WiseMan Trading

  Impulsiveness -Replace impulsiveness with proven rules that filter emotions into the correct actions.  Impatience -Replace market noise and emotions with quantified entries and exits based on signals.  Anger -Replace animosity towards the market with respect for price action and emotionless trading.  Uncertainty -Accept the randomness of short term results and embrace the long term edge.  Laziness -Reduce stress by doing homework when the market is closed so you can be ready when the market is open.  Greed -Replace the need for immediate wins with a process for consistently growing capital.  Fear -Replace your fear of failure with confidence in your system and your ability to follow it successfully.  Ego -Replace your need to be right about specific trades with the desire to make money.  Hope -Replace the hope that a losing trade will recover with a well-planned stop loss. Stress -Reduce stress by choosing to have small losses fast instead of big, slow losses. ＞＞ ＞Profitable traders

  US markets closed in Red. But, right now, as Presidential Candidates debate is going on, US futures are higher. Asia opened lower. Australia and Japan opened lower while South Korea is closed. At 6.30 am, China Manufacturing and Services PMI came, which was better than expected. Both China and Hong Kong markets opened higher. SGX Nifty is trading about 30 points higher. Yesterday our markets were highly volatile. But still traded within a range of about 100 points. FIIs have resumed their selling after a gap of just one day. Yesterday they have sold for Rs 1457 crores. That is a huge figure as they have sold for Rs 10000 crores in last 5 days. So, on an average, they have sold for Rs 2000 crores per day, in last 6 days. Yesterday Metals, IT and Autos did well. Reliance and TCS supported the markets, otherwise Nifty would have fallen much more. On one side Reliance and TCS trying to bring markets higher and on the other side Banking stocks trying to bring the markets down. When Nifty

 US markets closed higher on Friday. Asian markets are higher. SGX Nifty is up by about 70 points. This is a good gap up, after rallying about 250 points on Friday. China Industrial profit data came positive. That is one of the reasons for bullishness in Asia. First time, in last many months, DIIs buying matched FIIs selling. FIIs have sold for Rs 2000 crores and DIIs have bought for Rs 2000 crores in Cash market. In a matter of 4 days, FIIs have sold for Rs 10000 crores. But I mentioned that, if on Friday, markets recover, then 10800 will be the support for the short term. Now SGX Nifty is above 11100. Today, the most important thing is the 'interest on interest' case in Supreme Court. Bank Nifty seems to be in over sold region. In September, Bank Nifty future fell from 25300 to 20500. That is nearly 5000 points or 20%. There are still some negatives. Corona infection continue to rise in India, Europe and US. So far about 1 million people died and WHO said the death can reach

Filter out the noise The signal is the truth. The noise is what distracts us from the truth. – Nate Silver.   As a trader, you are dealing with two types of information, signals and noise. Signals are meaningful pieces of information that cause traders to take action when the odds are in their favor. Signals are things that traders look for; technical buy signals, sell signals, or psychological signals like the market going up on bad news or down on good news, for example. The noise is all the price action, news, predictions, opinions, projections, and forecasts that add no value to your trading. Your ability to filter out the unnecessary and focus on the important things is what will keep you calm while other traders are suffering a psychological downtrend. You have to identify what type of information is meaningful to you. What are your signals? If your trading is only done at the end of the day, then intra-day price action may just be noise for you. Talking heads on financial news n

   It’s why we all signed up for the battle against the markets.  In the beginning, we read an article or saw a sales leaflet about a guy who took his last few dollars and parlayed it into millions in the markets.   It usually involved a simple secret that when revealed to you (for a few hundred dollars), you could have the same success.  Most of the time, we would chuck the article/leaflet into the trash as garbage, but at some low ebb in our psyche, the article read like the answer to our prayers.    Most of us joined the fray for the “big hit”.   Whether we 1-2-3-counted with Ken Roberts, waved with Prechter, seasoned with Bernstein, or banded with Bollinger, we all soon realized that if we were going to stay in the game, we needed something more than desire and a dream…   We needed a back-tested system that we could have confidence in.   We realized that we needed to take our emotions out of trading and look at trading like a professional…like a job.   Now, that doesn’t mean we can

  Yesterday, our markets were highly volatile. Dollar Index above 94, FII selling of Rs 2000 crore in Cash market, Negative Asian clues, etc. But KKR investment in Reliance Retail news and Reliance JIO bundling mobile post paid plan with Amazon Prime Video, Disney Hotstar, Netflix, triggered short covering in Reliance. SO markets were in good shape, until FIIs press the sell button. Bank Nifty fell 500 points, Nifty fell 200 points. Then DIIs seems to have entered and bought heavily. That triggered a powerful short covering, in a matter of few minutes, Bank Nifty shot up 500 points from the low. So traders stop loss was hit on both sides. Bank Nifty future is at 120 points premium, that too just one day before expiry. That shows the power of short covering. All these Drama happened when European and US futures were firmly in Green. US markets opened, Dow was up about 175 points, from there, sell off came and Dow closed 525 points. From intraday high to low, Dow fell about 750 points. N

Pre Stock Market Report Yesterday morning, though Asian markets were negative, we were doing well. In the afternoon, when Europe opened, the news came that US 2 Trillion suspicious money handled by Banks. Banking stocks fell in Europe. That triggered a sell off in Banking stocks here also, which were already weak. Then the sell off spread to other stocks also. Reliance fell more than Rs 80 from intraday high. Many stocks fell by 5% to 10%. But Corona Virus spread, UK considering another lock down to control Corona virus, Banking scams broke out, Nifty reversed and tested 11200 almost.  When we closed Dow future was down about 500 points. When markets opened there, it was down 950 points at lowest level, but recovered about half of the losses to close 500 points lower. In fact, Nasdaq recovered about 90% of its losses, closed just 15 points lower. Since Nasdaq was sold off already, there seems to be selling exhaustion. But here, Bank Nifty is not seeing any selling exhaustion. Yesterday

I too started as a buy and hold investor. Like any other investor, I used tools like PE ratio, PB ratio, EPS etc for my analysis. I compared the company PE ratio with the Market, Sector, Industry and the historic PE of the same company. I wasted a lot of money, energy and time after buying an undervalued stock and waiting for the market to discover the value. One fine morning, it dawned on me that I must focus on market price rather than on this ratios .So I changed the formula.    PE Ratio = Market Price / Earnings per share    TO    Market Price = Earnings per Share * PE Ratio So the Market price is a multiple of  EPS and a variable. This variable is nothing but the market sentiment. Our companies declare their results quarterly and this EPS remained a constant at least for a quarter .Then everything was clear, the focus should be on the sentiment rather than on earnings for the short term player. People may argue that projected EPS is more important and we may need to research and p

 Pre Stock Market Report, September 21, 2020 US markets closed in Red on Friday. US markets were highly volatile, due to "Quadruple Witching" Day. But Asian mrkets today morning are mostly flat. Japan is closed, Australia and Hong Kong down slightly while other Asian markets are slightly positive. But SGX Nifty is down by about 30 points. Fridays are becoming highly Volatile now. Bank Nifty collapsed more than 600 Points on Friday in less than 30 Minutes. There were lot of rumors floating around, including border tension at India Pakistan border. But it seems that the fall was mainly due to HDFC Bank and Kotak Bank. In fact, Nifty, on a close to close basis, down only about 10 points. Many frontline stocks, including Reliance. closed in Green. Bank Nifty s struggling, even after falling more than 3000 points. HDFC Bank and Kotak Bank removed from FTSE rebalance could be a major reason for this sell off. ICICI Bank closed almost flat. On Friday, Nifty future low was 11455. Now

It occupies a chapter in just about every trading book or blog ever written.   It’s been preached by every lecturing market guru since the Aden Sisters danced to the music of the gold market.   Go ahead and hire a personal trading coach and likely the second thing he or she will utter will be these chosen words (right after “Trading is speculative and only risk capital should be used.”)…   And those words are…    “Limit your losses and let your winners run” .   OK. We’ve been told.   But you didn’t have to tell us. It makes perfect sense.   “On a roll”… “Go with the flow”… “Ride the wave”… “Get out while the getting’s good”… we’ve heard both sides of those golden words massaged in numerous different phrases. We get it.   During my trading and coaching days, I re-visit students that I trained weeks or months previously and, low and behold, I would discover that many of them were actually doing the opposite... (october registrations are open )  Letting their losses run and limiting their

  US markets closed lower but off the lows. When our markets closed here, Dow futures was down about 300 points. But Dow closed about half of that only. Yet Asian markets are trading with negative bias. SGX Nifty is almost flat. Bank Nifty is still not seeing any meaningful recovery. But at the same time, it is not falling much also. Bank Nifty taking support in the range 22200-22300. Rest of the series may continue to go for consolidation. Markets have been Highly Volatile for quite some time now. Yesterday Expiry was also the same. Directionless markets with high Volatility. Plus SEBI rules creating panic & volume changes in the Exchange. Traders should be very Cautious while dealing with such type of markets. The simple Strategy to Trade in such markets is to buy gap downs and sell gap ups. Buy Drawdowns and sell rallies. Buy Drawdowns and sell rallies. FIIs and DIIs both were net sellers in Cash market yesterday. DIIs have sold for more than 1068 crores. Now this is a big Numbe

  You’ve done your homework.    Countless hours of seeking out the right guru (or piecing together your own system). Weeks of monitoring your guru’s daily trade picks (or papertrading and back-testing your homemade system). You’ve done it by the book.      No seat of the pants trading for you!     OK, now you’re confident. It’s time to put your money where your homework is.     You’ve had your coffee and your first trade signal is before you.    Confidence high. Trade made. First loss. Not a problem.     You understood before you started that successful traders both win and lose and “losing is part of the overall winning”. You’ve also heard more then once that “successful traders don’t win on every trade.”     Moving on, still confident. Next trade made. Another loss, but…     This one hurt your pride a little because you got stopped out early in the trade, and then the market rebounded and would have hit your profit target if you weren’t stopped out.     You double check.     Yep, you

markets closed higher. World markets are stabilising after two weeks of down trend. Asian markets are mixed. Japan is down while most other Asian markets are up. Yesterday, huge intraday selling was a surprise. In fact, we had many such intraday falls in last two months. The severe one was on last Monday when Nifty fell from 11800 to 11350. Now SGX Nifty is trading about 30 points higher. IT stocks shot up after guidance from HCL Tech. IT stocks shot up despite appreciation in Rupee. Banking stocks are the main drag. From September series high, Bank Nifty is down more than 3000 points. That is about 15%. HDFC Bank lead the fall. First half the Markets were flat but we Witnessed big selling pressure in second half. This was a Total Surprise. Bank Nifty fell by more than 400 Points in about half an hour & Nifty by 100 Points. Maybe S&P fitch negative outlook on the Economy was the reason for this sell off. But later durring the day we recovered 50% of the losses as well. So it wa

Managing uncertainty      Speculation is dealing with the uncertain conditions of the unknown future. Every human action is a speculation in that it’s embedded in the flux of time. —Ludwig von Mises We must accept the randomness of our short term results, and understand our long term edge to stay calm in the face of uncertainty. Traders are entrepreneurs.They don’t trade for a regular paycheck, but they exchange that uncertainty for the potential of unlimited profits. New traders have a difficult time coming to grips with the uncertainty of the markets. It’s hard for them to accept short term losses on the path to long term profitability. There  are no guarantees in trading, only probabilities and possibilities.The more unknowns you can remove from your trading, the lower your stress level will be. One of the most powerful things a trader can do to become calm is to limit their losses on a single trade. This is accomplished by limiting any one trad

How is a Trade Developed ??   Trade Development You might have read a lot about the process of Trader Development.There are tons of materials available all over the internet. As always, I have a very simple approach to this subject also. In my humble opinion there are only three stages in trader development.You need to negotiate two slippery slopes and a plateau. These stages are Structure, Tactics and Action.

Pre Market Report, September 09, 2020   U.S Markets fell 3% Yesterday. Asian Markets are mostly trading Negative. Yesterday morning, Dow future was up 350 points but when markets opened, fell 650 points. That is a whopping 1000 points fall, after falling 2 days prior to that. Nasdaq has fallen more than 10% in 3 days. Tesla fell more than 20% as it was denied entering s&P 500 index. Asian markets are down. SGX Nifty is trading around 11270. That is because we have already fallen 150 points yesterday afternoon. But still we have to see when market opens. Day before yesterday low for Nifty future was 11266. I think that will be broken easily. Bank Nifty is looking more weak and falling and making new lows. Yesterday both Nifty and Bank Nifty closed at their lowest point. India China border issues going on & Yesterday indian Border forces have issued some official Statement. Corona Virus Cases are continuing to peak up. Government is slowly opening up the Economy now. GDP Growth r

  Reality of Stock Market Reality of the Stock Market Majority of the traders fail because they do not understand the reality of the market.Most of us are not even playing the right game. Materials available over the net and the books written by failed traders teach technical analysis patterns and indicator based signals and we assume this is the reality.   The indicator based TA signals and price patterns are illusions. These are only effects. Cause is something else. Then what is the cause? Price .Indicators and patterns are derivatives of price. Then price is the cause and TA patterns the effect.So we need to focus on price.   Do not reach a conclusion so fast. Price is another effect and there is something that makes prices move in markets. What it is? It is the order flow. Orders make the market move. If the net order flow is on the buy side market will go up. If net order flow is on the sell side market will drift down. Then order flow is the real thing that moves the market. Oh

  Pre Stock Market Report, September 8, 2020 US markets were closed yesterday. So no big Global cues. Dow future recovered all their losses and trading in Green now. But still Nasdaq is trading in Red. That is not bad as money will be moving from Technology stocks to Non Technology stocks. That is sector rotation. Sector rotation happens in bull market. There are some negatives specific to India. One, DIIs keep selling heavily every day. Even yesterday, they have sold for Rs 815 crores. They have been consistent sellers for the last 9 weeks. Yesterday Idea - Vodafone event was a non event. There was nothing Major except a name change. This is nothing to be considered as Strategic alliance. Bank Nifty is looking very weak. Second, India-China border problem still going on. Over the weekend, Defense Ministers met, now Foreign Ministers meeting. Any escalation at India-China border is surely not a good news. Positive thing is that US markets are stabilising after a sharp fall. Our markets

 Pre Stock Market Report, September 07, 2020 US markets went for a roller coaster ride on Friday. Apple opened 1% higher, then went down 9%, then recovered entire losses of 9% to close positive. Tesla also the same, fell 8% and then shot up 11%. Asian markets are mixed. US futures are also mixed. One good thing is that US markets are closed today. In last one week, Nifty saw two sharp sell off. Last Monday, from 11800 to 11350. Last Friday, from Thursday's close to Friday's low, it was about 250 points SGX Nifty hit a low of 11240 on Friday night. FIIss have sold for Rs 1889 crores and DIIs have sold for Rs 457 crores. After a long time, both FIIs and DIIs have sold heavily. That is really a bad news. Nifty closed below 20DMA. U.S Markets are closed today so market should focus on local cues. As we will get direction from local Factors only. Markets are looking weak now. One side of the Economy front everything is turning negative. But Markets kept rallying. This was only becau

Trading Revolutions and story of 6 Blind men Trading Revolutions My great seniors first exposure to the Stock market was as early as (1987-95). For the last (25-33) years they were in the market either as a buy and hold investor or as a trader. Earlier, trading for a living in Indian market was only a dream. Exchange membership was confined to a group of brokers. They controlled and manipulated everything. There was no transparency and proper price information. Investors always ended up buying at the days high and selling at the low of the day. There was no way to monitor intraday moves and change the orders during the day. Commission was as high as 2%,During market falls investors were not able to get out as the brokers did not accept the orders. Their first priority was to get out of their own positions. Then the first Stock market revolution happened. National Stock Exchange started operation in 1994. Floor based trading gave way to transparent electronic trading. Investors and tr

The art of self control It’s hard enough to know what the market is going to do; if you don’t know what you are going to do, the game is lost. – Alexander Elder, The New Trading for a Living. In the late 1960s and early 1970s, studies by Stanford University demonstrated that being patient and exercising self-control are important factors in our success and happiness. The researchers performed tests in delayed gratification by giving children a choice between an immediate reward like a marshmallow, cookie, or pretzel or waiting for 15 minutes and getting two rewards.   Stanford researchers found that children who were able to wait and not eat the initial treat and receive the additional reward, went on to be more successful in life. They had higher SAT scores, better educational achievement, and lower body mass index scores. This study shows the power of impulse control. If you pass on immediate gratification and exercise self-control, you will likely experience a larger reward in the f

  Pre Stock Market Report US markets tubled. Nasdaq down more than 5%. For the last two weeks, US markets kept moving higher. Today, very important data, Jobs data, is due. So markets were over bought, ahead of a key data, profit booking came. But the profit booking is so severe that Nasdaq has fallen more than 5%. We have already seen 2 such profit booking in last one month. Last month, Nifty fell from 11400 to 11100 intraday. Last Monday, Nifty fell from 11800 to 11350 intraday. When it comes to correction or crash, we always do first. Even in 2008, we fell in January, way before other markets. Today's data on Jobs is expected to be good but Private Sector Jobs data that came on Wednesday was not good as expected. That could be one reason for such a huge profit booking. Moreover, when real Economy opens up, money should move from new Economy stocks to old Economy stocks. Going forward, Dow is likely to do better than Nasdaq. But Asian markets are not reacting as bad as US. Even D

  US markets closed at another record high. Asian markets are mostly positive. Indian markets are struggling. SGX Nifty is up by 30  Points. The talk of the Town is SEBI pledging & Margin rules. SEBI Regulations have bought in too many complications for traders who trade with higher capital. Monday Markets fell Drastically most of it was due to SEBI pledging rules & some of it was Indo - China news. Nifty is doing better but Bank Nifty has not been doing well. In fact, yesterday, whole day it was trading with negative bias, only in last one hour, it moved. Yesterday night, though European and US markets were higher, SGX Nifty was very weak, traded below 11500. Let us try to understand what is happening. Right now, we are not worried about Global cues, worried about local cues. The AGR case finally came to an end but not loan moratorium case. The hearing continues today at 2 pm. Another reason for huge volatility in the last one hour of today's trade. But that affects only B

  US markets closed at another record high. But Indian markets are facing its own issues. Yesterday was one of the worst volatile days. Bank Nifty was making more than 300 points move at times. Yesterday, lot of traders had issues with trading. The margins were not showing properly , there was loss being showed on screen Many traders pledged but system was not reflecting any limit. In last 15 minutes, there was short covering. Both Nifty and Bank Nifty spot did not move but Nifty and Bank Nifty futures moved higher. Nifty future closed more than 50 points higher than the spot and Bank Nifty future more than 100 points. That is a positive sign. Dollar index was below 92 yesterday but now above 92. Rupee appreciated yesterday due to dollar index, it was trading below 73,(helped to sustain and moveup yesterday ) FIIs, after selling for more than Rs 3000 crores the day before yesterday due to MSCI rebalancing, turned net buyers. But DIIs have turned net sellers. Most of the Asian markets a