Six Habits of Highly Effective Traders

As promised, I started writing my book titled Six Habits of Highly Effective Traders. (If you do not want to read about my incredible insights and only want to know about my trading position then you can skip all this and go straight to the last para) My creative juices were flowing and I managed to type out the Headings of all the six chapters on the six habits. While traders might be forgiven for thinking that developing systems, developing information networks, developing screen reading skills and understanding money management or even something more exotic like understanding Elliot waves, Gann angles and astrology is the key to trading success, all their efforts will come to nought unless they understand and put into practice the six habits that I have discovered. Given below for the first time ever-and remember this is given for free- are the Six Habits of Highly Effective Traders henceforth immortalised as SHHET.

1] Watch CNBC, ET Now or any other business channel with great attention.

2] Meditate for 30 minutes in the morning and exercise daily without exception.

3] Improve your internet skills and online... get a fast wireless broadband.

4] Write a book or teach about trading.

5] Find a group activity which does not involve the market.

6] Learn effective communication skills. Beef up your personality.

Today, I will elaborate on the first chapter of my book. Watch CNBC, ET Now or any other business channel with great attention. But remember to mute the TV. You really do not want to hear all the tripe that is dished out in the name of news. The anchors are another matter altogether and most of them are very pleasing to the eye. You can find your own favorite to ogle at and pass time. Plus the ticker on the side will give you live updates on most world indices and commodities which is more than enough to keep you abreast of any developments. If there is something of any significance you can be certain that they will be flashed in bold letters as Breaking News.

If you are a system trader like me, then you really do not even need to know the Breaking News to trade but it does help to sound knowledgeable. However much you try and convince colleagues, friends, family members and clients that you are a system trader and do not need to know what is happening in the market to trade, they are not going to believe you. They will just assume that you have an attitude and that you are deliberately hiding important information from them which would have allowed them to make a lot of money if only you shared it with them. Of course even without knowing the various happenings in the market one could resort to ones imagination to talk knowledgeably about the market, but in case you are lazy like me and do not want to tax your creativity and at the same time avoid all unpleasantness then this first habit will come in handy.

Finally, if you trade other clients money then this first habit will be a lifesaver. It will also lend itself into the sixth habit about which I will be talking 5 days from now. All clients, however knowledgeable, want the comfort that they have entrusted their hard earned money to a trader who has all his facts right. Clients want to entrust money to different traders but they do not want their traders to be too different or eccentric. You really do not want to tell a client that you did not know that Infosys or Reliance had announced its results during the day. This habit of ogling at the TV anchors will please you and at the same time will save you from much embarrassment. Quite an incredible mix and as they say in Hindi "Sone pe Suhaga".

Tomorrow I shall elaborate on the second habit. After this interesting discussion on the first habit, I have to tell you that I am now 50% short on the Nifty (i.e. 50% of the maximum exposure allowed by MAPE). I will cut my short and go flat if Nifty trades above 4962. I will add to my short position and go 100% of my exposure short if Nifty trades below 4905.