BC TRADING
Saved by @Shubham51ngh

"90% of the traders lose money, But do they lose it all the time?"

Most of them do make money, its just that they give it all back.

Lets analyze why and how a trader makes and loses money
[Thread]:

 Below is the equity curve which is most traders dream.
This is equity curve of an average trader:

Most traders do make money, but they give it back to the markets .

Because of trading errors.

What are trading errors?
Trading errors are those errors which happen because of wrong Position sizing, Leverage , etc.

I am not making this up, check your P&L, 90 % of your losses would have come from less then 10% trades.

Most of these happen because of No knowledge, No plan, bad position sizing .
Now, we know what's the problem, lets talk about the solution.

1. Learn the Basics first-

If you don’t get the basics clear then how can you make money?

Learn How to use Support and resistances
Learn How to use trend lines
Learn about trend, it will solve 90% of your problem
2. Plan-

The number 1 problem is that you don’t have a plan,
And by plan I mean set of written rules.

If you don’t have a plan then you really aren't serious enough to consider making any money.

So, Make a plan.

How does a plan looks like?
3. Position sizing-

Money management is that part of your system that answers "How much?" throughout the course of the trade.

How much essentially means how big a position you should have at any given time throughout the course of a trade.
Attaching a thread on how position sizing affect the account-
https://t.co/H9UBHy0CSt

you can see that risking the appropriate amount of money is necessary for your equity curve growth.

There are two type of position sizing strategies,

1. Martingale
2. Anti-martingale
1. Martingale strategies increase the risk per trade when equity decrease.
2. Anti martingale strategies increase risk per trade when equity increases.

There are further many anti martingale strategies
I will be explaining this further in upcoming days as this thread will get super long if I do it now.

Tip-

When you start to trade ,trade small for the first 20-30 trade , at-least 1/3rd of the risk what you think you will trade.
This will give you confidence and you can follow the plan effectively when you do not have fear of losing.

4. Be ready for Black swan events.

What are black swan events?

Big gap-downs, Flash crash, Big news, Market or stock hitting Upper or lower circuit.
Think about can your account be wiped in these conditions?

If yes, then correct the parameter due to which you can have big draw-down.

4. Next is psychology, Read the book trading in the zone, that will cover all your psychology related problems.
Attaching some threads which can help you.

Thread on law of large numbers-
https://t.co/Hg0BnWGYrV

Tweets on psychology-

https://t.co/1CJT0sZcUs

https://t.co/8rIYnkLKTa

These are some of the things that can help you become a better trade.

Thank you for reading till here.
Tagging some accounts from where you can learn almost everything -
@PharmaBull20_22 - Best short term trader
@sanstocktrader - Most humble person and finest price action trader
@kirubaakaran - one of the Best system trader
@sakuag333 - System trader and rising star
@AnandableAnand - Experienced System and discretionary trader
@sohamtweet - Bade bhai and Finest algo trader
@jitendrajain - All rounder, system trader.
@quatltd - Best algo trader in stocks.
@ST_PYI - Price action master and super humble person.

More from Trader knight

Trader knight
Trader knight
@Traderknight007
A thread on SCALING IN - OUT METHOD -


What is scaling in - out?

1. Scaling in is adding on to the positions when they move in our favor (Pyramiding).

2. Scaling - out is exiting the portion of the position when the trade moves in our favor.

I have explained about pyramiding in previous tweets.

// Why use scaling out instead of exiting all position at once ?

When you are using ALL - out method where you exit positions at once, mostly you use wider Trail SL as you want to capture big moves and exit all when trail sl hits.

The problem with this method is that either you make too big or many times your medium size winners turns out to become Scratch trades.

So, when we use the scaling out method, we are trying to capture most of our medium size trades , so that they do not turn into scratch trades.

// How to use scaling out method -

Say we have to got a signal to enter in a trade, and we have to buy 1200 qty according to our Position sizing.

So, we have to divide this 1200 qty into parts, how much? It depends on you.

We can divide into 3 parts, each part 400 qty.
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Trader knight
Trader knight
@Traderknight007
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
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Trader knight
Trader knight
@Traderknight007
A thread on Trend-lines


// What are trend-lines?

Trend-lines are support and resistance lines which are formed by connecting Important swing points.

The beauty of using them is that We can use them when stock is not Respecting the Horizontal S&R zones, they can indicate us when the trend may change.

// Things To consider while Making trendlines?

• A trendline formed by using 3 Major-Swing points is a potential trendline, But we will also use 2 points to form a trendline, will discuss how, as you read further.

• Trendline can be formed by two ways-

1. Wicks-

In this method we only connect the wicks to make a trendline, this is a precise way of making a trendline.


// Why only connect the wicks?

There are two type of levels - Precise and Less precise (Which we call zones).

So what we are doing is by only connecting the wicks we are making a precise level where we can take trades, either Mean reversion or Breakout trades.

Examples-
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Trader knight
Trader knight
@Traderknight007
Are we Inherently Risk takers or Risk averse?

A thread-


You might have heard this word “Mental capital”

What does it mean actually ?

In the context of markets, It's the Risk that our mind is able to digest seeing the P&L.

If we breach this ceiling of Risk ,Our mind goes berserk, and we are not able to take rational decisions.


So can we increase this Mental capital level?

Let's dive into my story of how My mental capital levels changed over time, that will answer the question that are we inherently Risk takers or Risk averse.

When I started trading a few years back, with about 3 lakh capital, I was not a greedy person, and I had limited expectations from the markets.

Like every other beginner, First 1.5 years were great, made a lot of money,

which I wasn't even expecting to make, turned that 3 lakh to more than 12+ lakhs in that period.

This was only possible by taking huge leverage, which i didn’t know at that time was a big mistake i was doing.
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Trader knight
Trader knight
@Traderknight007
Pyramiding 101 👇
https://t.co/p7EnhB2Ztr
SCREENERS

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1/x Vanna is back & ready to turn back on the charm! Overnight the market hit our weeklong target of **3705 and pulled back... We were able to take profits & play for a bit of morning digestion. It’s been a nice +3.5% in a week w/a few extra scalps along the way...But the best


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I'm having difficulty seeing the need for any other currency in the world other than G$.

If it works, and it is decentralized, then why would we need more than one global-reach currency?

If it does the job perfectly, then why do we need another?

I don't mean there won't be others. What I mean is that maybe Crypto UBI will be like the existing non-democratic crypto market ranking. There will be a first-place market cap amount, and exponential decay to the #2, #3, #4, etc.

This is in contrast to the simplistic view where we assume there will be X systems and they all have more or less the same abstract Y market cap or reach, and they all add up to an integrated system with X*Y market cap.

All you have to do is design the controls the way they want to be designed. If you don't introduce some unneeded damage in it, then there won't be the need to come up with another system that fixes the damage and actually does complete "the system" that we will use.

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Sarang Sood
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THREAD ON DELTA (The most important GREEK)

Many traders don't indulge in understanding GREEKS because they think they are very complicated.

There are 4 primary greeks:

Delta
Gamma
Theta
Vega

In my experience, understanding DELTA is enough to take benefit of greeks.(1/n)

Delta measures the rate of change of options price based on the directional movement of the underlying.

So this means we can know in advance (theoretically) how much an option will move with the underlying & so we can prepare our strategies accordingly. (2/n)

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Net delta is just the sum of the deltas of all the bull options (call+ & put-) minus the bear options (call- & put+).

So if we can track this, we will always be in the know of how much exposed our position is. It makes it easier then to adjust our position. (5/n)
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Varsity
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A 🧵on the basics of block and bulk deals.

Block and bulk deals are large purchases of stocks by investment banks, mutual funds, hedge funds, pension funds, FIIs, and promoters. Tracking block and bulk deals can help give you a sense of what these large players are thinking.

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Brokers facilitating the transaction are required to inform the exchange. You can track bulk and block deals on NSE & BSE:
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A thread on getting intraday (any timeframe) data to excel without any coding. Limited to only last 60 days. Fetches from zerodha chart.

👇

1. Open the chart on zerodha web in chrome. Right click and select 'Inspect'. Click 'Network' as shown in this pic.


2. Right click on the last entry on the table you see and click 'copy as cURL (bash)'


3. Go to website https://t.co/f8rhwoGLUc and paste on the left box and click 'Run'

4. The output below candles written on right of box is the ohlc, volume and oi data. Copy and paste to excel.
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