Important Readings

Some of the must readings from the resources I follow

1. Brett on Trader Education, Training, Mentoring
2. Victor on Checklist for Traders
3. Nice Humour from Newton Linchen

DELAY in Market Moves

Markets delay the moves to frustate traders and force them out of their positions.

1. Stock price delays moves. This is an important characteristic of the market. Price movement will not happen when you are anticipating it.
2. Price moves when it is inconvenient for the trader.
3. This is recently observed in EDUCOMP.
4. The movement we think random may be in the scheme of things for traders on the other side.
5. This is the reason why for active traders path dependence is important.
6. If the stock price hits my stop before making the favorable move I am forced out of the position.

Indian Market on 20/2/2009

Market opened with a gap around 2750 Spot Nifty .However there is no big sell off.

1. I had a long position on Feb Nifty at 2790. Luckily I hedge it with Short 2800 call @ 38
2. Closed my NIFTY @2740. Opened fresh short @2743
3. Closed fresh short on Nifty with a trailing stop @ 2720 and also call @14
4. Market remained listless with little volatility till 2 pm.
5. Market searching for intraday bottom and taken out stops around the round number 2700 by dipping to 2690.
6. Closing saw some covering of short positions ahead of long weekend and recovered to 2630.

The lesson I have learned is to be ready with what - if scenarios and use appropriate type of orders for the market conditions and opinion.
For e.g If my opinion is for the market to gun for stops below round number 2700 I have to be ready with a deep limit order around 2690 with a stop of 20 points.
Another way to trade may be wait for a botom confirmation and enter Nifty on the market with stop at the day,s low @ 2690. Ofcourse all this appears easy with hindsight. Action in the heat of markrt battle is always hazy and fraught with uncertainities.

Learning to Trade

The education needed to effectively participate in Markets is wide and intensive. In this post I will discuss my observations regarding the beginning trader starting with a clean slate and resources available to him on web 2.0 for self development in the Indian Context.

1. Start with a very good introduction to markets from Trading & Exchanges by Larry Harris
2. Good resource for observation of market data like volumes, price history from National Stock Exchange.
3. The short term trader can concentrate on Most active Securities and Top Gainers/ Losers list.
4. Active Day traders benefit from a market scanner like FALCON software.
5. For general understanding of trading psychology there is no better resource than Dr Brett Steenbarger
   

Indian Stock Market 12 APR2007

The market is cautious ahead of INFY results tommorrow. Lot of action at the close on INFY 2100 Call and 2010 put options. Traders best strategy to play earnings season appears to be through the tool of options. However I feel this will be a non event with no surprises.It is interesting to see how option premium gets knocked off tommorrow.

The tension in Jet airways stock seems to have been resolved with stock up 3% after buyout of Sahara.

I am puzzled at the ever changing cycles in the market which prevent people from making money helping big fish. Media opinion routinely plays to shakeout the ordinary players at exactly the wrong time. Real estate is a case in point. people who have strong opinions against real estate are turning around to becoming bullish. RBI's action proved disastrous for the players in Bank and real estate stocks last week as they capitulated.

If we take IT index as a signal market is anticipating no negative surprises from INFY.