Trading rules I followed that helped me to make substantial
difference and win the ET Now game show!
The notional amount of Rs.
5,00,000 was given to start the week and the rules are explained in detail
post this section. Following is the thought process behind selecting the
stocks, Exiting and what really made a difference.
Even though it was notional amount given but the feelings
were not much different given the fact that it was viewed by millions.
1. Stock selection was done on basis of identifying the
momentum stocks rather than capturing reversals. Screening out involved looking
at more than 100 charts to see if there was Elliott wave pattern along with Momentum.
2. Forecasting Nifty direction and range was important to
understand out of 4 calls how many to be kept on the buy side and sell side.
3. During the week from 9th May 2016 to 13th
May 2016, overall tone of the market was range bound but still there was
positive bias as per the Elliott wave
pattern given the outperformance from Midcap and Smallcap space and so I
considered having 3 Buys and one sell on most of the days.
However, it
fluctuated based on my expectation from the broader indices using Elliott wave.
4. There was option of selecting one Futures position. Selecting stock has been one of a very important
task but at the same time it was crucial to leverage when majority of the
indicators and Elliott wave pattern were in favor and we went long on IBReal Estate Fut on one day and short
on Canara Bank Fut on another day to
squeeze out most of the momentum and trend.
5. It was crucial to not lose the patience and get greedy
and so we preferred trading stocks and not futures when the trend was not
strong. I adopted play safe strategy when the direction of the overall market
was not clear.
6. Even though individual stock follows its own direction
but for intraday trades correlation with index is high and so knowing Nifty
direction was very important. The most important tool at our disposal to
predict that is Elliott wave, Neo wave
and Time cycles.
7. Risk reward
was crucial along with prudent allocation to stocks and letting profits run was
important. A few of the trades helped in gaining nearly 5% in single day and
targets were set bigger to allow this to happen. So the old adage of let your
profits run is extremely important with prudent stops to cut out the losses.
8. Nevertheless, with all said and done a factor of lady
luck also had some role to play.
And most important
thing
9. Markets always teach you by playing out new things and
the best way to beat it is to accept losses as they come and learn from mistakes
rather than playing out with ego!
All in all it was a great week and feeling when you win by more than
twice the margin compared to other competitors….Happy Trading :) !
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