Hurst Cycles Trading Software - Accurately Forecast Nifty and Stock Cycles

Wednesday, May 7, 2008

Some thoughts before moving onto charts

The last time I posted on the forum I was referring to in the previous post, I gave an intermediate term update stating that I closed all my long positions on the 1st of May almost at the recent top..All of which was picked between the 4600 and 4800 area on Nifty...And all closed at 5250...Hows that!! :-)

I had recommended stocks such as rpl, polaris, infy etc...All of them gave amazing returns...

Why did I say this?...Not exactly tooting my own horn...But its just to set the stage for what I believe is coming next.

So What Next? I am not SO sure but I am bit bearish for next 2 months and then reasonably bullish after that. I opened few shorts in Nifty on May1st and hedged with calls...All these in good profits now...I am looking to cash out on these probably in the next few days.

I plan to reenter my long positions in cash only by mid/end of June or so after reevaluating the bigger picture...I will explain with charts what I see happening over the next few posts.

Right now I am only trading...No investing..Simply because the bigger picture is not clear...It looks like we chop around and correct a bit before taking off again upward....Downside might be limited going forward...But the market and technical analysis-the art of reading charts-being what it is will change over time...Why? Because it is a function of price...And as price changes, the analysis also changes. Funnily enough very few people can grasp this simple concept...All the public want are tips...If I buy this stock, will it go up?...Thats all that they want to know...

I said in my earlier post that I never take positions especially when leveraged in FNO without hedging it the other way...Now this will reduce my profits somewhat but it will also keep me from going bankrupt one fine day....I learnt this the hard way after losing a big chunk of my capital...So no more risky business...I will take what I get...

And why is it so bad?...I mean I said above I had taken an NF 5250...It was hedged with 5300 calls bought at avg price of 94....Now, NF is at 5150 or so....the call is worth 54....So my profit per contract is 100 on NF-40 on the call....Still a good 60 pts per contract...Good enough for me....And I am safe and can sleep sound at night ;-)

Folks, sleep and health is too important to worry about what the market will do the next day.
You know you are over your limit in the market if you cant sleep at night! :)

Remember Jesse Livermore was a great trader and speculator in the earlier part of the last century...He made and lost several millions many times over. He also went bankrupt many times...In the end, do you know what happened to him? Very few books will tell you this - He went into a store dressing room and shot himself....

So folks, remember, profits are important...But the most important thing is - Capital protection...Profits will follow...And dont ignore your health!


1 comment:

shamim said...

sorry to say my comment has sent
as (anonymous)