Technical Analysis Of Nifty 50:
Buy Nifty For A Target Of 10500+. Trade With Strict Stoploss.
Buy Nifty For A Target Of 10500+. Trade With Strict Stoploss.
This week’s question comes from Carol, who asks:
If a trader achieves $1,000 of open profit but then panic sets in what can be done to secure the trade and account with as little pain as possible, rather than close the entire position?
A few things come to mind, but the first thing that struck me here is the word panic. If you ever find yourself panicking about a trade, chances are your position size is too big for the size of your account.
This is true regardless of whether you’re managing unrealized gains or losses.
Take for example someone who has a $100,000 account. Do you think this trader will panic over an open profit of $1,000? Will they be tempted to close the position just because they’re afraid of “losing” those unrealized gains?
Not likely.
Now, if we compare the person with $100,000 of risk capital to someone with just $500, it becomes evident who is more likely to become anxious about securing a $1,000 gain.
The bottom line is that a position size that is too large for your account balance is the number one cause of emotions in trading.
But this is just one reason a trader might become anxious when managing unrealized gains. There are a few others that come to mind along with some possible solutions which we’ll discuss in this post.
Let’s begin.
The best way to avoid panicking in any situation is to have a plan. In fact, that’s true for anything you do in life, not just trading.
Before you ever put on a trade, you should have a plan. Otherwise, it simply isn’t worth the risk.
A plan keeps your logic intact. It’s also the only tangible thing you have that was created before putting capital at risk.
You see, the moment you put money at risk, you’re no longer neutral. As soon as money is on the line, you have something to lose which can compromise your judgment.
But that trade plan was created before you put a single dollar at risk. It’s the only thing that will keep you composed and thinking clearly when the market moves against you. Or worse, when things really go south.
And trust me, it will go south. It isn’t a matter of if but when which is why having a plan of attack is so important.
It doesn’t matter how you create it. It can be an Excel spreadsheet, Word document, notepad or a whiteboard. The important part is that you have one.
It also doesn’t need to be sophisticated or super detailed. Simply having your reason for entering, a few key levels and an exit strategy is enough.
In fact, I urge you to keep it simple. The more complicated and time consuming you make it, the less likely you are to stick with it over the long haul.
Once you have a plan in place, it’s as simple as seeing what the market does and following what you wrote.
- Did the pair break back below a level against your idea? Could be time to close the position.
- Did it breach a key level in the direction of your trade? Maybe it’s time to add to the position.
- Did it form a reversal signal against your position? Perhaps it’s time to get out.
These are all questions you should have answers for before ever pulling the trigger. Of course, you’ll need to keep track of the specific price levels that pertain to the pair you’re trading.
Remember, the more prepared you are for every possible outcome, the less likely you are to panic when managing open profit.
You’ll no longer be guessing or letting money control your decisions. Instead, you can just reference your plan and go from there.
We have a saying in the U.S., don’t bet the farm. It’s particularly popular in the south but applies to anyone anywhere regardless of the activity.
It means don’t risk everything you have because you’re certain about the outcome of something.
As a Forex trader, I’m sure you can relate to that right away. One of the most common errors among Forex traders is over-leveraging their account. In other words, taking a position that is too large for the size of their account.
I think Joe Vidich said it best…
If you find yourself making decisions based on the open profit or loss in your account, try cutting your risk in half. So if you’ve been risking 5% of your balance, reduce it to 2.5%.
Even if you only risk 1% of your balance but still find yourself panicking try cutting it to 0.5%. The point is to make it so small that neither fear nor greed has a hand in your trading.
Becoming a successful Forex trader is a marathon. It takes years, not days weeks or even months. Those who treat it like a sprint fall on their face before ever reaching the finish line.
The prior topic is a perfect segue into what is perhaps the most important mental shift you must make to become profitable.
Stop focusing on the money. In fact, forget about it completely.
Obviously, you still need to consider it when calculating a position size. But as far as trying to make more of it, don’t even think about it.
This is one reason I’m so against signal services. The primary driver for those who pay for such a service is to make money.
That’s a big mistake. It flies in the face of everything any successful trader has ever said.
Those who come into this market looking to make a quick buck get chewed up and spit out. And that’s putting it lightly.
Want to know how to make money in this business?
First, forget about making money. As long as you’re focused on becoming the next Forex millionaire, you’re preventing the objective mindset necessary to succeed.
Second, start focusing on the process.
- Do you have a trading plan? If not you’d better get one.
- Are you staying true to a particular style of trading or swapping out indicators every week?
- Are you continually using the 4-hour and daily time frames? Do you ever cheat?
- How’s your risk control? Are you position sizing in a way that prohibits fear or greed from taking over?
- Are you staying patient enough only to take quality setups that meet your requirements?
These are just a few of the things that will eventually make you money. But focusing on turning a profit tends to drain one’s account rather than grow it.
Here’s one last practical technique you might want to try.
Instead of holding the entire position from entry to target, experiment with taking partial profit. Just as I sometimes scale into a position, you could try scaling out when faced with managing an open profit.
For example, if you have a 100 pip stop loss, try booking half of the position once the pair has moved 100 pips in the intended direction. You can then leave the other half on to capitalize on the rest of the move.
If you live in the U.S., you may need to split your position into two blocks. But where there’s a will there’s a way.
I know some of my members have found success using this technique. It relieves some of the pressure and also makes it a risk-free trade, theoretically speaking.
To be clear, this is not something I do or even teach. I tend to approach a profitable position from an entirely different mindset.
As long as the currency pair is moving in the intended direction and thus validating my idea, I’d rather add to the position than reduce it. That’s how I maximize my winners so I can pay for the losers.
It’s the old 80/20 rule where 80% of my profits come from 20% of my trades. Some months it’s even more skewed than that.
But as always, you should experiment with different techniques. It’s the only way to find what suits you best.
You may find that booking partial profit is the way to go. Or, if you’re like me, you’ll decide to take full advantage of winning trades by scaling in rather than scaling out.
At the end of the day, trial and error is the only way to find what suits your personality.
One of the very best ways to avoid panicking when managing open profit is to have a plan. Be sure to create it before you enter the market so as to have an unbiased plan for every outcome.
Becoming a profitable Forex trader is a marathon, not a sprint. There’s no need to over-leverage your account. If you face $1,000 of open profit on a $500 account, you’re sure to panic if the market moves the slightest bit against you. Keep your position size small to mitigate the risk of emotional trading.
To make money consistently as a Forex trader, you have to forget about making money. Instead, focus on the process of becoming a profitable trader. Do that, and the money will follow.
Be sure to test various techniques for managing open profit. There’s no single best way; only the one that works best for you.
on Sunday, September 18, 2016
Failure is the highway to success. Tom Watson Sr. said, “If you want to succeed, double your failure rate.” If you study history, you will find that all stories of success are also stories of great failures. But people don’t see the failures. They only see one side of the picture and they say that person got lucky: “He must have been at the right place at the right time.”
Let me share someone’s life history with you. This was a man who failed in business at the age of 21 ; was defeated in a legislative race at age 22; failed again in business at age 24; overcame the death of his sweetheart at age 26; had a nervous breakdown at age 27; lost a congressional race at age 34; lost a senatorial race at age 45; failed in an effort to become vice-president at age 47; lost a senatorial race at age 49; and was elected president of the United States at age 52.
This man was Abraham Lincoln.
Would you call him a failure? He could have quit. But to Lincoln, defeat was a detour and not a dead end.
Would you call him a failure? He could have quit. But to Lincoln, defeat was a detour and not a dead end.
In 1913, Lee De Forest, inventor of the triodes tube, was charged by the district attorney for using fraudulent means to mislead the public into buying stocks of his company by claiming that he could transmit the human voice across the Atlantic. He was publicly humiliated. Can you imagine where we would be without his invention?
A New York Times editorial on December 10, 1903, questioned the wisdom of the Wright Brothers who were trying to invent a machine, heavier than air, that would fly. One week later, at Kitty Hawk, the Wright Brothers took their famous flight.
Colonel Sanders, at age 65, with a beat-up car and a $100 check from Social Security, realized he had to do something. He remembered his mother’s recipe and went out selling. How many doors did he have to knock on before he got his first order? It is estimated that he had knocked on more than a thousand doors before he got his first order. How many of us quit after three tries, ten tries, a hundred tries, and then we say we tried as hard as we could?
As a young cartoonist, Walt Disney faced many rejections from newspaper editors, who said he had no talent. One day a minister at a church hired him to draw some cartoons. Disney was working out of a small mouse infested shed near the church. After seeing a small mouse, he was inspired. That was the start of Mickey Mouse.
Successful people don’t do great things, they only do small things in a great way.
One day a partially deaf four year old kid came home with a note in his pocket from his teacher, “Your Tommy is too stupid to learn, get him out of the school.” His mother read the note and answered, “My Tommy is not stupid to learn, I will teach him myself.” And that Tommy grew up to be the great Thomas Edison. Thomas Edison had only three months of formal schooling and he was partially deaf.
Henry Ford forgot to put the reverse gear in the first car he made.
Do you consider these people failures? They succeeded in spite of problems, not in the absence of them. But to the outside world, it appears as though they just got lucky.
All success stories are stories of great failures. The only difference is that every time they failed, they bounced back. This is called failing forward, rather than backward. You learn and move forward. Learn from your failure and keep moving.
Below are more examples of the failures of successful people:
1. Thomas Edison failed approximately 10,000 times while he was working on the light bulb.
2. Henry Ford was broke at the age of 40.
3. Lee Iacocca was fired by Henry Ford II at the age of 54.
4. Young Beethoven was told that he had no talent for music, but he gave some of the best music to the world.
on Tuesday, July 19, 2016
Technical Analysis Of Ashok Leyland :
Short Ashok Leyland For A Target Of 87. Stoploss At Your Own Risk Levels.
Short Ashok Leyland For A Target Of 87. Stoploss At Your Own Risk Levels.
DISCLAIMER:
Investing
and Trading in any equity,future,gold,silver,forex and crude-oil is risky. My
recommendations are technical analysis based on & conceived from charts.
The information provided is not guaranteed as to accuracy or completeness. This
is my personal view only.
Please
consult your adviser or consultant or analysts before investing and/or trading.
We assume no responsibility for any transactions undertaken by them. The author
won't be liable or responsible for any legal or financial losses made by any.
on Monday, July 18, 2016
Technical Analysis Of Suntv:
Short Suntv For A Target Of 339. Stoploss @ 420.
Short Suntv For A Target Of 339. Stoploss @ 420.
DISCLAIMER:
Investing
and Trading in any equity,future,gold,silver,forex and crude-oil is risky. My
recommendations are technical analysis based on & conceived from charts.
The information provided is not guaranteed as to accuracy or completeness. This
is my personal view only.
Please
consult your adviser or consultant or analysts before investing and/or trading.
We assume no responsibility for any transactions undertaken by them. The author
won't be liable or responsible for any legal or financial losses made by any.
on Sunday, July 10, 2016
Technical Analysis Of Nifty50 :
Buy Nifty50 For A Target Of 8630. Stoploss At 8250.
Buy Nifty50 For A Target Of 8630. Stoploss At 8250.
DISCLAIMER:
Investing
and Trading in any equity,future,gold,silver,forex and crude-oil is risky. My
recommendations are technical analysis based on & conceived from charts.
The information provided is not guaranteed as to accuracy or completeness. This
is my personal view only.
Please
consult your adviser or consultant or analysts before investing and/or trading.
We assume no responsibility for any transactions undertaken by them. The author
won't be liable or responsible for any legal or financial losses made by any.
on Wednesday, July 6, 2016
Sell Ambuja Cem Fut @ 254 Tgt 250 Sl of 255.5
Sell Arvind Fut @ 337 Tgt Of 334 Sl 339.
Sell AxisBank Fut @ 538 Tgt Of 532 Sl 540.
Sell Dabur Fut @ 310.6 Tgt 306 Sl 311.
Sell Hindunilvr Fut Below 890 Tgt 880 Sl 899.
Buy KSCL Fut @447 Tgt 450 Sl 444.
Sell M&MFIN Fut @350 Tgt 344.7 Sl 353.4
Sell Petronet Fut @ 297 Tgt 292.5 Sl 299.
Sell RELINFRA Fut @ 571 Tgt 564 Sl 573.
Buy Ultracemco Fut @ 3396 Tgt 3426 Sl 3379.
Sell Arvind Fut @ 337 Tgt Of 334 Sl 339.
Sell AxisBank Fut @ 538 Tgt Of 532 Sl 540.
Sell Dabur Fut @ 310.6 Tgt 306 Sl 311.
Sell Hindunilvr Fut Below 890 Tgt 880 Sl 899.
Buy KSCL Fut @447 Tgt 450 Sl 444.
Sell M&MFIN Fut @350 Tgt 344.7 Sl 353.4
Sell Petronet Fut @ 297 Tgt 292.5 Sl 299.
Sell RELINFRA Fut @ 571 Tgt 564 Sl 573.
Buy Ultracemco Fut @ 3396 Tgt 3426 Sl 3379.
DISCLAIMER:
Investing
and Trading in any equity,future,gold,silver,forex and crude-oil is risky. My
recommendations are technical analysis based on & conceived from charts.
The information provided is not guaranteed as to accuracy or completeness. This
is my personal view only.
Please
consult your adviser or consultant or analysts before investing and/or trading.
We assume no responsibility for any transactions undertaken by them. The author
won't be liable or responsible for any legal or financial losses made by any.
on Monday, July 4, 2016
Technical Analysis Of ITC :
Short ITC For A Target Of 215. Stoploss At Your Own Risk Levels.
Short ITC For A Target Of 215. Stoploss At Your Own Risk Levels.
DISCLAIMER:
Investing
and Trading in any equity,future,gold,silver,forex and crude-oil is risky. My
recommendations are technical analysis based on & conceived from charts.
The information provided is not guaranteed as to accuracy or completeness. This
is my personal view only.
Please
consult your adviser or consultant or analysts before investing and/or trading.
We assume no responsibility for any transactions undertaken by them. The author
won't be liable or responsible for any legal or financial losses made by any.
on Tuesday, June 21, 2016
Technical Analysis Of AJANTPHARM :
Short Ajantpharm For A Target Of 1336. Stoploss at Your Own Risk Levels.
Short Ajantpharm For A Target Of 1336. Stoploss at Your Own Risk Levels.
DISCLAIMER:
Investing
and Trading in any equity,future,gold,silver,forex and crude-oil is risky. My
recommendations are technical analysis based on & conceived from charts.
The information provided is not guaranteed as to accuracy or completeness. This
is my personal view only.
Please
consult your adviser or consultant or analysts before investing and/or trading.
We assume no responsibility for any transactions undertaken by them. The author
won't be liable or responsible for any legal or financial losses made by any.
on Thursday, June 16, 2016
Technical Analysis Of PTC:
Buy PTC For A Target Of 84. Stoploss At Your Own Risk Levels.
Buy PTC For A Target Of 84. Stoploss At Your Own Risk Levels.
DISCLAIMER:
Investing
and Trading in any equity,future,gold,silver,forex and crude-oil is risky. My
recommendations are technical analysis based on & conceived from charts.
The information provided is not guaranteed as to accuracy or completeness. This
is my personal view only.
Please
consult your adviser or consultant or analysts before investing and/or trading.
We assume no responsibility for any transactions undertaken by them. The author
won't be liable or responsible for any legal or financial losses made by any.
on Wednesday, June 15, 2016
Technical Analysis Of MARUTI :
Buy MARUTI For A Target Of 4450+. Stoploss At Your Own Risk Levels.
Buy MARUTI For A Target Of 4450+. Stoploss At Your Own Risk Levels.
DISCLAIMER:
Investing
and Trading in any equity,future,gold,silver,forex and crude-oil is risky. My
recommendations are technical analysis based on & conceived from charts.
The information provided is not guaranteed as to accuracy or completeness. This
is my personal view only.
Please
consult your adviser or consultant or analysts before investing and/or trading.
We assume no responsibility for any transactions undertaken by them. The author
won't be liable or responsible for any legal or financial losses made by any.
on Tuesday, June 14, 2016
Technical Analysis Of IFCI:
Buy IFCI For A Target Of 28+. Stoploss At Your Own Risk Levels.
Buy IFCI For A Target Of 28+. Stoploss At Your Own Risk Levels.
DISCLAIMER:
Investing
and Trading in any equity,future,gold,silver,forex and crude-oil is risky. My
recommendations are technical analysis based on & conceived from charts.
The information provided is not guaranteed as to accuracy or completeness. This
is my personal view only.
Please
consult your adviser or consultant or analysts before investing and/or trading.
We assume no responsibility for any transactions undertaken by them. The author
won't be liable or responsible for any legal or financial losses made by any.
Subscribe to:
Posts (Atom)
