3 years ago, I started to learn trading from scratch.
Today I make good profits, generate high returns, and enjoy trading daily.
Here are 7 key lessons about mastering a new skill like Trading, quickly:
Collaborated with @Adityatodmal
Today I make good profits, generate high returns, and enjoy trading daily.
Here are 7 key lessons about mastering a new skill like Trading, quickly:
Collaborated with @Adityatodmal
1. Plan your trades in advance:
Every week I do multi-timeframe analysis to understand the larger timeframe and to understand whether the bulls or bears are are in control.
This helps me to plan and align my trades with the trend in the higher TF.
Every week I do multi-timeframe analysis to understand the larger timeframe and to understand whether the bulls or bears are are in control.
This helps me to plan and align my trades with the trend in the higher TF.
Usually, after a trending move consolidation takes place.
Similarly, post a consolidation, we see a trending market.
Also, knowing the trend for the past week is very important.
Then gauging whether that trend will continue, change, or a pause can be expected.
Similarly, post a consolidation, we see a trending market.
Also, knowing the trend for the past week is very important.
Then gauging whether that trend will continue, change, or a pause can be expected.
Here are a few examples of how I do multi timeframe analysis.
I regularly post Outllokf ro the upcoming week on Banknifty every sunday.
Example 1:
I regularly post Outllokf ro the upcoming week on Banknifty every sunday.
Example 1:
Example 2:
2. Knowing the risks involved:
Positions sizing should be such that, in case things go south, you lose a maximum of 2%.
If you lose more, it should not come as a shock to you. Because you should usually plan such losses well in advance.
Positions sizing should be such that, in case things go south, you lose a maximum of 2%.
If you lose more, it should not come as a shock to you. Because you should usually plan such losses well in advance.
I usually keep the loss ceiling as following:
1-1.5% on intraday basis.
2% on overnight basis.
5% for black swans. (For eg Feb 24th).
1-1.5% on intraday basis.
2% on overnight basis.
5% for black swans. (For eg Feb 24th).
Traders typically experience depression and a shift in their mindset after suffering a large loss.
That has a significant psychological impact. Thereafter, traders have low confidence in their own set ups.
That has a significant psychological impact. Thereafter, traders have low confidence in their own set ups.
For me, I know post 2-3% my mindset will be affected, so I try not to let that happen in the first place.
3. Know what's exact stop loss:
Many traders keep stops of their premiums, for example 2-4x of the premium they've sold.
However, I always keep a level-based stop loss on the spot.
Whatever is your stop loss level, just stick to it.
Never change/alter your SL in live market.
Many traders keep stops of their premiums, for example 2-4x of the premium they've sold.
However, I always keep a level-based stop loss on the spot.
Whatever is your stop loss level, just stick to it.
Never change/alter your SL in live market.
Stick to your SL what you had planned right at the entry.
At times due to the spikes, before your level comes, you are already in big losses.
At such times you can exit whenever the MTM in your trading account is in the range of 1-2%.
At times due to the spikes, before your level comes, you are already in big losses.
At such times you can exit whenever the MTM in your trading account is in the range of 1-2%.
4. Know the probability of profit:
This you will come to know with experience and backtesting.
After spending a few years you will get the hang of when to enter and exit the trades.
To quicken the process one can backtest and forward test as well (ofcourse with a small qty).
This you will come to know with experience and backtesting.
After spending a few years you will get the hang of when to enter and exit the trades.
To quicken the process one can backtest and forward test as well (ofcourse with a small qty).
5. Understand the behavior of the instrument you trade in:
Nifty traders find Banknifty moves erratic.
Whereas, Banknifty traders feel Nifty is pretty quiet.
High Beta stock or index will move by a higher margin than a lower beta stock or index.
Nifty traders find Banknifty moves erratic.
Whereas, Banknifty traders feel Nifty is pretty quiet.
High Beta stock or index will move by a higher margin than a lower beta stock or index.
You should choose the stock/index that fits your temperament.
In Banknifty if breakouts happen, one simply has to exit the CE sell position and cannot wait for their pre-determined levels.
The upmove or the downmove is more pronounced in Banknifty over Nifty.
In Banknifty if breakouts happen, one simply has to exit the CE sell position and cannot wait for their pre-determined levels.
The upmove or the downmove is more pronounced in Banknifty over Nifty.
6. Lose small and win big:
When you make 1-2% profits every week, then the frequency of losses should be lower.
When the number of red days is higher than green days i.e. if your trading style doesnt have frequency of making money everyday, then play for higher return.
When you make 1-2% profits every week, then the frequency of losses should be lower.
When the number of red days is higher than green days i.e. if your trading style doesnt have frequency of making money everyday, then play for higher return.
For e.g. If you make 6-8% whenever you win than losing 2% every now and then would look fine.
This is applicable for those who have a lower frequency of profits.
This is applicable for those who have a lower frequency of profits.
7. All about consistency:
Compounding is the 8th wonder of the world.
You just have to be consistent. Making 1% each week and then having it compounded will make you much richer than what you thought.
You are going to make returns on your accumulated profits also.
Compounding is the 8th wonder of the world.
You just have to be consistent. Making 1% each week and then having it compounded will make you much richer than what you thought.
You are going to make returns on your accumulated profits also.
Consistency leads to momentum. The more consistently you do something, the easier it becomes, and the more momentum you build up.
E.g. Even SIP's of Rs. 10,000 per month will generate a large sum over time.
E.g. Even SIP's of Rs. 10,000 per month will generate a large sum over time.
We also have a FREE Telegram channel as well.
Link to join: t.me
Link to join: t.me
We are on Youtube as well now!!
We have a FREE Youtube Channel where we cover our analysis of the markets.
If interested feel free to join using this link: youtu.be
We have a FREE Youtube Channel where we cover our analysis of the markets.
If interested feel free to join using this link: youtu.be
If you enjoyed this thread here's another one:
That's a wrap!
If you enjoyed this thread:
1. Follow us
@Adityatodmal
&
@niki_poojary
for more threads on Price action, Option Selling & Trading growth.
We've got you covered.
2. RT the first Tweet to share it with your audience.
I appreciate it!
If you enjoyed this thread:
1. Follow us
@Adityatodmal
&
@niki_poojary
for more threads on Price action, Option Selling & Trading growth.
We've got you covered.
2. RT the first Tweet to share it with your audience.
I appreciate it!
Loading suggestions...