Anirudh Sethi Report

10 Lessons

11 March 2010

1. Markets tend to return to the mean over time.
2. Excesses in one direction will lead to an opposite excess in the other direction.
3. There are no new eras – excesses are never permanent.
4. Exponential rising and falling markets usually go further than you think.
5. The public buys the most at the top and the least at the bottom.
6. Fear and greed are stronger than long-term resolve.
7. Markets are strongest when they are broad and weakest when they narrow to a
handful of blue-chips.
8. Bear markets have three stages.
9. When all the experts and forecasts agree – something else is going to happen.
10. Bull markets are more fun than bear markets.

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Confidence, Discipline and Consistency

11 March 2010

Consistently profitable trading comes down to just three simple things. The three are the trading psychology, the system, and the risk and money management. Trading psychology means the big 3: discipline, confidence and consistency.

The trading psychology takes precedence because it is needed to make sure that the other two are followed. When they are not followed, a good system and sound risk and money management rules are of limited value. When you have trading psychology that is not achieved through sheer will, you can have the discipline, confidence and consistency that make the most of your rules and system.

Sticking to your system for any length of time is nearly impossible without having confidence in your system. A trader may be able to focus intently on their discipline, and may even be able to stick to it for a time, but often the first handful of losing trades will kill that confidence and with it goes the discipline.

When the sting of a string of losses comes along, especially for a trader that has not established a solid confidence in their system, the temptation to deviate from the system, to second-guess it, is very strong. The natural impulse to avoid the pain is great and only grows with each subsequent loss. Faith in the system drops each time another loss occurs, even if the loss came to be from the deviation from the system. In these circumstances, doubts, fear and anxiety usually run high.

So what is a trader to do to avoid this situation, or to remedy it if this situation has already been encountered?

A great deal of trading psychology comes from expectations and reality. Frustration comes when expectations aren’t met by reality. When a person doesn’t know what to expect, then anxiety set in. When a person knows what to expect and what to do, then confidence is there. Worst case is when the primary point of reference is the recent and painful losses, and only slightly less difficult to be confident when matters feel very uncertain.

Since trading is an activity where losing trades will occur, the best way to establish confidence is to have a way to know what to expect – from the trading system. What is the way to make this happen? The trader can see what can realistically be expected and what can’t through system analysis and looking at the system metrics. The metrics give one a realistic and measured look at the capabilities and limitations of a system, particularly how many losing trades might be encountered during an overall profitable period of time. The primary benefit regarding the trader’s trading psychology is in the way the numbers from the analysis put things in a perspective that fends off the anxiety and doubt and makes for much easier discipline.

Once this is achieved, then the trader should track their metrics to ensure consistency and continuous improvement. It happens quite commonly for traders to experience major breakthroughs once they put in place the habit of analyzing their system and tracking the metrics. Confidence, discipline and consistency are the natural result of this activity, and frequently initiating this practice marks the turning point in the careers of many traders. It is vital as part of trading psychology that one properly analyze the metrics and track their numbers, as backtesting alone will only help to a limited degree.

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Guesstimates on March 11th , 2010

11 March 2010

Trading has everything to do with personal psychology, rules, systems, discipline, focus and skill. Like anything else that’s skill based, once you start it takes time and practice to become skilful. Ultimately trading is about making decisions between two choices, to buy or sell. As simple as these two choices are the variables that effect the decisions surrounding them can be as complex as the human mind can make them.

In last 2 sessions spurted from 936 to 999.

-Do u remember ,I recommended this stock…Just day before yesterday ?

-This is the way to to earn from Day Trading.

Yes ,Our Subscribers are short.

-Just watch 1805-1793 level.

-Once breaks 1793 with volumes will take to 1756-1744 in panic.

-On Rise SELL-SELL-SELL.

-If revives upto 1833…sell with stop of 1852-1858.

-Below 1793,Kill this stock.

-WILL update more to our Subscribers.

Don’t hold long.

-Below 2048 level…..Bears will have full control

-Stock will slide to kiss 2006-1992 level in panic.

Any Rise ,Exit from this stock.

-Intraday levels will update to our SUBSCRIBERS

-All Bank stocks are Looking tired and expect sharp crack any time any moment.

We thought only Nifty FUTURE dances on our tunes,But if u had seen about this stock ..What I had written:

-960 was not broken ,then 1036 was not crossed.Again as expected day before yesterday 993 level was crucial.(Yes kissed 993 & skyrocketed )

993-1017 are trend deciders.

-Decisive crossover above 1017 with volumes will create heavy buying and will take stock to 1028-1036.

-Below 993,Watch unexpected selling and nonstop slide upto 962 not ruled out.

Dear Traders /Readers…Just be cautious in Midcap Stocks traded in FUTURE Segment.All are ripe for Fall.And Yes ,Sensex stocks looking Tired.

-In these type of Mkt situation -Your Broker will become rich.

Today time thoery indicates from 12 till 3:30…..No charm in Mkt.Chances are bright Bears may have upperhand.

Updated at 9:01/11th March/Baroda

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Trading Strategy for Nifty Future -11th March’10

11 March 2010

There are typically three stages an investor goes through before they become successful. Building discipline starts with an understanding of these points:

Easy Money: The first stage involves thinking there is easy money to be made. This is the thinking of a newbie. Often, after a big stock tip gone wrong or a couple great broker recommendations that lose serious money, you enter the second stage.
I need a plan: The second stage begins when an investor or trader decides a plan is needed to win. The problems begin when the search for a plan becomes a search for the Holy Grail. And we all know there is no Holy Grail. What is needed is more than just a “system”. What is needed is you following the system. This leads to stage three.
I’m responsible for my success: Stage three comes when the investor or trader realizes that success comes from inside the person, not outside. To achieve true success you must understand the market is not responsible, you are. There is no one to blame or compliment but yourself when it comes to trading. So find a solid plan and follow it.

5144 & 5184 are Hurdles.

From last two days if u had seen (Iam writing not in Braille )3&7 DEMA will act as support levels.

*From last two days kissing 3 DEMA and taking sharp U-turn.

Now crucial support at 5106 ,5090 level.If breaks 5090 with volumes will take to 5058-5036 level.

*Hurdle at 5148-5161.Crossover will take to 5190-5200 in Intraday trade.

*Higher it is moving…More Dangerous sign.

-Trade with eye open

-Always read twice the levels mentioned.

I will update more During trading hrs to our SUBSCIBERS.

Updated at 7:57/11th March/Baroda

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Trading – Speculating – Gambling

11 March 2010

In the eyes of the vast majority, these things are blurred together, and very many things that the herd get up to in the name of “trading” is really either speculating or gambling. To that end, much of the advice published on the subject of trading can equally be as confused.

But not to real traders; real traders know the difference and are very clear that what they are doing is neither speculating or gambling. Just because you can know your risk per trade when speculating or gambling does NOT mean you are trading. Every game at the roulette table you can know your risk. Think about that…

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Top Selling Stock Market Movies

10 March 2010

If you are looking for some recreational movies relating to the stock market and Wall Street, which you can watch on DVD or Blu-ray, you should check out the following;

Wall Street

Boiler Room

Wolves of Wall Street

Rogue Trader

Barbarians at the Gate

Enron: The Smartest Guys in the Room

Other People’s Money

Wall Street Cowboy starring Roy Rogers

Madoff and the Scamming of America

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Fatal Attraction

10 March 2010

ASR-OFFER

Attractive SubscriptionOfferings

In response to Innumerable Mails

Send Mail-ID to get details

Limited period offer – Hurry Up

anirudhsethireport@yahoo.com

Yesterday received record number of e-mails to extend time period up to Saturday.

Disclaimer :By taking subscription it will create Jealously

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Guesstimates on March 10th , 2010

10 March 2010

Rather than trying to unlock the mystery of trading through the vast array of noise that surrounds our chosen craft, ask yourself a few questions.

Do I possess a set of rules by which I follow to execute each and every trade?

Are these rules written down and do I review them frequently?

Do I constantly review my trades against my rules as my first area of investigation for a trade gone wrong?

Am I constantly looking to improve these rules over time?

Most people could improve their results dramatically simply adopting and adhering to a simple set of rules. Picking up any book on trading will give you these rules to follow. Over time, the true professional will slowly start to build his own set of rules that better correlate with his personality and tolerance for risk and ultimately, this foundation will be the building blocks for the true success that I believe is available to all.

No Magic -No Miracle ,Only power of chart.

Jain Irrigation :As expected blasted like rocket.

IFCI :Was in Freefall mode.

Hero Honda :Brake Failed

TATA Motor :Worst accident ever !!

Hero Honda -SESA GOA :Kissed lower tgt ,Still looking weak.(I always says dont trade blindly…read between the lines )

Just see huge unwind of long position in these stocks :

I think u might be enjoying freefall in Tata Tea-Reliance if u had traded with your eye open.

Just watch 231 level.

Once breaks with volumes will take to 224-219-217 level in hrs only.

-Yes ,looking Toppy.

-Somebody sold yesterday ,watch open interest.

-If Revives ,Sell Sell !!

Virgin for Bears.

101% Rally over ,Now time to sell this stock.

Today ,In panic will slide to kiss 711-704 level.Once breaks 704 then watch panic selling upto 682-675 level in hrs.

-Any Rise ,Sell -Sell-Sell

Don’t hold Long !!101% if revives go short.

-Stock will crack to kiss 241-239 level.

Have patience and mint unexpected money.Not only this Bank stock …Many other Bank stocks are looking weak.

Sell if trades below 271 level.

-Stock will slide to kiss 264-262 level in panic.

Exit from long position immdly.

Enjoyed rally from 222-243 ??

Now Go short if revives.

-Stock will slide to kiss 234 & there after expect panic selling upto 228-226 in hrs.

Dont jump and Buy !!

Updated at 8:55/10th March/Baroda

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Trading Strategy for Nifty Future -10th March’10

10 March 2010

Its amazing how much you can learn from previous trades or stocks that have been kept on your watch list. What is even more amazing is how many people don’t track this and conduct the same mistakes over and over again. If you’re not already, consider starting a trading journal. Track dates, current stock price, future price targets, and what actually happens. Then every quarter (or as many times as you deem necessary) review the journal and see what change(s) can be made to improve your trading.