BC TRADING GUIDES
Saved by @SUDRED12

A market wizard named Michael Marcus converted a $30,000 initial stake to $80 Million dollars over a period of 10 years.

Here are 28 lessons he considers very important for anyone venturing into trading, from his experience.

 1/ The importance of not giving up:

In Fiddler on the Roof, there is a scene where the lead looks up and talks to God.

I'd look up and say, "Am I really that stupid?"

And I seemed to hear a clear answer saying, "No, you're not stupid. You just have to keep at it."

So I did.
2/ On key price levels:

There are key price levels like

- previous day/week/month highs or lows
- round number levels

where you can have 1:5 or more worth RR of trades if you place yourself right.
The key is to hit the crest of the wave, just at the right moment.

If it doesn't work out, you have to get out.

Doing this, you can make several hundred points, risking 1/3rd to 1/5th of what you make.
3/ The secret to getting efficient at trading:

Cut down the number of trades you make.

The best trades are those in which all 3 things check out:

- Fundamentals
- Technicals
- Market Tone
Fundamentals - imbalance in supply/demand which could result in a major move.

Technicals - chart must show that the market is moving in the direction that the fundamentals suggest.

Market Tone - when news comes, market should act in a way that reflects the psychological tone.
Ex: A bull market should shrug off bearish news and respond vigorously to bullish news.

If you can restrict your activity to only those type of trades, you have to make money, in any market, under any circumstances.
4/ Importance of dynamic betting:

If you bet the same size when a trade meets all your criteria as with the trades that meet only one or two of your criteria,

you will remain an average trader.
When a trade is

- high probability
- fits all your criteria

you should bet larger than your regular trades that only fit one or two of your criteria for a trade.
5/ Why trend following is difficult now:

Nowadays, the moment the market breaks a key chart point, it is perceived by a whole universe of traders.

Now, you almost have to be contrary.

What do you mean by contrary?
You have to ask, "Isn't it true that all my fellow professional traders are already in? So, who is left to buy?"

The problem is that once you have defined a trend and takena position, everyone else has taken a position as well.
Since there's no one left to buy, the market swings around in the other direction and gets you out.

You didn't have to worry about this before, there was always somebody left to buy due to slow information reach.

Now, everybody is just as decisive and as fast.
6/ Identifying high probability trends:

There has to be a particular imbalance in the market that overrides everything else for a trend to be sustainable and give a decent trend movement.

Another exception is if we were to enter a major inflationary/deflationary environment.
7/ On surprise price moves:

If you see a surprise price move against you that you didn't understand, it's better to get out and look for the reason later.
8/ On handling limit moves in market:

Whenever there's a limit up or limit down situation for days in a row, it's better to become very very cautious after the third straight limit up/down day.

When volatility gets crazy under such limit movements, it's better to get out.
9/ On good times and bad times:

You have to hone your trading skills and craft when the markets and the times are very good.

By the time market gets difficult again, you should have the knowledge and skills to navigate through the difficult market phase.

So, keep learning.
10/ Getting caught in potentially intimidating disasters.

Whenever you're at the wrong end of a tail event, it's better to get out of your position first and think later.

What's bad can always get worse before it gets better.
11/ On trading success:

To be in the upper echelon of super-successful traders, requires an innate skill, a gift of sorts.

It's just like being a great violinist.

But to be a competent trader and make money is a skill you can learn.
12/ On Risk Management:

Always bet less than 5 percent of your money on any one idea.

Also be on the look out for correlation.

Correlated trades increase the risk with all else remaining the same which you don't want.
For ex: If you take a long position in two different related grain markets, that is still one idea.

If you're long Brent Crude and long WTI Crude, that's the same idea with additional risk.

So, be very cautious and wary of correlation among your trades.
13/ On Stops:

Always use stops.

Don't have mental stops.

Put them in the orderbook so that you commit to get out at a certain point.

Always pick where you will get out, before you get in.
14/ On being flexible:

If a position doesn't feel right as soon as you put it on, don't be embarrassed to change your mind and get right out.

If you become unsure about a position, and you don't know what to do, just get out.

You can always get back in.
When in doubt, always get out and get a good night's sleep.

Next day, things will appear much clearer and you can reevaluate your idea.

When you're in the trade, you can't think straight. You'll always be subjected to bias.
15/ Basic trading wisdom:

- Hold on to your winners
- Cut your losers

If you don't stay with your winners, you can't pay for your losers.
16/ On copying someone else:

If you try to trade someone else's idea or method, you're going to lose.

Every trader has their strengths and weaknesses.
As long as you stick to your own style, you get the good and bad in your approach.

But if you try to incorporate someone else's style, you often end up with the worst of both styles.

In the final analysis, you must have the courage to hold the position and take the risk.
If it comes down to "I am in this trade because Shyam is in it", then you're not going to have the courage to stick with it.

So, you're better off not be in that trade itself, in the first place.
17/ On Influence:

Be very conscious of the idea that you have to listen to yourself only.

Take information from others without getting overly influenced by their opinion.

If it is not your own idea, it messes up your trading.

It has to fit within your trading framework.
Always ask yourself, "How many people are left to act on this particular idea?".

You'll have to consider whether the market has already discounted your trade idea.
18/ On lead-lag trades:

When the news is wonderful, and the market can't go up, you want to be sure to be short.

Also, if you find a common behavior between markets/products, you want to sell the one that is lagging as soon as it starts heading down.
19/ On trusting/relying on experts:

Listening to experts can help only if you are listening to the right experts.

Most of these analysts or fintwit "experts" can't be a proper trader in a million years.

More money is lost listening to them.

So, do your own homework.
20/ Is market out to get you?

It's a foolish belief that there's conspiracy in the markets.

Market is bigger than anybody and sooner or later, it goes where it wants to go.

There are exceptions, but they don't last too long.
21/ On important traits to be a good trader:

Gut feel is very important.

All great professional traders have it.

Also, courage. Courage to try, to fail, to succeed, and to keep going when things get tough.
22/ On balancing life and trading:

If trading becomes all consuming, it is a torturous kind of excitement.

But, if you keep your life in balance, then it is fun.

All the successful traders sooner or later got to that point. They have a balanced life, and fun outside trading.
You can't sustain your trading life if you don't have some other focus.

Eventually you wind up overtrading or getting excessively disturbed about temporary failures.
23/ On revenge trading:

Fighting back by trading even heavier after you start losing NEVER works.

It's important to cut down very fast to the point of completely stopping if it gets bad.

Most of the time you'd be better off if you just stopped.

Never risk a blow-up.
The pattern will be: Lose, fight like hell, revenge trade, lose again, then cut back/stop, until you get on a winning track.

It's important to recognise this pattern before you get into the revenge trading mindset itself and stop yourself at the first step itself.
24/ On losing:

Losing begets losing.

When you start losing, it touches off the negative elements in your psychology.

It leads to pessimism.

So it's important to give yourself time before you get back on the right track, and scale down your size and frequency of trades.
25/ On the importance of position sizing and risk management:

Many people make money fast and lose it even faster because they are trading too big.

It's important to trade the right way, the right size, to sustainably grow as a trader.
26/ On stock trading:

There's bigger edge in stocks that aren't dominated by the professional traders.

Relative strength tells you what a stock has already done.

When there's high relative strength, the stock usually has exhausted itself.
27/ On trading bigger size:

As your capital size gets bigger and bigger, it becomes difficult to trade as you have to compete in fewer and fewer markets with higher liquidity.

So, it's important to scale the good habits and cut down the bad habits which will highly impact you.
28/ On acquiring trading skill:

If you can trade one market, you can trade almost all the markets.

The principles are the same.

Trading is emotion.

It is mass psychology, greed, and fear.

It's all the same in every situation, every market.
If you found this thread insightful, please go to the first tweet and retweet it so that many more people can benefit from reading this thread.

https://t.co/F2rYftdwo3
I write such weekly threads on the top one percentile traders and investors.

Follow me @thebuoyantman to always be notified of my next thread.

More from Shravan Venkataraman 🔥🚀💰

Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
Breakout-retest-breakout

this pattern is among the high probability setups one can trade.

60-70% of breakouts fail.

If the breakout sustains the reversal pressure and manages to break above the breakout candle high,

there will be travel.

You can then take the trade in either of the two places.

1) When price is pulling back to the point of breakout - take trade at the breakout point.

If it closes inside the pre-breakout zone, get out.

2) When price pulls back, then breaks out of breakout candle high.

(1) is lower probability than (2) but higher probability than just taking the trade when price breaks out first.

It also comes with lower risk.

(2) is the highest probability trade (probably with relatively higher risk).

That said

If the breakout is from a multi-week or multi-month compression zone

do not expect pullbacks to happen immediately.

If they do happen, more often than not, it's a breakout failure.
SCREENERS
Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
** MEGA THREAD ON INVESTING **

I was thinking about what kind of resources I'd want to have if someone has to start learning investing right now, the ones I wish I had two three years back.

This thread is a compilation of the best resources I have come across. 👇👇👇

Let's start with ** BOOKS **

1) The Intelligent Investor - Ben Graham :

Classic book, suggested by investors all over the world. Start with this book.

2) One up on Wall Street

Peter Lynch covers his strategies to find 10 baggers, and describes how an average Joe can do as well as the pros with simple methods and rock solid discipline and consistency backing it.

3) Common Stocks Uncommon Profits

This is a Phil Fisher classic.

It's on the other end of the spectrum as the book dives into a deep qualitative approach in value investing rather than being fully quantitative like Ben Graham's.

4) Security Analysis

Another book by Ben Graham that dives deep into analysing and understanding the valuations of any company you pick up to study.
SCREENERS
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Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
In 2011, a blackjack player made $20 million over 4 months,

and ended up bringing some of the topmost casinos to their knees.

Here's the crazy story of how he pulled it off.

🧵

Don Johnson grew up taking care of his uncle’s racehorses in Salem, Oregon.

After taking interest in them, he began riding them competitively at age 15.

He then became a professional jockey.

As a jockey, he had to stay on a strict routine and take medications to keep his natural weight off and remain slim.

Eventually he couldn't keep up the routine.

So, he quit the job, and went to Philadelphia to manage racetracks.

Johnson was hired to manage the Philadelphia Park.

That race track evolved into the Parx Casino, in Bensalem.

Johnson was in charge of day-to-day operations, including the betting operation.

That's where he started learning about gambling.

Between 1990 and 2010, Johnson’s career has moved from managing racetracks to being a state regulator in the gambling industry.

Around 2000, he started a business that does computer-assisted wagering on horses.
LIFE STORIES
Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
Are you planning on handing over your money to an algo trading platform?

Maybe you want to subscribe to a strategy or two and make insane returns.

Here's why you shouldn't do it, and save your money instead.

1/ Maybe you want to have a strategy development company deploy such algorithms on your account with respective brokers.

Or the service itself has strategies that you just subscribe to and authorize your trading account with, and it will automatically trade your money.

2/ When it comes to @Tradetron1 there are a slew of issues.

Let's keep aside the lack of transparency and the total regulatory non-compliance for a moment.

First off, with most of the strategies, the backtests are BOGUS.

3/ Any systematic trader with even a little bit of experience will look at the strategies and tell you which ones are baloney.

Most of them are.

Don't take my word for it. Do your own due diligence.

And, those backtests aren't even for 10+ yrs. Some were done only for months.

4/ Secondly, SEBI has put rules in place on parameters like

- minimum net worth of the company
- qualifications of the fund manager
- minimum number of clients
- minimum amount to start with

and so on, for qualifying people who want to manage other people's money.
TRADING
Shravan Venkataraman \U0001f525\U0001f680\U0001f4b0
Shravan Venkataraman 🔥...
@theBuoyantMan
Have you ever had 4-5 profitable trades in a row, and you bet all your profits on your next trade feeling "in the zone" only to lose it all?

That's called as "hot-hand fallacy" bias.

I ran a poll recently to outline two classic biases we have as humans.

Thread below 👇👇


1/ *Hot-Hand Fallacy* first had its origin in the game of basketball.

If a player shoots few baskets in a row, people generally predict that the next shot will also be a basket.

This is ignoring the fact that each shot is independent of the ones that came prior.

2/ In this poll, 41.1% people voted that the batsman who hit 4 sixes in a row, will hit a sixer in the 5th ball also.

This is classic hot-hand fallacy.

Each ball's outcome is independent.

The probability is not 50% FYI (number of outcomes is not 2).

These 148 people who voted that the next ball will also be a sixer, did so because they believe that the batsman is on a hot streak, and that his streak would continue.

This is an emotional bias and is usually attached to human performance related events only.

3/ 45.3% (162) people voted that the 5th ball would be a dot ball, meaning the batsman wouldn't score anything.

These people displayed the classic "negative-recency" bias, which is also called the "Gambler's Fallacy".
TRADING

More from Trading guides

TraderLion \U0001f981
TraderLion 🦁
@TraderLion_
The best traders take advantage of alternate entries to build positions before a stock becomes obvious to the crowd.

Here are 7 lesser known Chart Patterns that are a MUST in any trader's tool box 🧵👇


#1: Alternate Pivots

Alternate pivots offer earlier entries when compared to regular pivots.

These pivots are important because:

▪️ They offer the same if not better R/R then regular pivots
▪️ Less volatility around these areas
▪️ Allow you to start positions EARLIER


#2: High Volume Close (HVC)

The HVC is created from a big volume gap up.

The close of this day is an important point for institutions to support.

If institutions are in supporting this point, price should be very responsive - making it a great, lower risk entry.


#3: Pivot Retest

The pivot retest setup happens when price retests the prior support/resistance point & then rallies back through.

This can be a powerful setup as it acts as a 'shakeout' and reverses higher with stronger hands holding the name.


#4: In The Wick Setup

We are looking for stocks that open in the wick of the prior session's bar.

The buy trigger is when price moves through the prior day's high.

The stop loss should be the low of the current day.
TRADERLION , TRADING GUIDES
Yash Dugar
Yash Dugar
@ydstartupreneur
An educational #Thread on what type of trades 1 can take & what r the rules for it.

Majorly there r 3 types of trades a trader takes :-

* Breakout Trade
* Breakout Retest Trade
* High risk reward contra trades

Disc. - All the #Stocks discussed are for educational purpose!

1/n

#Breakout Trade!

A Breakout trade is usually a trade where the price breaks a strong resistance/supply level after consolidation. These r considered strong stocks.

To add conviction to our trade we check volumes, RSI, RS etc. for confirmation.

Let's understand with e.g :-

2/n

#ADANIPOWER

It has broken strong resistance level of 135 with strong volumes on daily chart with RSI crossing 70, Prev. swing high which adds more conviction in the trade & makes it a high probability trade.

Suggestion - Add 50% qty on breakout & rest 50% wait for retest.

3/n


Breakout Retest #Trade

A Breakout retest trade is usually a trade where the price breaks a strong resistance with volumes, strong RSI & then retest the same price level with low volumes & RSI not breaking 55 on D which signifies a true retest.

Let's understand with e.g:-

4/n

#timken INDIA

It broke the strong resistance level of 2130 with strong volumes, RSI after long consolidation. After breakout it has retested it with low volumes & RSI abv 55.

Suggestion - Good risk reward here but 1 should keep S.L at breakout candle low i.e 2084 on clbs.

5/n
TRADING GUIDES
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TraderLion \U0001f981
TraderLion 🦁
@TraderLion_
There are thousands upon thousands of stocks that you can trade.

But how do you narrow it down to the best of the best?

In this thread, we'll highlight the 3 most important steps you need to take to create a Focus List (& how you can apply these lessons immediately)

👇🧵

By the end of this thread, you'll be able to:

✅ Scan quickly and effectively to build a Universe List
✅ Narrow it down further to a Weekly Focus List
✅ Find the best stocks possible to trade

It's that simple so let's jump in.

· Scan quickly and effectively to build a Universe List

🔎 Pullbacks
🔎 Breakouts
🔎 High Volume
🔎 Fundamentals
🔎 Momentum Edges

Here are the criteria you can use in your favorite scanning platform for each:

Pullbacks Edge 🚨:
· Above your favorite Key Moving Average Scan (> 10EMA, 21EMA, 50DMA)
· % Off Highs Scan (< 20%)
· Reverse Pocket Pivot Scan

Breakouts Edge 📈:
· 52 Week High Scan
· Volume > 2x Avg. Scan
· Price > 5% on Session Scan
TRADERLION , TRADING GUIDES , TRADER LION
Trendline Investor
Trendline Investor
@dmdsplyinvestor
Even the biggest handles with 100k+ followers get this simple thing wrong in charting!🤦‍♂️

This is the most important thing especially if you are analysing long term charts!🧐

So, let's get this right today!

USE LOG CHARTS 📈 FOR ANALYSING LONG TERM CHARTS!

Let’s go🧵...

1⃣ Wait, What's Log chart?

Before I define Log chart, let's look at the chart you are using daily - 'The Linear Chart'

- Linear chart is used by default in most platforms. This is probably why you never knew log charts

Wait, don't click on 'log' yet before you understand it...


2⃣ ok, so what does Linear chart mean?

Take a look at the image
- The y-axis is separated equally by 1000 points starting from 0 to 11000.
- So, any linear chart would have its y-axis equally separated by 'N' points always

And... that's where the problem lies...


3⃣ But, I don't see any problem?🤔

Ok ok.. let me explain...

- Can you look at this #TATAELXSI chart & tell me the price in '99 when it was listed? No!
- Can you draw a proper trendline in this chart? No!

Reason is because of the price congestion between '07 to '20...


4⃣ What else?🧐

- Whenever there is a price change in an instrument & it's drastic it'd be difficult to analyse on a linear chart

- Look at this example of #BTCUSD. What happened in 2021(refer to the red box)? 🤔

All this is because of the equally spaced Y-axis!

hmmm... ok🙄
TRADING GUIDES , CATAGORY TRADING
Dhanesh Gianani
Dhanesh Gianani
@dhanesh500
Watched a Brilliant Video on Powerplay Trades by @TraderLion_ @RichardMoglen featuring Mark Ritchie

Here is a compilation of past PowerPlay Trades in the Indian Markets I have tried to analyse and study (taken minimum stock advance of 75%)

Taken some past trades of @iManasArora @iArpanK @RahulKhemka16 to analyse these kind of setups

YouTube video link:

https://t.co/Oaau7X7CkG
TRADING GUIDES , POWERPLAY

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This funny but interesting anecdote was published by a statewide local daily Dinamalar. I have just translated and posting it here for rest of the nation;
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Dr. Barry J. Cooke
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1. Let's talk about the effects of #climatechange on the world's forests, with a focus on the northwest of Canada. This is also about electoral #greenwash, and my duty as public servant and right as private Canadian citizen to speak freely about what I know.

2. Why am I compelled to speak? How am I free to speak? The answer is in the federal Values and Ethics Code of Coduct (VECC).


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THEY DO READ THEM, YOU JUDGY, RACOON-PICKED TRASH BIN


If you come for Bookstagram, i will fight you.

In appreciation, here are some of my favourite bookstagrams of my books: (photos by lit_nerd37, mybookacademy, bookswrotemystory, and scorpio_books)
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Margatha Natarajar murthi - Uthirakosamangai temple near Ramanathapuram,TN
#ArudraDarisanam
Unique Natarajar made of emerlad is abt 6 feet tall.
It is always covered with sandal paste.Only on Thriuvadhirai Star in month Margazhi-Nataraja can be worshipped without sandal paste.


After removing the sandal paste,day long rituals & various abhishekam will be https://t.co/e1Ye8DrNWb day Maragatha Nataraja sannandhi will be closed after anointing the murthi with fresh sandal paste.Maragatha Natarajar is covered with sandal paste throughout the year


as Emerald has scientific property of its molecules getting disturbed when exposed to light/water/sound.This is an ancient Shiva temple considered to be 3000 years old -believed to be where Bhagwan Shiva gave Veda gyaana to Parvati Devi.This temple has some stunning sculptures.
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