Reblog: Top Stock Trading Techniques of All Time


Every successful trader on the planet has one thing in common – he has an edge. By that, we do not mean he has information about a company much before others and takes a position based on the information. On the contrary, the successful trader is on the same footing as anyone else, the big difference is he knows how he will act when he sees his signal on the screen and that gives him the edge over everyone else who will be swinging their bat blindly. Unlike a novice, he will trade only and only if the signal shows itself at other times he is waiting patiently.

That is all that it takes to be a successful trader, to know what to do and when to do it. But this is a huge wall to climb for a novice trader as he does not has the patience to wait or the ability of self-control.

Successful trading can be broken down into five techniques which have been followed by professional traders for whom it is now second nature.

Approach: For a successful trader, trading is his life and passion. It is as much a business as it is a game. How you approach trading decides how you will succeed. A casual approach to trading will result in mediocre results. But if trading is approached as a business with all aspects of it thought through the trader can be assured of success. The common trait among the successful traders is the businesslike approach to trading with a lot of attention to even the smallest details, writing their own logs, taking complete responsibility for their trades irrespective of the outcome.

Retail traders generally tend to search for a person or an event to blame for their losses, but a successful trader owns the losses and considers it as part of the game. It is this winning attitude that is the differentiator. Just like a successful businessman takes responsibility for the mistake of his managers and workers and moves on in the search for a solution, a good trader also moves on to the next trade. He knows that this is just one of the thousands trade that he will take in his lifetime.

Keeping it simple: A successful trader trades simple strategies. A retail trader, on the other hand, will jump from one strategy to the other if he does not see profits accumulating. He prepares complex entry and exit signals and most times mixes up his strategies. This results in loss of faith in his strategy and he jumps to test some other strategy. A professional trader will have very few and simple sets of rules which he follows and trades. His chart patterns are simple, like a breakout or a retracement entry. Such a trader has very clearly defined rules for entry and exits. A series of losses does not deter him as he knows that his strategy has been built to overtake such days in the long run. He has strong money management rules that will reduce his position in case of series of losses. On the other hand, a retail trader will increase his trading bet in order to retrieve his losses in the next trade, he seeks revenge from the market for taking money from him.

It’s OK to be wrong: Not reacting to losses takes more energy and time for a trader than to search for the right strategy. It is only after years and hundreds of trades that a trader learns how to be emotionally neutral in any situation. Many professional traders follow the trend following strategies which normally has a win-loss ratio of 0.4. In other words, six out of every ten trades that a trend follower takes will result in a loss. A retail trader will be crestfallen with such a ratio and would abandon the strategy at a time when the next trade would have resulted in a huge profit. The professional takes these losses in his strides and knows that they are in line with the long-term averages. Taking losses are important of trading, the trick is to keep them small so that one or two profitable trades will take care of the accumulated losses. Since trading is a game of uncertainties it is obvious that there will be occasions when the price moves in a different direction than the one suggested by the pattern or the signal. How one reacts to these uncertainties determines the winner in the long run. Trading consistently with discipline and tweaking the strategy after learning from the losses will in the long run help overcome uncertainties.

Plan your trade and trade your plan: Trading, like any competitive sports, requires more work out of the playground rather than in it. For a day trader, there is little time to plan as the prices move rapidly. He has to have a plan in place and trade according to the plan, the strategy has to be so engraved in him that it becomes muscle memory. Last minute thinking will only lead to losses as well as confidence. Most traders, irrespective of the time-frame they trade also do not change their trading plan and second guess when the time for action comes.

Continuous improvement: One of the key aspects of all successful traders is that they seek to improve their performance continuously. They are not competing with anyone but with themselves and the way they do this is by keeping their own logs. This way they know their mistakes that need to be rectified, their previous track record as well as how the strategy has performed at the various points of time. They are learning aspects of trading and psychology and try to incorporate these in their trading. A successful trader is always a student of the market learning with each uncertainty and ticking the checklist of having encountered another surprise so that next time he knows how to react to it.

Making money consistently in trading requires discipline and consistently more than selecting a trading strategy. The techniques used by successful traders suggest that after the initial work of selecting a strategy is done they pay more attention to the psychological aspect of trading. Ultimately it is how one reacts to unpleasant surprises is what decides the winner from the losers. This is true for life as much it is for trading.

This article appeared on tradesmartonline.in and is available here.


Reblog: Bharat Dynamic IPO review


Bharat Dynamics Ltd. (BDL) is one of the leading defense PSUs in India engaged in the manufacture of Surface to Air missiles (SAMs), Anti-Tank Guided Missiles (ATGMs), underwater weapons, launchers, countermeasures and test equipment. It is the sole manufacturer in India for SAMs, torpedoes, ATGMs and also the sole supplier of SAMs and ATGMs to the Indian armed forces. Additionally, it is also engaged in the business of refurbishment and life extension of missiles manufactured. BDL is also the co-development partner with the DRDO for the next generation of ATGMs and SAMs. It currently has three manufacturing facilities located in Hyderabad, Bhanur and Vishakhapatnam. BDL enjoys Mini Ratna (Category – 1) status.

Off late Foreign Direct Investment (FDI) rates have increased in sectors like defense, insurance and other sectors. Under the ambit of the ‘Make in India’ initiative, investment procedure, license applications, declarations and other processes has been streamlined to boost investor confidence. Applications for permits have been digitized and a new uniform tax regime (Goods & Services Tax) has been implemented to reduce complexity in taxation. The nation also has a vibrant micro, medium and small enterprise (MSME) sector to support manufacturing units set up in India. The MSME sector is expected to perform a vital support function to the manufacturing sector and will be crucial to India’s agenda to raise the share of manufacturing in India’s GDP from 16% to 25% by the end of 2025. The central government, as well as state governments, are also trying to incentivize domestic and foreign players to ramp up defense manufacturing in India through a combination of tax benefits, infrastructure incentives, and other methods. The Indian defense market is in a state of transition, as a result of new policies promulgated by the government. BDL is in the process of setting up to new plants – one at Hyderabad, AP and another at Amaravati – Maharashtra.

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Reblog: How to Build a Warren Buffett Portfolio


Warren Buffett is recognized as the greatest investor of all-time because of his discipline and conservative approach to investing.

Instead of focusing on the short term, Warren Buffett focuses on the long term.He also has a low appetite for risk, buying companies that active traders would find boring beyond all belief.

Buffett once described his investment style as, “I’m 85% Benjamin Graham.” (Benjamin Graham is known as the godfather of value investing. His book, The Intelligent Investor, is respected as a classic on Wall Street.)

Just look at Warren Buffett’s company Berkshire Hathaway’s (BRKA) stock price appreciation over the past 20 years. And yes, you are reading that correctly, the stock currently trades for over $260,000… per share.

Berkshire currently holds a market cap of approximately $430 billion, making Warren Buffett the third richest person on the planet.

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Indices end flat, Nifty settles at 10,227 levels; PSU banks, metals lose


The domestic indices ended largely flat on Friday taking cues from their Asian counterparts.

Among sectoral indices, the Nifty PSU Bank index ended 1.81% lower led by a fall in the shares of Canara Bank, IDBI Bank and Oriental Bank of Commerce. The Nifty Metal index too ended 1.81% down due to a fall in shares of Steel Authority of India Limited, Jindal Steel & Power and Tata Steel.

The Reserve Bank may provide four quarters to Punjab National Bank (PNB) for making provisions against the country’s biggest ever banking fraud of Rs 127 billion allegedly masterminded by billionaire diamantaire Nirav Modi. The bank has written a letter to the banking sector regulator seeking its opinion on making provisions for the fraud, sources said.

The S&P BSE Sensex ended at 33,307, down 44 points while the broader Nifty50 index settled at 10.227, down 16 points

Shares of steel companies were under pressure with Tata Steel, Jindal Steel & Power (JSPL) and Steel Authority of India (SAIL) down more than 4% on the National Stock Exchange (NSE) after US President Donald Trump imposed tariffs of 10% and 25% on imports of steel and aluminium respectively on March 8th. Meanwhile, Tata Steel slipped nearly six-month low at Rs 607, down 4% on the BSE in intra-day trade, extending its past two days 4% decline after the company on Wednesday said that it has emerged as the top bidder for debt-laden Bhushan Steel.

State-owned power equipment major Bharat Heavy Electricals Limited (BHEL) on Friday said it has won Rs 117-billion order for setting up a 3×800 Mw thermal power plant in Jharkhand.  Shares of BHEL were trading 1.34 per cent higher at Rs 87.15 on the BSE.

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Reblog: 12 Dumb Things New Traders Do


There are some common mistakes that the majority of traders make as they dive into trading before they have really studied what does and does not work. All new traders will find many of these things familiar. Some of us had to fight our natural impulses hard to overcome these bad habits.

A Dozen Dumb Things that New Traders Do

  1. Being a stubborn bear in a bull market. Continuing to sell short inside a strong uptrend not only causes the loss of money as a market makes higher highs but you miss out on the easy profits made buy simply holding positions or buying the dips.
  2. Being a stubborn bull in a bear market. Some markets are under distribution and keep making lower lows. If a market is not in an established uptrend or trading range then it can go lower if support does not hold. A stop loss gets you out of a downtrend.
  3. Risking your entire trading account on one trade. You should never risk your whole trading account and trading career on one trade. Safety comes in trading a small size so every trade is just one of the next one hundred trades not your whole future on the line. This is a poor choice financially and emotionally. It is also a sign of arrogance believing you can predict a non-existent future.
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Reblog: How to Identify Trend Reversal in the Markets With Zero Indicators


Do you want to know how to identify trend reversal ahead of time, guaranteed?

Well, it doesn’t exist.

No trading system or methodology can.

However…

The closest thing you’ll get is to learn how to read the price action and identify potential areas where the market could reverse.

And this is what you’ll learn in today’s post. Ready?

Then let’s begin…

How to identify trend reversal — identify weakness in the trending move

First, let me define what a trending move is…

A trending move is the “stronger” leg of a trend and it trades in the same direction of it (that’s why I call it trending move).

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Sensex ends 137 pts down, Nifty at 10,458 levels; PSU banks fall


The benchmark indices ended marginally lower on Thursday afternoon amid thin trade. The S&P BSE Sensex ended the day at 34,047, down 137 points while the broader Nifty50 index settled at 10,458, down 34 points.

The markets will remain closed on Friday, March 2, 2018, on account of Holi.

Among sectoral indices, Nifty PSU Bank index fell 1.87% on Thursday led by a decline in the shares of Indian Bank, Canara Bank and Bank of India.

Venky’s (India) continued its upward march for the seventh straight trading day, hitting a new high of Rs 4,530, up 15% on the BSE in an otherwise subdued market. The stock rallied 69% from Rs 2,673 on February 20, 2018, as compared to 1.3% rise in the S&P BSE Sensex.

Fortis Healthcare was trading flat on Thursday even after the company reported a consolidated net loss of Rs 191 million for the quarter ended December 2017 against a profit of Rs 4.5 billion year-ago periods.

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Reblog: 13 Simple Rules for Better Investing


The fund industry has grown massively in the last 25 years, and it has changed to a better-run, more professional, and lower-cost business, Here are some key lessons for investors:

  1. Build a plan for multiple investment goals and stick to it.
  2. Align your investments with each goal.
  3. Keep costs low, but evaluate whether some services like paying for financial or tax advice are worth the price if you don’t have the time or investing acumen to do it yourself.
  4. Choose funds that are good bets for five years from now because they have the depth of managers and analysts, low costs, and strong stew­ardship to keep them on the right path.
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Reblog: The Stock Market Is Only As Smart As the Investors Who Comprise It


A Buy and Hold friend of mine recently posted the following words to the discussion thread for one of my blog entries: “You’re confusing high valuations (a fact, historically speaking) with overvaluations (a judgement that the market is wrong, in effect that you’re smarter than Wall Street).

I like the comment because it concisely and clearly reveals the primary difference between Buy and Hold believers and Valuation-Informed Indexers. It is absolutely correct to say that I believe that the market is wrong. That’s the entire idea of Valuation-Informed Indexing. We can know when the market is getting things wrong and how off the mark the market is and we should put that knowledge to good use by adjusting our stock allocations accordingly.

My Buy and Hold friend dismisses out of hand the possibility that the market has gotten things wrong. His comment suggests that the market is comprised largely of Wall Street experts who possess more knowledge about the value of stocks than I possess. So I should just give up this effort to outsmart the market.

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Reblog: H G Infra Engineering Ltd. IPO Review


H G Infra Engineering Ltd. (HGIEL) is an infrastructure construction, development and management company with extensive experience in focus area of road projects, including highways, bridges and flyovers. Its main business operations include (i) providing engineering, procurement and construction (“EPC”) services on a fixed-sum turnkey basis and (ii) undertaking civil construction and related infrastructure projects on item rate and lump sum basis, primarily in the roads and highway sector. It has also forayed into executing water pipeline projects and is currently undertaking two water supply projects in Rajasthan on a turnkey basis which includes the designing, construction, operation and maintenance of the project. HGIEL enjoys accreditations, such as the ISO 9001:2015, ISO 14001:2004, OHSAS 18001:2007 certification for quality management systems, environment management systems, and health and safety management systems, respectively, issued by LMS Assessment Services Private Limited.

HGIEL has executed or is executing projects across various states in India covering Rajasthan, Uttar Pradesh Haryana, Uttarakhand, Maharashtra and Arunachal Pradesh. During the last five years, Company has completed 13 projects above the contract value of Rs. 40 crore in the roads and highways sector aggregating to a total contract value of Rs. 1674.89 crore, which included construction, improving, widening, strengthening of two and four lane highways, construction of high-level bridge and construction of earthen embankment, culverts and cart track underpasses. As on November 30, 2017, Company has 21 ongoing projects in the roads and highways sector which includes construction, improving, widening, strengthening, up gradation and rehabilitation of two, four and six-lane highways construction of high-level bridge and construction of road network. HGIEL’s order book for these ongoing projects in the roads and highways sector amounted to Rs. 3585.31 crore as on November 30, 2017, accounting for 96.70% of its total Order Book. As of November 30, 2017, it had a total Order Book of Rs. 3707.81 crore, consisting of 21 projects in the roads and highways sector, four civil construction projects and two water supply projects.

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