Very True reply sir!
Actually I have many more questions to ask.
Though I started with intraday trading in markets, have been a fundamental investor for past few years now. Wanted to allocate some portion of my portfolio to trading going forward and see how it plays out. Want to learn as much as possible and plan before jumping in with real trading. Zerodha is helping me by creating an opportunity to interact with an experience trader like Bharadwaj. Thanks to Zerodha!
Regarding your query about trading plan, journal and finer details, like many stalwarts of this forum and on the net have repeatedly pointed out, what works for one will not work for the other in the stock markets. Each trader will develop his/her own unique and unparalleled way of trading over a period of many years. It will be highly interesting and kind of educative to dwell deep into another traders style, but it surely cannot be replicated for the simple reason that each individuals thinking and decision making process will be as unique as a fingerprint or a retina For a young trader exposed to modern tech analysis tools my methods are very boring, primitive and traditional to say the least Further would like to stress the same rule again and again - risk management is everything… everything else is nothing !
@G.Bharadwaj Thanks for the candid reply!
I got you. Its better to keep it simple than than complicating it with too many tools etc. As long as it works why to bother.
You have put it very well
Can you say what do you think about the following:-
Set ups- Some experienced traders say they keep tweaking the set up a little bit every month or so as they go along. Some others like PeterLBrandt say they have not changed their setup (classical charting based) for decades.
- is it something like traders keep experimenting with set ups for say about 10 years and settle down permanently for a single set up or what?
(in my case, I use price action -pattern, supply demand, trend lines but every now and then I keep experimenting with some tech indicator before eventually discarding them)
Practice:- What practice does to a trader. What happens on mind / thought process when traders keep trading and trading and trading encountering losses and profits repeatedly
Professional traders actually find a method that works for them , use strict money management , have iron discipline and have a highly objective mechanical rule based trading plan that they follow on a day to day basis. Some even have a trading plan for each and every trade they take. Once they have the plan they lock it up and never share it with anyone. And hardly changes or tweaks it.
Like @G.Bharadwaj pointed out money management is everything really. Even a strategy with sub par performance like below 50% or 40% can be used to make money consistently if the trader uses strict rule based risk management.
I know, experienced traders turning to a robot emotionally is a myth. After all PeterLBrandt after 40 years of very successful trading accepted in many interviews and tweets that he still makes silly mistakes (FOMO, stop missing, large position size or missing an opportunity etc).
We are a human so long as we are alive. Trading is mostly about managing / doing thinks against human instincts
My question was how the thought process of experienced traders has evolved over period about “set ups” and what practice of trading has done to them emotionally in terms of approaching loss and profits
Only then does a trader have an edge over the others. An edge over the herd mentality of the masses.
hmm nail on the head.
In 2009, i invested a couple of lakhs to spend 2 exclusive one on one live market days with a renowned tech analyst. After thoroughly going through my simple methods he suggested a couple of indicators to improve profitability further, but by the end of the second day he candidly said, “Continue to do what you are doing without any modifications. Given your necessity to take home profits week after week and given stringent risk management principles you already have in place, I am not the person to suggest wrong or ‘not needed medicine’ for the sake of being paid a fee!”
Anyway the only changes in my trading has been the shift from equity to F around 2014 and now from F to O. Infact many times especially in the last 2-3 years i have tried to hold positions for longer, but my scalping mindset just prevents me from doing so . I tried to buy good stocks and forget in another account but for someone who has fought and won the battle against '>0.25% loss 'about 1.5 Lakh times, its just impossible to see a position in even 2 or 3 % red. So i gave up 'cos i dont want that parallel line of trading/investing mindset to slowly creep into my scalping discipline and ruin my bread and butter
But minor changes, tweaks and gearshifts do happen based on market conditions atleast couple of times an year, i will elaborate on this soon.
Thanks for that tip! But how to implant that algorithm into one’s mind and should one be worried about it if he thinks his investment is going to stick for long time without much worrying about short term fluctuations?