Hurst Cycles Trading Software - Accurately Forecast Nifty and Stock Cycles

Friday, February 13, 2009

Sabbatical

Okay guys...its been a tough week...very tough for me...One day the bear case presents itself and the next day, the bull case presents itself...We are in a range...Period. And I have been wearing myself out trying to trade it positionally instead of scalping.

The fractal called for a down day yesterday which we did not get. Maybe because of the last minute stick save in the US markets but whatever it is, we did not get it....I thinned down a lot on my option positions yesterday only because the time decay was killing and ofcourse took a loss in them. Going to avoid option trading from now on...

Overall a disappointing week for me...We may have topped as I said before but as each day goes by, I am becoming more and more skeptical...Maybe we just stay in a range for some more time....Just frustrating everyone...The budget next week might provide more direction...Maybe.

I am still holding my core short position but I will likely bail if market makes more of a push higher...And again maybe try at higher levels.

Overall not happy with my trading over past couple of weeks...I see that some emotion also entered in lately.. So I am taking a break from blogging...
Definitely for a few days...Maybe even a bit longer.

In the meantime, best of trading to everyone.

Wishing everyone and good weekend and happy valentine's. :)

Cheers

19 comments:

shaq said...

thx for the reply....looks like rangebound indeed for some more time ...and then lets c whether the bearish fractal plays out..the broad market is doing well so that cld spoil the party...but let market decide...
return soon...cheers

Yoda said...

Yeah, waiting for the fall has been excrutiating. Friday was disappointing.

I think I've got addicted to shorting, and I'm starting too soon. Lets see if the budget will set the ball rolling.
The markets could have shown the bears some luv ... grrr! Happy V day all.:)

Lee said...

@ Yoda -

"I think I've got addicted to shorting, and I'm starting too soon."

LOL...exactly my predicament.

I wrote myself some rules today morning...Sharing them here...

==================================
- never enter full position in one go - add 600 first....then 600.....then 400....and last 400.....never position more than 2000 NF.

- trade only NF. Never TRADE options going forward. time decay will kill you.

- no more hedging. this is causing more loss than gain in long run.

- dont fight the market. :)

- have an exit point. always. also have a clear plan. right it down. for example where will next 600 be added? where will next 400 be added and so on.

- mkt will always be there. dont be afraid to take profits for the fear of missing the big move.

- dont be afraid to take losses either. a new setup will always present itself.

- have stops of max 80-100 pts or so. wait for the correct risk-reward setup to present itself. adjust stops only if the chart asks for it. means if you add 2nd tranche, stop can be adjusted. But best to keep stops. If its taken out, reenter higher or lower as required. Capital preservation is most important. rest will follow.
==================================

Its been tough out there...But my experience has been that when it gets almost unbearable the tide changes...Next week has potential to be ugly...either way...lolz...Dont want to jinx it as I have been doing lately...lol

A very Happy V-day to you too!

Best.

Ilango said...

Hi..Lee,
I saw two pattern similarities in this supposed "e" wave but it delayed by a day & but materialised.

Like Yoda said, most have been spoilt by the 2008 carnage. The weekly set up has changed since then and so the half hearted moves. Nevertheless, there is no bullishness inspite of that weekly set up.

In such a sideways market, Lee, you who have not much time infront of the market find it impossible to locate the turnaround points as you would be away and thereby missing it.

Wrt to options, the strategy in a sideways mkt like the present one needs to be very short term in nature whereas in a trending market "the Buy & Hold" will work well.

Most are eager for the mkt to fall inspite of knowing well the 4th wave triangle is going on(Preferred Opinion of most EW sites).

Make rules for each mkt, Lee, because each mkt is different. I combine the EW & TA to get a better perspective and still some failures have to be admitted.And that is how it will always be. We can't call it correct all the time. Market being so dynamic, one can't change his write ups so frequently.

Another point, more talked about, is the position sizing...you play light in a sideways mkt.

There is the possibility of Major "A" having ended at 2253 or 2503 and that can change the outcomes.And a "Bow Tie Diametric" which can take it past 3250". This fluid nature of the mkt keeps everyone on their toes.

You very correctly sensed the reversals and started reducing your shorts. That says it all. You need to believe in your own observations with more conviction.

Best regards and "Happy Valentine's Day".

ilango

Yasharth Nathani said...

Hey lee,
I have been reader of your blog, and just out of curosity, how many nifty points is your avg daily target.

may be i can be of some help, because having 80 point sl in this market is not worth as the reward cant be that good in this sideway trend

cya than

Yoda said...

Trading light is the key, I think, like Ilango said. For some godforsaken reason, I always trade heavily in uncertain/flat times. Woe is me.:(

maghil-happy in tamil said...

my dear LEE TAKE CARE

easy is speaking
but acting is tough
no emotion

no others view
u think and decide

good luck
karuppannan

Lee said...

@Ilango - Very beautifully written...I read and reread the whole thing several times...And its very very true...Sidewise markets need a different strategy...I traded heavily...Trying the buy and hold thing...Options got terrible time decay...And so on...Overall made a lot of mistakes...Then thinned down on positions...Anyways taking things a bit lighter from now on...I still have a core short position which I plan to see what I can do about it...

@Yash - Yes you are right...see above...Sidewise mkt was the problem...Anyways my point abt 80-100 SL was a very general one...For a sidewise market or scalp positions, thats too large...This is only for swing/position trades for few days to several weeks. I mean scaling into positions...swing positions.

I dont have daily targets..I dont feel that is correct way..And I am not a day trader...I can only do swing due to the times I can actually be in front of the market. Mostly like Ilango said, I miss good points due to this...Day trading needs tight SLs I agree..Its all about risk vs reward. If we have a target of lets say 200-300 pts, then 50-80 pts SL is doable...Dont you agree?

Ilango, another thing..What you said is true...AT this point I dont know how to resolve..If you past 10 days, big moves have happened after 2:30PM IST. It is 3AM here for me...How can I stay up for that? And go for work the next day...Its frustrating...I need to figure out a better way in this...

Thank again all for all your comments...

Lee

parag said...

Lee ,
I have been a silent observer of all your blogging for a long time now .
Have also been seeing this mental battle against bulls since the Oct fall and me too have been a bear so far and dieing with each passing day :).
Now i have started believing that this big downmove will only come when you and me will be bulls :)
So many technicals being ignored simply ,maybe as ilango said , this market needs to be treated differently
Anyway , good luck, take some time off , will be nice to hear from you atleast once a week though
regards
Parag

Wroodrah said...

shorted.
mkt went a little above, i got even more convinced, shorted again.
mkts higher the next day, shorted, and stayed put as i was out of cash to put on my bets this time.
nect day higher.
m2m running in a heavy loss.

bullishness everywhere, got to me.

i exit all shorts.

next day:- mkt leaks from 3150 to 2650 odd.

(of course i played the small subwaves, but thats not the point.)

that same day, somehow i was smiling.

i was content that the mkt "okayed" what was on my mind all along.

although i didn't earn in rupees, in fact lost; i gained a lot on confidence off late.

i remember saying one line to myself, " keep doing what you think is right. you never know hwne you will be rewarded."

pranam,

wroodrah

Deepak said...

Hi Lee,

You are not wrong. It's matter of time only. Here is a link for nifty lovers. If link is not working pls copy paste. http://blog.afraidtotrade.com/elliott-wave-on-the-indian-stock-exchange

Lee said...

Hi D, Thanks for the link...I enjoyed the same...Yes its the other possible BEARISH count..The 1st one being the ABCDE I shared over here...The bullish count is what is making me bit nervous but we shall see...

Regd being right...Maybe true...BUT still I nor anyone else can overlook the fact that being right is one thing and trading it successfully is an entirely different thing - right? :)

It is this which made me more gloomy than anything else...Looking back, I should have approached whole thing differently...Trade light as Ilango said....

Anyways, it looks like we are close to resolution point...Market is showing its hand...Or will make it clear next couple of days for sure.

Cheers
Lee

Abhimanyu said...

2/3 days back I said same thing and today after budget
I again want to say this seems to be a fake positive break out of market.

Lee said...

Abhi, we never broke out positively? Did we?

Anyways 2840 is strong FIRST support...Break of this will mean test of 2790 and break of that will likely mean a quick decline to 2700-2720 odd.

Dont want to jinx this but target of this leg is projected to 2525-2600 range. FWIW.

Best.

Abhimanyu said...

"Fake Positive break out"
in other words there was no need to cover NF shorts those were made above/at 2800 to 2900+

Boss u r the one who suggested the book of Alexnder Elder.
Let market reach to the Strongest R then short......
I remember Fall of jan 2008 where and before many days(1st oct 2007) of that fall Momentum started to come down
7 to 10 Jan 2008 nifty faced R at 6300-50 tried 4 times to sustain and crashed
now it seems similar at 3000.

Let us see or let market show us.
I guess feb close is below 2600 or deeper.
- Regardsriceldo

Lee said...

Agree Abhi..You see my main frustration over past few weeks was that I started this short campaign way way too early..I know market will eventually bail me out...but its not a good strategy..Thats all..The few weeks frustrated me.....

Nonetheless we are close to resolution.

Cheers,
Lee

Abhimanyu said...

Hummmm....
Lee,u r right.
Not only correct policy but correct policy at correct time.
but my policy at least saves me in 95% cases
1)buy 2lots of puts & 2 lots of calls of any scrip around S1 R1
2)sell any single lot (put /call whichever in profit ) with profit
3)hold rest of 3
4) to make average of option which is in loss Just purchase single lot (third additional lot)
5)see if second lot of profitable option can make further profit if not then sell it. and buy 4th lot of option that is in loss to bring down the average
For Example.

RIL Call of 1380 2 Lots @ 20Rs
Put of 1170 2 lots @ 33Rs

Sold first lot RIL-CA-1380 @62
bought 1 additional lot of RIL-PA-1170 @ 16 Rs
Total 3 PUTS of RIL-1170 + 1 Call of RIL- 1380
later Sold second RIL-CA-1380 @ 74 Rs.
bought 4th lot of RIL-1170-PA @13 Rs.
finally No calls in hand only Puts. Either apply stop loss or sell them with profit.
one more VIP policy. my excel accounts with Tax + Brokerage , sell & purchase price. That gives me idea of position P & L
duet this i dont even spend brokerage at the time of stop loss. All stop loss covers all costs. So at the most no loss no profit for me. in such Worst cases - My Broker makes profit due to brokerage

Lee said...

Hey Abhi, Your trade plans are good...Keep it up..Need stuff like this to keep out of trouble.

Best,
Lee

Yoda said...

The 3 am thing is a bummer... don't know how you'll get around it. (Move back to India.:)

Woodrah had a good point there - it's almost enough to know you were right to build up your conviction. Even if you didn't make too much on it.