Raghav - My DayTrading

M y DayTrading - Raghav
Introduction: ..................................................................................................................................................................................................................... 4
Rules and Market Beliefs:............................................................................................................................................................................................... 4
My Psychology: ................................................................................................................................................................................................................. 4
Settings for Stoch for this method: .............................................................................................................................................................................. 5
How many trades do we get each day? ........................................................................................................................................................................ 5
My Style of Trading: ........................................................................................................................................................................................................ 5
How to Calculate Pivot Points: ...................................................................................................................................................................................... 6
Trade Setup NIFTY 17-M AY-2010: ................................................................................................................................................................................ 7
Trade Setup TATAM OTORS 17 -M AY-2010: ................................................................................................................................................................. 8
Trade Setup NIFTY 18-M AY-2010: ................................................................................................................................................................................ 9
How to Trade – Trade Setup TATASTEEL 18-MAY-2010: ........................................................................................................................................ 10
Trade Setup TATAM OTORS 18 -M AY-2010: ............................................................................................................................................................... 11
Trade Setup NIFTY 19-M AY-2010: .............................................................................................................................................................................. 11
Trade Setup TATAM OTORS and ICICIBANK 19 -MAY-2010: ................................................................................................................................... 13
Flipping of Stoch/Other Oscillators: .......................................................................................................................................................................... 14
Trade Setup REALTIM E 20 -M AY-2010:....................................................................................................................................................................... 14
Retracem ent of W RB: ................................................................................................................................................................................................... 20
Trade Setup REALTIM E 21 -M AY-2010:....................................................................................................................................................................... 21
4-min Timeframe: ........................................................................................................................................................................................................... 23
One of the members has sent a PM to m e and his opinions are like this: ........................................................................................................... 25
Overbought and Oversold: .......................................................................................................................................................................................... 25
Trade Setup TATASTEEL and TATAM OTORS 24 -MAY-2010: ................................................................................................................................ 26
Trade Setup Nifty 24-M AY-2010: ................................................................................................................................................................................ 27
Trade Setup EDUCOM P 31-MAY-2010: ...................................................................................................................................................................... 28
Trade Setup TATASTEEL 31 -M AY-2010: .................................................................................................................................................................... 29
Trade Setup TATAM OTORS 04 -JUNE-2010: ............................................................................................................................................................. 30
Importance of Pivots: .................................................................................................................................................................................................... 31
Trade Setup TATAM OTORS and ICIC IBANK 08-JUNE-2010: .................................................................................................................................. 31
Different Chart Setups: ................................................................................................................................................................................................ 32
Trade Setup TATAM OTORS and ICICIBANK 09 -JUNE-2010: .................................................................................................................................. 33
Trade Setup Nifty 08-JUNE-2010 and 09-JUNE-2010: ............................................................................................................................................ 34
Trade Setup Nifty 10-JUNE-2010: ............................................................................................................................................................................... 35
Trade Setup TATAM OTORS 10-JUNE-2010: ............................................................................................................................................................. 36
Trade Setup ICICIBANK 11 -JUNE-2010: ..................................................................................................................................................................... 37
Trading Forex: ................................................................................................................................................................................................................ 38
Trade Setup Nifty and ICICIBANK 14 -JUNE-2010: ................................................................................................................................................... 39
Trade Setup Nifty 18-JUNE-2010: ............................................................................................................................................................................... 40
Trade Setup ICICIBANK 17 -JUNE-2010 and TATAMOTORS 18 -JUNE-2010: ....................................................................................................... 41
Trade Setup Nifty and TATAM OTORS 21 -JUNE-2010: ............................................................................................................................................ 42
Trade Setup Nifty and TATAM OTORS 22 -JUNE-2010: ............................................................................................................................................ 44
Trading Divergences TATAM OTORS 01 -JULY-2010, 02-JULY-2010 and 05-JULY-2010: .................................................................................. 45
Trade Setup Nifty 12-JULY-2010: ............................................................................................................................................................................... 46
Trading the Divergence in Nifty 31 -AUGUST-2010 and 01-SEPTEMBER-2010: .................................................................................................. 50
Trade Setup TATAM OTORS 14 -SEPTEM BER-2010: ................................................................................................................................................. 51
Trading in the Direction of Larger Timefram e – ICICIBANK SEPTEMBER-2010: ................................................................................................ 52
Trade Setup TATAM OTORS 20 -DECEM BER-2010:................................................................................................................................................... 53
Interplay of Support and Resistance – TATAMOTORS DECEMBER-2010: ........................................................................................................... 53
Breakout – TATAM OTORS DECEM BER-2010:........................................................................................................................................................... 54
Retest – FOREX GBPUSD DECEM BER-2010: ............................................................................................................................................................. 55
Round Numbers – TATAM OTORS DECEMBER-2010: .............................................................................................................................................. 56
Sustaining a Level: ......................................................................................................................................................................................................... 56
Advice for Beginners: .................................................................................................................................................................................................... 58
Trade Setup Nifty 29-DECEM BER-2010: .................................................................................................................................................................... 59
Trade Setup REALTIM E TATAM OTORS 03 -JANUARY-2011: .................................................................................................................................. 61
Some words about Trading: ......................................................................................................................................................................................... 63
Inside Bar – TATAM OTORS FEBRUARY-2011: .......................................................................................................................................................... 64
Trade Setup TATAM OTORS 15 -FEBRUARY-2011: ................................................................................................................................................... 65
Trade Setup Nifty 17-FEBRUARY-2011: ..................................................................................................................................................................... 69
Moving from Stage – I to Stage – II: ............................................................................................................................................................................ 71
Trade Setup REALTIM E TATAM OTORS 21 -FEBRUARY-2011: ................................................................................................................................ 71
Some Casual Knowledge: ............................................................................................................................................................................................. 74
Money Needs Time to Grow: ....................................................................................................................................................................................... 75
Remorse o f a Trader – TATAM OTORS 28-FEBRUARY-2011 – Beginner’s Way to Trade It: .............................................................................. 79
Remorse o f a Trader – TATAM OTORS 28-FEBRUARY-2011 – Professional’s Way to Trade It: ........................................................................ 80
False Breakouts/Breakout Failure: ............................................................................................................................................................................. 81
Risk Management M od el: ............................................................................................................................................................................................. 81
Trade Setup REALTIM E Nifty 03 -M ARCH-2011: ....................................................................................................................................................... 82
Trade Setup TATAM OTORS 28 -FEBRUARY-2011, 01-MARCH-2011 and 03-MARCH-2011: ............................................................................. 84
How One Should Start Practicing Day-Trading? ....................................................................................................................................................... 91
Advantages of Day-Trading: ........................................................................................................................................................................................ 92
Some psychology or Philosophy (If you think so): ................................................................................................................................................... 93
Trade Setup Nifty 07-M ARCH-2011: ........................................................................................................................................................................... 94
Trade Setup Nifty 08-M ARCH-2011: ........................................................................................................................................................................... 96
Support/Resistance and Round Numbers: ................................................................................................................................................................ 97
Okay, now I will throw some questions… Please try to get an answer… ........................................................................................................... 98
Diversification: ............................................................................................................................................................................................................... 98
Mind and Meditation: .................................................................................................................................................................................................... 99
Value of Money: ...........................................................................................................................................................................................................101
Some more Stories: .....................................................................................................................................................................................................101
Money without Work/Effort: .....................................................................................................................................................................................102
How do we get in to Sleep during Night? ................................................................................................................................................................102
Trade Setup Nifty 25-M ARCH-2011: .........................................................................................................................................................................103
Psychological Thoughts: .............................................................................................................................................................................................104
The greatest ever question and answer I have read in my life... .........................................................................................................................107
Who is a Mentor? Who is a Guru? ..............................................................................................................................................................................108
Swing Trading the IB – Trade Setup Nifty 08-APRIL-2011 and 11-APRIL-2011:................................................................................................110
Trading the Gap – Trade Setup Nifty 13-APRIL-2011: ...........................................................................................................................................112
Trading Price Action & Location – Trade Setup Nifty 18-APRIL-2011: ...............................................................................................................114
Trade Setup REALTIM E Nifty 19 -APRIL-2011: ........................................................................................................................................................116
Is Trading Gambling? ...................................................................................................................................................................................................120
DETERMINING OPTIONS PREM IUM AND THE GREEKS: .......................................................................................................................................121
How Multi TF works – Constructing Candles: .........................................................................................................................................................122
Trade Setup Nifty 25-APRIL-2011: ............................................................................................................................................................................123
Trade Setup REALTIM E Nifty 26-APRIL-2011: ........................................................................................................................................................124
The event which opened my eyes towards trading: ..............................................................................................................................................126
Trade Setup Nifty 29-APRIL-2011: ............................................................................................................................................................................127
Why do people lose at the end of the M onth? .......................................................................................................................................................128
Market repeats the sam e action – Nifty 27-APRIL-2011 to 02-MAY-2011: .......................................................................................................129
Trade Setup Nifty 03-M AY-2011: ..............................................................................................................................................................................131
Spread Orders: .............................................................................................................................................................................................................132
Trade Setup Nifty 09-M AY-2011: ..............................................................................................................................................................................133
Trade Setup TATAM OTORS 09-M AY-2011: .............................................................................................................................................................133
Trade Setup REALTIM E TATAM OTORS 10 -MAY-2011: .........................................................................................................................................134
Trade Setup ICICIBANK 13 -M AY-2011: ....................................................................................................................................................................134
Friendship and Dharma: ..............................................................................................................................................................................................136
st
Commemorating 1 Anniversary of this Thread: ...................................................................................................................................................136
Meaning of Cost, Price and Value: ............................................................................................................................................................................138
The Value of Having an Alternate Skill: ...................................................................................................................................................................141
Trade Setup – Early M orning Breakout after Consolidation: ...............................................................................................................................142
Trading the Early M oring Breakout after Consolidation – ICICIBANK 23-MAY-2011: .....................................................................................142
Trading the IB – M inifty 20-M AY-2011 to 24-MAY-2011: ......................................................................................................................................143
Trading the Range and Breakout – ICICIBANK 23-MAY-2011 to 27-MAY-2011:...............................................................................................144
Trade Setup Nifty 31-M AY-2011 and SILVER 02-JUNE-2011: ..............................................................................................................................146
Trade Setup REALTIM E Nifty 03 -JUNE-2011: .........................................................................................................................................................148
Trade Setup TATAM OTORS 06 -JUNE-2011: ...........................................................................................................................................................148
Anna Hazare and Baba Ramdev – Sacrifice for the Nation: ..................................................................................................................................149
Taxation and Black Money: ........................................................................................................................................................................................150
Why do I post only Winning Trades over Here: ......................................................................................................................................................152
The Value of Humbleness: .........................................................................................................................................................................................153
Trade Setup Nifty 13-JUNE-2011: .............................................................................................................................................................................154
Trading the Exhaustion Bars – Trade Setup ICICIBANK 14-JUNE-2011: ............................................................................................................156
Trading the IB – Trade Setup Nifty 15-JUNE-2011: ...............................................................................................................................................157
Trading the Exhaustion – Trade Setup Nifty 16-JUNE-2011: ...............................................................................................................................158
Trading with Fibonacci – Trade Setup Nifty 17-JUNE-2011: ................................................................................................................................159
Some Basic Questions: ................................................................................................................................................................................................161
Introduction:
Kicking of this thread to post my trading style with analysis. My inspiration to develop this system came from these 2 thread s.
Smart Trade’s Thread – How to Trade Oscillator
Columbus’ Thread – Bollinger Bands
I love reading them again and again whenever I make a mistake in my trading to plug in my mistakes.
I should say this system must belong to these 2 highly helpful people. There is nothing which I can call as mine.
I am extremely thankful to both of them. They are not only great traders, they are great teachers too. Here our objective is to learn
as much as possible. Combine both the style, add Pivot breaks, Divergence, candlestick signals, Price action and make it a ro bust but
simple and understandable method. Anyone is welcome to ask any questions relating to system and add their positive suggestions
and comment for improving the system. However please keep unwanted and irrelevant questions away.
Further I must say that my deepest regard goes to ST and AW10 for their h igh level of understanding of market. I humbly request
both of them as well as other seniors to visit this thread and help in every aspect for overall improvem ent.
This thread is from a student and will be for students who are keen to learn. We will be keeping all the egos and arrogance away and
will act as we are all companions. Seniors will guide whenever we get in to trouble.
I will start posting charts as well as my analysis for those trades from today.
Regards
Raghav
Rules and M arket Beliefs:

I firmly believe in following rules. They help in longevity, avoid tension and provide great amount of satisfaction at EOD.
I do not short while in OS zone and do not buy in OB zone. (Even when Stoch stays in OB or OS for > 5 BARS I wait till it goes to other
end gives the entry signal). This has tremendous success rate. My grateful thanks to ST.
Some other beliefs:
1. Market is always in motion. It never stops. You can get in any time and get out anytim e.
2. It has ultimate potential. Anyone can make fortune provided he has knowledge of what works.
3. 90% come here to get rich quick. 10% come her to learn. The former pays the latter as latter has learnt how to get it from the
former!!
4. In market anything can happen anytime. So we have to have our m echanism in place to avoid those contingencies.
5. Market rewards students and punishes arrogants.
6. Easy to define entry. Very difficult to define exit.
7. No system can be traded in long run as market has infinite combinations. System cannot catch all those combinations.
8. Human brain is the most-most-most valuable thing in the world. It’s the best system too.
9. Taught speech and parcelled food can’t last long. It applies to traders also.
10. Two ways of trading:
(i) Uptrend: Buy pullback. Downtrend: Buy pullback
(ii) Get at top or bottom . Come out when it’s enough.
11. In the long run there is only one winner in the market. Broker. I win he gets. You win he gets. I lose h e gets. You lose he gets!!
That’s enough now. Will add my thoughts whenever I get time.
Regards
Raghav
M y Psychology:
I follow some disciplines religiously. I may miss a huge m ove. Never mind unless there is signal I won't go for it. Someone says:
Missing a trade of 100 points is millions times better that losing a trade of 20 points. Because both wins and losses are dir ectly related to
our psychology.
Also believe that simplest things done consistently produce great results. Remember the gigantic tree was once upon a time a
weightless seed........
Later I will post all other aspects which I would like to share with you in my previous reserved posts.
Anyone and everyone including newest members are welcome to comment, criticise and opine regarding my style and way of
trading.
As one person told “I became a mountain of knowledge by learning a matter from each individual I me t".
Let’s start trading now.....
Regards
Raghav
Settings for Stoch for this method:
Average Type: Simple (S)
Avg. Period: 3
% k period: 8
% k slow: 4
OB = 80
OS = 20
AFL for Stochastic (8, 3, 4):

_SECTION_BEGIN("Stochastic Slow");
periods = Param( "Periods", 8, 1, 200, 1 );
Ksmooth = Param( "%K avg", 3, 1, 200, 1 );
Plot( StochK( periods , Ksmooth), "%K"+_PARAM_VALUES(), ParamColor( "%K color", colorCycle ), ParamStyle("%K style") );
Dsmooth = Param( "%D avg", 4, 1, 200, 1 );
Plot( StochD( periods , Ksmooth, DSmooth ), "%D"+_PARAM_VALUES(), ParamColor( "%D color", colorCycle ), ParamStyle("%D
style",styleDashed) );
_SECTION_END();
Sharekhan Users: Please go through this post from Sunil.
How many trades do we get each day?

Originally Posted by prabit
Hi Raghav,
Thanks a lot for your nice thread, excellent presentation. I am sure many members are benefiting from your thread. I have one query.
Considering you trade 3 scrip and Nifty, on an average how often you get opportunity for trade.
Thanks again.
Hi Prabit,
Good to see you here. It all depends on whether it’s a trending day or a range -bound day.
Per day I would roughly say I aim for just one trade in Index (Nifty) and then one trade out of 3 Scrips (TATAM OTORS, TATASTEEL
and ICICIBANK). Anything above that is a bonus. It does help in avoiding stress and allows you to control the trades. There a re lot of
days I just wait-wait and wait and then end the day with no trades. I have no shame. I do get brokerage of 1 paisa for Nifty and 1.15
paisa for cash. Hence, I can afford to do trades liberally. Have you seen the tiger going for hunt every one hour? Once it starts to
hunt, have you seen how it puts all of its energy, effort and focus on the animal it aims to hunt?
Trading less and getting more is the secret to survive in day -trading in the long run.
Regards
Raghav
M y Style of Trading:
As far as my style is concerned, I do not g o long every time Stoch is in OS. Similarly I don't go short each time whenever it is in OB
zone.
For m e Stoch is a confirmation tool to get in at best place...
I do take decisions in this order.....
1. Price action..... If I get a hammer at low of the day or previous day , then Stoch in OS I go long as it provides me the best place
for entry and gives me the best RR (It ’s one of the exam ples... there are 100's of price action patterns).
2. Place where I see price action ..... High/low of today, yesterday, previous tested resistance or support...... so on
3. Indicator… .
If you take trades each time when it’s in OB and OS respectively, it’s going to harm you more rather than doing good....
It takes time to develop understandin g of the basics.... Once you get a strong grip at basics you will start sailing on your own...
When you get disease; doctor prescribes m edicines and tonic... That medicine needs to be taken one by one..... tonic has to be taken
spoon by spoon over a period of time..... Do you hear any doctor advising the patient to take all the tablets in one shot... a bottle of
tonic in one shot....?
Similarly, please take som e time and go through ST's great thread..... If not once... twice… thrice… till you understand the basics in
depth..... Then please come back to my thread for charts where I explain how I do it....
Regards
Raghav
How to Calculate Pivot Points:
From Investopedia:
There are several different methods for calculating pivot points, the most common of which is the five -point system. This system
uses the previous day's high, low and close, along with two support levels and two resistance levels (totalling five price po ints) to
derive a pivot point. The equations are as follows:
R2 = P + (H - L) = P + (R1 - S1)
R1 = (P x 2) – L
P = (H + L + C) / 3
S1 = (P x 2) – H
S2 = P - (H - L) = P - (R1 - S1)
Here, "S" represents the support levels, "R" the resistance levels and "P" the pivot point. High, low and close are represented by the
"H", "L" and "C" respectively. Note that the high, low and close in 24 -hour markets (such as forex) are often calculated using New
York closing time (4pm EST) on a 24-hour cycle. Limited markets (such as the NYSE) simply use the high, low and close from the day's
standard trading hours.
I left using them after few months since the 4 confluence points noted here have been giving me great results. Since I get very less
day time for day-trading now-a-days, I use only weekly and monthly Pivot points as one of the parameters for m y swing trading.
Regards
Raghav
Trade Setup NIFTY 17-M AY-2010:
My horses are Nifty, TATAM OTORS, TATASTEEL and ICICIBANK.
The reason being they are volatile, they have volume and they give biggest m oves in their sectors on a trending day.
However, trading nifty is easy as well as very much enjo yable. Hence, will post only Nifty charts as of now. Going forward, let’s look
at those other 3 charts.
Coming from yesterday, Nifty stayed in OS > 15 Bars. I was looking to short highs. However, it never kissed O B Zones and I had no
clue whatsoever till 12 PM . In audit we say "when in d oubt disclose ”. In trade I say “when in doubt close" . I just kept quiet as I
didn't know what’s happening. Then it did signal a positive divergence which signalled me to be ready for longs.
Then comes ST with his magic wands. OB > 5 bars. Bought the dip meeting all the rules and rode till EOD.
Yes. I would have missed some down moves early morning due to my rigidness. It’s OK. M ore than that sticking to my rules gives me
enormous satisfaction.
Regards
Raghav
Quote:
Originally Posted by sartaj

Hello friend i am doing day trading. But i don’t follow any theories. Sometime i made profits. But most time i am losing money. Because if
the scrip seems to uptrend i use to buy and sell, buy and sell likeeeeeeee and after some time like 2, 3 trades it suddenly come to down
trend (with in a small time). Then i did not want to bear the loss and exit from that price, and waiting for profitable price but it doesn’t
come to pull back and finally i made a loss. And if the scrip seems to down trend i use to trade like sell and buy, sell and buy but after 2, 3
trades it goes to uptrend... How to expect the trends with a n easy theory
Hi Satraj. I had been there. I think there are 2 ways for successful trading.
1. Identify trend. If it’s up, go long at every pullback. If it’s down, short at every pullback.
2. Identifying tops and bottoms and riding the trend till you feel it’s enough.
It applies to all timeframes. But learning it takes needs lot of sacrifice.
As far as learning those tools are concerned, Traderji has more than enough materials. Great trader Gann said in 1909:
“For the past 10 years I have devoted my entire time and attention to this speculative market. Like many others, I lost thousa nds of
dollars and experienced usual ups and downs incidental to the novice who entered the market without prepar atory knowledge of the
subject. I soon began to realise that all successful men, whether lawyers, doctors or scientists, devote years of time to the study an d
investigation of that particular pursuit or profession before attempting to make any money out of it."
So in my personal opinion three stages for a successful man:

1. Identifying what suits my personality, it can be a job, profession or an art.
2. Years of relentless effort to find out how the vibration (in modern words its nitty -gritty) works behind that job, profession or
art.
3. Tune our personality in harmony with that vibration.
4. Flow of wealth in the form of reward.
Trade Setup TATAM OTORS 17-M AY-2010:
I mentioned in my initial post that I do make use o f BB with 20 SMA along with Stoch. For Nifty I use only Stoch. M ore the indicators
more will be the mess with the chart.
Now let’s see how BB complements and how Stoch filters these trades. I am taking TATAM OTORS. We need to rem ember that
trading stocks is not as easy as that of Nifty indexes as Manipulators keep on pushing the prices back and forth thereby catc hing
maximum possible Stop loses. Unless we have logical st op loss it will be a game of feeding sharks.
1. Stoch in OS. Break of PL means sign of weakness. Short.

2. Here it’s difficult to define which is a PL and which is PH. So then I wait and take a common bottom and top and break of tha t
can be shorted. I didn't take this trade as per my policy "When in doubt close".
3. Here comes Bollinger band. Lower band pierced , a green candle after a Doji candle and Stoch also flips from OS to neutral.
Great RR entry. Go long.
4. Bollinger band rules are satisfied. Aggressive and quic k scalpers can short for a small gain. However I will wait for the dips to
buy as Stoch in OB > 5 bars.
6. Then at 20 SM A see how the price takes strong support. That’s the time to add or make fresh entries.
7. We are in mess now. There is a -ve divergence. Also B B top band pierces green + red. Now I trail my S/L to bottom of 2nd
green bar from top. I survive ju st by whisker.
Then again when Stoch flips from OB zone by staying in OB < 5 bars no point in remaining in the trade.
Regards
Raghav
Today’s trade.
1. Short – A break even trade
2. Long – 5035
3. Cover at close below shooting star – 5098
4. Lower PH – Wait
6. Break of PL – Short – 5070
7. Cover at break of top of Doji – 5058
Other remarks can be found in the chart.
Regards
Raghav
How to Trade – Trade Setup TATASTEEL 18-M AY-2010:
Now I am going to prove something which can be easily learnt by all newbies.
Here we just need 20 SM A, Stoch. That’s it, nothing else. You can do successful trading with just these 2 and as usual you should
know the basic of candlesticks. No excuse in that regard.
What I am going to do is simple. When price moves up:
1. I ask where the next resistance is?

2. Then look for a single candlestick pattern like Shooting Star, Hanging Man, G ravestone Doji etc.
3. When that candle arrives ask where the Stoch is. It’s in overbought – short.
Vice versa when price is dropping. Let’s take a chart and you will get more clarity on this. Today's TISCO 5-M inute chart.
Commenting number wise.
Immediately after first 5 -M inute bar we have a Shooting star, 2nd bar of the day. Wait for a close below that shooting star. It didn’t.
1. High wave candle. Wait for a close below that High wave candle. Ask where the Stoch is. In overbought. Short. Ask where the
next resistance is. We don't know. Wait till we get one.
2. Hammer with volum e. Ask where the Stoch is. OS. Long above the top of hammer. Ask where the next resistance is .It’s at the
50% of that big red bar .i.e:7th bar of the day.
IM PORTANT: In a trend whenever you see a wide range bar remember this .The 50% of area of recent WRB acts either as res
or support depending on the trend.
3. Am I true? At 20 SM A, price gets rejected as well as its 50 -60% of that big red bar. Small shooting star. Ask where the Stoch is.
OB. Short below the close of Shooting star. Ask where the next resistance is. Its point number 2 at the hammer.
4. Am I true? One more ham mer. Ask where the Stoch........ OS. Go long above top of hammer. Ask where next res istance is.
Remember it took support for the 2nd time. Now the next res istance to 50% area is 100% area of that WRB. I.E: TOP OF THAT
BIG RED CANDLE.
6. Am I true? Bearish Engulfing. Ask where the Stoch is. Stoch stayed in OB > 5 Bars. Remember the rule and keep quiet because
bulls are still in lead. Now ask where next supp ort is. 20 SMA? Let’s wait.
7. Yes. At 20 SM A, Gravestone Doji followed by a big green candle. Ask where the Stoch is. Turning upside from the dip. Go long.
Now ask where th e next resistance is. After 50% and 100% it’s certainly high of the day. Let’s wait.
8. Yes. Big shooting star with huge volume. Ask where the Stoch is. Now we realise that there is -ve divergence w hich indicates
we are for big down move. And you short the break of bottom of shooting star and walk to your bank with a smile by EOD.
Just ask these little questions and you will do wonders in trading. It’s a flip flop day and this simple m ethod works. And market
remains in these situations for 85% of the times. Then O n huge trending day you do not require any system at all!!!!!
Regards
Raghav

Coming from previous post... TATAM OTORS. Self-explanatory.
Regards
Raghav

We had a gap in the morning and whenever we have a gap we need to wait as the market takes time to come to equilibrium.
The gap down sustained for first one hour which means more likely we are in for a down move.
Let’s see how our method worked.
1. OS > 5 Bars - OK due to gap down there may be error in our data. So let’s not consider that.
2. Stoch flips without remaining in OB > 5 bars. Short 5010. S/L - 12 points 5022. (I usually keep 12-15 points as my S/L).
3. Stoch makes lower high.
4. Stoch makes still lower high .W e are in for a crash. Low of day is broken which also happened to be previous 2 P Ls.
6. Trailing Stop profit hit at 4925. Good day
Patience always pays in the market.

Since the market was range-bound till 1.30 I did use BB today. Just see how it complements Stoch and helps to remain in the trade.
Regards
Raghav
Trade Setup TATAM OTORS and ICICIBANK 19-M AY-2010:
43 Rs. Move
39 Rs. Move
To develop temperament of staying in the trade till EOD based on technicals is as important as that of making an entry.
Regards
Raghav
Flipping of Stoch/Other Oscillators:
Originally Posted by simple_trader
Raghavacc Thanks for putting effort and posting your method.
I have a basic question about indicator Stoch (or any other oscillators) - how do you decide it is flipping or not/coming out of over bought
or not. I am asking this because in live chart, we would see lot times it is flipping, but it can change and stay in over bou ght/sold in next
candle.
Do you face this issue? Thanks in advance!
Simple Trader. Good question.
In 5 Minutes timefram e you tend to get noise till you get hang of it. It’s natural. Don't mind. If you follow these rules fram ed by ST
Bro, you will be in perfect trades most of the tim es. Let’s assume w e have opportunity for shorting: Now we have candle number 1
which is a starting candle. Then candle number 2 which would have closed below candle number 1. We enter only at candle numbe r 3
if that takes out the bottom of candle number 2. By this time invariably Stoch has to come to neutral zone.
The rules for entry are:
1. The oscillator should have gone to overbought zone.

2. Wait for a bar where the oscillator flips...i.e. comes out of overbought zone and comes in neutral zone....
3. In doing step No 2 the oscillator should not have stayed in overbought zone for 5 bars and more
4. Wait for a down close (meaning close less than earlier bar’s close)
5. Ensure that by that tim e oscillator does not go very near oversold region
6. Sell when the low of the down close bar is broken on downside.....
Further that’s the exact reason I have been merging BB with this method so that newcomers can perfect the entry initially.
See the chart below. The first arrow indicates an area where BB top band pierced green + RED. Now watch for next down close
below the bottom of that RED candle which was pierced by BB top band. It’s the 6th candle where I have marked a line. See Stoch,
it’s already in neutral zone. Go short as all 6 qualifiers are met.
See my 2nd arrow. Same phenomena. What a beautiful trade that was. Try to perfect these entries .You will realise how powerful it
is. Practice. Practice. Practice. You WILL get it.
Regards
Raghav
Trade Setup REALTIM E 20-M AY-2010:

20th May 2010, 09:56 AM
If you just grasp what this system has to tell it has no lim its.
Just for giving example posted live charts. No comments. Let the chart talk.
Don’t rush to short now. Let the pullback take place. Wait for the next signal from system.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Regards
Raghav
20th May 2010, 11:12 AM
Try to understand what it's telling
Regards
Raghav
20th May 2010, 11:51 AM
Today I am posting the charts so that newcomers can understand how to trade this system. I am not going to post it daily .
Below is nifty chart. Entry at 4952 as per system. S/L was high of day 4969. Bit far for my standards as I keep 12 -15 points. It reached
4928. Number 1, 2, 3 are Stop profit points. It’s up to yo u where you keep that SP. If one wants to come out and then re-enter again
after clear picture they can do so. In case Europe markets opens +ve and market reverses maximum it can do is takeout our SP.
Observe that Stoch is also making lower highs.
Regards
Raghav
20th May 2010, 12:47 PM

BB condition met. Now we need to see for Stoch qualifiers to short TATAMOTORS as well as Nifty.
Regards
Raghav
20th May 2010, 01:12 PM

No signal no trade. Let the sentiments of Europe market cool down.
No trades as of now.
Regards
Raghav
20th May 2010, 01:42 PM
-VE divergence.
Going to short only break of previous P/L. Though market seems strong no signal to go long as of now.
Either it has to stay in OB for > 5 bars or has to flip up from OS without staying there for > 5 BARS. None of the conditions met.
Regards
Raghav
20th May 2010, 02:01 PM
Try to rem ember what I have told few posts ago about big candles with Volume.
30-Minutes chart weakness of nifty was found at 60% of that big red candle of yesterday.
Regards
Raghav
20th May 2010, 03:09 PM
Once we have milked the power of -ve divergence I saw a small +ve divergence for small gain
Regards
Raghav
20th May 2010, 03:27 PM
Covered at 4947. That’s it for the day. M eanwhile will post todays chart with comments.
Regards
Raghav
EOD - 20th May 2010, 03:51 PM
Today I have posted few live charts and interpreted the signals from our system every now and then. You only decide by EOD how
profitable you would have been.
Charts disseminate lot of information. If one can interpret them correctly there is abundant fund available in the market to earn.
Also I was able to show you
1. Weakness of bulls: Negative divergence: Nifty higher highs – Stoch lower highs: which is one of the best and profitable way of
trading markets.
2. Weakness of bears: Positive divergence: Nifty lower lows – Stoch higher lows: which is also one of the best and profitable way
of trading markets.
When European markets opened (+1%) Nifty made higher lows and higher highs. When everyone thinks of long we note the
weakness of bulls and position ourselves to extract the maximum. When people think it will break 4900 we note the weakness of
bear and position ourselves to take what is in the offer.
I have noted 100's of observations which also work in the markets by which one can make his life. The key is how we apply t hose
observations. Market is an applied science, maths and economics.
The people who talk of worth, usefulness, convincing etc. would have got answer to their questions by now. No more talks on t his
topic. It’s up to each individual chose his system .Mean while we will focus on what all we can do to improve our setup. Just make
observation of BB also. How beautifully it complements our setup.
It also showed this system can be used irrespective of time of market. Early mo rning I have posted 3 charts. In just half an hour you
would have made your entire month!!!
Regards
Raghav
Retracement of WRB:
Originally Posted by sumitdasjoshi
hello raghav its great post by u, i just have one question. Few posts ago u mentioned a big red candle with 60% volume, i didn’t
understand that. It will be great help if you elaborate it little bit. Thanks.
Hello Sumit,
Let me keep it simple.
One of Yesterday’s 30-M inute candle was a red one and big in size. It has huge volume. That means we had heavy supply in that area.
Now 50-60% of that bar from down will act as resistance which means demand will be dominated by supply at half of that bar from
down. In market it’s also important to know which is demand area and which is supply area and then which one is dominating.
Regards
Raghav
Reply by AW10
Sumit, I would refer this 60% in terms of f ib level of 62.8% retracem ent. For ease of use, u can very well approximate it to 60% and
that's what Raghav has described here.
If you visualise, then that big red bar can be called as a major wave in 1min chart... or any low TF chart, which m ight have been made
up of few smaller internal waves.
In 30m chart, this all is covered up in 1 big bar.. so when u consider 60% of big bar, it is like looking into the mind of 1m in chart trader
who is waiting for 60% retracement. That is as deep as a retracement shou ld go to, to keep the previous trend in motion (most of
the time). If price can retrace more than 62.8% (or 60% approx.), then most likely we are seeing the reversal.. it is no more
retracement.
Do spend time in understanding the difference between retrace ment and reversals and u will see the difference in your chart
reading skills.
Happy Trading.
Trade Setup REALTIM E 21-M AY-2010:

21st May 2010, 10:01 AM
Tata motors and ICICI bank are showing bit of weakness.
Regards
Raghav
21st May 2010, 10:37 AM
Usually chart won’t lie.
Regards
Raghav
21st May 2010, 12:57 PM
Indeed my S/L being taken out at the top o f that shooting star. Don’t mind as long as I stick to my rules. Now there seems to be
negative divergence. Break of previous P/L I will go short.
Regards
Raghav
21st May 2010, 01:21 PM
Nifty we have a red hamm er w ith volume break of that hammer downside can give very good move.
Regards
Raghav
21st May 2010, 02:15 PM and 02:47 PM
Nifty – OB > 5 bars.
Regards
Raghav
Again a small -divergence in nifty. It’s been a day of extreme volatility.
Regards
Raghav
EOD 21st May 2010, 04:10 PM
It’s been a day of push and pull. As far as nifty is concerned I had only one trade today.
Big gap down, higher highs and lows, lower highs and lows, again higher highs, double top, -ve divergence twice. An eventful day.
Yes. We can take a bias and go long or short and get so me profit. But as per my policy no signals no trades.
I have marked a -ve divergence twice; one of that gave a pretty good move. Second one was almost at the end session. Also all of our
qualifiers were not met.
Hammers work really well and I couldn't take that trade as I couldn’t make out any clear picture also this was preceded by a -ve
divergence.
Regards
Raghav
4-min Timeframe:
Originally Posted by columbus
Hi Raghav,
On 4-min timeframe atleast 5to6 signals were generated
Hi Columbus,
Perfect. 4-minute TF gives som e real good entries. I have been trying to harmonise it w ith Stochastic without tweaking the original
rules. Something which can extract maximum juice out of 2.
I am thinking from both perspectives – scalping as well as trend (opening position first up and then carrying it till the trend
dissipates).
One of my pet observations which give too good trades is .
1. Stoch in OB – upper band piercing GREEN + RED.

2. Stoch in OS – lower band piercing RED + GREEN.
Let me comeback with few charts and more on this by night.
Regards
Raghav
Reply by AW10:
Originally Posted by Raghavacc

1. Stoch in OB – upper band piercing GREEN + RED.
2. Stoch in OS – lower band piercing RED + GREEN.
As far as i understand, this strategy of BB trading is "Reversal to Mean approach" i.e. anti-trend approach.
Whereas the other system that u are following (Oscillator one with Pivot) is more of trend following.
Two entirely opposite way of looking at the market.
Will need a lot of clarity in decision making to trade them simultaneously. May throw additi onal psychological challenges.
But I am sure; you will find your way out.
All the best.
Happy Trading
Reply by Raghav:
AW,
Few observations from my real trades.
90 - 95% of the times Stoch and BB complement each other i.e. Upper and lower piercing happens in OB and OS respectively.
Regarding your opinion on anti-trend and clarity is concerned. Incidentally those piercing takes place at the start of correction wav es
and then at the resume or continuation of impulse waves. I have posted lot of charts in BB thread and even on trending days I caught
huge moves successfully in scrips like T ATASTEEL just using this method alone.
I do agree that Trend following and scalp ing are 2 different mind -sets. Here we respect both. No disputes.
Further since the Stop remains very near (top or bottom of upper or lower band respectively) whipsaws are not of a big issue.
I am attaching ICICI Bank 4 -M in chart for last 3 days. It gave enough opportunity for profit. Also to note the fact that on all occasions
BB gives signal either in OB or OS zone. So we have no conflict .Trend follower can follow trend and a scalper can break that trend in
to parts (up and down) and grind most of it.
However no system is perfect. If something works even 60% of the tim es we are happy.
The reliability on the system remains high due to its usage in both trending and range bound markets.
Regards
Raghav
Reply by Raghav – Trade Setup EDUCOM P 20 -MAY-2010:
This is what exactly this system wants to achieve. We are in a trending market now. That does not mean we disapp oint a scalper. We
want rewards for both. EDUCOM P chart we are looking at 20th May 2010. Just one signal early in the morning for a trend follower.
Then all the way and entire month is made. He can spend rest of the month for any other commitments!!! 560 to 500. (Note: The
trend follower has only one signal as the price remained below 40 EMA for the entire period in question. Trend follower will look for
longs only once price remains/sustains above 40 EMA for a considerable period).
Then a scalper has may be 2 -3 signals in the anti-trend direction which also fetches few rupees. W e need to rem ember a scalper
never remains in the trade for say more than 30 Minutes (max). So at the end of the day both go smiling. Can it become simpler than
this?
Also note where the signal got generated. In oversold zone. So Stoch and BB go in synch. Chart keeps on generating signals like this
number of times in a day in a week. Just catch 2-3 signals in a week. That’s enough. Even powerful swing trading can be done
through this set up. If you surf through BB thread I posted one chart when ICICI was @1000 and it gave a sell signal (F&O). I used
same system – BB upper pierce, then negative divergence. Today it’s trading @ 834.
I do study lot on psychology. In every one of the book I read it concludes that human brain is so tuned from early ages that it cannot
do simple things over a period of time consistently. Ironically even we don't allow others to do simplistic things....!!! W e need magic
formulas everywhere.....well......... what to say...
Sorry ST - That’s the way I talk... too much straight forward....

Regards
Raghav
One of the members has sent a PM to m e and his opinions are like this:
1. This system cannot be understood by newbies.
2. This system uses very little information to take trading d ecisions.
My answers to these questions are:
1. Any one when enters market has to have atleast basics in his bag. It’s like when we learn driving car we should have atleast
basic judgement skills and then where to apply brakes, when to accelerate etc. Once we get hold of it we can take our car to
congested places.
Now when it comes to system , a newbie can just start trading this system just by using BB piercing. Trade upper piercing in OB
and lower pierce when in OS. Can keep the stop loss at the top or bottom of that pierced bar. That’s it. As simple as that. I
have posted enough charts in BB thread which itself talks how profitable it can be.
As he trades this simple setup for weeks, months and years the understanding of patterns, price action and pivots, resistance,
support develops by experience and screen time. In market there is no shortcut.
2. What is m eant by little information? What is meant by full information? I asked the sam e person if the inform ation I use is
little then tell me what all information should I make use of. So far no answers. When o ne comes with say "X" is wrong better
he suggests a "Y" alternate. I mean when I say something is wrong I should be in a position to say what is right. M y answer to
this question is -in the chart itself all the information is built in and factored. There are traders who make tonnes of money
just by using chart and volume alone.
Also I do not have any compulsion to prove or make any one to trade this system. I do not feel comfortable in repeating this
sentence again and again.
Regards
Raghav
Overbought and Oversold:

Let’s keep it simple.
Oversold: Say we have many vegetable shops in our colony. They keep on selling and at some moment say all the stocks start
getting emptied. But people have to eat and survive. So people start buying and due to heavy demand the shopkeeper keeps on
increasing the price. So the price goes up.
Demand > Supply = price goes up
That’s why we always BUY in oversold zone because price is going to go up. (Exception Stoch stays in OS > 5 BARS).
Overbought: Let’s say people have bought the vegetable for next one week and the demand now has declined as there are no
buyers. Then the shopkeeper starts reducing the prices as there is no demand. So price drops.
That’s why we always SELL in OB zone as the price declines and we can buy at a later stage for lesser price. (Exception Stoch stays
in OB > 5 BARS).
Supply > Demand = price goes down
It’s just a hypothetical example to understand the concept. Let’s not apply our logical mind here!!!.
Regards
Raghav
Trade Setup TATASTEEL and TATAM OTORS 24 -M AY-2010:

Originally Posted by laxsri
Hi,
This is the Nifty 5 min chart. Please observe the blue line in the image attach ed. Here is where RSI > 70 for more than 5 candles (satisfying
the first condition), for the second condition, there is no candlestick pattern showing negativity signs but the Nifty has cr ashed. Please
suggest the behaviour behind it.
Also, for Tata Steel and SBI, the candlestick trends were positive in the daily charts of the type "Meeting Lines Pattern" and "Bullish hold
pattern", still both of them closed in negative. Any suggestive reasons.
Laxsri,
I cannot find any chart in your post.
However, coming back to your point. Yes, Indeed the Nifty stayed in OB > 5 bars and then got crashed as per 5 -M inute chart. That’s
the exact reason I make use of BB as well as Pivot breaks.
That’s one part – Second part is even good systems will fail once in a while. No system is fail proof. That’s why I mix price action, BB
and Pivot breakouts.
Later when I post the chart (in next post) I will explain w hat I did.
-----------------------------------------------------------------------
Tata Steel, SBI – We are in a downtrend. Friday bulls tried to reverse the market. Just by looking at one candle on daily chart , we
cannot say whether it’s going to be reversal or not. We need confirmation. What’s that confirmation? M ore higher closes. So we need
to wait. Today bears have reversed it again downside. I suggest you to study Steve N issons "Candlestick charts" thoroughly.
For m e Tata Steel gave great opportunity. I do not trade SBI. Hence can't comment.
TATAMOTORS
By now I must have posted more than 50 charts overall. If anyone traded these signals seriously then there is no looking back.
It’s just not one or two day phenomena. It’s universal. Charts keep generating these signals.
Regards
Raghav
Trade Setup Nifty 24-M AY-2010:

Gap up always creates noise. So
as per this method one has to
wait for first 1.5 hours at least.
Market won't go anywhere.
I am not putting BB as today I am

putting lot of green lines. As per
BB as well as Pivot break went
long at 4992. 4th line marked
from bottom. Break of PL, got
out at 5009. BB didn’t give any
reversal signal in 5 M INUTE
CHART. 4 minute chart- Lets
keep it aside.
OB > 5 bars. Remember I have

mentioned several tim es we do
not buy as soon as OB > 5 bars.
W E NEED TO BUY DIPS. So we
have to wait for the dips.
However, dips/retracements in
a day do not keep on breaking
PL's. I waited till 3rd P/L break
and went short. Other reason is
at 3rd P/L break I got very
nearby S/L. Just listen what
system and market says. Reward
or S/L. No issues.
Trade Setup EDUCOM P 31-M AY-2010:
A little bit of effort to understand this method can never go for waste.
EDUCOMP today.
Regards
Raghav
Quote:
Hey Raghav,
Thanks for your reply and am eager to know one more fact, of all the stocks available in Nifty 50 and BSE 30, how did Educomp catch
your eye. Any specific criteria one should look for in spotting these types of stocks or patterns.
Please suggest.
It all depends on who you are and what type of set up you are comfortable w ith and what gives you more needed confidence.
I am comfortable with few patterns which these stocks generate again and again (ICICI, TISCO, TATAM OTORS, EDUCOM P) and for
me they are easy to read. And they do facilitate this m ethod with high rate of success.
The key is you should extensively study few s tocks and just focus on their behaviour for few months. Go through the historical charts
for may be last 3 month 6 month or if possible one y ear again and again and observe. Any tim eframe which you are comfortable
with. Then all of a sudden you will know w hat it is likely to do next at any given point of time....
For example: Today at this point of time (3rd June 2010, 12:18 PM) TATAMOTORS is trading at 765. It’s o ne of my favourite setups:
Staircase rally. Now M y S/L is @ 761 and I bought @ 764. So now I look for at least Rs 6 move upwards with risk of Rs 3. When you
know what’s your setup and what’s your losses are, profits start chasing you automatically.
Regards
Raghav
Trade Setup TATASTEEL 31-M AY-2010:
Today Tisco behaved very violently.
Broke Low, broke high, again broke low and then again broke high.
However, if you followed what Stoch said we would have 1 losing trade and 2 winning trades.
Pointwise comment. M ay be bit difficult to understand.
1. –ve divergence – Break of P/L a winning trade.

2. OS > 5 Bars – at the same tim e w e have 2 hamm ers. Still we look at highs to short. Then it goes and makes lower highs even
without touching OB zone. I short the break of PL.
3. Stoch makes HIGHER LOW. Then it makes higher closes and my stoploss is taken out.
4. OB > 5 bars – wait for dip and break of Pivot high we go long. In case one knows what exactly is the end of dip then he can
take long even before that pivot break. Let’s not discuss that now.
Being conservative w e end with up with Rs 8 profit and Rs 2.50 loss = net Rs 6.50.
The key is to follow the m ethod religiously by keeping intuitive, logical and emotional mind away.
Regards
Raghav
Quote:

Thanks Raghav.
Can you please help me understand on w hat basis (apart from the peaks / troughs of the day) should an intraday target / support price be
decided.
I suggest you to Read "A complete guide to Technical Trading Tactics" by John L. Person. It should help to build some good ba se.
Regards
Raghav
Trade Setup TATAM OTORS 04-JUNE-2010:
Trading is all about what we see rather than what we think.
Few days back in local newspaper I read this quote.
--------------------------------------------------------------------------
Success: Doing very simple things day by day with unprecedented discipline.
Failure: Repeating small and same mistakes again and again.
---------------------------------------------------------------------------
Today, it was a simple setup in TATAM OTORS.

Our aim is to make very few low risk and high potential trades in a week which is less stressful but more profitable.
I personally do not prefer trading first 1 - 1.5 hours unless I see a strong setup early in the morning. Reason – it takes time to build a
setup.
1. Stoch stays in OS zone for more than 5 bars. Sign of weakness. Price goes to 21 SMA but comes back. Stoch doesn't reach OB
zone – so we need to wait for the direction.
2. Point number 2 Stoch makes higher low - sign of strength. Arrow number 3 we have a hamm er. Also do note that lower
Bollinger band pierced the tail of that ham mer. One of my favourite long setup. S/L below the tail of hammer and we are long.
I have not added Bollinger Band to this chart to keep the chart non confusing.
3. Stoch in OB > 5 bars sign of strength. Next our Pivot low is broken and it’s just + Rs 2.50. We look for next chance. It’s part of
the game we have to accept.
4. Stoch makes higher low again. I go long above one more hammer keeping the S/L below the tail of the ham mer.
6. Here there is no -ve divergence so we need not liquidate the position immediately. W e wait.
7. Stoch makes one more higher low. More is left. Then w hen we see w ide range bar w ith huge volume its indication that it can
be a buying climax. Get alert. Next bar is a shooting star with good volume. I place my trailing S/L at 80% of that wide range
bar. It’s taken out within few minutes. That’s it for the day.
In a week may be twice we get these kind of strong setups. We just do whatever it says . Awarding part – we leave it to market. Key is
to know "W HAT IS THE RISK". Also trailing stops or taking profit at various points is an art. I myself and you all are learning it day by
day by our practice and experience.
Regards
Raghav
Importance of Pivots:
Just to mention the fact that for day trading the levels play major role.
th
What I mean is for Tata M otors (Chart I have attached few posts ago) Friday’s (4 June 2010) Pivot levels were:
Resistance: R1 – 771 & R2 – 777
Support: S1 – 758 & S2 – 753
Key is to know weekly as w ell as daily Pivot levels.
Now just look at chart what happened. Early morning it slides and halted @ 757-760 range. We have 3 hamm ers. Lower Bollinger
Band System cutting through the tail of a ham mer. Isn’t that enough confirmation?
We know that at all major pivot levels, we have floor traders waiting for picking the orders. So it pays to get in to trades at those
levels when our system tells to go ahead.
Then if you see, R1 is 770 where we have a long consolidation. There is no harm in using this knowledge to make this system more
reliable. We can just have an excel sheet o n desktop keeping these numbers. No need to put up lines ON THE CHART and mess up .
Let the chart be with as less indicators as possible. Charts look beautiful without any indicators.
Trading as well as highly profitable traders were there well before computer software/systems/programs were invented. Do we
think the people before it were dumb?
Just Stoch and candles. That’s enough once we get a hang of it.
However, additionally I am keeping 21 SMA and BB for confirmations since we are in initial stag es and also we need to make
newcomers comfortable. That’s it. No more indicators.
Regards
Raghav
Trade Setup TATAM OTORS and ICICIBANK 08-JUNE-2010:

Today TATAMOTORS did move either way. Same time it also teaches lot of lessons.
1. We have OB > 5 bars and then a p ivot break. Long. It did produce a tiny trade, as P/L is broken after an hour.
2. Now we are going to buy at dip. So it is at Point number 2 in Stoch, it comes back without being in OS > 5 bars. Then there is a
window (Gap up) which shows the strength. We are long. Got good move. OB again > 5 bars. Again everything is bullish.
R2 = 753. See how useful that information was. I never expected such crash but bias is an enemy of a trader. Here w e clearly
see the difference betw een mechanical trading and emo tional trading.
Upper BB piercing both in 4 and 5 M inute chart when in OB zone (4 minute chart is for the confirmation of signals). As per the
method, I was still bullish and it is our commitment to do only what system says. Next we have 2 consecutive P/L's broken and S/L
also being taken. Stoch also makes lower high which indicated weakness in up move. Shorted at the break of window , which gives
almost Rs 18 move.
Also to note is the fact that one can (Aggressive traders) cover positions once it reaches R2 and would have made more profit than
what I could. However, my aim is to persistently stick to rules which give more and more confidence in what we do. Also a kind of
satisfaction by EOD. It’s again individualistic.
Its second time that I encountered 2 extremes (Up and down) under this method and it pays to listen to the system.
Remember in initial posts what I said. "Shorting when upper BB pierces in OB and long when lower BB pierces in OS". How many
more examples w e need? ....
Regards
Raghav
Different Chart Setups:

Also one may ask why one day I put SM A 20 ; another day BB and someday only candles. However, it makes no difference as long as
we follow price action. The purpose of putting them is to just show how resistance and suppor t works.
One can make use of any one of them or all together depending on comfortable levels.
In market Price is king, volume is queen, indicators are servants.
Regards
Raghav
Trade Setup TATAM OTORS and ICICIBANK 09 -JUNE-2010:
A golden day for our system.
Yesterday late session OS > 5 bars.
Early morning comes out of OB zone. BB confirm s shorting.
Then double bottom. +ve divergence.
OB > 5 bars add.
-ve divergence. Cover longs and open shorts (Reverse). So we have caught a down move, then an up move and again a down move.
Chart is in front of you for rest of the calculation.
Do we need still more? Watch where is Stoch when lower BB pierced.
Regards
Raghav
Trade Setup Nifty 08-JUNE-2010 and 09-JUNE-2010:
This is how I traded Nifty.
We need to remember - On a big gap up/down day its essential to wait for at least 1.5 to 2 hours as indicators get choked up and
need tim e to balance themselves. Till then we can trade price action (If one wants to trade in such condition!!).
th
For m e it was strictly no trade on M onday (7 June 2010).
th
Then coming to yesterday (8 June 2010) (Half of yesterday’s chart produced below along with today's). Just see: Again that typical
phenomena: Upper BB pierce – Stoch -ve divergence – Then.............
Coming to today's chart:
It made bottoms thrice but held on to support which means it has strength. We are least bothered whether up move is due to
covering, sentim ent etc. We go according to our chart reading. It breaks the range we go long. 5022 P/L brok en we are out. Stoch in
OB > 5 bars we add dips. Makes higher high but lower high in Stoch. For -ve divergence: if we can’t mak e out lower high in Fast line
(Green), then see the slow Stoch line (Red). So our S/L gets taken out. Hardly 4 points trade. Then all conditions of Stoch rule
satisfied. We are short. I came out @ 4992 when it fell in congested zone.
Market is like a cow .When we try to squeeze maximum milk we are definitely in for a kick out...
Regards
Raghav
Reply by SwingKing (aka Raunak Agarwal):
Raghav,
A very good trade indeed. Keep it up. I just have a few p oints to share.
Sometim es, in Day trading some of the most vital clues occur just before a trend is about to set in. And today's trade is an excellent
example of that. Look at the graph below. I have marked the indicator with orange lines. Between 9 to 11 your indicator was making
a lower low and lower high. Your price on the contrary was making higher lows. Now this typical phenomenon is called hidden
divergence. This is price directly telling you that despite the momentum slowing, I am not ready to go down. When you typical ly get
this signal, your volumes will be very low. Now, once your Stochastic touches the OS zone and comes in the neutral zone, you should
immediately know that this is your trade.
1) Hidden Divergence confirmation

2) Low volume pattern confirmation
3) And finally your range breakout confirmation.
Hope this helps.
Tc
Trade Setup Nifty 10-JUNE-2010:
A no gap day.
Then, first up OB > 5 bars.

Then, Stoch flipping down
coming back and coming
out of OB. I didn’t take this
trade as:
i. BB was too
narrow.
ii. All our qualifiers
were not met.
Whereas at point number 2

I did go for the trade as
Stoch made lower peak and
in no tim e my S/L was taken
out. Needed to wait for the
opportunity.
At No 3 and 4 Stoch refuses

to touch OS. Higher lows in
Stoch whereas lower lows
in Price. Then BB pierces a
red and Green
horizontally. That’s my
favourite. I didn’t go for the
trade im mediately as still it
is in the range.
Then we got a clean shaven

candle for breaking range.
Regards
The low of that candle was
Raghav
my S/L and then again OB >
5 bars. A dip and resume of
the trend takes us to the
end of the day for one
good trade.
In market – A loser tries to create Opportunity. A winner always waits for the opportunity.
Regards
Raghav
Trade Setup ICICIBANK 11-JUNE-2010:
A reversal takes place after providing signals on many fronts. ICICI Bank today's 5-Minute Chart. How beautiful that setup was.
See how many parameters were there in our favour to take a long position.
1. +ve divergence (Lower low in price, higher lows in Stoch)
2. Tweezer bottom
3. BB piercing
4. Trend line breaks (Before that w e have 3 ham mers each closing at new highs).
5. A clean shaven candle breaking the trend line (Means a candle having no wicks on either side).
I have put 2 vertical lines. Just observe the activities/action in between those lines.
The short trade I did earlier marked in the chart was purely based on price action and pivot breaks. However, going for a short after
OB > 5 bars will not be profitable most of the times.
Regards
Raghav
Trading Forex:
Truth is universal.
When I apply our method to EURO/USD it gives really good results. Rule remains same . "Short when BB pierces Green and R ed
horizontally and Stoch in OB. Go long when BB pierces Red – Green horizontally and Stoch in OS". Stoploss is always top of pierced
RED bar for shorting and bottom of pierced GREEN bar for long.
Just see how many pips one would have made. My ultimate objective is to apply this method to Forex after refining all our
observations over the period of time.
Regards
Raghav
Quote:
Originally Posted by columbus

Yes, once it is successful with one instrument, we can apply to other financial markets also like Futures, Bank Futures, Commodities,
Currency Trading and finally FOREX. I am a bit doubtful about Options. In future I will take it up.
Personally I feel it should work with Options as well.
I observed change in Stoch setting in your MetaTrader (5,3,3).
Columbus,
Indeed I have kept Default settings provided by Metatrader. Since Forex is a 24 hour affair w e need to see what TF suits our method
and also its reliability in the long run. Since we do not face issue of volatility in forex the method should come out as successful one.
Also in the process of blending some other simple techniques to make it more meaningful.
Regards
Raghav
Trade Setup Nifty and ICICIBANK 14-JUNE-2010:
If one has patience then trading is a matter of joy. Again and again I said it’s about simplicity. Still I say that.
Remember there is a big industry and vested interest built to make you feel that trading is about million dollar systems and it’s
beyond the capacity of normal mind.
Just see the charts below. I used only Stoch and price action. You decide is there anything complicated? Is there any rocket science
which a newbie can't understand?
I have been told in the beginning that I use very little infor mation. Agreed. Our aim is to just make good trades and not focus on
accumulating information!! We leave the latter task to the people concerned.
Nifty:
Exactly the same

setup as explained
by Raunak few days
back. A small gap
not big enough to
spoil our indicators.
Then OB > 5 bars.
Then watch lower
lows in Stoch and
higher lows in
Price. That action
took place with low
volume. It must be
accumulation. Let
the Stoch come out
of OS Zone. Break
of trend line. Burst
of volume. Very
simple.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
ICICI Bank:
It’s a case of all

extrem es. We can see
everything that a
price can do in a day.
Price holds on to
support. Then higher
lows. OB > 5 bars.
Then see what
happens. A doji with
Extreme volume
(Inside the vertical
lines). That’s
DISTRIBUTION. Wait
till trend line breaks
and short. Then at low
of the day a hammer.
Stoch makes +ve
divergence. A heavy
bullish candle breaks
trend line. Ride till
you feel enough.
So we have seen what

is Accumulation and
what is distribution.
That too in a single
day.
It’s so simple!!!
When we follow rules strictly one trade is enough to wip e out 5 losses.
I have put arrow marks (Please co-relate Stoch and BB) where w e had dead simple opportunities. Just 2 days gave 6 trades.
Assume that we take half (50%) of that i.e:3 trades. Even then one will go back smiling by weekend.
This is very important.
More than 90% of reversals take place either in OB or O S. Next important place is high of the day and low of the day.
So key is to look for the entry in those places with BB giving go ahead signal.
It works and works always......
Regards
Raghav
Trade Setup ICICIBANK 17-JUNE-2010 and TATAM OTORS 18-JUNE-2010:
For a disciplined trader surprise treats are common.....
Sheer Pivot play: R1 – 814; Pivot – 804; S1 – 794.
That’s the reason I use Brokers level as well to enter and cover positions. If something works it’s worth continuing with it. I have put
up lines just for understanding. I don’t put them on the chart in real tim e.
Regards
Raghav
Trade Setup Nifty and TATAM OTORS 21-JUNE-2010:
I love staircase rallies because they give consistent profits and reliable more than 90%. This type of rally is ver y common in
TATAMOTORS. That’s why I love that scrip. I can’t count how many huge trades it gave me w ith that pattern.
Nifty gapped up. As I told in earlier posts I don’t trade big gaps immediately. However the pattern which I mentioned above made
me to take this trade 5335-5362.
Self-explanatory.
Quote:
Raghav,
Can you please let me know as the reason for you to go long on Nifty at the level u specified? As per the principle, watch for OB > 5 bars,
wait for Stochastic to drop to OS area and then go long. Is my understanding right?
You are absolutely right Laxsri. Even your understanding is perfect. How ever as I have m entioned it’s one of the pattern to whom I
am married. It’s one of the setup which works for me. Nothing to complicate. Do whatever works for you but not gambling. That ’s
the key. It’s nothing but one of the style of price pattern. When you get experience in chart read ing you will know what is strong
price pattern and what is weak price pattern.
We are not trying to violate the rule of our system. Whereas, we are bringing best things in to our style of trading. Remembe r as a
trader we evolve day by day.
Do remember what I told earlier. Price is king.
Regards
Raghav
TATA M otors:
I had a winning trade and I had a losing trade today.
The moment it reaches 820 (R2) Stoch already made divergence. Got in at 818 and had to cover at 810 due to hammer with big
volume. Again entered at when it dipped next time with Stoch making double bottom and breaking the neck as well as price making
good consolidation. Stoploss taken out at 807. Overall +5.
Lessons: I would have kept an advance order @ 815 or 816 (area above consolidation).
However, Market has nothing called "Perfection". What all we can do is "Improve".
Regards
Raghav
Trade Setup Nifty and TATAM OTORS 22-JUNE-2010:
We got 2 entries.
1. Stoch not making lower lows whereas Price does. Again see the candle next to breakout candle. Clean shaven with no wicks
on either side. Sign of strength indicating that more is left.
2. -ve divergence. Then a crash.
============================================= ================================================
This is how floor traders trade. They don't know anything about Indicators and Systems. Neither do they understand.
Do you see any indicators on the chart? Just see how many opportunities are there.
Regards
Raghav
Trading Divergences TATAM OTORS 01-JULY-2010, 02-JULY-2010 and 05-JULY-2010:
I found that one can be highly profitable just trading divergences. Just 3-4 opportunities in a week are enough with proper position
sizing.
Some of them will be big runners and others are small o ne. We just go for it when w e see, one keeping proper control on risk.
To be profitable by weekend it’s not necessary to look for ev ery top and bottom.
Regards
Raghav
Quote:
Originally Posted by raunakagarwal

Very well said. All it takes is one strategy, simple risk management rules and an analytical mind to beat the markets. I beli eve this is far-
far better than any mechanical system giving a trader "Buy – Sell" signal.
Good to see that you use your analytica l mind in executing trades. No matter what happens, a mechanical system cannot see what the
human eye can.
Tc
Absolutely Raunak.
It’s true that there are only three systems.
1. Bad System
2. Good System
3. Better System
There is no "Best" or "Perfect" System. If there is any "B est" System ever, it’s human brain.
Still people spend whole lifetim e in search of the "Perfect" System which never exists.
Further the irony is that including me knowingly or unknowingly all try to tweak a "better system" to "Best System" an d get beaten
badly.
Once I realized this I stopped searching for all costly software, Fancy Formulas, Market Profiles, Alert indicators etc. etc. and started
trading what I see. With humbleness I say that this has given me phenomenal results. I owe it to ST's great thread that inspired me to
think this way.
Regards
Raghav
Trade Setup Nifty 12-JULY-2010:
I did hardly trade last week as its moving in tight range. Not trading is also a part of trading!!
Today was a classical copybook style example for divergence trading.
The beauty of divergence is that it always catches reversals and allows getting big trades. Rule is simple.
1. For shorting. Stoch makes lower highs and price makes higher highs. Wait for the uptrend line to break and go short keeping
higher high of the price as S/L (Chart explains it all).
2. For going long. Stoch makes higher lows and price lo wer lows. Wait for the downtrend line to break and go long keeping
lower low in price as S/L (Please see the chart).
However in such range struck market one cannot expect more than 20-25 points in a single route.
Regards
Raghav
Two things, two
different
directions. I Jump
in without
hesitation.
Also I have few

questions.
1. There is one
more
divergence
in the chart.
Can anyone
pick it
please?
2. Adding to
point no 1
we don't
take that
trade. Why?
No prizes for best

answers.
Regards
Raghav
Quote:
Originally Posted by jinnav

Hi Raghav.
First, thanks for this nice thread with gr8
charts and lucid explanations.
Second, you've already given prize to all,
by starting this thread.
Hi Jinnav,
Nice to see your inquisitiveness and effort. You are right. Just need to add one more thing.
Look at the volume. It’s very low almost nil. Remember to throw a ball up you need lot of energy (Volume). To drop the ball do you
need any energy?
Good to see you people taking so much interest in this thread. I am grateful to all of you... Keep questioning.
Regards
Raghav
We traders trade based on the belief that price has to move in either direction i.e.: It can’t be stagnant, even if it does i t can’t do that
for long.
5400 was where it was struggling and today let’s see what happened.
1. We have a +ve divergence. Sign of bulls gaining mom entum.

2. Hidden divergence. (Go through previous pages where Raunak has luc idly explained about what is the phenomenon of hidden
divergence).
Hidden divergence: Stoch lower lows, price higher lows coupled with low volume. Then burst of volume. And the rally.
Chart explains it in detail. Also remember one important thing. The longer the rally with small candles more will be the strength
and sustainability and vice-versa.
See the structure of the rally after that +ve divergence. If we observe this for a while with patience, the market looks like a gold
mine, I bet.
Can anyone please try to mark the entries, trailing S/Ls and the exit?
Regards
Raghav
Quote:
Originally Posted by vmonu

Hi Raghav, have i marked the points correctly?
The second last candle is not an exact Doji, but a bit like spinning top with smaller lower shadow.
Vmonu,
Really good effort. You are right in all aspects.
There is one point to be noted. After +ve divergence in most of the cases the volume bursts with pr ices moving upwards. However,
in this case it took very long time for the volume to co me in. I have a standard S/L of 15 points on entry. I don’t enter a t rade if it
demands an S/L of more than 15 points.
As I said earlier trailing profit is an art. If yo u move your S/L too close you will be caught. In case its far then you may give back what
you have already in your pocket.
On Real-tim e it needs lot more effort to trade these setups which can only come by practice and patience.
Great Pickings VM ONU......
Regards
Raghav
Trading the Divergence in Nifty 31-AUGUST-2010 and 01-SEPTEM BER-2010:
The big moves take place always after a typical phenomenon. Below is th e evidence.
Regards
Raghav
Quote:
Originally Posted by rajeabc

I was thinking that top should be matched with top and bottom with bottom? Can we mix them?
Raje,
It’s all subjective and anything that is visual. Two different things two different directions. That’s enough. We do not look for
precision.
Price remains flat. Stoch makes higher lows. What do you infer? It’s a sign of strength. So on.. Please let’s keep it simple..
Regards
Raghav
Trade Setup TATAM OTORS 14-SEPTEM BER-2010:
The volatility says it’s trending. What’s the trend we kno w. Today there were 2 opportunities.
1. Price breaks the range of yesterday’s consolidation. Most of the Day trading strategies would make us to enter long.
However, I did not take that trade.
2. Next best chance is to enter on retracement. Just look at chart and see the fib zones. 50% is the point to enter. Stoch near OS.
Downtrend line gets broken. OB > 5 bars in the background says is loudly that we are in for a ride.
An ideal set up (doesn’t require m uch of analysis) which we don’t see every day.
Regards
Raghav
Trading in the Direction of Larger Timeframe – ICICIBANK SEPTEM BER -2010:
Below is a quote from The classical trading rule is "W HEN DAILY TREND IS UP BUY EVERY DIP IN INTRADAY"
ST:
ICICI DAILY CHART
Trade only when you
have a very strong
visible trend in the
market... trading on
every turn is
frustrating..... Trade
only when the market
is bursting like corn
with cracking sound in
the popcorn machine
we see in the malls....
You know its cracking....

you can hear the sound.
So it’s time to be
aggressive and
doubling or tripling the
size. I just wait fo r the
Stoch to come near 30
levels and buy/add
without mercy. Rest is
visible on the chart..
ICICI daily trend is up.

(It started vertical
move and started
printing Doji's. Hence,
caution should be
exercised by taking
lower risks)
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Coming to intraday ICICI 5-MIN CHART

chart we recognise dip
by "OVERSOLD" zones.
In other words every
oversold level is a
buying opportunity.
I have marked those

zones with up arrows
both in price and Stoch
area respectively.
It’s 5-Min Chart. See the

RR. It’s awesome. Same
applies to one more my
favourite TATA M otors.
Regards
Raghav
Trade Setup TATAM OTORS 20-DECEM BER-2010:
Though it moved just 5-6 Rs in our favour, overall it was a flop show. It couldn’t cross yesterday’s high of 1360 marked as line in the
chart.
Interplay of Support and Resistance – TATAM OTORS DECEM BER -2010:

Though month of December is not the best time to day-trade, just see how simple things can help to earn consistently.
1300 is a round-number. It’s broken with big volume. Same becomes support. Rule of thumb: "Previous resistance now becomes
support". So the buy zone is 1300 -1290 each time it hits that support level.
Isn’t that simple? For easy understanding I have mentioned O/S and O/B and divergences in Stoch. However, this particular chart not
needed any indicator for trading as it is as obvious as moon on the blue sky.
Breakout – TATAM OTORS DECEM BER -2010:
We have covered support and resistance, divergences, O B and OS. Let’s just workout on some aspects of breako uts as we move on.
We need to rem ember one thing: "To throw a ball in the air we need pow er (energy). To drop the ball you need almost no
energy". Likewise the price to move up needs volume and follow up, when there is no follow-up the other 2 options are either
consolidation or drop in the price. So to play a breakout one needs good understanding of the concept as well as understanding of
psychology.
70-80% of the tim es as experienced people say the price moves in a range. Others say 20-30% of the time it moves in trends. In other
words I personally interpret the ab ove sentence like this. While day-trading 70-80% are false breakouts. Only 20 -30% of the
breakouts are valid. A successful day-trader will be able to distinguish between these two (We will cover the sam e soon).
Unfortunately most day-traders and novices get trapped in false breakouts by impulse trades. Brokers and professional traders take
their money away without much effort!!
Here I brought a chart and let’s analyse how pro's trade and how novices trade.
TATA M OTORS 5-Min chart
th st nd
The chart covers 20 , 21 and 22 of December 2010.
th st nd
On 20 price hits 1360 and drops sharply, same on 21 and on 22 early morning, it breaks 1360 and all novices go long whereas an
experienced trader knows the symptoms of valid breakout and he does the opposite of what novi ce does.
The breakout candle has moderate volume. Next candle a gravestone doji, next a red candle breaking low of the doji. Then again a
doji coupled with lower volume, then more bearish candles which mean there is no follow up for the breakup and failure of retest,
Stoch in OB. Hence the odds are against who entered lo ng. (Later I will explain what a "retest" is). Here a pro enters short @ around
1365-1364. S/L is above breakout candle i.e. 1368. Just 4 Rs.
If is crosses 1368 there is nothing to lose, however if it’s a false breakout next target w ill be the recent round number i.e. 1350. 1:3
risk-reward. That’s what exactly has happened. That’s the beauty of trading false breakouts.
Here comes why pro traders need just 30 -40% win to make money. Simple. Their risk-reward ratio is too good.
Just try to grasp what I have w rote and shown. I will cover mo re later.
Retest – FOREX GBPUSD DECEM BER -2010:
As promised in previous post I am illustrating what a retest is. Those who trade Forex "Retest" is a common word for them. To make
things clear and for better understanding I have taken a forex chart itself. However w e need to remember "Price is same across all
markets and all timeframes".
In the below chart (GBPUSD 15 -M in chart) I have drawn a red horizontal line which represents 5560 (let’s round off to 5550).
On 16th D ecember we see it makes a higher low @ 5550 which proves to be a support at that point of time.
On 17th December it breaks the support 5550 and moves all the way to 5450. Now , 5550 becomes resistance. Rule: "a support once
broken becom es resistance and vice-versa”.
The aggressive traders make a short entry @ break of this 5550 .What most pro's do? They know the retest is the best place fo r entry
(stacking odds in their favour).Now on 20th and 21st the price r eaches 5550 and falls like anything. That means it RETESTS 5550 and
the RETEST IS SUCCESSFUL.
Now let’s go to the TATAM OTORS chart found in previous post. It broke 1360 and moves to 1370. This is where novices enter and
repent. What pro's do? They look at 2 things.
Either wait for it to retest 1360 for a valid break out or look for a false breakout to go short.
In the particular case the retest was unsuccessful and price went down. Now one should understand where the m ost orders are?
In this case what I do. I look for retest of 1360. If it’s a success then we see some action like hammers, dblhc, inside bar upper
breakout etc. with volume. Stoch in OS or near OS. Then look to go long keeping the s/l just behind the retested level.
The other option is going short on failure of retest keep ing the top of breakup candle as S/L. (Already elaborated this in my previous
post)
Need to rem ember that on an extrem e trending day when big players carry their operations in a military like precision, the
price may spike or decline without retest as m arket does not work exactly according to theory. To identify such days w e need
to look at volumes and size of candles which comes slowly by experience.
Do ask freely any questions as mutual discussion only makes the learning process speedier and better. Rem ember what all I am
talking and demonstrating is cent per cent practical and can take you long way in your trading career. All this I learnt on my own
without any guru by losing my precious money , time and peace before becoming a better trader. I do not want the same to happen
with any new comer. Besides it also helps me to learn and hear new things from you.
Round Numbers – TATAM OTORS DECEM BER -2010:
Round numbers, shortly called as RN's, work in all markets because there is a psychology beh ind "0".
0, 25, 50, 75 are crucial numbers. M ost of the o rders are placed around these numbers. I have a friend who doesn’t know any
technical but he plays only numbers, still amazingly profitable.
100, 200, 300....... 1000 I mean 00, 000, 0000 etc. are highly crucial levels.
Then comes 50, 150, 250, 350........ 950.... etc. are of second importance.
3rd importance is placed @ 25's and 75's.
What we look for are Hammers, Shooting Stars, DBHLC, DBLHC, Engulfing Bars, Inside Bars at these levels and take the trades
accordingly.
TATAMOTORS fell from 1375 – 1250. Few posts back I told "Price (anything as such) to go up needs energy (here volume). ” When
there are not enough buyers to buy, it falls in the form of retracem ent. If you look at daily chart today is a hammer pattern. A
hammer @ 1250. That’s what we need to observe. Multi-timefram es, numbers and sustenance.
My main intention is to show how price reacts to these 4 levels. I have drawn horizontal lines @ 1375, 1350, 1325, 1300, 1275 & 1250.
Just see how patterns form at these levels and also consolidations.
Today consolidation @ 1250. Then again @ 1275. Yes, today it was not tradable as its consolidation and then huge spike. However, my
point is to stress on the importance of numbers and how it reacts at those levels.
We shall talk about sustaining a level in next post which should be interpreted along with what all I w rote in this post.
Regards
Raghav
Sustaining a Level:
I was supposed to explain the term: "Sustaining".
It’s like climbing a mango tree. When we are say @ 10 ft. we see lots of mangoes at the branches at the top, we keep climbing up
(greediness). Then at certain level say @ 50 ft. we may not feel comfortable. What do we do? We climb -down to next lower level
(fear). After feeling comfortable at that lower level we may try next higher level and likewise.
Feeling comfort at lower level and climbing up, feeling uncomfortable at higher level and climbing down. Same way the market
(psychology) works. When you feel comfortable at a particular level it’s called "Sustaining".
When we say Nifty sustained 6000. It means its comfortable trading at 6000 and there are enough orders to move it forward. When
we say it couldn't sustain 6500. It means people thought its high and started southward journey.
In coming days I will explain it with charts.
Regards
Raghav
It’s just like practical class after theory in your higher school. Yesterday it ’s theory. Today it’s practical.
Later I will show you how 2 different people see the sam e chart from 2 different angles. A Pro and an Amateur.
Regards
Raghav
Reply:
How an amateur trades:
1. Yes it looks so juicy. I will go long. It’s a high RR trade. I will keep my S/L just below entry. Wow what a set up.
2. My S/L hit. Nothing works in market...... Wow. See there – Another big red candle. It’s definitely going to fall. I will sh ort now. I
knew that it’s going to fall.
3. Damn it. Every time I go long it falls and every time I short it goes up. This is not for me. It’s all game played by brokers and big
players. Nothing works in market. All those theories and chart examples are just nonsense.
2 trades. 2 losers.
Now let’s see how a pro trades and thinks:
1. I can see no big gap ups or downs. Let the engine warm up. I will have a coffee and a walk. I shall wait the price to come ba ck
to my levels.
2. Good. As expected, it’s coming back to my levels. 1275 should be the level where I should see big buy orders where there will
be retest of the breakout. Let’s wait. I have a big red bar now. Now let’s wait.
Yes. I now have Stoch divergence. Price is consolidating just above 1375. Above yesterd ay’s close. Retest is successful. Now
odds are in my favour. W HAT WILL BE M Y POTENTIAL RISK? S/L below 1375 – say 1373. Entry 1378-1380. Good it’s my set
up. I will take it.
3. Smiling all the way to the bank.
1 trade. 1 big winner.
Regards
Raghav
Advice for Beginners:

Most of us in our early trading days experience this. When we buy it goes down. When we sell it goes up. Because we don't know
why and where we are buying and selling? A pro knows what exactly he is doing. He absorbs all the orders of amateurs in the
opposite direction.
REMEMBER: AN AM ATAUER WILL CHASE THE M ARKET. A PRO W AITS FOR THE PRIC E TO COM E TO HIS LEVEL.
We need not be in the market all the time to be highly profitable. Profitable traders hardly take 4 -5 trades per week. They spend
little tim e on screen and more tim e for other productive things. Still are far.... far.....far.... mor e profitable than who spend 12 -15
hours in front of monitor.
Can we control market – no.
Can we control price – no.
Can we control risk – yes.
2 factors are against you and a single factor is in your favour. So just focus on the latter. You will w in.
Regards
Raghav
Trade Setup Nifty 29-DECEM BER-2010:
Is there anything which cannot be understood?
Regards
Raghav
As I pointed out in my earlier posts in this thread , "The best place to buy is in OS zone. The best place to sell is OB z one, as most of
the biggest moves in either way start from these zones".
Once we see consolidation and +ve divergence we should not jump in to trade straight away as there can be shakeouts (will explain
it later). As I told in my earlier post pro's wait fo r the price to come to their levels.
At the end of the post I will show you cleanly where big orders are.
1. No big gap ups. OB > 5 bars. 2 big candles with moderate volume. Consolidation with + ve divergence. Don’t hurry. Let’s wait
for the action.
2. Price drops and comes all the way near 1300 (Round Number). Then a squeezer candle. I was long above that candle. S/L 2 Rs
below squeezer.
3. 3 bullish candles with good volume. Placed stops for 2/3rd positions @ the shoe of breakout candle. Taken out. Brought S/L
for other 1/3rd position to breakeven.
4. Saw a Tweezer bottom. Expected a rally. That’s where I normally add back. However, the very low volume coupled with not so
bullish candles didn’t impress me to add. But no volume follow -up. Was taken out @ Breakeven for 1/3rd position.
Not a great day. Should be considered as either breakeven or a small gain day.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
W here the big orders are?
At EOD I analyse daily and

weekly candles to see the
direction and while during
the day I use 5-min chart for
trades and 10, 30 and 60 min
candles for decisions.
Let’s look at 10-M in chart.
Yesterday 3rd candle back

from the close was a clean
shaven candle with huge
volume. Where did that
candle finish? 1300!!!! W here
was today's support? Exactly
at the top of that clean
shaven candle @ 1300. It
means the top of a heavy
bull candle becomes support
and vice-versa. That’s where
we buy. I mean, that’s the
level we wait for the price to
Regards
come and that’s where the
Raghav
big orders are sitting.
Trade Setup REALTIM E TATAM OTORS 03-JANU ARY-2011:
3rd January 2011, 01:03 PM :
Just try to understand. Where it’s taking support?
I ask these questions: Who will sell at that level? And why? Who will buy? And why?
Why it’s taking support at that level?
Is there any guarantee? No. Because that’s market. What are my odds? 6 or 5 out of 10 times I will win. Still that’s enough to be
profitable.
Regards
Raghav
EOD:
Last 2 days for this scrip can be called as highly frustrating day. The pink line that I have drawn says the choppiness and a range that
it is in.
I took 2 trades. That’s my standard policy. Taking max 2 trades per day barring exceptions. This 2 trades per day equation is working
very well for me.
Trades:
1. Gap up and then a DBHLC. Shorted below DBHLC, keeping top as S/L. 50% closed @5Rs another 40% @10Rs and rest 10% hit
trailing stop for 4 Rs gain.
About trading ranges:
Note: It’s common that when we see range we place an order and then keep the S/L just outside of range. Ex: placing a buy order
while price in range and then placing s/l just below range. Brokers love this. They break the range and catch s/l of most peo ple and
then take the price in the other direction. It happens so often. It happened yesterday and today!! Trading needs patience.
While trading w e need to decide these 3 before placing an order.
a) Trend (It can be any time frame)

b) Location for placing the order (where to buy or where to sell).
c) Trigger (An event which makes us to buy or sell. It can be a hamm er, shooting star and so on).
2. 2nd trade was on break of hammer upside and the s/l was 1 Re below hammer. I would not say I did good trade here because I
waited till it hit my S/L for 7 Rs loss. Any intelligent and sensible trader will cover his posit ion when it didn’t mo ve upside for half an
hour. Old habits seldom die. IT IS NOT NECESSARY THAT EACH TIM E W E W AIT TILL IT HITS OUR S/L . We can cover our position
for a small loss when it does not move in our direction for pretty while or we sense anything fishy.
As I told last 2 days are dead, boring and flat days. Key is to keep losses as small as possible on these days.
Regards
Raghav
Reply on 15th February 2011, 12:44 PM :
Tata Motors daily chart. I have drawn 3 horizontal lines. Please refer them i n tandem w ith my comments belo w. (Along with the 5 -
rd
min chart for 3 January 2011 posted above)
I wanted to reply to with a live example and now I got the one today. Two different perspectives. {For today’s (15-Februay-2011) live
chart refer this post}
---------------------------------------------------------------------------------------------------------------------
rd
In the above chart, let me tell you how I arrived at my trades (3 January 2011). Above I have attached 5 -M in chart for 1st week of
January 2011 and then a daily chart.
th th st
1. Daily chart. On 29 and 30 of December-2010 we have Tweezer bottom candles. On 31 December 2010 we have a doji. On
rd
3 of January-2011 the candle has broken the doji upside. A common trader enters long. Then the price comes down to the
st
consolidation area of 31 December-2010 and we have a sign of support over there on 5 -min chart. The closing price of doji
acts as support many times besides it being a consolidation area. Here I learn how bigger perspective (Daily chart) helps us
even in day-trading.
2. 5 M in chart: I commented on that day that "The pink line range according to me is the best support place. It closed just on
the bank of that range. Let’s wait and see how it reacts to that level and take our trade accordingly" . The very next day it
broke the doji downside and there w as a big down-move. I did not trade this entire move as I was in to some other
commitments.
The Systematic way of looking at it would be:

th th
First go to daily chart: 29 and 30 December-2010 are Tweezer bottoms. An experienced trader would not give much im portance
st
to these days as these are year ending days and there is not good volume to support any moves. Then a gap up on 31 December.
rd
However, that gap up resulted in a doji indicating a weak up -move. On 3 January-2011 we have a doji broken upside. How ? It was
initial euphoria with a gap up (M orning sentiments). Then it moved downwards without much retracement and could not sustain g ap
st
as well as higher highs. It ended being a version of dark cloud cover. Next day our entry would be on break of Doji for med on 31
January.
Every day I am learning a new thing and every day is a new day in Market for m e.
Regards
Raghav
Some words about Trading:

We often hear that it’s easy to interpret charts EOD but difficult to do it in real -time. It’s true as well.
Tell me how many of us do real analysis of daily, weekly, hourly charts consistently? Day -by-Day? Then write a note on analysis of
each candle. Then a plan for next day. Next trade. Support and Resistance.
Keeping the NR7 Rule behind the curtain, how do we react when we see an inside bar? A bullish engulf bar? A dark cloud cover, a doji
on a daily chart? Then how do we plan?
What to do then?
It’s not rocket science. Just look at the history and observe what happened previously when similar kind of phenomena took place? Is
there any guarantee that exactly the similar thing would happen next. No. But say at the rate of 60/100, 50/100 its definitel y going
to happen. That’s it. With proper money managem ent, R:R ratio even if you win 5 out of 10 trades you are a profitable trader in the
market.
I am talking of daily tim e fram e.
What does a professional doctor do first, when he meets a patient who comes with disease? He sees whether patient had similar
disease previously (Patient history). If yes, he will prescribe same medicines with which the patient got cured previously. I t’s all about
action and then reaction (Not medicinal reaction!).
Similarly in market the action (history) gets repeated M OST of the tim es.
A doctor becomes expert after say 10 years of practice.
CA/CS/ICWA becomes expert after 10 years of practice.
A lawyer also...........................
An Engineer as w ell......................
But why traders want to become expert in a w eek? Month? 6 months????????
I have read somewhere that the most number of losers in the market come from engineering background, then comes lawyers,
MBA's and successful business people from other streams. All these people before en tering market, in their previous stunts can
manipulate the work environment around them, even though they are wrong. In Market, we can’t manipulate price. We just have t o
follow the price. Please read this deeply to understand.
The most successful of the traders are either uneducated/less educated or are from military background because they follow strict
discipline and do the things exactly as per the rules. These people have less or no opportunity to manipulate the work enviro nment
around them as rules are rules in military and uneducated/less educated have very less complicated garbage (indicators, TV
Channels, Tips, rumours) inside their mind as we do and they also follow the rules by default as they don't have choice.
An elephant is so powerful that it can turn a bulldozer upside down. Still it keeps itself restricted to a 3x3 ft. space being tied to a
tree w ith thin rope. Where is elephant? Where is thin rope? We traders are exactly the sam e. We are tied to a rope called tip s,
rumours, brokers, TV channels and what not?
I write all these because I was the one who experienced all these before becoming what I am today.
Regards
Raghav
Inside Bar – TATAM OTORS FEBRUARY-2011:
I am sorry as I couldn't trade for last few weeks due to m y heavy commitm ents. However, I do scan the charts EOD.
Here it is. Rule: In any kind of trading we have to follow Step Down approach. That is from higher timeframes to low er tim eframes.
I am attaching 2 charts of TATAM OTORS. One of 5 -Min and another of daily timefram e. See how an inside day works. What happens
after inside day is taken out? How does price react to a trend line after it breaks the inside bar. Where does Stoch go?
That’s how we should trade. Our perspective should be bigger for the direction of the trade (daily or weekly). In simple words what
all I mean is: We are in a down trend day 1 and day 2 .Then we have an inside daily bar: Yellow Signal. Wait: Inside bar breaks upside
and trend line is maintained. What do we do? 100 Rs upper move. We must know how our horse reacts to any given situation. Once
we start observing this in real time or EOD the REAL TUNE OF THE MUSIC starts playing in our life.
Also look back at daily chart for other opportunities i.e.: just see what happened each time after it breaks an inside bar or say small
candles.
Regards
Raghav
Trade Setup TATAM OTORS 15-FEBRUARY-2011:
Today I have captured charts live to explain how I do it real time. Incidentally today was a day where everything I explained e arlier in
this thread came alive.
There are seven charts. Please go one by one and see m y commen ts.
Earlier I briefed about round Numbers: This chart shows how they play. 1200 – 1225 round trip. When this hap pens I play ping pong
(Tennis match hitting the ball from both the courts). Sell around res istance and buy around support) placing the stop just below
support and above resistance respectively). Please do not look to catch exact top and bottom. Don’t try to squeeze entire m ilk as it
may kick us.
At the same time you see that it takes support @ 1200 for the 3rd tim e. Bulls are strong. M y entry was a t 1207 with stop @ 1198.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Now it breaks resistance @ 1225.Remember m e talking of retest of breakout?

Trying to retest.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Retest successful. This is where I add to positions. In case it’s a fresh entry I enter on top of that retest candle keeping the S/L below
the retest candle. In case it takes out my S/L or breaks that retest candle I reverse. We shall talk about false breakouts going
forward.
Stoch making
higher lows.
Price as well.
Need to stay.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Price blasts
after a gradual
hike.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Target was 1250
(next round
number).
However,
momentum
weakens. Time is
up. Covered at
1246.
Regards
Raghav
Quote:
Originally Posted by Pralhad

Hello Raghav,
My problem is when prices breakout previous Pivot High (PH) and then decline, I will get in a dilemma i.e. whether it is Rete st of Breakout
or Breakout failure. And vice versa for Breakdown PL. At that point of time I am in the state of Analysis Paralysis.
I would like to know, how you judge this situation at that particular time. W hat criteria you will look for each possibilitie s? Please advise
me how to overcome this problem.
Thanks and Regards,
-Pralhad
Hello Pralhad,
I suggest that you please go through the above post where I have visually explained a retest of breakout step by step... live.
How to find out? Very good question. Some general sym ptoms.
Let’s take an example. 1000 is resistance. Price blasts through it and then reaches 1010. Now in case of retest the price slides very
slowly... tiny bars, longer lower wicks... low volume....what does low volume suggest? Bears are not so strong or there are n ot
enough short orders.... Ensure further there is no -ve divergence in Stoch. Price slides slowly and comes back to 1000 where w e had a
breakout....... Then you see a hammer, bullish engulf, a big candle with volume or any other bullish patterns........ The candle should
not be tiny......That means bulls now know that there are not enough bears and are ready for next blast....
Don't worry; if you are wrong in recognising, just reverse it. Key here is REVERSING IN CASE W E ARE W RONG (99% fail here
because they carry an opinion and are unable to go in opposite direction in case they are wrong and get caught in the trap.
This is due to the social environment where we live in).
I suggest you take some 2 – 3 months intraday chart and start observing breakouts and failures bar by bar. Also I have posted lot of
charts. You can also go through them and study. Within few months you will be able to recognise them correctly.
Breakout failures..... Inside Bars right after breakout. -ve divergence in Stoch… .. Moderate or big red bars.... then pullback with very
tiny green bars... or no pullback.... If there is pullback then Lower Pivot high....Then break of previous Pivot low.....Please go through
my few previous charts.....
Practice.... observe.... charts.... bar by bar... till you get it.... I know you will get it...
Regards
Raghav
Trade Setup Nifty 17-FEBRUARY-2011:
When I see such beauties I increase my position size significantly. Because, if I lose it, I lose nothing as risk is absolute low and there
is a clear high reward potential.
Attaching Nifty Future as well as 5500 CE charts. Nothing else to discuss. It’s as clear as it is.
Nifty future 5-Min chart
5500 CE 5-Min chart
Regards
Raghav
Today there were plenty of things to take from the market (Plenty of profit as w ell as plenty of learning).
th
This chart was as of EOD Thursday (17 February 2011). Where is the last minor swing high? 1250. Last but one was inside candle
coupled with low volume. Less buying pressure. Thursday is a narrow range day again with low volume and it’s not making highe r
high. So last three days we remained where w e are. Now the interesting o r key area is 1250. Further Stoch is heavily overbought.
Here is Friday's 5-M in chart. For me it was a royal treat. In a week I just look for one day like this. That’s enough.
We have no gaps. It opens at yesterday’s close and it needs to cross 1250 and sustain. Let’s watch. 6th bar from the open – a heavy
bullish bar. Next bar crosses Thursday’s high as well as close. Amateurs go long in euphoria. For a pro fessional to open a trade
sustaining a level is very important. Next bar is a shooting star with heavy volume. Though it closed in green it couldn’t takeout the
high of last bar. Next bar is inside bar. It’s unable to make higher highs. Now bears take charge and its bearish en gulf. Here I shorted
just one rupee below bearish engulf bar and S/L is at day's high. This itself is called breakout failure. Breaking a crucial point then
unable to sustain. Don't worry if you have gone long. Just reverse. That’s it..... Friends, it’s all m ental game........ Failed breakout is
highly powerful and gives you huge trades.
Regards
Raghav
M oving from Stage – I to Stage – II:
Well, friends,
As far as the objectivity of this thread is concerned, it’s more or less achieved. I wanted to share plenty more. B ut thought it’s time to
complete stage – I after looking at the response to this post. However, I am not closing this thread. It will be alive and whenever
anyone gets a query I will be there to answer and discuss.
It gives me pleasure to say that this thread has been ranked high due to unprecedented support from you all. The ignite for starting
this thread came to m e from one of the best traders and a writer I regard as, that is ST bro...
He taught me that trading is simple. It opened my eyes. I have thrown everything else except a chart, a Stoch. It has made great
difference to m e today and now whenever I hear and read that "someone has some secret system and he do esn't want to reveal it. I
laugh." The only secret in the market is price. It’s there to see for all.
Everyone wants to become best trader/great trader as soon as he enters the market to realise that nothing works in market.
Surprisingly the market is "Lender of last resort" to m any people!!! Reality is entirely different from what brokers, TV channels,
newspapers and tip provider's project. In my opinion trading is a "Psychological business"!!! The only way to become a good
trader/best trader is:
“Not a good trader to a good trader to a better trader to the best trader to the great trader. ”
Basic is everything. Successful people from all the fields are always best in their basics. Whatever I have shared here is the very
basics and trading them is enough to be highly profitable in the market. If anyone has doubt in that I am ready to debate and
discuss and clarify. Support, Resistance, Breakou t, Breakout Failure (Going to present in next post), Candlestick Patterns, OB, OS all
these work all the time. The only way to profit from them is to practice.... practice.... practice... "YOU ARE THE OWNERS OF YOUR
MONEY. WHY DO YOU TAKE A CHANCE BY FOLLOWING OTHER'S ADVICE.... BY KEEPING IT WITH OTHERS"???
Even the best classical musicians practice at least 6 hours a day. Enough is said. The 25 pages of this thread will be there always to
read and act.
I will start stage-II whenever I feel appropriate. Good learning in next few posts.
Regards
Raghav
Trade Setup REALTIM E TATAM OTORS 21-FEBRUARY-2011:

To end this We do not have a gap opening. Big red ba r with heavy volume. A dumping case. Now draw a Fib from bottom to
series, I am top of that big bar. Look for retracem ent either till 38, 50 or 61%.
attaching
today’s live
charts as it
happened. We
shall cover topics
like Multi TF's,
using moving
average for
gauging Support
and Resistance,
Trailing S/L,
reversing trade
in our next
series.
By the way, few

of my critics had
some concern
that I may do the
trades hindsight
and then post
charts. That’s the
reason I have
posted live
charts.
Now it should be
clear that I do it
practically and it
makes money
too!!!
Trouble at 38%
retracement.
Shooting Star.
No higher highs.
Stoch makes
divergence. I
keep short order
@ 1169. (Below
previous Pivot
low)
(POSITION SIZE
= 2X)
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Order gets
triggered. S/L
@ 1175. I know
1175 is not a
Pivot high. For
me it’s a "point
of no return"
(Same I will
discuss in next
series). It may
not be logical.
However, I
cannot take a
risk of 14 Rs by
keeping S/L @
1183 i.e. above
pivot high.
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Momentum
intact. My first
target is 1150,
the next round
Number
Consolidation at
bottom. Sign of
continuation.
Will add 1X on
break of Pivot
low@ 1153-1152
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Breaks another
Pivot low. 1X
added. Now 2X
from 1169 & 1X
from 1152. Total
3X. S/L for all 3X
is 1162.Previous
Pivot High.
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Covered 1.5X
@ 1150. Brought
S/L for another
1.5X to 1155.
Covered 1X at 1145 when it halted and unable to make new low s. Brought S/L to entry price (1152) for another 0.5X. S/L triggered
for 0.5X at breakeven and out.
Regards
Raghav
Some Casual Knowledge:

Friends,
It’s time to take a small break and put some time on my self-development. I am also in the process of starting up a new venture
which needs time. If anyone wants to put their charts o n a regular basis (May be daily or weekly) – they are welcome. I will post my
comment whenever I find tim e, as this thread is my own plant and it needs care.
From 1st page of this thread we had a great learning journey which will never end.
--------------------------------------------------------------------------
People say Market is very complex and thereby make their minds much more complex. Believe me. If you don’t believe m e, believ e in
the charts that I posted throughout the thread which speaks for themselves – I repeat again. Trading is simple. Very simple.
It is a fact that world’s most complicated issues have sim plest answers.
1. Americans when went in to the space initially tried to note down all observations by writing it in a notepad. However, they
couldn't do that because in space we lack gravity and ink wo n’t flow down. So one cannot write.
Then Americans came back to earth and spent many years and huge funds on research for making a pen which can write in
space.
Brilliant Russsians never scratched their head. They tried for simplest answ er. They got it.
What they did?
..................
..................
They used Pencil!!!
2. Few decades back a soap making factory in Japan faced a problem of declining sales due to frequent complaints from
customers. The complaint was that the plastic box in which the soap wa s packed were coming empty when they bought their
brand of soaps from stores.
As we know Japanese are one of the most brilliant and cool headed people in the world.
The problem solving task was assigned to the production manager. What he did was very impressive and simple.
He bought a table fan and kept it at the end of the conveyor belt which carried the plastic box containing soap. The empty
boxes were blown off due to wind and box with soaps continued their journey!!
Regards
Raghav
M oney Needs Time to Grow:
A story from my native.
There was a monkey. It thought that if it could put some mango seeds it would be helpful for it to have the food throughout t he
summer. It has put some 20 -30 seeds in the nearby fertile soil and then went to the tree where it lived for past few months........
Now as soon as it came back, monkey has become restless and cannot contain itself. It was anxious about the upcoming tree an d
then fruits. Just half an hour passed........ It became restless and started scratching the soil where it planted the seeds a nd was
curious to know whether the seeds have grown. It did not!! So now after every half an hour it has become a habit for the m onkey to
go there scratch the soil and see whether the seed has become plant..................
This went on for 5 days and one day the monkey could realise that all the seeds have become dead. Now the monkey shouted that
both the soil and seeds are bad, th at’s why it couldn't get what it wanted..
Typical mind-set of amateurs and newbies... They can't stay in a trade even for just 5 mins intraday or swing trade.. When they invest
for long term they want to see whether they are in profit.... @ every half an h our interval.
Money needs time to grow. It’s universal law. No shortcuts....................
Regards
Raghav
I got few PM's saying that I should not discontinue posting charts regularly. I am heartily thankful to all of them and would like to
convey that whatever I have shared previously is enough for learning some good habits in trading. I am compelled to stop postin g
charts frequently due to my personal commitments which have grown considerably during last 6 months. Please don't hesita te to
ask queries and questions, if possible with charts.
Today I did trade because it’s big day. I remember, 2 years before I lost considerable amount on this day because of amateur
mentality. For day trading we need a flexible mentality i.e.: from bear to bull to bear to bull............................................................
Trading is simple but not easy to execute. Conviction and confidence based on due homework are necessary.
th
Day charts as of EOD Friday (25 Feb). 3 IB's at exact locations. Next???? W e don’t know. We need to mark high, low, close of
previous bars then mark the locations of interest.
Here is a battleground. You know what TV channels; brokers and tip makers have to say. We don't listen to them. We just look at
charts. Go short, long then reverse when necessary and by EOD we would have made few excellent trades. That’s what independent
thinking and making our homework is all about. The chart can't lie because it’s a fact. I am not taking pain of explaining all my trades
here as I have explained enough of them in my previous posts.
Where did it touch and fall? What does a bearish engulf signify? It’s tim e to do our homework and mark locations of interest for
tomorrow’s trade i.e.: Support, resistance, entry, S/L and so on....
Regards
Raghav
Quote:
Originally Posted by k.raaja
Raghav ji, could u specify what is the "IB" w hich you pointed on chart. Advanced thanks...
Hello Raaja,
Below is the answer you are looking for.

W hat is an inside bar (IB)?
An inside bar is a bar or series of bars which is/are com pletely within the range of the preceding bar, or , i.e. it has a higher low a nd
lower high than the bar im mediately before it (som e traders use a more lenient definition of inside bars to include equal bar s). On a
smaller time frame it will look like a triangle.
W hat Does it mean?
An inside bar indicates a time of indecision or consolidation. Inside bars often occur at tops and bottoms, in continuation f lags, and
at key decision points like major support/resis tance levels and consolidation breakouts. They often provide a low -risk place to enter
a trade or a logical exit point.
W hen to use the signal?
The most logical time to use an inside bar is when a strong trend is in progress or the market has clearly been moving in one
direction and then decides to pause for a short tim e.
These inside bars are very good when trading a trend on the 4 -Hour charts and the daily charts.
Regards
Raghav
IB's are one of the best signals to make big trades provided you are aware of the tricks big players play.
IB's are used for both accumulating/distributing as well as trapping.

th
See last week, we had a bull run, then next day is IB. People think its accumulation or retracement. They add. Today (18 April 2011)
there is initial rally. People add more. All will think that it will break IB upside. Then , a shock. In 10 – 15 minutes all will be saying
"these are games played by crooks". Who knows what is there in the bag tomorrow?
I use IB's in 5, 30 and 60 M inutes to prepare a recipe. On a daily candle it is used for preparing a grand dinner .
Regards
Raghav
Quote:
Originally Posted by balasoft80

Thank you so much for such wonderful reply Raghav. Could you please clarify, W henever IB forms in daily chart, then low of th e IB bar
becomes support. Am I correct?
Also, Could you please brief ho w IB can be utilized effectively in the day-trading? Please clarify this when your time permits.
Thanks
Bala
Bala,
Good question. Before we move to how to trade, let’s understand what is presumed support and what is an established support.
A swing high is an established resistance and a swing lo w is an established support.
However When an IB/Doji forms on a daily charts the high and low of that IB bar is considered as " Presumed Resistance and
Presumed Support" respectively. M eans we go long on break of high and we go short on break of low.
However, there is a catch. Assume that we are in an uptrend and we get an IB. What do we do? This IB can be an accumulation bar
(means a day when more buyers have accumulated long position for the days ahead, for further rally). It can be a distribution (buyers
would have liquidated and sellers would have accumulated short positions).
Here comes your skill of identifying the context of the market. Even if you are wrong , need not worry. You have a chance of
recovering the loss out of your wrong trade and making some money on top of that.
st
Let m e clear it with an example. Nifty Daily chart of Thursday (21 April 2011). It’s a Doji. What is the context? See the history. After
bullish engulf, bears have broken the low of Bullish engulf bar. Then bulls have comeback strongly and formed a morning star. Then,
st
what happened on Thursday (21 April 2011) in the 60-Min chart? A breakout, then a shooting star at 5900-5930. Then a hammer and
then consolidation at around 5900 above that hammer.
Overall Friday is a daily Doji bar. For an average trader, it can be a sign of stalling or sign of continuation. He does not know. For our
example – Now, let’s say we assume that its accumulation by b ulls and we expect more up -move.
Also now, say you want to go long on break of Doji upside. No issues - go for it. Where is your S/L? It’s Low of Doji + filter. What if
price breaks upside and then reverse and comes back and breaks the low? Simple. Reverse it. Where will be the S/L now? On top of
Doji bar. In such false break cases, 99% of the times you get big trades. Since Doji’s, IB's are small bars we get high reward for taking
low risk as the S/L will be very small.
Trapping by big players, we shall discuss in next post. I really don't understand why people lose when we have such simple patterns
to trade and make good/great gains.
Regards
Raghav
Trapping by big players:

Now let m e tell you how big players and brokers can trap you. It’s just an example relevant to the context… The market has rallied
and it’s consolidating. When this happens the brokers smile and they know there are lot of impatient traders out there. They just
break the low of Doji and all impatient traders jump in with sell orders. Then market starts opposite movement due to big buying
from brokers and other big players. The impatient trader has lost his cool due to his failed trade and he is unable to reverse his
position. A pro always looks for a retest, false breakouts when market remains in the range for a long period and then breakouts.
M.S. Dhoni, the Captain of the Indian Cricket Team, is successful not because of his skills, neither he has great batting or wicket -
keeping skills compared to his counterparts, but because of his great -great-great cool and calm mind even in extremities.
Regards
Raghav
Remorse of a Trader – TATAM OTORS 28-FEBRUARY-2011 – Beginner’s W ay to Trade It:
A common trait among all successful people is, they study the psychology of people around them for years before they make the ir
fortune.
I did work closely with the management team including MD an d operational team of an IT company including Chief Operating
Officer. That’s where I realised that to be successful in any field requires thorough study of the psychology of people aroun d us.
I brought this topic here because hardly in any forum s, hardly in any books on trading you find the discussion about the false
breakouts. But everywhere the breakout is being discussed. Both breakout and false breakout are a result of huge psychologica l
phenomena which I will explain in my next post.
The second trait to be successful is to admit the mistake and accept the right thing (in trading , it’s reversing or closing a position
when we are w rong).
The third is blending with all kind of people (In trading its adjusting oursel ves with both bulls and bears.. No pre-conceived opinions).
If you are a beginner or trying to evolve as a good trader, below chart should be a food for thought.
I am talking of something called remorse of a trader. Remorse = repenting for a past mistake and then unable to come out of it
thereby missing the current opportunity available in fro nt.
th
Yesterday's (28 Feb 2011) TATAMOTOR chart.
(Sharekhan’s TradeTiger don't have number 5 in their symbol wind ow. So it’s 6 after 4!!!).
I have put numbers on the charts and lines as well to show how traders especially beginners get in to remorse mode and miss g ood
opportunities and then lose both shirt and pant.
A beginner’s way to trade this intraday chart (Of course, that’s how I traded 2 years back):
1. Price makes lower high.
2. Entry say @ 1075. S/L say @ 1092. In next 2 bars it goes to 1056. I think our day is made.
3. However, in next 10 M inutes market has different story to tell. M arked as number 3 and next bar it takes away all the profit
from me.
I panic and blame the market. The pain (remorse) of that losing trade takes away my mental energy and thinking ability. It
takes time to heal that pain. Rem ember it was a winning trade turned in to losing one. M ore pain and frustration................
4. & 6. The remorse continues and I keep on blaming market, brokers and manipulators and the opportunity in hand for a good
trade is missed out. .......
7. Yeah. It broke the high of the day. Now I am unable to contain myself beca use it's breaking the high of today and close of
yesterday and I may miss out a great trade if I don't punch the order instantly. Heavily anxious and gets my long order. M y S/L
is below breakout candle if I am little bit experienced otherwise it’s below candle no 6................................ Starting fro m very
next bar itself price never reaches my original price where I went long. I hope that it will definitely comeback. Two small green
candles raise my hope of being right. After then it never stops and crashes my s/l........
The only option for me is to shut my computer. Still I can't take my lunch happily. The pain is killing me from inside.... Now I am so
frustrated that I shout at my parents, wife, and children and if at work I can't do any work. Now I say market is only for cheaters.
Person like me cannot make any money out of market. It’s only for those.......................
Please be frank with yourself and tell me how many of you felt the same way? It's a thread where we make realistic introspection
without shy, we admit mistakes without feeling guilty because we are all human beings and we all make mistakes....some big an d
some small. Making mistake is not an issue. But admitting it and taking corrective action makes the difference bet ween the great
and worst.........................
How a professional trade this day and what is a psychology involved here? ... In next post.
Regards
Raghav
Remorse of a Trader – TATAM OTORS 28-FEBRUARY-2011 – Professional’s W ay to Trade It:
How seasoned traders do it:
A. Entry @ Number2 – 1082 (shorting break of consolidation): S/L at Number1 – 1090. Price moves to 1069. Lock in some profit
or at least move S/L to Break even (BE). We assume it’s a BE trade being conservative.
B. Entry at Number4 – 1076 [shorting break of Swing Low (SWL)]: S/L at Number3 – 1091. Price moves to 1056. Lock in some
profit or at least move S/L to Break even (BE). Further +ve divergence should make you alert to close the positions. We
assume it’s a BE trade being conservative.
C. Candle Number7 breaks previous Swing High (SWH). B ut we don't enter. Why? Because there is no nearest place where we
can keep S/L. If we have to put one it will be @ 1056. A S/L of 40 Rs!! Wait for SWL.
D. Entry at Number8 – 1098 (Longing break of SWH: S/L at 1082 OR 1085 i.e.: below the low of 3rd or 4th bar from the candle
numbered as 7. Price reaches 1125. I cover after seeing -ve divergence and also feel of a false breakout (I will talk more about
this later)
E. Entry at Number10 – 1110 [(shorting break of Swing Low (SWL) -ve divergence as well as false breakout]: S/L at Number9.
There are two 9's. You can place the S/L at either of the 9's. There is no right or w rong here. It’s your style. Price reaches 1070.
Remember here instead of "Reverse", I used the word "Entry".
Covering and trailing is up to each individual. But just imagine how bre aking even helps in generating extraordinary returns at the
end of the day. A great Fo rex trader taught me that I have to treat every BE trade as a winner. He also showed me, how a prof itable
trade turning in to losing one can affect our trading psychology and its effect on future trades. N ever ever allo w a profitable trade
to run in to loser. It’s a slow poison. Just think of it. Your results will improve a lot.
There are lot of other things which will be explained by chart not by me, as I am talking a lot . Let the chart talk m ore and myself less.
Regards
Raghav
False Breakouts/Breakout Failure:
Regarding false breakouts – Why they are so strong and what is the psychological phenomena behind it?
A level say 1000 has been acting as a stiff resistance for a scrip and lot of people watch out for this level. During a day s ay it reaches
995.Now it’s like this.
1. There are lot of bears sitting at 1000 to sell becaus e they know that’s where the scrip has resistance or in other words last
time the price w ent down when it reached that point.
2. There are bulls (including amateurs) who want to buy @ 1000 and many have already placed an advance order say just above
1000.
3. There are Big pockets who are ready with small size order through resistance to test who is strong at that resistance level
(testing whether enough bears are there at 1000).
4. Professionals who are just waiting by the side like jackals waiting for either:
a. Retest of break or
b. Breakout failure.
Now people mentioned in Number3 puts the order thro ugh 1000 to test the bears; and; it say reaches 1110 and now all the advan ce
long orders sitting at 1000 -1110 gets caught. Amateurs also join the league because they can't " M iss" something. Now what? The
bears who are sitting at 1000 sell heavily. The price goes down. Now big bulls who have put sample orders come to know that t here
are enough bears and they keep quiet. Remember bulls have put very small size (sample like) ord ers.
Now the people who have gone long on breakout wait thinking that prices will comeback. To their dismay there is no follow -up since
big bulls have gone quiet. (Price to make higher highs needs volume and follow -up). Now price keeps on declining and the panic sets
in. Go to previous post and see the place marked as no 10 in the chart. Now come s professionals who have been sitting on the banks
looking at the on-going TAMASHA.
Now along with bears who are selling heavily, the people who have gone long on breakout upside also start selling in panic. The
velocity of fall in the price increases.......... Remember fear is a greater force than greed. That’s why false breakouts are powerful in
day trading. They happen every now and then.
Has any book taught this to you? Vice-versa for failed breakdown.
Bulls have not lost because of sample orders. Bears have made money. Professionals have made money. Only amateurs get beaten
up....
Regards
Raghav
Risk M anagement M odel:

I have attached a Risk M anagement M odel. (Watch out for the attachment tab in your PDF Viewer)
Enough has been written on this forum regarding position sizing and risk management. Here I am attaching a sheet containing 2
categories. One with R:R of 1:1 and another with 1:1.5 respectively. Then each category has four scenarios as mentioned.
Do note that market has infinite combinations and accordingly we have to adjust our styles. It’s like driving in a mountain or desert
region. We shift gears, vary the speed , manoeuvre and so on...The purpose of me attaching the sheet is , if you are a new co mer or
an amateur this is how you should start thinking before you put your money in to the market.to be precise the purpose is to d evelop
a habit of business discipline.
It’s a model which I have followed for a while and had very good results. It’s still under my observation perio d. So any conclusion
from my end at this point of time w ill be premature.
Here, Hypothetically I am keeping base capital as 3 Lakh. Also the max risk per day is 2% of base capital. Per day we are goi ng to take
only 2 trades. So first trade we risk half of 2% of base capital and then we have different permutations and combinations. In case
first trade is a winner w e plough back (Reinvest) profits and in case we lose 1% on first trade w e invest only rem aining 1%.
Let’s see how many feedbacks I get.
Catch you later…
Raghav's RR &
Position Sizing Model.xls
Regards
Raghav
Trade Setup REALTIM E Nifty 03-M ARCH -2011:
3rd March 2011, 01:00 PM
Regards
Raghav
3rd March 2011, 02:09 PM

“The second trait to be successful is to admit the mistake and accept the right thing (In trading its reversing or closing a position
when we are wrong).”
Regards
Raghav
EOD
When we carry pre-conceived opinions we miss opportunities. A lope sided trend day can be traded by any one (Like Tuesday). But to
become good traders we need to trade well when market behaves like drunkard taking neither side of the road.
Regards
Raghav
Trade Setup TATAM OTORS 28-FEBRUARY-2011, 01-M ARCH-2011 and 03-M ARCH-2011:
TATAMOTORS – A trap. We have the solution for that too. Simple. Reverse it. Reversing needs lot of hard work at psychological end.
Did we learn lot of lessons today?
Regards
Raghav
4th March 2011, 09:49 AM:
It’s all about:
1. Doing proper homework
2. Observation
3. Right interpretation
4. Waiting till opportunity arrives (Of course staying away when you are not clear)
Nifty Daily Chart:
Nifty 5-Min Chart (Realtime):
Regards
Raghav
EOD:
My 2 trades for 4.3.2011:
Regards
Raghav
Quote (Realtim e):
Originally Posted by VJAY

Dear Raghav,
Please give here your views is this entry correct?
Hello Vijay,
As per Pivot break rules that one is right entry.
However as per as my trading is concerned, I would not go for that as all my parameters do not match. Stoch is in O/S zone. I look for
just 2 best trades per day. M ore or less those good trades come when I short from OB and long when Stoch in OS along with oth er
patterns and price action parameters.
Due to this I miss-out some moves. I am fine with it.
Regards
Raghav
Quote (Realtim e):

Thanks for your views... Yes i bought it when Stoch came from OS zone… .. That’s why entered in it... also previously Stoch above OB zone
more than 5 bars though it from y’day...
Hello Vijay,
Something else we need to consider.
1. Stoch being in OB for extended period. Today there is a moderate gap (Means there is mismatch in demand and supply
upfront). Hence, that rule is not applicable for may be first 1 to 2 hours till things get settled. In such cases we should a void
entering the market as soon as Stoch comes out of OS for first time unless strong price action supports it.
2. Now Stoch is making +ve divergence. We allow the Price to break Pivot highs and then go long. Till then we consider that we
are in a downtrend for the day.
3. If you keenly observe first up there was a breakout failure and I did catch that for 30 points. M y 2nd trade is still in waiting
period either in Tata or Nifty.
Regards
Raghav
Continuation of Reply (Realtime):

This is what I meant. It’s in downtrend for the day..... Still... but there is a +ve divergence.... does that mean we come to conclusion...
No. We need volume. We need bullish bars... more than that it need s to break previous swing highs... We accept as it is… Not forcing
any opinion. Neither do we predict... We are too small creatures in front of market....
Regards
Raghav
Quote:

Dear Raghav,
Here can we wait for break of previous swing highs? Means wait for bar to close above gates... Then only our entry comes or w e put stop
buy order above swing high?...... Also want to know that do we not look previous days+todays 5 bars over OB zone?
Hello Vijay,
Very good question. Comments point-wise.
1. Conservative traders go long above 2nd gate and aggressive one's go above 1st gate. Regarding placing advance order.... If it
meets my risk managem ent (how far is s/l from that Pivo t high) I do place an advanced order. If it does not, I pass on.
2. We do look for previous day’s + today's bars for 5 bar rule. Remember price is in motion 24 hours, though market has limited
time set for trading called as trading sessions.
That’s the reason I keep last 3 days chart when I do my homework before market opens. What happened during last 3 days is of
utmost importance. That’s why I give so much importance to OHLC of last few days and draw my horizontal lines.
Regards
Raghav
Quote:

my 2 trades today... for learning... both failed... though I got clarification for where I gone wrong in 1st tra de.... i think we must trade it
live for learning this method... otherwise only reading this thread can't help... many doubts come in live.... stick to look various
observation is important...
Hello Vijay,
It would be nice if you post your entries, stops and exits so that I can make my comments.
Below is a chart and it’s a fact and we have to accept it. That’s the reason I always stress on keeping a policy on how much % of
capital you can lose per day, then bringing S/L to BE as soon as it goes in to profit, then never allowing a p rofitable trade to turn in to
a loss.
This is a gam e where we fall, then get up, then look back, introspect and take actions to prevent from falling next time and move
on...
If you ask me I lost my fortune twice before I lea rnt whatever little I can....
30 Minutes chart:
Regards
Raghav
Quote:

Dear Raghav,
Thanks for your all explanations... my entry long @5572 (marked on my chart GREEN line) stop hit @5556 (RED line)... again long @5569
stop hit @5552 (i used filter of 2 points)......
Hello Vijay,
Trade1: Gap up so OB > 5 bar rule nullified. However, still you have covered for very small loss as price remained in 5570 level for
almost 5 bars. Once you have entered and then price not making new highs for next 25 minutes, it’s time to cover. Further you have
one more ideal exit which I have marked in the chart. Day -trading is all about cutting lo sses mercilessly.
Trade2: Nothing wrong from your end. If you observe it’s a false breakout on a smaller scale? Did you observe that? What do w e do
on seeing false breakout and being in a long trade? Please recollect.
I will just give you one interesting c lue. For last 5 days open 5-min Chart and just see what will be your result if you take long trades
when Stoch just starts coming out of OS zone (ONLY AFTER PROTRUDING OS ZONE) and vice -versa for short trades, barring 5 bar
rule scenario. If you do so invariably, at least 8 out of 10 trades you will be either winner or breakeven.
Regards
Raghav
Continuation of Reply:
This is how I would have managed positions if I were you. Market always gives an opportunity to run....... AND...... OR...... reverse.
Regards
Raghav
Quote:
Originally Posted by krishere

But if you noticed M30 & H1 also gave -ve divergence.... i got
into the trade but my SL was hit because the market gave too
many false breakouts today....
Krishna.
It all depends on your mental setup: Whether you want to be a scalper or a trend trader. Indeed I keep on watching 30 M inutes and
60 Minutes, every 30 M inutes for longer direction because for me 2 trades per day are enough. So I look for few big/moderate trades
which can be taken only by blending 5, 30, 60min and daily charts.
However, for a scalper who wants to take 10 – 12 points per trade; he need not necessarily watch these longer timefram es. His job
can be finished even in 5 M inutes per trade.
Multi-timeframe trade is in itself a big subject. I need atleast 5 pages to elaborate it. I will talk on that only when we enter next
series. However, ST, Saint all have w ritten beautifully on this subject which can be found elsewhere in the forum.
2nd part of your question: False breakouts. It is the nature of market. It’s like your teacher in primary school. Someday he/she is in
good mood and pampers you with everything. Some days you are punished though you don't have any fault from your end. Let ’s
accept it. We can control ONLY RISK. Price... Market.... sentiments.... we don’t have control. So let’s keep the day behind and look
forward for good days.
Let me give an example. In cricket’s one day match we have 50 overs. 1st 10 overs are compulsory power-plays. Batting side takes
1st 5 overs to read the pitch and get adjusted to the new ball while putting bad deliveries to boundary. Then you have next 5 overs
of power-play where batting side wants to score more than 6 runs per over. 10 overs o f power -play are over. Now 10 overs of power-
play are left; out of which 5 overs at the discretion of bowling side and 5 overs at the discretion of batting side respectively.
Now what will the batting side do? They know they don't have control over pitch and no control over bowling side. What they will do
when they have 30 overs of non-power-play (Sideways market)? They try to keep their wickets, nudge around for single s and 2’s, 3’s
and occasional boundaries. In their effort they may lose 1 or 2 wickets (small trades fetching few bucks, BE or small losses). They
know still they have 10 overs of power-play (Trending days) left and they can make most out of it. What if they lose 6 wickets
(capital) in fist 10 overs?
So in market you also have power-plays, non-power-plays, swinging deliveries, yorkers, stumping, run out everything. What all you
can do is keep your wickets so that you can take maximum home runs out of power-plays. Got it?
Regards
Raghav
How One Should Start Practicing Day-Trading?

1. Keep Rs 1000 – 2000 as a spare amount.
2. Then pick a liquid stock where the method you chosen works (I used to trade DLF, BHARTIARTL and IBREALEST and then
found that those do not match my personality. I trade only TATAMOTORS, NIFTY and ICICIBANK because they support my
style, personality and method).
3. Start trading 2 – 3 shares. It will really have no impact on your capital. This is to avoid emotional trap that is involved whenever
a beginner puts money in to the market. It really helps to focus on your trade and defocus on money part hence learning curve
sharpens.
4. Keep brokerage as business expense and while learning trading you should not be worried too much about brokerage. It takes
care of itself when you become a good trader.
5. It’s not necessary that you should do the same what I do. Everyone is different. There are 1000's of ways to make money and
10000's of ways to lose money in market.
6. Do this for 3 – 4 months. Evaluate results on a broad b asis (I am not going to talk on this as we have separate sections devoted
to this subject). Then only you should start increasing your position size steadily.
First w e must learn jumping in the front yard of our house. Then only start jumping in to the sky....................
PS: The way I did was different. I had taken Rs 8000 as spare amount. I used to trade 5 shares. Just focussed on doing EVERY
W RONG TRADE that one can think of. Then I kept a snap shot of each of that trade in a folder. Daily 1 of our analysis as to why I was
right in doing wrong trades!!! This went for 4 months. I lost entire Rs 8000. But I learnt all the ways of doing wrong trades. Took
break for 2 months. I didn’t see even the monitor for 2 months. Looks so silly right!!
When I came back I knew how to make w rong trades. Just did the opposite. Within next 10 days, I recovered that Rs 8000 and it
really built in confidence and erased my frustration which I faced during earlier trading. Then I increased my position size gradually.
Risk is 2% per day. M aximum of 2 trades per day barring exceptions. This whole process is easier said than done. Needs enormous
mental stability...
Regards
Raghav
Quote:
Originally Posted by gsam

Dear Raghavji,
Is 5-min the best TF for trading? In 1 -min I feel, I am able to see the actual action blow by blow as they say. Is that a bad idea? After
making the decision to buy, when we place the order should we give an asking price or just buy at market price? Thanks for yo ur help.
Dear Gsam,
Beginning stages of trading career one should try following higher TF's. The reason being in higher TF's the patterns and reliability is
more. Less stress.
Over here I have posted a 30-M inute Nifty Chart showing how to trade Inside Bars and make good gains. I have never ever traded 1 -
Minute Chart.
Though most of day-traders do trade 5-Min chart, Once you develop confidence in higher TF's you can scale down to 5 -min and trade
it comfortably. In higher TF's you get less trades but good o nes. You save your energy, time and stress. Even who work in offices can
take 30-Min trade as they can watch the chart once in 30 -Min. Currently that’s what I do , as I have couple of other projects in hand.
Regards
Raghav
Every beginner should learn this first. Trading small quantity.
I do this every now and then intentionally to train the mind to be away from herd m entality, feeling of missing something, fear of
loss and more than that greediness.
I will be knowing that it will make 25 Rs move. I intentionally position myself with only 4 shares. Then I cut my position for 13 – 15 Rs
move though its certain that it’s going to make 25 – 30 Rs move. Market existed 100 years before and it will exist for 100 more years.
This move is not the last move!!!
Trading is a big subject. Unless we adopt discipline, rules, Mind controlling techniques – one fine day greediness or panic will rule
th
over and destroy the trader. This one is from yesterday (6 May 2011).
Regards
Raghav
Advantages of Day-Trading:
Originally Posted by k.raaja
Raghavji, are you a full time trader... or are you doing trading as a part time business...?
Dear Raaja,
I am a full time trader. However, I am in to some other venture and unable to give all my daytim e to trading.
Hence I look for daily levels and setups and decide on entry points. I take out little tim e out of my other venture to place orders and
then:
1. Square off 50% by EOD.
2. Carry other half for swing trading till the trend exhausts.
Further what all I can say is, in the beginning one should not start day -trading. Instead learn simple option trades. Buying puts and
calls (let’s leave other advanced strategies). Then set an amount apart per 3 days, week, month and do the trade for 3 – 4 days’
timefram e; leaving the last week of expiry (I suggest 3 – 4 days’ TF because the time decay won't hurt you).
Advantages are:
1. Less stress (whereas day-trading is a stressful job and can wear you out in just 5 – 6 years unless you have enormous mental
energy).
2. Amount of loss is exactly defined (If you buy a 5900 call 1 lot , say at Rs. 50/-; you pay a premium of Rs. 2500/-. M aximum you
can lose is Rs.2500. You can also put Stops. Even if the underlying gaps down you have no tension of losing more than what
you paid).
3. Your reward may be unlimited.
4. You can carry any other activity/job with no tension!!
5. In stocks, you cannot carry on a short-sold position overnight; i.e.; you need to square your short position same day. However,
in the same place you can buy a put and can carry till downtrend ex hausts.
6. No tension of leverage and margins.
7. How to analyse and trade in a particular direction , I have written enough. What all you need to be a profitable trader is RIGHT
BASICS.
8. The beauty of option trading cannot be emphasized enough!!
9. It took me damn 10 years to learn all this AFTER LOSING MY FO RTUNE TWICE.
10. Most traders learn lessons after 50. Som e people at 6 0 after losing all. Few people never learn during their life time... The
common trait among these 3 categories is "they keep on searching for the system till they are alive" .
Regards
Raghav
A Tip to Improve Trading:

We can improve our trading following different techniques. Each one has different tools to do that. We respect that.
What I do? Each day (whenever I take trade) I save the image of the chart. At EOD, I analyse it marking my entry and exit points.
Then, I relate it to an ideal entry and an ideal exit. Then, I analyse how much I need to improve in entry and exits. I save all charts in a
folder month-wise, date-wise.
For m e that’s not important. The important is my mistakes. Whenever I lose, I just get alert. What I do is once I lost a trad e I not only
save that chart but I do take a print out and write on the printed chart "NOT ONCE AGAIN ". I look at it for 5-M inutes and then punch
and file it. In the file I have 2 sections:
1. Lost due to my mistakes.
2. Lost due to bad luck (Though I have followed all my plans, rules disciplines – I lose the trade). On top of this printed chart I
write "BAD LU CK".
This is based on the theory – One picture is equal to 1000 words. Invariably , when I see the same kind of action again, I recollect the
picture and stop myself from making the same mistakes. I told you I am not a scalper. That’s why I could afford to do all this. All this I
do by evening or night when I get free.
This improved my trading a lot. Try to do different things. That’s when you get lot of joy in life.
Regards
Raghav
Some psychology or Philosophy (If you think so):

To become good traders one of the other traits we need is to detach ourselves from trading every now and then. Detachment is a
word/concept and a gift presented by Indian sages/ancestors to this world.
What is Detachment? Not attaching ourselves to some being/material. It’s a very broad subject. 1000’s of years before, our Indian
sages have found that the root-cause for all unhappiness is attachment. Sticking to something and expecting so mething out of it and
then getting too anxious for the result. If the result is positive getting too happy, if not too unhappy. This causes friction between
+ve and -ve energy which gets stored inside our subconscious mind and keep on distracting our day-to-day activities minute-by-
minute. This is a cycle. The concept of Detachment says we just need to do our duty diligently and then get away from it and live in
the present.
99.99% of people, if they look at their mind, it’s either in the past or in future at any given point of tim e. All of our emotions are
result of either past events or future expectations. That’s why w e always say keep your “emotions” away while trading. The person
who is in the present only can do great things . Because both past events and future expectations have no impact on his mind and his
efficiency is very high.
Imagine like this.
A person who lives in the present is like a person standing in the open ground. Lots of air, open space, lots of freedom, possibilities.
A person who always lives in past events or future expectations is like a person who is standing between 2 big walls, one in the front
and one at the back.
Now you must have got what is D etachment. Detaching ourselves from past experien ces and not distracted by future expectations.
How do we apply in trading? No fear of loss. Neither expectation of profit. Do the things perfectly with cent per cent devotion.
Results take care of themselves.
We put seeds. That’s our duty. We don't know whether it w ill become plant, tree and so on. Last time it..... No we don't bother.
Because if we keep bothering, w e will not be able to put the seeds correctly. Just put the seeds with cent per cent effort.
Detachment does not end here. It has more meaning which we will talk after sometime … Then we need to discuss diversification
(Not asset diversification!!)… ..
Also I will talk on meditation later....
Remember first tool of any trader is his mind....
PS: Every now and then we see people fighting in this forum for silly reasons like who is bigger, up-man ship etc. I remember one
lesson from my school days.
The lesson was about who is bigger? Then at the end of the lesson while summarizing there was a small note. That is when God
laughs. It said he laughs on 2 occasions.
1. When 2 brothers fight like cat and dog for piece of land claiming it is mine, it is mine.
2. When a doctor talks to the relative of patients saying , “Don’t worry. I will not let the patient die.”
Market laughs at someone when he says “I am a great trader”, "My system/method ONLY is great. I only know trading and all other
traders are useless fools”.
Knowledge is like a sky, space. It has no ends. Let’s be humble...
Regards
Raghav
Trade Setup Nifty 07-M ARCH-2011:
Dear Raghav,
My today’s trades; please look and advice......
Green line: Entry… .. Red line: Exit
trade1: Short @5445 exit @5440
trade2: Long @5115 stop hit @5431
But i failed to trade this entire up move.....
Hello Vijay,
You are almost there. You have got all the points that I was mentioning previously.
Your 1st trade: Good. You are trading with trend. Stoch coming out of OB. Entry @ 5445. S/L would have been around 5456. Then you
might have trailed your S/L till 5440 and it would have got taken out. OK. No issues. As long as you don't take any BIG LOSS you will
be in the game for long. What all we have to look is small loss, Break even, small profit and BIG PROFIT as rightly advocated by ST
bro…
Now comes the question. Once you entered @ 5445 and price starts moving within a range without any great movement. H ere
comes your skill and experience. Recognising whether it’s a pullback, consolidation or a reversal. The one here was a
pullback/consolidation. Why? What was the trend? Down. Why it is a pullback not reversal? Because there are no reversal patterns,
no volumes (just see the volume after you entered), no big orders. What does 30-Min say? What does 30-M in volume say? Same goes
for 60-Minutes? For a beginner level this should be sufficient. There are lot of other parameters which we will discuss going forward.
As long as it’s not reversal; it’s continuation of trend. So a conservative trader stays in the trade whereas an aggressive trader get s
out with small loss or breakeven when it doesn ’t move in his favour im mediately after his entry.
2nd trade: 5415. You really got it very cheap. See where your stop is. It’s hardly 20 points. Stoch divergence in 5-M in. Small hammer
in 30-Min with Volume. A higher close in 60-Min with heavy volume. All this suggest potential reversal and up -move. Good going
Vijay… .. Riding trends you get by practice and experience coupled with patience… . Also some psychological tuning… .
Nifty 5-Min:
Nifty 30-Min:
That’s why I always look for 2 good trades. I get time to analyse and interpret when I do few er trades. I will have control over my 2%
risk. I can always pick up low risk trades. I don’t go for a trade if it requires 35 – 40 points of S/L; however juicy it may b e.
The same 2 trades you did can be interpreted from several other perspectives. It will take another 10 pages atleast to detail that.
Unfortunately we are not blessed with unlim ited tim e.
Regards
Raghav
An Afterthought:
Some more afterthoughts:
Have you noticed Round Number Theory? What happens at 5600, 5550, 5500, 5450 and 5400? Can you find some bullish or bearish
rd th th
patterns at these round numbers? It can be on any time fram e. (Thursday: 3 March 2011, Friday: 4 March 2011, Today: 7 M arch
2011).
Thursday 5-Min: 5500 double bottom
Thursday 5-Min: 5550 volume bar break high of current day and previous day with Stoch convergence
Thursday 60-Min: 5600 inside bar
Friday 5-Min: 5600 false breakout
Friday 30-Min: 5550 an inside bar
Today 5-Min: 5500 gap down open below double bottom (resistance)
Today 60-Min: 5450 inside bar
Today 30-Min: Hammer at 5400
The market is in the eye of the beholder.
Regards
Raghav

1 & 2 as per me are not right entries. No 3 protrudes OS zone and comes back and gets volume. Right entry. That’s the only move I
could trade for 22 points. Otherwise, it’s just a waiting and learning day.
I do carry one lot as a swing trade for a target of 5600.
Regards
Raghav
Support/Resistance and Round Num bers:
Regards
Raghav

Saw a beauty. Just sharing. Will catch you somewhere next week.
Regards
Raghav
Okay, now I will throw some questions… Please try to get a n answer…
1. Why do you day trade? Why not swing? Why not buy and hold?
2. What do you feel when someone says Market is gambling?
3. Why do you get fear of loss? How many hours per day you spend for the market, trading?
4. What do you do when you get frustrated by Market movements? O r, when you are in trade and market does not move in your
favour? Or you lose trades one after another?
5. How many number of thoughts per whole day you get in your mind (including personal, official and so on… overall) ?
6. What do you think is mind? How big it is? Where does it exist? How can I control that? In what form it exists?
7. After all what mind has to do with our trading, when w e have holy grail readymade systems on offer?
8. Why do I need to write on Traderji? Why do I need to contribute? What do I Get?
9. What is the role of money in my life? People say if I get truckload of money I can live a wonderful life… Really?
10. At last what is the purpose of my life? It’s Very very very very important and very tough to answer…
Regards
Raghav
Here you go: My best answers. What about you?

1. Because it suits my personality. M ore than that it’s working for me...
2. Well a gambler takes WILD RISK. I take CALCULATED RISK (On the lighter side ask him, isn’t marriage a gambling? Why did you
gamble?).
3. Answer in the following posts on mind and meditation.
4. Answer in the following posts on diversification.
5. Each one of us will answer: I am yet to count. Answer is hardly 40 per day for an average man. If you say more than 40 you will
realize that those more thoughts are none but bra nches (sub) of those 40 thoughts. Just do this exercise one single day. You
will really feel wonderful.
8. The sun comes every day at right time to do its duty. The air gives m e free oxygen. The water makes my living possible. The
trees give shadow, fruits. Though I have done lot of mischiefs, Earth has never shouted at me since my childhood. Despite of
this they have never ever asked m e anything in return. Absolutely nothing… Here I am doing after all… … a small… … … … …
9. I will write a beautiful story on this next time.
10. When people ask me this question , I myself ask one more question. Why I am not born as a dog, a lizard , a snake, a monkey, a
donkey; all those 83 odd crore other creatures? Why I am born as a human being which is one of the best birth that a being can
get? The question gets answered automatically. When I don't get answer for something I will go back to nature and it has
answer for each and every question. Refer answer to question no. 8.
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
By the way, I have forgotten to ask one more question:
11. What is “HOLY PERSON” (not Holy Grail) syndrome?
Still I have not answered all the questions. Catch you some other day.
Regards
Raghav
Diversification:
th
This post answers the 4 Question: “W hat do you do when you get frustrated by Market movements? Or, when you are in trade and
market does not move in your favour? Or you lose trades one after another? ”
I just get rid of market and I put all my energy in w hat I am best at, apart from trading.
Yes! I am talking of this kind of diversification. (This is called releasing -ve energy on which I will talk in my “M ind and meditation“
part)
What is diversification as far as a personality is concerned? Simple. Involvement in more than one thing/activity.
If you have 2 different trees – it’s good. 3 trees – better. 4 trees – best. 5 trees – too good. Because all fruits are seasonal. Now when
one tree stops yielding you can go to another.
Likewise in life more the interest you have in different subjects, more the joy you have in your life. Art, history, medicine, Accounts,
sports, movie, circus, literature. There are so many areas.
If you are frustrated at trading, go to som e movie, if yo u are bored reading literatu re go and play sports and so on and on..... Now-a-
days somebody treats chatting also as a hobby, I am afraid!!!
Remember mind always looks for change. Your mind exp ects something out of an activity and it does not get fulfilled. Then the mind
looks to change its direction. In simple words it looks for a change. But you try to hang on. M eans you are forcing the mind to stay
there in the same activity. That’s where the friction starts which I have detailed in my previous philosophy!! Class. That’s what
frustration is. The war is betw een “you” and “your mind”. Not between “you” and “Market”, not between “you” and “price”.
Now you have 2 options:
1. Learn to exercise control over your mind so that it never demands you to go “elsewhere” when the expectation does not get
fulfilled, without creating friction.
2. Going “elsewhere”, i.e.; changing your activity.
A common man (trader) or majority has no choice but to go for the 2nd option. Only the masters who have conquered their mind can
opt for the first option.
----------------------------------------------------------------------
Look at our politicians. They are 24 hour politicians. They just do politics. Nothing but politics… . No diversification. Hardly any one of
them knows about our history. Forget literature… sports (Of course Common Wealth Games!!). What about Circus!! Of course they
do only during election time… !!
Lack of diversification… It’s a blocked water… .That’s why the whole political system is rotten…
Regards
Raghav
M ind and M editation:

As I stated earlier, the first and best tool of a trader is his own mind. It is his best system as w ell.
Now comes the question.
What is mind? Where is it located? How big it is?
The answer is easy as w ell as tough because mind is the most amazing thing ever existing in this universe.
Stating simply we would say mind is nothing but everything. Again I say mind is nowhere, but it is everywh ere. It is smaller than an
autumn but as big as space. It’s Infinite as w ell. How? (Read my upcoming posts for exclusive… .)
Sounds really crazy. Isn’t it? You are right. It’s none of our fault.
The people at helm designed our education, belief, rituals in such a way that by the time we complete degree/post degree we feel
we have a complete knowledge of everything in the world … Nothing more to learn!!
They do not want you to be an independent thinker. They want you to be one among the crowd and one am ong st those crores of
followers.
For a politician, for a M arket analyst, for a business T V channel your ignorance, ego, herd mentality is a product. They sell that
product and they make money and w e pay for our own made products at the hand of others!!
Just make an honest introspection. Starting from prim ary school through college till master degree did we study really anything
about our mind, soul? It’s possibilities? Did we study anything about what we are and what capabilities we have? No. Because we
want to be slaves. We want to be one among crowd. We do not want to be independent thinkers. The system makers whether its
education system, a trading system, a political system… … … … … .. They all want you to be slaves… .. a herd… …… … . That’s how they
design the system… .. Because if you get freedom… … … … if you become an independent thinker, they lose their place… . They lose
their bread and butter… … … … .
So every day we pay for our “OWN PRODUCTS” because we have not realized what we are and what our potentials are either as a
trader, or as an individual or as a family man and so on... Neither are we not allowed… … … … . nor we will be allowed… … … … . That’s
why they need the current education system. That’s why they need you to search for a 50K trading system… . T hat’s why they need
current political system… . Understand me… . I talk reality. I talk practical, I talk facts so that some beginners, newcomers and
aspiring traders can come out of this trapping mentality in which they have fallen knowingly or unknowingly. If someone says I am
wrong they are right, they are free to do so. By talking facts neither I gain nor lose anything.
What all I am saying is… WE ALWAYS RUN OUTSIDE!! WE HAVE NEVER EVER TRIED TO LOOK INSIDE… . TILL DATE WE ARE NOT
ALLOWED TO LOOK INSIDE BY OUR LEADERS IN ALL A SPECTS OF LIFE BECAUSE THEY NEED FOLLOWERS NOT LEADERS…
The perspective of life takes drastic change the day we start looking inside… … … … … … …
------------------------------------------------------------------------------------------------------------
We are discussing the problem. To find a solution we need to study the problem in depth.
Take the field of m edicine. M ost patients suffer more when they go to doctor because in 90% of the cases the doctors do not
diagnose correctly (sometim es/most of the time internationally!!). That means doctors are not understanding the problem in -depth.
The result... more suffering for the patient both health -wise and economy-wise.
So let’s understand the problem completely. Then we shall go to solution part.
------------------------------------------------------------------------------------------------------------
We stated that the perspective of life takes drastic change the day we start looking inside … W hy? It’s simple. W hatever w e see, hear,
feel and experience OUTSIDE is a mirror or reflection of INSIDE.
For example: Two people look at same thing. One say’s wow!! Another says “nonsense”. They saw a same thing. But 2 different
views. Why this difference? Because what they saw was just reflection of inside in that “outside stuff”.
Similarly market seems like a hell as long as we do not repair our inside. It looks like gambling… ..!!! It looks like a machine stealing
our entire wealth. If the inside is calm the market looks full of opportunities because behind every change the re is an opportunity
and there is a change in price every moment. But our mind is like a lake water in which the stone is thrown from outside. It ’s creating
rounding waves across lake and there is no clarity. You see the bed of the lake when the water is c lean and when there are no waves.
SIM ILARLY W HEN IT COM ES TO M IND. W E NEED TO STOP THE W AVES TO EXPERIENCE THE CLARITY. ONCE W E GET CLARITY
INSIDE IT’S A DIFFERENT EXPERIENCE ALTOGETEHR.
Now the question arises. How do waves get created inside the mind? Simple. Through thoughts. M ostly through unrelevent,
unnecessary thoughts and through thoughts of past experience and future expectations. (I wrote on this before few posts).
In my early career days when I worked in Bengaluru I used to ride my bike to office. It was 8 KM ’s distance. O ne day I counted… . I
shifted the gear 68 times… .. Imagine the impact it has on the engine and its life… ..
Like-wise in a day, through continuous shifting of wagering thoughts, the mind gets beaten badly. That’s when it loses the clarity.
First of all we have an education system which teaches you everything apart from what is needed for life ... Then your early childhood
experience… … .i.e.: No you can’t do this... that… .. On top of that comes gossip, TV channels, newspaper, tabloids, internet,
forums… .. our mind becomes a complete dustbin full of garbage… .. If you don’t clear it, it produces bad smell… . the surrounding
also gets poisoned…. You take bath to clean your body… . Have you ever thought of bathing your m ind?????????
The next part is reaction. We react to everything... each and everything.... Even when it’s not necessary..... This chain of reaction again
creates friction which I discussed in my earlier posts.... We need to learn the skill of not reacting on each and every thing...... A small
story.... A beggar needs reaction... if you don't react he will go to next door... if you react......!!! Read on...
A beggar landed in front of a Sethji's house…
Beggar: Ji... Give me som e money...
Sethji: No I don't have anything. Go to next door.
Beggar: Ji... Give me som e cloth...
Beggar: Ji... Give me som e food...
Beggar: Ji... atleast Give me a glass of water...
Beggar (shouted): If you don't have anything… What are you doing sitting inside? Come out... Let’s go to next door together!!!
------------------------------------------------------------------------------------------------------------
By now we have understood that our mind is restless… it ’s full of thoughts… it’s running every minute, every second… . It’s always
busy in reacting… …
Now the other important character of mind as I stressed earlier is either li ving in past or in future… no doubt… 99% of the times… .
The happiest people, less than 1% live only in present.....
1ST CATEGORY: LIVING IN FUTURE
If I become manager I will be happy… If I am promoted to Senior Software Engineer… . QA Lead… .. I will be happy… If I get 50k P.M . I
will be happy. If I get married I will be happy.
That means today you are not happy. Our happiness is conditional… It’s called living in future… . Both in market and life outcome of
any future is uncertain… Now logically that means the people who live in the future have no guarantee o f happiness.… .
2nd CATEGORY: LIVING IN PAST
These people always live in past. They say , ”Oh I missed that opportunity. I would have made this… that… I would have been so and
so if I would have done that… this… and so on… …. Everything happens for a reason… Past is gone... It will not comeback… ..
Once Buddha was walking to a village with his disciples... They neared a river... They saw a beautiful lady who needed someone’s help
to cross the river as the flow of the river was heavy... Buddha took her on his shoulder, crossed the river and dropped her on the
other side of the river. Lady conveyed her gratitude and continued her journey... Buddha also continued his journey with disciples.
However all disciples were somehow upset. Their face was dull and doubting... However Buddha’s face was as ever glowing. After
sometime Buddha could sense these and asked : ”My friends why are you so dull and look very much down?”
One of the disciples: “Lord. All of us felt very bad and shocked when you lifted that lady on your shoulder... Being a M onk is it fair to
touch a lady? We are highly concerned and worried.”
Buddha laughingly told : ”M y friends the difference between you all and me is , ‘I DROPPED THAT LADY LONG BACK A N D YOU
PEOPLE ARE STILL CARRYING HER ON YOUR SHOULDERS ’.”
How many of you still carry a lady called “Past” on your shoulders?
------------------------------------------------------------------------------------------------------------
Well, you may ask. What all these subjects have to do with trading? The point here is success in all the fields starts from within. As
long as we do not rectify inside either we don't su cceed or even if we succeed we are not happy with that success. What all we
see outside including the price chart is nothing but a mirror. What we see in the chart is only a reflection of ourselves. So we can't
blame mirror for not being right. It shows exactly what is in the front. So what all we are doing here is not finding a way to rectify t he
mirror but rectifying what is in front.
There is a life without trade. However there is no trade without life... Hence market is invariably a reflection of life in most of the
aspects. What applies to life also applies to market in m ore than 90% of aspe cts.
I am sharing what I practice and experiment.... I continue to do so... I can do experim ent.... I can practice................ .. Can I share the
feeling of that experiment............? Can I share the joy of that practice.....? No. No. No. You have to do it yourself and feel it.................
------------------------------------------------------------------------------------------------------------
Living in the present is bliss, bless and a boon..... It provides enormous enthusiasm, courage and strength. (When I write on cosmic
energy, its usage and abundant resources of nature, I will throw more light on this) .
If you live 5-minutes in the future, you have lost 5 -minutes of joy of the present. If you live 5 -minutes in the past, you have lost 5 -
minutes of joy of the present.
A living in the present trader. What he does:
1. He analyses past. (Homework. Do you remember how m any times I stressed this word in my previous posts?)
2. He plans for future.
3. He lives in the present.
A living in past and future trader:
1. He lives in the past.
2. He lives in future.
A living in the present trader. How he trades:
Say an IIP Announcement day. He is ready with homew ork (past analysis). He does not predict anything for the day (future). When
the market opens he is only in present 100%. Numbers are announced. TV channels are all admiring the numbers and say market will
reach 5550. Analysts say the figures highly encouraging. Amateurs are waiting for their tip providers to give a call. Our trader does
not bother about any of these.
In euphoria, market breaks 5000 all are long. Our trader is in present. He says it’s broken 5000. Let me wait for retest. N ow? N ext a
small IB. Now? It’s not making higher highs. Now? One more red bar? Now? My short entry below breakout candle (failed breakout).
Now? It has broken breakout candle downside, -ve divergence... Now? Stoploss above breakout candle. Now? I know how much I can
lose. It can go either way.
At the same tim e, all who are long at 5000 are hoping (future) that market will reverse and go up. Simultaneously they repent for
going long (Past). They fail to reverse their positions because they are either in past or future and not in present.
At the end of the day our trader has won because he lived in present. He knew what he did because he focused on now. He did
follow rules and discipline because there was no past and future haunting him. He did what he saw in the present.
That's why it’s called its "NOW" or "NOWHERE".
Even if you are in a most difficult time of your career, life; try to live in present, accept that I am in difficulty, try to be in present each
and every second... (Clues: If you are typing just focus on it.... if you are watering garden be with it cent per cent... If you are talking
to anyone enjoy that talk as though you are sipping a cup of tea.... The things start changing.....). The Zen monks of Japanese were
the ones who are the great advocates of "living the present". Early morning after their meditation they used to go to nearby canteen
to have the tea and when they drink tea they used to say "Hey lord, how lucky I am? This is a beautiful moment. How can I thank you
for blessing me with such a moment?” With such deep gratitude they used to sip their coffee with utmost joy. Looking at such height
of happiness the people at the canteen used to go and join these Zen monks for the meditation and become one more monk!!!
Regards
Raghav
Value of M oney:
There was a king and he has won lot of kingdoms over the years. The wealth and the kingdom he has won, has gone to his head and
he became an arrogant, egoistic and stubborn and completely forgotten w elfare of his people. People started suffering due to this
attitude of king. He used to spend most of his time lavishly and he used to say “I have mountain of wealth and I don’t care anything
and anyone”. The people have gone to the minister and put their grievances. Though the minister was aware of all these affairs of
king, he couldn’t do much. So he decided to go to his Kulaguru i.e: A rishi who used to be the guide, mentor and teacher for king’s
family.
The Kulaguru told minister that he w ill take care of it and minister need not to worry and can carry on with his job.
The king has a habit of going for hunting every week. He used to go with his minister and few soldiers. Kulaguru has a plan a nd he
told the minister as well as soldiers what to do.
That day, minister told king, “Lord, today let’s go to the other forest (The forest which was unknown to the king). I know there are
beautiful bunch of deers which you will really like to hunt”. King happily agreed.
While they w ere hunting, M inister told “Lord I will go towards north, let the soldiers go towards so uth and you can wait here for the
hunt since this forest is unknown to you. We will m eet after an hour”. King agreed.
While King was waiting, suddenly a stranger came and shoot the kings riding horse and disappeared. Now King is shocked. He waited
for minister and soldiers. They didn’t come. He is worried. Now sun also has set… He is more worried… . It is a forest unknown to
him… He was hungry… thirsty… He was now roaming in a wild forest… It ’s dark. Now he didn’t want to take chance against his life...
He climbed a tree and spent entire night on the tree.… .
Sun rose… king started walking searching for his way back to his palace… Now he could not walk as he was almost dying out of
hungriness and thirstiness…
Out of nowhere, he saw beggar (Kulaguru has come in the disguise of a beggar) and that beggar has a water and food in his hand…
King pleaded him that he be given a food and water.
Beggar told he can give food... but he has some conditions... King asked what the conditions are… King is frustrated as he was in a
dire state.
Beggar demanded... For a glass of water… king has to give half of his kingdom… .. King agreed… he has no other choice…
Beggar now told… for one plate of food… . King has to give another half of his kingdom… . King agreed. H e has no other choice… .
Now beggar started laughing loudly… see my lord… I am far b etter than you… . Because your “W HOLE KINGDOM IS W ORTH A
GLASS OF W ATER AND A PLATE OF FOOD”… … …
Remember. The money is m eans not the end. Money is not life. It is a m eans to carry on a good life... It has to be used for worthy
causes. Helping people... Under privileged… Poor… Otherwise the nature knows how to get it back from you… … … .
Regards
Raghav
Some more Stories:

A farmer wanted to dig a well to provide the water for his newly put plants. He started digging the soil nearby plant and after
digging for 10 ft. he thought there is no water in that place and started digging at a few distance. He dug for 16 ft. and couldn’t find
the water again. He started digging again at a different place. Now 20 ft. Failed. Next 25 ft...... Next 30 ft.... Now he is tired and lost
all his energy.... A by-walker saw this farm er and asked.... This entire area looks like a graveyard with this dug soil...... What are you
trying to do?
Farm er told.... I am trying to dig a well... but not getting water anywhere?
By-walker sensed the problem and told farmer "See. What all you are doing is wasting your energy and time.... Instead of digging 20
ft. at 15 locations, if you would have dug 50 ft. at a single place you would have got the water. Also would not have spoiled this place
like this.....
99.99% of the people who come to trading are like this.... They start from beginners section and surf through each page of each
thread, each post till they reach members area...... Then they start with another forum..... They are searching for a system........ Poor
fellows.... Sorry can't help....
------------------------------------------------------------------------------------------------------------
A Highly "QUALIFIED"!!! 60 year old person was driving through highway and on the way he saw a maize field and stopped for a
break.... He saw bunch of farm ers working in the field. He called one of the farm ers and started chatting…
Old person: "How do you do?”
Farm er: "We are doing extrem ely well, sir."
Old person: "How do you feel the weather would be this year?"
Farm er: "Seems to be normal this year, sir."
Old person: "How do you feel the crop would be this year?"
Farm er: "Seems to be normal this year, sir."
Old person: “Hey. By-the-way, how much per annum do you make by selling this crop?”
Farm er: "On an average 2 Lakhs sir."
Old person: "Hey. Just 2 Lakhs.... just 2 Lakhs..... It’s a pity my friend.... Look at me, I have 3 P.H.D's and I make 25 Lakhs per annum...
You people work so hard out there under the sun and end up with just 2 Lakhs??? Ha -ha-ha what a joke...
Farm er: Sir, we are extremely happy with 2 Lakhs… .. We need no more… . But there is one difference sir… .. You have money
today… . I agree… .. But there is difference sir… . I have spent best part of my life with birds, trees, rivers, anim als, beautiful sunrise
and sunset… … … .. Whereas you have wasted best part of your life reading books day and night to get those 3 P.H.D's… !!!
This story is meant for all those CA’s, Lawyers, Software Engineers, Doctor’s AND others who boast about their degree and their
wealth… … ..
Regards
Raghav
M oney without W ork/Effort:

All of you keep asking a question to yourself... most of the times....
Why wealth always comes after a great effort..... Great sacrifice.... not so easily? Read it.
There was an old man... H e had an attack and he was in rest... They had a family doctor who just finished his M B BS and he was doing
practice since 2 years... He had a steady income through his clinic...
Since he was a family doctor he used to come daily to check his patient. This day when he came for checking the old man (patient),
patient's wife wanted to tell something to the doctor...
She took doctor away from patient and whispered "Can you please help me? ”
Doctor: "Of course, tell m e, I shall help you."
Wife: "See doctor. M y husband has won a lottery worth Rs 5 crores. Now I can't tell him since he is a heart patient. Can you help me in
intimating the same to him in a way so that he does not get excited?”
Doctor agreed and went to the patient and slowly started speaking to patient.
Doctor: "How do you feel now ?"
Patient: "Better. Very much."
Doctor: "Ok. If I tell you some good news, how would you feel?"
Patient: "I will feel much better."
Doctor: "Now if you win Rs 1 Lakh in lottery what w ill you do?"
Patient: "I will keep it in my Bank Account."
Doctor: "Rs 10 Lakhs?"
Patient: "I will still keep it my Bank Account."
Doctor: "Rs 1 Crore?"
Patient: "I will donate Rs 10 Lakhs and rest in Bank."
Doctor: "Rs 2 Crores?"
Patient: "I will donate Rs 50 Lakhs and rest in Bank."
Doctor: "Rs 5 Crores"
Patient: "I will give half of that to you."
Doctor died due to heart attack....
Any money which comes easily/without proper work will create anxiety, overexcitem ent and slowly start eating the person behind
it... It’s a universal law … Work and earn.....
That's why most politicians die due to heart (If they have one!!!) attacks...
Regards
Raghav
How do we get in to Sleep during Night?

Ok... Let me end the day with one more writing.... It’s a part which we have treated with least importance but is of highest
importance.... That is how do we get in to sleep during night........ If you are depressed or stressed – sleep is a medicine… W e get
refreshed after sleep. That’s what we know and a comm on man knows... But there is much more to it...
Sleep is a unconscious meditative state.... Whatever you think or carry in your mind while s liding to sleep it gets multiplied while you
are sleeping (penetrates through your subconscious mind) and one day it becomes reality....
The people who carry some worries while getting in to sleep get up next morning with much more worries... fear....
A person who gets in to sleep with a happy mind gets up with more happiness next morning...... A person who gets in to sleep in a
thoughtless state gets up with great power and courage and abundant energy....... A person who goes to sleep after meditation gets
up next morning with "heaven" in front of him.....
By-the-way which one you would like to experience tom orrow morning?
Regards
Raghav
Few posts back I have told : "Chart is a mirror and it reflects what is in front. W e need to rectify what is in front and not the mirror."
I am evidencing my statem ent with today's Nifty chart. If you think a teaching can get better than this then it's difficult...
Regards
Raghav
While the previous chart was a Chocolate, here I present a Cake..........................
Confidence gets developed by making proper hom ework... Confidence helps to trigger the bullet in time... Hom ework helps to keep
the gun besides when it’s not your turn....
This happened again and again.... I posted charts again and a gain..... How many take it and how many don't is entirely their personal
choice....
Regards
Raghav
Referring to the above chart, reproducing a partial statement of ST Bro. from the other thread....
1. Option buying should not be considered as an investm ent.... it is a trade... don’t buy options in anticipation of a price move (it
may never take off), buy when you see the move has started.
2. If the move stalls, get out of your option buy position... you can always enter again once the move resumes after anti-trend
correction/consolidation/sideways movement.
Options can be even day-traded successfully as per the short term trends that we get during the day......
Options is a great tool in the hands of a skilled trader.....
Regards
Raghav
Psychological Thoughts:
Okay. Now let’s get back to the Psychology class. By now we know that our mind is full of thoughts at any given p oint of time. There
is friction, confusion, reaction and what not?
I told mind is nothing but everything ... Because you are nowhere when you stop thinking and still the thoughts
At the same time we can’t live without m ind as without it there is no life ...
It’s smaller than autumn but as bigger as space... Because a mind cannot be seen, however, because it’s fictitious at the same time. It
travels at a speed which cannot be matched by any other object in the universe… Your mind can be in Delhi now, ne xt second, New
York and very next second at London because it’s so big… ..
Mind is a big “0”. (“0” is again a priceless gift invented by our own great Rishi “Aryabhata”)
“0” is nothing as long as it remains aloof… What is the value of “0”… … .. "00”… … … . ”000”… … … . Value of
”0000000000000000000000000000000000000000000000000000000”. Value is still “0”. Right?
We can add as many “0”s as possible but it remains “0”… . Now it’s nothing because “0” is NOTHING…
Ok. Now let’s put single “0” INFRONT of digit 1 = 10… two “0”s INFRONT of digit 1 = 100… . Likewise 1000…. 100000, 10000000… …
1000000000000000000000 , 1000000000000000000000000000000000000000 0000000000000000000000000000000… infinite… … .
Now... Because of zero only the value of 1 has increased to infinite… . Now "0" has become EVERYTHING
This is simple maths… . Not a new concept…
The Mind is same… .. It’s “0” as well as “infinite” depending on where do you place it.
Today what all we are experiencing is the “O” part and w e have never ever attempted to experience the “infinite“ part…
Welcome to the world of “Infinite”… …
But before we enter the world of infinite w e need to see where we are placed inside that “0”.
------------------------------------------------------------------------------------------------------------
Mind of a common man is like a kettle full of water… .. But when you go to your coach who is th ere to develop your personality, who
charges a hefty fees… he says… . You have to think big… . to become big… .
There is a saying in my native… “Forcing a person to eat Idli vada, who cannot even swallow water”… There is no use if a weak m ind
thinks big… It produces either a weak result or no result at all… . It’s like trying to move your car without fuel… . First you need to fill
the fuel…
So what is the solution? Simple. Empty your mind. Fill the energy… . Then start a great thought… Now it has got the energy… .
Whatever you think can be converted in to reality… .. Because your thought had the energy and power needed to create the things
you wanted. (In Sanskrit it’s called “M anobala”… . WILL POWER).
All of you have heard of “MANASA SAROVARA”. Do you know how it’s created? It’s created via Lord Brahma’s imagination… . M anasa
means Mind… .. Sarovara = Lake… …
So this lake is created through “will power”… ..
Let the critics keep arguing that its myth and all… we shall focus on what we need and not on what we don’t… ..
Still one question remains. How to empty the mind ?
There’s only one way.
STILL YOUR THOUGHTS (Thoughtless state). (I will write more on techniques and practice for stilling thoughts in a while) .
When we talk of stilling the thoughts, we come to our d estination – a great world called DHYANA o r M EDITATION.
Meditation is a priceless gift presented to us by our Great Rishi’s thousands of years before… . Rishi’s have understood that every
man lacks something despite getting everything in life… . No one is a complete happy person… ..they went in search for that eternal
happiness state… . And after thousands o f years of experiment invented a concept called Dhyana… .. A bless… a boon to mankind…
Before w e understand all these we need to ask this question invariably… .
What is the most difficult task in the world?
Climbing Himalaya? No. Lot many have achieved that.
Crossing Pacific Ocean? No... Lot many have achieved that.
Going to space? No. Lot many have achieved that.
Answer: ”DOING NOTHING”!!!!… … I caught you my friends… .. Just try it and see if you think I am joking… ..
I was with a master few years before… He w as talking to some 300 people… He offered the people with food, shelter and
everything in life till death… … provided they can agree to a small condition… … Condition??… . For one year they have to do nothing
(Both mental and physical)… . Just sit doing nothin g… . How many of were ready? They were told to raise their hands… …
None out of 300 could utter even a word, let alone agree to the condition… …
Our education, our upbringing, blind following of other cultures, Dirty politics, forgetting our own great history, Ego, arrogance of
wealth in early part of life… . Have spoiled us… Now we can’t sit thoughtless even for a minute… …
But the beauty of sitting thoughtless… .. That is meditation… a “THOUGHTLESS STATE”… .
Meditation can take you to your past..... Meditation can take you to your future… . one step ahead… “M EDITATION CAN M AKE YOU
W HAT YOU W ANT”… … … .. Coming back to same circle where we started... everything is within...... But we are looking outside for
it.... We have lost something inside our house and we are s earching for it in the street, which is outside the house.... How do we find
that? We have to search inside the house..... That’s the only way... only option..... Only all-time truth....
------------------------------------------------------------------------------------------------------------
We are born in nature.... live in nature.... and die in nature..... Mother Nature has not only given a life. It also has given equal
opportunity to all of us in the form of:
1. Energy
2. Resources
Whatever you do a job, business, profession we are in a simple cycle... The cycle starts from getting energy from the nature and
using that energy for acquiring the resources....
Now... coming to mind – There are 2 types of minds!!
1. Mother mind (Subconscious mind)
2. Child mind (Conscious mind which we use for our day-to-day activity and thinking… )
What we see, what we use every day is a child... Most of us die even without realising that there is a mother mind.... Mother mind is
big..... bigger… .. biggest..... more..... more................... more..................... more........... more.................. more and more and more and more
and more................................................ more... more....... bigger........................ infinite....... That's why mind has limitless possibilities… … .
When there is limitless possibilities.... Why can't we become a successful trader? Why not a successful businessman? So on.....
Upanishad says....
Mind is your own enemy as w ell as friend". it goes further and concludes.... men is what his mind is....
Taking the example of “0”, let the mother be “0”…
Mother mind for us remains nothing as long as we keep the “0” behind the child… . 01, 001, 0001, 00001… ..
Once we start putting mother in front of the child the game changes… .. 10, 100, 100, 10000… … … … … …… … …… … … … … … … … …..
Infinite… . Limitless
After all life is game about who is in front and who is behind!!!!
Let’s talk in IT Language… ..
Conscious mind is the desktop… … .
Subconscious mind is the hard disk… .
We are putting so much of items (Thoughts) on desktop (conscious mind) that there is not even a centim etre space left on the
desktop… .. The system becomes slow… . it may crash as well… … ..
Why is there any need to do so when we have a hard disk (subconscious mind) which can store terabytes (big) of data… We can have
all setup files, programme files, everything in hard disk… … … … … . But in life we store all those files on desktop (conscious mind)
and create friction, irritation, frustration, anxiety, unhappiness and what not and let it crash....
There are options… Delete all unnecessary files from desktop – transfer the remaining files to hard disk or delete all files from
desktop and put everything afresh in the hard drive… and so on… Be careful you may have viruses too… .
This process of cleaning the desktop with unnecessary files is called “meditation”
Coming to energy and resource part… ..
Nature or space is producing energy every second… . It’s called “cosmic energy”… .
The thoughts create friction, friction create waves… .. And the waves block “cosmic energy” from penetrating through our mind and
body.... Unless and until we allow that energy to penetrate we cannot attract the resources....
Now Thoughts are working like cell phone jammers… . Mismatch of frequency or disrupting the frequency… … and blocking cosmic
energy....
Once we start getting energy, it can be used for any cause…
Consider this... there is a river… . You put a dam… . you produce electricity... The electricity can be used for plenty of purposes… .
Now we are not using water directly… . But water (cosmic energy) is converted into electricity (thoughts, imagination) and used to
achieve our goal… .
------------------------------------------------------------------------------------------------------------
Remaining in thoughtless state till the cosmic energy gets stored… .. Once this energy gets stored... The same energy when get
stored flows through the nerves of your entire body… . It is the energy which gives you immense confidence and courage… . Once it
starts flowing, we can use it to achieve any objective… … . That means the dry land is now being irrigated through the flow of
water… . that m eans the land is due for sowing… . then land is due for harvest… ..
Once the energy gets stored… your thoughts get pow er… huge power… your imagination gets power… huge power… . Powerful
thoughts and powerful imaginations turn in to reality… … ..
When you go to someone and say “I had a painful experience on X day at Y event. It can be a trade with severe loss. The person to
whom you have gone say’s “Forget it”.
Do you think you can forget it? No. It already got stored in your mother or subconscious mind. Again and again it keeps on poking, its
noise creates friction and frustration to your child or conscious mind… Unless it is burnt it is going to be there for ages... even it will
haunt us in our next birth… .
Remember… THE BIGGEST M ISTAKE W E M AKE IN LIFE IS TRYING TO AVOID PROBLEM S. PROBLEM S CANNOT BE SOLVED BY
AVOIDING; INSTEAD BY LIVING W ITH THEM .
Exercise… ..
The release of energy from the space is heavy during dawn… say 4 am till 6 am… because everything is calm… . Due to very less
counter-waves on earth because of less or no activity… . We relate space to the sky… so imagine that that cosmic energy is flowing
in to you from the sky… . from space… . Or you can imagine that it’s raining on you… .. That itself is divine experience… .
Get up early (in between 4am to 6 am is best). During this time the nature is singing… … … … It’s at its best… … . That’s when all
divine forces start their d ay… That’s the time when they are in business… Unfortunately lot of us never happen to see this part of
the day during entire lifetime… .
Get refreshed… if you want take a bath… .. Do few light exercises for 5 to 10 Minutes… .. Then sit straight… .. CLOSE YOUR EYES…
and you guessed it wrong… No… first you are not trying to still your thoughts… .. It can’t be done so easily… . Instead… ..
For first 15 to 30 minutes depending on level of friction that exists inside the mind allow all bad thoughts, painful experience to
come through… … It can be the big lo ss that you took 6 months back, a position that turned in to loss from a profitable one… .. Or
your boss firing at you… . so on… . LET IT COME… . IT WILL COME… because the moment we close our eyes the first thi ng we get in
our mind is -ve thoughts, I say… .!!!
This process is called burning of negative energy… … . It’s nothing but burning the -ve experience which we have gone through in the
past. Let them come one by one or in bulk… . Try to remember as many as possible… let them go out… .. When everyone has gone
out… . who will be there to pelt the stones at you… … ? None… .. Now your mind automatically stops everything… … virtually
everything… . Because you have burnt all your -ve experiences… .. Wood is burnt … .. Fire is no more… .. What can the mind do with
ashes… it cools down… Now we focus on breath… .. Deep breath… . Only on breath… .. Nothing else… still you struggle for few
days… .. Try again next day… for 3 days, 4, 5, 6… .. A day comes when you start sliding tow ards your mother m ind… . And one-by-one
things starts changing… . Life takes a new dimension… . It’s not a story… It’s not a comic… It’s not a fiction… . It is a reality. It’s a
divine experience… .
Why can’t you take a chance (with no risk, without fee) and experience it? At least to make my hours of writing and effort a worth
full endeavour…
------------------------------------------------------------------------------------------------------------
Further there are following aspects… …
Once cosmic energy gets stored… . Now we have the following options… ..
A. Using that energy for creating +ve experience. Then… …
1. Releasing the +ve experience. Or
2. Storing that +ve experience in subconscious mind … and
3. Retrieving that +ve experience in subconscious mind knowingly and unknowingly.
OR
B. Using that energy for -ve experience. Then… .
1. Releasing the -ve experience. Or
2. Storing that -ve experience in subconscious mind... and
3. Retrieving that -ve experience in subconscious mind knowingly and unknowingly.
Here comes the crucial part… .
A successful person or a winner:
A. Uses that energy for +ve experience. Then… …
1. … … … … … … … … …… … … … … … …… … … … … ….
2. Stores that +ve experience in subconscious mind … and
3. Retrieves that +ve experience from subconscious mind knowingly for replicating and multiplying that +ve experience…
That’s why success begets success… Money begets money… . good health begets good health. Good thoughts begets
good thoughts…
AND
B. W hen that energy get used for -ve experience through an event on which he has no control, then… .
1. He releases the -ve experience immediately… ..
2. Never stores that -ve experience in subconscious mind.
3. … … … … … … … … …… … … … … … …… … … … … ..
Remember… to do meditation you need to have a calm atmosphere and need some part icular postures… but to be in the
“thoughtless state” you don’t need anything… You can get in to thoughtless state when you are walking… when you get free time in
your office… when you are riding or driving… . so on… .
Further we know that seven chakra’s (wheels) rule our body and when all of them are in sync our mind and body perform their best.
(Please Google around for knowing about chakra ’s as it is a Big subject and I will not talk on that here).
By nonstop thoughts we block energy from penetrating through mind and body which we have discussed. The food for the chakras is
the cosmic energy. When you don’t feed them they start eating you!!! That's the reason we get diseases… . both mental and
physical… We put some chem icals in the name of medicines to rectify the d isease… . But that disease is temporarily detained… not
cured completely.… It needs energy…
There is a continuous nonstop supply of energy… … there is a technique to supply that energy to all chakras… what else do we
need?
Our Rishi’s have prepared an astrological chart called “Panchanga” 1000’s of years before. It contains the details of planetary
positions at any given moment for next 1000’s of years. Even they did chart future eclipses with pin point accuracy… So precise that
it won’t differ even by a second… It’s prepared when we didn’t have any modern technologies… Then how did they do it? It’s only
through that divine energy… Cosmic energy… Acquiring that energy through m editation (Called as "Tapas" during those times).
COSMIC ENERGY CANNOT BE SEEN. IT HAS TO BE EXPERIENCED…
When the cosmic energy penetrates through the body and mind it creates a frequency… it’s like tuning the radio to a particular
frequency to catch a station.
When we merge ourselves with this universal energy w e become one among nature and start seeing whatever universal energy is
able to see… even the future… .. This is highest level achieved by plenty of effort so w e will ignore this.
One must be aware that subconscious mind stores all our experiences, each and every deed in a visual fo rm. It has got a camera!!!
Whatever we do is photographed and stored in a big lab. We can pull-out this picture in a deep meditative state. Only matured
person can understand this; not others… This part is what we are concerned with ... This is where we pull-out our –ve experiences and
burn it into ashes so that it never comes back to haunt us…
M editation can take you to your past… … . many-many years back… . 100, 200… …
To summarise… ..
1. All of us get nonstop cosmic energy from space… .
2. The flow of energy is severe during dawn…
3. The waves created through continuous thoughts within our mind block this energy from penetrating through our body and
mind.
4. To stop the waves we need to get in to the thoughtless state.
5. How to get in to the thoughtless state is explained. A thoughtless state can be achieved anytime, anywhere.
6. A person with past -ve experiences cannot p erform his b est in the present.
7. To perform best in the present one has to burn his past –ve experiences.
8. To burn the past –ve experiences one need to pull them out. How to pull them out is explained… It’s through deep
meditation… Doing meditation for longer periods over a period of time.
9. Once past –ve experiences are burnt, our mind becomes empty kettle. The bathing of mind is complete…
10. Once mind becomes empty kettle, all fresh supply of cosmic energy gets stored and becomes powerful.
11. The stored cosmic energy can be used to achieve our objective. You can become whatever you want through your
powerful/energetic thoughts and powerful/energetic im agination.
12. Once we create a +ve experience w e can pull them out again and again to multiply them, thereby achieving m ore and more
success... more and more happiness…
13. The stored energy also gets utilized for –ve experience due to an event beyond our control. This has to be burnt as soon as
possible through deep meditation by pulling out that particular –ve experience.
14. Your posture while walking, sitting in your office, house everywhere is very important. The back and the body posture should
be as straight as possible as any irregular posture will block the energy from penetrating through chakras or balancing wheels
and thereby creates disease… .
15. Dawn is a time when nature offers everything for free… … .
I can write another 100 pages. But it’s a simplistic basic of how it works and how to tap it... Beginners may not understand this by one
reading.... Tube takes time to light..... . Once understood and practiced over a time without fail would result in something
phenomenal.... There are people who live for arguments... there are people who live for great experiences... which category you
belong to?
I have heard this word when I was born
I have heard this word when I am alive
I will have to hear when I die
That word is "I DON'T HAVE TIM E"…
These practices will not only make one a successful trad er but also a best human being........
Let me wind up for now......
Regards
Raghav
The greatest ever question an d answer I have read in my life...

In Great Geeta, Arjuna asks Krishna… "M y Lord, what is "PERM ANENT"?”
Krishna says "My friend "CHANGE" is "PERM ANENT".
The universe keeps changing every moment... There is change in season.... There is change in environm ent, day becomes night ...
night becomes day.... M en, animals, our body keep on changing everyday..... Virtually every second there is a change.....
So is the market.... Volatility, ATR, all change.... Trend also gets changed.... so is the dynamic of the market...... How silly it is.... A
trader never accepts that there is change in the trend... volatility.... he keeps hanging to his position and then gets beaten and then
says.... market is not a place for m e...
Look at TATAMOTORS.... M y favourite horse.... it changed..... Its volatility changed..... I have to realise that there is change and I have
to adopt... I have to understand that it needs rest after a run.... I need to realise that it w ill start running again after taking the
breath.....
I have to realise that I have to change my field.... Nifty Futures, Options… ICICIBANK, TATASTEEL..... Till my horse rests....
Regards
Raghav
W ho is a M entor? W ho is a Guru?
I am writing on this topic because if we want that real happiness and want to know the purpose of life and want to know how t o
fulfil that purpose legitimately w e need a Guru (mentor) at least in life if not in trading.
For the definition of M entor I have tried for a most comprehensive and convincible explanation throughout this forum and
elsewhere. Everywhere the definition is so b ig that by the tim e we finish reading it, w e fo rget what w e wanted to search!!
2 years back I was also searching for a mentor and even started a thread “ Need a mentor” (Even today it remains one of my favourite
threads because of the wisdom I got there). Then I got a mentor. Though he was good at trading his character never made me to
believe that he is a mentor. Ultimately an incident made me to realise that he is one among thos e roadside Guru's. It made me to
think more and realize that it’s really difficult to search a true mentor and more difficult to get one because all eligible mentors have
gone beyond money and what all they want is a true student who wants to excel not the one who is in search of money. Those
true/great m entors hardly speak and write because they are filled pot. Filled pot doesn’t make sound because it is filled with
knowledge, wisdom and content.
Come to the other part. Welcome to the 21st century. Welcome the world of modern Guru!!!! What all you need is just a call to get
these Guru's. They are available so easily!!!
Now we have a Guru for almost everything. Market Guru, IT Guru, Corporate Guru, Uptrend Guru (These Guru's incarnate when
market is in uptrend, they suddenly disappear when market tumbles, they reincarnate when market again starts uptrend), Kitchen
Guru, Indicator Guru, System Guru and so on… .. They come as cheap as Rs 2000 – 3000 a month. They are always rechargeable but
with higher denominations…
The commercial world has ruined the name of Guru by calling every crook at the corner as “Guru”. The common trait among all these
Gurus are – The Guru’s make money by making all their Shis hya’s (students) bankrupt in no time.
One more type of Forum Guru’s – He starts a “Money making” thread and attract newbies towards it and then once he sees there are
enough bees!! around, he says I am closing thread and contact me by mail or call for paid services. Even Traderji has enough of these
types of Guru's/threads.
We had a great tradition of Guru and Shishya (Student). A Guru as per our ancient customs never expected money. However, a Guru
can give you whatever you want. He can make you whatever y ou want. But he expects nothing since he has gone beyond money and
what all he wants is the real happiness of giving. His o nly Objective was to prepare students of unquestionable characte r who can
lead the society efficiently.
A Guru never says run away from life and go to forest. W hat all he says is:
You have two types of duties. One is towards yourself and your presumed family (parents, spouse, children and relatives. I use word
“presumed family” because according to the Rishi’s – entire globe is a family).
Second duty is towards the society to which you owe everything.
A real Guru’s presence is a bliss and a bless. His vibrations and aura are so strong that you forget all your pains in his presence. Kabir
says:
सब सब ब ।
स स स ब ।
“Let me make surface of entire earth as my paper; Let m e make all trees on the earth as my pen .
Let me make waters of all 7 oceans as my ink ; Still I can’t describe the GURU.”
---------------------------------------------------------------------------------------------------------------------------------------
A true Guru makes impossible things possible. In our ancient history we had plenty of instances where a student had a wish and by
the blessing of Guru, the wish becomes reality.
We had a politician called Pandit Madan Mohan Malaveeya (Hereinafter I will call him as 3M !). Unlike today’s dirty stinking politician’s
he was a man of dignity, character and great personality. He studied with a Guru by name Pundit Hardev in Banaras.
When he was a student, 3M had a dream of building a university of our own as w e were ruled by British then and we didn't have any
university which can be called our own. When he finished his studies he revealed his wishes to his Guru. Pandit Hardev told “Go
ahead. I am with you. Whatever comes don’t back. Your wish will be fulfilled”.
Now 3M has a great task of collecting funds for arranging infrastructure for university. Wherever he went people told he is dreaming
wild though he had got good support here and there. O ne day he thought “Why can’t I go to the rulers of different provinces and ask
for donation? At that point of time India was ruled in terms of provinces like Mumbai, Mysore, Hyderabad and so on… .
First he thought he will start with Nizam of Hyderabad who was the ruler of Hyderabad Province. An appointment with Nizam was
fixed and 3M knew very well that Nizam was an autocratic ruler and he never respected people and their welfare. However, a person
with Guru’s blessing never comes across doubt and fear.
The day has come. 3M arrived in Nizam’s Darbar. Nizam asked “What made you to come to me? ”
3M: Your courtesy, I have been steering an endeavour o f building a university for our own countrymen and for that sake I have been
travelling across the country to arrange the fund for this cause. I am here to know whether, your kind courtesy, I can get a support
from you in the form of donation.
Nizam started laughing loudly and shouted “Donation? Donation? Ye lo donation” – he threw both of his shoes on 3M . All the Royal
people present in Royal Court (Darbar) laughed loudly at 3M till they became tired. 3M was a man of courage and character. That
insult made him a more courageous person. He collected both of the shoes and with smiling face and politely told Nizam who was
still laughing like a demon, “Thank you my lord. Thanks for your courtesy”.
3M came back to Banaras and very next day he went to open market and took a place for himself and kept bot h the shoes of Nizam
and started auctioning. He also ensured that this auction news reaches Nizam. On hearing this news Nizam got shocked as it wa s a
great insult for him. ”Vo m era joota bazaar me bech raha hai? Tum log khade hoke kyaa kar rahe ho? Turant jaake kisi pi kimat par
usko khareed ke lana. Verna tumara Sar kaat doonga.” He ordered his subordinates.
Servants ran to Banaras with enough money in their hands in panic. Now its 3M’s turn. He acted as though he is busy in auctio ning.
Servants asked how much he is asking. 3M told 10000 VARAHA’S (Varaha is a gold coin used as currency at that point of time).
Servants told: Ok. We are ready to pay 10000 Varaha's. Give the shoes. Servants paid and in return got only one shoe. They were
taken back. Why only o ne shoe?
3M: 10000 is only for one shoe. Pay 10000 more if you w ant another. I have plenty of people here who are ready to bid...
Servant’s thought they will lose their head with Nizam if they keep on arguing and don’t get another shoe. They paid another 10000
without any more words and went back to Hyderabad.
3M used all of that money for that worthy cause. By looking at his willpower and determination people from all over the country
started pouring in funds for this cause. The dream o f Malaveeya got realised.
Today, the same University remains the largest residential University in entire Asia and it offers almost everything ranging from
Engineering to M usic.
When you have the blessing of Guru behind you there is no place for the word called “Impossible” .
Regards
Raghav
Some more thoughts about M entor:

A mentor is one who enables you to divert all of that cosmic energy (I wrote on this subject over here) toward s the achievement of
your goal.
The above is a modern term of mento r.
During ancient tim es a guru himself used to be a m entor. A Guru is far-far above a Mentor.
Apart from doing whatever a m entor does, Guru helps you to:
1. Realise the purpose of life
2. He makes you to understand why you are here
3. Why you are born as a human being
4. What are your personal duties and social duties ; and more than that
5. He helps you to kill animal instincts within you which come along with you invariably, when you are born, due to our
experiences in the past births.
We become HUM AN BEINGS only after we kill animal instincts installed within us since our birth. TILL THEN WE REMAIN AS
ANIMALS.
Most of us die before w e can kill our animal instincts. The best examples are Politicians of our country.
A Guru is Guru because he can create whatever he wants and he can destroy whatever he wants due to sheer willpower present
within him due to years of Tapas or Dhyana (Meditation). For humans the REAL LIFE begins the day he finds a true Guru...
Regards
Raghav
Swing Trading the IB – Trade Setup Nifty 08-APRIL-2011 and 11-APRIL-2011:
I wrote heavily about Using Daily charts to generate powerful trades: Two consecutive IB's. I use them for a nice day
psychology. As a trader trading and swing trading Combo.
without tuning his
Being aggressive, I do not wait till it breaks IB. I enter early when it breaks the open of the day
psychology:
downside. 3 possible stops:
1. Cannot succeed in the
Conservative trader – stop above mother bar.
long run.
2. In case he succeeds Less aggressive trader – Above 1st IB...
accidently he cannot Highly aggressive trader – above today's high or above 2nd IB.
sustain the success.
3. Even if he gets success
by luck he will either
get overexcited or
become a slaver of bad
habits due to excess of
money.
Few traders have written to
me in PM and detailed their
story of failure and loss. I am
sorry to say that some of
them have lost heavily.
In reply I have asked them to
follow some simple
practices/routines. None of
them have come back to me
so far... Sometimes I feel
anything given free is valued
as worthless. That's why all
good traders and writers stop
halfway in this forum and
never come back. Even I feel
the same way. Any individual
who is not committed either
in life or in trading cannot do
any good things in the long
run... Again it’s up to each
individual.
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
This is a
reflection of
same in 5-Min
timefram e
which is my
battleground.
The bull pressure is still alive.
What we are seeing is a
possible correction... Once
Stoch comes down to OS bulls
may comeback roaring.
Regards
Raghav
Trading the Gap – Trade Setup Nifty 13-APRIL-2011:
Once the price gaps substantially it will either:
1. Continue in the sam e direction (Opportunity to trade).
2. Try to close the gap by reversal (Opportunity to trade).
3. Remains volatile throughout the day due to indecision (No Opportunity to trade. During these days I exit If I hit 2 consecutive
S/L's. It happens many times. The important thing is to keep those losses small).
Today we had confluence (meeting of 2 or more events). These are:
1. Nifty gapped 50 points (Moderate gap).
2. It gapped exactly to 38.2% retracem ent (depicted in daily chart in the next post)
3. As we know through daily Stoch, Bullish pressure is still alive.
4. Once it gaps, it makes vertical move with volum e.
5. 30-Min Stoch turns up from OS zone.
Once we have 2 – 3 factors evidencing a future event it is a time to go for the deal.
A strong trend is like a Tsunami. It washes out everything on its way. It cares nothing (Resistance/ Support). So getting a deal early is
important as it just runs away and thereby demands huge S/L. The days like this do not need any m ethods or systems to trade.
5-Min chart:
1 & 2. Inside days (IBs').
3. Breakout from Inside days. (Now since it breaks downside, Breaking of low of IB's which was support earlier. The same becomes
resistance now, as per the theory. Let’s see whether theory works).
4. Gap down today and vertical move upside. Now it crosses close of yesterday as well. What is the real resistance?
It’s at No. 3 where it broke IB's downside (Breakout area).
6. Here exactly at the same area no 6 (resistan ce – green horizontal line), it starts retracing. Now let’s see what happens in 30 -M in
charts.
Nifty 5-Min:
Nifty 30-Min:
In 30-Min chart 2 Inside bars at the same area
with low volume. Then Retracement is short
lived means trend is too strong. Then breakout
of IB's upside with Volume and then gradual
increase in Volum e).
These kind of days are the days to make big
bucks with less stress...
What all we need is a right basics and
application in real-time... Nothing else...
Regards
Raghav
Indeed Bulls have roared loudly during the day.

Trading Price Action & Location – Trade Setup Nifty 18-APRIL-2011:
th
Bulls are shaken. I don't know whether it’s a match fixing . After a great run last week bulls took rest on Friday (15 April 2011).
Bears have made som e inroads on Friday by retracing 6 1.8 %... Today though bulls have played really well in power-play, afterwards
they collapsed like a cycle stand. Bears broke the low of the bullish engulf slowly though not comprehensively. If bulls do not react
quickly then bears will be Is it a sign of reversal.... YES. N O.

-------------------------------------------------------------------------------------------------------------------------------------------------
Now let’s get back to class without wasting much time.

How ironical it is? Sometimes day traders make far more bucks than a swing trader. I couldn’t play the down move since I was busy in
my other commitment. How big it was!! What a day for a day trader!!
Now I will come to my point.
First up we have a double bottom. It takes out last days close upside. Entry for a long trade. What is the risk: 20 – 25 points.
It rallies, looks like sky is the limit. It reaches last day’s (IB’s) open or say last day’s high. That’s why I shout “Location. Location.
Location.” I can promise you that I know a person who makes money jus t by trading OHLC. It is LOCATION.
What does Stoch say. It is OB > 5 bars and we are bullish. However, what price does when it reaches open of last day (IB)? It makes
inroads. Small LOWER HIGH, LOWER LOW, And AGAIN LOWER HIGH. But here Stoch does not say to go short. It is PRICE ACTION.
I have marked the place for covering long positions. I have also marked the place for short entry. The place for stop depends on the
aggressiveness of a trader. So , three possible stops. The RR is really Great… Adding to winners... well I am not great in that...
A winner listens to market and takes a trade. A loser listens to friends, brokers, TV, Tip makers and takes a trade.
When we talk about multi TF, we make use of 5 -min, 30-min and 60-min here. When the price reaches the high of last day what does
Stoch do in 30-M in Chart? What does price do? Price did a n IB and Stoch stayed in OB for less than 5 bars (signs of bullish pressure
dissipating). [One can't make out -ve divergence clearly in TradeTiger.]
So the ideal trade is to short the break of IB downside which also happens to be the break of second pivot low in 5 -M in chart. See
how multi TF's work in tandem and produce great results.
There is no substitute for practice, patience, observa tion, effort and experience… Today I showed you how to get an edge by
blending price action, location and then Multi TF and the indicator to certain extent.
Most of the traders are extremists. Either they love an indicator or a system or a method too much. That’s not the way. A plate of
meals has all tastes and flavours. Likewise a trader needs to blend few things to make a great trade or a great recipe!! Do you
agree???
Regards
Raghav
Trade Setup REALTIM E Nifty 19-APRIL-2011:
It’s clear from my
chart that bulls are
clearly at least in for a
fight if not a win.
More than 2 factors in
my favour, I take it. I
am long.
Regards
Raghav
EOD:
Liquidated 50% of the long position by EOD for +3 points. Rest 50% carrying overnight. Stop and reverse at lo w of today + small
filter.
Regards
Raghav

th
20 April 2011, 10:27 AM :

Hello Raghav,
Today market has opened gap up and Stoch has stayed for more than 5 bars on OB zone. Can we consider Stoch now? But in the day high
there is a doji too… . Please let me know your thoughts on this
Thanks
Bala
No. We do not consider. A moderate gap. It needs to cool down. Usually it takes 1-2 hours after market opening. Break of high of the
day – go long. Also consider false breakout. Break of low of day – go short till it closes gaps. Of course other parameters do apply.
Regards
Raghav
th
20 April 2011, 10:38 AM :
As per my little knowledge and looking at Nifty Spot chart, it’s heading North. It’s just my personal analysis.
20th April 2011, 04:47 PM :

Bulls have indeed proved my analysis to be true.
Covered another 25% @ 5810 (carried 50% yesterday), then added back another 50% on top of red hamm er on 30 -M in (charts later
on). It’s been a phenomenal run for me since last 2 weeks.
20th April 2011, 05:55 PM :
This was posted earlier in the
morning:
“No. W e do not consider. A moderate
gap. It needs to cool down. Usually it
takes 1-2 hours after market opening.
Break of high of the day – go long. Also
consider false breakout. Break of low
of day – go short till it closes gaps. Of
course other parameters do apply.”
Regards
Raghav
EOD:
I will be posting 3 Nifty 5-M in chart (sorry I have not put the Stoch on the chart due to size issue)
charts below. 5-M in,
30-Min and daily
respectively. Just
observe how they
work in tandem and
how do they
complement each
other by patterns
and formations.
That’s why I always
do my homework on
locations. OHLC of
last 3 days, place of
breakouts, place of
swing highs and
lows, IB's etc.
Trading is simple
(Again ). Market
keeps on making
same formations 8
out of 10 times. Why
90% are losers??
They are unable to
do the same simple
things again and
again. Because doing
same thing again and
again results in
boring. People want
change. They need
something which
raises their BP. Here
also they need quick
action, quick bucks,
and quick wealth.
Result everyone
knows. More than
that the secret of
failure (!!!!) is no one
wants to put efforts.
Everyone wants
EASY M ONEY.
th
After an IB day, price breaks the low of IB (support) with huge volume on 18 April 2011. That area is called break out area. Once
th
support is broken the same becomes resistance. Next day we see a higher low (more on 30-M in chart). Today (20 April 2011) gap up
opening. Now where does price go and come back? It bounces thrice fro m the area where we had an IB breakout. See how support
and resistance theory works in a competitive market.
Ok. Now once price breaks low of the day what was the support. It’s high of last day + close of last day + close of gap. Such
Confluences tend to generate huge trades. Now for the 4th time the price reaches that res istance area and now it breaks the same
with huge volum e. Now the sam e remains major support. Support, resistance, support, resistance, support, resistance..... M arket is
just an interplay between these 2. W hen these 2 expands it’s called trending period. When it shrinks it’s called sideways period.
Nifty 30-Min chart:
From 30-Min perspective:

1. IB DAY.
2. Lower swing high.
3. Price breaks open of the day and sustains and bulls start accumulation.
4. Bears try to drag the price down. However, bulls fight back and closes the price right at the high of the day.
6. High of yesterday will be resistance for today. Some brokers have an extreme idea. What if we b ypass that resistance and
open above? Result gap up. But there is one more resistance as detailed in 5-Min chart. 3 attempts failed because of lack of
force. Then bears drag it to yesterday's resistance. Now bulls who are just waiting for the close of gap jump in and ch ase the
bears down the street.
Nifty Daily chart:
1. Bullish engulf
2. IB
3. IB breaks
4. Bullish Harami
5. Morning star formation by EOD today.
Nifty 5-Min Chart:
Any breakout to be a real breakout needs to have force/volume. Important breakouts need more force.
Price gaps up near the resistance. Reaches resistance, comes back as it doesn't have any force/volume. Tiny candles and see the
angle.
Reaches resistance second time, comes back as again it do esn't have any force/volume. Tiny candles and see the angle.
Reaches resistance third time, comes back as again it do esn't have any force/volum e. Tiny candles and see the angle.
4th time. Now it collapses and at gap there were bulls waiting with
They now decide to bulldoze and now see the angle and volume. Meanwhile some phoren Bulz were also noticed …
Rest is history.
Now top of last daily – IB, around 5925 is next resistance. Once that is crossed and sustained, gate of 6000 should be crushed with
force. Meanwhile bears w ill be meeting tonight to finalize their strategy to tame the bulls... It’s fascinating to watch and trade when
two forces fight like cats and dogs.
Regards
Raghav
Sometim es we
don't get any clue
at all on shorter
timefram es. That’s
why we make use
of Multi TF's.
Now in 5-Min TF it’s
confusing. Come to
60-Min chart.
A shooting star at
the top of IB which
I had marked
yesterday as
resistance. Price
slides. Closes the
gap. Then we have
a hammer – means
bulls are in charge
and are looking to
surge.
Regards
Raghav
Is Trading Gambling?
We hear again and again and again that "Trading is gam bling. A righteous man should not be involved in trading .", etc.
Now let me make it clear how w e are far-far greater than both businessman and a professional.
Capital and Skill these two words differentiate a business from a profession.
In other words to a businessman the capital is the key since he can’t make business without capital. A businessman has capital. But
what about the skill part? He hires one. If you are a software engineer, you are hiring your skill to your company which is a business
entity.
For a Professional the skill is the key because without skill he cannot carry his profession even though he has the capital.
Now to which category a trader goes! He is both!!!
He has to have capital – which means he is a businessman.
He has the skill which means he is a professional. It means a person trading blindly cannot be successful in trading. The skill of a
trader is very wide. It ranges from analysis, a vision, forecasting the future movement, strong Psychology, adjusting to varying
conditions and so on…
Though western countries have accepted trading as one of the most respected business/profession . In countries like ours traders
are treated like “snake catchers“ by our society. The blame should equally go to traders because they operate like underworld dons,
sitting at the most non-noticeable corner of house or office and hiding their screen when they put on a trade. M ost of them are
hesitant to say that they are traders.
But I would like to tell you one thing; even an opponent to a trading loves the market somewhere in the corner of his heart. Almost
everyone loves stock market for that matter. That’s why your delivery head opts for a corner cabin. Comes to office at 12 in the
noon. Tells all JSW, SSW and PM to be strict about their work and mind their delivery schedule, then goes in to cabin, locks the door,
sits facing the door, starts the Laptop, open trading charts looking at the d oor… and then… … … .
Regards
Raghav
DETERM INING OPTIONS PREM IUM AND THE GREEKS :
Got it from the net. He explained it w ell.
Delta:
Delta is the measure of an Option’s sensitivity to the changes in the price of the underlying asset. Therefore, it is the degree to
which an Option price would move given a change in the price of the underlying asset or stock or index, while keeping all oth er
factors as a constant.
Delta = (Change in Option premium) ÷ (Change in underlying price)
For instance, an Option with a Delta of 0.50 would move INR 5.00 for every change of INR 10.00 in the price of the underlying stock
or index. To illustrate this further; let’s say a trader is considering buying a Call option on a futures contract, which has a price of INR
19.00. The premium for the Call option with a strike price of INR 19.00 is INR 0.80. The Delta of the Option is +0.50. This m eans that,
if the price of the underlying future contract rises to INR 20.00, which is a rise of INR 1.00; then the premium of the Option would
increase by 0.50 multiplied with INR 1.0, which is 0.50. Thus, the new Option prem ium would be 0.80 + 0.50, which is INR 1.30 .
Now, far out-of-the-money calls would have a very close to zero premiums, as the change in the underlying price is not likely to make
them valuable or cheap. While, at-the-money calls would have a delta of 0.50 and a deeply in -the-money call would have a delta of
1.00. It may be noted here that, if the delta of our position is positive, then we would desire the price of the underlying asset to rise;
and on the contrary, if the delta w ere to be negative w e would want the price of the underlying to fall.
The knowledge and understanding of the Delta would be of vital importance to the Options traders as this parameter is frequently
applied in margining and risk management strategies. T he Delta is often called the hedge ratio. For instance, if we have a portfolio
of ‘n’ shares of a stock, then ‘n’ divided by the Delta w ould give us the number of Call options we would need to be short (that is,
would need to write) to create a riskless hedge; that is, a portfolio which would be worth the same monetary value whether th e
stock price rose or fell b y a small amount. In such a scenario of a Delta neutral portfolio, any gain in the value of the shares held due
to a rise in the stock price would be exactly offset by a loss in the value of the Calls written, and vice versa.
It may further be noted that, as the Delta changes with the stock price and tim e to expiration the number of shares would need to
be continually adjusted to maintain the hedge. Now, how quickly the Delta changes with the stock price would be given by the
Gamma.
Gamma:
The Gamma is the rate at which the Delta value of an Option increases or decreases as a result of a move in the price of the
underlying instrum ent (which may also be read as the underlying, or the asset or the stock, etc.).
Gamma = (Change in the Option Delta) ÷ (Change in the underlying price)
For instance, if a Call option has a Delta of +0.50 and a Gamma of 0.05, then a rise of +1 in the underlying means that the D elta will
move to 0.55 for a price rise and 0.45 for a price fall. Gamma would be rather like the rate of c hange in the speed of a car (its
acceleration) in moving from standstill upto its cruising speed and breaking back to a standstill. The Gamma would be the gre atest
for an at-the-money Option (cruising) and falling to zero as an Option moves deeply in -the-money and out-of-the-money (standstill).
If we were to be hedging a portfolio using the Delta hedge technique explained above, then we would want to keep the Gamma as
small as possible; as the smaller it is, the less often we w ould be required to adjust the hedge to maintain the Delta neutral nature of
the position. If the Gamma were to be too large, a small change in the stock price could wreck the hedge. Adjusting the Gamma can
be tricky, and is usually done by buying or selling the underlying asset as the Gam ma of the underlying asset is by definition always
zero, so more or less of it would not affect the Gam ma o f the total portfolio.
Theta:
The Theta is a measure of an Option’s sensitivity to tim e decay; and would be the measure of the change in Option price given a one
day decrease in time to expiration. It is a measure of time decay or time shrunk; and would give us an idea of how time decay would
affect our portfolio.
Theta = (Change in Option premium) ÷ (Change in time to expiry)
The Theta is usually negative for an Option, as with a decrease in time the Option value decreases. This is due to the fact that the
uncertainty element in the price decreases. Assume an Option has a premium of 3.00 and a Theta of 0.06, then after a day the
premium would decrease to 2.94 and to 2.88 the following day. Naturally, other factors such as a change in value of the underlying
stock would alter the premium; while the Theta is only concerned with the time value.
Unfortunately, we cannot predict with accuracy the change s in the stock’s value or price, but we can measure exactly the tim e
remaining until expiration.
Vega:
The Vega is a measure of the sensitivity of an Option price to changes in market volatility; and would be the change of an Op tion
premium for a given change (usually 1%) in the volatility of the underlying asset.
Vega = (Change in an Option premium) ÷ (Change in volatility)
For instance, if a stock has a volatility factor of 30%, the current premium is 3.00 with a Vega of 0.08; it would indicate t hat the
premium would increase to 3.08 if the volatility factor increases by 1% to 30%. As the stock becomes more volatile the change in the
premium would increase in the same proportion; as the Vega m easures the sensitivity of the premium to these changes in vola tility.
The Vega would be useful for option traders who while wishing to maintain a Delta neutral position would trade select Options
purely in terms of their volatility; in such cases the trader would not be exposed to changes in the price of the underlyi ng assets.
Rho:
The Rho is the change in the Option price given a one p ercentage point change in the risk -free interest rate; and would measure the
change in an Option’s price per unit increase (usually 1%) in the cost of funding the underlying asset.
Rho = (Change in Option premium) ÷ (Change in cost of funding the underlying)
Assume the value of Rho is 14.10. Now, if the risk -free interest rate were to go up by 1%, the price of the Option would move by
0.14109. To put this in another way, if the risk -free interest rate changes by a small amount, then the Options value should change
by 14.10 times that amount.
For example, if the risk-free interest rate increases by 0.01, from 10% to 11%, then the Option value would change by 14.10
multiplied with 0.01 which is 0.14. Now, for a Put option the relationship would be inverse. If the interest rate goes up the Option
value decreases and therefore the Rho for a Put option is negative. In general Rho tends to be small, except in the case of l ong-
dated Options.
We would strongly recommend that the investor first study these investm ent instruments along with the above listed factors
affecting them; conduct dry runs with pen and paper; understand the nuances of the dynamics of the underlying security and th e
connectivity between the various risks that he or she w ould be taking on during the pendency of a futures or options position held
by him.
Regards
Raghav
How M ulti TF works – Constructing Candles:

One more reason why beginner traders fail. They are lured by Brokers,
System vendors, TV and experts. They are lured to use the fail proof
system.
But how many are ready to teach basics? How many are ready to learn?
How multi TF's work? If you know how to construct candles then you
will know how multi TF's work.
Idea is the key to success in any field. H ere we go.
On left hand side we have six 5 -M inute candles. What they do. First 3
Candles drop the price. Next 2 candles (4th and 5th) take the price near
the candle where the price started downward journey. Now the 6th
candle just closes above the open of first candle where the downtrend
started.
How does it look in 30-M inute candle? It’s a hammer. Summary: Six 5-
minute candles = One 30-M inute candle.
Can anyone construct similar chart of 30 Minute and 60 Minute candle
for a pattern (It can be any pattern). Clue: Two 30-Minute Candles =
One 60-Minute candle.
Regards
Raghav
Quote:
Excellent Vijay.
Keep it up.
More Ideas....
Trade Setup Nifty 25-APRIL-2011:
I am recollecting what I on days like this. When we make a judicious mix of price and indicator it saves our money.. ..
discussed with Vijay
sometime back over
here.
“I will just give you one
interesting clue. For
last 5 days open 5-min
Chart and just see
what will be your
result if you take long
trades when Stoch just
starts coming out of
OS zone (ONLY AFTER
PROTRUDING OS
ZONE) and vice-versa
for short trades,
barring 5 bar rule
scenario. If you do so
invariably, at least 8
out of 10 trades you
will be either winner or
breakeven.”
Anyone can trade on a
trending day. But the
real skill comes in to
picture on a congestion
day. Just think how small
your loss would have
been or breakeven or
small profit if you would
have followed the rules
which I discussed with
Vijay.
Most of the trading
systems give whipsaws
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
People don't love

sideways day. I do love
because after that
congestion, once it
breaks the range it runs
big. Big enough to make
a week if not month.
It’s like pressure-cooker.
Within it builds up
compression. Then, a big
whistle. Big explosion.
Let it go up or down, we
traders don't mind. W e
just run behind that like
Ostriches. Wait for the
pressure-cooker to
whistle. It may be
tomorrow.... who knows?
Regards
Raghav
26th April 2011, 12:38 PM :
After a down-ride,
Long at 5802 with
S/L at 5789. 13
points risk.
Regards
Raghav
26th April 2011, 01:37 PM :

Most Important rule: Never allow a profitable position turn in to a losing one. Stop profit @ 5806. Trade locked to safety.
EOD – Pressure Cooker Situation:

The following was posted
yesterday over here:
“People don't love sideways day. I
do love because after that
congestion, once it breaks the
range it runs big. Big enough to
make a week if not month.
It’s like pressure-cooker. W ithin it
builds up compression. Then, a big
whistle. Big explosion. Let it go up
or down, we traders don't mind.
W e just run behind that like
Ostriches. W ait for the pressure -
cooker to whistle. It may be
tomorrow.... who knows?”
Today it whistles and explodes.
Regards
Raghav
EOD:
It happens again and again. I have
explained it again and again. How long
do you expect me to explain it again
and again? It’s as clear as it is.
5-Min Chart:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
30-Min Chart:
60-Min Chart:
Regards
Raghav
The event which opened my eyes towards trad ing:

In my early days of working, I used to go to my office by Bus unlike you people who go to your office very first day with an Audi A-6!!!
While coming back from the office I used to catch 2 buses. I mean by first bus I would come down to a junction. From there I would
catch one more bus to my house.
It will be around 8 PM by the time I would reach that junction and from that junction the frequency of buses towards my house was
very random, though we had plenty of buses in that direction. Som etimes the frequency was 30 minutes, sometimes it was 45
minutes.
Whenever there is a big gap between arrival of two buses, passengers used to accumulate and the first bus that comes after th at
gap would be over crowded. Due to the gap people used to becom e frustrated and impatient. As a result, that first bus used to look
like a battlefield. People used to rush in to the bus like as though they have not seen the bus at all. Then inside, fight fo r the seat,
quarrel… shouting… I could see all kinds of stalwarts. Only thing missing was an arrow and a bow… … !!!
However one day I came to junction at 8:30 PM. I had to wait for almost 40 Minutes. Passengers were very big in number. The
unpleasant experience that I used to have every day made me to pass that b us since I was tired. I waited.
Exactly after 4 M inutes, I got 3 buses one behind another. All were empty so much so that I could sleep while travelling. This day
passed.
Next day also similar thing happened. Not even a minute late… exactly after 5 Minutes, 2 empty buses after the crowded bus
passed.
3rd day also… … Not even a minute late… exactly after just 2 Minutes… .
I wondered… . whether it is a peculiar phenomenon… ?
It happened day in and out… .. The maximum frequency between that warring crowded bus and next empty bus was 12 minutes… ..
The beauty is that the empty bus which I took always reached my destiny well before the crowded bus…
It really opened out my eyes… That is the day when I understood what exactly is a breakout and what is a breakout failure… .
Being impatient, being frustrated, in pursuit of “being first”, in the ”fear of missing”; people rush and make irrational decisions in life
as well as trading… . Almost 99% of the crowd… . Their mind is conditioned. It’s hard to change… That’s why experienced people say
don’t follow the crowd… don’t follow the herd…
Most people trade breakouts in the sam e way. The mom ent they see a breakout they jump in and get trapped … They are not patient
enough to wait for a retest or breakout failure… … .. The hole is created not by market but by impatience, frustration and trying to
“be first” and a feeling of "m issing something”… …
Life teaches so many lessons every day... That’s why I say – go thoughtless… observe nature... takeout the garbage from inside… …
Regards
Raghav
Trade Setup Nifty 29-APRIL-2011:
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Regards
Raghav
W hy do people lose at the end of the M onth?
I tried to get an answer to this question. But it’s not answered.
Question: In a month there will be at least 4 – 5 days when market runs huge in a single direction which can be traded by any last
person in the street. These 4 – 5 days of profit are enough to neutralize losses of other days and make some bucks on top of it.
Still why do the traders lose out big? Can't they keep their losses small on other 15 days? Is it M M , Discipline, impatience.... what is
it????
Pour your thoughts.... Once in a while let me have a seat of listener from the seat of speaker...
Regards
Raghav
Reply by Dan:
Hi Raghavacc,
Just my two cents:
First of all: No trading p lan/No stop loss/No idea of position sizing/No MM/Little understanding for the market and the instrument
they trade/Not enough experience with live trades/Wrong psychological setup which in some cases only concentrate on how much
can I win (greed) and not on how much can I lose/Not understanding of themsel ves, in what time fram e they fell
comfortable/Concentrating on the wrong side: They concentrate only on the mo ney side and not on the trade setup by itself, which
brings the money, if done the right way, as a by -product/Yes, some of you are right: Concentrating only on the money side can also
bring up the trade set up which most of the time looks like this: Help, I am in trouble. Can you tell me how to get out of the trade as I
lose money? That is also a trade set up /and surely more facts which will be posted by the other participants.
DanPickUp
Reply by ST:
The fact is most people make small losses on sideways days and they cannot control their urge to trade on sid eways days.... these
small losses add up to a sizable loss figure. To avoid small losses, they will some time avoid taking timely stops and in the process
make a much bigger loss...
On trend days, most will cash out too early, will not add and will not encash the move fully because of fear of letting the s mall
profits vanish.... and the money they make on trend days is small compared to their losses on sideways days.... some more innovative
and dare-devil types go against the trend on the trend days saying "kidhar jata hai...." as they cannot "tolerate" market going in one
direction and they come in to fade th e move... adding to their troubles and nursing the losing positions...
Anyone can put on a trade.... it is no brainer... but understanding when not to trade separates a good trader from a losing trader.....
Smart_trade
Reply by S-1585:
- Instead of improving existing trading style, jumping fro m one m ethod to another.
- Following a method of other person without understanding its m erits, dem erits, and its usage in d ifferent situations.
Reply by Nihilistic:
Dear Raghav,
Very real-tim e blunders, due to which, at least I am dow n.
1. Fear of losses due to past hurt gets one out before reaping the full profits.
2. Inability to manage the trade even though entered in the right direction, turning a winning trade into a losing one.
3. Fruitless efforts to find tops and bottoms so that one can enter at the lowest/highest price.
4. Inability to understand/read the market behaviour, i.e., the point of reversal, trend change, what is happening and why it is
happening.
5. All in all, lack of knowledge.
Regards.
M arket repeats the same action – Nifty 27-APRIL-2011 to 02-M AY-2011:
Market repeats same action... It needs just an observatio n..... Problem is we look at money not at the chart.
Nifty 27-04-2011:
Nifty 28-04-2011:
Nifty 29-04-2011:
Nifty 02-05-2011:
Regards
Raghav
Quoting what I had posted earlier
over here:
“Being impatient, being frustrated,
in pursuit of “being first”, in the
”fear of missing”; people rush and
make irrational decisions in life as
well as trading… . Almost 99% of
the crowd… . Their mind is
conditioned. It’s hard to change…
That’s why experienced people say
don’t follow the crowd… don’t
follow the herd…
Most people trade breakouts in the
same way. The moment they see a
breakout they jump in and get
trapped… They are not patient
enough to wait for a retest or
breakout failure…… .. The hole is
created not by market but by
impatience, frustration and trying
to “be first” and a feeling of
"missing something”… …
Life teaches so many lessons every
day... That’s why I say – go
thoughtless… observe nature...
takeout the garbage from
inside… … ”
Regards
Raghav
Spread Orders:
We shall try to understand the term called "Spread" and how it results in big moves.
Let’s not try to deal in high language. We shall keep it simple. According to me, a spread is a length of a particular order/collective
orders.
Let’s take an example. Say, M arket is making down move and say Nifty is at 5475. Now say we want to buy 100 lots of Nifty between
5500 – 5550. Now what I do is like this.
I place my order like this:
Quantity – 100 lots
Trigger Price: 5500
Limit Price: 5550
A trigger price refers to a price if triggered or reach ed results in execution of our orders. So that m eans, if N ifty reaches 5500 level
our orders start executing.
What about the Limit Price. It is a price beyond which we don't want to buy. It’s a Max Limit, Seal, Cap. Why limit? Because we don't
want to be buying too high as we want market to move up. Rule: Buy low Sell high. So in this case w e don't want to buy over and
above 5550.
So the difference between the Lim it Price (5550) and the Trigger Price (5500) i.e.; 50 points is called as Spread in this case.
Another question: Why 50 points spread? Answer is: I want to buy 100 lots and I may not have 100 lots of sell orders (To match my
buy orders) at 5500. Hence, I am putting a spread or net. It’s like a fisherman spreading across his net across the diameter of the sea.
He knows if he puts his net at a single place he won't get enough fishes or he may not get the fish at all.
Now what? The 100 orders may get executed like this.
20 Orders executed @ 5500
Total = 100 Lots of Nifty bought starting from 5500 to 5550.That ’s how spread works. Reverse it for selling orders.
Regards
Raghav
Once you have grasped the above concept, now see how a big pocket can bulldoze the market.
A Big pocket trader always looks for a good location to enter th e market. It can be a Big round Number or a particular FIB
retracement (31.8% or 61%) or a touch and bounce of trend -line.
In this example, assume that its 5500. His Trigger price is 5500 and Limit price is 5600 means he is laying a net b etween 5500 – 5600
for 5000 lots of Nifty.
Now let’s say he places his buying orders at 10 AM. Now it’s like this:
1000 orders executed @ 5500
Say by 10.30 AM, all these orders got executed. Now the result will be a bullish candle on the 30 -M in chart as shown above.
The essential point here is to show how a candle opens and how it closes. Different people interpret Spread in different terms. Here
we are trying to understand how a buy er’s or seller’s Spread of orders can affect a movement of market and formation of candles.
Here the transaction time was in between 10 AM to 10.30 AM and the candle opened at 5500 and closed at 5600. So a bullish 30-M in
candle made a movement of 100 points in half an hour. Bid/Ask etc. we shall try to understand later.
Regards
Raghav
Hello Friends,
I am really stuck
with my work so
much so that I am
not even able to
take any day-
trades!!
Your enthusiasm is
highly appreciated
and please keep it
going. I know I miss
lots of things in
between. However,
let’s wait till my
work gets eased
and we shall take up
everything one by
one. I know how
much you all love
this thread.
On EOD basis what I
saw, though I
couldn't take any
trades during the
day.
Regards
Raghav

TATA MOTORS – A
"Safari" move first
down!! Then a
"NANO" move up!!
Regards
Raghav
Trade Setup REALTIM E TATAM OTORS 10-M AY-2011:
Breakout Failure as explained over here in the form of a practical example:
Regards
Raghav
Trade Setup ICICIBANK 13-M AY-2011:

th
ICICIBANK yesterday (13 M ay 2011) was a perfect setup for our method. Yesterday I did blend everything starting from adds to ST
Bro’s gaps, price gaps, patterns, Stoch. In one word ICICIBANK chart yesterday gave everything that we want. It was an Ideal Day.
----------------------------------------------------------------------
Looking at chart:
A. Break of high of the day: Here I open 50% of normal size (Hypothetically , say 100 shares) as we are not sure of the type of
trend or whether the move is going to continue in the same direction. As I wrote a few posts back, early morning trends
usually are strong and move steep and not very often go for retest. Now OB > 5 bars as well.
Total open position in longs = 100 shares .
B. PRICE GAP: (Not ST Da’s gap). This gap happens when buyers are too enthusiastic and trend is in full force. I do add other 50%
(Hypothetically, say 100 shares) once this price gap is sustained i.e .; on close of green candle above that gap. OB > 5 Bars.
Total open position in longs = 100 + 100 = 200 shares .
C. Consolidation: Please note that I keep 50% (Hypothetically , say 100 shares as reserve as normal size is 200 shares) over and
above normal position for handling adds on super trending days. This 50% reserve is only for super trend days and cannot be
used during normal days.
D. Add 25% reserve (50 shares): as there is huge gap and then breakout upside (This time ST Da’s gap).
Total open position in longs = 100 + 100 + 50 = 250 shares.
E. Consolidation: Red candles are tiny and has longer lower tails – m eans more up-move is on the cards. OB > 5 bars one more
time. 30-M in chart at this point has an IB.
F. Add remaining 25% (50 shares): of the reserve on breakout of IB as well as last swing high.
Total open position in longs = 100 + 100 + 50 + 50 = 300 shares.
G. Left with empty hand: No adds.
Total open position in longs = 100 + 100 + 50 + 50 = 300 shares.
Now comes your skill as a trader in to play. That’s why I prefer price action over system. Let’s see the magic of price action.
H. Price makes a swing high : Total open position in longs = 100 + 100 + 50 + 50 = 300 shares.
I. Price goes and reaches previous swing high but says I can’t cross it : It’s also a version of tiny breakout failure!!! In Bar Chart
the same candle is a bearish engulf.
I offload 75% of my positions (200 shares) on symptom of trend exhaustion. Next 2 candles do not show any symptoms of
enthusiasm from buyers means trend is exhausting. Still we have not entered downtrend. It’s a phase where you close longs
and wait for further orders from the boss.
Total open position in longs = 100 + 100 + 50 + 50 = 300 shares - 200 = 100 shares.
J. Here is where the neck of the double top is: That’s where my SAR is. On break of the Neck of this D ouble Top I do cover
remaining 100 longs and open 50% of positions of normal size as short orders (100 shares) which means I will be placing 200
shares as sell order at point J.
Total open position in longs = 100 + 100 + 50 + 50 = 300 shares - 200 = 100 shares - 100 shares = 0.
Total open position in shorts = 100 shares .
K. Price makes lower high : and I do add another 50% of normal size to join friendship of 100 shares which are already in short
(100 shares).
Total open position in shorts = 100 + 100 = 200 shares.
L. Time up: Cover 200 shares short positions by end of the day.
Total open position in shorts = 100 + 100 = 200 shares - 200 = 0.
Note = Number of shares I have taken is hypothetical. It will depend on your size of capital, aggressiveness, confidence and more
than that how much control you have on your mind.
Regards
Raghav
Friendship and Dharma:
A newspaper in my native language carries a column every Thursday. It is a beautiful one and the editor of that newspaper writes on
variety of subjects.
Today he wrote on a subject called “Friendship” and how people use it. This editor had lots of friends when he was an editor for a
renowned newspaper. The day he left that newspaper (Read , the day he quit the position), the people who were called so close
friends became traitors and started writing all dirty things about him. So he narrated one beautiful story.
There was a king called M hmd. Reza Pallavi. He had a dog in his Darbar. This dog was not an ordinary dog. It was so brilliant and
tactful that it knew who is close to the king and whom he do esn’t like. It used to wag its tail and brush its body at the people whom
the king liked and barked at the ones whom king hated within his Darbar.
King loved his minister a lot. H ence naturally dog also loved him. One day minister cam e to the palace as usual. The dog as usual
brushed its body at minister with unlimited wagging of the tail!! Minister had a grand welcome by the dog.
Now the king had a secret meeting with Minister and when minster came ou t of the meeting the news was out. The minister was
sacked by the king.
As soon as the dog came to know this while minister was walking away from palace, it started barking at him
heavily… … … … … … … … … …… … Luckily it didn’t bite him…
Even a dog hates you when yo u lose your position/wealth/money.
----------------------------------------------------------------------
I reflected back on my life. I had 2 “good friends”. They were so close that we used to have regular evening dinner, then discussion,
chat till midnight. We used to travel very long. Even I took one of them abroad and he stayed with me there in my sister’s house.
Once I left the job and started on my own, they sensed that I am out. When I lost my fortune they sensed , this friendship is "not
worth". After that no whereabouts. One of them took all the help from m e when he needed.
Another friend – I taught him basics of trading with patience without any expectations. Even he tripled his small capital. After that it
seems I was found “Worthless”. Calls stopped. He calls once in a while when he "Needs" me.
----------------------------------------------------------------------
A Sanyasi was walking besides a river. H e saw a scorpion being washed away in the flow of river. H e stood and put his hands a t the
scorpion and saved its life. While putting the scorpion back on the ground it bite his hands. Still he continued his love towards it and
helped it to go away from the river.
A passer-by asked ”Hey it was biting you. Still you were keen to save its life. I would have killed it. Why are you so concerned about
its life?”
Sanyasi told, “Biting is its dharma i.e.; a deed which you follow as per your birth. It followed its Dharma. As a human being helping is
my Dharma. When such a small living creature follows its Dharma, how can I divert from my Dharma?”
----------------------------------------------------------------------
As a student Sudhama was very poor. Lord Krishna and Sudhama studied together. Then Sudhama got married and he had a couple
of children. Now he had more trouble. He needed to feed his family.
He went to the king of his state. King insulted him and knocked him to the street saying you are a waste. King made a mockery of
him.
Then, one day his wife reminded him of Krishna , “He is your best friend. Why can’t you go to him ?”
Sudhama said, “I am poor. Krishna is very rich. What can I carry for him?”
Then he thought what all he could afford. Puffed rice w as what Krishna loved. He decided to carry that. Then, he carries puffed rice
in a tied torn cloth. Such was his poverty.
Sudhama goes to Krishna. Krishna leaves not even a piece of puffed rice. He sa id, ”How can I forget you my friend? For m e whatever
you offer is so valuable than anything else in life because ‘it has come from true friendship’, you are my true friend.”
Sudhama gets what all he wanted from Krishna.
When lord is your friend why to care for creatures?
Regards
Raghav
st
Commemorating 1 Anniversary of this Thread:
Today this thread completes one year. Exactly a year b ack I started this thread with an objective of educating newcomers, novices
and beginners so that they too can reap the advantage o f trading.
Today I am overwhelmed by the response, care and love people have showered on my effort. Now it remains one of the best threads
on Traderji. It is an evidence for the fact that "EVEN IN THIS CROOKED M ODERN W ORLD, AN UNSELFISH EFFORT, and HELPING
OTHERS GETS ITS DUE".
One person I like very much for his dedication and devotion is Columbus. Without missing a single day, he updates his thread. It’s
almost 2 years now. How many of us can do such thankless job w ith such dedication? I was surprised a lot when I saw his voting in my
thread "Friends talk on my daytrading". Though he is a seasoned campaigner in trading he voted for "I am learning this method and I
am halfway". Great people always carry great amount of humbleness. He deserves all my due respect gratefulness.
Then comes my dear and near ST. The day I started reading on Traderji, I really fell in love with every word he writes, his style of
narrating, teaching. I don't know, I always wait for his next post. His Stochs and his Gaps are absolutely wonderful, wonderful
techniques. What a great personality this brother is.....

Where is Dan?? He must either be out of stock or on vacation!!!!
I love writing on Traderji because the honesty, integrity and characters of moderators here are unmatchable... One day one of the
moderators of this section (He is a great-great trader... must be one of the few traders who have made billions . I am a great
admirer of him) of the forum wrote to me in PM and told me not to stop writing because he loved my writing. I am grateful to all of
the moderators.
My thanks to all the friends who have actively participated and contributed. What all I can say is "IT'S YOUR THREAD".
-----------------------------------------------------------------------
M y objective for starting this thread is to:

1. Educate newcomers, novices on trading and its nitty-gritty.
2. To make you understand that Trading is not Gambling but an Applied M aths and Science.
3. To make my tiny contribution to enhance the image of this industry which is even today ruled by crooks who live to cheat you.
4. More importantly, help to "COM E YOU OUT OF THE GROUP OF HERDS" because 99.999% of the public is in that group.
What all and how far I have achieved my objectives? I don't know. You have to decide.
I do write on variety of subjects since my philosophy is "There is life w ithout trading. But there is no trading without life." Both are
highly uncertain. Ups and downs, sudden shocks, windfall profits, sorrow and happiness... Both have similar characteristics... I can
write another 10000 posts. However, god has given m e only 24 hours per day. I am dealing with too many variety of subjects in
personal as well as professional life. I will do whatever I can.
Regarding PDF M anual I will write in 2 – 3 days’ tim e.
-----------------------------------------------------------------------
Today let me tell you how to celebrate a birthday. Again comes the group of herds. They light the candles and then OOgh... OOgh..
OOgh..... Mindless culture borrowed by mindless people.
Our culture is all about "Asatoma sadgmaya, Tamasoma Jyotirgamaya". We want to travel from darkness to light. Not vice-versa.
If you turned 25, light 25 candles instead of blowing all your air towards 24 candles. Past is past. You are now 25. What you do now is
important for future outcomes.
Look at the greatness of light. How beautiful a temple looks in light. Our culture says our soul exists in the form of Jyoti. See the
sunrise. You get up, you are happy after a great sleep. You earn your wealth during daylight. You do most of the things for your
health during the day. All creatures, verms, they die or they run away once they get sunlight.
Dark: Robbery, murders, accidents, fear, heart attacks, disease, demons, ghosts. All animal instincts are alive during night or dark.
Then the knowledge/wisdom is considered as "light". That ’s why you call "I am enlightened".
I am here to try, to do different things in different way which have meaning. The inspiration are our great Rishi's who have left a
great culture and knowledge coupled with wisdom.
Regards
Raghav
Quote:
Originally Posted by Nihilistic

Dear Raghav,
Let the lights of knowledge glow brighter and b righter. It was a dreadful feeling, the loss; trading had seemed like a demon and had its
tentacles of after-effects choking me for dear life until I stumbled upon your thread. Many things have changed now for good including
the vision for life.
Thank you, and we request/expect your guidance all along through this journey, a journey towards light.
Regards,
Dear Raghav (he is one more Raghav!!),

Absolutely. Our tradition says. When we die, Yama Dharma (The lord of death) asks only one question . What's that question?
How much wealth you have garnered? – No.
How many Bungalows you have purchased/built? – No.
How many shops you have opened? – No.
How many KG's of Gold/Silver and diamond you have bought during your lifetim e? – No.
The only question he asks is: I gave you birth as human being. The best birth a being can get. I gave you health, wealth, I fulfilled your
desires. Then...
"In the life of how many beings you brought the light?”
My grandfather says. Whatever you earn you won't carry. You carry only whatever you learn and whatever you do to others.
Lord Krishna in Geeta says "Helping others is Punya (Sacred deed). Troubling and torturing others is Paapa (Sin).”
Upanishad says "Our Karma's of many past births (deeds) live with us. When w e sleep, they also sleep along. When we sit, they also
sit along with us. When we run, they chase!!! We have to decide whether w e want good deed to chase us or the bad deeds? ”
Regards
Raghav
M eaning of Cost, Price and Value:
When we look at our public, sometimes w e feel pity and sometim es we get frustrated and sometimes get ashamed because they do
not value things in life. M ore than that, they do not know the difference between Cost, Price and Value respectively.
Cost = The amount spent on producing a good or service or an intangible asset.
Price = Cost + Profit for a PRODUCER. For buyer, it is the amount he pays to buy that good or product or an intangible asset.
Value = Subjective. For a Sanyasi money has no value. For a businessman money is everything. For a runner even single second has a
value but for a lazy guy time has no value. For a healthy person food has great value. For a "eat out" lover food is of no value (for him
it is just a way of filling his stomach like postman filling the post -dabba with letters).
We as a public have never been known for anything that is good. We remain good inside our houses. The moment we step aside we
become demons, wild animals. On roads, buses, cars, bikes and even on aeroplanes. We can be best called as "spitting public"
because we are good at/known for spitting at other's feet.
All this because we never attempted to know what is the meaning of cost, price and value respectively. I will talk about this value in
my coming posts.
Regards
Raghav
On a trading thread why do I talk all these? You might have wondered.
The reason is: before becoming a good trader, we need to become good human beings. To become good human beings, we need to
follow certain disciplines, cultures. Then only we become an asset to society, public and nation. Otherwise it’s a waste.
My effort is to introspect how we are as a public, how we are as individuals so that those who really wish can improve. We need to
become that 1% and try to increase that 1% to 2%, 3%, 10% like that.
This thread is not about any up-manship. If you find my ideas as worth, please join me. If you find something missing, please feel free
to discuss. Then, if anyone wants to join those 99% – No issues, let’s not argue with them – Let them join the league of herds.
Anyway that’s an open market!!
-----------------------------------------------------------------------
Continuing with the above post – Cost, price and value – The entire state of public madness and the strategy followed by corporates
to catch these herds can be divided into 5 categories:
1. Cricket
2. Celebrities
3. Media
4. Mobiles
5. Politics
Regards
Raghav
CRICKET:
Once a guy asked George B ernard Shaw, the famous English Writer as to what do you feel about Cricket?
He replied “11 idiots playing around in a big ground and 11,000 idiots watching it wasting their entire life .”
The difference today is the number of idiots playing it remains the sam e, but number of idiots watching it has touched more than
Crores.
A comedian in my native language refers to umpires as doctors, batsmen as patients and fielders as compounders!!!
This game is not played on grounds but in the room of betting people who tune the music and the players dance. The game has
“developed” from match-fixing to spot-fixing.
Even the beggar on the street wants to know the score. The mad public feels that watching cricket and supporting their players is an
expression of patriotism. They wait for entire night to collect tickets. Stampede and death thereby are comm on. When there is a
match all IT companies, Govt. offices go “Workless” because they are “fan s” of a player. The media says it’s a “religion” in countries
like ours. Commentators say cricket is “god” in our country.
At the end of the day the team that wins collects money FROM BOTH BOARD AND SPONSORS. The team that loses collects money
from both BOARD AND BETTERS... The betting people make money. The cricket board gets rich. Commentators make money. The
media makes huge bucks by luring public by “live coverage”. This “fan” or the spectator at the ground gets lathi charge, shells out
money for ticket, food, transportation and what he gets in the end? Ask them. He gives it a name of ”Entertainm ent”.
What a sheer waste of valuable life… .
How many go to airport to welcome Leander Paes or Vishwanathan Anand? Look at the state of hockey today. Don’t we have any
other sports in life?
Almost all other games finish in 3 – 5 hours’ time. Tennis, Hockey, Football, TT, Badminton...... Cricket is the only game which lasts for
days. That’s why advanced countries don't like to play much of this game.
Look at Australia, New Zealand, England and South Africa. Australia – they play home tournaments only d uring summer when public
in their country have holidays. It starts from November end and ends by February end. That’s it. No more domestic international
tourney. They are good in Hockey, Tennis, Swim ming, Rugby and so on… … . Similarly England, SA and Kiwis. In Australia most of
them are day-night matches and people come to ground during second innings only after they finish their office work.
Here you have tournaments every day. Now-a-days we have a new madness called “IPL”. A same player in 5 years’ time would have
played for 5 teams or more. What a joke?
Every single child when born knows only one play… Cricket. Every damn person on the street and ground with a bat and bowl… …
We are good at using leftovers. This gam e is a “Leftover” by British and we are ma king effective usage of it by wasting the entire life,
time, money, energy… … .
Frankly ask yourself: What difference these idiot players made to your life? Because they won a cup did our nation became Wealthy?
Healthy? Poverty less? Did they make any difference to the farmers who commit suicide? Just tell me one big difference they made.
Just think. Can’t you spend the same time with your child, spouse, parents and anyone who loves you? Can’t you just watch
highlights?
What a great ”Religion”!!!!???… … . Kudos… … ..
Regards
Raghav
CELEBRITIES:
th
Tonight (28 May 2011) there will be a final show of a movie called 120 crore idiots (IPL 2011 Final). Though the watching idiots get
nothing wasting their time, the playing, broadcasting and sponsoring idiots make big bucks…
The next show of the movie will be in W est Indies (India’s Tour of West Indies – June-July 2011)… ..
CELEBRITIES:
The next group of herds are fro m “Celebrity” fan category. I really don’t know what kind of celebration they bring in your life!!!
In our Purana’s we read – The lord of heaven, Indra was scared of his position being threatened when the people from the earth used
to make rigorous Tapasya. When people made rigorous Tapasya, lord would manifest and ask what boon they want. Even they could
ask for the position of King of heaven from the lord. This was a worrying factor for Indra. For that sake he had deployed a strategy. In
the heaven he had kept beautiful angels namely Menaka, Rambha, Urvashi, Tilottame and so on. They were so gorgeous (Now -a-days
people call them hot etc. etc… .) that anyone looking at them w ould just fall in to their beauty. Indra knew that the weakest point of
a man lies in his desire for female.
Hence whenever Rishi’s and Rakshasa ’s used to go on rigorous Tapasya, he used to send these beautiful wom en to earth to disturb
them. On top of that these wom en w ere beautiful dancers and singers. So even good Tapasvi’s used to fall in to their trap and after a
while they used to realize the “importance of temporary pleasure” and then repent and then start Tapasya again. This cycle got
repeated and most of them could never finish their Tapasya successfully.
One of the Great rishi’s of our tradition Vishwam itra was also a victim of this trap by Indra. He was performing a difficult Tapasya on
completion of which he w ould become powerful and may even get a boon of becoming the king of heaven.
Indra got worried and sent M enaka to disturb him. Vishwamitra was under a deep meditative state , his eyes being closed amid a
thick forest. Menaka danced, sang and even made garlands of fragrant and put them around Vishwamitra’s neck. This made
Vishwamitra to open his eyes. The moment he saw the beauty of Menaka, he started liking and loving her and then it resulted in
marriage. They got a daughter called Shakuntala who became famous later. Once Menaka found that her purpose is served, she
went back to heaven leaving sad Vishwamitra on earth.… … . Vishwamitra repented for breaking his Tapasya and not controlling his
Mind and started it again...
This is the half story. Rest I w ill tell you when time comes… .
..............To be Continued
Continued:
Cricket herds – Hashan Tilakaratne names 2 prominent Sri Lankan players involved in Match-fixing. M ore and more wickets.... Afridi
resigns and get banned.
Look at our players.... Let BCCI dare to ban any player here… You will see how patriots jump to streets and show their "love towards
the nation"!!!! Our players can play 10 – 12 matches in IPL. W hen it comes to West Indies they need rest!!!! They get injured. There is a
fellow called "Ashish Nehra" (As a person he is a cool and also a great gentleman. I appreciate that). However, when he is in, when he
is out – god only knows. he says – "Body mein injury nahi. Injury mein body phasi hai"!!!!
For them IPL is important than playing for their country, because IPL has crores of money involved in it. After all what is t here in
Caribbean? It’s a shame that these people are auctioned like old Gujri items in an open market.
---------------------------------------------------------------------------------------------------------------
Coming back to Celebrities… … … What Indra did lakhs of years ago is imitated by C orporates, Producers and underworld dons for
making money. They use “glamour, gossip” as their tool to lure the public. The media hypes it. The camera of the media captures
each and everything that they do and the same becomes headlines in newspapers and TV channels because people wait for it.
Hollywood, Bollywood, M odels, Players… ..
2 years back, an actress used to come on TV for “Tax payment awareness campaign”. She used to say “Time p ar Tax jama karo aur
man mein Shanti Pao”. Just few months back the house of the same actress was raided and the authorities found more than 3 crores
worth unaccounted cash. But she is a role model for most of the girls. An actor runs his car over the sleeping day labourers in
Mumbai. But he comes out clean. He is a role model for most of the youngsters. Further the personal and public life of th ese
celebrities is filled with divorces, illegitimate relations, connection with traitors of nation. Still they are national heroes and people
imitate them in each and every part of life.
All the hype started with M iss Universe and Miss World. The “cosmetics Corporates” saw 120 crore herds in India and thought what
could make them catch these herds. They thought the b est way is to make some idols and then make herds to follow the idols. Now
these idols are leaders. Whatever cream, toothpaste, soap, underwear they propose people politely follow it.
Indeed they did great Cosmetics business in India over the last 10 years.
Now once they made great bucks here they are now in African countries. Those poor African countries neither have food to eat; nor
the water to drink, but they get M iss World and Miss Universe award for their country. Doing business on top of dead bodies!!
Our Ancestors believed that character is the most important thing for a men. Their role model used to be the one who sacrificed the
most. I am afraid that these celebrities would have ever heard a word called “Sacrifice”.
Regards
Raghav
M OBILE HERDS:
The next group of herds belong to "M obile herds".
It all started in 2003 when a renowned company in its endeavour to capture market brought mobiles costing Rs 500/ - to the market.
All herds bought those 3rd class handsets to join the grade of "Mobile owners".
Now this concept called mobile, instea d of becoming a facilitator, has become a menace.
A college boy who does not earn a single paisa wa nts mobile worth Rs 25000/-. A day-labourer whose earning does not exceed Rs
100/per day wants a mobile worth Rs 15000/-.
After all what is a mobile? It is a way of communication. It’s mobile because you can carry the phone to wherever you go. That’s it.
However, now it has become a thing of prestige. A perso n without having a fancy mobile is considered as worthless.
Any instrument, if used appropriately becom es an advantage. However, here people have made it a menace. Handset manufacturers
nd
bring new model every 2 day and people make a beeline to mobile shops to buy it. Then mobile operators bring a new plan with
nd
lowered call rate every 2 week. X mobile to X mobile free, 10 paise per minute, 5 paise per minute...... so on.
Starting from house to streets, to bus to train to office to parks everywhere people talk … talk... talk.... they do not know what they
are talking. They do not know whether it’s necessary… T hey do not know how disturbing it can be for others....
The owner of a famous transport co mpany was attending a function and he was accompanied by a famous editor of a news
magazine. This editor found that this transporter is using a second hand mobile s et. He asked "Arrey… you are an owner of a Rs 350
crore group and you make use of a second hand mobile set. Very very funny and surprising.” This transporter replied "For me the
mobile is only a means to communicate with other person. Nothing more, nothing less".
Yes. Today's world needs speed. Mobile is unavoidable. That does not mean you have to spend Rs 20000/- when your Income is Rs
5000/-. That does not mean we have to waste our tim e and disturb others by talking … .. talking and talking.....
When I walk on the roads, it’s difficult to make out who is nuts and who is fair...!!!
Both manufacturers and mobile operators have made and making enough business of these herds. The amount of money these
companies spend on marketing their products and services resp ectively is mind boggling......
That day is not far when a customer care executive of a mobile company calls you on the day a new baby is born and says "Sir w e
have a wonderful plan for you. Please leave your address with us. Our "SIM Doctor" will visit yo ur place and have the "SIM
VACCINATION” to your baby. By 6 months your baby will have an inbuilt mobile sir. Sir, the SIM has life time validity"!!!
Regards
Raghav
POLITICAL HERDS:
When freedom struggle got steam, British administration called Gandhiji to London. Winston Churchill told Gandhiji "After all what
are you going to do by getting independence? Your own people will loot and ruin your country in 50 years. They are not yet fit to
manage a country".
Exactly that's what happened. Today we hate to talk about politics. We borrowed constitution from the British , their education
system and what not. Today we have nothing that can be called our own. Mecalay, the designer of our current education system
during British regime told "I am designing this system to create 3rd class clerks who are by colour Indians but remain slavers from all
other perspectives". Aren't we?
During ancient times, during their early days of life the king used to send his successors to Rishi's Gurukul where Rishi's would
inculcate the "Sanskara" to these "would be kings". Those "would be kings" used to sleep on the floors, serve their Guru with utmost
devotion. Once he finished his sanskar at Gurukul he would be fit for getting in to king's position.
Whenever king used to be in trouble Rishi's used to come to king and resolve their problem. Rishi's lived only for real knowledge,
dharma, wisdom and ultimate happiness. Look at Chanakya. He built an empire by defeating rivals and made Chandragupta as the
king who was in all aspects an ideal king. And his tenure is termed as "Golden period". Chanakya could have had all the pleasures of
king and kingdom. Still he chose to go to forest for his Tapasya once his objective was met. He said "I came here to reinstall Dharma.
My work is over. Now I will go to my original destiny".
Today's political class stinks so much so that we get o mitting. W e have carried them on our head. The politics entered eve ry door.
Even villages. Every home has a party. Youth's instead of working, started to go to "Paid" campaigns of political parties and became
chelas and chamchas. Politics entered education, hospitals, temples, corporates and even games like hockey and a b ig bullshit called
Cricket and then every home. The day it entered every home we becam e virtually beggers.
See at Karnataka. A chief minister was elected due to sympathy. There was hope that this is a different political party and they will
do well. Now he carried "family business" for 3 years successfully through his 2 sons. M ass transfers, land deals, highly corrupt
administration, kickbacks...... every day he goes to a function and gets in to tears and says "I am sorry I won ’t do this again. Then says
3 times "DEVELOPM ENT, DEVELOPM ENT, DEVELOPMENT"… Indeed he developed HIMSELF a lot.
Look at Centre. It’s a big family business and it’s an established one. Now 2 opposite parties but same business, one at Centre other
at State. The difference is family busin ess of Karnataka is just 3 years old and in Delhi this family business is alive for last 64 years. So
naturally enough money (Sorry – Profit!!!) should be in Swiss Bank. That's why these chelas and chamchas, the moment they hear the
word "Black Money" jump from their chair and start crying as though some snake has bitten them.
Remember one thing. Time is suprem e. Look at history. All the autocrats, arrogants were punished heavily by a force called "TIM E".
"The person who eats the salt has to drink the water".
I do not support any political party. But I do appreciate people when they do good work irrespective of their party, caste, region,
nation. Do we remember Vajpayeeji because he is from BJP? Lal Bahadur Shastri, Vallabh Bhai because they are from Congress? No.
Not at all. They all lived for a cause, for people, they sacrificed and did what nation needed.
Narendra Modi is one of the administrators who proved that this system can be changed and efficiency can be brought in. Who cares
which party he belongs to? We need people with clean hands and who make the difference to the lives of peo ple. Still some media
people keep on barking at him!!!
Let’s finish this topic as this subject called "Politics", for me is garbage. Let the "TIME GOD" take care of every one.
Regards
Raghav
The Value of Having an Alternate Skill:
He is Vinaya. Though he is from Technical background he has gathered an excellent wisdom about personal finance. I suggest ev ery
newcomer should visit this blog. Like me he also writes for the sake of passion, not for any commercial gains.
Hope moderators are not going to ban me for 2 sins.

1. Writing against cricket!!!! (In addition Going to write against celebrities also )
2. Posting the above link of other blog.
------------------------------------------------------------------------
rd
Here is what he w rote today (23 M ay 2011):
The Value of Having an Alternate Skill:
I’ve assembled from scratch each and every one of the desktop computers that I have owned. I used to obsess over and then
handpick each component that goes into building a desktop computer. To this day, I keep up -to-date on what’s happening with
computer hardware technology. That obsession recently proved its worth, and in doing so, proved the value of having an alternate
skill.
W hen I was looking for a new job last year, one of the offers that were extended to me was for the role of a Technical Marketing
Engineer at perhaps the best computer hardware technology company out there. All interviews revolve d solely around picking my
brain out on my knowledge of the nitty-gritty of computer hardware technology. W hat I’d done professionally this far had zero
linkage to what I’d be doing in this role. The salary on offer was excellent too.
W hy I didn’t take up the offer is a different story altogether. But the experience really proved the value of having an alternate skill
especially one that can get you a job. W hen you have alternate skills, you stand a much better chance when the chips are down .
And these days, you simply can’t predict when the chips will come falling down. But you definitely can be prepared for that day.
I strongly believe that everyone can have a valuable alternate skill. All that is required is deliberate practice.
Consider this. W riting is another of my alternate skills. Capital Advisor has over 1,200 plus posts. Each post, on an average, takes
about an hour before it’s good enough to be published. Before Capital Advisor, I’ve free-lanced for over a year for a bunch of other
blogs learning the ropes.
Passion. Practice. Patience. That’s the trick to building an alternate skill. That’s the trick to building multiple sources o f income.
Regards
Raghav
Trade Setup – Early M orning Breakout after Consolidation:
Regards
Raghav
Trading the Early M oring Breakout after Consolidation – ICICIBANK 23-M AY-2011:
Regards
Raghav
Trading the IB – M inifty 20-M AY-2011 to 24-M AY-2011:
Regards
Raghav
Trading the Range and Breakout – ICICIBANK 23-M AY-2011 to 27-M AY-2011:
The core of our m ethod lies in drawing Horizontal lines mostly at the end of the day mark ing Swing highs, lows, gaps, resistance,
support, breakout’s, Breakout Failures etc. Even I have posted so many charts.
But I am highly surprised that none of you have ever asked anything about these Horizontal lines nor did you post any chart drawing
lines. Is it lack of homework or lack of understanding? It will not take much time, neither much headache. Just draw the lines. They
make your trading dead simple.
Here is ICICIBANK last 4 days chart. 5 Days chart would have been Ideal. However, some problem with TradeTiger hence can post
only 4 Days chart.
It shows how to trade the markets even when it is in sid eways mood.
1. Draw a Horizontal line at majo r points OF LAST 3 – 5 days action/Patterns.
2. Then look for reaction at those points.
3. Then decide which way it gives more reward with less risk.
4. Take trade without hesitation.
------------------------------------------------------------------------
Let’s analyse the chart.

A. Price makes Double Bottom. Breaks neck – enter long keeping bottom of pattern + filter as SL/SAR.
B. It is a point where the price consolidated 1 – 2 days back and broke down the support (Not visible in the chart). Support
broken now becomes resistance. The price plunges down here because it was a previous support broken now becomes
resistance. Think which the better option is. To go long or short at this point? S/L – SAR just above the consolidation area.
C. Once price starts falling where the next Support is. Sim ply at previous Double Bottom i.e.; A. Now at B think over which is the
better option. To go long or short at this point? Which is less risky? S/L – SAR just below bottom of pattern + filter. Once the
price takes support at C and starts moving up where is next resistance. Obviously at Previous swing High i.e.; at B.
D. It is a point where price started declining at Point B. Now again price starts declining. Now assuming that we are in range
where next support is. Definitely at Point C where it took off last tim e. Now let’s see what happens.
HL: At this point where I marked as HL, it makes higher low means it’s looking to move up. Let’s be neutral by end of the day
as we don’t have any concrete clue.
E. Price gaps up. Why? Because there was a resistance at B and D. The same resistance has been taken out through gap. Now
once price gaps up it is important that it sustains that gap. We wait for one hour and gap is sustained.
F. Now I have a concrete evidence that Price wants to move up as gap is sustained. I open my positions here once price breaks a
previous swing high of the current day. Then almost 22 Rs. move.
Summary: A – B – C – D is a range.
Below is best example o f how do I trade sideways market.
THE MOMENT PRICE COM ES TO “A” OR “C” I TAKE LONGS AS MY RISK IS HARDLY 6 -7 RS.
WHAT DO I DO IF THE PRICE BREAKS “A” OR “C” DOWNSIDE? SIMPLE I KEEP SAR JUST BELOW “A” AND “C” IN CASE THE PRICE
BREAKS “A” OR “C” AND STARTS M OVING DOWN.
WHERE DO I PLACE M Y SAR IF THE PRICE BREAKS “A” OR “C” AND MY SHORT ORDER IS CAUGHT? SIM PLE, ABOVE THE NECK OF
DOUBLE BOTTOM .
REVRESE THE FORM ULA FOR LONG TRADES AT “B” AND “D”.
THEN, LET’S TALK ABOUT BREAKING RANGE AND START OF TREND. AT POINT “E” PRICE BREAKS RANGE UPSIDE I. E.; BREAKS A – B
– C – D. NOW LOO K FOR SUSTAINING OF PRICE ABOVE BREAK OF RANGE I.E .; B – D AND ALSO WE CAN M AKE USE OF OSCILLATORS
TO OPEN OR ADD POSITIONS FOR LONG TRADES.
IF YOU THINK I CAN EXPLAIN M ORE SIM PLER THAN THIS, THEN “I AM SORRY”.
Regards
Raghav
Trade Setup Nifty 31-M AY-2011 and SILVER 02-JUNE-2011:
Above 5-
Minute
chart
shows
why low
and high
of the day
are so
crucial. A
long
position
at LOW of
the day
when it
tests is a
good way
to take a
small risk
big
reward
trade. IF
YOU
LOSE,
YOU LOSE
NOTHING
since S/L
or SAR is
just below
LOD.
------------------------------------------------------------------------------------------------------------------------------------------------------------------ ------------------------------
When it
takes
support at
LOD 30-
Min has a
version of
DBLHC –
confirms
the
trade...
nd
Silver 5-Min chart of today (2 June 2011):
Point "A" is open of the day. Point B, C, D tests it and bounce and thereby form low of the day. Now at "E", it breaks the LOD and
then at "F" it retests the break. That’s where Pro’s come and make money. You too can..... Almost 1800 points fall.
Regards
Raghav
Trade Setup REALTIM E Nifty 03-JUNE-2011:
Best point to
short is at D
or E
depending
on your
aggression.
Regards
Raghav
Regards
Raghav
Anna Hazare and Baba Ramdev – Sacrifice for the Nation:
In Geetha, Krishna says: "Whenever something becomes too much, I will manifest in one or the other form to eliminate it ."
I rem ember this after 2 bachelors have achieved, which could not be achieved by greatest o f great.
I am talking of Anna Hazare and Baba Ramdev. One is a bachelor and another is a Sanyasi. Both sleep on the mat on floor. One wears
khadi and another wears khavi. But look at what they have done. Entire Govt. Machinery is running around to stop Bab a Ramdev
from going on fasting.
Anna Hazare has shown the country that a person with character, even if he has not got any money, wealth, chelas and chamchas,
still can do great things.
Now the govt. is like a cat with burnt tail. They are trying to hide themselves. But they can't.
Samarth Ramdas once told Shivaji – "There is Political power, there is money power, there is muscle power, there is soul power and
there is godly power. First three types of powers may dance for a while but the winner will be the last two types of powers." He
further tells Shivaji: "You have none of the above three, but you have enough of last two. Go ahead and you will be winner". Infact
Shivaji eliminated intruders through sheer soul power…
That’s what exactly happened and happening here also. The people at power for 64 years have danced with first three types. Now
these two sanyasi's made them bow their head to the nation just through sheer soul power. Those who work for a great cause and
live for others, even godly power supports them.
Kalmadi and Anna Hazare both are from Maharashtra and both were ex-military service men. M aharashtra is known for producing
great people who fought for greatest causes.
Anna chose the tough way whereas Kalmadi chose the other one. One slept on the floor of temple of Ranegalasiddi. Another slept in
Bungalows of Delhi. One sacrificed everything for the sake of people, another sacrificed dignity of the nation for the sake of self.
But everything has an end. Krishna says "To install dharma I will ma nifest in different forms or through different people".
Now where is Anna and where is Kalmadi? Truth always wins.
Coming to Baba Ramdev – M edia people and politicians tried to somehow demoralise and degrade him. They told he has some 1000
odd crore worth assets. Then they accused him of buying an Island in Ireland. One day he was in a mock court show in a TV channel
and when asked about this accusation against him , he told "British have looted the entire nation for hundred years. Be proud to say
that we have bought land in the same British Country with legitimate money. I want more and more people to buy land outside our
nation with legitimate money". What an answ er.
A tree called Bharat (India) has root of 1000 feet depth. Since 1000's of years lot many have tried to uproot it. None could do.
However great cyclones, toofans etc. have shaken the tree. But the roots are intact. Our nation is called "Sanatana Bharati". A
mother which has no death. We come back despite of extremities.
How often when our country is salvaged by Sanyasi's. Shankaracharyaji, Swami Vivekanand all of them cam e w hen people thought
the country's future is over.
The question is how can they do such things when they have nothing but which cannot be done by most powerful people?
Answer is "They live their entire life for others".
Our Upanishad says "Fear, hungriness, Sex, sleep these are common among all species. What makes the men great is his sacrifice. His
sacrifice towards others".
That’s what brings that enormous power to Anna and Baba Ramdev......................
Regards
Raghav
Quote:
Originally Posted by gsam

IMHO, sacrifice is not the exclusive domain of human beings although we like t o think so. A pride of hungry lions w ho waited for 2 whole
days (without going after their food – buffalo herd – which was moving further and further away from them) while one of their girls went
looking for her lost cub comes to mind. Sorry for the digression, but could not help putting in a word for my much maligned animal
friends.
Gsam,
Though your understanding is correct, here is the crux of that statement from Upanishad.
Our ancestors worshipped cows. Lord Hanumanji's outer appearance is in the form of M onkey. One of Vishnu's avatar was a pig then
a fish. We do worship Naga, the lord of snake. Sri Shirdi Sai Baba and Lord Datta Guru all kept animals including dogs besides them.
If you are aware of Yogasana's we have thousands of postures imitatin g animals. It has postures that of dog, crocodile, Peacock. You
name any animal it has.
The point is, since men has a thing called mind, he can scale to greater heights through his sacrifice which is tough for ani mals to
achieve.
Regards
Raghav
Taxation and Black M oney:
Chanakya in his “Arthashastra” says the root cause of dishonesty lies in the taxation system of any economy.
Just by bringing back black-money in to India won’t solve the problem of black -money. Its root cause is in the Rakkas Taxation
System that w e have.
Imagine you are a resident Indian and you want to start up a business. By the time you register your company you are half dea d. By
the time you start up your business you are fully dead. The number of table you have to round is hardly 15 – 20!!! Earlier it was hardly
80 (Only Gujarat is an exception for this). Then adding to your wound you have to then serve the “Servants” of nation both “ON top
of the table” and “Under the table”. Now you feel – Dam n I slog and I shell off my hard money and these suckers sit and make money.
Then once you start your business you have different doctors. One is Income Tax Doctor. Another is Sales tax Doctor. Sales Tax
doctor tortures you every day whereas the former takes hafta once in a year (Now -a-days in quarterly instalments). You look for your
nearest mental hospital after you hear “VAT, CST, OCTROI, DUMPING DUTY, ANTI DUM PING DUTY, AUNTY DUM PING DUTY,
EXCISE… … If I write the list you start omitting. Hence, discontinuing.
rd
Tell me one thing – A businessman is forced to pay 33% as Tax. He says why the hell I should cuff 1/3 of my Pro fit to th ese buggers?
He says “I slog for my labour, materials, then serving “Maamu’s” (I really love MunnaBhai. The way he presented is fantastic ). See the
logic. The businessman gets a white hair by slogging 18 – 20 hours a day. He gets headache by managing labour, capital, M arket,
Competition. The “M aamu’s purchase Lamborgini, Audi, Benz; just sitting on the chair and doing virtually nothing but only doing
“Maamugiri”. What a way to do business!!
Ok now that 33% he has paid – where does it go? 80% of that to non -plan expenditure – M eans again it goes to M aamu’s to buy that
Lamborgini, Audi, and Benz. What public gets is a BIG “TOPI”… …
Now businessman thinks – I slog. I earn. I am honest. I make profit. It’s my money. Then even when I pay for the sake of nation,
Maamu’s swallow it like an Anaconda. Public gets nothing. WHAT IS T HE USE OF BEING HONEST? WHAT IS USE OF BEING IDEAL
BUSINESSMAN? WHY SHOULD I PAY TAX? Now he goes to a Chartered Accountant… .!!!!
That’s the root cause of the disease. I can promise you no person wants to cheat. He wants to contribute for his nation. However,
Maamu’s want the same system because if they change this “Use and throw“ outdated Taxation system borrowed from British, they
will come to streets… …
When A rowdy kicks and collects money from you, it’s called “Hafta”
When Govt. kicks and collects money from you, it’s called “Tax”
What is the difference? Who is better?
To be Continued… … …… … … .
Regards
Raghav
Continued:
Okay. Businessman is frustrated – He says– My money, my sweat, my skill – But Maamu’s “Aish”.
Okay, now Chartered Accountant tells him – Open a sister concern in your wife’s name and do all end sales through sister concern.
Then he tells him to give yearly gifts to all his relatives includi ng his great-great-great grandfather who is dead 150 years ago!! All
this is to “Save” tax and avoid “Shaving”.
Now M aamu’s came to know that Businessman have become intelligent. SEZ, Tax treaty, Exempt zones all these are getting
effectively used by Businessman. So M aamu’s need herd s now.
They got their catch. ”Salaried class”. Poor salaried chap – he cannot run away anywhere – M aamu’s knew that in case they allow
these chaps to pay later – they won’t pay. They started taking it before the chap gets his am ount in his account. They gave a fancy
name to it called “TDS” – full form “Topi Diya Sala(ry)” ke badle.
These poor chaps are in majority. They think they are safe. On top of this, the Maamu’s offer them carrots called rebate, deduction,
exemption… . everything… They have no respite... Coupons, HRA, Allowances, fringe benefits for everything they have to pay
mamool… . The difficulty for them is their employer ded ucts it… .. No choice of finding “other way”.
Then comes March end… The war starts in the office. The war between finance dept. and the employees… . This employee who is
already tamed big time by TDS – now needs to submit “proofs” for all his “Legitimate” investments… … It’s like “Throwing a snake at
already half dead person”… !!
Now comes Chartered Accountant with his 2 assistants to file your return!! He makes you to feel that you have to take 2 births to
learn filing that return… H e knows he will come to roads if Govt. makes it easier… . So his bosses have fo rmed a committee which
acts as a "Tax Consulting" Committee to Govt. before the budget… . Each of you pay your hafta to him… 100, 200 or 300/- Rs. per
filing… .
Shankaracharyaji told this 1000’s of years ago itself “All play gimmicks to feed their stomach“ (Udara nimittam b ahukrata ves ham).
Now you are relieved… .. Oh! At last I have come out of burden… But you don't know that M aamu’s are still very much worried about
your savings, welfare and future… For them your "survival" is very important!! That’s why they make you to invest to save tax. Okay.
Let’s see how much they are concerned… .
Say you have to pay Rs 10000/- as tax. How much you have to invest. You know? Just 5 times!!! That is Rs 50000/-. After all M aamu’s
need to get some business for M utual Funds, Insurance Companies… .. naaa?
To be Continued… … …… … … .
Regards
Raghav
Continued:
Now you go to your nearest Bazaar where you want to p urchase a Laptop Backpack. You ask for it in a shop. He says sir its Rs. 1500/-.
You ask – “Is it final price?”
He says “No sir – 14% VAT extra”… Rs. 1500 * 5/100 = Rs. 156/-.
You think “I came here searching for the least price. Now it’s already above my budget. Now Rs.156/- extra. M eanwhile the shopper
asks. “Sir you want item with bill or without bill? Sir, Tax is applicable only if it’s with bill”.
You got what you wanted. You say “Why the hell I care for the bill? Give me without bill.”
A black money worth Rs.1500/- has been generated.
Say a college student goes to buy cinema tickets. He go es and asks at the counter. They say its Rs. 300/- (Inclusive of SERVICE TAX +
ENTERTAINMENT Tax).
There is a gatekeeper in the corner offering it for Rs. 175/- in “BLACK”. What the student thinks… .? Savings of Rs. 125. He buys in
“BLACK”. You saw how even gatekeeper makes black m oney!!! But he does it for his survival, for his food and shelter.
You go to your doctor for some check-up. When you come out you see the Bill is Rs.1000/-. However, taxes are Rs. 100/- odd. Service
Tax 10.3%....
“Wherever you go, our Tax network follows”…
You pay Tax from your Salary.
You pay Tax when you buy goods.
You pay Tax whenever you avail any service.
Even if you go to movie for a change you pay tax.
It’s not surprising if our neighbour vegetab le-wala starts levying “Vegetable Tax”.
Have you ever asked “I pay so many taxes at each and every part of life. Where do they go?” Do you get good roads? Do you have
Health Insurance from Govt.? Do you have employment security? Have you got qualitative and uninterrupted supply of electricity?
Have you got good sanitary systems? Public Drainages? Leave it, ATLEAST GOOD PUBLIC TOILETS?
If your answer is yes, I will stop here.
If your answer is No, then I am going to ask “where do they go? Every person from t his generation M E AND YOU should ask this
question. Then only that transformation can START at least in the mind.
Though the issues that Baba Ramdev has raised are valid and every on e supports, building an Army is an extrem e step. That’s not the
way. No army can stop Corruption. The corruption is a result of greediness or extreme greediness. Hence , the change has to start in
the mind of every citizen. Nothing to do with physical army.
Regards
Raghav
Now let me tell you small example on how corrupt people grow exponentially…
Again a bus example. I stayed in PG early in my working life. As I told you earlier, at that point of time I could not even afford a bike.
It was a bus. But what a time I had!! I learnt most valuable lessons of my life on those bus trips.
My office stop was just 2 stops away – say approximately 1 km. The charge was Rs 4/-.
Bus conductors too are experts in dealings. The moment I used to say I want to get down at my office stop which is just 1 km, they
would think of a deal (Since it takes just 5 – 10 minutes of time, they think it’s safe to take such risk and go for a deal). What is that
deal?
I have to pay Rs 4/- for the ticket. Now as per the deal he will take Rs 3/- and won’t give me the ticket. I save R e 1/-!!
Since most of the people who travel on these buses are from poor background , a 1 Rupee “saving” would make them happy.
However, I used to carry exact change of Rs 4/- every day and ask for ticket though they used to invite me for the “deal”. Conductors
used to get very angry with me.
Other tactic that they used to get in to deal with the p assengers was, most passengers don’t carry change. So when a person gives
Rs 10/- for a Rs 4/- ticket, conductor will say I don’t have change though he got full pocket of changes. This would invariably result in
a deal!!! What an Idea Sirji!!!
Then lot of college boys used to be very happy with the deals. Some of them will stuck deal of 50:50. Rs 2/- for Conductor and Rs 2/-
“Savings” for themselves.
-----------------------------------------------------------------------------
Now see the overall equation – Rs 3/- for conductor which is 3 times more than what this passenger has “saved”!!! Rem ember he has
paid for the conductor personally. If caught by the squad, passenger has to shell out Rs 400/- i.e.; the minimum penalty for travelling
without ticket. How many days does it take to “SAVE” that 400? And how many deals it takes to recover that 400 Rs. for a passenger?
Just do some maths.
Just imagine if conductor makes 10 such deals per day he is just making money for his petty expenses … Of course 10 is too less.
They will make much more number of deals per day.
It shows that corrupt always grow exponentially. Poor becomes poorer exponentially.
People do not think. They feel some kind of “inner happiness” for cheating someone. They don’t know that they are the one who are
losing…
But at the end of the d ay the question remains ”who is responsible for this pathetic state”? We blam e system, politicians – Politicians
blame people and opposition parties – in the end someone has to take it… ..
Just imagine. The black-money to the tune of Rs 5000 crores is being generated each year at Inter-State checkposts. You know how
traffic police buy bungalows in the heart of the city.
It’s none other than me and you… . A person was carrying an ass on his shoulders and a passer -by told. Hey – it’s an ass. Why do you
need to carry it on your shoulder? Let it be on the ground. Drop it. The person told “I love it sir.” The moment he finished his words
that ass **** on his head. The passer-by said. I told you to drop it. It’s an ass. Everything has its own place. It deserves to be on the
ground and not on your shoulders.
W e have carried big bunch of “ASSES” called politicians on our shoulders for 64 years, we garlanded those buggers and today
the same “ASSES” are shitting on our head.
First w e need to drop them from our shoulders. Then tell them “You work for your bread and butter like all of us."
One good news is that – we from this generation (I mean those who are born after 1975) want to work, co -operate, we also have
concerns towards our society. We are modest. We love people. We believe in working and getting reward. I am talking of majority.
However, there is a drawback. We do not take responsibility. We live in fantasy. W e want to do everything E-W AY… E-meditation, E-
lunch… Now even E-Cigarettes!!!! We need little bit of tweaking in our mind-set.
-----------------------------------------------------------------------------
If you closely observe 95% of these “asses” I spoke above belong to previous generation. I see in so many Govt. offices the younger
people who are appointed freshly want to work; they are "shy" of asking (begging) for b ribe...
Remember corruption is a M ass Psychology – it has to be changed through a transformation IN A MASS SCALE BY BRINGING IN
RIGHT MINDSET. That transformation takes place when we adopt our own values – be it Chankya’s Arthashastra, Patanjali‘s
Ayurveda, Aryabhata’s M aths, Ravi Verma’s art, Chandragupta’s administration.
Currently we are rag pickers. We pick what westerner’s use and throw. Culture, cloths, style, family values, language – everything…
This has to change starting from me… . do not point fingers at others… It has to start from m e… .
Lord Krishna said in Geeta “Sanghe Shakti Kale Yuge”. The efforts which are done with unity brings power and results in this
particular era… But w e have a problem… 10 people can’t mingle even for an hour. Because each one says I am “X” party, I am “Y“
party… ..
Regards
Raghav
Quote:
Originally Posted by Piuvbn

Long back I read a book ''This Or Else'' by DINSAW J DASTUR, he wrote about taxes, how heavily commoner like us burdened by indirect
tax.
You can't leave it on moral alone. There should be an all-inclusive strong, quick and impartial detecting system and equally quick
judgement system. This would act as strong deterrent to anyone thinking of earning wrongly. The law should be such that whoever in the
family enjoy the fruit of ill-gotten gains would be asked to bear the burden. Strong deterrent is the call of the time. Regards
Hi Piuvbn,
You are right. Our ancestors have stressed on a subject called "self-restraint". This comes through a process called "Sanskara". When
everyone knows what their duty is, there is no need of any law to restrict them from wrongdoings.
Again tell me does our education system say anything about honesty, our values, our ancestors, and our golden days 200 years ago.
Look at Japanese. There, when a child goes to his school you know the first lesson? Teacher says "Look my boy, even the sun loves
our country, that’s why he rises first in Japan". That’s why they are such patriots.
Come back to India, all we study is who attacked, when he attacked and what all that attacker carried with him. When we are
bombarded with lessons of "Slavery" during early stages of our life, how can we expect the public to become good citizens? He
becomes one more heard..........
Regards
Raghav
W hy do I post only W inning Trades over Here:
Originally Posted by mahindratheman

Dear Raghav good thread. Congrats on it.
One question if you take in right spirit...
W hy charts are posted on that day when trade works well... I am sure before day starts you don’t know if the day is going to be good or
bad... why not post the charts of day when trade does not work out... that will be more learning.... isn’t it?
Mahindra
Dear Mahindra,
One of the best questions I have come across in a while. Your question: Why do I post charts of only winning trades? Great question...
Answer: This trading world is full of negatives. If you go through most of the posts in any forum, they say day-trading is dangerous,
highly harmful etc. etc.
The beginners are scared. But they feel something is there in the market. Then they go and put their money without any knowledge
and effort and practice and lose big tim e. It’s a systematic ploy by media, brokers and some tip service providers .
I wanted to show this game works. Bring confidence and bring a culture of effort and practice among new -com ers. For that no one
listen to me if I say day-trading can be done successfully. I had to show it to them, bring confidence. That’s why I post winning trades
to bring confidence. Like all others I lose 3 out of 10 trades, 4 out of 10 trades. But when I make gains, it’s big because this method
has logic, M M , science and arithmetic involved in it. The core of the method is in what it preaches – the M ass Psychology.
M y efforts, as you can see, have started yielding results.
Anyway, you have said it; we shall try to post even losing trades going forward.
Regards
Raghav
The Value of Humbleness:
Indrajitu was the son of Ravana. He was one of the greatest warriors ever known. He did years of Tapasya to get various boons from
Brahma. He learnt all the arts of war including Mayavi Yuddha (Warring without being physically present).
When he faced Lakshman in the battle field, he tried all his warfare tricks. Since Lakshman was also one of the great warriors,
Indrajitu couldn’t make much impact.
Then he decided that he would exercise best of the 3 Astras (Arrows).
First he sent “Pashupatastra” belonging to Lord Shiva. Lakshman on seeing this, instead of sending counter Astra, dropped his Bow
as well as arrows and stood with 2 hands joined in “Namaskara“ position chanting Shiva M antra.
The Arrow reached Lakshman. It said “How can I kill the one who worships me. I am there to destroy evil powers. It went back.”
Indrajitu got angry. Now he sent “Narayanastra” belonging to Lord Vishnu. Lakshman stood as he was earlier. N arayanastra which is
in the form of a Chakra (wheel) just made a ro und of Lakshman’s body and said, “I am there to cut the neck of destructive people.
How can I cut the neck of a person who is bowing his head to me? I am not meant for that.” It returns.
Now Indrajitu got furious and frustrated. Now he pulled out the ultimate Astra. The Brahmastra. The mom ent he sent it, Lakshman
bent his knees and told “Hey Lord Brahma, you are there to protect ‘Dharma’ and destroy ‘Adharma’. I came here to protect
Dharma.” Saying so, he worships Brahma in his mind.
Brahmastra reaches Lakshman and says “I am not meant for killing the one who fights for the true cause.” It goes back.
Moral of the story: Even greatest of greatest Astra, Brahmastra cannot kill a person with humbleness. Instead it protects the
humble.
-----------------------------------------------------------------------
Hanumanji is one of the extraordinary being as w e know . He could lift and move mountains. He could jump the sea, he could travel to
all 3 lokas. But never ever in his entire stint he asked even a single favour for himself. H e never said “I have done this”. For him
serving Rama was everything. M ost of us know the great physical endeavours of Hanumanji. But he was also a Pundit. He learnt all
the 4 veda’s. He mastered ”Ashta Siddhi”. Still he remained humble. He spent all of h is tim e m editating.
Due to his unrelenting Dhyana and chanting of “Rama”, even the best of the best evil powers could not come near him. He remains
as one of the 7 eternal beings and worshipped across the world.
We all just with few crores, a bungalow, and a fancy car become so arrogant and egoistic that it seems there is no second person
than the self.
-----------------------------------------------------------------------
Kannada Actor Rajkumar became an Icon through his efforts and superlative acting. As long as he lived, whenever he used to see an
elder person, he used to put his head to touch the feet of that elder person irrespective of who that elder was. When asked about
this behaviour, he used to tell, "Let not my success, glory, wealth get in to my head. This always keeps me humble."
Hence Let the darkness called "Ego and arrogance" be overcome through a light called “Humbleness”.
Regards
Raghav
Nifty 5-Min chart:
---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Nifty 30-Min chart:
What a newbie will do? He logs in to Traderji in the morning and looks whether someone has posted any "New Syste m". Also he sees
whether they have posted any AFL for that system.
I reiterate here what ST Bro has said in his other thread few days ago. If AFL can make money for you, 99% of the traders would have
been billionaires. If the system can make money, no trad er in the world would have gone bankrupt.
M oney is made in mind. I can just trade IB's and make money. Today’s 30 Minute Nifty chart. Look at it.
IB's high is 5453. Low is 5442. What I do? Just put order on both the sides as soon as the IB forms. It catche s order on one side. Put
SAR on the other side of the bar. Does it take any stress? Great mental work?
What is the risk? Including filters, maximum 15 to 18 points. If anyone gets time just do the homework. How many IB's we got last
week and how much money it made.
The rule is simple:
1. Look for IB to form on 30 -M in.
2. As soon as it forms, put orders on both sides of IB with small filter.
3. Once the order is caught on one side make the order on the other side as SAR.
4. If the price reverses our SAR is caught and we are in the trade.
5. What is the loss we incur if it reverses? Virtually nothing.... How many times it reverses? Please do some homewo rk.
6. What is the R:R under this technique.... Only charts can tell..... Please do some maths on the chart.
Regards
Raghav
Quote:

Hello Raghav,
Could you please explain bit about the 3rd point? I am not much clear :
3. Once the order is caught on one side make the order on the other side as SAR.
Thank you
Bala
High = 5453
Low = 5442
Place a Buy order of 1 lot above IB at 5453 + filter (say 3 points) = 5456
Place a sell order of 1 lot below IB at 5442 + filter (say 3 points) = 5439
Once the long order is caught @ 5456. Place 2 lots as SAR @ 5439. Now what happens if price reverses? Your long order gets
squared off @ 5439 (1 lot) and a short position of 1 lot is opened. Hence, either way you get benefited with low risk.
Number of lots I have mentioned is hypothetical.
Regards
Raghav
Quote:

Thank you so much for the prompt answer Raghav. I got the point. How many point s is better to use as filter? Usually I think of using 1
point as filter.
Bala,
Trading is always subjective. There is no written rule. As per my style I use just 3 Points. 1 point according to me is too narrow and
more than 3 points is too big. This is considering current heavy sideways market. Once the trend comes we may have to adjust the
filter accordingly.
Quote:

Hello Raghav,
Could you please clarify the below points too?
1. If market has opened Gap up / Gap down and also second bar is inside bar means, can we consider this scenario to put order? A s
per your earlier posts minimum market needs 1.5 hours to settle down. If second bar mean s that is within 1 hour.
2. Inside bar means it should be exactly within previous bar or 1 or 2 points up/down should be fine?
1. Yes sir. When it comes to 30-M in INSIDE BAR we can right away go and put the order even if it is the second bar of the day.
Cooling down of sentiments does not apply to this technique.
2. Very good question. As far I am concerned I look for a bar, the entire body of which is covered by previous bar including the
wicks. However, there are people who ignore wicks and even if the wic k is outside previous body they call it Inside bar. But not
me!!!
Regards
Raghav
Trading the Exhaustion Bars – Trade Setup ICICIBANK 14-JUNE-2011:
Today’s ICICIBANK 5-M in chart:
Market is a dynamic entity. One has to keep on evolving to sustain and grow here. In my early days, I used to scalp and it was based
on this technique called "Exhaustion technique" .
It works wonderfully in a sideways market. What is exhaustion? When you run for a while, you get tired and say I got exhausted.
Same thing here. In a sideways market, Bulls and bears get exhausted after a small move only. That’s the tim e I take position.
How to identify that they got exhausted? Simple. Extreme volume with WRB and that bar is squeezed or in other words , that bar has
longer wick. Chart says it all.
When bulls exhaust go short keeping the S/L just above exhaustion bar and when bears exhaust vice-versa.
Rest of the things is explained by chart. Please go through it, analyse, do homework. It’s something meant for sideways
market...............
Regards
Raghav
Quote:
Originally Posted by murthyavr

Excuse me if I am naive…
Exhaustion gap is found at the end of the trend and we look for such a gap, to be able to catch the trend reversal early.
I am under the opinion that for a bar to be categorized as an Exhaustion Gap Bar, a gap should first of all precede the bar to decide on
its status – whether it is exhaustion gap bar or not.
Secondly, there should be high volumes on this bar.
And thirdly, after formation of the high -volume bar, if the gap is getting filled up backwards (or as Raghav says – if the gap is getting
closed), it's a trend reversal.
Is my understanding correct? Or, is this a different concept altogether that you are discussing?
Hello Murthy,
Indeed, your doubt is natural. Let m e clarify your doubt.
The concept you have elaborated is a classical theory, whereas what I am explaining is the technique based on my experience,
observation and years of experim entation.
This technique advocates that the range-bound market has very short bull and bear waves respectively ; meaning neither bulls nor
the bears are able to maintain their power for long enough to domin ate. At a particular place on the upper side bears are strong and
at a particular point on the lower side bulls are strong.
Now say Point "A" is upper side and point "B" is lower side. Say, now price is moving towards point "A". Now what happens? Bulls try
to pierce that point "A" by putting good volume. The price pierces "A". However, since bears are strong at this point they also put
huge sell orders and the candle closes far below its high i.e.; a WRB with long upper tail/wick. This means that bulls couldn't
dominate and close the price above Point "A" as bears are strong at this area. Now we have all 3. A WRB, long wick, and extreme
volume. That’s where we decide bulls are exhausted.
Once bears notice that bulls have become w eak they start putting selling orders and price collapses. Then it reaches lower side at
Point "B". Now its bulls.... like this, this cycle continues.....
Am I clear?
Regards
Raghav
Trading the IB – Trade Setup Nifty 15-JUNE-2011:

Here is how we long order above this Red IB as we are already in a long position.
should trade it.
(8th Bar) Now price slides down and catches our SAR at point "C". What’s the result? Loss of 9 points. Let’s keep
On that day the this loss aside.
4th Bar was an
Since 5488 was a SAR, a short position is also opened at 5488. Where do we place SAR now? It is 5499 (High of
inside bar. The
red IB =5496 + 3 points filter).
upper side of the
IB is 5494 (9th Bar) Now price moves and makes another IB. Now what do we do? Same thing. Since we are already in a
whereas lower short order no need to put any more short orders. Just trail the SAR to 9th Bar high + filter. Price never catches
side ends at our SAR and moves down heavily.
5485. As soon as At the end of the day count the pips and go to your bank smiling all the way!!!
IB is formed I
place one order Adding to positions we can talk later.
above IB at 5497
(5494 + Filter 3
Points) marked
as point "B".
Then, One short
order at 5482
(5485 - 3 points
filter) marked as
point "A".
(6th Bar) Now
market breaks
the IB upper side
– our long order
gets caught at
5497. Now SAR
is at 5482
(Double the
quantity of long
order). S/L is just
15 points. [Note:
Poor Sharekhan
don't know how
to count. They
don’t have
number "5" in
their window.
That’s why its 6
after 4.]
(7th Bar) After
that price
weakens and
forms another IB
(red). Our long
order is intact.
However, we
need to raise our
SAR to 5488 (low
of red IB is 5491
- 3 points filter).
Now we need Regards
not place any Raghav
Trading the Exhaustion – Trade Setup Nifty 16-JUNE-2011:
Originally Posted by kmgsm
Raghav ji, the marked bar in the chart qualifies for an exhaustion bar? If yes, the entry and SL are correct? Please clarify.
Thanks
You have got

it and you can
do it....
Absolutely
fantastic.
Note: May be
due to data
feed there is a
difference in
our respective
charts. 1st
exhaustion
marked by me
as No. 1 is
missing in
your chart. As
per my chart
No. 1 is a
losing trade.
You are lucky
to have only 2
trades that
too winning
trade!!!
(Actually, the
chart posted
by kmgsm is a
10-min TF
Chart and the
one posted by
me is a 5-min
TF Chart).
Just count the
pip in just 2
trades!! Don't
you think your
Banker will be
happy???
Regards
Raghav
Trading with Fibonacci – Trade Setup Nifty 17-JUNE-2011:
Originally Posted by casonite
Hi Raghav,
Thank you so much for your posts. For people like me who are not naturally talented
as a trader your posts are a great learning. I have read a lot of books but learnt more
from your posts. I have started paper trading and took a trade today and wanted to
know if I followed your system correctly. The only thing I want is to be able to learn
and follow the system religiously because that ’s the only thing that will help me in the
long run.
Took the following trade in Nifty. Short at 5396 with SL a t 5403 [62.8% retracement].
Regards
Nitin
The chart from N itin's Fib perspective:
Hello Nitin,
You have got the concept right. Just need to fine tune it.
Let’s see what happened. In your chart I have marked candles as 1, 2, 3 and 4 for 17th June. Price from 5419 slides to 5403: 16 points
down-move. Then a small hamm er and it moves up to 5410 and then comes back , breaks the low of hammer and slides heavily. In this
case, the price movement from 5403 – 5409 you have considered as retracement. From macro perspective it ’s a perfect assessm ent.
However, as far I am concerned I use Fib tool only after we have a movem ent of at least 30 – 35 points in a single direction.
Ok. Now you will ask me how you have traded this early morning set up.
No. 1: I have told earlier that early morning sw ing high/low broken gives huge trades. From intraday perspective I use this techn ique
for this set up.
No. 2: Let’s go to my Fib perspective.
The chart from Raghav's Fib perspective:
th
On 16 June we had a significant event at 5455 i.e.; 2 exhaustions where kmgsm traded over here. From that point price slides to
th
5393, around 60 points move. By EOD it retraces a bit. Now we draw line from 5455 to 5393 and watch out for price action. On 17
the price opens at 38% retracem ent but cannot sustain. It slides to 5403. Then, a small retracement and again it cannot sustain.
That’s the sign that price is very weak. I go short big time since I have "confluence" of lot of factors confirming the weak price.
However, unluckily I could not take any of these trades last week due to heavy commitments. The above shows only my style of
trade.
See the maths, science, logic – everything is involved in the above setup. You need to work relentlessly to find it. Then, it will be your
second nature.
Remember I do all of this just with "Tradetiger". I have discarded AmiBroker, data-feed etc. long back. It’s not that I do not like AM I.
It is a wonderful tool.
My point is – to be successful you need not necessarily have fancy softwares and codes. What all you need is "Your own cool, calm,
relaxed and balanced mind" which can get you whatever you want.
Regards
Raghav
Some Basic Questions:
Quote:

Sure and Thanks Raghav. Yes I had gone through ST sir posts and yours. The most confu sed part was when you use candle sticks like Doji,
hammer and etc. W here can I read these patterns better?
Thanks in advance
Hello Bala,
Let me make you feel better with a chart. Here is a 5 -Minute chart of Nifty of 28th March 2011.
There is no gap up or down opening.... Then OB > 5 bars means we are bullish... Stoch comes down to OS... Now price reaches low of
the day… . Then we have a ham mer at the low of the day.
When we got a hammer see where the Stoch is. It’s coming out from heavily oversold zone... In such cases I jump in with double the
quantity which I normally trade... Just because...
1. We have a bullish minor trend as Stoch stayed in OB > 5 bars... So we are looking for long trades... This is called reading the
direction of trade…
2. Where do we get ha mmer? At the previous low of the day... That’s called reading the Price action and place of price action....
3. Where is Stoch... coming out of OS… . Best place for a long entry... This is called combining and reading indicator with price
action and location of price action.
4. Using multi TF's. I will show that to you some time going forward.
When you blend at least first 3 points above, a tasty recipe will be ready for you on the table....
Look at my risk. Just 12 – 14 points... Entry at 5676 – 5679. Stop just below the tail of hamm er... 5665... 5662. What about reward.... at
least 50 points....
My technique remains same for all the timeframes.... Including swing trades....
Some good books where you can get an idea for reading price action and locations etc. are:
1. Technical Trading Tactics by John L. Person
2. Beyond Candlesticks by Steve Nison... (ST Bro has already suggested the other book by Steve Nison in Oscillator thread).
Regards
Raghav
Quote (Continuation of Previous One):
Originally Posted by vikas2659

Hi Raghav, this is my first post in your thread… I read ST’s thread & then yours (not fully but 75%)… my doubt was also same as was of
bala but couldn’t dare to ask u because of fear of being out of place (as i had the feeling I may be missing something in unread 25%)...
th
You replied very well… But another question arises... W hen you bought at the hammer in the chart of 28 March 2011... Nifty was in OS
region for more than 5 bars if i observe correctly... Then wasn’t that trade against our rules... Or we pay more weightage to
candlestick/price action patterns/support/resistance than oscillator…
Thanks,
Vikas
You are absolutely right Vikas. If you see how I come to decisions; the priority/weightage...
1. Price action
2. Location of price action
3. Indicator
So Indicator alone will not stack the odds in your favour... It ’s how you blend it with others....
Regarding your question about OS > 5 bars when ham m er was formed....
Now what is the major trend? Up. W hat does daily, hourly and half hourly say?
Where did the ham mer form? The down move w e saw before the hammer fo rmed, whether its retracement or reversal?? All these
you will learn over time by experience and practice. (I will explain how to differentiate between a reversal and retracement going
forward)...
IMHO... I gave the example of ham mer to answer Bala's questions... However that day we had plenty of opportunities on both the
sides....
Don't hesitate to ask questions... That’s how you learn... But new questions each time... That’s how you develop.
Regards
Raghav
Quote:

Hello Raghav,
I thought that Nifty will come down due
to -ve divergence and price taking high.
But it went in reverse. Really I couldn't get
what I am missing here. Could you please
clarify me?
th
(This is a 5-min Nifty Chart for 13 April
2011)
Thanks
Bala
Bala,
As I stated earlier, Trading Indicator alone cannot make a trader profitable. Indeed many times we see a divergence whi ch fails to
produce results. Also the divergence in longer TF's like 30 -Min, 60-Min and Daily are more reliable compared to 5 -M in TF. So it’s
essential that we have a m echanism to filter out the false ones.
That’s why I blend price action with indicator. I use 4 solid proofs of evidences to derive at a decision in following priority:
1. Price action (A hammer, Shooting Star, bullish/bearish engulf, IB's, gaps and so on).
2. Location of price action (Round numbers, at significant resistance/support, at a Fibonacci retracement level and so on).
3. Indicator (Divergences, double bottoms, M patterns, V patterns in Stoch and so on. Yes. I trade Stoch patterns too!!).
4. Multi timeframes (5, 30 and 60 minutes), A hammer in 30-Min is stronger than a hammer in 5 -M in, a shooting star in 60 M in is
stronger than a shooting star in 30 -Min, a Bullish engulf in a daily chart is far stronger than a bullish candle in 60 -M in). I have
depicted this in my previous posts.
It’s called confluence. The confluence has a capacity to generate hug e trades 9 out of 10 times.
---------------------------------------------------------------------------------------------------------------------------------------------------------------------
Now let’s comeback to the case you have mentioned.
th
1. We are in a strong uptrend on Wednesday (13 April 2011). So we always look to go long.
2. As our master ST bro says: "M arket does not change its mind so suddenly. It has to have some strong trigger to change
direction". So unless we have a strong trigger there is no point in thinking otherwise.
3. None of the candles either in 30 -Min or in 60-Min has shown any symptoms of reversal.
From technical point of view:
In an uptrend to reverse your position along with -ve divergence you should look for:
a. Break of trend line or channel
b. Break of last swing low.
Look at Wednesday. Forget the breaking of swing low, it hardly retraced.
Take it easily and keep on observing. Try with M INIFTY/small quantity of shares. Practice whatever I shared. One day you will be
surprised by your own results. In case you are comfortable with any other systems/methods you can follow the same as well.
However the basics remain same. H ence whatever you learn here will not be a waste any time during your entire trading career.
I tried almost everything. Then learnt that "PRICE IS THE BEST INDICATOR AND M IND IS THE BEST SYSTEM " . M y critics (system
lovers) are still angry with me because they want to pro ve that market is complicated whereas again and again my charts prove that
"M arket is simple and their ow n mind is complicated”.
Regards
Raghav
Quote:

Hello Raghav, Could you please explain the role of 21SMA in our trading?
Thanks
Bala
BALA,
1. I myself, no more make use of moving Averages in my trading. Earlier I did use them. M y experience w ith them is not so good
especially in day-trading. In my previous post I detailed 4 pillars of my trading on any TF.
2. SMA, EMA etc. are more effective when they are used as a measure of su pport and resistance (I don't have chart right now. I
will show the same going forward). Some traders take only long positions if the price is above particular moving average and
vice-versa for taking short positions. Such discretion/tweaking may enhance the efficiency of systems/results.
3. Longer the timefram e more will be the relevance of Mo ving Averages.
Regards
Raghav
Example of Moving Average with the help of a Chart:

That's how some
traders trade M oving
Averages. Green =
21SMA, Yellow =
10SMA. It’s 30-M in
chart. Once 10SM A
crosses 21SM A
downside see what
happens. Every time
it pulls back to
10SMA price
gravitates down. So
the people who
follow this method
short each time price
pulls back to 10SM A
(Not necessarily be
10SMA. You can use
any average that you
are comfortable
with), vice-versa for
uptrend.
I have seen people
doing it wonderfully
in Forex. I am not
sure whether there
are any people doing
it in Indian markets.
Higher the TF, better
will be the result.
However, If you dare
to do it on 5-Min, be
ready for BP (Blood
Pressure) check-up....
Regards
Raghav
Quote:

Right now, W hat I am doing is selected few stocks which you suggested and closely observing price action with volume. But I had
different scenarios yesterday.
Hope I am going in the right way... please correct me if I am wrong…
Thanks
Bala
Bala,
Indeed you are in a right way and I am sure you will reach where you wanted.
Go through the charts again and again. Note down how price reacts when it reaches low of the day, high of the day, high/low of
previous day, at previous swing high/swing low.
Also see how price behaves when the Stoch stays in OB > 5 bars, OS > 5 bars. Also note how round numbers 00, 25, 50, 75 act as
support and resistance. Just observe for few days. Just observe for weeks… DON'T trade first. First you observe. After few
days/weeks you would develop the confidence automatically. Why you should not trade first? The moment you trade, the past
haunts you. The emotions try to catch you. That's why just observe. Same phenomena repeats – That’s called "again and again and
again and again and again". That’s where you start................. Oh... So simple.... How did I miss these simple stuffs for years.... Oh god...
Then you really develop...... Then you say I neither need Raghav's price action nor ST's Stoch
Beware of herds... They are round the corner to catch you out …
Regards
Raghav

Raghav - My DayTrading

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Raghav - My DayTrading

Uploaded by

Copyright:

Available Formats

M y DayTrading - Raghav

Smart Trade’s Thread – How to Trade Oscillator

Columbus’ Thread – Bollinger Bands

Rules and M arket Beliefs:

Let’s start trading now.....

AFL for Stochastic (8, 3, 4):

Sharekhan Users: Please go through this post from Sunil.

How many trades do we get each day?

For m e Stoch is a confirmation tool to get in at best place...

I do take decisions in this order.....

Originally Posted by sartaj

So in my personal opinion three stages for a successful man:

1. Stoch in OS. Break of PL means sign of weakness. Short.

What I am going to do is simple. When price moves up:

1. I ask where the next resistance is?

Commenting number wise.

Trade Setup TATAM OTORS 18-M AY-2010:

Trade Setup NIFTY 19-M AY-2010:

Let’s see how our method worked.

Patience always pays in the market.

Raghavacc Thanks for putting effort and posting your method.

Do you face this issue? Thanks in advance!

Simple Trader. Good question.

The rules for entry are:

1. The oscillator should have gone to overbought zone.

Trade Setup REALTIM E 20-M AY-2010:

20th May 2010, 11:12 AM

Try to understand what it's telling

20th May 2010, 12:47 PM

20th May 2010, 01:12 PM

20th May 2010, 01:42 PM

20th May 2010, 02:01 PM

20th May 2010, 03:27 PM

EOD - 20th May 2010, 03:51 PM

Also I was able to show you

Let me keep it simple.

Trade Setup REALTIM E 21-M AY-2010:

Tata motors and ICICI bank are showing bit of weakness.

21st May 2010, 10:37 AM

Usually chart won’t lie.

21st May 2010, 12:57 PM

21st May 2010, 02:15 PM and 02:47 PM

Nifty – OB > 5 bars.

Again a small -divergence in nifty. It’s been a day of extreme volatility.

EOD 21st May 2010, 04:10 PM

One of my pet observations which give too good trades is .

1. Stoch in OB – upper band piercing GREEN + RED.

Let me comeback with few charts and more on this by night.

Originally Posted by Raghavacc

Two entirely opposite way of looking at the market.

But I am sure; you will find your way out.

All the best.

Few observations from my real trades.

Reply by Raghav – Trade Setup EDUCOM P 20 -MAY-2010:

Sorry ST - That’s the way I talk... too much straight forward....

My answers to these questions are:

Overbought and Oversold:

Trade Setup TATASTEEL and TATAM OTORS 24 -M AY-2010:

Trade Setup Nifty 24-M AY-2010:

I am not putting BB as today I am

OB > 5 bars. Remember I have

Originally Posted by laxsri

Pointwise comment. M ay be bit difficult to understand.

1. –ve divergence – Break of P/L a winning trade.