EWATSS® Elliott Wave Analysis and Trade Selection Trading System
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- It is always the Investor who has to grow first before his investments can grow.
- It depends on how much time, effort, energy you are willing to devote to stock trading/investing.
- If you do not have such time, effort, energy, you may choose the mutual funds route to participate in the stock markets.
- If you have such time, effort, energy, passionately immerse yourself in study and learning of the stock analysis methods, acquire and practice best tools therefor and preferably also get a mentor who is ahead of you on this path.
- It depends solely on the Trader/Investor himself alone.
- Just as there are good / average / poor doctors / engineers / CAs / sportsmen / businessmen / students / persons in any field, similarly there are good / average / poor Traders/Investors.
- If you are a good Trader/Investor and are also financially wise, you have a great chance to be rich.
- Our best short advice : “Don’t be average”
- If you are an average Trader/Investor, you are bound to lose money in the markets.
- We want you to passionately and relentlessly educate yourself and practice to become a “Sophisticated Trader/Investor” - who makes money when markets go up and also when markets go down.
- There is no guaranteed performance in the stock market. In life also, there are no guarantees, only opportunities.
- Actually Intraday Trading does not work consistently.
- Positional Trading is the best winning strategy
- Intraday Trading can be highly volatile and not suggested as probability of consistent success is low.
- One should also not expect profit on every day of intra day trading.
- Hence intra-day has very low probability of consistent success to serve as a profitable profession for long term survival.
- Swing Trading has better probability of consistent success to serve as a profitable profession for long term survival provided you can pursue your development along the lines suggested below over a long period.
- Have sound Method to trade only when markets are trending and avoid corrective phases of the market like cancer;
- Have sound Money Management policy;
- Have sound Mind Management;
- Have some decent initial capital to trade with;
- Treat trading as your serious business and not just by the way time pass or hobby or as a side income source; you must invest time, effort, energy into it like you would into any business where you want to succeed;
- If you have such time, effort, energy, passionately immerse yourself in study and learning of the stock analysis methods, acquire and practice best tools therefor (available for purchase in the market) and preferably also get a mentor who is ahead of you on this path;
- Begin with Fundamental Analysis to become broadly familiar; then graduate to focus intensively and passionately on Technical Analysis. Money is made or lost on Price Charts -for which Technical Analysis will be your main critical tool;
- Focus on trading longer term charts not less than Daily time-frame charts;
- Develop a sound Strategy, Method and Trading Plan you are psychologically comfortable with at your soul level and believe in; and much preferably get these converted into a sophisticated computerised algorithm to throw up the stock recommendations based purely on analysis of combination of patterns, price, fractal nature of markets, momentum, sentiment, directional congruence on multiple time frames etc.;
- Have no ego to hang on to trades going against you as suggested by your sound Method;
- Have another person (i.e. other than you the trader) be in-charge of actually executing exits (irrespective of whether on profit or loss) as and when and as soon as suggested by your sound Method – to avoid your own emotions, doubts, ego, love for a particular trade etc. coming into the way of such exits. You may exit the stock you have bought if the momentum which was pushing up the stock prices, has waned away. There are technical methods to determine this;
- Have tons of patience, the hallmark of all top Traders/Investors - as per your sound Mind Management policy;
- Cut your losses when suggested by your sound Method;
- Take good approach to booking profits as suggested by your sound Method;
- Be aware that even the best traders know that even a 50% Win / Loss ratio of trades is good enough to achieve consistent profits if the Average Profit / Average Loss ratio of trades is good enough, say, more than 3:1;
- Always have patience to wait for best trades to come your way and stay in them till your sound Method suggests exit options;
- Add on to your trades in profit in a pyramidical way while keeping total risk within tolerable limits - as per your sound Money Management policy;
- Re-invest profits for compounding affect on your investment portfolio;
- Do not add on to your trades still showing loss;
- Do not get swayed by external non-market factors like news, biases, tips, noisy channels etc.;
- Do not do short term intra day trading;
- You should calculate Expectancy of your trading strategy by learning about this key factor at Expectancy.
- If your trading strategy has a Positive Expectancy, you may have landed on a decent stock trading strategy and you may make money over a number of trades over a period of time provided all your trades and position sizes are exactly as per the rules of your strategy.
- Always accept market alone as supreme guide to your trading decisions and learn to ‘dance with the market’ and ‘want what market wants and not what you want’;
- Keep learning, practising and improving as a trader.
Remember Rakesh Jhunjhunwala’s Ten Commandments of Investing:-
- “Be an optimist! The necessary quality for investing success.
- Expect a realistic return. Balance fear and greed.
- Caveat emptor. Never forget this four letter word : R-I-S-K.
- Invest on broad parameters and the larger picture. Make it an act of wisdom not intelligence.
- Be disciplined. Have a game plan.
- Be flexible. For investing is always in the realms of possibilities.
- Contrarian investing. Not a rule, not ruled out.
- Its important what you buy. It is more important at what price you buy.
- Have conviction. Be patient. Your patience may be tested, but your conviction will be rewarded.
- Make exit an independent decision, not driven by profit or loss.”
Best wishes.
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