Stocks in Play

Stocks that may be on traders' radar today

1. FINANCE TECH : The stock appears to have rebounded stronly yesterday. My inductive leap  of understanding in this might have to do with  SEBI Chairman replacement / hopes of MCX-SX revival ?

Transaction Costs in Trading

Active trading involves huge transaction costs. In my experience as an intraday trader and running a trading office predominantly consisting of short term traders

1. Huge amount of energy is expended in the form of Transaction Costs, Taxes
2. Some of the items in the Broker's charges that need clarity is the Stamp Duty in case of Brokers having regd office at Hyderabad.
3. Turnover Charges being charged in excess of NSE Charges from clients ?
4. Victor on the effect of VIG

INTRADAY FUNDAMENTALS

Intra-Day Trading  requires lot of attention to detail and a science in itself.

1. I have been inspired by several concepts from SMB Trading Blog like Stocks in Play, Second day plays, Earnings play.
2. Combining Intraday fundamentals with technicals.
3. Traders' intution as a result of  years of screen time ( 10 yrs min according to Outliers by Malcom Gladwell),ability to process breaking news ( witnesses in TCS - Friday) will result in good trades.
4. Identification of Niche of the trader is important since it tells us where the escape routes exist.

Technical Analysis @Manipal Education

The training program  jointly delivered by me along with another colleague gone very well.

1. NSE's Technical analysis material supplied to the participants provided unique way of classifying TA
2. Students liked the classification of TA tool kit and what tools to apply to Trending, Range-bound markets and transitioning markets from Bull to range-bound and vice versa.
3. Audience participation is very good with practicing traders and even top management from some brokerages thrown in.
4. I could bring value to the process through my emphasis on trading psychology and risk management mostly adopted from Trader Feed.
5. Intraday trading strategies with pivots is one chapter on the TA course.
6. I could personally appreciate how the basic concepts of TA can help the beginning trader have a grip on the market perception.
7. So many commentaries on  Financial Press and TV  became evident after going through this process along with my co-learners.
8. Much of the philosophy and terminology was effectively internalised by the participants by the end of the workshop as they were freely using the jargon.
9. Illustration of many concepts were done using  TAME and ShareKhan 's TradeTiger platform.
10. TA concepts when viewed in a foundational sense clarified many of my hazy opinion on TA.

Simplifying the TRADING Framework

Today I had an aha moment trying to explain a methodology to understand price action to a new student of Markets and Trading.

1. The need for reference points which act as handles for the trader is emphasised.
2. These price handles will make the trader make sense of randomness
3. New and developing trader could feel a sense of elation at understanding the complex world of  Trading
4. When you can write your trading style on the back of your visiting card you can easily explain the approach to traders.

Simplifying Your Trading Framework

Active Traders internalize market lessons through exposure to patterns, pain of market losses, learning forced by the market.

1. There are many stages in the development and evolution of a trader.


2. I believe it is always difficult to predict the market as it appears mostly random. But a trader with clarity of his approach and trading framework is not surprised by the market moves . This progressive elimination of being surprised by the market makes him resistant to being fooled by randomness.


3. The trader should be able to explain his approach on the back of a visiting card in three steps.


4. The trader can reduce most of the trades to three approaches . Thus the concepts of trading are superior and of lasting edge than a single trade idea.


5. I would admit most of the trading experience and knowledge can be distilled in this excellent article by Brett Steenbarger.


6. When the market movement cannot induce surprise in the trader most of the negative power of the market is reduced. As the greats in trading say " In the expert's mind there are only few possibilities where as an amateur sees many possibilities".

Trading and Econometrics

I have been reading a bit on Econometrics recently sparked by my registration at NISM workshop.

1. My friend Newton Linchen has interesting comments on Trading and Econometrics
2. Econometrics of Tape reading where Newton Linchen discusses Strategies and Models. As pointed out trading is more about skill than knowledge.
3. Good posts by SohamDas relating to Quant and Econometrics, Basics, Concepts
4. As Newton Linchen rightly pointed out , Insightful analysis by Victor in DailySpec, here
5. Thoughts on Trading Price levels

Interesting Readings

The quality of the information available free in web for any willing and hardworking trader surprises me. What are the incentives available for traders to share so much information and insight so freely ?

1. Newton Linchen 's insightful post on Trading Behavior
2. Another great piece from Newton on Fun in Trading
3. Dr Brett on Trading Education

Few Queries

In my quest to learn trading , I had great teachers in Dr Brett, Victor, Newton Linchen, SMB. Their thoughts continue to light my path towards finding consistency in trading. In following their articles and discussions , I had a few queries in Indian Context.

1. Is there a similar indicator as NYSE TICK ?
2. Any trading platform allows caluculation of % Change from OPEN ?
3. How to get Adv- Dec line caluculated from OPEN instead of Previous Close ?
4. Market Delta and Market Profile how to access in India without high cost for retail traders

I would highly appreciate responses from fellow traders to share their nowledge in this area.