This is one of those podcasts' which should not just be listened to, but should instead be understood and assimilated. That's all there is to trading, esp. day trading.
When I started trading, esp. day trading, a whole lot of people told me, don't do it, it's the most risky form of trading. Then when I would ask them why is it more risky than say positional trading, they would not have convincing answers. That was a good starting point for me to build my conviction around the possibility of success in intraday time-frame.
Likewise, when I started studying technical analysis, I was always surprised by the way traders at large perceive it, to be a predictive tool. If there is a crossover buy or sell. But they never told me why should the price move further if there is a crossover. That uncertainty brought me to the fundamentals, i.e. time, price and probability.
So in my search for people who view the market price action in these fundamental ways, I chanced up on George Angell. You can search more about him and his books, but here I am going to post a selection of videos which he did I guess in the 90's. Its a part of a larger series and I would recommend you watch most of them.
What to look for and be mindful of when watching the videos?
1. Focus on the larger contexts and broad methods, not really the specifics.
2. His definition of "Scalping" is different from how I refer to the word. Over here I use the Tasty Trade definition. Keep that in mind as he may come across as if he is against scalping.
3. His methods are pretty relevant to NIFTY and its nature/market structure, hence good to back-test the ideas if you are serious about using them. His recommendations about order execution may not be relevant as NIFTY is far more liquid today than what ES/S&P would have been then.
The first video explains the fundamentals of price and time. You will understand the causes of price movements. Why you get pullbacks? Why does a breakout happen? Understanding price equilibrium? Side note - He looks at 1 min. bars. Notice his emphasis on "Time" - How long does it take to get from point A to B, something most people overlook.
The second video is on day trading - Here he talks about the advantages of day trading and a lot more. In fact there is a series of videos that he seems to have done on the topic of day trading, watch them all. Most of what he says is absolutely right.
Lastly, don't take anyones word (including mine) when it comes to what works and what doesn't. Think for yourself, apply your mind, try, experiment. At some point that "ah ha" would happen.
This is the my first blog post on the site and let me be overwhelmingly honest. I have no clue as to how its going to shape up. But one has to start somewhere and here it is.
I thought of writing the first post about something that the whole site is dedicated to i.e "Scalping", and more importantly as to - Why do I do what I do? in other words - Why do I Scalp?
To understand that, we will look at Scalping through three lenses.
Personality - I think this is one of the key aspects of trading success, in the sense one has to find a strategy or method that suits their personality. One element of my personality is Risk Aversion, yes before you make that obvious expression, let me explain. Here I am referring to "Overnight Risks". I just cannot sleep in peace with open positions. That's me. Even if its just two piddly lots, it weighs on me.
A related aspect is, scalping or day trading gives you the freedom to close your day, when you want to trade and also to choose how many days you would like to trade. And as I said earlier, when you are not in trade you not in trade - its as simple.
Opportunity Cost - Since I am a full time trader, if I do not make the best use of my time, its not fair. And Scalping is the only strategy for which there are opportunities practically every minute the market is open. So to make the best use of my presence in front of the screen, I scalp and scalping gives me the best relative yield for the time invested.
Developing Expertise - This one needs a bit of an explanation. When I reflect on all the other careers/jobs I've had in my life, one thing that made me leave those jobs was the fact that most of them had changing expectations from me. One year it was some work and the other year something else, at the end you become sort of, a jack of all trades. Perhaps all corporate jobs are like that. At end you do not feel a sense of satisfaction which you get from refining and improving on a specific skill. This is where I use to envy trades/professions where there is a constant use of the hand and head, where variables in the context of practice are well within your control. In the context of trading, the markets are not in your control but everything else that you do is indeed in your control. That I think is very critical for expertise development.
So what's all this got to do with Scalping? - Well the line of reasoning goes like this - I intuitively felt that I need to be working at something where I can constantly practice a skill, and refine it over a period of time + In an environment where a fair number of variables are in my control + and (Borrowing from Malcolm Gladwell's 10,000 hour rule) - I wanted to get past the 10,000 hour threshold as early as possible. - So as to develop expertise.
Since scalping gives you innumerable opportunities to practice your craft, and if you do practice and make use of the opportunities, I guess there are fair chances that you would be able to develop some sort of expertise in it. You are not dependent on the opportunity to show up. This for me is one of the biggest advantages.
Think about it. How many professions give you such a structured and predictable opportunity set to practice?
So that's pretty much for this post. More later.
Please Note - Each of the blog posts which are categorized as "BLOGCAST" would have an accompanying audio both on SoundCloud and YouTube