Developing an Effective Trading Strategy

By | January 6, 2012 8:21 am

Nifty did again the Unexpected Making everyone Bearish Today  Blue Channel talking about 4600 Traders holding Bulk of Puts and Than came the U-turn and an awesome rise in 15 mins.

Traders who were short  need to cover at high price or might be still holding the shorts in a HOPE of nifty coming down.(Well it can but I am a system trader and System is in up mode)
100 % traders are bearish/bullish – how can market fall now or rise? ?

For every trade to take place there must be a buyer and a seller. Further, there must be agreement on price and volume.

You need to have a trading Strategy to earn money in Stock Market

Developing an effective strategy requires a clear understanding of your goals, your risk tolerance, the time you can devote to trading as well as the appropriate investment vehicles.

Full or part time trading?

Consider this: if you are going to be a full time trader, invest in your total education as a trader. Successful traders have the potential to make impressive amounts of money and live a most impressive lifestyle. Most professionals spend years in expensive higher education and taking a continuous series of professional courses. They must invest a lot of time and resources before they can even begin to earn a decent income. A successful trader can develop a career with high rewards but it too has some costs. Just because you don’t need a degree doesn’t mean that a significant targeted education isn’t necessary.

That training cost money and you will be “employing” yourself.

To think that you can start trading without proper preparation is naïve and self destructive.

Not only does a trader need a comprehensive program of education on economics, investments and rules and regulations but also a program on how to trade.

 

Depending on several factors such as time available to trade, amount of capital and the personality of the trader, there are several main “styles” of trading.

 

  1. Position Trading is where you would hold your trades from a few days or weeks to a few months. This is ideal if you cannot watch the markets all day and want to avoid entering and exiting markets frequently. However, as markets become more volatile this is considered to be more risky as you are also open to adverse overnight movements and unpredictable events.(Marutius Event)
  2. Swing Trading is becoming increasingly popular as traders look to capture short term movements lasting from two to five days. Although this has more frequent trading activity than position trading, one can also look to profit from both the up and down movements of the market within a short period of time.
  3. Intra Day Trading is where you take shares/Stock for Intraday basis.You can hold it for a 5mins to few hours,but need to square of everything before the closing of trading day.
  4. Scalping is essentially capturing very small moves during the Day Trading timeframe but holding trades from as little as seconds to minutes. This would be suitable for professional traders rather than beginners.

All successful traders have learned that the key to their own success is to find a trading style that best suited their own personality. Deciding on which one of these styles is suitable for you is a matter of study and experimentation.

So guys find your trading type and develop a Trading strategy which is properly back tested.

Interested in Learning How to trade in Nifty/Stocks Profitably Intraday/Positional

If you are Loosing Money while trading it is because of 3 Reasons

  • No Trading System -To Generate levels
  • No Trading Plan -To Execute Trades
  • Lack of Discipline

We can help you out in on the same bottlenecks and help you in trading profitably.

Call@09985711341

Email@bhandaribrahmesh@gmail.com

 

4 thoughts on “Developing an Effective Trading Strategy

  1. Subrahmanya S J

    Hi Bramesh Sir,

    Hi Dipankar,

    Before i start talking anything, 1st i have to say thanks to Bramesh sir, From a long long time i read this web site every day.
    Long back when i was just a trader in stock market (At present Financial Adviser / Stock broker in Religare Securities Ltd.) Bramesh sir suggested me to do my own research and technical analysis, today i can proudly say i KNOW MARKET.

    Mr. Dipankar, I don’t know which technical letter u read and you are angry on writer, T.v and websites are only source of news, best to study Fundamentals, As Bramesh sir also pointed in lot of his posts a trader can earn money by maintaining trading disciplines, what ever you see in T.v is only the view of different people. What to trade and when to trade must be decided by you only, after all its your money, your trade, your profit/loss.

    I am not a good analyst compared to Bramesh sir, but we were totally bullish on Nifty from 5300 (Ready to prove that also), Recommended my clients to buy Nifty @ 5250 and 5300 in bulk and booked today (28/06/2011) at 5555.

    Take below lines as one more T.v show only (just my view)
    If Nifty sustained above 5585 (where its 200EMA comes) one more bull rally upto 5660 is expected, but in my experience Nifty sustaining above its 200EMA is not a easy task.

    Once again thanks to Bramesh sir for creating a wonderful platform to share our view.

    All the best Mr. Dipankar.

    Reply
    1. Bramesh Post author

      Thanks Subbu Sir,

      Really appreciate your comments and insight you have provided.

      Rgds,
      Bramesh

      Reply
  2. Dipankar Bhattacharyya

    Hi Bramesh,I am new to trading and have written to you only once before about a query on buying L&T.
    I have been observing over the last few months that whenever the big analysts,TV channels and stock websites says that the market is due for a fall,the market rises and whenever they say the market is ready for a rise,it invariably falls.I have also seen that whenever the “research newsletters” from the big brokerage firms say that the market will fall ,it rises sharply.Please tell me, is there a scam going on to fool people like us?Are a few rich people fooling the majority of middleclass people?If this is so can we use it to our advantage–sell when everyone ask to buy and viceversa.In fact I have tried doing it in a small scale( 1 lot mininifty)twice and made profit.Is it advisable to do it in a bigger scale?Is there a technical explanation for this observation of mine.For example you have raised the question”every trader is bearish,how can the market rise”–is this rise a lure to invite people to buy and suddenly when there is “Buy,Buy” everywhere(most analysts have already started asking people to BUY and my famous brokerage firm has already reversed the nifty target to 5900 from 4780 in its newsletter)there will be a sudden fall and most people will lose and few will profit.
    This is solely my observation as a novice and not intended to hurt or challenge anyone.Dipankar.

    Reply
    1. Bramesh Post author

      Hi Dipankar,

      I agree and understand your frustration towards your market. To be frank stop listening to so called TV Analyst if you want to succeed in trading.

      Never go by herd mentality. If making money was so easy in market why 90% people are losing money?

      Rgding your question on Technical explanation on market rise YES we were in buy mode @5295 and i can prove it.

      You know in trading most important part is understanding the market psychology, Having your trading system,trading plan and trading journal.

      I have highlighted the importance of these things in my previous article and please go through archives.

      Rgds,
      Bramesh

      Reply

Leave a Reply