.: Technical view by Nooresh on Sensex/Stocks/Commodities

Monday, 21 July 2014

Technical view by Nooresh on Sensex/Stocks/Commodities

The thrill of Day Trading Gains- Instant Gratification

Posted: 20 Jul 2014 11:40 PM PDT

One of the biggest things which attracts a lot of people to Day Trading is the thrill and chills it gives to the trader more than the absolute returns over a period of time.

We have over the years realized that purely day trading needs a lot of emotional temperament apart from analysis which is extremely tough. ( We do not have an intra day trading calls service. )

But still when we get a short term trade turn into a 8% intra day gains its much more thrilling that other trades.

Lets take an example.Today in the morning we initiated this trade.

10:27:07 AM

nooresh merani: Buy hercules above 148 stoploss 142 targets 160-165

10:34:30 AM

nooresh merani: Book half Hercules at 156-157

10:41:54 AM

nooresh merani: Book fully Hercules ar 160-161

The entire trade lasted for around 15 minutes for a gain of 7-8% from initiated price.

Also it does not bother much that the stock is up another 10 bucks after booking. Stock on upper circuit at Rs 172:)

This is the Problem of Instant Gratification

The technical reasons are below but it does not give a time frame for the targets.

Hercules Hoists – Technical Breakout above 148 and boom on 20% circuit.

But this excited us more than a bigger conviction trade we took on a stock like HCL Infosys from 58 to 68 in 4-5 days. ( although we booked early yet again of instant gratification and we tend to give exits early and let stock price hit higher levels also post the update to provide executable trades to clients)

Jul 11, 2014

2:36:04 PM

nooresh merani: Strong buy for Delivery Buy HCL Infosys at 58-59 ad on dips to 55 sl 53 tg 75

Jul 16, 2014

2:51:34 PM

nooresh merani: Book fully HCL-INSYS at 68-69

Lets look at the reasons. ( Disclosure – HCL Infosys has been a reco in Big Value 1 at 37/44 and even at 65 in Big Value 2.0) Continue to like it for next 1-2 years view.

HCL Infosys – 20% bounce from support levels

-> Strong uptrend with nice higher tops and higher bottoms.

-> Retest of previous breakout point as well as trendline support made it a good risk-reward entry point.

-> But you can never put a time approximation to how many days or weeks or months it would take the stock to do the target.

-> So this was thought of as a few weeks trade ended up doing targets in 4 sessions.

In both the above instances we made a lot more money on HCL Infosys than on Hercules Hoists and were much more convinced on the above but its more gratifying when a short term trade turns into a day trade. ( partly because we dont focus on day trading )

This is how our psychology is today.

The psychological concept of Instant Gratification refers to the idea that humans like to have what they want right now; not later and they don’t want to wait. You will notice that products and services that promise instant push-button results tend to do well. Think Aspirin for pain and McDonalds for fast food. Humans are mostly short term and Instant Gratification orientated because if you value immediate results you stay alive. It’s an Evolutionary advantage that has played out over a period of millions of years and was very valuable when we were living in different times.

This is what is being sold to us

Pizza in 30 minutes

Flipkart same day delivery

Home Delivery

Lose weight in 7 days etc etc

We need a solution for this as traders/investors and even as consumers !

Luckily in markets instant gratification can only lead to loss of opportunity and not losing money but as individuals when we spend money on instant gratification it is loss!!

Another video which i liked and would highly recommend to watch