Friday, June 1, 2012

Traders go with Market Flow

I received a comment which I did not add to the comments section, instead I am giving it here with my notes.

The comment was:

"You dont know even S of Share market Sudarshan. .....  one day u say to go long and another day short on nifty.. u just dont know anything."

My Notes:

There is a conceptual principle that I should explain. As traders, we follow the market. We do not control these markets. The purpose of trading is to try and identify the market trend and go with it. Quite often, the Market Trend will change. What should the trader do? The trader's task is to  go with the trend. If the trend changes, the trader MUST change his stance. If he remains obstinate and sticks to his original position, the Market will sweep him away.

Once the Nifty went below 4920, our long positions were to be closed. That is prudent money management. On Thursday, the Nifty opened gap down at 4900. We close our positions at 4900, without any waiting. No new positions were taken because the trend was confusing. In Markets Today with Udayan, a program broadcast at 5.30 and 8.30 PM, on Thursday, I gave two levels, 4880 below which a sell is possible and 4925 above which a buy. Today, Friday, the 4880 level was breached and we went short. This position was disclosed at the 12 PM show.

Our short positions were closed since we did not wish to carry overnight positions.As I write this, U.S. Markets are tumbling. Quite possibly, the Nifty may open lower on Monday. But, do I regret closing my short positions? Absolutely not. Because, we have two principles: we try to avoid carrying positions taken on the first day of the new settlement, since the trend is often unclear, and, second, we avoid overnight positions when Nifty is inside a trading range.

13 comments:

Khush said...

Not knowing the S of the share markets is what makes a trader S .. uccessful and S ... urvive

Jitender Yadav said...

Respected Sir
You are one of the rare traders who have 'knowledge' of 'share' market and 'share' that 'knowledge' with us.
When the markets change their trends at the drop of a dime an astute trader will change his opinion too to get in sync with the markets while a novice will be rigid and will start to fight the newly changed trend. Markets oblige nobody and hence we should go with the flow of the markets.
Your Fan
Jitender Yadav

Technotrader said...

Sir, as always many people believe that we know everything abt market as if we are controlling the market. I have seen some people who expect exact levels for buy and sell and with 100% success ratio, if this is what they want then I will suggest them to go for FD in bank or post office. Everyone want to get rich quickly and this is not the place where u will get tips and u will make coreres in a year or two.

Abhinav Srivastava said...

Thank you for your humility in answering such a comment. Your admitting that sometimes you don't know the direction of the market makes me respect you more. Thanks Sudarshan Sir.

Rushabh Shastri said...

if anyone thinks so its a great regret, not on the part of any individual but on the part that still retail investors has lot more to do to understand the equity market.Its a sad.......

Unknown said...

Mr Sukhani you need to understand people following you on television are not mechanical in their trading so as to follow the levels that you mention,so i think you should be a little prudent while shelling out TIPS anyways have a nice weekend.

avv said...

Will you consider the recent nifty upmove as a bear flag if nifty closes below 4700 on Monday? If yes then what are the implication of it in terms of targets. When can one take positions?

Atul

avv said...

Will you consider the recent nifty upmove as a bear flag if nifty closes below 4700 on Monday? If yes then what are the implication of it in terms of targets. When can one take positions?

Atul

Nikhil Dalvi said...

I totally agree with Sudarshan. I will tell what the issue is, because i have gone through the same. For you to understand what Sudarshan says you need some level of trading knowledge. Only then you can understand what Sudarshan is saying. You please educate yourself, it will help you a lot in your trading. Sudarshan is doing a good job. I agree with him

Shreeanandaaaekhaanthaa said...

"The purpose of trading is to try and identify the market trend and go with it".I make a printout of this statement and kept it under the glass on my table to see and imbibe it.Thank you very much sir.

4209211 said...

Respected sudarshan guruji if in life i could do one thing is then i would just touch ur feet and say thank u
i am an astro trader and trade only in very few instruments like nifty, Bnf, sbin & LT nothing else
but i started following u thru CNBC and u always been the person who either gives me corretion or confirmattion in trading and also one more thing
if that person writes u any thing bad again just forward it to me i will teah that person a great lesson and show him how by just following u on tv i brought a home cleared all my debts with just a margin of 55000 in a period of 8-9months me and my family will always be thankful to u today my brother is studying in good college i am earning more than 90% in trdes and loosing only in 10% trades all only because of u thank u verymuch
u know when u started ur studies at that year i was born my age is = to ur knoledge
as i said i am an astro trader and also follow chartpatterns so what i saw is till june mid or late june we should sell all the rallies and after july and august only should we start buying in indian share mkt but that also in small quantities
one thing is sure now very soon we are going to kiss atleast 4400 and then after may be 4200 as per technials but as per astro the positive aspects are due in JUNE & July'12 when Jupiter aspects Neptune in June 25th, then Pluto, Uranus & Chiron in 2nd half of July. July will be more Bullish because of the three consecutive aspects in a short duration.

many times in life i just felt like correcting u but aahhhh i feel so helpless

i will tell u one thing if in this one life a chartist like u if combines his studies with a astro trader like me i can say u one will earn money like hell i will sailently keep posting my view as per astro to u via comments over here every day within 8am i know this all may sound to u like as if i am selling u some thing but sir i am just sharing my views with u i am registred on many forums also with a veery common id but u r the person beause of whoom i could atlest come till this place and write this thankful letter to u with deep deep deep thanks and respect to u from the bottom of my heart and wishing u a long healthy and wealthy life ahead
Manoj Tewani-----

Bashu said...

To 'Unknown' and the person whose comment inspired this article:

You guys remind me of the following farmer:

God to Farmer: I am here to help you. Just harvest 1 grain. I will give you 100 grains in return.

Farmer: Oh God, It is too much work. I will not harvest any grain. You just give me the difference: 99 grains

Technotrader said...

One more point like to add today, VIP was a gem few months back when it was at 200, today it is at 75, Why? eveyone knows it. So now Titan broke down from range of 220 to 255 which it was holding since last three and half months and expect 190 levels. So both stocks are good stock if ur short i.e. we go with flow if Titan is moving up we are long and if going down we are short. This suggests that we move with flow and it does not matter if the stock is moving up or down.