Trading on 28th Nov 2008

These are today's trade details:

Today i selected HDFC because, there was a meeting going on between RBI and banks and interest rate cut is expected by the market.

Long View: Entry: 1410 Exit: 1405.5

After tracking the markets for more than an hour. I observed HDFC looking pretty strong, its moving up when markets are moving up and falling only a little when markets are falling. So went long on HDFC at 1310 at 11:12am. I decided to have a stoploss as 1300, it broke once at 11:40 but recovered within a min and came back to entry level. It broke again at 11:42 and recovered in 2 mins. At this point i am worried that HDFC could break down at any moment and make a loss. At around 11:57PM, Nifty which formed triple bottom at 2730 broke down. This just added as a stimulus to my fear, i got out immediately at 1405.5 only to see that HDFC staying firm at and above 1405. It haven't gone down any further in spite of market going down by another 1 to 1.5%.

Short View: Entry: 1478 Exit: 1470

After missing the complete upmove in HDFC, i saw it struggling to move above 1480 for about 15mins and has fallen to 1470. At this point it was clear that HDFC would have correction after a good upmove. So waited for a small pullback and shorted at 1477 at 3:05 pm. In about 4mins HDFC started to fall. At the same moment, my trader friend has messaged me to short HDFC. This boosted my confidence about the trade. HDFC has then fallen down to 1457 in about 15 mins. My over confidence about this trade has blinded me in identifying reversal points. My target of 1457 has reached but greed took over me. Finally i realized the reversal in HDFC only after it reached 1470. I got out immediately at that price.

No Lessons today.... Only thing is i am vexed of trading this way. I don't want to have this sort of trading life. Things need a change and I will make that change immediately.

Trading on 26th Nov 2008

Today is the day of rule breaking.

Trades in HDFC:


Trade 1:
Short View: Entry: 1325 Exit: 1335

This is the first trade of the day. As per my rules, at that point i am supposed to take a long position. I was having a short view about the market today, so ended up taking short position. Even after realizing it, i haven't exited the trade, but the good thing i have done is, i placed a stoploss. In the next few mins it got triggered and thrown me out.

Trade 2:
Short View: Entry: 1345 Exit: 1358.25

This time i followed the rules. Identified HDFC facing resistance at 1350 (this has been a psychological figure in my mind about HDFC). Last 3 trading days it held this value, inspite of markets falling. It finally broke today and i expected to face resistance at that level again. It strugled crossing 1350 for about 15mins, so shorted it at 1345 and decided 1355 as stop loss. Finally after 30mins it broke the 1350 resistance level and started to move up fast. After it crossed 1355, i placed a market order to exit the trade and got out at 1358.25

I have no regrets for this trade, i followed my plan.

Trade 3:
Long View: Entry: 1370 Exit: 1387

Finally i gave up my short view of the market. Identified the retracement in HDFC and jumped in at 1370. After entering the trade, i was still thinking about my previous losses and getting worried about if this could also be a loss... So i got satisfied if with just 15pts move and exited at market after it hit 1385.

Postmortem Analysis: This trades entry was a good entry. It would have paid off well had i held on to my position with good Stop Loss. Previous trade losses should not affect present trade. It only makes you worry and make you take irrational decisions.

Trades in SBI:
Short View: Entry: 1091 Exit: 1110.7


This is my second trade, where i broke my rule. Entered short into SBI, when the markets are all going up. The mistake is, i entered with a gut feeling that its going to go down, i havent verified it. Just when i was looking for an opportunity to go short on the market, i heard my friend saying exactly what i want to hear. He said, it seems like the markets are going down. I just went short immediately after i heard him. Only to realize that, i might be wrong. Even worst part is, i haven't got out immediately and let my emotions ride me. So, the remaining part of the story is obvious. It happened many times in the past and it happened again today.

Lesson:
- Never enter the market in a hurry.
- When you realized, you entered a wrong trade... get out immediately.
- Find a way to get all these lessons into your mind ASAP... You are repeating your mistakes over and over.

Trades in BHEL:
Long View: Entry: 1260 Exit: 1270


This is a perfect rule based trade. Identified a bottom formation at 1260, entered in long. Should have had a bigger picture in mind to have identified a better target. Even during this trade, my mind was occupied by the loss trades i made in HDFC, which made me worry a bit and exit with a small move.

Lesson: Try and approach every trade as a new one. Dont let your previous trades effect you decisions.

Trading on 24th Nov 2008

Pre-trading Preparation:

First of all, i was late today, i came at 10:30 (full 1hr late). This has become an irritation, which affected my trading today. It left me with a guilt feeling and it took me one hour to get out of this feeling and concentrate on markets.

Trading:

For some reason, i decided to concentrate only on HDFC today. This has taught me a few lessons. First of all here is today's HDFC chart

Trade 1:
Long View, Entry: 1360, Time: 12:02
Exit: 1370, Time: 12:19

After observing for 30mins, i noticed that the fall in HDFC is coming to an end. I noticed that pace of fall in HDFC has slowed down. At around 12:00 i noticed other stocks like Infy, Reliance and BHEL making intraday highs. Expecting a reversal to happen, took a long position at 1360. Later i noticed, bank nifty making intraday low, nifty falling again. These created doubts in me, so i took the first opportunity to exit the trade. I exited at 1370, in just 15 mins. My minimum target was 1374, which was reached 2 mins after my exit.

Lessons:
- There is no reason to go long on a stock, if you the sector itself is down. I will be avoiding the mistake from next time.
- Once you take a position, wait for Tgt or SL to hit. Otherwise your emotions will always takeover the trade.

Trade 2:
Long View, Entry: 1355, Time: 1:21
Exit: 1363, Time: 1:24

After observing HDFC for nearly 2 hrs. I realized it wont come down below 1350. The best it could fall to is 1355. So placed an order to go long on HDFC at 1355 levels. This order got triggered at 1:21pm. This is the same time when nifty has breached its morning lows, with slight increase in volume. Stocks like Reliance, BHEL have made new low in futures. This made me feel that HDFC might also break the days lows and go down further. This view is probably right, as banking is the weakest sector today.
So i decided to place a cover order, when i noticed all the scripts rebounding to test the previous lows and HDFC started to rebound from my entry. I took that as an opportunity and exited from the trade. Only to later notice that its a false breakout and i actually entered HDFC at the best price possible.

Lessons:
One of the reasons, i thought Nifty and other scripts have broken the day low and are going to go down further is because of the increase in volume during the breakout. This error is consistently made by me. Looking at historical breakouts which are successful and which have failed. Comparing the rise in volumes in each case and determining a range to each of them would avoid such mistakes. It not only avoids, it also give opportunity to enter at best price and capture a good part of the move.

Trade 3:
Long View, Entry: 1390, Time: 2:48
Exit: 1367, Time: 3:28

Noticed that HDFC is likely to break out of this narrow 20pts(1355 - 1375) consolidation at around 2:30. So i got ready to place a long order. Just when i was about to enter, i got a phone call and by the time i ended it it was 12:48 and HDFC has already broke out of its trading range, so without thinking anything, i jumped in at market price. I got it at 1390. First thing i missed out is, it was a false breakout and i entered at one of the highest prices after breakout. It tested 1390 three time in 30mins, giving me a chance to get out. I haven't noticed any of these things and was waiting for HDFC to go much above 1390 and make me rich quick.

HDFC faded the breakout and entered back into the trading range. I was caught up in emotions about not to take any loss and i finally have to take the loss at 3:28, just before markets close.

Lesson:
- Never enter the markets in a hurry. There will always be opportunities by doing cool analysis.
- Never do other things for too long during markets hours.
- When you realized you made a mistake, get out of it fast. Don't make any fuss or let your emotions takeover.

- Don't always track only one script. The one you are tracking could just not move for the whole and and you will be left having no trading opportunities.

Trading on 21th Nov 2008

These are my trades today. 

BHEL:

Trade 1:

Bearish View, Short, Entry: 1270, Exit: 1257

          I have identified the reversal quite well, so the entry was good. The exit was bad, as fear of loosing what ever money i got has made me to exit from the trade early. It is very clear that the down move is continuing. This trade showed me that i need to work on my fear of loosing profits earned.

Trade 2:

Bearish View, Short, Entry: 1252, Exit: 1245

Good thing about this trade is, instead of glorying myself about profits i made in my previous trade or cribbing bad about my bad exit. I was watching the markets and without any emotions entered short immediately after i realized that there is still some down move left. The better part is, i entered even if the price is less than my previous exit. This time the exit was better, waited for enough time to let the markets give the signal that the down move is over.

SBI:

Bearish View, Short, Entry: 1138, Exit: 1120.5

In this trade, the down move is identified very well and the entry was perfect. The down move happened in just 2 Min's after the entry, i am probably not ready for such a quick move. The anxiety created by this fast move made me fearful, so i existed the position :( even though there is a lot more down move left.

Moral of the day: Work on you fear and also work on identifying good exit points.

This is my first post on trading, would work on improving the quality of blog from next time :)