Friday, March 5, 2010

Invictus

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.

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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.

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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.

5 comments:

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 anything..it is so wonderful to know a person like you..
Thanks
Shazia

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!