my corp , Omerga

Get Weekly 25 Dec. 2011

aromerga@gmail.com (Yuvraj Kalshetti) — Sun, 25 Dec 2011 14:49:00 +0530

Hi ,
First of all a merry Christmas to all Readers , Traders and Investors.

Here is the latest update on upcoming week.

click here to download a copy .

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

look once at NIFTY ! and our Research togather .

aromerga@gmail.com (Yuvraj Kalshetti) — Thu, 22 Dec 2011 22:43:00 +0530

Nifty advanced Almost 250 Points from lower level in only 2 days... what was that ?
The strong Buying from lower levels and we published this thing before four days ago that nifty is ready to shoot upp !

now the Dow is flirting third time with 12200 and we expect this time Dow will break 12200 level and whenever Dow goes above the 12200 get ready to buy when it returns to test 12200.
well still the opportunity is not gone from the hand, you have a chance to enter into the buying in nifty for a shorter term target of 4900 - 5000. and its not the logical guess this is our research.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

Hey Listen na... Listen our articles Right here , Right now !!

aromerga@gmail.com (Yuvraj Kalshetti) — Tue, 20 Dec 2011 23:37:00 +0530

Don't want to Read Then "Listen Article Now"

Well hope you seen the "Listen Now" Button on the upside of every article this button will speak whole article for you in no cost !! Yes its amazing and time saving tool and user friendly . and guess what you can save as mp3 files my articles to listen later. as i received some comments on articles that they are good but the person dont have a good time to read an article and so thy skept the article to save the time.

so now introducing the Text to Speech application into the browser just click to listen now button and the application will speak full article .
its ture Try now.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

Nifty : Expecting to jump 100 points tommorow.

aromerga@gmail.com (Yuvraj Kalshetti) — Tue, 20 Dec 2011 23:01:00 +0530

Positive Divergence

As we are shouting from last three days that nifty is experiencing very strong buying in lower levels and it might be you thought that i was misguided you but no i said what the chart is telling me and i always try to give readers a fultime knowledge and the broad picture of the world market. as i said in about me i strongly believe in the art of technical analysis and i follow only technical signals so here are some technical reports with picture and also for fundamentalist i am adding some fundamental data to feedback my judgement .
well as i accepted that i was wrong when i am giving a buy call of nifty and still holding a losing position in my account i think technically i was right buy in the money management my strategy is completely against with my position.
Nifty is expected to shut up by 100 points and why ?
yes here is a fundamental and psychological data in my hand just check out the us market branch mark Dow has been shorted by 283 points in percentage 2.43 % and i am expecting this move in Indian markets to because this is a psychological truth that Indian markets follow the us market.

fundamental :

Look at the last three rows . there is a strong buying and a good sign of volume is present there to hit nifty up.
and the current PCR is 83.
well again a call for ARomerga readers to buy nifty for shorter time tomorrow if nifty will go up by 100 points.

till then ba by

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

Dow : Shuted 2.27% up, Nifty's turn now !

aromerga@gmail.com (Yuvraj Kalshetti) — Tue, 20 Dec 2011 22:27:00 +0530

As we expecting that market's are accumulating on lower levels the solid rofit booking and fresh positional buying was expected today we can see that bulls are enterd in the market to voilently move markets in upside.
well, Dow Jones is climbed on economical data of housing report is become a key point of jumping . and so on we are now expecting Dow can rally till upper resistance and the psychological level of 12200 and may be in future Dow will touch 12400 also. as we analysed that Dow can fall till the 11437 that was the support level for Dow and this bounce is a pretty good sign of the booming year end hope this rally will continue till 29th december....
its good to be in buying and yes don't forget the stop-loss. good luck.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

Money management rules for stock trading

aromerga@gmail.com (Yuvraj Kalshetti) — Tue, 20 Dec 2011 13:32:00 +0530

Find the best ways to invest

your money wisely

Money management rules are an obvious part of every good stock trading strategy.

These rules should answer these questions:

These money management rules will help you to identify how many shares you can buy or sell short in a particular trade.

How big is my risk for one trade ?

The definition of maximal risk value for one trade could vary a little bit. Generally, the numbers used are between 0.5% to 2% of the total account size.

Example:
The account size is $100,000 USD. The maximum risk per trade is 1%. It means that you can risk $1000 USD on every trade. If distance between your entry and stop-loss level is $1 USD, then you know that you can open trade with 1000 shares. Simply calculated by (absolute risk)/ (point of distance between entry and stop-loss level).

Should you open trade with 1000 shares? No! You must check other money management rules and combine the results.

My stock market trading tip:

If you are a beginner in trading, start with a small risk. Use 0.4% or 0.5% risk of the total account value. And as your confidence grows and your trading journal reports your success, increase it.

How many opened trades I can have at a time ?

It isn’t easy to manage trades by moving stop or taking profits manually if you have a lot of trades and only two hands! You must be able to manage trades manually in case of any strong move on the stock markets. Even if your trades are not day trades but you are swing trading on stock markets, it can happen. So every trader must limit the maximum number of opened trades. The absolute maximum for a single person is eight open trades at once. Don’t surpass this hard limit.

Five or six open trades at once as a maximum is an appropriate limit for every trader.

Example:
Your swing stock trading account size is $100,000 USD. You decided to have max. five open trades at once. Your broker provides you with a 2:1 overnight margin. That means you can use $40,000 USD for one trade. How was it calculated? 100,000 x 2/5 = $40,000. So when you plan to buy XYZ stock with a stock price of $20 USD, this rule tells you that you can buy max. 2000 shares. Combine it with the number of shares from the previous rule and use the LOWER value for your trade setup.

Special stock market trading tip:

During the first years of your trading set this number of trades to the lower value (like 3 or 4 max.)

What is my risk: reward ratio ?

Never, ever try to have the risk reward ratio less then 2.5 to 1. This rule is crucial in your trading statistics, especially if you’re new to trading and without any relevant trade history, so set this ratio to 3:1.

Other relevant issues

There are also other important rules, which are part of a stock trading strategy.

Trade only liquid stocks. stocks have an average daily trading volumeover 300,000 shares traded per day (for swing trading stock) or above 1,000,000 shares per day (for online day trading).

Trade stocks with a price above $5 USD. Stocks with a low price aren’t traded by big institutional traders and therefore are easily manipulated. Technical analysis can fail on such stocks. Also, most big investment funds don’t invest in such low-priced stocks.

Another of my tips on stock market trading:

All money management rules can be easily defined in spreadsheet (like Excel or OpenOffice Calc) and then all values are calculated automatically as you are entering your setup entry , stop-loss and targets .

Here is example of a spreadsheet table:

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

8 reasons why stock market traders lose money

aromerga@gmail.com (Yuvraj Kalshetti) — Tue, 20 Dec 2011 13:27:00 +0530

Many people think trading is the simplest way of making money in the stock market. Far from it; I believe it is the easiest way of losing money. There is an old Wall Street adage, that "the easiest way of making a small fortune in the markets is having a large fortune."

I discuss below eight ways of undisciplined trading which lead to losses. Guard against them, or the market will wipe you out. I am qualified to speak on this subject because I was myself an undisciplined trader for a long time and the market hammered me into line and forced me to change my approach.

1. Trading during the first half-hour of the session

The first half-hour of the trading day is driven by emotion, affected by overnight movements in the global markets, and hangover of the previous day's trading. Also, this is the period used by the market to entice novice traders into taking a position which might be contrary to the real trend which emerges only later in the day.

Most experienced traders simply watch the markets for the first half of the day for intraday patterns and any subsequent trading breakouts.

2. Failing to hear the market's message

Personally, I try to hear the message of the markets and then try to confirm it with the charts. During the trading day, I like to watch if the market is able to hold certain levels or not.

I like to go long around the end of the day if supported by patterns, and if the prices are consistently holding on to higher levels. I like to go short if the market is giving up higher levels, unable to sustain them and the patterns support a down move of the market.

This technique is called tape watching and all full-time traders practice it in some shape or form. If the markets are choppy and oscillate within a small range, then the market's message is to keep out.

Hearing the message of the market can be particularly important in times of significant news. The market generally reacts in a fashion contrary to most peoples' expectation. Let us consider two recent Indian events of significance.

One was the Gujarat earthquake that took place on 26 January 2001 and the other the 13 December 2001 terrorist attack on the Indian parliament. Both these events appeared catastrophic at first glance. TV channels suggested that the earthquake would devastate the country's economy because Gujarat has the largest number of investors and their confidence would be shattered, making the stock market plunge.

Tragic as both the events were, the market reacted in a different way to each by the end of the day. In both cases the markets plunged around 170 points when it opened, in both cases it tried to recover and while it managed a full recovery in the case of the Gujarat earthquake, it could not do so in the Parliament attack case.

The market was proven correct on both counts. The Gujarat earthquake actually held the possibility of boosting the economy as reconstruction had to be taken up, and also because most of the big installations, including the Jamnagar Refinery, escaped damage. In the case of the attack on parliament, although traders assessed that terrorist attacks were nothing new in the country but the market did not recover because it could see some kind of military build-up ahead from both India [ Images ] and Pakistan. And markets hate war and uncertainty.

In both these cases what helped the cause of the traders were the charts. If the charts say that the market is acting in a certain way, go ahead and accept it. The market is right all the time. This is probably even truer than the more common wisdom about the customer being the king. If you can accept the market as king, you will end up as a very rich trader, indeed.

Herein lies one reason why people who think they are very educated and smart often get trashed by the market because this market doesn't care who you are and it's certainly not there to help you. So expect no mercy from it; in fact, think of it as something that is there to take away your money, unless you take steps to protect yourself.

3. Ignoring which phase the market is in

It is important to know what phase the market is in -- whether it's in a trending or a trading phase. In a trending phase, you go and buy/sell breakouts, but in a trading phase you buy weakness and sell strength.

Traders who do not understand the mood of the market often end up using the wrong indicators in the wrong market conditions. This is an area where humility comes in. Trading in the market is like blind man walking with the help of a stick.

You need to be extremely flexible in changing positions and in trying to develop a feel for the market. This feel is then backed by the various technical indicators in confirming the phase of the market. Undisciplined traders, driven by their ego, often ignore the phase the market is in.

4. Failing to reduce position size when warranted

Traders should be flexible in reducing their position size whenever the market is not giving clear signals. For example, if you take an average position of 3,000 shares in Nifty futures, you should be ready to reduce it to 1,000 shares.

This can happen either when trading counter trend or when the market is not displaying a strong trend. Your exposure to the market should depend on the market's mood at any given point in the market. You should book partial profits as soon as the trade starts earning two to three times the average risk taken.

5. Failing to treat every trade as just another trade

Undisciplined traders often think that a particular situation is sure to give profits and sometimes take risk several times their normal level. This can lead to a heavy drawdown as such situations often do not work out.

Every trade is just another trade and only normal profits should be expected every time. Supernormal profits are a bonus when they -- rarely! -- occur but should not be expected. The risk should not be increased unless your account equity grows enough to service that risk.

6. Over-eagerness in booking profits

Profits in any trading account are often skewed to only a few trades. Traders should not be over-eager to book profits so long the market is acting right. Most traders tend to book profits too early in order to enjoy the winning feeling, thereby letting go substantial trends even when they have got a good entry into the market.

If at all, profit booking should be done in stages, always keeping some position open to take advantage of the rest of the move. Remember trading should consist of small profits, small losses, and big profits. Big losses are what must be avoided. The purpose of trading should be to get a position substantially into money, and then maintain trailing stop losses to protect profits.

Most trading is breakeven trading. Accounts sizes and income from trading are enhanced only when you make eight to ten times your risk. If you can make this happens once a month or even once in two months, you would be fine. The important point here is to not get shaken by the daily noise of the market and to see the market through to its logical target.

Remember, most money is made not by brilliant entries but by sitting on profitable positions long enough. It's boring to do nothing once a position is taken but the maturity of a trader is known not by the number of trades he makes but the amount of time he sits on profitable trades and hence the quantum of profits that he generates.

7. Trading for emotional highs

Trading is an expensive place to get emotional excitement or to be treated as an adventure sport. Traders need to keep a high degree of emotional balance to trade successfully. If you are stressed because of some unrelated events, there is no need to add trading stress to it. Trading should be avoided in periods of high emotional stress.

8. Failing to realise that trading decisions are not about consensus building

Our training since childhood often hampers the behaviour necessary for successful trading. We are always taught that whenever we take a decision, we should consult a number of people, and then do what the majority thinks is right. The truth of this market is that it never does what the majority thinks it will do.

Trading is a loner's job. Traders should not talk to a lot of people during trading hours. They can talk to experienced traders after market hours but more on methodology than on what the other trader thinks about the market.

If a trader has to ask someone else about his trade then he should not be in it. Traders should constantly try to improve their trading skills and by trading skills I mean not only charting skills but also position sizing and money management skills. Successful traders recognise that money cannot be made equally easily all the time in the market. They back off for a while if the market is too volatile or choppy.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

The Trading Mindset (Trading Psychology)

aromerga@gmail.com (Yuvraj Kalshetti) — Tue, 20 Dec 2011 13:24:00 +0530

The Trading Mindset
(Trading Psychology)

Now what does Psychology or your mindset have to do with trading? You might not believe it, but it has a huge amount to do with it - ask anyone who has been trading for a little while.

Trading boils down to three main areas - your Mindset (or psychology), your Money management (how you manage your risk) and the Method you use to buy and sell (your trading system). The three Ms!

Of those three areas, your mindset and your ability to control it are by far the most important! The key is that your mind drives everything you do in your life and trading is no exception.

"There are no limitations to the mind except those we acknowledge."
Napoleon Hill (1883-1970)
So it begs the question, doesn't it? What is it that separates the successful from those who fail? Why are most people who start trading unsuccessful yet there is this small group of people who are successful?

If you ask anybody who has studied trading for any period of time, they will answer ‘psychology’. Essentially, your mental ability to manage losses and profits and the good and the bad times in trading, manage risk, to not become too greedy and many others are all encapsulated under the heading of ‘trading psychology’.

OK, let's accept that your mindset is crucial to your success. Your Mindset - what does that mean? Often it comes down to you as a person and your character attributes - what are your strengths and weaknesses? Are you a level headed person / are you highly emotional? Are you disciplined and willing to work hard to achieve results? I hope so ...

Let's look at some character attributes for a moment (there are a few of them).

There is one overriding influence on your trading success and that is your attitude. I believe that your attitude will determine whether or not you are profitable with your trading. Your attitude is more important than any of the character attributes required for successful trading; it is more important than your market knowledge and your degree of skill.

I am inspired by the following quote and believe it is applicable to trading.

"The longer I live the more convinced I become that life is 10 percent what happens to us and 90 percent how we respond to it."
Charles Swindoll
It is not important what the market does to you, it is how you react to it that is important. For example, it is not important that you are faced with yet another losing trade, what is important is how you react to that situation. Do you get upset and allow your emotions to cloud your judgement or do you react calmly accepting that loss as a part of trading, and move on from the experience.

Swindoll's words are true when applied to anything in life, yet I don’t think many people would consider how powerful that statement really is.

I think one of the most underestimated attributes of successful traders is patience. Patience is a factor in a number of different situations in trading from trade entry, to trade management and your expectations.

One of the most important attributes (in anything in life really) is self-confidence. Self-confidence is a measure of your belief in yourself, and has a number of consequences in trading should you lack it. Essentially, being successful requires you to trust and follow your trading plan. If you lack self-confidence, then you are not likely to trust and follow something you have developed.

Confident traders rely on their own methodology and not what others are saying. In line with this, I think it is important to never give tips and moreso, never listen to them.

I think the best advice when talking about trading to others is to keep your mouth shut about your own positions.

Emotions are probably the single biggest problem we face when trading (along with a lack of discipline). Trading the market is like running a business and anyone who has run a business successfully will tell you that emotions should have little place in your decision making.

Trading successfully is all about decision making, although because of money and our natural instincts, many people cannot remove their emotions from their decision making process, sufficiently.

Further to decision making, it might be worth considering the importance of being decisive and disciplined with your decision making and importantly, focussing on the right areas. Too many people expend too much energy worrying about the wrong things.

How much control do you have when you are trading and over the markets? There are various parts of a trading plan which are easy to control however just as many that are quite difficult if not impossible to control.

One of the first problems that many people face is that of unrealistic expectations. This can make you come unstuck very easily. What makes people think that they can start trading one day and be super profitable from day one is beyond me. Yet, some do.
"The dictionary is the only place where success comes before work. Hard work is the price we must all pay for success."
Vince Lombardi (1913-1970)
Once they realise there may be some work involved, many search for the holy grail of trading. The Holy Grail is often referred to in trading circles as the perfect trading system; the perfect conditions or indicator that will guarantee success in every trade you enter.

The reality of trading is that there is no such trading system in existence. It never has existed and never will.

"How to succeed? Try hard enough."
Malcolm Forbes (1919-1990)
It all sounds a little difficult, doesn't it? It shouldn't be ... I believe anybody can achieve anything they set their mind to. So can you!

Let's quickly review what successful traders really do ... let's look at the winning factors. There are a number of specific factors that assist winning traders and that losing traders don’t consider. Winning traders focus on the right things - things that matter.

Another problem that people can have is to take trading too seriously. The problem here is that the individual will feel the weight of the world on their shoulders and crumble under the pressure. It is very important that you always maintain a clear mind and perhaps consider trading like any other game or sport.

A very positive thing you can do is occasionally schedule a break from your trading. Sometimes trading can be quite stressful and other times it may appear as if you can do no wrong.

These emotional swings and emotional stresses do impact on your mental state and can ultimately affect your trading decisions.

We focus so much on what can go wrong (I think it is important to do so as to avoid making the same mistakes). however when things do go well, you should certainly reward yourself for it.

In some way, reinforce to yourself that you have had a great trade and have followed your trading plan to the letter in doing so. It helps reinforce the positive and instill in you that good things can happen when you follow your plan.

Another key consideration when preparing yourself to make your own trading decisions is where you are going to make your decisions. For example, are you going to be trading from work, or in the home office? Where are you going to be more focused? This is important because you need to be able to reduce the effects of any possible distractions, but also eliminate the influence of how you are feeling.

This would be especially relevant if making your decisions at home where distractions could potentially be numerous. It is important that you are relaxed and able to focus when you sit down to review your positions and to identify potential trades.

Books like ‘Market Wizards’ by Jack Schwager and other similar texts illustrate how successful traders have found a trading methodology that they are very comfortable with. None of them have found any magic solution to trading but they all clearly possess an inner confidence in their own ability to follow rules and their own trading plan.

To develop a solid trading plan requires commitment and discipline, but more importantly time to sit down and work through it methodically. At the end of the day, if you are not comfortable with the way you approach the market, then you will likely drift away from your plan and fall into bad habits. In this situation, it is highly probable that you will lose money.

If you want to trade well and therefore develop a trading plan and follow it, you need to convince yourself that it is something you really want to do. Commit to it and there really shouldn’t be anything stopping you developing a robust trading plan that will over the long run be profitable.

Do you have a trading plan? Have you fully committed yourself to following it?

Why Do Traders Fail?

It is widely accepted that most traders are not suucessful. Yet, there is this small group who are consistently profitable year after year. How do they do this? How do they get themselves into this enviable position of being able to make money trading regardless of which direction the markets are moving?

An interesting observation can be made about traders generally either following or not following the rules. It is widely accepted that there are no secrets to what makes a successful trader and the rules that have stood the test of time and do work. Yet most people fail to follow them. Why?

Interestingly, many studies suggest that humans are naturally inclined to fail at trading. People are naturally inclined to break all of the time tested trading rules. Probably the biggest reason for not following the rules is that people generally do not like to lose. Nor can they bring themselves to accept that they are wrong.

As an example, there may be a certain type of person who is very confident in themselves and their own ability at different ventures, and this attitude and confidence naturally carries over to their trading.

This potentially is a problem because there will be many occasions when a trade they enter does not head in the anticipated direction. The time tested rule of ‘cutting your losses’ would be most applicable however for those who have strong self-confidence may find it difficult to close the trade at a loss because doing so acknowledges that they got the trade wrong in their own minds.

This may be a difficult situation to digest so the easier option will often be to not close the trade at a loss and therefore violate probably one of the most important trading rules there are. To most traders, the idea of not closing a trade at a loss means that they haven’t had a loss despite the fact that they may have a large unrealised loss.

Money is something that affects people’s emotions and your natural instincts with money will often encourage you to break some of the time tested risk management rules, for example ‘cutting your losses’ and ‘keeping your trades small’. Most traders focus on making money and realising a loss goes against the aim of making money.

Similarly, when you have a position that is performing strongly, a small part of you wants to sell that position to realise the profit. This is perfectly natural. Letting your profits run and not selling too early is also an important time tested rule, however because of the focus on money, some people can be very quick to sell shares when in a profitable situation.

If you find it difficult to accept an initial small percentage loss in a trade, what makes you think it is going to be easier later on to sell the shares when the position has lost 30% or more? Yet, when you consider the influence of trends in the market and how important it is that you manage risk, the best time to sell the shares is when you are faced with only a small loss.

Thoughts often appear about holding on to shares that are falling in value because one day in the future, they will increase in value and return to the price that you purchased them at. This is unfortunately a myth that many people have about shares in the market.

Some people believe that shares will always return to previous values, presenting them an opportunity to sell them at break even. There is a chance that the share price will never return to the price you bought them at.

Furthermore, whilst you may have absolute confidence that a share price will return to levels that you purchased them at, consider if it is worth holding on to them and waiting for that time to come, if it does. Would it not be better to sell those shares and move on by committing your trading capital into a company whose share price is clearly trending up at the present time?

Often people will think about how they will feel if they sell shares and in 12 months time, the share price returns to where they purchased them. There is a feeling of, ‘I should have just held on to them’. Meanwhile however, over that 12 month period whilst you may have been waiting for the share price to return, your trading capital was elsewhere obtaining solid returns for you.

All of these emotions and others can paralyse you and force you into not making a decision. Remember the old adage that says that taking no action is an action. Successful trading is all about sound decision making and you need to ensure that some of these emotional impulses do not freeze you or cloud your judgement.

The bottom line is that humans are naturally inclined to break the time tested trading rules. If this is the case, then those who do succeed trading are totally committed to their trading and are able to focus on the task at hand. They are able to exercise great internal control and discipline and do as their trading plan would have them do.

If you were to isolate the reasons why people do not follow the rules, you would most likely conclude that it is a lack of discipline and involving too much emotion in the decision making process.

Patience

So what is it that separates the successful from those who fail? If you ask anybody who has studied trading for any period of time, they will answer ‘psychology’. Essentially, your mental ability to manage losses and profits and the good and the bad times in trading, manage risk, to not become too greedy and many others are all encapsulated under the heading of ‘trading psychology’.

There are also a number of character attributes that successful traders have to include discipline, commitment and motivation. An often overlooked and underestimated character attribute is patience.

Patience is a factor in a number of different situations in trading. First, considering a potential trade requires patience. You may be considering a trade and conducting your analysis, weighing up the various criteria you normally use.

For example, you may be analysing a chart and identify an ascending triangle forming with the top of the triangle positioned at $1.00. The security may have closed at $0.94 the previous day and you are now considering an entry based on the reliability of the triangle pattern.

Part of you wants to enter the trade now at $0.94 while another part of you suggests that you wait for the security to break the top of the triangle at $1.00 and then enter. Which approach is correct? On one hand, you purchase the security at $0.94 and enjoy more gain than should you purchase it at $1.00 however you have no certainty that it is going to trade beyond the present resistance level.

On the other hand, you have purchased the security at a higher price (just above $1.00) however with the certainty that the resistance level at $1.00 has now been broken and is likely to now become a support level for the near future.

The second approach may be the wiser approach and likely to be more profitable in the long run however a degree of restraint is required to follow it. A trader needs to be patient to wait for the $1.00 level to be broken as opposed to entering the trade now and purchasing the security at a cheaper price.

Sometimes when you enter a trade, there is a sense of optimism that this will be the one that makes your year. The analysis may have been thorough and the security met all of your criteria. Then after you enter the trade, it moves very little in the short term after. Due to your thorough analysis and optimism, you may have subconsciously set an unrealistic expectation for this trade. When in the immediate future after entry, it fails to meet those expectations, you may get frustrated and close the position in disappointment, even though it may still be meeting your entry criteria. Patience is required in this situation.

Another problem that some traders face is even when they set themselves a realistic goal of 20% per year for example, they then expect to achieve that return in the first few weeks as opposed to taking a longer term view over the 12 months. 20% per year is only just over 1.5% per month yet some traders will expect to achieve that quickly and may adopt some poor trading habits. Patience is an important character attribute that traders need.

Confidence

Numerous character attributes are often listed as being important for an individual to achieve trading success. One often overlooked is self-confidence. Self-confidence is a measure of your belief in yourself, and has a number of consequences in trading should you lack it.

When starting out to trade, it is important that you objectively assess your level of self-confidence, as being successful requires you to trust and follow your trading plan. If you lack self-confidence, then you are not likely to trust and follow something you have developed, but worse than that, you may be influenced by someone else’s opinion of a stock. Has anybody given you a red-hot tip about a stock before? What did you do? Did they also tell you when to sell it? How did it perform?

In his book ‘Reminiscences of a Stock Operator’ (a fictionalised biography of one of the greatest market speculators, Jesse Livermore), Edwin Lefevre mentions how destructive tips can be to one’s trading. This is coming from a book that was first published in 1923 and is one of the most highly regarded financial books ever written. Back in 1923, tips were considered disastrous, so what makes you think that tips you hear today will be any different? Trust yourself and have confidence in your own trading plan.

When developing a trading plan, it is important that you develop all the steps yourself. By doing this, you will know and understand the logic behind each step in the approach. Should you conduct extensive backtesting, this will also provide you confidence in the approach when it comes to implementing the plan. This confidence will also provide you the discipline to follow the plan.

Furthermore, this confidence and discipline will be vital when it comes to trading the plan with real money.

One way we can also increase our confidence is knowing that we have adopted sound risk management rules. A simple stop loss set when entering a trade should provide us the confidence to enter the trade in the first place. The stop loss prepares us for what potentially will be the worst outcome in the trade, notwithstanding the potential for far great loss.

Confidence is believing in yourself to do what needs to be done. It is a measure of your faith in your ability to do something. It is often suggested that successful people are not afraid to fail. In fact, a lot of successful people have failed along the way to success. However, they all have the ability to accept their failures and move on. They understand that failure is often a natural consequence of trying.

It is important that when you trade with a plan that you have developed, that you do so with a positive attitude and with confidence. As soon as you start to think about missing trades or thinking that the next trade is going to be a loss, it is probably time to review your trade or your own level of self-confidence.

Finally, one thing that will help with your confidence is your own knowledge and understanding of the markets, the products you are trading and various tools you use in your decision making. Competence yields confidence. If you are not competent at something, it is highly unlikely that you will be confident doing it.

Keep Your Mouth Shut

In numerous traders clubs and forums, you will often find people who routinely disclose what positions they have and why. Often, the intentions of these people are innocent in that they want to help others to discover an approach that is going to work for them. They want to teach the recipients and empower them to learn more about trading.

Sometimes, the person disclosing the information may have other intentions however there is always the chance that this could have a detrimental effect on the person disclosing the information.

They need to be careful that they don’t start believing too much in their position just because they have disclosed it to others.

At the best of times, taking losses can be difficult. It is probably the most single identifiable reason why traders fail. Taking a loss means that you must accept that you got the trade wrong and this can be difficult for a lot of people. Now that you have disclosed your trade to a group of people, it can make it even harder to accept that you were wrong and therefore close the trade when you should.

Advocating the trade to others instills in you the positives of the trade and these may eventually subconsciously influence your decision to not exit the trade.

Traders should avoid discussing their open positions and their opinion on various potential trades because it may affect their objectivity when in that position themselves and make it harder to take a loss, even when that is their best course of action.

Confident traders rely on their own methodology and not what others are saying.

If you make a habit of discussing your open trades, there is a chance it will end up costing you money, especially if you repeat your opinions often enough, in that you might actually start believing what you are saying.

The same goes with tips. A common rule is to not give nor listen to tips. A trap that you can easily fall into with a tip, can occur when your position starts to move against you. You are more inclined to break the rules and not cut your loss because of the ‘reliable’ information you have heard about the security’s future.

Have confidence in your own approach and never worry about tips of any nature regardless of whom they are from.

When you give a tip, and the position moves against you, it is possible to feel some obligation to stay in the trade because of the relationship you have with the person you gave the tip to.

It is unlikely that you could face up to the person one week after the position was entered, and tell them that the tip is no good and they should exit.

In his book ‘Reminiscences of a Stock Operator’ (a fictionalised biography of one of the greatest market speculators, Jesse Livermore), Edwin Lefevre mentions how destructive tips can be to one’s trading.

This is coming from a book that was first published in 1923 and is one of the most highly regarded financial books ever written. Back in 1923, tips were considered disastrous, so there is no reason to think that they are different today.

Trust yourself and have confidence in your own methodology

Emotions

Often when people talk about the importance of psychology, the need to be as unemotional in your decision making as you can be is frequently mentioned. Decisions are required often when trading and a fair percentage of the decisions that are required will be difficult.

Humans are naturally inclined to break the time tested trading rules and this is why your psychology and decision making are such a vital part of your success. Successful traders have great internal control and discipline to overcome the natural tendencies.

Trading the market is like running a business and anyone who has run a business successfully will tell you that emotions should have little place in your decision making. Trading successfully is all about decision making, although because of money and our natural instincts, many people cannot remove their emotions from their decision making process, sufficiently.

This is essential however. If your emotions have a great influence on your decisions, the chances are you will break the time tested trading rules. You will be inclined to not cut your losses and not let your profits run, for example.

To develop a trading plan and to then follow it requires some time tested character traits that lead to success in any endeavour such as commitment and discipline. These attributes will help you eliminate as much as possible the influence of your emotions over your decision making.

Developing a trading plan will also greatly assist as it will provide you something tangible to base your decisions on. Without a trading plan, you have nothing to base your decisions on except how you feel, which is largely governed by your emotions at the time.

One final thought about your emotions. If you buy something and it doesn’t move in the direction you were hoping, don’t get upset. Understand that it is a normal part of trading. Getting upset about it is not going to achieve anything, especially moving the share price back in your favour.

If anything, it will only cloud your judgement when making future trading decisions and potentially do you more harm than good.

Your emotions are a part of who you are and your decision making process. Decision making is a large part of trading, as you need to make decisions often and many of them are difficult decisions. Furthermore, people like to break rules, even ones they set themselves.

There are some simple trading rules that have stood the test of time, and will always work yet most people cannot follow them. It is essential that you realise how important it is that you demand of yourself the highest level of discipline to ensure you implement the requirements of your trading plan ruthlessly and follow some of the time tested trading rules.

Decision Making

Many consider that there are only a handful of vital elements to successful trading. Whilst psychology is the most often suggested item as being the most important, it covers a wide range of different things. Many would suggest that ‘your psychology’ is what will make or break you as a trader.

Essentially, your mental ability to manage losses and profits and the good and the bad times in trading, to manage risk, to not become too greedy and many others are all encapsulated under the heading of ‘trading psychology’. Interestingly, many studies suggest that humans are naturally inclined to fail at trading. We are naturally inclined to break all of the time tested trading rules.

One of the items also covered under ‘psychology’ must be decision making. Trading is effectively all about decision making. Before you even start trading, you need to decide on simple things like your goals as well as what taxation structure you will trade through, for example.

Then you decide upon your selection criteria for potential trades, how you will size your trades, whether or not you will include derivatives in your trading or whether you solely trade equities, and how you will exit your trades at either a loss or profit.

The vast majority of these decisions are important and can adversely affect your overall success if they are not sound decisions and supporting of each other. For example, if you trade medium term yet employ tight stops that are better suited to short term trading, you are likely to exit well over half your trades at a loss even though the security may eventually continue to head in your anticipated direction.

The method of stop loss positioning was not suitable for the selection process you were using.

Another example might be to use a medium term approach for your selection process however then use exchange traded options with only a few weeks until expiry to trade with. The expiry of the options is very likely to impact on your decision making before the medium term outlook for the underlying security eventuates. For those who are generally indecisive will most likely face extra challenges in becoming a successful trader.

Decisions are required often when trading and a fair percentage of the decisions that are required will be difficult. Humans are naturally inclined to break the time tested trading rules and this is why your psychology and decision making is such a vital part of your success. Successful traders have great internal control and discipline to overcome the natural tendencies.

They will likely cut their losses when deep down they don’t want to because they don’t want to lose money. They will likely stick with their position sizing model even though they feel super confident about a particular trade selection. Trading is all about decision making and successful trading is all about sound decision making based on the foundation of a solid written trading plan.

Decisiveness and Discipline

Trading is primarily decision making. It is not physically demanding nor do you have to remember complex formulas and concepts. It is just decision making. You are presented with or you acquire information for analysis and make decisions based on that information and your judgement. As trading is essentially decision making, you have to be decisive to be successful.

A fair percentage of the decisions that are required will be difficult. Humans are naturally inclined to break the time tested trading rules and this is why your mindset and decision making is such a vital part of your success. Successful traders have great internal control and discipline to overcome the natural tendencies.

They will likely cut their losses when deep down they don’t want to because they don’t want to lose money. They will likely stick with their position sizing model even though they feel super confident about a particular trade selection. Successful trading is all about sound decision making based on the foundation of a solid written trading plan.

With regards to decision making, there is one thing I learned from my military experience which I think is quite applicable to trading. As an Army officer, you are also often faced with situations where decisions need to be made. When faced with a situation where a decision needed to be made, you often considered a number of different courses of action.

One thing was for certain. The easy option was rarely the best option.

The easy option is the decision that is the easiest to make. It was the one that caused the least discomfort, inconvenience and was likely to be the most popular with my subordinates. This was rarely the best option.

In trading, you will often be faced with difficult decisions that need to be made with probably the most often being to cut a loss. When faced with a loss, the easiest option is to do nothing about it and hope the trade rights itself.

I can assure you that this will never be the best option. You could argue that sometimes, the trade will right itself and the decision to not cut the loss will result in a profit. This is true but it only reinforces the negative and will lead you into bad habits.

An easy way to ensure that you always do as your trading plan demands of you is to consider yourself an employee of somebody else. This other person has employed you to trade their plan for them. The plan is not difficult to follow and it is not beyond your intelligence to follow the rules within the plan.

There is only one condition.

If you do not follow the rules, you will lose your job – no questions asked. Sounds like a simple job. Do you think you could successfully hold onto this job if all you had to do was follow the plan? I think I could ...

I think this little mental preparation could help many traders who are not following their plan. Next time you make a decision, pretend your boss is looking over your shoulder and see what happens.

Focus

A point about preparing your mind for successful trading is to focus. Focus on the right things and the things in your trading plan that are important.

As an example, a few years ago, a colleague and I were running a full day course where we both presented on different topics throughout the day and the attendees could decide which presentations they attended. As the day started, the group split themselves quite evenly to listen to the two separate presentations.

This even split continued throughout the morning as people moved between the two seminar rooms between breaks and maintained a fairly even split.

After lunch, the first two presentations were on industry sector analysis and money management. The group split themselves up again however this time, 80% of the people went into the seminar room for the presentation on industry sector analysis and the remaining 20% entered my seminar room for my presentation on money management.

Before I started my presentation, I said to my attendees that this another reason why most traders fail. 80% of the group thought that industry sector analysis was more important than money management and therefore decided to listen to that presentation.

There are not too many more important things than money management and industry sector analysis, which was designed to help them with their entries, is certainly not one of them.

The lesson here is to focus on the right things. Don’t focus too much on your entry signal, as most people do. Keep it simple and then move onto the more important areas like position sizing, setting exits and preparing your mind for successful, disciplined trading.

Take Control

Have many traders actually thought about how much control they have of their trading? Trading is decision making based on various conditions that lead to the range of emotions that humans can experience from exultation to despair.

You could argue that there are various parts of a trading plan which are easy to control however just as many that are quite difficult if not impossible to control.

The point at which where we can exercise the most control is at the point of trade entry. It is here where we can measure the various tools and indicators that we use in our analysis and decide whether or not to enter the trade.

It is here where we have the maximum control in being able to not enter the market because the conditions are not right based on our trading plan. Consequently, you could suggest that trade entry is an easy part of trading as we have maximum control, and can decide to do as we want.

For those who have extensive entry lists that they check off as they evaluate a potential trade, they would exercise more control than those who have very simple entry criteria. They would be more selective and if the market didn’t present the exact conditions that they wanted, they simply would not trade.

The situation changes completely when the trade is entered however. As soon as the trade is entered, countless possibilities arise and most of which cannot be controlled.

This is an interesting situation that confronts all traders.

Even though you may have exercised great control in deciding to enter a trade or not, you now have lost a great deal of control in what happens. Individual traders simply just can’t control what happens in the market.

A trader must now be prepared to react to whatever the market does. The market does not care that you exist nor does it care that you have a trade open. It is the market that is now in control.

The market can do whatever it wants and these possibilities are endless. Your security could halve in price, all the volume may dry up, it could reverse on you, gap down, or more frustratingly, move nowhere and establish a sideways trading range the day you enter.

When you are faced with a losing trade, you have a fair amount of control. You could follow the time tested trading rule of cutting your losses and just exit the trade. You can generally control how much you will lose in a trade should it not move in your anticipated direction.

Interestingly, the same cannot be said for profits. Although you can generally control the size of your losses, you really have little control over the size of your profits. Should you have a $1000 profit, you have no control over whether it becomes a $2000 profit. You do however have control over protecting profits.

Within your trading plan, there are components that you have control over and those which you have little or none. It is important that you maximize the control that you do have to your advantage.

Be Realistic

Unfortunately for many people who take up the endeavour of trading, they end up losing money. This is despite the existence of many reputable share trading education companies, an abundance of trading books available and the presence of solid trading rules that have stood the test of time. These rules are not secret to anyone either – almost any book will refer to some of them. Yet despite all this, many people still find it difficult to achieve long term profitable trading.

So what is it that separates the successful from those who fail? If you ask anybody who has studied trading for any period of time, they will answer ‘psychology’. Essentially, your mental ability to manage losses and profits and the good and the bad times in trading, manage risk, to not become too greedy and many others are all encapsulated under the heading of ‘trading psychology’. There have been numerous professional articles and books written on the subject of ‘the psychology of trading’ and therefore this article is not intended to elaborate any further on an already well debated and discussed topic, except for one area. One thing that many people struggle to come to terms with is their expectations of their trading. Too many people have unrealistic expectations and expect to make triple digit returns consistently, for example.

Having high expectations of yourself is a good thing however, unrealistic expectations is not. Many traders when presented with the wonderful opportunities that the market offers can be very easily led to setting unrealistic goals for their trading. This can be devastating.

At various trader’s exhibitions and similar events, it is surprising to hear the number of people who demand trading systems that can produce several hundred percent return and won’t settle for anything less. These people sometimes then have the audacity to scoff at solid methodologies on offer that can reasonably expect to achieve a consistent 25 – 35% per year return.

Unfortunately for these people, their expectations are often too high and unrealistic. There will be times when they will suffer several losing trades in a row and when this occurs, they potentially will not be able to get back on track. With a slight drawdown in their trading capital and with their unrealistic goals in their mind, they will start to bend the rules and assume unacceptable levels of risk in order to regain the losses quickly and achieve their lofty goals.

Another problem that some traders face is even when they set themselves a realistic goal of 20% per year for example, they then expect to achieve that return in the first few weeks as opposed to taking a longer term view over the 12 months. 20% per year is only just over 1.5% per month yet some traders will expect to achieve that quickly and may adopt some of the poor habits similar to described earlier.

It is vital to set yourself goals with your trading but it is equally vital to ensure that those goals are measurable, and realistic.

The Holy Grail

The Holy Grail is often referred to in trading circles as the perfect trading system; the perfect conditions or indicator that will guarantee success in every trade you enter. All traders at some stage undertake the search for the Holy Grail whether it is consciously or subconsciously.

The reality of trading is that there is no such trading system in existence. It never has existed and never will. The fact that some software packages label an indicator the ‘Holy Grail’ only serves to whet the appetite of some people further and arouse their suspicion of what it could be and how they will find it.

It is also widely accepted that your own psychology or mindset is the largest single determinant of your trading success followed by your ability to manage risk. The small remainder of the ingredients to your trading success is your system which includes your entry signal.

When most traders start trading, they spend most of their time on developing their entry conditions. They will learn about various technical indicators, trends and chart patterns, and how they can be interpreted and applied to their trading.

In his book ‘Market Wizards’, Jack Schwager interviews numerous profitable traders in the United States. There is an interesting observation to be made about most of them. Often Schwager asked if they were to start trading again, what would they do differently.

Many answered that they would not have wasted as much time initially on their entry signals and they would have rather spent that time concentrating and developing their risk management rules and working on their own mindset or psychology.

When trading does not go well for most traders though, they begin to wonder what part of their entry conditions is failing them. Thoughts like is it the data they are using, the software, should they use different moving averages like weighted or exponential, or look at hourly data.

It is obvious that entry conditions are a necessary part of any trading plan but their importance is often overrated. Numerous texts have been written about various entry signals yet not enough focus on what is really important to trading.

This may not help the beginner who naturally assumes that their entry signal is the most important part of their trading plan and therefore they shall spend most of their time developing that.

Unfortunately some traders who have looked for the Holy Grail try to lay the blame for their lack of success on external factors. It might be the software they are using or the new entry signal they acquired from reading a book, but at the end of the day they should look no further than themselves.

Successful traders have numerous personal traits in common. They are focussed, disciplined, passionate, and are totally committed to their trading. They are humble and always prepared to learn from their mistakes. The Holy Grail of trading has never existed and never will.

Winning Factors

There are a number of specific factors that assist winning traders and that losing traders don’t consider.

A common factor is the search for the Holy Grail or at the very least, the development of such a complex trading system, that even the trader who thought up the approach, will likely lose their place a few times should they describe it to you.

Traders often undertake a search for the perfect entry system, even if it is subconsciously. If the trader doesn’t search for the perfect system, they may develop a very complicated approach, with the belief that ‘more complicated must be better’.

Some of the most effective trading systems have very simple trading rules and entry criteria, and winning traders often use very simple techniques. Invariably they use either a modified version of an existing methodology or else they have developed their own.

It could be argued that the simplest of trading methodologies are easier to implement than complex techniques. Having said that, there is another myth that says that trading requires some level of intelligence in order to be successful.

One of the greatest qualities of any open and free market is that it will not discriminate. It does not care what colour your skin is, whether you are male or female, how old you are nor how intelligent you are.

It is for this last reason, that a trader who possesses nothing else but patience, discipline and a simple approach, is likely to outperform a lot of people who are more intelligent but using a complex trading system.

Another factor with losing traders is when they have a bad trade. Sometimes, they will want to start from the beginning with a new trading system with the belief that their present system is useless.

When winning traders have a bad trade they will devote some time to analysing the trade and determine whether or not there is a lesson to be learnt from the outcome. It is unlikely however, that they will make drastic changes to their present system.

The only time they would consider significant changes to their approach would be when it was blatantly obvious that their present approach was no longer suitable.

Again, winning traders will often use simple approaches and they will use them consistently. It could be argued that a poor plan, with solid risk management rules, used consistently is going to outperform an approach where you are constantly jumping from one system to another.

When a lot of traders start out, they seek the best software available to fulfill their needs. Many charting software packages include various technical indicators that are available, and new traders seek to discover how these various indicators can be interpreted.

Numerous texts include the more popular indicators and many assume that as they are so widely documented, that they must be the best indicators to use.

Many losing traders rely too heavily on these indicators and the very mechanical systems that use them. Many would not be able to provide a brief overview of how the indicator is constructed let alone a more detailed explanation with why it should be used. Furthermore, often they will not consider using any other variables other than those declared as the defaults or the variables that the creator of the indicator stipulated.

There is no doubt that winnings traders will take advantage of computers because of their speed in analyzing large amounts of data.

What you will also find is that often, they would have also taken the time to learn the actual mathematical construction of the various technical indicators to fully understand what it is displaying. It is likely, that they could probably construct them manually if the need arose.

The importance of this is that they fully understand what the indicator is designed to achieve and therefore the best way of interpreting it and applying it practically.

Losing traders will attend seminars and courses like many others however they will often focus on the wrong things. They will try to copy the presenter's technique, by asking which indicators they use and even what time frame they use in their moving average.

This is misguided because even though the presenter may use indicator A and B does not mean that the individual asking the question should also use those two indicators.

Winning traders will always monitor new methodologies and indicators that are developed but will maintain their confidence in their own approach. They will no doubt consider them but will only incorporate some part of it should they see something that could make a valuable contribution to their present trading methodology.

This is important, because your confidence in your own trading approach is vital. Winning traders realise there is no perfect trading system and there own may be close to as good as it gets.

One of the common problems new traders face is developing an approach that is not right for them. Often new traders will tend to develop a short term trading system as they are attracted to this form of trading. Short term trading is an approach that considers trends of approximately 3 to 10 days in duration, and where the majority of positions are held for no longer than 2 weeks.

Short term trading by its very nature demands constant attention and a reasonable amount of your time during the trading week in order to monitor open positions, adjust stops, conduct analysis and make your trading decisions.

Generally speaking the potential for returns in short term trading is greater than those with medium or long term trading approaches especially when derivatives are included in the trading, hence the attraction to this style of trading. As people are generally infatuated with money, they are naturally drawn to short term trading because of the very real possibility of achieving good returns quickly.

For many people, a short term trading system may not be right for them and if it is not right for them, the chances are they will not achieve trading success over the long term.

Furthermore, often new traders who begin trading short term do not have sufficient capital to make it worth their while. They cannot tolerate losing months and the capital drawdown, and the high number of transactions results in a lot of commissions being paid, which can affect the bottom line considerably.

In short term trading, derivatives may be used to counter the lack of equity, however the degree of skill and discipline to trade these successfully is far greater, further reducing the chances of long term success, for beginner traders.

Generally speaking, losing traders place a great deal of importance on being right in a trade. There is a sense of control they think they have and there is also a degree of excitement and adrenalin associated with keeping in touch with the markets and the latest prices.

You will find some winning traders who will go for days without checking any prices confident in the knowledge that their stops are well placed away from the market action. They also don’t care about being right, only entering high probability trades and not caring when they suffer losses.

They treat trading like running a business knowing that they make some good decisions and they make some bad decisions.

There are a number of factors that separate consistently profitable traders with losing traders. Make the change yourself and commit yourself to trading profitably.

Exercise

Unfortunately, many people who start trading find success difficult to achieve, certainly in the period of time immediately after starting. Trading is a challenging endeavour that has torn people from all across the world across generations, from every extreme of their emotions. It is our money that is directly involved in trading and therefore at risk, and the potential of making more money is our primary motivation for beginning this undertaking.

Therefore any emotions that we may associate with other endeavours are heightened because money is something that seems to accentuate any natural human emotions that we have. Ironically, it is the money that encourages the vast majority to attempt to trade yet it is the money that causes most people to fail.

In his book, ‘Trade Your Way to Financial Freedom’, the renowned American psychologist Dr. Van Tharp discusses in several parts how important your psychology or mindset is to your trading success. He graphically depicts the significance of your psychology using a pie chart and explaining that there are three ‘Ingredients to Trading’. They are System, Money Management and Psychology. In the pie chart, the System is 10%, Money Management is 30% and the remaining 60% is psychology.

Why does a psychologist who has spent his entire professional life counselling traders of all experience levels say that so much of your trading hinges on your psychology?

The key is that your mind drives everything you do in your life and trading is no exception. Your emotions are a part of who you are and your decision making process. Decision making is a large part of trading, as you need to make decisions often and many of them are difficult decisions. Furthermore, people like to break rules, even ones they set themselves.

There are some simple trading rules that have stood the test of time, and will always work yet most people cannot follow them. It is essential that you realise how important it is that you demand of yourself the highest level of discipline to ensure you implement the requirements of your trading plan ruthlessly and follow some of the time tested trading rules.

At a presentation I gave a few months ago to a group of about 50 fellow traders, I was asked several questions, as per usual. After discussing the items above about emotions, sticking to a plan and the stresses associated with trading, I was asked about how you overcome the stresses and emotion of trading that seem to jeopardise so many traders around the world. I answered, “Exercise”. I immediately received many puzzled looks and someone said, “you mean practicing trading?”

It appeared to me that many had never considered a regimen of physical exercise in order to prepare well for trading. You don’t have to run in order to trade – you just have to sit at a desk.

However when you consider the demons that haunt many traders and the obstacles we face, then think about the benefits of physical exercise, shouldn’t we mention the two together more often. More and more today, people not only mention the physical benefits of physical exercise, they also include now the mental benefits of physical exercise. These are numerous.

Physical exercise can greatly improve both your mental and physical health. The physical benefits of aerobic exercise are well known and include improved muscle strength, flexibility, and cardiovascular endurance. Exercise also helps lower your blood pressure.

My belief in the benefits of physical exercise with regards to trading is based on the ability of exercise to help combat stress, and help you think more clearly when you are facing adversity.

Generally speaking, the lives of many have never been busier and more stressful. It has become a driving force behind most visits to doctors for people of all ages. Medically, when a person is experiencing stress, adrenaline pours into the blood stream as part of a person’s ‘fight or flight’ response and muscles throughout the body tense in anticipation of a challenge. Immediate effects can range from a short temper and heightened emotions to difficulty sleeping.

Many traders would agree that you can experience certain levels of stress when trading and it is often at these times that we do not employ the best judgement in our decision making.

John McCarthy, executive director of the International Health Racquet & Sportsclub Association (IHRSA), says, “Regular physical activity can help counter the potentially damaging effects of stress on the body and may help prevent stress-related illnesses. These activities provide a natural way to release tension in the body and will often lead to an automatic state of relaxation that naturally follows a good workout.”

Medically, during exercise the body starts to produce endorphins. Endorphins are chemicals that lead a person to feel peaceful and happy; they promote a sense of well being. This is a perfectly natural and effective tool in helping to manage stress. Exercise can also help some people sleep better and raises their self-esteem.

By increasing your self-esteem, your self confidence grows and this can directly assist you with trading, as confidence is one of the more understated character attributes required by successful traders.

Of perhaps less importance, exercising can help you physically look better, as those who exercise regularly, look more toned than those who don't. Exercise is one of the most important parts of keeping your body at a healthy weight, and people generally feel much better and confident when they see themselves in a positive light.

Again, those who feel more confident in themselves are likely to have more confidence in a trading plan they develop. The flow on effect can be very positive for their trading.

Trading is generally decision making where we need to employ sound judgement on a regular basis. Along these lines, exercising can also help your brain to work better. There have been numerous academic papers and research done to support the notion that exercise can improve a person’s ability to think more clearly.

Exercise has been found to increase a person’s mood state and an overall improved sense of well-being, which in turn helps to keep stress, anxiety and depression to a minimum.

Military forces all around the world engage in regular and demanding physical exercise in preparing for the demands of military operations. Officer training institutions generally enforce greater standards as officers are often required to make decisions and often do so under pressure and hardship. The physical exercise they endure enables them to think more clearly than the average person and remain level headed when the pressure is on and all seems lost.

Could we as traders not benefit from a similar mindset where we are able to think clearly at all times and make sound decisions based on solid judgement? Wouldn’t this help us take a step towards overcoming the adversities we can face with our emotions and stresses?

Focussing on the type of exercise, it is important that people don’t exert themselves too much. It has been found that a steady aerobic workout will produce far greater results than those that exhaust the body and leave a person folded over in pain and out of breath.

A steady aerobic workout will greatly assist the brain’s ability to solve problems and make decisions fast and effectively. Generally after exercise, people are able to concentrate and focus much better than before. They are better able to block information that is irrelevant to the task at hand, and respond much faster to information relevant to the task.

From a motivation perspective, it is important for those who have never really exercised before or where there has been a lengthy layoff, that they start off easy. Many unfit people set out to begin an exercise routine with great ambition and enthusiasm and then find that they cannot stick to the routine and their motivation quickly disappears.

These people end up on a never-ending cycle of great ambition, loss of motivation, and a steady slump back to where they started. This is often because they are not enjoying the exercising they are doing. This is a problem.

Exercise is supposed to be a fun activity, even for the whole family and when you arrive back home feeling terrible, the motivation to go back out and do it again takes a big hit. This is when you will begin to think of all the reasons not to go again and then, you have taken a turn down the wrong road. Naturally, the fitter a person is, the more they will reap the rewards from aerobic exercise.

Physical fitness does not come easy. The best strategy is to gradually increase the duration of your exercise sessions and, along with enhancing your physical fitness, your mental muscle will also begin to take shape.

There is no doubt that regular and moderate aerobic exercise will help your brain to function more efficiently, and therefore reduce stress, think more clearly and remain level headed in times of emotion and adversity. In an endeavour where very few people succeed, it is in our very best interests to do everything we can to increase our chances.

I strongly believe that physical exercise can greatly assist traders to think more clearly, reduce the effects of stress, and ultimately make better and timelier trading decisions.

Take a Break!

To many who have traded for an extended period of time, they would agree with the fact that traders can experience a wide range of emotions and often one straight after another.

Traders can experience the exultation of a winning trade that went very well to the despair of the string of losses where ‘giving up trading’ is a prominent thought in one’s mind.

Books like ‘Market Wizards’ by Jack Schwager and other similar texts illustrate how successful traders have found a trading methodology that they are very comfortable with. None of them have found any magic solution to trading but they all clearly possess an inner confidence in their own ability to follow rules and their own trading plan.

Undoubtedly however, trading can be a taxing experience on your mental health. You are constantly faced with decisions that need to be made and can easily go through the swing of emotions described earlier.

For some people, in all honesty you may also lack confidence in your own ability to trade well or lack courage of your own conviction and therefore experience another array of emotions when trading.

Sometimes trading can be quite stressful and other times it may appear as if you can do no wrong. These emotional swings and emotional stresses do impact on your mental state and can ultimately affect your trading decisions.

It may be prudent sometimes to schedule a break from trading. Therefore, close all positions before your break, or a few weeks out from the break commencing, open no new positions and allow your open positions to take their course in the time leading up to your break. The time you schedule your break may coincide with the school holidays or your Christmas break from work.

This may end up being the best trading decision you make as you are able to separate yourself from some of the emotions you have experienced, and recharge the mental batteries. The requirement for a break will obviously significantly vary from trader to trader and will depend largely on your trading frequency.

One of the things stopping people thinking about taking a break is that they may miss out on some good trading opportunities. Rest assured that the market you trade will always be open for trading. This means that when you finish your two week break for example, the market will still be there and be ready for you, as if you didn’t even have your break.

Next time you open your diary, consider scheduling a break from trading.

Congratulations for the Profit

Often when people talk about the importance of psychology, the need to be as unemotional in your decision making as you can be is frequently mentioned. Decisions are required often when trading and a fair percentage of the decisions that are required will be difficult.

Humans are naturally inclined to break the time tested trading rules and this is why your psychology and decision making is such a vital part of your success. Successful traders have great internal control and discipline to overcome the natural tendencies.

When you have a great trade, why not reward yourself for it? When it is often considered that trading well for an extended period of time can be difficult for many, yet you have a trade that all goes well, you may think it appropriate to congratulate yourself for it.

For example, you may have followed all of your selection criteria, and you considered all the things your trading plan insists you follow when deciding to enter a position. Once the trade was open, you monitored your initial stop loss point and then started to trail the price with your trailing exit.

Some time later when the position reversed sufficiently on you and your trailing exit was hit, you executed the sell order without emotion and realised your profit in the trade. All in all, it was as close to a perfect trade as you can have, and it was your largest profit you have had in 12 months.

A situation like this will occur for almost everybody at some stage and more often for some. When this does occur, you should consider rewarding yourself.

Depending on the size of your profit, you could take the family out to dinner, escape to a country retreat somewhere with your spouse for the weekend, or perhaps buy that new #1 wood for your golf set you have been eyeing off for months.

In some way, reinforce to yourself that you have had a great trade and have followed your trading plan to the letter in doing so. It helps reinforce the positive and instill in you that good things can happen when you follow your plan.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

Dow : likely to close below the 11937 Level

aromerga@gmail.com (Yuvraj Kalshetti) — Mon, 19 Dec 2011 21:24:00 +0530

A Small positive move was expected in the us market from the technical viewpoint and also expecting that Dow will close above the 11937 the 200 day S.M.A. . this level is impotent because the move's direction will be clear after the market closes. the 200 ma level is a break even point for both parties . and other side the support level is 50 sma so currently we can say us market is facing the consolidation but i am looking buying opportunity in us and Indian market also if Dow closes above the 11937.
as i seen positive divergence in nifty and the inverted hammer doji in Dow the expectation is going to show the impact and now i expect that Dow will close in green and also near the 119320-37 level.

till then Ba by.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

Nifty : Stopped out ? Buying is there .. Yes.

aromerga@gmail.com (Yuvraj Kalshetti) — Mon, 19 Dec 2011 19:20:00 +0530

Dear fellow Traders ,
last post about nifty was '"nifty will shut up" and suggested to be ready to fly with us but we got stopped out. and we stood a lesson of "never do early entry before market shows a clearer signal. and the same one is true.
Technically in the Indian market a positive divergen is signaled a clear worming of trend reversal. in the normal form the nifty experiencing strong buying pressure from bottom levels and thus nifty is likely to boom from the current level but ... i am not pretty sure that when it will happen !! finally i suggest to do not go for shorting the nifty and why ? there are many aspects to be focused on.

The Option market overview

Put call Ratio of the last week :

in the chart self ploted PCR's showing the weak strength of bear's and finally today at 13th dec. the pcr is 0.90. and the market behavior is similer to me prediction.

The daily Change in Open Interest.

well look at the daily picture we can look the slightly buying is taking place and there is no selling in the call option what the meaning of this think by self.

Look at the picture and you will easily find the positive divergence and the chart at the bottom has been hammerd. and this is the sign of trend reversel.
But hey don't hurry tommorow if nofty trades in positive bias then that's a conformation to enter in the to the long position.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

Crude Short At 5100 - 5200 sl 5390 Target : 4000 - 3800

aromerga@gmail.com (Yuvraj Kalshetti) — Fri, 16 Dec 2011 13:25:00 +0530

In The CME the crude oil has been declined sharply and indian markets also reacted to the glogal market. well the fall in crude we was expecting from past two weeks but the consolidation was started and crude was range bound in the 101 to 102 levels. and finaly made a double top formation as we guessed few day earlier the crude done it and we can lood an apportuonity to short the crude.
well as a chartist i think crude will again build a rally to climb 96 - 98.50 doller ownwords. and there is a nice chance to enter in a short sell in the CME and MCX also. crude is likely trying to touch the 89.76 level and today crude made a weekly new low and now the time to test the upwritten levels . as CME wtic / crudeoil will start to fall mcx will also follow the sentiment of globe. so what will be the stretegy to trade crude in mcx !

just wait for crude to touch 5150 - 5200 level and short the crude for longer term view and the last lower target is 400 - 3800 . if you have good paience and money to hold the crude overnight then this golden opportionity waiting for you. be calm and wait for a good entry point then create a good trade at fixet price level.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

Nifty : Ready to shoot upp !

aromerga@gmail.com (Yuvraj Kalshetti) — Thu, 15 Dec 2011 21:26:00 +0530

yes i know that smart experts are guessing that market will bottom out this month . but i am looking a bullish setup by nifty . nifty tested a bottom of 4740 - 4750 level and may be retest 4740 level, but i an not agree with experts that market will broke the lower low of 4600. i am a buy side analyst today and i like to be an a buyer in nifty.

Our call is : Strong Buy Call [4800 29 Dec.] at 80 - 90 levle , Stoploss 40 target 150 - 200.

to track our call please follow this link.

Technically nifty formed Bullish Divergen, Double Bottom and increase in volume.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

RBI : Will Not Rise Rates .....

aromerga@gmail.com (Yuvraj Kalshetti) — Thu, 15 Dec 2011 21:03:00 +0530

The inflation monster is in the air and dancing in the indian politicians and the so called economiest and experts. inflation rate and the rupee fall is the main subject to think on for the goverment. now tomorrow RBI monetory policy will be discussed again and hoping that rbi will do not rise the repo and the reverse repo rates right now. the first challenge is front of rbi is to dicrease the price boom in doller by sellent it. RBI shown his intelligence by rate hiking 10 times in 13 months. and this actin does not supported the economy and inflation is in the fullspeed.
as a chartist i think the downfall is over here and we can see a nifty boom from here. nifty may likely to touch previous target of 5200 and current level is just a last support for nifty and after a support test nifty will shoot from here.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

About us

aromerga@gmail.com (Yuvraj Kalshetti) — Thu, 15 Dec 2011 16:55:00 +0530

  Who am I

Well i am Yuvraj Kalshetti , i hade my capital market degree of CPCM from Focus Edu Care Ltd. in 13 jan 2010 to 15 jun 2010. with certification in

* Equity
* Commodity
* Forex
* Derivatives
* Money Market
* Bond Market
* Mutual Fund
* IPO / FPO
* Fundamental Analysis
* Technical Analysis
* Micro Economy
Listed subjects are learned and passed out respectively from Focus Edu Care Ltd.
in the process of learning we known very impotent things that hits the capital market's over the globe.

  The Backround

Before being a sub-broker of the Aanand Rathi Group i was worked with many broker's as a trade dealer in verius city's . the broker's are followed

* Religare Securities [ Omerga ]
* Aayush Commodities [ Puna ]
* Angel Broking [ Puna ]
* Emkay Securities [ Puna ]
* Sharekhan Securities [ Puna ]
* Aanand Rathi [ Puna ]
* SMC Global [ Omerga ]

i worked with these brokers with almost 4 years and had a good experience in dealing with clients in Trading and Account opening. the broker is not an issue with the clients the issue is the person who is contacting with them and the same scenario has been experienced while dealing in my town omerga.

Track Record

As a Dealer in Commodity and Currency market i seen many cross roads while trading a intraday ether a positional holding in certain stock , commodity or currency pair. many times investors lost there fortune because a lack of discipline and professional mindset to react to the situation arises. They don't done a study on self and trying to achieve something they don't know how to achieve that ! almost 90% investors and traders lost because of a 'psychological' problem with themselves. and as a dealer i observed the behavior of normal investor & trader to all situations. and finally come with the experience that emotional trading always results in heavy loss and disappointment.
Other side the pro. traders bahvior is always attracted me to observe them from start to end. a pro trader always do trade with a written plan with the following points :

   Trading Plan

* 3 Reasons To Enter in a Trade
* 3 Reasons To Close the Trade
* Rules of the trade Entry , Holding Period and Exit
* How much i can loos on single trade
* How long i planed to hold into trade
* What is the Method , Money Management Reules & Mental Calmness

Mentioned a bow is the very formal format of the trading plan. Every investor or trader have to be mentally professional first then learn to manage money after learning these things he is able to learn Technical Analysis .
if you ask as a person how much peoples are get rich by me then my answer will be "none" . Because every one who trades with me i convene him/her to to take full responsibility and never blame your failure or prosperity on destiny , bad luck or anything. moral is that you must have to be fully responsible to manage your account and become a psychologically good to easily accept loss or profit with great professionalism .

Thank You.
_____________________
Mr. Yuvraj S. Kaslshetti
[President & Founder]
My Trading Corp.
02475 - 251888
9021167890

A R omerga is now on Mobile

aromerga@gmail.com (Yuvraj Kalshetti) — Thu, 15 Dec 2011 14:06:00 +0530

The World of an trader is very faster and he must have to update with latest move in the market and new infromation about the overall market. for this reason a normal trader and investor cannot stay away from the rerminal and the office of broker. But now there are many sites are disigned for mobile devices and they are very user friendly . the sites are m.moneycontrol.com , m.fxstreet.com and m.nseindia.com .
Sites listed abow are the recourses to provide current market action to you but they don't have any clear view and the own research to give you clear picture about future market move and that's why we decided to design something to provide clearer picture directly to your mobile in a fingertips. the default site will be located by entering www.aromerga.com from mobile browser.

Here is the Mobile Application called "ARomerga" is now available in nokia store
freely !
you have to just login to the site and download the application and run it . this application is free of cost so don't worry about pricing . only the application requires working internet connection for live updation . and you will be updated with new articles from our officeal site www.aromerga.co.cc .

Disigned by : Nokia Apptool
Version : 1.0
Author : Yuvraj Kalshetti

one onother way to brows the site from your wap browser visit to mippin.com/aromerga
This mobile site will help you to read all the articles from your non-nokia mobile phones .

So no worry just type the address from you mobile and catch all the actions from our eyes. no delay , no broken links and no problem atoll. we are ready to serve you better just hold on your sits and get ready to fly with us.

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888
a36bd98c

Currection Is Almost Over : But Over Reaction still in action! Gold, Copper.

aromerga@gmail.com (Yuvraj Kalshetti) — Thu, 15 Dec 2011 11:12:00 +0530

Good Morning,
A shiny day has been started with red bias for Indian markets every side we are experiencing selling pressure.
last night we seen strong sell off in precious metals , crude oil and copper . actually one correction was pending in the listed scrips. but now they have been corrected almost to there lower level of support level. and in other side the puree don't want to revers and hitting rock bottoms and this scenario will continue.......
Now what next ? i want to suggest if anyone have a money in hand then invest in Copper at current price level with stop-loss of 379 and target will be 415. and gold has been acted very panicking as every market overacts to all major moves in a single day Indian markets also do. just be aware about stoploss and stay with the trend. so now you have to know that what is the major trends of the Indian capital markets are :

Stock Market : Down
Gold , Silver : Secondary Down
copper : Up
Base metals & Gas : Down
Rupee : Down

Thanks
_____________________
Mr. Yuvraj Kalshetti.
my trading corp.
Shop no. 3, Kalshetti Complex,
Saraf line , Omerga, 413606
02475 - 251888

Financial Latest News

aromerga@gmail.com (Yuvraj Kalshetti) — Wed, 14 Dec 2011 19:36:00 +0530

Economic Calendar

aromerga@gmail.com (Yuvraj Kalshetti) — Wed, 14 Dec 2011 19:20:00 +0530

Live Economic Calendar Powered by Forexpros - The Leading Financial Portal

Thanks
______________________
Mr. Yuvraj Kalshetti.
my trading corp. Shop no. 3,
Kalshetti Complex, Saraf line ,
Omerga, 413606
02475 - 251888

Copper : Good To Buy at 396 - 400 Level

aromerga@gmail.com (Yuvraj Kalshetti) — Wed, 14 Dec 2011 18:35:00 +0530

We suggested to stay aside from the market and do intraday trades. now here is a chance to enter in a good position with tight stoploss. as we seen a bullish setup in copper that copper will touch 400 - 395 level and there is a good suppoert for copper so get ready to buy copper at the lower level of 395 - 400 level and please dont buy abow this key level or dont do early entry for fast profit wait till copper comes to 395 level we are prity sure that copper will touch 400 - 395 level and we will create a long position at that point .

so the call will be clear when the copper will touch 396 level . if copper crosses the lower level of 390 then more panic will arise in copper but we suggest to short for an intraday purpose but don't hold your shorts overnight. and get ready at 395 level to buy copper and hold for longer period fol good profit.

Thanks

______________________

Mr. Yuvraj Kalshetti.

my trading corp.

Shop no. 3, Kalshetti Complex,

Saraf line , Omerga, 413606

02475 - 251888

Market Update: 15 Dec market will go up.

aromerga@gmail.com (Yuvraj Kalshetti) — Wed, 14 Dec 2011 18:08:00 +0530

Nifty almost lost everything achieved in past session. today nifty is down by 37 points and closed at 4763.25.

and formed a inverted hammer in the bottom the sign of trend reversal. but we are not looking any strong up-move from here but yes nifty may consolidate at this level because some technical indicarors are in the fever of conjection . as we expected the possible double bottom formation at the 4700 level this may be in process.

but guessing anything will be the early decision wait till the chart becomes clear then enter for good profit. now for next session of 15 Dec 2011 we think nifty will go up and may touch 4800 - 4850 level again. and for a longer term view nifty will consolidate here for a small period of time.

Nifty : Failed to cover properly

aromerga@gmail.com (Yuvraj Kalshetti) — Wed, 14 Dec 2011 00:08:00 +0530

Nifty has opened gapped down and recovered from the bottom level. the 4700 level again acted as a strong support and technically trying to form a "w" bottom in bolinger bands also called double bottom and there are also possibilities to hit a lower low of 4600.

4850 is the nest resistance for next session and may be nifty will be green next day.

Derivatives

aromerga@gmail.com (Yuvraj Kalshetti) — Tue, 13 Dec 2011 16:26:00 +0530

The indian derivatives market is very nice to be profitable . currently derivatives are available to trade in both NSE & BSE stock and indexes . if any one want to trade in derivatives then he have to submit 6 months bank transaction history copy's .
what is the concept of future and options is ?
the simple line about the future is to buy a shares lot [a fixed quantity of shares] for a fixed time period , date in a marginal price . and you must have to sell before the fixed day [expiry]. & the Option means to buy a shares lot [fixed quantity] for a fixed day in a nominal price. and you dont need to sell the stocks [if you want to carry them then you can, but after the expiry the shares lot get worthless].

Know The Indian Derivatives Market.

Currency

aromerga@gmail.com (Yuvraj Kalshetti) — Tue, 13 Dec 2011 16:17:00 +0530

The indian currency market is operated by NSE and tha major currency's are

1) USD [ U.S. Doller ]

2) GBP [ Great Brithish Pound ]

3.) EURO [ Eurozon Currency ]

4) JPY [ Japnis Yen ]

and the trading session is monday to friday 9 am to 5 pm.

we offer currency trading . trading will be starts from very nominal capital in example form if you want to buy usd/inr then you have to maintain account with 2000 to 2500 in your active account.

The Forex Quotes are Powered by Forexpros - The Leading Financial Portal.

========================================================

Trade With A R Omerga .

Commodity

aromerga@gmail.com (Yuvraj Kalshetti) — Tue, 13 Dec 2011 16:06:00 +0530

What's the commodity is ?
where all commodity's are getting traded! like metals, oil, gas, agree products. in lot form with expiry [ a fixed date , and fixed quantity of commodity.] you can buy thees products with marginal capital and you can carry then to your shop/home or you have to sell the before expiry.
Commodity market is good for intraday traders. to gain good profit in small move with small percentage of money.

Trade With A R omerga Now

This Technical Analysis is Powered by Forexpros - The Leading Financial Portal.

Equity Market

aromerga@gmail.com (Yuvraj Kalshetti) — Tue, 13 Dec 2011 15:33:00 +0530

In India only two equity markets [share, stock market] have a great strength of liquidity. and the name are NSE [National Stock Exchange]
& BSE [Bomday Stock Exchange] respectively. the bombbay stock exchange is oldest Stock Exchange in asia. there are lot of company's are listed in both exchanges.
well coming to the point, a common investor can buy a share and sell when he think that he is getting good profit or sell when his money at risk or losing it. a similar view of Buy and Hold of stock's have good potential of profit, this thinking is out of date right now. because of heavy fluctuation in the major world markets and volatile inflation and growth rate of India. the GDP, IIP, Reserve Rates, Currency Boom and political unstable belief in Indian economy. if we look at overall condition we cannot afford a buy and hold strategy. we have to be a good player to play the game well.
finally we have to adopt a good psychological habits and proper trading plan with calm and disciplined mind to execute a trade when market offers us and exit at satisfied level of the security. as your friend in the current capital market we offer a diversified portfolio and some apposite scrips to enter and exit in shorter time prospective to achieve your financeal goals.

Trade With A R omerga Now