Tuesday, December 27, 2011

Welcome to a New Year

The year 2011 has been difficult for traders as well as investors. investor saw significant erosion in values of their portfolios, while fresh opportunities for investing were absent. For traders, the year saw a series of small trends interrupted by counter trend moves. Small trends are difficult to make money. What then is the possible scenario for the New Year - 2012? When we look at long term charts of the Nifty, we see the scope for further declines. While markets will do what they will do, it does appear that the recent low of 4530 may not be the final low of this bear market. At some point, the markets will bottom out. But, that point is not within sight.

This is what 2012 could look like: 

Trading will continue to attract the best minds in business, because of the intellectual challenges, mental satisfaction and independence that the profession offers. 

Markets will bottom out in 2012, after which a new bull market will start that may last for several years. 

High Frequency Trading Systems will dominate scalping, but individual traders will dominate all other time frames including swing trading which lasts for a few hours to few days. 

A number of stocks will never revive from their bear market. 

Gold will continue to be in a bull market after a deep correction, while silver bulls may remain disappointed during the year.

5 comments:

Technotrader said...

Sir,
Yesterday received your book and read first 100 pages. Its a different book and your daily notes with chart explains how to read the chart and go for the conclusion and apply it for trading. Good work sir.

Atul Krishna said...

Dear Friends

Let us start new year with a better understanding of stk mkt business.

Money can be earned in batches & not on regular basis.

I understand that a business generates money in cycles only & not on definite dates like salaries.

But can we always successfully protect our profits during trading/business cycle ??

What I have observed is that "periodic losses & trading cost" normally compel a trader to pump more money from external sources to sustain in the mkt as trader.

Is it not so ?

When I say "money from external sources" it means use of our own money into trading which was not initially meant for it but later on located to trading limit as we were out of our (initial money+ initial profit) allocated for trading.

Some might be also borrowing it from friends etc with a commitment to pay interest on borrowed money.

I wud call it all this i.e. any money from external source a debt on our trading balance sheet.

Am I wrong ?

Now the bigger question is-

"If stk mkt is a business, will it generate a debt cycle to be managed ?

Is it only a medium to rotate money with cyclic profits & losses which remain notional till we remain active.


If so, why we talk about actual profit & loss...we should learn to live like a businessman & understand the business cycles & cycles of profits & loss & funding requirements to keep the business alive.

It is always better to understand the business concept first before entering into it.

Every one can not afford to be an enterprenour.

I am looking for more sharing of views on this from all my respected friends.


Regards

shabsaif said...

Happy New Year Sir, Congrates for your book Publishing....

We know you are a expert trader, and you earn lot of money by trading.....so if you gift your book (Pdf formate)to trader shall be great free gift for all new trader...and they also become good trader...and pray for you....Thanks in Advance....I know your good earner by trading....and you dont mind, if you not earned by book...Thanks

rohit said...

Sir how can we say with such certainty that a roaring bull market will start in the next 9-12 months, it is also possible with so much uncertainty in the world that we stay in a wide range of say 4000-6000 for the nifty for an extended period of time?

Unnath said...

Dear Sudarshan,

This is in response to your opinion that "Markets will bottom out in 2012, after which a new bull market will start that may last for several years."

If we take a look at the chinese Market,after the crash in 2008 it rose in 2009 and started falling again just like our market started to fall in Nov 2010. After this fall there was a substantial rally, but this year the Shanghai index has broken the previous lows made in 2009 and trading way below its all time highs.

Similarly is it not possible that we see a rise in our market just because we fallen from 6300 to 4500 in 13 months and Nifty may come back and trade below 4000 or so for a long time like china is doing right now.

Do you think we cannot compare India and China.Pleas provide your thoughts.