December 11, 2008
Pivot points as a trading strategy has been around for a long time and was originally used by floor traders. This was a nice simple way for floor traders to have some idea of where the market was heading during the course of the day with only a few simple calculations.
The pivot point is the level at which the market direction changes for the day. Using some simple arithmetic and the previous days high, low and close, a series of points are derived. These points can be critical support and resistance levels.
The pivot level and levels calculated from that are collectively known as pivot levels.
Every day the market you are following has an open, high, low and a close for the day (some markets like forex are 24 hours but generally use 5pm EST as the open and close). This information basically contains all the data you need to calculate the pivot levels.
The reason pivot points are so popular is that they are predictive as opposed to lagging. You use the information of the previous day to calculate potential turning points for the day you are about to trade (present day).
Because so many traders follow pivot points you will often find that the market reacts at these levels. This gives you an opportunity to trade.
December 11, 2008 0 Comments
November 24, 2008
2. Place your first order with stop loss below two levels and concentrate on the first target and with every target achieved follow rule number 3.
3. A: For futures: If the Nifty is moving in right direction (your targets are getting achieved) do as follows:
If you are holding 1 Nifty contract book complete profit with 1st target achieve.
If you are holding 2 Nifty contracts book profit in 1 at each target you achieve.
If you are holding 5 Nifty contracts book profit in 1 at each target you achieve.
B: For cash market: The same technique as in (A) above but you need to keep a watch on NIFTY.
4. If your stop loss is cut twice then end the trading and forget the loss. If it is early (or even few hours before the close) then you can enjoy it as a holiday. (Believe me it works wonders because you have converted your loss into positive by enjoying the day as a holiday). Overtrading is a Sin.
5. Do not calculate your profit and loss on a daily basis. Do it on a weekly basis.
6. Forget your losses as soon as possible. Never try to recover your losses. Instead begin a new game everyday just like SACHIN TEDULKAR.
7. The moment stock market closes forget everything whatever happened there. Do not carry them to your home. There are two major drawbacks of doing that which distinguishes a normal trader with a winner:
You will create a bad environment at home with your family which no one wants to do. Remember whatever you are doing, you are doing for them. So who is better for you: Stock market or your family? I hope everyone have the same answer. If someone has different then please either change this or leave the group.
Psychologically it is proven that the mind which does many things separated by different other things works effectively. We as our favorite tool recommend every trader to listen to music before leaving for the stock market from home.
8. Give at least 30 minutes to understand our daily analysis and the effect of each section (Future analysis, day trading analysis, international market analysis, advance decline report and other reports if any). And these 30 minutes must be before 9:30.
9. Ideally you should have the plan for the whole day written on some piece of paper (in the language which you understand the best, this is actually the analysis of our daily analysis by you) and that paper should always be with you. Consult the paper every time you feel trapped / nervous / rumors etc. Don't ever think of any other thing (CNBC(specially that smiling guy and that pretty lady that you all know - Not to be named :-), Guys they get lakhs for every word ), any broker report, any other person's report, don't even finance minister's). Guys you are carrying a report of 100 experts and it has enough for at least that day. For the next day you will get the next report. So don't worry.
10. Do send your weekly report and do attend weekly voice one to one session for better trading/learning new skills/to modifying techniques if something wrong happens.
11. Always reach market between 9:30 - 9:45. Don't delay ever or reach early. Believe me there are drawbacks on the both sides.
I wish you all very best of luck once again. Believe me everyone knows the rules but no one follows. My job here is to make everyone adhere to the rules till you start following on a natural basis.
All the Best for new trading day :)
November 24, 2008 0 Comments
Disclaimer
