TRADING STOCKS

Trading stocks is not easy, it is high risk and low probability of success for most of the traders / investors. A STUDY HAS BEEN REVEALED THAT 80% OF ACTIVE TRADERS LOSE MONEY. The most of the traders loose because they trade without a proven system. Don't even think about relying on anything or anyone else for trading advice. Trusting tip providers is big gamble. They don't know how to trade and make money, but they know how to sell stocks. Market manipulations also happen and is out of your control. That is why you must know what's going on with the money you invest or trade.Otherwise who knows what will happen. Insider trading puts small investors and traders at risk who are trading without system.You cant depend on company results also anymore ( remind satyam scam ). But you can fight with all these odd situations if u try to learn technical analysis and develop your own trading system. It is difficult but not impossible, u have to read lot, you have to see and try to analyze n number of charts, slowly but surely u will become successful.

The main aim of starting this blog is to help our friends who are interested in learning financial planning, investing, trading. While learning we have faced lot of problems, lost money also ( actually that is fee we paid for our learning ). But the most valuable fee we paid is in form of TIME , believe us we were spending on an average 75-80 hours per month almost for 4 years ( 4 YEARS  ), for surfing and reading material related to financial planning, investing and trading.

SO BOTTOM LINE IS TO BECOME A SUCCESSFUL TRADER U MUST HAVE PASSION FOR CAPITAL MARKET, U MUST TRY TO LEARN HARD, U MUST HAVE PATIENCE . YOU NEED YOUR OWN TRADING SYSTEM THAT WORKS PREDICTABLY IN ANY MARKET SITUATION.AND THE LAST BUT NOT THE LEAST  YOU MUST BE VERY MUCH DISCIPLINED TO FOLLOW  YOUR SYSTEM TO MAKE SMALL BUT CONSISTENT MONEY TO BECOME FINANCIALLY FREE. ALSO THEN AND THEN ONLY YOU CAN CONSIDER TRADING AS A BUSINESS.

SOME OTHER TIME WILL RIGHT WHY IT IS MOST IMPORTANT TO BE DISCIPLINED AND ALSO WHAT IS MEANT BY FINANCIALLY  FREE ?

WILL IT BOUNCE BACK FROM HERE

On 11 Nov. in this post http://kolhapuritrader.blogspot.com/2011/11/will-it-hold-5170-80-today.html we have mentioned that " As shown in hourly chart 2, nifty is range bound whithin 5215- 5315 since 1/11/11,  so now if hourly close is below 52125 it may target 5215-100 =5115 . Also in hourly chart there is descending triangle formation which gives target of 5065.
Also if u observe chart 1 50SMA ( shown in pink colour) is at 5050 on daily chart

AND Conclusion : short term - downtrend target 5115, 5050-65. " THUS BOTH THESE TARGETS HAVE BEEN ACHIEVED WITHIN TWO TRADING SESSIONS. 

DAILY 50 SMA

 Now as shown in the above chart yesterday it closed at 50 SMA on daily chart so if yesterday's low which is 5052.85 so approximate 5050 is held ( ON CLOSING BASIS NOT INTRADAY ) , there is possibility of bounce back ( i.e. up move ) . AND THE RESISTANCES ( I.E. TARGETS ) FOR THIS UP MOVE WILL BE 5120, 5170/80 , 5200.


NOTE : short term trend is down


              intermediate term trend is up


              long term trend is down.


DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

WHY STOP LOSS IS MUST WHILE TRADING

Trading and investing are to different things. While investing is for long term duration, trading is for very  short term so while trading it is necessary to follow stop losses very strictly. JUST SEE WHY ?

Yesterday we mentioned that " As shown in above chart there is positive divergence ( price making lower low while indicator making higher high ) looks like now it will target 5170-80 / 5200 in next 2-3 trading sessions. Stop loss for this trade will be today's low 5120.95 ". in this post  http://kolhapuritrader.blogspot.com/2011/11/fpllow-up.html

FREE FALL AFTER STOP LOSS TAKEN OUT

As shown in the chart nifty is trading above the support ( i. e. low) almost for four and half hours but once the intraday support is taken out ( i. e. 5 min candle closed below 5120.95 there is free fall and nifty falled almost 60-65 points within one and half hour. So if someone  not followed stop loss after buying according to positive divergence on hourly chart he/ she has to bear the loss, which otherwise has been limited if stop loss has been followed.

CONCLUSION : DISCIPLINE IS IMPORTANT REQUIREMENT TO BECOME A SUCCESSFUL TRADER.

DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.

FOLLOW UP

On Friday in this post http://kolhapuritrader.blogspot.com/2011/11/will-it-hold-5170-80-today.html we have mentioned that "NOTE : UNTILL WE PREPARE THIS POST AT 10 AM NIFTY CLOSED AT 5185.50 WHICH IS BELOW 5215, SO IT LOOKS LIKE AT LEAST IT WILL TARGET 5115 WITHIN 2-3 TRADING SESSIONS."
 Now today low made was 5120.95, so the target of 5115 is almost done, and on hourly chart there is positive divergence as shown in chart below, if someone have shorted at 5185.50 should have booked profit at around 5120-30, so there is cool profit of 55-65 points within 2 trading sessions. THUS AS PER SAYING TRADING IS GAME OF PROBABILITY, IF U TRY TO LEARN HARD, AND ABLE TO PREDICT FUTURE PRICE MOVEMENT MOST OF THE TIMES ( YOU MAY NOT BE RIGHT ALWAYS BUT MOST OF THE TIMES YOU SHOULD BE RIGHT ) YOU WILL ABLE TO WIN THIS GAME !

HOURLY CHART POSITIVE DIVERGENCE.

As shown in above chart there is positive divergence ( price making lower low while indicator making higher high ) looks like now it will target 5170-80 / 5200 in next 2-3 trading sessions. Stop loss for this trade will be today's low 5120.95

WILL IT HOLD 5170-80 TODAY?

Due to weak global cues nifty opened gap down today so now the big question is will it hold 5170-80 today( the previous resistance should act as support )

CHART 1 : NIFTY EOD

As shown in the chart 1 previous resistance ( blue line ) may act as support for this fall / correction.

CHART 2 : HOURLY

As shown in hourly chart 2, nifty is range bound whithin 5215- 5315 since 1/11/11,  so now if hourly close is below 52125 it may target 5215-100 =5115 . Also in hourly chart there is descending triangle formation which gives target of 5065.
Also if u observe chart 1 50SMA ( shown in pink colour) is at 5050 on daily chart.

CHART 3 : DAILY

Also as shown in chart 3 5030-40 area is tested so many times so  it will act as support.

So now if on hourly if it closes below 5210-15 it will target 5115.

And today if it closes below 5170-80 may be 20-30 points here & there so if below 5150, being today is last day of week, nifty will become weak and it will target 5050-65.

Conclusion : short term - downtrend target 5115, 5050-65.

                    medium term - uptrend target 5250-60 (50EMA & 50SMA) on hourly chart, 5400 (200SMA on daily chart shown in pink colour in chart 1). Also 5400 is approximate value where downtrend line is acting as resistance on weekly chart since november 2010 as shown in chart 4 below.

CHART 4 : WEEKLY

In short once again nifty will be range bound only in near term and range will be 5050 to 5350-5400 and 5200 being mid point.
NOTE : UNTILL WE PREPARE THIS POST AT 10 AM NIFTY CLOSED AT 5185.50 WHICH IS BELOW 5215, SO IT LOOKS LIKE AT LEAST IT WILL TARGET 5115 WITHIN 2-3 TRADING SESSIONS.

CHART 5 : WEEKLY, INSIDE BAR

As seen in chart 5 nifty made inside bar last week , low of which is at 5201.85 so  today if it closes below 5201.85 it will be bearish.

SO IN SHORT IN SHORT TERM NIFTY LOOKS WEAK.
DISCLAIMER: This Blog is meant for sharing my trading ideas only and no calls to be taken as trading recommendation. Visitors please do your own research or consult your advisers for safe trading.