Wednesday, September 14, 2011
Wednesday, August 24, 2011
Confidence and Patience
One needs to have confidence in oneself. It is easy to lose it and panic and sell off before things get realized. Even though one may be correct in analysis and the trend of the stock one may sell it too soon when there is no confidence and fear of losing in the very short term instead of waiting for the analysis to realize.
This is very important quality for a trader. Confidence and patience. Knowledge of trend is essential but one has to be confident. One should not be overconfident and go against the rules of trend analysis. That is dangerous but if one is sticking to the rules, then one should be confident.
Money comes to the confident, knowledgeable and the patient. Wow!
This is very important quality for a trader. Confidence and patience. Knowledge of trend is essential but one has to be confident. One should not be overconfident and go against the rules of trend analysis. That is dangerous but if one is sticking to the rules, then one should be confident.
Money comes to the confident, knowledgeable and the patient. Wow!
Thursday, August 18, 2011
Options pricing and Volatility
1. Use option calculator to always find the option price.
2. when volatility is high it is time to sell. Use stop loss to sell. what if the market opens rally low or high??
3. That is a good question. The best thing is to buy when there is low volatility or when the stock rallies in the opposite direction of the overall long run 1 year 30 day moving average.
4. Got the idea. Take good profits and get out.
5. Volatility is the most important factor and also the trend of the underlying stock. The option pricing is most dependent on volatility. This is an important point to remember.
2. when volatility is high it is time to sell. Use stop loss to sell. what if the market opens rally low or high??
3. That is a good question. The best thing is to buy when there is low volatility or when the stock rallies in the opposite direction of the overall long run 1 year 30 day moving average.
4. Got the idea. Take good profits and get out.
5. Volatility is the most important factor and also the trend of the underlying stock. The option pricing is most dependent on volatility. This is an important point to remember.
Buying Put options during bear market conditions
1. Buy stocks options puts that have high volume. Like Bank of america.
2. Buy options that expire in 1 to 2 months to take advantage of the downward momentum.
3. find the price of the option in the option calculator before purchase. Do not buy options that are too high above the option calculator price. May be 5 to 10 percent higher is fine. More than that is not worth it and the profit potential and also the loss potential becomes high.
4. Diversity put options into 2-3 stock options.
5. This is a great way to make money during these unhealthy times. Better than shorting stocks if done in a proper way.
6. Move money to MB trading where it is easy to buy options and stocks from the same platform.
7. Buy puts when the market rallies for 2-3 days. That is the time to buy puts during bear markets and hold it . If the stocks are in a down slide, profits are sure.
This is the way to make money.
2. Buy options that expire in 1 to 2 months to take advantage of the downward momentum.
3. find the price of the option in the option calculator before purchase. Do not buy options that are too high above the option calculator price. May be 5 to 10 percent higher is fine. More than that is not worth it and the profit potential and also the loss potential becomes high.
4. Diversity put options into 2-3 stock options.
5. This is a great way to make money during these unhealthy times. Better than shorting stocks if done in a proper way.
6. Move money to MB trading where it is easy to buy options and stocks from the same platform.
7. Buy puts when the market rallies for 2-3 days. That is the time to buy puts during bear markets and hold it . If the stocks are in a down slide, profits are sure.
This is the way to make money.
speculating and not waiting,losing is easy but waiting and gaining is hard
When one knows what to do but yet one cannot do what one wants to then there is a problem somewhere. Fortunately I do not have losses but all my gains have been lost because of day trading.
The underlying macro economic conditions are weak and the market is bear. I have not taken advantage of this situation. I shorted stocks but put all money in one stock and took stress when it fluctuated and sold off at a loss or day traded.
Now I am in no loss no gain situation. Do I want to make money or not is the question???
The way to do it is to diversity the shorting into 3-4 stocks and segments. All stocks are falling broadly.
This is a great opportunity to short the market not to leave it and run.
One a good 2 to 3 day rally upwards, short the stocks broadly, one in financial sector for sure like BAC.
Fossils has been falling like crazy. As you know the most gains come during this time when the stocks fall from the top part of the hill.
The graph formation now is utter bear and if I can short broadly and wait, I will surely realize gains. I should not touch the stocks because the markets behave the way they should not in short periods of 2 to 3 days but within 2 to 3 weeks time.
Stop day trading completely. This is the best analysis of the present conditions and why not to day trade. I have been day trading and missing all the big moves. It is an utter waste of knowledge of the markets.
The underlying macro economic conditions are weak and the market is bear. I have not taken advantage of this situation. I shorted stocks but put all money in one stock and took stress when it fluctuated and sold off at a loss or day traded.
Now I am in no loss no gain situation. Do I want to make money or not is the question???
The way to do it is to diversity the shorting into 3-4 stocks and segments. All stocks are falling broadly.
This is a great opportunity to short the market not to leave it and run.
One a good 2 to 3 day rally upwards, short the stocks broadly, one in financial sector for sure like BAC.
Fossils has been falling like crazy. As you know the most gains come during this time when the stocks fall from the top part of the hill.
The graph formation now is utter bear and if I can short broadly and wait, I will surely realize gains. I should not touch the stocks because the markets behave the way they should not in short periods of 2 to 3 days but within 2 to 3 weeks time.
Stop day trading completely. This is the best analysis of the present conditions and why not to day trade. I have been day trading and missing all the big moves. It is an utter waste of knowledge of the markets.
diversified portfolio during shorting Vs day trading problems
1. this is the great blunder I commit when I short. I try to short just one stock with all my money.
Now is a complete bear market conditions. If I can pick 3-4 stocks and short them and wait for a month, I am sure I can make money.
2. This is the same as buying stocks upwards and diversifying within a 3-4 stocks.
3. Without diversifying one panics even for small changes in price of a single stock and takes losses. when the market rises and feels normal during a bear market that is the time to short the market and diversity within 3-4 stocks.
4. do not mix this strategy of diversifying and waiting with day trading. Do not confuse day trading with this strategy. This a the best strategy because it depends on macro economic conditions which
realize themselves with in a time span of 2 weeks to one month depending on fundamental conditions of the economy. But Day trading depends on many day to day factors of world economy, news,etc.
5. But over a period of 2-4 weeks, the market moves in the direction of the fundamental strength.
6. Find the weak segment and short the market on the good days during a bear market. Then just leave it to realize the fundamental weakness of the market conditions.
How is possible to get any kind of losses with this strategy???? Day trading needs a lot of attention and following the rules and control on emotions on a day to day basis. It also consumes a lot of time.
And after all that if one makes one or two bad trades one loses all the money one has made with all the skill, time and energy.
It also increases broker charges significantly.
This the reason also why Options is a good way to make money because one has to wait for a couple of weeks to a months time for the stock to realize the fundamental direction and when one makes a good assessment of the fundamental economic factors and waits for some time for the market to realize it within a certain time span, then definitely the market moves in the desired direction. The important lesson is to wait.
But that is not possible in day trading. One has to keep making changes every day and one misses the big moves either upwards or downwards.
Now is a complete bear market conditions. If I can pick 3-4 stocks and short them and wait for a month, I am sure I can make money.
2. This is the same as buying stocks upwards and diversifying within a 3-4 stocks.
3. Without diversifying one panics even for small changes in price of a single stock and takes losses. when the market rises and feels normal during a bear market that is the time to short the market and diversity within 3-4 stocks.
4. do not mix this strategy of diversifying and waiting with day trading. Do not confuse day trading with this strategy. This a the best strategy because it depends on macro economic conditions which
realize themselves with in a time span of 2 weeks to one month depending on fundamental conditions of the economy. But Day trading depends on many day to day factors of world economy, news,etc.
5. But over a period of 2-4 weeks, the market moves in the direction of the fundamental strength.
6. Find the weak segment and short the market on the good days during a bear market. Then just leave it to realize the fundamental weakness of the market conditions.
How is possible to get any kind of losses with this strategy???? Day trading needs a lot of attention and following the rules and control on emotions on a day to day basis. It also consumes a lot of time.
And after all that if one makes one or two bad trades one loses all the money one has made with all the skill, time and energy.
It also increases broker charges significantly.
This the reason also why Options is a good way to make money because one has to wait for a couple of weeks to a months time for the stock to realize the fundamental direction and when one makes a good assessment of the fundamental economic factors and waits for some time for the market to realize it within a certain time span, then definitely the market moves in the desired direction. The important lesson is to wait.
But that is not possible in day trading. One has to keep making changes every day and one misses the big moves either upwards or downwards.
Saturday, August 13, 2011
ONLY HIGH PROBABILITY TRADES
1. This is the new mantra. HIGH PROBABILITY TRADES ONLY. Nothing else is worth the time or life because others trades just wipe off the profits of the high probability trades. That's what they do and at the end all you gain is nothing and a whole lot of waste of time and money and profits and also getting into losses. This is the story of many many times. Nothing will improve unless I take this stand of only trading high probability trades.
From my experience in day trading, this is what I realized. One has to do only HIGH PROBABILITY TRADES one a week and keeping the 1 year 30 day moving average graph into perspective. This graph is the only graph that give the over all picture of how the stock has been behaving over one year. Obviously if one can see a pattern repeating one can take advantage of it.
2. If the stock graph does not fit the conventional but moves like commodity, that is moves in one direction extremely and does make a repetitive pattern, these are the graph to avoid. I got loss on shorting SINA, which moves like commodities.
3. Again day trading is not a HIGH probability, it is low probability and most unpredictable. Experimenting with too much money wiped off all the gains from previous months. I should not have put too much money into low probability trades and time consuming and ill studied systems.
4. So the best way to is only trade the high probability trades from KNOWN graph patterns that repeat themselves and I have studied them intensely over the years. Just make money on them using OPTIONS with low capital input for now, since the markets are bad. Even if there is a small rally going on one can still buy calls on stocks that are moving above 30 day moving average in a bullish macroeconomic scenario which is not evident in conditions now.
There might be small rallies but nothing consistent with the economic problems we have. So just buy some puts when the stock moves to the 30 day moving average in bulling and down trend markets.
From my experience in day trading, this is what I realized. One has to do only HIGH PROBABILITY TRADES one a week and keeping the 1 year 30 day moving average graph into perspective. This graph is the only graph that give the over all picture of how the stock has been behaving over one year. Obviously if one can see a pattern repeating one can take advantage of it.
2. If the stock graph does not fit the conventional but moves like commodity, that is moves in one direction extremely and does make a repetitive pattern, these are the graph to avoid. I got loss on shorting SINA, which moves like commodities.
3. Again day trading is not a HIGH probability, it is low probability and most unpredictable. Experimenting with too much money wiped off all the gains from previous months. I should not have put too much money into low probability trades and time consuming and ill studied systems.
4. So the best way to is only trade the high probability trades from KNOWN graph patterns that repeat themselves and I have studied them intensely over the years. Just make money on them using OPTIONS with low capital input for now, since the markets are bad. Even if there is a small rally going on one can still buy calls on stocks that are moving above 30 day moving average in a bullish macroeconomic scenario which is not evident in conditions now.
There might be small rallies but nothing consistent with the economic problems we have. So just buy some puts when the stock moves to the 30 day moving average in bulling and down trend markets.
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