WiseMan Trading

  Common Gaps Sometimes referred to as a trading gap or an area gap, the common gap is usually uneventful. In fact, they can be caused by a stock going ex-dividend when the trading volume is low. These gaps are common (get it?) and usually get filled fairly quickly. "Getting filled" means that the price action at a later time (few days to a few weeks) usually retraces at the least to the last day before the gap. This is also known as closing the gap. Here is a chart of two common gaps that have not been filled for while but now filled up . Notice that after the gap the prices have come down to at least the beginning of the gap? That is called closing or filling the gap. A common gap usually appears in a trading range or congestion area, and reinforces the apparent lack of interest in the stock at that time. Many times this is further exacerbated by low trading volume. Being aware of these types of gaps is good, but doubtful that they will produce a trading opportunities. Brea...

 Winners and Losers in the Market a. Who is dominating the current swing, bulls or bears? b. Are they correct? c. If they‟re wrong: i. Where is this move likely to stall? Where is the opposite order flow likely to enter the market? ii. Where will these traders have positioned their stops? d. If they‟re right: i. Where are these traders targeting? Where are they going to take profits or lighten their position? e. If they‟re in the right direction, but late: i. Where is the worst place to be entering late in this move? Where will the late traders be stopped out? Trapped Traders a. Where is the last group of trapped traders? b. Where are they hoping to get out? How will that affect price? c. Where will they give up and bail out? How will that affect price? Expectations - Most Likely Price Movement a. What do you expect the market to do from here? i. Why do you expect that? ii. How would price have to behave prior to that move occurring? iii. Is price behaving this way? b. If the most ...

The Wheel of Success in Trading  There are three spokes that make up, what I call the Wheel of Success as it relates to trading.   The first spoke is content Content consists of all the external and internal market information that traders utilize to make their trading decisions. All traders must purchase value-added content that provides utility in making their trading decisions. The most important content being internal market information , which is simply time and price information as disseminated by the exchanges. As we are making our trading decisions in present time based on time and price, In order to "scalp" the markets effectively, we must have the most live up-to-date information . The second spoke is mechanics Mechanics is how you access the markets and the methodology that you employ to enter/exit your trades. You must master mechanics before you can enjoy any success as a trader. A simple keystroke error can result in a loss of thousands . A trader can ruin his e...

 So we will talk about the things which have been holding you back in next few blogs coming in next months taking each specific problem at one time  -  1. Cut winning trades short even though you know your trade setup is solid. 2. Failed to pull the trigger on a perfectly good trade because of fear of loss. 3. Let losing trades run hoping for a return to breakeven. 4. Added to a losing position in the hope that the market would turn around. 5. Made profits in the morning but gave them back in the afternoon. 6. Became more aggressive after losing money. 7. Took unplanned trades when the market suddenly moved. 8. Stopped trading or reduced position size after a loss. 9. Traded greater position size than prudent money management practice would advise 10. Held trades longer than they should have been held looking for a “home run.” 11. Failed to take a perfectly sound setup because the last two trades were losers. 12. After a day of big ...

we considered a few questions: Should we use a tight stop loss to cut any losses quickly or a wide stop loss to allow some room to move? How quickly should we move the stop loss to breakeven? Should we take profits at a target, or should we let the profits run, perhaps trailing a stop behind the price? In attempting to answer these questions we looked at a number of charts, chose entry criteria, and then looked at possible options for the exit. And this is what we discovered: Firstly, in each case, the profit or loss taken out of the trade was more a result of our chosen stop and exit method, not our entry. For the same entry, there were numerous possible exits, some profitable, some breakeven, and some at a loss. And secondly, we cannot know, except with hindsight, what will be the most profitable exit strategy for that particular trade. In other words - the exit is more important than the entry. The exit has more bearing on whether the trade ends in profit, or in the loss. But there ...

1. Having no plan An investor with no plan does not know what he wants. Investments are made in order to finance or accomplish something. In order to be able to invest in a proper manner, an investor should know what he is trying to achieve. He needs to have a reason he is investing for. For some investors this may be for the retirement, for some it may be the education of the children, but there are also who are willing to invest for the short-term goals such as a vacation. Having a plan helps the investor to decide in what type of securities he must invest in, how long he should invest and how much he should invest in order to get the expected return that he wants.    6 financial planning mistakes that can change life 2. Going with the market trend Some investors give too much importance to what is written in financial media. They almost always refer the Financial news before making any investment. By investing in this so-called fashionable securities, investors fall into a ...

  Since our childhood, we have been taught to be forward thinking and we have always been asked to plan long term. Don’t you think that our parents started planning before we came into this world? While we were enjoying our kindergarten days, our parents planned long term. Starting from, which school we step into to our higher education. From our marriage plans to their own retirement plans. Basis the long term investment plans, they made our future secure. They enjoyed the happiness of their family, in return for their look-ahead approach and long-term investment goals. In this article, we will understand as to how long-term investments serve us future security and much more. ---------------------------------------------------------------------------------------------------------------------------- What is long term investment? Long term investments means holding assets such as stocks, shares or securities etc for more than a year. Usually, the long-term investments means holding ...

This article is about the basics of portfolio diversification. If you want to get a more comprehensive idea of portfolio diversification. People may have huge resources at their disposal deployed in a particular asset class. For Example, Mr. Alex had a huge amount of funds which he decided to invest only in real estate.  Accordingly, he pooled a large amount of funds in the real estate market. In a couple of years,  he gained multiple amounts of returns from the investment made and therefore continued to invest in that particular asset class. He was contended without diversifying his portfolio. What if that particular asset class suddenly starts showing a bad result? What if the market does not respond well to that asset class? What if Mr. Alex had a cash crunch and liquidity becomes an issue? Like Mr. Alex, there are several investors who are unwilling or are not aware of the benefits of portfolio diversification. To resolve all the above-mentioned queries and to make the inv...

 Mistake 1 – Waiting for the so-called “right time” for investing in financial markets During our school or college days, when we are financially dependent on our parents, we think that we will invest soon when we get our first salary. On getting our first salary, we think that it is the time to rejoice the perks of all the hardships, so we treat ourselves with the best of luxury. We all know that money is what money does. Gone is the first salary and then year after year, since we get addicted to the luxury, we end up complaining that we do not have much left in hand after expending. Well. If you are spending before saving, then obviously you have no amount of savings in your hand at the end of the month. You promise to yourself that you will start investing as soon as there is salary hike. Salary increases, but you never save. Eventually in the early 30’s, when you face the boredom of responsibility you wish you would have saved at the “right time” That right time was soon after ...

 Traders often go through periodic up and down phases in stock market, but if it occurs on a frequent basis, they should introspect and try to find out the reason for the same. It may so happen that they might ride on beginner’s luck at the start of their trading career, but soon law of average will likely kick in and if they are not disciplined, they may lose quite a lot of money. In such scenarios, instead of getting depressed or cursing the market, traders should spend time in figuring out their weaknesses, improve their knowledge and become more disciplined. Many people consider trading stocks to be the simplest way of making money but it often comes out be the easiest and fastest way of losing money. Also, often you might have heard an analyst discussing on news channels that market is making new highs but you may wonder that your portfolio is not performing the same and rather end up in losses. Today you will get to understand the 5 important reasons why most traders lose mon...

If you are one of them who pays a lot of attention to financial media and base your trade based on their recommendation, here are eight facts you must know about how media affect your mind and behaviour in the long run. 1. Everyone is biased Most of the people we see on business media is paid. Since everyone is selling something, biasness is bound to occur. If you still want to base your decision on the financial media, it’s better to conduct your research rather than blindly following them. 2. People in business media are more actors than experts The anchors and analysts on financial media try to create an authority bias through good English, use of high-fi jargons and with good dress up. These are the perfect ingredient to trap people. 3. Everyone is selling Everyone is selling something or other thing in the market. Some sell you the stocks they already hold (so that they become richer and richer when you buy), some tries to sell some financial products, some newsletter or any finan...

Investment is a process or an action undertaken with an expectation to generate profit in future. In the dynamic environment, we live in it has become a very common tool used by people at almost all the levels, making proper planning of money is an integral part. However, the financial planning mistakes that a person makes can change its life. Money is a very vital part so decisions regarding how to invest money and where to invest money should be taken with utmost care. Investments, if put to good use, can yield great benefits and vice-e-versa. Therefore this tool/process called investment should be used wisely. As per Alan Lakein – “Failing to plan is planning to fail” Therefore avoiding financial planning mistakes is very important for safeguarding your and your loved one’s future. 

  Putting this blog with another last month PNL - not been able to trade much but tried to do whenever possible, the Personal Training groups size also got reduced and batches got shut down, but overall being a green month at the net which came with lots of learnings below are some I have put.  I've never seen a trader succeed whose explicit or implicit goal was to not lose. The trader who trades to not lose is like the person who lives to avoid death: both become spiritual hypochondriacs.  How can traders reduce their level of performance anxiety? Here are a few strategies that I have found to be effective : Focus on process goals when thinking about trading, rather than profits/losses – Traders like to set goals for themselves, yet often as not, monetary goals end up creating unnecessary pressures. More effective goals are ones that focus on the process of trading, such as limiting losses to two ticks if you’re a scalper or holding trades until a trailing stop is hit. ...

  Would you like to become a trader? At WISEMANTRADING   we don’t believe this is possible through just purchasing a course / Mentorship Programme. The road to trading success is a long, hard, winding road, with many potholes, false turns, and dead-ends. Sorry, but that’s a fact. There is no Holy-Grail trading solution  Just as peak performance in sport requires years of exposure to the sport, trading success comes from years of exposure to the markets, allowing constant improvement in the trader’s ability to read changes in market sentiment and react without fear, what we do at WISEMANTRADING  is to reduce your time and money spent on the market and keep you ahead 4-6 years ahead in Trading career.  Disciplined application of the following steps will get you off to a great start to becoming a trader. Please print it out and get started from step one immediately. And as you travel along this long journey to profitability, don’t forget to enjoy the process a...

  If you‟ve noticed the small number of pages in this blog, you may suspect that this is not the Greatest Trading Book – Ever! And you‟d be correct. But don‟t worry; there‟s a simple explanation. This blog will explain exactly how you can create The Greatest Trading Book – Ever! You see, it‟s not a book you can buy. It‟s something you create. Let me explain…

The best way to profit in the stock market, or any financial market, is to capture a trend in your time frame. There are other ways, like selling option premium or hedging production by selling futures contracts.                                               DECEMBER PNL AN REQUESTED BY MANY   But the majority of market participants are trying to capture a trend on their own trading or investing time frame. Buy and hold investors are betting on the long-term uptrend of the stock market over the course of their working life. Day traders try to capture trends from the time the market opens, until the time it closes, all in one day. Swing traders are looking to buy a low and then sell it as it trends higher over a few days, or sell a high price short and cover it at a lower price over a few days’. I have found that the longer the time frame, ...

  Most traders move from trading system to trading system, and over time, until they find one that suits them… one that is comfortable to run and tests well over (back-tested, then real) time. Some traders never stop looking for the “right” system. THAT is a problem. There are many systems that can generate nice profits over time. To settle on a trading s that’s right for you: First, you have to believe in the process by which the system generates trades. Who was Fibonacci, and how did he arrive at his methodology? Does it make SENSE to YOU? Maybe you’re a visual sort of person and you are drawn to Candlestick charting. Take the time to understand why the patters mean “reversal” and not just accept the “picture”. Go deep. Choose a guru that you will need to trust 100%. If you choose to take your trades from a guru, understand where his or her godliness is coming from. This can be a dangerous choice in that you are giving up control to another. Choose wisely. Second, whatever system...