Sunday, June 12, 2011

Eye of the Bird

Guru Dronacharya decided to test his students in their skill of archery. He hung a wooden bird from the branch of a tree and then summoned his students. He asked the first one to aim for the bird's eye but not shoot just yet. He then asked the student what the student could see. The student replied that he could see the garden, the tree, flowers, etc. Drona asked him to step aside and not shoot. He repeated the same process with a few other students. When it was Arjuna's turn, Arjuna told his Guru that the only thing he could see was the bird's eye. This satisfied the Guru and he allowed Arjuna to shoot the bird. The lesson here is the power of focus.

Well, dear trader: what do you see? Do you have one pattern to trade with? If you are comfortable with indicators, then perhaps you use the MACD to determine entry signals. Sometimes the MACD will give you big gains, sometimes it just misses a move. Sometimes, there are losses which you control with your risk management methods. All in all, the system works.

During trading hours, do you keep your eye ONLY on the method that you use? The answer should be: Yes. The need for focus will also free you from the disappointment of not catching every twist and turn in the market. Nobody is expected to do this. But, deep inside we blame ourselves if we miss this or that move. When you understand that your task is to follow the discipline of your trading method, you will remain focussed on what the method gives you.

Just to take the analogy forward, it is possible that Arjuna could have located another target, even more difficult to shoot. He could have surprised Drona by taking out the more difficult target to prove his skills. But, he did not do so. because his task was to execute his responsibilities within the dscipline set by his Guru.

So also, it is posssible that your method will miss out on many market moves. So what? The moves that you get will be rewarding enough to give you your best trading experience. So, remain focussed.


SWEETY said...

Dear Sudharshan ji,

I would like to have your opinion on the following:

Is there an universally accepted benchamrk on the minimum return percentage on intra-day trades (Index only)...

The reason for asking this question is - i used to look at my ledger once in a month (calender month) - sometimes it is too good.. some times it shows a small negative return... but overall quarterly return is good enough that might be not lesser than 15% approximately - so annualized return is around 60% on the margin money i put in to trade intra-day (nifty)....

I understand ( as per my knowledge ) there is no such universal bench mark to compare with... May be i wrong in my understanding.. which is why i ask you..

Please tell me is rate of return is good or not upto the mark...

Even though I am satisfied with 60++% returns, it matters to me a lot if some real expert like you to assess / comment / whether it is below the mark or not.

Thanks in advance


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