Teaching Trading

As the financial markets become more accessible and democratised the need for Trading Education grows.

1. In my own way I have conducted around 15 programs in the past one year. They are basically 2-day workshops focussing on necessary trading skills, TA tools, psychology and risk management.
2. Around 200 participants were covered by our courses.
3. An intersting article on Teaching Trading at Universities.

Useful resources on DERIVATIVES

Web provides top class resources on financial markets,trading and exchanges.

1. Derivatives FAQs by Ajay Shah, an original thinker in Financial Economics. Although the document is

a bit dated, his prose reminds me of the style of Larry Harris in Trading & Exchanges

2. Another original piece by Dr Ajay Shah

The QIP Trading theme

Lot of trading activity around QIP theme in the market today 30/6/2009. Nice article on trading secondary offerings on www.smbcapital.com/blog .
1. HDIL selling off from important price level of 260.
2. I've seen how traders disregard risk and concentrate heavily on one scrip tempting the BlackSwan.
3. Too many instances of mistaking Correlation for causation.
4. Taking anecdotal evidence as definite relationship in the market.
5. It is unnecessary to search for reasons in the market which are evident only expost.

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.