Wednesday, July 21, 2010

What are my strengths?

Gourav wrote: "Is there any specific reason you adress the traders as she instead of he.While reading i fell bit unusual"

My Notes: I should do it more often. Woman constitute 50% of the population, so, in all fairness, they should be referred to half the time in my writings.

This question sparked off a thought: I feel one of my strong qualities is: I have an open mnd. This helps me in my trading. Traders should ask themselves: what are my strengths? Trading plans should be developed around individual strength, avoiding rules that can be influenced by weaknesses. If a trader can ruthlessly cut losses, then he should plan a strategy that trades frequently with many small losses and few large profits. To bring this down to a more macro level, for each trading day, reaffirm your strength before trading starts, decide on a goal for the day which uses your strength, then work for it. For example, A trader has the ability to identify momentum stocks from a list. Then, listen to the top 5 stocks given on CNBC, choose the two most likely to move that day, and, trade them with your levels.

In the same way, identify your weakness. Ensure that your trading plans do not include any action that includes your weak spots. In this way, you can make your weakness, a strength (by knowing about it, therefore, avoiding it). A trader is quickly influenced by TV advice. She avoids getting caught in this trap by putting the TV on mute, so that only news flashes are visible.

Readers are invited to offer comments on perceived strengths and weaknesses and how they can be used to enhance a trading plan.


pranav said...

Dear Sir,
Request you to provide your favorite top 3 books on trading.

thanks n regards,
pranav kulkarni

gourv said...

Hello Sir,
Gourav here.I have read in your blogs a trader can either trade the same pattern in different stocks or trade the same stock for different patterns.I usually trade NIFTY for different patterns like H&S,Double top,Double bottom etc.Last few days it has been very hard to find any pattern in NIFTY.As the market is range bound selling both CALL and PUT option seems will make money,though i have not trade this way. Could you please explain which one has more edge same pattern in different stocks or same stock for different pattern.


raj said...

Respected sir,
will u please guide me on the subject of false breakout .how to identify them before taking any position in stocks.

please help sir...


Gaurav Verma said...

Hello Sir,

I really appreciate you for "What are my strengths" article as very few analysts discuss about Psychology which has a big weightage in successful Trading.Also thats one area that helped me a lot in my trading setup.

I believe you are doing a great Job for helping traders to know the reality of Trading world and helping them to pursue their career too in this.


Vie said...

You can't use trading setups with any degree of confidence till you understand market cycles. Numbers don't lie.

The legendary stock market trader W D Gann identified converging market cycles and traded stocks based on predicted market turning points. My analysis of Nifty data has yielded stunning results. Is the Nifty poised over the edge of a cliff? Stock market cycles seem to think so. Allow them to tell their story. Visit my blog for more.

Krishna said...

Dear Sir
Do stratgies , technicals ,plans etc etc etc...really work and help one earn take home money over a period of time or sideways movements & consolidation periods take all that money back from traders which they had made in short term.
This is very clear that periods of consolidations & sideways movements of market make technical traders helpless and they identify the fact only on EOD charts & not in the beginning.
Perhaps this is the reason that most of traders go back home after loosing their money while most of the patient investors still remain in better placed than TRADERS.