How to use Moving averages like a Pro.👇

https://t.co/7VbuGovmee

Objectivity- Undistorted by emotions or personal bias.

What is objective Trading?

Trading in which decisions are taken on pre-decide rules, decisions in objective trading are not decided by Feelings or opinions.

What is subjective trading?

It is discretionary trading, in which one uses his intuitions and Analysis to take trading decisions.

Is one superior to other?

The rules in a mechanical system are going to be decided by you, the plan is going to be made by you,

the positions sizing and all other aspects are going to be made by you.

So your psychology is going to filter the information coming towards you, even in a mechanical system as well as in discretion.

WHATS THE USE OF OBJECTIVITY-

I am a Discretionary - Rule based trader.

So, I take trades based on my analysis, my entries are discretion based, but the exits , position sizing and Risk management rules are pre decided.

WHY USE SUBJECTIVE TRADING?

The biggest benefit that objective trading do is that it makes the chances of you thinking less during the time of taking an execution decision.

As a beginner trader you will not have much experience, and you will inevitably do a lot of mistakes.

"A trend once established, is more likely to continue than it is to reverse"

A thread on Trend (Market structure)-

A trend is a path of least resistance, basically the side where the smart money is betting upon.

And our work is to be on their side, to make some money.

Why do we use trend?

In an uptrend, the sum of the rallies will always be greater than the sum of the declines.

In a downtrend, the sum of the declines will always be greater than the sum of the rallies.

How to Find the trend?

There are 3 methods which one can use-

1. Swing points method.
2. Moving averages.
3. Trend lines, channels.

1. Trend identification by using swing points-

• UPTREND in simple words - Higher highs, higher lows

• DOWNTREND in simple words - lower lows, lower highs.

• Flat trend - The price stays in a range

THE TRADER'S EDGE: THINKING IN PROBABILITIES

Casinos make consistent profits day after day and year after year, doing something random

At the same time, most traders believe that the outcome of the market's behavior is not random,yet can't produce consistent profits

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What casino owners ,professional traders know is that probable outcomes can also produce consistent results if you " Have an edge" and trade on a large enough sample size.

The best traders treat trading like a numbers game.

1. To illustrate, let's look at the game of blackjack-

In blackjack, the casinos have approximately a 4.5-percent edge over the player.

This means that casinos will make profit over a large enough sample size, even after several winning streaks and big profits of many players.

At the end of the day, week, month, or year, the casino always ends up with approximately 4.5 percent of the total amount wagered.

That 4.5 percent might not sound like a lot, but let's put it in perspective.

Suppose a total of $100 million dollars is wagered collectively at all of a casino's blackjack tables over the course of a year. The casino will net $4.5 million.

What casino owners and pro traders understand about the nature of probabilities is that each individual hand played

How position sizing can affect your trading performance-

Assuming that you are trading a Trend-following system with Big RR and low win-rate.

For example, assume that you risk one percent per trade on a 100,000 account
and you have 20 straight losses.

That one percent is of your remaining equity and at the end of 20 losses, you would be down to 81,790.60.

Now if you got a 30R winner and you are risking one percent of your balance of 81,790.60, your new equity would be 106,327.9,

You’ve had 20 losses and one winner though you are still up 10Rplus your equity is up by 6.3R percent.

Now, let’s say you risk five percent per trade on your balance. At the end of 20 straight losses, you would be down to 35,772.89 or down 64 percent.

If you risk five percent on this amount and get a 30R winner, you would be up to 89,621.48. You are up 10R, but because of your position sizing, your equity is still down over 10 percent.

#positionsizing
#Trading
#nifty50

This is why position sizing is the most important factor in trading if you get it right and you have an edge, you will do good.

Thanks for reading till here.
@AnandableAnand @jitendrajain @quatltd @sohamtweet

Richard dennis made "$80 Million " in 1986. That kind of money making put him squarely at the center of Wall Street .

How Richard dennis became one of the greatest trend follower of all time.

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1. Personality-

Though he made big profits in the year of 1986, but Profits and risk comes hand in hand.

He was down $10 million in a single day that year before bouncing back, a rollercoaster ride that would have made mere mortals lose serious sleep.

Yet Dennis cockily said that he slept like a baby during all that volatility.

His money making style was to go for the home runs and swing for the fences,But dennis was never a gambler.

Dennis was believer of the Empiricism philosophy.

Empiricism is rooted in the notion that knowledge is derived from experiment, observation, and experience

2. Family-

Dennis family was not of market operators. Dennis was always honest about his father’s “hatred” of the market, explaining,

“My grandfather had lost all his money in the stock market in the Depression. The urge to speculate kind of skipped a generation.”

Fake Breakout : Price crosses over the resistance but does not get follow through. Bearish Engulfing is seen at these levels.

Legit Breakout : Price crosses over the resistance & gets follow through. Pin Bar is ideal candle at these levels.

Thread :

#asianpaints (Weekly)

- A stock moving with a healthy momentum and reasonably good trajectory.

- I assume that It may come down to touch it's primary support trend line as it did in the past.

-If it do so, It will be a "must buy" opportunity.

Tip:
a) 30°-45° inclined trend line is considered sustainable.
b) Steeper trend line angle can not sustain for a long period of time.
c) Exceptions are always there.
d) To beginners : Explore more related to trend line inclination angle and relate this with above chart.

#INDICATORS
All my TV indicators can be accessed by adding to favorites from the below link:
https://t.co/vSyPBEvnLY
Notable ones r:
1) JPMUPS - contains all the pivots
2) Pivotshift
3) ADMIN
4) DPW
5) Pivotwidth for next session
......
and much more.

(1/n) Some notes from my trading journal – A thread
With this thread I shall attempt to explain how I select my trading picks.

I have learn't this concept from @markminervini 's books. Hope it helps.

#Trade #Investment #invest #StockMarket #stocks #india

(2/n) Stock trading above 200 and 50 DMA

Buy high to gain higher. CMP above 50 Day Moving Average (DMA) and 50 DMA above 200 DMA signifies the stock to be in an uptrend. This is an uncompromisable rule. @ZerodhaVarsity @zerodhaonline
#stocks

(3/n) Volume

Volume is the key factor. The stock should show clear signs of accumulation. Generally, accumulation should happen over multiple periods of time. Attached image in the case of #BALAMINES can be used as an eg.
@ZerodhaVarsity

#stocks #StockMarket

(4/n) Surge

A stock should be bought either when it’s in stage 2 or when it’s forming a base after a surge. Surge is an upward move in a stock. The best trades are those when a huge surge happens in a very short time frame. Eg #FILATEX
@ZerodhaVarsity

#stocks #StockMarket

(5/n) Consolidation

After a good surge, a stock generally consolidates. This means the stock is in its resting period and will trade only in a range. This phase will be coupled with volume dry up. Tight range with low volumes are the best setups. @ZerodhaVarsity
#stocks