Thursday, March 13, 2014

A Trader's Gospel

When the teachings say we need to reduce our fascination with the things of this life, it does not mean that we should abandon them completely. It means avoiding the natural tendency to go from elation to depression in reaction to life’s ups and downs, jumping for joy when you have some success, or wanting to jump out the window if you do not get what you want. Being less concerned about the affairs of this life means assuming its ups and downs with a broad and stable mind.


Thursday, December 05, 2013

During times of Volatility

If you did not sell before volatility kicked in simply hold and endure the whipsaws (harder than it sounds).

If you sold your position, be happy and sleep peacefully while the confidence of novices and new traders get shattered.

If you don't hold any position, look for opportunity to enter when the volatility subsides.

If you need to stay invested during times of volatility reduce your exposure and do not over trade.

More tips to deal with volatility

Sunday, December 01, 2013

It pays to be cautious!

Markets have been on a tear since my last post on May 05.  Indexes have hit new highs repeatedly.  There were plenty of opportunities to make money in this market.  However, the recent new highs on the indexes have been on feeble breadth.  The advance/decline ratio I track is not providing the underlying support for this rally.  Not many stocks are leading the market higher.  The sentiment is at extreme bullish zone which doesn't bode well for the continuation of the rally.  Ofcourse, no one can predict when the rally would come to a halt.  It pays to be cautious rather than adventurous at this levels.  Keep the profit objective lower and cut your losses quickly to stay in the game.

Sunday, May 05, 2013

Do not fight the Fed and Do not fight the Trend!

It has been almost 2 months since my last post on the Market action.  In my last post on Feb'19, I warned folks to be cautious since the market looked like it was to undergo a correction.  However, it turned out to be a minor pull back of about 3% and the Market has marched higher and hit new highs since then.  There was another correction of about 4% that lasted a week from Apr'11.  The Market remains in an uptrend.  I continue to remain bullish only because I see many stocks  break out to new highs and hold their gains.  The corrections along the way seem to punish the extended stocks and reward stocks breaking out of their bases.  Fed pumping liquidity without any end in sight is the main reason for the Markets continuous march higher.  Do not fight the Fed and Do not fight the trend!

Wednesday, February 20, 2013

Slow grind comes to a halt

Distribution on the indexes today.  This is the first day in a long time a meaningful distribution has occurred in terms of breadth.  The Markets have been rallying in a grinding fashion on low breadth  since the beginning of the year.  The breadth numbers I track have been steadily approaching a correction zone.  Today the slow grind has come to a halt.  Now is the time to tighten stops or take profits if you have any.  While one day of distribution doesn't make a downtrend, it pays to be cautious!