Trading Journal

Taking a break from the normal weekly write up, this post is more about live trades. I started following a mechanical approach around the end of 2013 and since then it’s paid of J (took more than a year reading, testing and finding a method that suits me). The above chart is of the Nifty index and the green part is when it’s a buy signal and the red part is the periods when I should be in exit mode. I use the Nifty ETF to trade this. i.e. it tracks the Nifty index returns. My main objective was to avoid predicting (frankly no one can predict consistently. Period) and try and keep losses as low as possible. This system suits me; it’s a weekly chart so avoids the day to day noise. Just have to wait patiently for every Friday to get the signal.

It’s no holy grail; it’s not going to mint money day in and day out. But hey ! I am under 30 and have a long investment horizon which means – I need a plan.

It has been very difficult to not read too much into the news - Greece, Current account deficit, Eurozone, Fed rate hike, BJP, Congress, Elections etc. etc. and the list goes on and on. As Life goes on so too does the market. The main battle was to keep the emotions at bay..fear..greed. Every time one has to remind himself to wait for the signal, not to pre-empt it.

Key learnings 

• Know yourself (what will you do if the stock drops 10% tomm. ?, are you comfortable with a plan or you want to trade the “news”)
• Know which product you are comfortable with. (Equities, MF’s, Futures, Options, ETF’s, Warrants, Structured products)
• Discipline – easy to say, most difficult to implement
• Patience
• “read” the news BUT “trade” on the signal
• Know your goal, mine is to generate decent positive returns over a long term but with as little of drawdowns/ losses as possible.