The Laws of Trading

The market sleepwalked through the day to end in the green. Luckily for me, the Nifty remained below 5703 and therefore my STT buy trigger was not hit. I remain short on the STT and long on the LTT.

The US market is shut for the Independence day celebrations and the rest of the world markets might as well have been shut. Not just India, even European markets have seen very little movement through the day.

I have been talking in the past about how the ability to do nothing is crucial for a traders success. There is one other thing a person needs to do in the path to becoming a good trader. And that one other thing is getting married! Yes, you read it correctly-getting married!. Before you stop reading further please let me explain this. You see, the one thing a trader really needs to do is to give up the need to be right. This need to be right is the genesis of all the ills that befall a trader. This need to be right causes the trader to book profits too soon. This need to be right takes the form of a fear of going wrong and makes traders let losses run until it is too late. This need to be right transforms into paralysis and prevents the trader from taking the trade which his system has thrown up. I could go on but you do get the essence of what I am saying.

Anybody who is married will tell you that the one thing marriage teaches you is that you can rarely be right. I have learnt to give up on this need to be right a long time ago. 20 years of marriage does help a lot in this! Hey now that I think about it, I can make this into a couple of laws of trading. 1] On the average, married traders are better than unmarried ones and 2] Greater the years of marriage better the trader or S is proportional to N where S is skill of the trader and N is number of years of being married.

I am sure that if I look out of the window, stare at the lake facing my house for some more time and let my creativity flow unhindered, I can come up with a couple of more laws. But then I am not too sure I will have a readership tomorrow! or a marriage!                                                          

Current Position STT Short   LTT Long     

STT: Cut Short and Go Long > 5703 (2/3 weight)                                  

LTT: Cut Long and Go short < 5561 (1/3 weight)