know what indeed was a good daily goal to target at,and the weekly ,and the monthly.

I was not very sure whether I would be creating some sort of a mental confusion in the psyche of this 23-year-old young man….would I,in showing him what was indeed an achievable goal in the realms of possibility,end up aiding and abetting carelessness and recklessness in his trading thereby leading to his financial ruin?Or would he,instead,believe that a certain goal was gettable,and then rise to the challenge and make an attempt to reach it,still holding on to the basic tenets and rules of disciplined trading?

Not knowing which way to go,I chose the more conservative path and told him to set a Goal that he is comfortable with and reach it,and raise the bar once this Goal was getting achieved regularly……….but this young man persisted!!I then went ahead and told him that he should try to hit at a daily Goal of 1.5% on the capital.He might not reach it every day,but that should be his target nevertheless.The Weekly Aim was 5% of the capital set aside for trading the Ambush method,and a Monthly goal should be around 18%…….but in and through the achievement of all this,he cannot deviate from the rules of the game.

I then waited for a reply from him,and his reply was swift and prompt…….a simple "Thank You,Saint",and that was that.

A month later,which was today,I received yet another email from this aforementioned young man……..a very upbeat and excited sort of a reply,and dripping with gratitude for a lesson learnt,it spoke of all his trades in the past month,he had made a bit under 20% in this one month,……more than anything he was excited that he had crossed a big hurdle,he had shown to himself that what was previously perceived as impossible was indeed very much possible.

This young man is just another person,just like you and me,just another person………he is no financial wizard,no super genius,just another person,someone you might even know,someone you might walk by in the streets and would not look a second glance at……just another person,but someone who believes that something can indeed be achieved.On setting a Goal for himself,he has raised the focus of his mind to the Goal,his target as he sits in front of his computer is no more preservation of capital alone,his mind is now looking to reach the goal of 1.5%/day.Not only is that his Goal,but he believes that it can be reached,for if that belief were not there that the Goal could indeed be reached,his mind would have found a variety of methods and ways to not reach the target.

This young man typifies the youth of today………his reply to my comment that 20% a year is too lax a target,and that 18-20% a month is in the realm of possibility was a simple "Thank You Saint"……Brought up in an atmosphere of "Just Do It" and "Impossible is Nothing",these young men and women are so unlike the older generations who found ways to beat themselves,who found ways to grab defeat from the jaws of victory,…….these young men and women may not have the experience and wisdom as they come into a new field,but they have an attitude,a winner's atttude,they have this belief that if one person has been known to achieve something,then why can't they?Theirs is a never-say-die sort of an attitude,……they would make a certain brand of films although the older generation had warned them that it would not work,and then going ahead with it and proving everyone wrong…..they would hit 26 runs in the last over of a match,when conventional wisdom would suggest that it is not possible…….they believe that the psyche of a nation can be changed and therefore its direction and then go about doing it.

Ah,the future of this country is bright,…..we live in very interesting times……and the best thing that we,the slightly older generation,or the much older generation can do is to identify with the youth and imbibe this winning attitude and carve out a path like them and Blaze to Glory….Try as the more pessimistic of us might,their enthusiasm cannot be dampened,their attitude cannot be changed,they cannot be convinced of the logical fallacies in aiming for the stars,their vison is on the stratosphere,the Winds of Change are upon us,and we have 2 choices.We could join them in the Stratospheric Trajectory or we could stand against them and be blown away by the Winds of Change and be reduced to a state of Inconsequence.

The choice as always is ours to make.

MAY 19th,2009:Take the Blame!

A great day today………but these great days always exist.They may not come every other day,but they do come ever so often,sometimes more often than one notices.But it coming is one thing,capitalising on it and gaining is another.How often these days come and go, leaving one with regret at the end of the day instead of great satisfaction…….should it not have been exactly the opposite?One needs to ask oneself why one had not maximised one's gains if gains were small,or why one would have lost on such a huge win day……Do the Analysis,and rectify the mistakes.

Not all mistakes stem from external issues or trade related problems,or a bad method……Psychological issues play a major role in success,a "Losing Pattern" Mind will find ways to take a fast profit and when stops are hit,not to take the losses.The gains are small,days like today would find him getting all excited and high,as he had made gains -small but he comforts himself by saying that one should not be too greedy,and that these gains are good enough- but they are setting up for a bad loss as they have not learnt the fine art of taking a loss so long as it remains small.Losing trades again and again laced with a winning trade every now and then leads to frustration and despondency,which leads to deep dejection and then the mind in a bid to protect itself from pain comes out with a theory that it is because of his computer,his wife,the distance of work place from home,traffic jams,sickness,a bad method/system,etc…….and then,to his great satisfaction,once he picks on some excuse or the other,there is a sense of relative peace in the understanding that it never really was his fault,it was because of all the other 101 factors……..Ah,peace at last!!He sleeps well that night,may be the next few nights…….his trades continue to suffer though,as he hops from one reason or the other,each time finding a relative peace with each new excuse after a string of losses……."Losing Pattern" minds might or might not be intelligent people,the more intelligent amongst them have that unique ability to talk of a trade or trades at the end of the day sounding extremely brilliant,getting a lot of oohs and aahs ,but that is about the only thing they can manage……there really is nothing wrong with their intelligence,but during the trading day,they seem to do the opposite.They would go long when the correct action would have been to go short.They would not position size accurately and get into hope mode if price breaks past the stops levels……they have not figured it out,it's a "Losing Pattern".And this pattern can never be broken……..never,until he begins to realise that the fault is his and his alone.Not in some external cause.Not because of someone else.Till that time comes when he takes the blame all upon himself,there is no breaking from the Losing Pattern,as one Losing Trade begets another,and he is sucked into a vortex of great misery.

Can the Losing Pattern be replaced by a Winning One?Yes,it can……….but Step No 1 in that direction is to understand that in every trade,profit or loss,the Credit and Blame is all yours!!No harm in thanking the Almighty for the gains for the day if that is in your personality ……..but in the Trading Office,all credit and all blame is entirely yours.It is up to you to change this pattern to a Winning one.It is up to you to tweak your method and make it more fine tuned to your personality.It is up to you to manage the niggling issues that traders have on a day-to-day basis……It is and always has been up to you,so give the mind no avenue for excuses…..

The Power to change from one Pattern to another is in your hands,or rather it is very much within you………but first,take the Blame.Not part of it,not a huge portion of it,but All of it!!

MAY 31st,2009:The Secret…..

We sometimes wonder at the profits we are able to squeeze out of the 60min Flow Method and the MiniFlow Method and there is but a moment where we think we have stumbled upon a great secret.Surely,nothing but a fantastic method can get us these profits.The mind believes that correct identification of entry points and exit points is the secret of its success.Although it is indeed very important,and the correct placing of certain points ,from where one reverses to longs until one reverses back to shorts,is crucial……..the secret of its success is just taking the old adage of "Minimise your losses and maximise your profits" and working it to our advantage.

These points of reversal could be using pivots,or some mathematical formulae,or something else…we use pivots,many others use different things………but it is in the ADDs that we succeed.And this is where the 1 lot trader fails…..he follows his rules and minimises his losses but does not maximise his gains.On a strong trending day,if his stops were at x pts away,he may have made 3x,and he is thrilled.He has indeed profitted,but he has not maximised his gains.A few days of getting x pts stopped out and he is crying that this method does not indeed work…….And he is right!

But the other trader,the guy who trades 1 lot and added 2 more lots along the way,he made 8x,and maximised profits in that trade.The next few days of getting stopped out least perturbs him……..And then comes that next move.And he is shouting from rooftops that this method works……And he is right,too!

Yes,the entry and the exits are important………but if you are trading the 60min Flow Method with 1 Initial Position with no adds,you would not have created that buffer for yourself to withstand a few stops.Not doing so creates panic in the mind,the mind does things to the person that is not there and he makes decisions contrary to the method.

Therefore the reaction from certain people…."Oh my God!!!!!!We are near our stops!!!!!!!!!!!!!!!!!" and then there is the reaction from another group,"Looks like we are going to reverse anytime soon over…." The 2nd group makes the 6x and the 8x and is least concerned of a few x pts losses along the way,and he is supremely peaceful,confident and much unlike the other group.

So anything great about this method?No,none at all……..nothing the whole world of trading already didn't know(except a few so called brilliant geniuses gifted with the power of the mouth sadly lacking in the power to put it in practice and trade what they speak)…….nothing that every book has not already proclaimed…..That is the beauty of these things.Everyone knows that they have to cut their losses and let their profits run…..and that is the secret of this method as well….Minimise losses and maximise gains…..everyone knows it,nobody practises it.Practise it and you are head and shoulders above the rest.

And in doing so,you leave behind the hapless,small people out to bring you down…..a strange peace and confidence envelops you,your gaze set to the stratosphere,you are no more interested in the happenings-on below you…….and while everyone around you debates as to what should be and what should not be,and how many ways something cannot be done….you are busy trading and proving to yourself that every limitation of heights that your mind sets for itself can be reached and crossed.