It has become fashionable to see many traders tweet their months old stock picks which have given 2x-3x.
I am happy for them....But
(1/n)
While re-tweeting them each time they make a new high and upgrading the targets and potential over and over again,
Traders seeing their feed would jump in and buy at any price running on the tape.
(2/n)
Understand that the traders tweeting it may be holding it, may tweet it for their ego boost or for their own feel good moments.
But it doesn't mean you should get enticed seeing the run up of a stock and buy at any random prices.
(3/n)
If you buy at any random price without seeing technical support/resistance just because you see those scripts being tweeted over and over again, you are the losing one.
Ex: Total silence on CDSL and BSE on fintwit since this week since they started correcting.
(4/n)
Understand that finding a strong script and finding an attractive risk reward entry in a strong script are two different things.
When things go south, nobody would come to your rescue. You should handle your trading acc.
(5/n)
Do not get caught in the bull market FOMO. It is the job of analysts to keep tweeting stocks when they do well.
EX: Just because you see some fitness professionals chug protein and workout all the time on SM doesn't mean you should do the same.
(6/n)
In the end, it is your money. Opportunities are endless, but your money isn't.
Keep calm, respect risk and trade sensibly without getting caught in FOMO.
One of the most important yet underrated and unknown aspects of improving your trading performance is "Inward reflection"
(1/n)
90% of the trading happens inside your head, only 10% on the terminal.
As a trader looking to improve or maintain performance, it is essential to constantly introspect on how you feel before, during and after market hours on days of various performances.
(2/n)
Asking a generic question like "How to improve my trading psychology" is like walking into a garment store and asking " I want a shirt."
Sideways price action or consolidation is a phase where institutional players are silently building their positions transacting in smaller quantities.
(1/n)
What we need to understand is that big players have huge amounts of money and one major disadvantage of having such large cap is that they cannot transact in big quantities without being spotted (aka volumes)
In order to minimize this disadvantage to an extent, they will begin building their positions with many smaller blocks of orders to look like multiple small players and to not alert other market participants much.
Yesterday, I met with a trader who wanted to make it in the markets. Advised on the following psychological pointers from my own exp:
Time:
1. You cannot become a successful trader overnight. 2. How long it takes depends on a person, the time they can dedicate everyday, their level of emotional control and balance etc.
Expectations:
1. There is no magic setup to turn 1L into 10L in a week or month. 2. Compared to other professions, trading can make you rich faster but not UNREALISTICALLY faster. If you have a golden goose, take one golden egg per day, don't cut its stomach in greed.
Thread on risk and trading psychology in day trading:
Some traders stress too much on RM and TP to cover their many incurably inept trading methods. Some simple rules which is all you need are:
(1/n)
Pre-Trade:
1. Have a proven system in place. 2. Do not risk more than 1% of cap per trade. 3. Fix a number of trades per day. I don't go beyond 4-5 trades at any cost. Many days, I am done in 3 trades only. 4. Focus on R:R but also make sure you focus on POP.
(2/n)
During the trade:
1. Be a trend follower. Higher rate of success. 2. Do not always book in full at target in the direction of trend. Book partial, move SL to cost and let it trail. More often than not, trends continue than reversing and will give extra gains.
1. Momentum is the one of the most important and crucial aspects of TA in trading without which opportunity cost is lost.
2. The main purpose of RSI is to assess the momentum of the current and past price moves (which we will discuss later). 3. RSI is measured between values of 0 and 100 with certain values being defined as overbought and oversold. 4. These values are not constant but depends on:
a. Time frame of analysis.
b. Overall strength of the stock's/market's trend.
c. Current Market cycle. 5. The size of the TF and value of RSI are inversely proportional. 6. Ideal trade conditions are when RSI on 5 mins>15 mins>1hr in case of bullish trend.