Friday, March 5, 2010


Thursday evening proved to be  memorable experience when we went to watch the movie 'Invictus'. The movie, directed by Clint eastwood is a remarkable lesson on life. A web search tells me that Invictus is the title of a poem, written by English Poet Henley in 1875. The first lines start with:

I thank whatever gods may be
For my unconquerable soul.
the end of this short poem says:
I am the master of my fate:

I am the captain of my soul.


If we are masters of our fate, we cannot blame choppy markets for out trading setbacks. Let us consider the current market situation. The Nifty has broken out of a trading range. That is a buy signal.  Now comes the confusion:

1. If I have not yet entered the Market, then should I buy now? [risk: market may start a correction immediately after I enter]

2. If I wait for a correction, then what is the assurance that the market will indeed correct. Also, The correction may be shallower or deeper than what I anticipate. [risk: markets may not correct, finally pushing me to buy at panic levels]

3. If I do enter at correct levels, what is the assurance that the market may continue going up? Suppose, it begins a downtrend. Then, how do I get out? [risk: the exit may in fact be the exact low of the dip]

There may be many more of such questions, which are difficult to answer.

My Notes: Extensive study enables the trader to make sensible decisions. He gets confidence because of his experience / study. He know that if he is wrong, so be it, since there will be many more opportunities.


sahil said...

One thing I will like to tell all readers that technical analysis works like magic. At one point of time i thought Its all bullshit bcz i want able to understnd it. But with passage of time i learnt alot. And now making money ( daily small profits) seems to b so easy. Yes with the help of technical analysis n our common sense we can figure out trend direction, peaks, bottoms, reversals easily specially on intraday basis. And one most important thing i observed is that self invented parameters for ex 8-13-39 period moving avgs would work n so many other examples. For a tool to work its necesaary that it should b used by most of big professional traders. If 20 period moving avg works on all time frames then its reason is that every1 use it. 5-15-60 mint time frame r used by most traders, now if u try to use 10 or 20 mint time frame for ur trading , u will only end up in loss

sahil said...

I meant self invented parameters wouldnt work if they r not used by most big profesioanl traders

Unnath said...

Dear Sudarshan,

You have mentioned that Retail Traders dabbling in F&O are transferring their wealth to Big Traders.Over a period of time Is it not possible for a retailer to learn how to trade in F&O, Or will he always be a loser. Since I am one such trader shouls I give up F&O now or are there any trading principles for ppl like me. If so, Please share them

Shazia said...

Hi Sir,
I quite like the way you take out lessons from anything you see.. means that you think deeply for is so wonderful to know a person like you..

shan said...

Simple but profound message, Sir. Just like trainee pilots should not jump on a Sukhoi and move at Mac speeds without first getting trained in a simulator and jet trainer, similarly, no point in trading big till all important lessons learnt. Trading seems easy, there is no or little entry barrier and that is a deadly trap!