BC TRADING
Saved by @Alex1Powell

It's Sunday morning and I'm grumpy 😑😑 and bored 🥱🥱

Why you ask? It's the weekend, everybody loves the weekend. Time to chill and relax and unwind!!

Yeah talk to a Trader!! We hate weekends and Love Mondays 😂🤣😋

 So anyway, my threads on real life practical trading seem to be helping you guys and getting lots of good questions

One which I'm getting asked a lot and a traders biggest dilemma is "WHEN TO SELL"!!
I mean we first look thru a 1000 charts, then we select one to enter, get the entry correct nd wowza it's moving in th right direction nd we're in some profits

Shud be super happy rite?

Unfortunately that's a traders worst nightmare!! Why you ask? Cos goddamit when do we sell?
If we sell too early we risk losing big profits

If we wait too long it might just reverse and we lose most of our profits and most likely even end up in a loss

If we do nothing then our blood pressure goes up cos hey we're traders and that's how we are 😋😋
So here's a "DEEP DIVE WITH DEEPS" on "When To Sell"

** Took me several days to come up with this catch phrase for my learning threads. I hope you guys like it
Before I start here's one of my fav financial quotes by Baron Rothschild (Google him) - "I never buy at the bottom and I always sell too soon"
The point being it's never to early to sell as long as you're making profits so don't ever feel bad that you sold early

If you do it consistently enough those profits will add up and you'll end being richer and more confident allowing you to ride winners as your trading improves
With that aside here are 3 simple methods that will help you guys resolve this dilemma and no matter what will ensure that you almost always end up in profits

But remember this works only if you get your entry right and following classical charting in the best way for that
For today's example we take the hourly chart of Tata Steel

Before anything we wait patiently for the pattern to setup and enter only on a confirmed breakout which is marked on the chart with a blue arrow
So now that we got our entry correct and the stock is moving in the right direction - We immediately start praying 😋😋

With that I mean set your SL as per your risk profile. RISK MANAGEMENT is always a traders top most priority
Method 1 - Set a winning percentage to exit between 5 - 10% from your entry price

This is good for rookie traders so that you slowly accumulate profits. Might sound less but remember banks give you 5% a year and here you're getting 5% in a few days sometimes even a few hours
Method 2 - Say thank you to our good friend Leonardo Fibonacci for this. This is something most seasoned traders follow so it pretty much works

The 161.8% Fib level from the high to the low of the pattern is your exit level

It's simple, easy, fuss free and almost always works
Method 3 - Pattern Target

Classical chartists follow this and magically it almost always works as well.

Richard Schabacker considered the grandfather of technical analysis follows this method in his book "Technical Analysis and Stock Market Profits"
There will always be regret that we sold too early but whenever you feel like that remember the quote from Baron Rothschild mentioned early. Taking profits will never make you poor.

More Profits = More Capital = More Confidence = More Chances you will ride winners better
Once you sell just MOVE ON!!

Consider each trade to be ur mistress and not your wife. Done with one mistress, move on and look for another. Isn't that every guys dream anyway 😋😋

It's every girls dream as well but unfortunately they get branded sluts! But that's another topic
So that was a "DEEP DIVE WITH DEEPS" on "When To Sell"

Hope you guys enjoyed it and hope it helps you trade better. That is the goal here - Make all of you better traders 😇😇

As always LIKE - SHARE - RETWEET - COMMENT 🙏🙏
Here's a parting gift that you all can use to practice "When To Sell"

JM Financial with a neat little symmetrical triangle breakout on the daily

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Earnings announcements are public announcements that display a company’s earnings, or lack thereof. As the earnings announcement gets closer, implied volatility tends to increase. After earnings are announced,...

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the uncertainty of what will happen diminishes, and usually we see a rapid decrease in implied volatility because of it. Because of this phenomena, we tend to stick to premium selling strategies when it comes to earnings plays. We can take advantage...

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of the implied volatility crush by selling premium prior to the announcement, and buying it back after the announcement.

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How position sizing can affect your trading performance-

Assuming that you are trading a Trend-following system with Big RR and low win-rate.

For example, assume that you risk one percent per trade on a 100,000 account
and you have 20 straight losses.

That one percent is of your remaining equity and at the end of 20 losses, you would be down to 81,790.60.

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Circle of Competence 101

Warren Buffett and Charlie Munger often reference the importance of knowing the boundaries of your circle of competence.

But what is a Circle of Competence and how does it work?

Here's Circle of Competence 101!


1/ First, a few definitions.

A Circle of Competence is the set of topic areas that align with a person's expertise.

If the entire world of information were to be expressed in a circle, an individual's Circle of Competence is the small sub-circle that represents their expertise.


2/ The idea surfaced in the 1996 BH annual letter.

"You don’t have to be an expert on every company...you only have to be able to evaluate companies within your circle of competence. The size of that circle is not very important; knowing its boundaries, however, is vital."


3/ A Circle of Competence is built over time.

It is built through experience, reading, dedicated study, and effort.

It is dynamic, not static.

It can expand as you deepen your knowledge in new areas. It can contract if you fail to nurture your existing areas of expertise.

4/ To engage this mental model in your life, there are two key processes to go through:

(1) Identify what falls within your circle
(2) Identify the boundaries of your circle

(1) is all about figuring out what you know, while (2) is about humbly admitting what you don’t.
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This incredible book focuses on understanding why periods of recessions & growth occur frequently wearing lenses of all mkt participants-the economists, the investors & the regulators.

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The book tries to explain the human tendency of extrapolating the recent past and the imbalance in defining risk at the time of bear & bull markets. It is this tendency that drives booms & busts.

Here are the Important learnings from the book: 👇

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1. Every Asset class goes through a cycle - Up & Down this book teaches why such Up & down occur how to spot them & how investors can improve their returns.

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How to Avoid Big Losses In trading ?

1. Avoid Stocks Below 200 ema
2. Sell Stocks in Stage 4 Down Trend
3. Dont Trade Stocks that are moving in Circuits
4. Avoid News based Trading

A thread With examples🔖

Retweet to Educate Your Trading Friends !
1/n

A Study Shows that 90% of the winning Stocks stay above 200 ema before a big Advancing Phase

1. Simply Not Holding or Buying Stocks below 200 ema Saves a lot of time and Money.
2. You can looses opportunity Cost if you buy stocks below 200 ema.
3. TimeFrame: Daily 200 ema

2/n


B. Sell Stocks in Stage 4 Down Trend

1. Stocks Exhibiting this are in complete Bear Grip
2. The 30 week ema acts as reference for stage analysis
3. These Stocks can be short sold on pullback to 30wema
4. Happens after Topping Phase
5. TimeFrame : Weekly , 30 Week Ema

3/n


C. Dont Trade Stocks that are moving in Circuits

1. Mostly these stocks are Speculatve and Operator Driven.
2. You never know what is the top of the trend and may get Stuck with Huge Losses

Example : TTML , Alok , Ruchi etc
This is Pyramid Structure and news driven also
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D. Avoid News based Trading
1. Whenever a postive News comes in Market People Jump in Buying the Stocks without thinking .
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3. Your Money may get Stuck

Example : PnbBousing , AdaniPower
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The first ever world map was sketched thousands of years ago by Indian saint
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This is how he described the face of the world:

सुदर्शनं प्रवक्ष्यामि द्वीपं तु कुरुनन्दन। परिमण्डलो महाराज द्वीपोऽसौ चक्रसंस्थितः॥
यथा हि पुरुषः पश्येदादर्शे मुखमात्मनः। एवं सुदर्शनद्वीपो दृश्यते चन्द्रमण्डले॥ द्विरंशे पिप्पलस्तत्र द्विरंशे च शशो महान्।

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हे कुरुनन्दन ! सुदर्शन नामक यह द्वीप चक्र की भाँति गोलाकार स्थित है, जैसे पुरुष दर्पण में अपना मुख देखता है, उसी प्रकार यह द्वीप चन्द्रमण्डल में दिखायी देता है। इसके दो अंशो मे पीपल और दो अंशो मे विशाल शश (खरगोश) दिखायी देता है।


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How come the other person always gets their way?

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I have no clue, that is only something that you can decide for yourself.

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Plenty..

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Because most people have 0 clue that they are being manipulated.

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You ever made a mistake around someone, only for them to hold it over your head?

The will always bring up the mistake when you 2 are not seeing eye to eye.

These people will use that mistake as leverage to get what they want from you in the future.

Look out.

2. The Rationalizer

This person will commit the worst acts & find a way to rationalize it.

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