Stock Market Views

These are personal views of my experiences on my short life on the Stock markets.That Psychology of the market player is one major factor between winning and loosing money to me at least is a foregone conclusion .I maintain this blog maybe mostly as a reminder to me to be wary and careful and keep my emotions under check. To write on a blog means to think first so its also to print in the brain so i remember well the pitfalls associated with trading and the stock markets.

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Location: Solan, Chamba,Dalhousie,HIMACHAL, Ranikhet,Nainital,UTTARANCHAL, India

Ordinary girl with open mind about the possibilities of the impossible.

Wednesday, July 19, 2006

Trading methods

Some thoughts on how to increase trading profits: How does one trade ?? some using charting tools and software for the same ,These are basically the minority group of traders , the majority trade using information,tips , viz depending on secondary people tools or views etc etc,and thats why the person using his own decision making apparatus has an advantage . Those who trade using their own analysis are really committed so what are the methods and systems used and how efficient are they and how sound are the foundations : The fundamental analysis i will leave aside.
One of the most efficient systems available are the patterns : However these have a lot of hard work in the sense that for a pattern to be perfect has to satisfy a number of criteria and some criteria are minute and easily forgotten .Also most patterns have a confirmation before they can be traded ,the frequency of patterns is not much .but once a pattern is established properly the rewards can be huge. So is a trendline a pattern or something else ?? So better to trade using the most recurring and easily identifiable and profitable patterns ,trendline ?? , triangles , pennants etc etc and not bother about the entire gamut of patterns . You draw a pattern and u also draw a trendline . The gann and elliot waves and astrology i will leave aside There are many issues of relating to foundations , validity of these theories , substance and prediction which are highly debateable. and come to mathematical models which are the most frequently used ?? Why are mathematical models used so frequently ??? mathematics is an exact science , it is vast ,and has many aspects to it , and is robust ,one knows that one plus one cannot be three , There is a solution to almost anything using numbers one can draw any shape ,size and also predict the probable outcome of an event which is where i am interested because in the stock market what is going to happen in the future is what is of basic interest to make sound decisions . Another advantage is one can have more than one formulae or method to do a certain task and efficiency of all these tasks is very simple to calculate using past data and doing a walk forward .One can also do an optimisation which is not available in any other method which makes it even more robust .The main criteria of risk and rewards are easily adjusted according to ones condition so something called a calculated risk can easily be taken. The key to have better trading results using mathematical models is to have better indicators which are robust developed by using combinations of various mathematical and also statistical models . This not being an investment model but a trading model ,since here fundamentals dont really play that big a role in decision makeing .however in investing fundamentals also have a major share of consideration cause unless there is growth there cannot be price appreciation.

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