I have moved to another blog as some extra features were required to express a trading system which I have derived, which is neither for sale or disclosure. However, anybody with a basic knowledge of technical analysis would find it interesting.

For invite, please email to – novicetrader at eim dot ae

• Michael Marcus: Turned a $30,000 account into over $80 MILLION
• Tom Baldwin: $25,000 into over $2 Billion
• Paul Tudor Jones: Triple digit returns five years in a row.
• Ed Seykota: 250,000 percent return on his account over 16 years!
• Nicolas Darvas (the best): $25,000 into $2,25 million (in 18 months)
• Richard Dennis: Turned a $2,000 into $200 Million.  
• Jesse Livermore: $500 - $100 million - $0 - $100, million - ZERO....
• Steve Cohen: Manages billions of dollars and averaged returns of 90% during the past seven years

(1) Law of LOVE - It says in essence - "LOVE ALL PEOPLE AS YOURSELF". All other rules are subordinate to this one Law - they must NOT conflict with it. It's biblical. It applies to everything we do - as individuals - families - business teams - organizations - countries. It is Global in its reach.

(2) Law of CAUSE & EFFECT - This is an orderly universe. There are no accidents. Everything happens for a reason. For every effect there's a cause or a set of causes.

(3) Law of MIND - Thoughts objectify themselves. We 'become' what we 'think about'.

(4) Law of MENTAL EQUIVALENCY - To achieve success in any area, we must have a 'clear image' of that success in our mind a mental picture of our idea of success - a vision.

(5) Law of CORRESPONDENCE - Our outer life will mirror our 'inner' life. There is a 'direct correspondence' between our experiences and our thoughts and    more ...

Empty your mind, be formless, shapeless - like water. Now you put water into a cup, it becomes the cup, You put water into a bottle, it becomes the bottle, You put it in a teapot, it becomes the teapot. Now water can flow or it can crash! Be water my friend.
Bruce Lee.

Simplicity is the key to brilliance.
Bruce Lee

Ever since I was a child I have had this instinctive urge for expansion and growth. To me, the function and duty of a quality human being is the sincere and honest development of one's potential.
Bruce Lee

I'm not in this world to live up to your expectations and you're not in this world to live up to mine.
Bruce Lee

If you always put a limit on everything you do, physical or anything else. It will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them.
Bruce Lee

Love is like a friendship caught on fire. In the    more ...

Source: http://www.themoneyblogs.com/steve/my.blog/how-to-beat-the-market-consistently.html

There is a wonderful book about how to become wealthy and if you haven’t read it, I highly recommend that you do.  It is called “Think and Grow Rich” by Napoleon Hill.  It is not about trading.  As a matter of fact it really doesn’t tell you exactly what to do to become rich.  It is not even necessarily about how to gain financial wealth, but how to gain abundance of whatever it is that you do want in this life.  I think that for many of us financial wealth is one of our goals-it is one of the reasons (if not for some of us the only reason that we trade).  Despite this “goal” many people who take on the endeavor of trading consistently lose money in the markets.  As a matter of fact, that is the way that trading works-it is not that 60% of the people win and 40% lose, or 50% win and 50% lose...it is more like 2% of people win and 98% lose.  I don’t think that anyone has the real data on this, but the    more ...

Article: Trading Without Ego
by Ruth Barrons Roosevelt

Make no mistake about it. A trader's self concept has to be separate from the trading. Who you are as a person began before you ever thought of trading and who you will be as a person will extend beyond y   more ...

Seven Deadly Trading Mistakes - Part Four
by: Harvey Walsh

Mistake Number Four - Not Testing

Trading is a great business, it offers potential levels of income and freedom that most people can only dream of. So it's quite natural that having got the groundwork out of the way, the novice trader is eager to get clicking those buy and sell buttons and see the profits roll in. But hang on - the preparation isn't over yet!

Imagine for a moment that you decided you wanted to become an airliner pilot. You spent time and effort researching the type of aircraft you were going to pilot, you read some books on how to fly, and one day you found yourself in the cockpit at the end of the runway. Clearly, without having actually taken some time to learn how to fly this machine full of passengers,    more ...

Seven Deadly Trading Mistakes - Part Three
by: Harvey Walsh

So far we've looked at how not sticking to a strategy, and not planning our trading will inevitably lead us to loss. Now I want to talk about one aspect of planning in more detail - money management.

You're probably thinking that's a really really boring subject, but before you decide to skip this article, let me say that money management isn't just about making sure you survive long enough to turn a profit, it can also open up whole new trading opportunities to you.

Mistake Number Three - Not Understanding Money Management

There are two distinct sides to this subject, and for some unknown reason, most people only ever talk about one of those - survival - or what I call classic money management.    more ...

Seven Deadly Trading Mistakes - Part Two
by: Harvey Walsh

In part one of this series, we looked at the problem of continually switching trading strategies in the hope of finding something better, and why that can never bring us long-term success in our trading.

In this second article, I'm going to talk about a closely related problem many traders suffer from - a lack of planning.

Mistake Number Two - Not Having a Trading Plan

"If you fail to plan, then you plan to fail". I don't know who first said that, but it's a very sound piece of advise indeed. Planning is something that is all too often overlooked by traders, and yet a well drafted trading plan is one of the most important tools for success and profit.

In talking to struggling traders, I am constantly amazed at not only    more ...

Seven Deadly Trading Mistakes - Part One
by: Harvey Walsh

By studying at the most frequent reasons for failure, we can avoid making the same mistakes as the crowd, and thus turn these negative points into positives. In this series of articles, I will be looking at the seven most common mistakes I see made by traders.

Mistake Number One - Switching Strategies or "The Hunt For The Holy Grail"

The holy grail of trading - we've all looked for it - the super system that never loses. We've searched forums, read books, been to seminars, discussed in chatrooms, but the secret system that wins every time continues to elude us.

Why do we waste so much time and effort searching for something that doesn't - cannot even - exist? Because    more ...

I feel my success comes from my love of the market. I am not a casual trader. It is my life. I have a passion for trading. It is not merely a hobby or even a career choice for me. There is no question that this is what I am supposed to do with my life.

- Ed Seykota

Warren Buffett is a man who has made millions but he also started working at his father's brokerage when he was 11 years old, that's an age when most other kids were playing hide-n-seek and didn't know how to spell 'brokerage'.

This financial wizard is by recent estimates, worth $46 billion but how he got there is the fascinating story.

It all began in the family grocery store back in Omaha. Buffett's great grandfather started the store in 1869 and it was in the Buffet family until 1969, till his uncle finally retired. But it's at this store, where he began going around his neighbourhood selling gum. This was before his stint at his father's firm.

Warren Buffett told CNBC's Liz Claman, "My grandfather would sell me Wrigley's chewing gum and I would go door to door around my neighbourhood selling it. He also sold me six    more ...

Paper trading is the biggest mistake that new traders can make. This is the most counterproductive way to learn how to trade properly. When paper trading, every single trading decision is based on zero emotions. You are actually training yourself how to decide entry and exit targets based on no risk. It is a fact that the greater the risk, the greater the reward. As paper trading has zero risk, it has no reward. It will actually increase your risk to gain reward when you start to trade with real money because you have been teaching yourself how to make decisions that do not apply in the real world. When you start to make these decisions in real life, it will be financially devastating.

In order to trade properly, traders must possess 100% technical skills, but they only need to apply 15% of these skills when trading. The other 85% of the equation is keeping their emotions under control. Trading profitably is 15% technical and 85% emotional. So how do you keep your emotions in check?

To do this, you must    more ...

In financial markets, the “majority is always wrong". When the investing majority or the crowd is overly bearish, this is the best time to be buying stocks. When the crowd is overly exuberant, this is the time to be selling stocks. The financial markets work in this ironic way because not everyone can win in the market.

The Start of a Bull Market

The bottom of the market starts at a time when the stock market is weak and the general population is pessimistic. At this point most investors sell after having endured a long and torturous bear market. This extreme pessimism found at a bottom is always irrational and undeserved. Now the market is undervalued and is a bargain. Savvy investors, the “smart money”, buy bargain stocks knowing that they will be able to sell them higher in the near future. Smart money buying, called accumulation, causes stocks to rise.

The smart money often consists of operators, and corporate insiders (promoters of companies). These traders have access to    more ...

This is the text of the Commencement address by Steve Jobs, CEO of Apple Computer and of Pixar Animation Studios, delivered on June 12, 2005.

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I've ever gotten to a college graduation. Today I want to tell you three stories from my life. That's it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

It started before I was born. My biological mother was a young, unwed college graduate student, and    more ...

I came across the list below from 'Craig'. It is a great list:

By John Murphy

John Murphy's ten laws of technical trading explain the main ideas to beginners and streamline the trading methodology for experienced practitioners. The precepts define the key tools of technical analysis and show how to use them to identify buying and selling opportunities.

1. Map the trends.

Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale 'map of the market' provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term view alone can often be deceptive. Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer term trends.

2. Determine the trend and follow it.

Market trends come in many sizes - long-term, intermediate-term and short-term.    more ...

"Experienced traders control risk, inexperienced traders chase gains."

~ Alan Farley

The disciplined trader does the following:
1.Keeps accurate records
2.Demonstrates, with only minor and short losses, positive performance greater than 25% return per year;
3.Develops a unique trading plan based on his or her own personal techniques;
4.Never shares information or listens to advice from others;
5.Learns as much as possible about his or her chosen market;
6.Constantly grades his or her own adherence to a chosen trading plan;
7.Devotes as much time to the markets as possible every trading day;
8.Monitors the chosen markets every day even if he or she is not actively trading;
9.Learns new ideas to improve trading methods, but not before thoroughly testing them;
10.And finally, follows his or her set of rules as though life depended on them.

On the popular sitcom, "That '70s Show," Eric asks his father, "Bad things always seem to happen to me. Why do I have such bad luck?" His father replies, "Son, you don't have bad luck. Bad things happen to you because you're a dumb-***." Novice traders often feel like Eric. They make trade after trade and watch their account balance dwindle with each trade. They may feel unintelligent and thoughtless and think, "Why am I making so many losing trades?" At times they may wonder if they are thoroughly incompetent. But it's all a matter of perspective. If you aren't trading profitably, it isn't because you can't. It isn't because you have bad luck. It is a matter of gaining experience with the markets, and gathering rock solid, reliable knowledge about them.

Awareness is the key to high performance.    more ...

Success in stock market is being 90% right 70% of the time.

Don’t confuse brains with the bull market.

Success in the stock market usually comes to those, who are too busy to be looking for it.

Markets test patience and reward conviction

Markets can remain irrational longer than you can remain solvent.

Everyone has brain power to make money in stocks, but few have the stomach.

In the stock market, a good nervous system is more important than a good head.

Forecasts tell us more about the forecasters than the future.

Risk comes from not knowing what you are doing.

It is better to be approximately right than to be precisely wrong.

Rational people acting independently can produce irrational market results.

At stock market, money is moved from active to patient investors.

In the stock market, luck never gives, it only lends.

Fear is the foe of the faddist but a friend of the fundamentalist.

Investment managers are not beating the market, the market is beating    more ...

"One-half of life is luck; the other half is discipline - and that’s the important half, for without discipline you wouldn’t know what to do with luck."

~ Carl Zuckmeyer

Trading is a crucible of life: it distills, in a matter of minutes, the basic human challenge: the need to judge, plan, and seek values under conditions of risk and uncertainty. In mastering trading, we necessarily face and master ourselves. Very few arenas of life so immediately reward self-development--and punish its absence.

So many life lessons can be culled from trading and the markets:

1) Have a firm stop-loss point for all activities: jobs, relationships, and personal involvements. Successful people are successful because they cut their losing experiences short and ride winning experiences.

2) Diversification works well in life and markets. Multiple, non-correlated sources of fulfillment make it easier to take risks in any one facet of life.

3) In life as in markets, chance truly favors those who are prepared to    more ...

"As far as the laws of mathematics refer to reality, they are not certain; and as far as they are certain, they do not refer to reality."      ~ Albert Einstein

http://i174.photobucket.com/albums/w109/novice_trader/realtrading.jpg

by Mark Cook, featured in the Market Wizard series

If you decide to trade for a living, you have to treat it just like any other business endeavor and go into it with a plan. If you want to start a business, and all you do is walk into a bank, smile pleasantly, and ask for a $200,000 loan, do you think you'll get it? Are they going to say, "You have a really nice smile; here's the money." I don't think so. You need
to have a solid business plan. The trouble is that most people start trading without any definitive plan.

It should contain specific answers to all of the following questions:

1)What markets are you going to trade? You need to select a market that fits your personality because a market is reflection of the people who trade it.

2)What is your trading capitalization? On the one hand, you should honestly be able to say, "If I lose all this money, won't change my    more ...

By Mike Parnos of Online Trading Academy*
Posted: February 9, 2007

In the wide world of directional trading, two species exist, basically -- trend followers and contrarians. Trend followers take a "hitch your wagon to a star" approach. When they see a stock moving in a particular direction, they figure that someone smarter than they are must know something. So, they jump into the fray and hope for the best.

Whether they profit or not depends largely on when they have this epiphany. If they get in early in the trend, they may make a few bucks. If they come late to the dance, they usually discover that the party’s over, and they’re out some money.

Contrarians are a different breed. They believe that when too many people agree on a direction, they're simply confused, don't understand the situation and are in for a rude    more ...

EMAAR : Purchased on 31/01/2007 @ 12.70 and sold today @ 13.20

- Remember that there is always another trader on the other side of the trade doing the exact opposite that you are doing. Only one of you can be right.

- Waiting around for the perfect trade or the perfect opportunity will guarantee that you never trade stocks.

- Trading stocks is about probabilities, NEVER certainties. You are not smart enough to predict, with consistency, what will come next.

- Conventional wisdom is usually wrong. Trade against the crowd, not with them.

- Money, trade, and self management has always been and will always be the holy grail to trading stocks.

Source: http://www.swing-trade-stocks.com/

Trade What You See, Not What You Think.

~ Joe Ross, Trading The Ross Hook

By Linda Bradford Raschke, LBRGroup.com

Many traders quickly come to acknowledge that despite being familiar with winning strategies, systems, and money management techniques, trading success is dependent on your psychological state of mind. If you're a trader just starting out, where do you find the initial confidence to pull the trigger? How do you deal with the down times without digging yourself deeper into the hole? If you are in a hole, how do you work your way back out? How do experienced traders push through the ceiling of profitability that caps their initial trading years and make a truly fabulous living?

Trading is a performance-oriented discipline. Stress and mental pressures can affect your ability to function and impact your bottom line. Much of what has been learned about achieving    more ...

By: Anonymous

To this day, I confront the same emotions. I have learned better control and have learned the signals of impending emotional responses.

I now anticipate, control them, and put them away. They have become my friends and my teachers.

Earlier in my trading experience I had spent 18 months, five hours a day, learning and trading various platforms and methods. I treated trading as a job from the first day, no mulligans permitted. I researched, read, struggled, made error after error, modified my trading plan and finally, after 18 months I felt ready to “go live” with real money. For the record, I was making between 5 and 15 trades per trading day and over the term had made an average of 256 pips per month with a 78% correct trade record. Not a bad record. I was ready. I gathered up my $10,000 and opened my live account with a reputable brokerage.

I still laugh at my naiveté, as the broker opened my account and automatically limited my    more ...

Purchased Balaji Telefilms Ltd. on 22/01/2007 @ 132.90 and sold today @ 141.35

by Justin Small -  Dec 18, 2006   

Introduction
The key to successful trading is having a methodical approach and not being emotional about your trading decisions. Never forget that it is always best to accept when you are wrong and cut your losses where appropriate.

Technical analysis, also referred to as ‘charting’, involves the use of charts or graphs to present historical performance and price changes at a glance and the ability to use this information in order to make investment decisions.

The first golden rule of technical trading is, where possible, to keep charts as simple as possible.

Technical Analysis and Charting
Even those new to trading will be familiar with the image of a chart in relation to the financial markets. They appear on City Traders’ screens, the news, financial magazines and even the City pages of newspapers.

Investment software packages have    more ...

ABB Limited : Purchased on 08/01/2007 @ 3558.63 and sold today @ 3787.00 

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DCM Shriram Consolidated Ltd : Purchased on 22/01/2007 @ 102.10 and sold today @ 109.80

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Gammon India Ltd.: Purchased on 22/01/2007 @ 386.15 and sold today @ 420.00

I think to be in the upper echelon of successful traders requires an innate skill, a gift. It's just like being a great violinist. But to be a competent trader and make money is a skill you can learn.

Michael Marcus

As a trader it is more important to know that you will always follow your rules than it is to make money, because whatever money you make, you will inevitably lose back to the markets if you can't follow your rules.

Mark Douglas

by Doug Hirschhorn -  Sep 11, 2006   

There are times when all traders question their logic for entering a particular trade. Here Dr Doug examines how to maintain your objectivity when trading.

Perhaps one of the most challenging skills in becoming a successful trader is Maintaining Objectivity in trades. While there are a variety of factors which contribute to you losing objectivity in a given situation, there is a clear and defined path you can follow to re-gaining it. In simple terms, it is called Thinking Backwards.

The Issue
More times than not, losing objectivity occurs when you micro-manage a situation. It may be in the form of watching the tape or over-thinking a position but in essence, you lose sight of the MACRO picture or WHY you were in the trade in the first place. As a result, you make poor decisions which generate poor results.

   more ...

The market will decide how much profit to give you. Only you can decide how much to limit your loss.

Linda Bradford Raschke

Amlak purchased yesterday at 5.03 and sold today at 4.71; a terrible loss.

The techinicals were OK but the financial result declared were not upto the expectation of the market and the PE (at 57) turned negative for the price at stock market.

by John Mauldin -  Jul 17, 2006   

The rules that should be 'Utterley Simple Rules of Trading' but which we all seems to find 'Utterley Difficult!'

The world of investing/treading, even at the very highest levels, where we are supposed to believe that wisdom prevails and profits abound, is littered with the wreckage of wealth that has hit the various myriad rocks that exist just beneath the tranquil surface of the global economy. It matters not what level of supposed wisdom, or education, that the money managers or individuals in question have. We can make a list of wondrously large financial failures that have come to flounder upon these rocks for the very same reasons. Let us, for a bit, have a moment of collective silence for Long Term Capital Management; for Baring's Brothers; for Sumitomo Copper... and for the    more ...

by Dima Vonko -  Oct 16, 2006   

What are the significant factors that need to be considered when looking to create a trading system. In this article we look at how to start creating your own system.

Its long been understood by most and proven by experience that trading is a hard trade to ply, and those who decide to tread on this path have to take their bearings on a variegated sea of information, diverse and, oftentimes, controversial.  A tyro trader is flabbergasted by the panoply of approaches, trading means, and celebrated personalities as soon as he opens his first trading magazine. Poised for choice, he kicks off browsing Internet forums, turns for dubious advice to his slightly more versed acquaintances or joins one of the guru-lead sects that dispense prefabricated, moderately-priced trading wisdom to    more ...

by Frank Kollar -  Jan 25, 2007   

Stick With The Plan
This may seem like a common sense statement, but the reality of market timing is that the majority of timers "think" they can stick to a timing strategy, however when the market moves against them, as it always does as some point, they are swayed by financial news stories, the desire to be "with" the crowd, and their own emotions, often exiting the strategy at exactly the wrong time.

Think about it. Let's use a fictional market timer named Mark for this example.

Mark has a strategy he knows has, over many years, outperformed the stock market. Mark knows going in there will be times when the strategy will lose. He sees this in the historical trades. He accepts this or at least he thinks he does.

But then, the market turns against Mark's first buy or sell    more ...

Aug 18, 2005

by Brett Steenbarger

One of the most common pieces of advice trading mentors give to their students is the keeping of a trading journal.  By documenting your trading, the common wisdom holds, you can learn what you’re doing right and wrong and speed your learning curve.  I happen to be quite a fan of trading journals; indeed, I made journals a mandatory part of the training program at a Chicago-based proprietary trading firm.  All too many times, however, I found that the journals did not accomplish their purpose.  They became rote exercises that did not get to the heart of either trading problems or solutions.  So I thought in this article I’d outline the five most frequent shortcomings with journals and how these can be addressed.

The journal lacks specifics.  Many times the journal becomes an outlet for the trader, a way of venting.     more ...

“Most analysts feel they must choose between two approaches customarily thought to be in opposition: “value” and “growth”. Indeed, many investment professionals see any mixing of the two terms as a form of intellectual cross-dressing. We view that as fuzzy thinking. In our opinion, the two approaches are joined at the hip.” – Buffett

Source :  www.csus.edu/indiv/k/kuhlej/fall00/mgmt135/mo.ppt and http://www.sanjaybakshi.net/Hips_Dont_Lie.pdf

Trade @ NSE
Purchased on 08/01/2007 and sold today:
Bharat Electronics: Purcahse @ 1,289.45 and sold @ 1369.85
BHEL : Purchase @ 2,270.69 and sold @ 2370.00
HDFC : Purchase @ 1588.95 and sold @ 1650.00

Charts, in same order, as follows:

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Trade @ DFM
Purchased AMLAK on 15/01/2007 at 5.12 and sold today at 5.19 ; trade done based on below chart.

Figuratively speaking, the small trader should imagine himself as a hitch-hiker in the market. For the ordinary hitch-hiker, someone else supplies the car, chauffeur, oil and gas. When he thinks the car is about to go in his direction, he jumps aboard and rides as far as he thinks the car will go. When he notices the machine has been stopped by a red light, or is about to turn a corner and go in some other direction, or that the car is running out of gas, or the brakes failing to work properly, he steps off and figures he has secured about as long a ride as he may expect. All he has supplied in this transaction is a modest commission and whatever brains were necessary to observe and recognize the opportunity when to get on and off.

The experience of the past few years has emphasized the value of disregarding all considerations except those which relate to price movement, volume and time.    more ...

Reliance Communication - Purchase on 08/01/2007 @ 438.05 and sold today @ 452.00

Trade with marginal profit - the purchase was done early - the stock was not fully bottomed out. See the chart below:

Source : http://archive.gulfnews.com/business/Markets/10097909.html

01/19/2007 07:00 PM | By Gaurav Ghose, Staff Reporter

Dubai: Top global investors George Soros and Franklin Templeton Investments have entered the local stock market lately, according to Shaikh Khalid Bin Zayed Bin Saqr Al Nahyan, Chairman of Bin Zayed Group, the local Arabic daily Al Khaleej reported this week.

It is estimated that the foreign investors bought up to $100 million of shares from local stock markets in December, the paper said.

The entry of the two players into the local stock market indicates that these investors expect real opportunities to reap profits from UAE stock market investments, with prices reaching very low levels, said Shaikh Khaled, who is also chairman of the boards of Tamweel, Salama and Manasek companies.

On his visit to Dubai in December, Mark Mobius, managing director of Franklin Templeton Asset Management, said the company was looking at the market seriously and was in the process of hiring analysts.

When the company's local office was contacted to confirm the news, the representative said, "We definitely have not made an official release in that respect."

Harshendu Bindal, senior director, CEEMEA, Franklin Templeton Investments Ltd, added: "To me, one of two things could have happened. One, maybe    more ...

Too Busy To Blog

No attorneys - to plead my case
No opiates - to send me into outer space
And my fingers are bejeweled
With diamonds and gold but that ain't
gonna help me now
I'm trouble - yeah trouble now
I'm trouble y'all, I disturb my own town
I'm trouble - yeah, trouble now
I'm trouble y'all, I got trouble in my town...from "Trouble" by Pink


One of the awesome things that happens in the live trading room of Trending123.com is that John Lansing talks about his views, stock/sector picks and general interpretation of market activity. There is almost no place else on the web where the moderator of a live trading room is in the trenches with you day in and day out. That said, for my part, the really fascinating stuff has to do with what people in the room write about and how they express their thoughts and emotions during the trading day. This week, discussion of the concept of risk carried    more ...

Janice Dorn, M.D., Ph.D
January 8, 2006

This time we almost
Made the pieces fit
Didn't we, love?
This time we almost
Made some sense of it
Hum... didn't we, love?
This time I had the answer
Right here in my hand
Then I touched it
And it had turned to sand...Lyrics J. Webb, Sung by Barbra Streisand


It has been going on now for over 25 years of my professional life. Year after year, the faces change but the song remains the same. Some traders do magnificently, continuously grow their equity and strengthen all aspects of their capital. Others go through highs and lows and end up with mediocre performance at best. Many of these leave the markets and do not come back. The rest of the traders hang out, go from    more ...

Kahneman and Tversky presented groups of subjects with a number of problems. One group of subjects was presented with this problem.

1. In addition to whatever you own, you have been given $1,000. You are now asked to choose between:
A. A sure gain of $500
B. A 50% change to gain $1,000 and a 50% chance to gain nothing.

Another group of subjects was presented with another problem.

2. In addition to whatever you own, you have been given $2,000. You are now asked to choose between:
A. A sure loss of $500
B. A 50% chance to lose $1,000 and a 50% chance to lose nothing.

In the first group 84% chose A. In the second group 69% chose B.

The two problems are identical in terms of net cash to the subject, however the phrasing of the question causes the problems to be interpreted differently.

Source: Daniel Kahneman and Amos Tversky, "Prospect Theory: An Analysis of Decision Making Under Risk," Econometrica, 1979.

Today I closed three trades at NSE. The purchases were made on 8th January 2007 and the shares were sold today.

Share - ASSOCIATED CEMENT COMPANY
Purchased @ 1036.00
Sold @ 1084.00

Share - HCL TECHNOLOGIES
Purchased @ 604.63
Sold @ 639.00

Share - GUJARAT AMBUJA CEMENTS
Purchased @ 136.60
Sold @ 143.25

Charts given below:

Another trade completed.

Share - PUNJLLOYD

Purchase on 08/01/2007 - 1000.50

Sold today - 1074.00

By : Brett Steenbarger, Ph.D.

Source : http://traderfeed.blogspot.com/2006/12/three-pieces-of-trading-wisdom.html

Over the years, I've been the fortunate recipient of much good trading advice and wisdom from those far more experienced in the markets than me. Here are three gems that have stood me in good stead in up markets, down ones, and everything in between:

1) Focus on being profitable for the week - Individual trades may go against you and individual trading days can offer little opportunity. As a senior trader once explained to me, for the active trader, however, there are enough fresh opportunities in a week to make it reasonable to set a goal of being profitable for the week. You won't reach your goal every single week, but the mere act of setting the goal keeps you focused. For example, you don't want to lose    more ...

Executed the first trade of 2007

Share – WIPRO

Purchased on 8^th Jan 2007 @ 580.85

Sold today @ 625.00

Trade based on below chart.

This articles is published in Valueresearchonline, by Dhirendra Kumar, an acknowledged economist and analyst. It is worth reading.

Beware of Tips
By Dhirendra Kumar | Oct 03, 2006

Last week, SEBI passed an order against a Kolkata-based broker for giving stock tips on a website while himself doing the opposite of what he was asking his readers to do. A SEBI investigation has found that Mathew Easow, who has been fined Rs 20 lakh in the order, would recommend stocks on the website moneycontrol.com while he himself had already bought these scrips. When the prices of these stocks would move up after his tip appeared he would sell them, sometimes at a far lower price than the 'target' price he had publically pronounced.


The pursuit of tips is as much a part of some stock investors' life as it is of restaurant    more ...

Brett N. Steenbarger, Ph.D.

www.brettsteenbarger.com

I would describe my approach to trading as research-based trend following.  By that I mean that I attempt to ride strength or weakness in the market after it has been manifested.  I do not, however, automatically assume that any trend is my friend.  Instead, I use historical research to distinguish between trending movements that are likely to continue and those with a high probability of reversal.  This is a highly disciplined approach to trading in that it requires significant research and preparation time, as well as an ability to stick with market movements and one’s game plan. 

Source : http://www.learntrading.co.uk/article_trading_successfully.htm

Want to trade successfully? Just choose the good positions and avoid the bad ones. Poor trade selection takes a heavy toll as it bleeds your confidence and wallet. You face many crossroads during each market day. Without a system of discipline for your decision-making, impulse and emotion will undermine skills as you chase the wrong stocks at the worst times.

Many short-term players view trading as a form of gambling. Without planning or discipline, they throw money at the market. The occasional big score reinforces this easy money attitude but sets them up for ultimate failure. Without defensive rules, insiders easily feed off these losers and send them off to other hobbies.

Technical Analysis teaches    more ...

By John J. Murphy

1.Map the Trends
Study long-term charts. Begin a chart analysis with monthly and weekly charts spanning several years. A larger scale "map of the market" provides more visibility and a better long-term perspective on a market. Once the long-term has been established, then consult daily and intra-day charts. A short-term market view alone can often be deceptive. Even if you only trade the very short term, you will do better if you're trading in the same direction as the intermediate and longer term trends.


2. Spot the Trend and Go With It
Determine the trend and follow it. Market trends come in many sizes -- long-term, intermediate-term and short-term. First, determine which one you're going to trade and use the appropriate chart. Make sure you trade in the direction of that trend. Buy dips if the trend is up. Sell rallies if the trend is down. If you're trading the intermediate trend, use daily and weekly charts. If you're day trading, use daily and intra-day charts. But in each case, let the longer    more ...

BY BABU DAS AUGUSTINE (Assistant Editor - Khaleej Times)
Source:http://www.khaleejtimes.com/DisplayArticleNew.asp?xfile=data/business/2007/January/business_January80.xml&section=business&col=
4 January 2007

DUBAI — Gulf investors lost close to $450 billion in value last year as stock prices tumbled since the beginning of the year. Overall, the Middle East has nine of the 10 worst performing stock markets, plunging after a three-year, 267 per cent surge in the Dow Jones DIFC Arabia Titans 50 Index.

Total losses in the GCC markets amounted to more than $600 billion from October 2005 when most leading GCC markets such as Saudi Arabia and the UAE peaked.  Today, the Saudi market is ranked as the worst performer among emerging markets with the Saudi Tadawul Index down 53 per cent during the past 12 months. In terms of value, Saudi investors lost more than $320 billion during the past 12 months.

Leading UAE stock indices are also ranked among worst performers. While the    more ...

1) Mental Accounting. This is the tendency to value some dollars less than others. One example of this is the "House Money" effect: if you are gambling at a casino and you have been fortunate enough to win, you might tend to be more risk-seeking with your earnings than you would be with your principal.

2) Loss Aversion. This is the tendency to feel more pain by losing money than you would feel satisfaction in gaining an equal amount of money.

3) Myopic Loss Aversion. This is the tendency to focus on avoiding short-term losses, even at the expense of long-term gains. For example, this explains why people tend to buy insurance policies with low deductibles and low limits, despite it being opposite to what is clearly in their long-term best interests (i.e., most people would be best served with high deductibles and high coverage limits).

4) Sunk Cost Fallacy. This is the tendency to "throw good money after bad." It is related to    more ...

'What Trading Teaches Us About Life' is a good top 10 list from Brett N. Steenbarger, Ph.D.

Trading is a crucible of life: it distills, in a matter of minutes, the basic human challenge: the need to judge, plan, and seek values under conditions of risk and uncertainty. In mastering trading, we necessarily face and master ourselves. Very few arenas of life so immediately reward self-development--and punish its absence. So many life lessons can be culled from trading and the markets:

1) Have a firm stop-loss point for all activities: jobs, relationships, and personal involvements. Successful people are successful because they cut their losing experiences short and ride winning experiences.

2) Diversification works well in life and markets. Multiple, non-correlated sources of fulfillment make it    more ...

My One and Only New Year Resolution 

PLAN THE TRADE AND TRADE THE PLAN

Sold TATASTEEL @ 478.50 netting a GP of 5.47%

Sold BPCL @ 317.95 - Loss 2.16%

Sold HEROHONDA @ 739.70 - GP - 0.77%

Sold AMLAK @ 5.10 - Loss 8.76%

Amlak recovered 1.98% and closed at 5.13. The price recovery rate is slower than the decline rate, though, expected to speed up in the coming trading days before month end.

Amlak closed at 5.03; lost 3.54% on last trading day’s close and also saw the 52 week’s new low of 5.01. I am paying the price of not sticking to stop-loss and giving more importance to the expected price move from chart. A trade gone wrong is wrong, no matter what chart says. I should have followed the stop-loss very strictly. I have to redefine the stop-loss marks for DFM and NSE; and also a trading plan. I should close all my open positions by end of this month and then I should redefine everything and make a trade plan.

Amlak's WMS has reached the oversold situation, in same as of 4th December. The WMS at 04/12 was 96.6 and 97.6; and now at 97.8 (both) - {red circles and red lines on chart below}. It seems Amlak has bottomed out and would head for a reversal; hence, holding the position for one more trading day. 

How?

Two days’ lows to left.

 Based on:

- Delivery time required : 2 days

- Price range between O-H-L-C

- EOD data analysis

Dubai Financial Market – witnessed the bull-massacre (not a new story now). The major movers shed their prices by 3.5% to 5%, Emaar being the leader and followed by Amlak.

My stop loss is hit and I should close my position tomorrow, though, WMS (93/89) and MACD builds hope on the recovery of prices. Tomorrow the market is to be watched live and position to be closed by 12.30 pm, if no recovery.

Market indices were down, however, individual shares are in within safe limits, except ITC, again for which I haven’t received the delivery.

Purchased AMLAK @ 5.59 / SL @ 5.27

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Details later.

The market at DFM/ADSM is upbeat but could be short-lived as all tradable shares reached its peak of over bought situation or when I compare with the previous pattern, I am not able to catch any similarity. The situation as a whole is very confusing for me or might be (which has more probability) that I need to brush up my theoretical studies, for which, lately, I am not devoting much time owing to my busy day job and personal life.

The market at NSE/BSE was up today and closed at 3765 (NSE) and 13181 (BSE). I have to update the data and charts for this market too. Same problem, not being able to devout time for it. I hope, by tomorrow, I make everything in order.

It was the third day of bloodshed on Dalal Street. At closing, the Sensex was down 404.41 points at 12,995.02 while the Nifty was down 132.60 points at 3,716.90. At 2:56 pm, the 30-shares BSE Sensex was down 570 points at 12,829.65. It had witnessed high volatility in the opening session of trade. After opening flat at 13, 413.61, it had declined sharply. The BSE benchmark also slipped to a fresh intra-day low of 12,801.65, as selling continued following a sharp 400-point plunge on Monday (11 December). Its high for the day was 13,492.21.

This is the third sharp day of the market decline after the party was spoiled by a surprise hike in CRR. The Sensex lost close to 980 points in just three days, in a knee-jerk reaction to the move, and the banking stocks lost the most.

If I watch market on daily basis, take the extra effort of downloading all major movers’ data and feeding to software on daily basis, I might get an opportunity to make a good killing    more ...

The trick is, when there is nothing to do, do nothing.

- Warren Buffett

Du closed at 7.13, showing a rising trend for 3 consecutive days and slightly above EMA 22 with MACD lines and bars rising. As with Emaar, Du’s WMS 5 and 10 (at 3.7 and 2.7 respectively) shows an over-bought situation. I couldn’t find a similar situation earlier at Du graphs.

Tamweel closed at 4.51, again as other shares, showing a rising trend for last 3 consecutive days and crossed EMA 22 and within the bands. MACD lines and bars in favorable position, except WMS 5 and WMS 10 are at 5.4 and shows again, overbought situation.

Amlak closed at 5.43, showing a rising trend for 3 consecutive days and is nearing the EMA 22 with MACD lines and bars rising. A very positive move, except the WMS. WMS 5 is at 4.8 (highly over-bought) and WMS 10 is at 41 (mid position). Amlak does promise a further rise and needs to be watched on next trading day (tomorrow). The point to note is a very similar graphical situation near 3^rd week of March 2006 shows a subsequent upward trend. Watch the prices till 12.00 noon and decide the position.

HL's SL also triggered.

The Log-In for Weyak was not working this morning, I have many pending things and situations to post and will try to post tomrrow. 

The topics for tomorrow :

- HL and BA's position analysis.

- ADSM/DFM entry position.

Stop loss triggered and sold BajajAuto at 2695/-. Details to be blogged during weekend.

Tomorrow morning, DFM/ADSM position to be updated as market was up for two consecutive days, might be offering an entry opportunity.

Today was bearish for both, BA and HL. BA at profitable price and above SL; however, HL is down by 1.30 and above SL.

For BA, all indicators, except MACD bar, are favourable. To be on safer side, I will to place a sell order with SL trigger as the current close price (2719.35) is only 0.87% above SL (2695.63).

For HL, its wait and watch. All indicators are favourable. 

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Still both above stop-loss. The tarding hours is not over yet, would be updating tonight.

BA - SL - 2695.63

HL - SL - 235.05

Order placed for HINLIV @ 237.00 and SL @ 232.25

Source : http://www.swing-trade-stocks.com/read-stock-charts.html

Learn how to read stock charts

Make no mistake about it. Reading charts is an art form that can be mastered! There are many factors on a chart that go into making trade decisions.

You have to be able to analyze all of these factors and come to a conclusion about whether or not to risk your hard earned money on a trade. This is what separates the novice trader from the professional. There are several things on a chart that make it worthy of trading.

The questions that you want to ask yourself about the chart are:

• What stage is this stock in?
• Is this stock in and uptrend or a downtrend?
• Is the stock at the beginning, middle, or end of the trend?
• How strong is the trend?
• Where are the trend lines?
• What wave is this stock in?
• What do the moving averages tell me?
• Was there a    more ...

Bajajauto gained further 3.76% and closed at 2743/-. SL (2%; instead two low left) raised to 2689/-.

As last week, UAE stocks are touching new lows and nearing the 52 week lows. Dana closed at 1.57; Amlak at 5.22 and Emaar at 11.55. Tamweel and Du closed at 4.12 and 6.96 respectively. None of them are in trading position, though Emaar might resist going further down. All the shares to be watched daily during next trading week for an entry. As per reports, liquidity in DFM/ADSM might rise after refund of DFM IPO (December 10^th, 2006).

BAJAJAUTO moved up and closed at 2675/- and SL is raised to 2622/-

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Today, DFM and ADSM moved down and closed at some new lows. After tomorrow's trading hours, I will update the DFM and ADSM stock charts.

Purchase order was executed and details are:

Stock - BAJAJAUTO

Purchase @ 2630/-

Today's Close @ 2656/-

Stop Loss @ 2603/-

Order placed at NSE for BAJAJAUTO. LO at 2,630/- and SL at 2,580/-

Another flat day of trading at DFM and ADSM. No much movement in prices. Amlak lost 1 fils and closed at 5.60; Du gained 5 fils and closed at 6.95; Emaar gained 5 fils and closed at 11.60; Tamweel gained 1 fils and closed at 4.30 and Dana gained 2 fils and closed at 1.65

I would wait for the price level to reach the points as today morning. Meanwhile, I am analyzing the NIFTY companies and would be able to complete and plan for this week’s trade by tonight.

Dana - Though WMS shows an oversold position, but all other indicators are unfavourable. MACD is showing negative indication and the price is also on downturn. Waiting till the price moves upward and reach 1.70

Amlak – WMS shows oversold and MACD is also positive, however, price on downturn. Waiting till the price moves upward and reach 6.25

Du – This is one share which is constantly rising in price, but for last one week. Currently, all other indicators at negative and no price target to watch. But have to review news related to DU and reversal of MACD.

Emaar – The stock which burned my hands last week. Other indicators except price movement are still positive, like, Amlak. Waiting till price reach 12.25

Tamweel – Again positive indicators, except price movement. Waiting for price to reach 4.60

One thing common to all shares – weekly price movement – downward. 

by: Geoff Turnbull

In part 1 of this article I started to look at the financial implications of giving up the day job to instead start trading full time for a living. There are more than just monetary considerations as we will see later, but for now, there are some more costs to ponder.

More Costs!

Let’s move on to equipment. Presumably you already have a PC and internet connection by virtue of the fact you are reading this on the internet. But are these both up to the job of trading full time? Again the specifications for both hardware and ISP will depend largely on your trading style, but if you’re relying on a 100Mhz Pentium II and a dial up service, you’re setting yourself up for failure. So budget for quality equipment, budget to keep it up to spec, and budget for some repairs too – expect the unexpected. Many traders make the    more ...

by: Geoff Turnbull

There can’t be many traders who haven’t at least considered the idea of telling the boss what they think of him, throwing it all in and going off to trade the stock market for a living. It’s a big risk financially, and that uncertainty is what stops most from jumping ship. Is it really possible to trade for a living?

The Dream

You know how it is, you’re sitting in a traffic jam at some unearthly hour of a particularly wet and miserable morning, on the way to the same office you have sat in for too long to remember, and you’re thinking - there must be a better way – life shouldn’t have to be like this. Your mind starts to wander and you find yourself thinking back to that stock you bought only a week ago, and how it skyrocketed    more ...

Paid the price for not sticking to the stoploss - an excess loss of 2.8%.

Sold Emaar at 11.45 and netted a loss of 6.9%.

The stoploss was hit but my order was not executed. The online order placement had some problem and the help-desk lady was saying the market is closed and that’s why the order could not be executed; though the time was only 12.55 pm. By the time I could place the sell order by phone, the market was already closed. Very terrible day and now I am having a book-loss of 5.25% and it could go up by tomorrow as it is the last day for DFM IPO.

But do the IPO subscribers till have time to sell their current shares holding tomorrow and then subscribe DFM IPO tomorrow itself? Is the selling frenzy for IPO is over by today?

Very volatile situation. Lets assume the Emaar goes down by, lets say, further 10 fils, i.e., upto 11.55 which means 6% loss and to gain back or reach back to my purchase price the Emaar should move up by 6.5% and    more ...

These are the companies for which I would analyzing data and charts to start my trading at NSE.

S. No. ** Company Name ** Industry ** Symbol ** Series ** ISIN Code

1 ABB Ltd. ELECTRICAL EQUIPMENT ABB EQ INE117A01014

2 Associated Cement Companies Ltd. CEMENT AND CEMENT PRODUCTS ACC EQ INE012A01025

3 Bajaj Auto Ltd. AUTOMOBILES - 2 AND 3 WHEELERS BAJAJAUTO EQ INE118A01012

4 Bharti Tele-Ventures Ltd. TELECOMMUNICATION - SERVICES BHARTIARTL EQ INE397D01016

5 Bharat Heavy Electricals Ltd. ELECTRICAL EQUIPMENT BHEL EQ INE257A01018

6 Bharat Petroleum Corporation Ltd. REFINERIES BPCL EQ INE029A01011

7 Cipla Ltd. PHARMACEUTICALS CIPLA EQ INE059A01026

8 Dabur India Ltd. PERSONAL CARE DABUR EQ INE016A01026

9 Dr. Reddy's Laboratories Ltd. PHARMACEUTICALS DRREDDY EQ INE089A01023

10 GAIL (India) Ltd. GAS GAIL EQ INE129A01019

11 Glaxosmithkline Pharmaceuticals Ltd. PHARMACEUTICALS GLAXO EQ INE159A01016

12 Grasim Industries Ltd. CEMENT AND CEMENT PRODUCTS GRASIM EQ INE047A01013

13 Gujarat Ambuja Cements Ltd. CEMENT AND CEMENT PRODUCTS GUJAMBCEM EQ INE079A01016

14 HCL Technologies Ltd. COMPUTERS - SOFTWARE HCLTECH EQ INE860A01027

15 Housing Development Finance Corporation Ltd. FINANCE - HOUSING HDFC EQ INE001A01028

16 HDFC Bank Ltd. BANKS HDFCBANK EQ INE040A01018

17    more ...

The average closing price for Emaar was same as  yesterday's, i.e., 11.80 but the charts still builds a hope for recovery. All indicators for today is positive and shows that the price is almost bottomed out and there could be a reversal and upward movement. Two more days left for closing of DFM IPO.

However, if the prices goes down even by one tick tomorrow (as the close price is at stoploss), for me, that could mean to close the existing trade at a loss of 4.5%

Today's charts:

The market condition at DFM and ADSM is very pathetic and there is no much of movement to make any swing trade. The movements are getting very much unpredictable and the finer points of technical analysis is also not working (may be for the time being). The reasons as given in financial magazines and newspapers are impact of Saudi investors trading actions, tension in middle east and DFM IPO, etc.

As stated in many “investor wisdom” articles, its always better to trade in 2-3 markets, so that draw-downs or sideways movements in any market would not effect the overall trading situation of the trader.

Recently, I developed interest and studied the Indian Stock Market and I found some real action there. I opened the trading account with ICICI and done the initial formalities of setting up and fund transfer.

Now I    more ...

Earlier I thought of reassessing my position, but then I realized, there is no point in doing that exercise when stoploss is already hit. Today the last traded price was 11.70 which is expected to be the start price tomorrow. If the price goes up and crosses 11.80 within the first 30 minutes, I would hold on to the position or I will sell at the prevailing price.

The stoploss of 11.80 for Emaar was hit, but my order was not executed as the price went further down to 11.70 and all this happend in the last 15 minutes of the trading hours.

I would be posting a detailed analysis tonight. Today's movement for Emaar:

It was a dull day in market. The market would be dull till the DFM IPO is over. The IPO is closing on 23^rd November 2006 (Thursday) and then the market could rally from trading week starting on 26^th November 2006. The technical indicators point towards an upcoming upward movement.

The chart for Emaar is as follows:

-- Buy low, sell high.
-- Buy high, sell higher.
-- The trend is your friend.
-- Trade in the direction of the trend.
-- Buy the dips, sell the rallies.
-- Buy the rumor, sell the fact.
-- Buy into bad news and sell into good news.
-- Buy the panic, sell the greed.
-- Buy strength, sell weakness.
-- Never short a dull market.
-- Cut losses short, let profits run.
-- When in doubt, stay out.
-- It's easier to stay out than to get out.
-- Get out when you can, not when you have to.
-- Minimize losses.
-- Never let a winner turn into a loser.
-- Never let a small loss turn into a big loss.
-- Lose your opinion, not your money.
-- Trade what you see, not what you think.
-- When in doubt, sell. You will usually get another chance in something else.
-- Quickly exit losing trades and move on to the next opportunity.
-- Date them, don't marry them.
-- You can't go broke taking profits.
-- A profitable trade is a good trade.
-- Take profits relentlessly.
-- Profits aren't as important as preserving your capital.
-- Manage the    more ...

by Ryan Cooper

This is the point where you admit you were wrong. No one can pick winning stocks 100% of the time. Accept this fact. You can only play the odds.

Let’s say we buy a stock at $20 with the plan that it will go up to $24. Now we have to decide what to do if the stock does not go up, but suddenly starts to fall. Let’s decide that if the stock moves below $19, we will accept that we were wrong about the direction of the stock, sell the position immediately, and take a small loss. By taking small losses, we preserve our trading capital, which allows us to trade again tomorrow.

Before we even get into a position, we have to measure our risk-reward ratio. In the above example, if we were correct about our stock pick, we would have made 4 points. If we were wrong in our stock pick, we would take a loss of 1 point. That is a risk-reward of 4:1. Let’s say we were only correct about our stock picks 50% of the time and we    more ...

Another day with flat trading, however, Emaar closed at an improved average of 12.15 and all other indicators still in favour.

Chart below:

Today Emaar closed at an average of 12.05

Other indicators of Triple Screen still shows positive and have a promise of rise in price after the close of DFM IPO. Waiting and watching.

Emaar chart below:

Emaar, though, down by 25 fils (because of profit taking??) on the average close for the day (closed at 12.10) looks attractive on follows counts:

Price within the lower channel of Bollinger band.

MACD improved from -0.187 to -0.161

Curve in DIF and pointing to cut DAE from bottom.

WMS (5-D and 15-D) pointing towards oversold.

Volume less.

Note : Stop loss still at 11.80 

Today the price moved upward for Emaar and closed at an average of 12.35 and had a new high of 12.55

MACD, again, improved to -0.187 and 15-D WMS still at oversold position, however, 5-D WMS has moved to 25 which means there would be a profit-taking or selling spree tomorrow. Stop loss moved to 11.80

Again star today and WMS at oversold and MACD improved to -0.234; though price declined to 11.95 and its still above my stop loss of 11.75

Expecting a turnaround and hoping to close this trade in good profit. Chart of Emaar below.

The star formation for today's Emaar's movement shows an undecided postion for TODAY. However, towards the end of trading session, there was slight upward movement in price and the MACD improved to -0.245 (yesterday : -0.254). The WMS is again at oversold position. With today's movement, the price got into the bollinger bands lower channel. Volume was very less. Altogther, it shows signs for an upcoming upward movement.

Emaar Chart - Today and Daily

Today's final view at Emaar after market close:

WMS - oversold (favorable); MACD - rising, from -0.26 to -0.254 (favourable); BB - bottom of lower channel and rising [bullish day] (favourable).

Order placed for Emaar @ 12.20

Waiting for confirmation.

Purchase order for Emaar executed at 12.30

Stop Loss : 11.75

WMS shows Emaar at over-sold position and could reverse tomorrow.

If: Opening = or > 12.05; High of the day = or > 12.40; Low of the day = or > 12.05; then consider for purchase after 12.30 pm, but, strictly after plotting daily, 30minute and 10minute charts.

Daily and 10minute chart for Emaar:

The 10-minute and 5-minute charts for Emaar shows that it has not bottomed out and still would go down. Tomorrow, the chart to be watched live at half an hour intervals and trade decision to be taken after 12.30 pm.

Not bottomed out yet, the market is going further down. The charts for Amlak and Emaar.

With market situation like this, it is better to stay away, but keep updating the data regularly to strike at right opportunity.

Amlak and Emaar charts are below:

Downtrend continues and none of yesterday's required conditions were met for the purchase of Amlak shares; hence, not purchased.

As Dr. Elder says, not having a position is a position in itself.

Amlak: 

As the conditions were not met, I didn’t trade today. Amlak price is at the lower end of Bollinger Band and chart shows that whenever it touches the lower levels, trend reverses and tomorrow the price should rise.

Tomorrow’s conditions:

Rising price from 6.68 to 6.78

High above 6.94

Low above 6.61

Purchase Price : > or = 6.80

Stop Loss : 6.60

Target : Trailing stop till triggered or based on charts - to be decided later giving preference to former choice.

Purchase Time : later than 12 noon after updating data on daily chart.

Amlak charts:

As yesterday, major movers made bearish movements, but the indicators changed in different directions:

Tamweel: No indicators favorable.

Du: No indicators favorable.

Emaar: 5-D WMS is 80 and 15-D WMS is at 86.95 - favorable. MCAD :  negative – not favorable. EMA and BB : Bearish movement – not favorable. Decision – No Buy

Amlak: 5-D WMS is 79 and 15-D WMS is at 88.46 - favorable. MCAD :  negative – not favorable. EMA and BB : Bearish movement – not favorable. Decision – On watch as today’s averaged close of 6.91 is lowest in last 50 days. The last trade was at 6.87 and if the price reaches at 6.93 (1% up on last traded price) by tomorrow in an upward trend, it would be a purchase signal. Hence, to be watched on 10-minutes graph tomorrow during trade hours. Final decision not before 12 noon.

The charts below is in same order as above mentioend stocks.

Today the major movers showed a bearish trend. Same as yesterday, waiting for “buy” WMS signal for Emaar and/or Amlak.

Today I received an email from Mr. Valdi Thorkelsson stating that "The article you refer to on the following page of your blog: http://blog.weyak.ae/novicetrader?preDate=2006-10-07%2016:31:00&post=393 entitled '38 Steps to Becoming a Trader' was written by Ron Schoemmell of
R.S. of Houston Workshop. It was originally published in Commodity Traders
Club News (CTCN) back in 1995".

Well Mr. Thorkelsson, this said article has appeared on many trading related website without any link to the source of article, hence, I was not aware of the source. I did mentioned that "I don’t know who created the original list, but should the original author read this and get in touch, I will gladly credit them for their efforts!".

Thank you for providing the source information and I am giving the right credit here.

Today was first day for trading after Eid holidays and weekend.

The major movers in ADSM were DANA with 243 trades, TAQA with 167 trades and ALDAR with 118 trades. All others were less than 500 trades and with less number of trades and no much price movements, there is no much scope for swing trade at ADSM.

At DFM; the major movers, with more than 500 trades, were AMLAK with 679, DU with 3896, EMAAR with 1031 and TAMWEEL with 3181 trades.

The daily charts for each of them are as below and none of them are at tradable point (for swing trade) as per triple screen. The WMS is not allowing, though other indicators are ok. AMLAK and EMAAR are in watch list and any one of them would be traded at correct WMS level.

So the last trade of mine ended with a marginal profit and I learned an important factor for successful trading – i.e., THE FACTOR OF FIVE.

I attempted my last trade as a day-trade but ended in keeping the trade on for more than one week and converted in into swing trade. I traded on the basis of 1-minute chart (which showed an up-trend) and after buying I had a look on 5-minute and 10-minute charts which showed a down trend. Then and there I knew the mistake I made, however, kept my position as daily and weekly charts showed an up-trend too. But I lost to grab the stock at its minimum and lost the chance to sell at maximum (well, for loosing the chance to sell at high, there is one more reason – As I was at work, I was having an informal chat with my colleague, while Du was going up and my order to sell at 6.45 got executed. When my informal meeting finished, I saw Du at 6.52 and bite my    more ...

Closed the Du trade at 6.45 at a marginal profit (Purchase Price 6.38).

I have a lot to write about the deal and the mistakes I made and lessons I learnt.

I will blog about it at leisure.

There is no much action in the market. As Du closed at an average of 6.29; moving 2 fils up compared to yesterday's close.

No change in price, as the closing price averaged to same as yesterday's 6.27 with very thin volume of trade.

Today Du moved sideways but lost 2 fils on the closing average and closed at 6.27

The day was bullish and expect an uptrend tomorrow. The low for today (6.18) was below my stop loss (6.20) but recovered within 10-15 minutes during the day.

Du had a intraday downward movement with a high of 6.38 (my pruchase price) and low of 6.25; and closed at an average of 6.29; the stop loss remains at 6.20

Today I received the books which I ordered from Amazon.

1. Encyclopedia of Chart Patterns (Wiley Trading) By Thomas N. Bulkowski
2. Technical Analysis Explained : The Successful Investor's Guide to Spotting Investment Trends and Turning Points By Martin J. Pring
3. Technical Analysis of Stock Trends, 8th Edition By Robert D. Edwards
4. Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications (New York Institute of Finance) By John J. Murphy

TLTB - To Lazy To Blog   ;)

Bullish day, stop loss trailed to 6.20 and close ended at an average of 6.34; expected to close the current trade with a profit by next week.

It didn’t work out – day trading. There is not enough margin to cover the charges and a minimum of the profit, though the prices went down towards the close of the market. Anyway, this trade is going to be, as usual, swing.

The prices are:

• Purchase - 6.38
• Stop Loss - 6.17
• Target -  6.52

Purchased shares of Du at 6.38

Sold Du at 6.39 and made a profit of 2.57% before charges, on invested equity .The charts are as follows. Meanwhile, I opened trading account with Mubasher and I started using their charting tool. It seems a very good tool and I am in the process of discovering its features.

Very bright day, good volume as compared to last one week, bullish trend for the day, price of Du improved by 6 fils, the closing average was 6.22 and stop loss trailed to 6.06

Today the last half an hour trade showed improvement in the price of Du, however, it lost 1 fils in its price on the average close of the day as compared to yesterday's close. The number of trade and volume were less than yesterday and the lowest in the last 3 weeks.

One interesting information is that the high of the day was at the close of the market and the expectation of next week is bright. The 3 day RSI is at zero and the chart shows on previous occasions whenever 3 day RSI has hit zero, it is a break-out for uptrend.

I expect to close this trade in profit by end of next trading week.

There is no improvement in price of Du, the price average closing price went down by 2 fils and closed at 6.17

The number of trades and volume as compared to yesterday were less and the chart shows RSI is within safe limits. I should continue to hold and my stop loss raised to 6.05

There is no improvement in price of Du, the price average closing price went down by 3 fils and closed at 6.19

The number of trades and volume as compared to yesterday were less and the chart shows RSI is within safe limits. I should continue to hold and my stop loss remains at 5.93

Du price showed an improvement over yesterday’s close (6.16) and closed today at an average of 6.22; the last traded price was 6.18 and the total movement for the day was sideways, probably due to profit taking by day-traders. However, RSI still shows room for improvement in price and stop loss is shifted to 5.93

Du price had an upward movement. Probably, it will cross tomorrow my purchase price. Today's last traded price was 6.23 (my purchase price). Stop loss remains at same, 5.83 and RSI shows room for further improvement in price. 

I had a second look at the charts of Du, the daily, weekly and monthly charts. The weekly and monthly charts show Du is a good buy; however, the daily chart shows I entered at a relatively high price.

Well, tomorrow market will open and I expect some positive moves which would lift the price of my holding and also my morale.

These days I am reading the third book on trading – TRADE YOUR WAY TO FINANCIAL FREEDOM by Dr. Van K. Tharp.

Van K. Tharp, Ph.D., has been a consultant to traders and investors for over 15 years and has studied over 4,000 traders during that time. He is internationally recognized as the number one psychologist and couch for traders and investors. Dr. Tharp is a sought-after speaker, developing courses and seminars for large banks and trading firms around the world. He is the author of a successful 5-volume home study course, a test designed to evaluate a trader’s strengths and weakness, eight different 3-day workshops, a monthly newsletter on systems and psychology, and numerous articles in industry publications. 

The previous two books which I read were:

- Trading for a Living by Dr. Alexander Elder

- Come Into My Trading    more ...

Let me read out a paragraph from Dr. Elder's book - Come Into My Trading Room.

Sleepwalking Through the Markets

There is only one rational reason to trade - to make money. Money attracts us to the markets, but in excitement of the new game we often lose sight of that goal. We start trading for entertainment, as an escape, to show off in front of our family and friends, and so on. Once a trader loses his focus on money, his goose is cooked.

It is easy to feel cool, calm and collected reading a book or looking at your charts on a weekend. It's easy to be rational when the markets are closed - but what happens after 30 minutes in front of a live screen? Does your pulse begin to race? Do upticks and downticks hypnotize you?    more ...

My target selling price for today was 13.85 and I was expecting to achieve that in the morning rush-hour bull run. But it didn't happen. The highest price was 13.80 at two moments - first within the first 15 minutes, and second time by 11.30am.

I was apprehensive if the price didn't reach 13.85 or what if market turned bearish and I go back to my stop loss. I decided to place my sell order near the closing time of market.

Around 12.15pm market index showed some improvement, so did Emaar (or is it the other way round?).

Market depth at those moments:

Market depth shows bearish trend, however, price movement was bullish.

Around 12.35pm, Bingo !!! My order was executed. Huge relief, considering that two days back I was contemplating a loss of 8% on my equity.In short, I made my broker richer by my transaction cost. :)  

The moment, I sold, I realized one thing, market is showing the same    more ...

Indeed today's move in Emaar surprised me. The last half an hour move from 13.20 to 13.75 was very ecstatic.

What a way to go !

I read in Dr. Elder's book, "Come into my Trading Room", trading is the most exciting thing a man can do with his clothes on. Probably he is true.

Today's Open - 13.15; High 13.75 (above my purchase price); Low 13.10 (above last day's low); Close 13.35 (average of day); Last Trade - 13.65 (can expect a good start tomorrow). Volume 25,491,114 (over 1.5 million increase as compared to yesterday). Great going !!!

Now, a look at technicals.

Today's move is bullish, but could be damped if profit taking happens. All other indicators, not very promising. I have to keep an open eye. Should I sell tomorrow in the    more ...

Today’s market move has reassured me that I made mistake in the entry. However, I am holding the position as I haven’t hit the stop loss (12.60) and with the new low (12.95) today, I expect it would happen tomorrow.

Today’s Open – 13.35; High – 13.45; Low – 12.95; Close – 13.20; Volume – 23938038

Day – bearish

RSI 3 & 5 still at 0, perhaps that explains low volume and RSI 10 made a dip to 29. Still holding on the hope to reversal, though none of the other indicators implies so. Lesson learned hard way – wait for the triple screen to say ok to enter trade. Greed would land up me like this and make each EOD analysis a pain in heart.

If I exit (which I would, as no other way) at 12.60, I would be loosing 8% of my equity and to regain that I have to make 9% in another trade, commission and transaction    more ...

During Ramadan 2005, the trade in shares of Emaar were normal and had two major and one minor up swings. It seems that as such the trade was not affected.

Today’s Emaar price movement has confirmed one thing. Never ever break the rule of Triple Screen Trade of Dr. Alexander Elder.

Open – 13.75
High – 13.85
Low – 13.25 (new low in the last 3 weeks). Would this be disastrous for me?
Close – 13.50

If I follow the 2% risk capital management plan, my trade already has hit the stop loss at 13.50 but I am not considering it as I don’t have much room to move around and its just two ticks below my purchase price. Hence, going with rule two lows at left for stop loss.

RSI 3 & 5 still at 0 (positive) but MACD shows bearish (negative).

I am holding position and hopes for a rebound.

I have to check what the trading scenario was during last Ramadan.

As reported in Khaleej Times / 21st September 2006

Dubai - Dubai Financial Market has announced that its trading week will start from September 24, 2006 (Sunday). The market will open five days a week from Sunday to Thursday, however trading sessions will remain as usual from 10am to 1pm.

The market will close on Saterday (September 23) and trading will resume as usual on Sunday (September 24).

Based on :
1. RSI 3 & 5 days at 0 which means market oversold on 3-5 days range.
2. Slow moving MACD below fast moving MACD
3. Candle stick - star (undecisive???)
4. Bolinger band - lower edge

Stop loss is at 12.60 (two lows to left).

Expectation - Reversal of trend (may be short term)

Signals ignored:
1. MACD - bearish
2. Candle stick - bearish
3. Price below EMA 22
Trying to catch the trend at the bottom. Greed factor worked very well . Will I burn my hand?

Lets see.