Wednesday, September 21, 2011

Mid Day Musings

Sify Technologies
Sify is listed in the U.S. exchanges and has been discussed today in the blog - Tischendorf Letter . I know that Sify was a child of the dot com bubble in the year 2000. Then the stocks were forgotten. Now, maybe a revival is in the offing. I request readers to share their knowledge on Sify and Rediff. [The post mentioned above has a kind reference to this blog].

You may also like to read this post from the same blog: Great Traders offer no excuses. Once you reach this post, you will find links to many other posts on trading psychology. go ahead, read them, the market is dull today, so make the best of your time.

In the morning, I suggested a trading plan using multiple positions. smit asks "sir what about trader playing with one lot only".

My Notes: First, the correct term is 'trading' and not 'playing'. I have a big problem when TV anchors ask me "how should you be playing xyz...". The concept of playing trivalizes the serious business of trading. Ok, Sorry about that!
If you trade with only one lot, there are two options - First, trade the mini  nifty. The mini consists of 20 units as against 50 for the standard contract. Therefore, you can trade three mini contracts eventually. Second, take the first trade and skip the rest.

Referring to the bullish head and shoulder pattern: Rohit asks "Also will this upmove be sharp and one sided in straight line or we will go up and down and reach there." Rohit has two other thoughtfull comments on the market. He feels that it is better to short at higher levels than to take a long trade now.

My Notes: Fair enough. We all trade according to our methods. I cannot say if the Nifty will go up. For all I know the 5165 resistance may hold. Therefore, I cannot say if we will have a straight line advance or a jagged up move. What I can say is : Here is a pattern. This is how I will trade it. I have said this here.


rohit said...

Sir I always respect your thought about this playing thing and I have seen in tv how bad you feel, this is actually very serious business. Also one advice of yours that you do not have to do something everyday, infact when we read biographies of people who have made serious money,they may trade only a few days in the year but when they do they do it with conviction and earn the profit.

rohit said...

Idea of mini nifty is the best, I have been trading in cash markets for the past 3 years and started trading in nifty only 2 months and have started with mini nifty.

rocky said...

respected sir,
I was reading your blog and you mentioned that you booked at Range Expansion. this move may be more higher so that one can hold to enjoy the trend.How can one identify the Range Expansion can you ellaborate.. if possible give chart with example also

shabsaif said...

You said “The concept of playing trivalizes the serious business of trading” Correct, we are doing business in stock market and we like to call trader.

Same for Cricketer, they are playing and they want to call player , but some one call them trader…. Ha ha ha , they are getting big money for there job by playing foreign game , other side, player of hockey, our national game , getting very less money.

avv said...

Very useful post. I have a question with stop loss setting. The average true range on nifty (14days) is about 115. In that circumstances won't the chances of one getting stopped out with 5050 stop loss almost guaranteed? Does stop loss has to be multiple of ATR to avoid getting stopped due to noise?

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