When I didn’t know anything about candlesticks, patterns, reversal, volume, I was making money in the market. This was in Sept month. I was using simple breakout strategy and it worked wonders. With small capital, profits were building up. Any breakout, I was scalping and making money. Small profits were building up. 8/10 trades were successful and was happy to continue with breakout strategy. I told myself to stick to breakout strategy but then everything reversed since 01st Oct.
I lost the magic wand. Since 01st Oct, I am losing and it continues. The more I learned, the less successful I am. I am adopting the same breakout strategy but it stopped working. Then I understood the term ‘Fake breakout’. Wherever I am taking an entry, it reveses the direction I took. If I keep 10 paise above the higher high, it will hit order and reverses the direction. same is the case with sell too. If I place an order with 10 paise below the previous lower low, it hits my entry and reverses the direction. All the profits are not only wiped out but also losses are mounting.
Now I trade less often but keep watching the charts. I could clearly see the move of the market but when I take a trade, it goes against me.
Where is the issue? Timing of entry or Trend direction or Stop loss? Unable to unravel the secret of successful trader.
Confusion looms large…
I started trading last year. At that time, I didn’t know what is bracket order, Cover order or stoploss. I traded in futures and that too normal. I held overnight positions without knowing its danger. I loved the movement of the price and I enjoyed trading at that time. I lost more than what I lost this year. But when it went beyond a threshold, I stopped trading for almost 10 months. The only difference between last and this year is I lost the confidence in myself. guts to take next trade, HESITATION for fear of losing. I could clearly see the profits in front of me(in charts) but unable to trade for the fear of losing. Last year, though I lost but there was no hesitation, no fear and after a loss, I immediately took the trade in the direction of the market. The more I started to know, the more the confusion, fear, hesitation. Ideally it should be other way round. Just like a kid doesn’t know the danger of fire but as we grow and know playing with fire is dangerous, we keep ourself away from fire. But still use it in a safe way like cooking. I am waiting for the day to grow up and trade in a safe and profitable way…
I tried that too. I wanted to stick to that strategy only. Fake breakouts threw me out. Lost money is not at all an issue but what I lost is the confidence in myself and guts to take an entry. Today is the last day for the contract SBIN19OCtFut. In the pre-open market, I saw there was Re 3 increase in the SBI. I knew I should go long. Market opened with SBI at 293.60( prev close 290.35). I told myself it will go up. First and second candle went up but it didn’t go straight up, suspected there are bears in the market and moreover, it opened gapup. I read somewhere that in gap up opening, the prices would come back to close the gap. Now third and fourth candle were bearish. Now I thought my suspicion came true and on the opening of the fifth candle, I went short. Thats it. The next milli second there was no going down and the price went straight up to hit the stoploss and I am out of trade. Now I saw it was just a retracement and not reversal. I realised my mistake. I could now clearly see the uptrend, uptrend and uptrend but lost the confidence and guts to jump into the trade. Somehow the profits and success is eluding me.
I went long on sbi today and made some profits.
Even i saw those 4 bearish candles…i knew they were retracement because the volumes were too low. And i went long on the next green candle.
Even the moving averages told to go long.
I think it was your mistake to go short just by seeing red candles.
Also the thing which you read about gap up/down is completely wrong.
Me too going through the same phase like you. Last year 2018 started actively trading, in the beginning, in averages, profits profits only. But this year May-2019 onwards started losing spree. 90% of the capital got blocked in Nifty50 stocks, then shifted to “Bank Nifty Future”, then to “Bank Nifty Options”. At present continuing in “BN options” with little left capital. @kichap
I just stuck to one stock SBI because of tracking the price movement on a day to day basis. I too tried NIFTY future but then calculating risk:reward ratio and entry/exit/sl at that right moment was difficult. Hence i stuck to one stock which had liquidity and in Nifty 50 pack. Probably my mind is not doing the calculation faster as it should for a day trader
As we are going through the same phase, I suggest you to start “Bank Nifty Options” trading with 1 lot only (20 units) Rs.5000/- enough at a time. (I made huge profits on BN Options with more than 1.5 Lacs investement at a time, in the beginning but then, there also started losses.) @kichap
It makes sense to trade less quantity in cash market when you are not 100% sure of the direction. SBIN has a lot size of 3000 and one wrong calculation can cause a five-figure loss. You should trade a smaller quantity (say 1000 in this case) in cash market instead of risking more money in futures when you don’t have full clarity. Cash market allows you to add or partially exit your position, so you can manage risks even when you are wrong.
@kichap nothing ,indian stock market is simply a gambling den. The moment retail traders take position there are algo trades of FIIs that take the exact opposite position to first kick us out of the trade. Once that is achieved trade may move in our direction.
Even if sometimes u r lucky to go in institution direction they will target ur trailing stoploss and make u exit with small profits. Once u r put again it will boom up
Pls join a trading company and dont further lose hard earned money.
I understand smaller size will have less risk exposure. but trading 1 lot of SBI future would cost me 210 - 220/- which is roughly .07 paise for breakeven. so even I could get 20 paise, I would end up with 400/- after all taxes(.20 * 3000 = 600 - 220). but if trade in equity and qty is 1000, my breakeven would be at least 20 paise if I am lucky to get 1000 shares in one order. if there are multiple executed orders on one side, then the brokerage needs to be calculated for each executed order. same is the case with sell side. so what is the profit ?
What you call as a magic wand, was actually a monotonous market where your plain and raw strategy worked. Now as soon as market changed, both stated opposing each other. Now either find a strategy for this type of market, else wait for your type of market and dive with double captial
