2020-11-27 - முழு பைத்தியம் - Story of 2 halves

 Yesterday's trading story can be divided into 2 halves. The first half where I did all the wrong things and notched up a big loss. In the second half, I was more careful, watched the charts and was able to halve the loss. On the charts, I separated the halfs with a white dotted line.

 

In the first half, I was trading blindly (literally). I had 8 charts tiled and was impatiently taking every signal on those small charts. This method can work in a backtested mechanical system, but not in discretionary trading. None of the signals worked. I booked losses in each of those trades.

 

I was just trying to enter every time the price range compressed to some extent. 6 trades in all. But getting every one of those wrong? Shouldn't I have won at least one by gambler's luck? What's wrong with statistics? 😡

I was tweeting live during this period. Not that the tweeting affected me. If it had, I would have not tweeted - I know the priorities. The issue was that I had planned to take every signal early, without really looking up the chart.

 

Lesson 1: For discretionary trading, open the charts and study it carefully (duh!!). 

So, after the string of losses, I decided to call it quits for the day, and tweeted so. But then, the compulsive idiot that I am needed to try once more, didn't I?

This time, I looked at the charts more carefully. This time the enlarged charts, not a tiled collage. Didn't matter if I missed some - FOMO be damned.  I already knew that secret:

If I don't trade, I don't get to lose.

And I did miss some. And some I missed because I was trailing quickly. Got to work on the trailing. Some part of my trailing is mechanical - calculated values, not charts. Got to work on it.

In NIFTY, I was able to lock better profit by moving the stop. In HDFCBANK, I regretted not moving the stops lower.

KOTAKBANK -  entered it when it consolidated for a couple of bars with volume and volatility - though I was in two minds about it. Good entry, I think. Trailed mechanically and got out. Undecided about whether that was a good thing or a bad thing??? Then took a short. Dangerous one during a highly volatile period. Almost lost more than planned - see description in chart.

 

Lesson 2: Avoid trades in very high volatility zones. 

Since I had more losses in TATASTEEL, it would have been gratifying if I could get that money back in TATASTEEL. Almost got my chance in the last trade... almost. Got to work on the trailing, but isn't this one of the permanent to do points in trading?