BC FINANCE
Saved by @curiousat3am

The most common problem faced by day-traders and it's easy solution which is extremely difficult to implement.
A thread.
( uses concepts I have discussed many times before in separate threads)

 Problem : I have a good system, I understand charts and/or price action, but I simply can't make money. I hold my losses too long or ( this is most common) I get out of profitable positions too fast and cannot sit for the whole move
At many firms at NASDAQ, day-traders are seen as elite sportspersons playing in a difficult taxing game. That's why, they have regular sessions with sports psychologists. They are advised to follow the basic routine of sportspersons.
Train ---- Play tournaments --- Rest
The cycle repeats
We retail day-traders here neither rest nor train.

Rest = taking time off markets
Train = trading in markets in training mode

Understanding REST is easy, simply take time off markets and spend time with family or do something you love
But what about training ?
Paper trading or trading on a simulator is never good training as it never gives you the same psychological issue while actual trading. Deep down you know this is fake, you are not making or losing actual money
As you are never making or losing money, you will not be able to be in the same psychological state / pressure which comes in actual trading. Your decisions while paper trading or simulated trading will be vastly superior or actual trading
The solution:
Trade 1 lot ( I am speaking about intraday options trading, cash traders can do this with a simple share of any stock) following your system/process for one month. This sounds easy, right?
Try implementing this, you will understand the massive psychological discipline and strength it requires. Majority fail to do this over a month and go back trading their normal volumes and thus face the same issues all over again
If you are in a trading slump for long and aim to claw back, give yourself 3 months.
First month = 1 lot
2nd month = 2 lots
3rd month = 4 lots
4th month = follow money mgmt/position sizing with a small bet per trade
I have used this "one lot" rule twice in my trading career to resolve my psychological issues while trading. In my time on twitter, have advised this method to probably hundreds and thousands of traders over the past few years.
So far, very few traders ( around 5 or 6) have followed this method diligently as I have outlined and come back to me with the results. Not surprisingly, all of them were profitable to various degrees
There is no short-cut solution is you are facing the same problem. No guru, no webinar/seminar/handholding/setup/system will be able to solve this issue.
As one of my students rightly said " when we go to a gym, the trainer can show us all the moves. But it's us who have to appear at the gym everyday and do the exercises if we have to improve our body"

Same with trading. Best of luck ! 🙏
Anthony Saliba, the only options trader to be interviewed in the first Market Wizards book was the original one lot trader. Indian fintwit has nicknamed me also as one lot, what a great title ! Thanks

https://t.co/oqCwSz8kfW

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Subhadip Nandy
Subhadip Nandy
@SubhadipNandy16
Since 99% of my own trades are in options, the calls I give are also on options. I am of the firm belief, that a basic knowledge of option greeks is necessary for any trader aspiring to trade options. For this, there are numerous books and even more resources on the net/youtube

However, a trader trying to learn Greeks face the problem of information overload. The problems are mainly 3
1. Either the text is too mathematical
2. Or the explanation is too simple just skimming the surface
3. In some cases, outright wrong info ( specially on youtube)

I have decided to make a video on options greeks in which I will try to explain simply ( without the maths 😀) but will go a bit more in-depth so that the info is usable by traders doing actual trades

Spent the major part of today designing the ppt ( 40 slides), hope to upload the video in the next few days. I will also provide the names of other resources which I have referred in making the video so that viewers can refer those texts for a more comprehensive understanding.

The video will be from the view of a trader/practitioner and not just a theoretical discussion.

I sincerely hope starters will be benefitted from my effort 🙏
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Subhadip Nandy
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@SubhadipNandy16
Showing one example on how we see VolXplosion.
iBulHSgFin came under VolXplosion on 24th Feb, Check the price charts and the OI analysis. Price blasted today after OI buildup of two days.
Self explanatory


A single day long or short buildup can flutter to deceive. Analyse minimum 2 days to 5 days

SBI is now on watchlist
( disclaimer : already long today)


I am seeing many users using the VolXplosion as a daytrading concept. It does work , but the main juice is on positional plays. You will be much better off if you take this trades from a positional standpoint

The Decoding Volume & OI course is not just about VolXplosion. Analysing OI correctly gives you a lot of other trades.
DrReddy : OI buildup within range. We have discussed this in the video. Move seems to have started today
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Subhadip Nandy
Subhadip Nandy
@SubhadipNandy16
Regarding the MFI divergence indicator those who are asking :
1. Link not working on TV
2. Not showing on spot Nifty/BankNifty
3. Code showing errors
All your answers are there in the original thread. Kindly do not expect spoon feeding .
SOLVE YOUR PROBLEMS ON YOUR OWN
MFI
Subhadip Nandy
Subhadip Nandy
@SubhadipNandy16
My experiences in trading through various international locha events, high VIX and various events.
A thread

I follow the news, but never think of myself smart enough to predict what is finally going to happen. I am not a geopolitical expert, smarter brains than me are analyzing and acting on the news

Their actions are reflected on price, volume, OI. Following the data keeps me at par with the latest news

Be ready to cut your existing positions ruthlessly when data changes, be ready to absorb the loss and get out of the position. Never hold onto with hope.
Never works

Reduce trading volumes. Higher the volatility, lower the trade size.
Use lower volumes and bigger stops to counter the volatility
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Subhadip Nandy
Subhadip Nandy
@SubhadipNandy16
Two year back thread on MFI, someone liked this so came up in notifications . Rather than running around 100s of indicators, I have made this my go to indicator under any circumstances and have been using this for years


This thread actually had some great answers , one can learn a lot about the thought processes of different traders from the answers. Please go thru them
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Terry Smith is often referred to as "the English Warren Buffett".

He runs Fundsmith which has a fund size of £27.9bn.

Despite the size, Fundsmith did a CAGR of 18.4%.

In his book Investing for Growth, he explains his investing philosophy.

Here's a breakdown:


1. Fundsmith's winning formula

Find companies that focus on delivering value.

Not those who are looking to pacify Wall Street with short-term results.


2. Avoiding "cheap" companies?

Low multiples are not a reason to buy a company.

A ship will continue to sink if it has a hole in it.

"A stock may have a low valuation but an even lower intrinsic value. Buying such a stock is not a recipe for investment success."


3. Getting quality right

For long-term investors, getting the quality of the business is more important than the valuation.

“An investor could have paid 281 times earnings for L’Oréal, 156 times for Colgate, and 147 times for Brown-Forman and still beat the market.”


4. "Unprofitable" companies could be good investments

Many of the best companies don't show earnings today.

But that's because they're heavily reinvesting for the future.

It's just that the earnings hasn't show up.
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Travelogue: Ibadan-Hills, Bottoms, Masquerades & Research

More than 15 years ago, I met an Italian who had lodged at KS Motel at Total Gardens, Ibadan.

He was in Ibadan for the first time and he was very fascinated with the city when I informed him that Rome and Ibadan shared a very unique similarity: both of them are built on seven hills. He asked me to take him round Ibadan which I did.

The seven hills are Oke Padre, Oke Ado, Oke Bola, Oke Mapo, Oke Are, Oke Sapati and Oke Mokola. But Ibadan is not just a city of hills. It is also a city of 'bottoms'. Loosely translated, 'idi' means bottom or the backside.

Several people have attached sexual innuendoes to the names. However, the actual translation indicates that some of the 'idis' indicate how the settlers converged at a point thereby leading to how they arrived at the names given.

Go round the city and you can locate Idi-Arere, Idi-Ose, Idi-Ishin, Idi-Ape, Idi-Ayunre, Idi-Obi and Idi-Ito.
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The Profitabull | Invest Better | Think Better
The Profitabull | Inve...
@theprofitabull
It's been more than 60 years since Philip Fisher wrote the investment classic in "Common Stocks & Uncommon Profits".

The book is famous for the 15 questions which one must ask before investing in any company.

THREAD


These are the questions which help us in determining the "quality" of a business.

Warren Buffett has time and again said that he is 85% Graham and 15% Fisher.

Let's have a look at these 15 questions.

P.S.: Stocks listed in this thread are not to be taken as recos.

1. Does the company have products or services with sufficient market potential to make possible a sizable increase in sales for at least several years?

The important point which you must note here is that you must not just look at the size of the company.

You must also look at the opportunity size of the market in which the company exists.

Let's take the case of HDFC Bank. Although it is a huge bank, but it controls just 9% of the total credit market in India, suggesting an enormous opportunity for it to capture.

2. Does the management have a determination to continue to develop products or processes that will still further increase total sales potentials when the growth potentials of currently attractive product lines have largely been exploited?
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Vidya
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@VidyaG88
1/16
Was reading upon #Biases & learnt a lot. Thought of sharing a few pointers .
Simply put Bias is a disproportionate weight in favour of or against any idea/thing in all aspects of life.
Few types of Biases ( out of the many) with not so random images. :)
+

2/16
The #DunningKruger effect now is fairly well known , wherein people with limited knowledge overestimate their competence, whilst the actually knowledgeable question themselves often .
"Ignorance more frequently begets confidence than does knowledge".
+


3/16
*#SelfServingBias*
A very interesting bias wherein we credit our successes to purely ourselves, but when things go awry we cite luck & external forces .
Rings any bells?
Basically a defence mechanism to protect our self esteem & eventually from personal responsibility.


4/16
* #ConfirmationBias *
We all favour ideas & beliefs that affirm to our existing ones' , rarely being open to contradictory opinions .
(Especially in markets !! 😬) Why?

Laziness? Mental block? Ego ?
No wonder, Birds of a feather flock together ... 😉


5/16
* #SunkCostBias *
As we know, sunk costs are irrecoverable , regardless of outcomes. (Eg Money expended towards R&D for a molecule which doesn't work out)
But this actually extends in any investment we make - Time,Money, Effort, Relationships ...😏
Interesting right?
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Subhadip Nandy
Subhadip Nandy
@SubhadipNandy16
Rule 4 : If buying a naked option, always ensure that implied volatility is low. This can be understood from the level of IV vis a vis historical IV levels. Use IVR or IVP etc.
For a naked option to make money, it's better if IV rises or at least stays flat.


This is a thread I wrote on IV, IVR etc
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