Yes, doing all of this on a basic level.
For day trading, I find it very difficult to guess the next movies. I don’t have much experience of course, but still it is tough. For delivery trades, it is relatively easy.
doing intraday swing or positional doesn’t matter, its your cup of tea. but master price action, basic is not bad meanwhile it isn’t good too
Hi,
I strongly believe that manual Back-testing is the key to become a better trader because:
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It will give you a sence of “How market is actually working?” Like what levels market is respecting or rejecting?
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With Enough manual Back-testing, you will handle different situations better while trading.
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You will know when to take trades and when not to.
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As we all know that “Practice Makes a person a person perfect”. So why not take Manual Back-testing as a practice. You will learn more than theory.
You need to test for atlest one year, more is better. But the best way is to test your strategy for 3 scenarios:
- Up trend
- Down trend
- Consolidated market (Most Important)
Look at daily chart to get general idea for market scenarios. Then Back-test you strategy in lower Time frame.
Manual Back-testing is hard and time consuming, well that is the price you have to pay the market for your learning. (No shortcuts)
Lastly, I will say that you really don’t need to learn coding or use any software.
Just observe the price action. (Higher lows, Higher highs, lower lows, lower Highs, Support and resistance, Price and volume relationship).
Happy Back-Testing,
Dewansh Jaiswal
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By basic, I mean I am learning. And it has helped me so far, along with the market going up, of course.
I can see some things from the charts, and I guess as I gain more experience I can see more things from the charts.
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Can you reply here?
Okay You wanna Know If I do check other indices before trading, I do check and offcourse including the ones you have mentioned and few others too. from my experience I have seen Nifty catches up with Nasdaq in the western and Hangseng in Asian. why not other Indices is that our economy, trade etc is closely related to both US and China.
But I take it lightly because other than uncertainity like ukraine war china conflict at border corona or some other big events they don’t catch up closely.
for example say if Nasdaq is down 3% yesterday for some reasons, but that’s not gonna affect us in anyway what happens to nifty is nifty will open at -1% but will not go down big, either it will mov up and close at 0.5% or close to -0.2%. If you think that it will go down and have your view that way you will either gonna loose money or you will just let that day go in confusion.
same apply to news, i don’t read news that much now, initial days i did but that lead me into confusion like the example i have given above, either i trade in market opposite direction or let that day go watching in confusion.
for stocks you have to catch up with both insider and outside news.
which is why I say you trade based on price action, price action will tell you where the market is headed.
you need not bother about other indices or news.
Being in stock market you need to have knowledge about everything, but too much of knowledge is not good too. you need to know for which you have to give more weightage and for which you have to take it lightly. All this will come from experience only, it cannot be taught or read somewhere in book or forum.
don’t make it too complex. as much as you keep it simple you are good. too much complex is too much confusion.
all said above are from my experience, I might be wrong too.
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Thank you for the detailed reply. I asked because even if I select a stock for trading based on a good chart, the price may still go down because of things that happen elsewhere other than India.
Reasoning is not important in TA.
You can take bestest best chart and see it fail and take the worst possible signal with great edge in opposite direction and yet see it work. Things begin to converge to edge once sample size increases. In the short run, any one can win or lose. Its just luck.
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I am yet to check my old charts, both for winners and losers to see how they moved, to see why those winners and losers happened.
Also, the rationale in selecting the stocks is the same, unless I am reasonably sure I will not select a stock to invest, and I reject many charts. So I also think there is no need to check the old charts.
What do you mean sample size increases, the points that I consider for investing look at a chart are the same for 1 chart or 20 charts, because I reject many charts and I take trades in only a few charts. Are you saying we can come to a reasonable conclusion that a particular strategy works if hundreds of bets are taken based on that strategy?
yes, a bet result is basically random. I have systems with edges, and i have absolutely no idea what any trade will do. I have no idea what system will do over next 1/3/6 months even. But eventually wins will beat losses and some money gets made. This is how trading works. I did not understand this for a long time. You can take the trade with the best edge, the best pattern, and lose on that trade. And you can do something that is completely against market behaviour, something very stupid and win on that trade through dumb luck.
This is also why fretting over result of few trades is absolutely pointless and changing/tweaking plan only based on recent events is self defeating - yet its very enticing to do. I used to do this a lot when trading with discretion, always tweaking plan based on recent stuff, new ideas etc. Only way to do this is test each change over a large sample and then check if its worth it.
To complicate further, systems can stop working too, although i have not faced this one yet and its likely rare. Probably structural changes in markets, changes in market participants and things like that could trigger a change in behavior. So we need to be prepared for that too through diversification.
Uncertainty at trade and even to some extent at system level is built into trading.
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Yes, so basically after taking a trade, the result is out of our hands, the randomness that Taleb says will come into picture. I know this and accept this, hence no greed and strict stop losses.
I am not tweaking my strategies, I am following different ones and checking each individual result, understand the chart structure, and if I am okay with it then I am taking a trade. And I am taking trades based on different approaches. So in that sense, I have not found the Holy Grail, nor I think I can create one.
Just tagging along the momentum, profiting when I am sitting on the market’s shoulders, losing occasionally when the market is dumping me, and I am not overstaying my welcome, getting what I want and getting down 
And I think, whatever changes that happen in the market will get reflected in my strategies, say if there is good retail participation, I get more opportunities, if the markets are falling, I get fewer. So I want to focus on what I can learn from the charts, increase my understanding and get better at the reasonable prediction.
I can see and sense the experience you have, experience speaks, thank you for your replies.
Successful discretionary traders apparently can also drift their style as market evolves, So how they trade can shift slightly to adapt, whereas systematic ones might be too exact and hence need periodic reviews. Good luck …
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Who wouldn’t want to get a grip on a few profitable strategies, automate them and enjoy the day for other things. Why adapt when the selected path gives what is expected, along with peace of mind, be it trading or any other activity.
I am not there yet, so I am looking everywhere grabbing bits and pieces that help me
I think people who want more control on their day to day trading typically prefer discretionary trading. Also, the outliers are perhaps more likely to trade with discretion, i read somewhere that traders in market wizards tend to trade with discretion. Could be mistaken.
Peace of mind, dunno about that. Future returns are uncertain and we are almost always in drawdown, but yes trade multiple types of systems + keep max risk low + large capital to be able to absorb any blow and without worry about day to day expenses will lead to peace of mind in trading.
I still have a lot of work to do, but one big advantage with automation is that i can choose when to work. So i can work in bursts and relax when i don’t feel like working.
I have mentioned it few times now, but for me work of Adam Grimes is what made it possible for me to trade profitably. There is no shortcut there but lots and lots of info. Look at it and see if you find it interesting. Good luck …
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For the moment, I am a discretionary trader with a very distant, remote possibility of becoming a full time trader.
And yes, I have got what you mentioned about having a peace of mind, on a very fundamental level.
I don’t remember I have heard of Adam Grimes, I will check this and even a few things are familiar to me from his work, as I am a beginner I am sure there will be things that will help me too. Thank you again.
Check his blog. Its great, running for more than a decade. Then if you feel its interesting, look at his 1st book, which is very nice. There is a lot more stuff including a free course and some paid stuff, but blog+book is probably more than enough and then you really need to just apply and adapt.
It probably wont work instantly - and for me - actual success only appeared once i started backtesting. The setups i took were fine, but my trade management was all wrong to the point that if i had just taken the trades and held without doing anything, i did a lot better. But before backtesting, we need some understanding and experience as well and here blog+book can work very well.
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Just watched the introduction video, looks promising and encouraging. I will watch all of them. Thank you very much for suggesting this. I did join a couple of such courses in the past, but I did not have this much inclination and seriousness before, so this time, I will go through the course completely. And I am accustomed to accumulating knowledge bit by bit, know that it takes time, I just hope I am able to understand it is all.
Thank you again.
things happen, thats like if some stock post results, the profit would be 50% high qoq and 30% high yoy, we tend to see it as good result and go long, but what happens is that the stock goes around 3 to 4% down on that day and you will get confused. by Eod when you search for reason you will get silly reason as “Expectation was 75% qoq and 50% yoy” but actual truth is smart money who somewhat knew the results way before would have accumulated the stock weeks before and would offload the stock on result day when retailers try to buy.
the same happens vice versa with negative or ordinary results and stock going UC. I have experienced both. so If you are trading stocks you need to face all these. These are part and parcel of stock trading. which is why I have totally avoided stocks.
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I know about somethings about these things. I know that even if the results are good, sometimes the price falls as the expectation was high, and even if the results are bad, price moves up as the market expected very bad results. So I have to check if the results are coming in a few days, and I will not take trades in these stocks, because the price can go in the opposite direction to my expectation.