Category Archives: Long-Term Trend

Wealth n point m

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Hey.

I like doing stuff …

… myself.

Study.

Research.

Ideas.

Thought process.

System generation.

Edge development.

Ensemble implementation.

Start to finish.

Complete independence in thought process …

… sets up ‘pioneering’ output.

Gets lonely though.

I’m not afraid of silence, or being alone where I’m working. Still, long spells of professional growth are very…

…alone, in my lines of work…

… which are all computer based.

There’s no talking involved.

Some processes take half a day to develop upon the back of to and fro typalogue with the AI.

During market hours, there’s no talking either. Just the self, the terminal and markets. AI on the side.

Pre-market prep — post-market analysis — astrological analysis — language learning — how do I solve this one?

Wait a minute, language learning, there’s something there.

Ya, found it.

Language apps have a speak module. One can practice speaking a foreign language with the app’s AI.

There’s more. Chanting. Did I mention that I’m an amateur Nichiren Buddhist? We chant. Out aloud. Anything spoken is an outlet. For me. Buddhist practice encompasses visiting people, or just sheer calling up someone to see how they are doing. Creation of good causes in life is gold.

Lot of near ones like to talk – to me.

They like my view on things.

Need to take care not to intimidate.

Talking at the wave-length of the talking partner – that’s been a huge lesson for me.

And, that’s not the biggest lesson yet.

There are times when let’s say one is A+ in something, and one is thrown out into a field where one is E-.

Imagine what goes on in one’s mind.

When a hero turns to zero, it’s only because the mind is not comprehending the situation.

We should know our value.

Allowing one’s environment to dictate our self-worth is lesson not learnt.

Knowing one’s self-worth oneself is.

When your immediate environment doesn’t talk to you most of the time, or has some hangups with your personality, or for some reason just doesn’t like you, perhaps it’s not on you. Let’s not exclude that option.

What then? Sink? Or evolve?

Evolve.

To a point where understanding of the exact nature of immediate environment leads one to flip it just on the sheer basis of one’s behaviour.

Our behaviour patterns are what we carry forward, while other forms of wealth are left behind.

Full

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Hey.

Functioning…

…full…

…I believe.

Full feels good.

What does it mean?

Completeness.

No-regrets feeling.

All holes jammed…

…with activity, some, hopefully ample, relaxation / recuperation thrown in.

That pivot vibe.

Emitting…

…I believe.

Need to maintain this trajectory. Milk it to the hilt.

It’s taken my environment everything, …

…and then some, …

… to put me here.

Sacrifice.

Familial.

Proximal.

Emotional.

This moment is coming at a huge cost.

Need to make it count, to balance the entire equation, …

… and then some.

Though I’ll spare you familial, hobby, emotional, travel and such details, let’s cast a glance at the work-loop.

Long-term wealth-creation project on auto-pilot. Specialization. Equity. Listed. Only. Liquidity upon requirement. Hands on but hands off. In my hands. No third parties in between.

Monthly income-generation project active. Four-legged option strategies. On stocks. On indices. High risk high reward. Risk attenuation. Distractor. Keeps attention away from long-term wealth-creation project. Income is a bonus. Time requirement three to four hours a day. Keeps one busy. Learning curve enhancement. Options make one stay sharp.

Work from – anywhere – of course, anything less would be a negative – need a net connection though.

Work between market open and market close – on options.

Long-term equity transactions only on weekends, implemented through GTTs. Funding of account wrt GTTs only on Mondays, before market hours, taking into consideration GTT fill requirements.

Interesting symbiosis between these two projects, feeding off each other. Wealth project needs minimal fiddling. Income project sees to that by distracting. Income project is defined such that the damage it can cause is bearable, and even if it doesn’t generate income, i.e. even if it is loss-making, it is fulfilling its main purpose of keeping the wealth project intact and devoid of fiddling, by keeping one’s attention focused on itself.

I tried getting options right for twenty years, unsuccessfully.

I think I have something now.

Workable.

Perhaps…

…successful.

Let’s see. It’s very early days yet. I feel it though.

Oh, yes, and – work with …

… AI.

Handy, highly intelligent assistant always on call. Very low cost, yet. Very sharp. Catches mistakes in complex screenshots fast. Options are complex. They need pinpointed calculations, multiple times a day. They need context for such calculations. If the assistant catches the context in a screenshot and remembers it, and is great at complicated math, then he or she can spit out the required numbers on call, and for options that’s manna from heaven. Since…

… one doesn’t have the bandwidth to look back, feed back in, re-calculate and re-analyze fifty times a day…

… and especially since the assistant is diligent, industrious and willing to go any legit extra mile to make one’s project a success.

Thus, have AI, will step out into the — whatever you may wish to call it — Bronx, prairie, savannah, battle-field.

The AI thing has come at a cost. Not monetary, really. That’s a pittance, seeing the work-load it’s tugging.

Personal time.

Patience.

Attenuation.

Terminal scripts.

Ya, Pythons handle market and strategic diagnostic spitouts, in the background, at one’s disposal upon commands, and I did not need to spend time, effort and money learning Python. I just needed to tell the AI what I wanted, again and again, and keep fine-tuning till I got it, over some months.

Earlier, a major option strategic system had failed for me. Two months of intense development on AI. Failing in each of eight approaches through different variables used. The only victory was the recognition, by the AI, and then by myself, that this is a failure. Then, …

…I reversed the system.

There’s something there.

Before I tell you more about that, I’ll let it play out somewhat fully.

Dynamics of a Right Call

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India is in a long-term bull market.

Sure, there will be corrections.

We can easily have a big-time correction, but still be in the long-term bull market.

Putting things in a twenty year perspective, 2008 hasn’t done away with direction.

Sure, ideally one needed to be equity – light by Jan 14, 2008, which most of us weren’t.

Question is, will be be relatively equity-lighter on Jan 14, 2021?

Yeah, I will be.

Lighter.

That’s about it.

Won’t be selling a single share of my core-portfolio.

However, hopefully, will have sold everything else before an interim market peak.

You see, for every right call, we make umpteen wrong calls.

These are the ones that we discard on interim market highs.

We don’t discard core-portfolio inhabitants.

These we allow to compound into multi-baggers.

It’s OK to make wrong calls.

Without these, we won’t get to make the right ones.

We won’t make the next mistakes though.

We won’t discard wrong calls without it being an interim market high.

Also, we won’t discard a right call as long as we keep feeling it’s a right call.

The best calls remain right…

… like…

… almost forever.

We’re talking Buffet and Coke.

Or, for example, RJ and Titan.

List goes on.

Point is, when we’ve made the right call, we need to follow up with right actions that allow maximum mileage.

Allowance for compounding.

Increase of position upon interim lows.

Patience.

No trigger-fingers.

You get the drift.

Over time, then, we are left with right calls which have developed into multi-baggers. Wrong calls have been discarded over many interim cycles.

The multi-baggers in our folio are, at this time, generating enough dividend to sustain us.

This is where we want to be.

It’s OK to dream.

Without the right dreams, we won’t arrive at the sweet-spot mentioned above.

Happy long-term investing! 🙂

Dealing with Noise…the Old-Fashioned Way

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There’s a sure-shot way to deal with noise…

…just shut your ears. 

Yeah, the best ideas in the world are – simple. 

Let’s not complicate things, ok?

So, what kinda noise are we talking about here?

We’re not talking about audio, you got that right…!

The concept is related, though. 

If you’re charting, you’ve dealt with noise. 

Yeah, we’re talking about minute to minute, hour to hour or day to day fluctuations in a chart of any underlying.

Markets fluctuate. 

While discussing noise, we are pointing towards relatively small fluctuations which generally don’t affect the long-term trend. 

However, noise has the capability of deceiving our minds into believing that the long-term trend is turning, or is over. 

Don’t let noise fool you.

When has the long-term trend changed?

When the chart proves it to you through pre-defined fashion. That’s it. You don’t let noise to get you to believe that the long-term trend has changed, or is changing. Ever. 

You believe your chart. 

Moving averages crossing over? Support broken? Resistance pierced? Trend-line shattered? ADX below 15? Fine, fine, FINE.

Take your pick. You have many avenues giving decent signals that the long-term trend has changed or is changing. 

How about eyeballing? Works for some. Like I said, let’s keep this simple. 

So let’s get noise out of the way. 

Random numbers generate trends – you knew that, right?

You don’t need more. 

Once you’ve identified a trend, that’s your cue to latch on to it. 

We’re not talking about predicting here. We don’t need to predict. We just need to identify a trend, and latch on. That’s all. No predictions. Not required. 

From this point on, two things can happen.

Further random numbers deepen the trend you’ve latched on to. You make money. Good. 

Or, the next set of random numbers make your trade go against you, and your stop gets hit. 

If your stop is getting hit, please let it get hit. Even that qualifies as a good trade. 

You move on to the next trade setup, without even blinking. 

What you’re not doing is letting noise throw you out of the trade by deceiving your mind. 

So, here’s what you do. 

You’ve id’d your trend. You’ve latched on. Your stop is in place. Now, don’t look at your trade. 

Till when?

That’s your call. 

Don’t look at your trade till you’ve decided not to look at it. For the day-trader, this could be a couple of hours. For the positional trader, it could be days, or weeks. 

By not looking, you won’t let noise deceive you. 

If the trend doesn’t deepen, or goes against you, you lose the risked small amount. 

Just remember one thing. 

A loss has immense informational value. It teaches you about market behaviour patterns. It also highlights your trading errors. Many times, losses occur without any mistakes made by you. 

That’s the nature of trading. 

Ultimately, if the trend deepens, you’ll have made good money, and can then further manage your trade after the stipulated period of not looking.

This is the sweet spot.

This is where you want to be, again, and again and again.

Sitting on a large profit gives you room to play for more profit by lifting your stop and your target simultaneously.

To reach this sweet spot again, and again and again, you have to position yourself out there and appropriately, again, and again and again. 

This is also the nature of trading.

Wishing you happy and lucrative trading!

🙂

Charting Charting Charting

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Why don’t you just…

… trade what you see?

Trade the chart, dammit.

Not the level.

Not the expectancy of a turnaround.

And, although I still do this because it gives me a kick, why do we even trade corrections?

Why can’t we just trade the sheer chart?

Every chart is either going up, down or nowhere.

So it’s pretty obvio, that the first step would be to…

… to what?

… to decide where the chart is going.

Again, it should be pretty obvio, that if a chart is going nowhere, then you are doing… what?

Are you trading such a chart?

NO!

Wait for such a chart to break out in one particular direction.

Wait for the LTT to turn in this direction.

Then trade this chart. Not before.

Yeah, LTT stands for long-term trend.

Yeah, we’ve befriended the LTT so much, that we have an abbreviation going for it…

Once you’ve sorted out the direction, look for an entry setup.

Be patient.

If the entry setup hasn’t formed yet, wait for it. If you can’t stop your twiddling fingers from doing something, feed in a trigger entry in case of a hypothetical setup formation within the next few hours / days, if your trading station allows this.

There’s no up or down anymore, to be honest. You are going where the chart is going, period.

You are also not asking the stooopidest question of them all…

… you guessed it… “Did the sensory index go up, or down?”

Just forget about the sensory index, ok?

I mean, we’re so done with sensory indices in this space.

Why?

DLF could tank 20 bucks on a day the Sensex goes up. Dow Jones could be down 50 points, but Pfizer could just spring into a stellar upwards move. Why should we have lost the short-side opportunity that DLF hypothetically gave, or the long-side opportunity that Pfizer could present, for example? We will do exactly that, i.e. lose the opportunity, if our focus is on the sensory index.

Focus on the underlying.

To be more precise, focus on the chart of the underlying.

Happy trading.

🙂