Trading is a Slow process of learning


This comment is interesting "Please guide me I love trading so much that now I am unable to work and I hate to do my job.I will be very happy if I am earning so much that it is enough to leave a middle class life provided I am trading.Please suggsest me what should I do.Should I look for a trading job???"



My Notes: It is a pleasure to view such passion for trading. I think the first requirement for a trader is a passion for the proces of trading (not for the money!). But, trading is a slow teacher. Therefore, it is wise to enjoy your exisiting work, do your best there, and work on charts in the part time. Follow only end of day charts, so that you are not distracted during work hours. Identify one or two patterns and focus on trading only those patterns. Once you acquire the discipline essential for trading, you can make a call on your future course of action.





Harsh asks me : could u describe a sucker rally





My Notes: Not really. I assume that Harsh is thinking of the current upmove as a 'suckers rally'.





Nirav says: have read the book named Swing Trading:A guide to profitable short-term investing by Marc Rivalland.

"1. Is there any other book which will give more knowlege about Swing Trading?



2. Is there any book available in market which was written by W.D. Gann or related to W.D. Gann swing theory?"



My Notes: A lot of Indian reprints are offered by Vision Books. Go to their website and you may find more books of your interest. Instead of buying from Amazon, you should kep on searching the internet for Swing Trading and Gann. You are likely to get a lot of information for free. The Swing Traders bible is Streetsmarts by Raschke and Connors.



kk says "IN YOUR RECENT UPDATES YOU USED A WORD "LUCK".SIR I HAVE NEVER HEARD THIS WORD FROM ANY TECHNICAL ANALYST.PLEASE ELABORATE"



My Notes: You take a trade based on your analysis. Your analysis is conceptually correct, giving you a positive expectation. (meaning over a period of time, your profits will exceed your losses). Your trade by trade profit or loss depends on market conditions, but you will emerge as a winner over time.



Now, you take a trade that is conceptually incorrect. But, Luck favors you and the trade works well. Your rewards have come due to a sudden chance, not because of your analysis. If you persist in such trades, the risk of ruin is high. Most technical analysts will offer such incorrect trades. As a matter of luck some of them will work out, and they think they can get away with it, till the big one goes against them. Then of course, they are out of the market of many years. Sounds familiar?



In the same way, when you take properly analyzed trades, sometimes you get a big winner. This is not due to some extraordinary skill in picking winners. It is a matter of luck that you had the winner first, and, probably the losers will follow. The wise trader knows this, and does not get carried away.