Focus on few basic setups

Most setups are rehash of same basic ideas like range breakouts, pullbacks, pivots, exhaustion. Same soda , different color, flavor and bottle. The real key is to understand the essence of a setup and then decide whether your current setup achieves the same thing.

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Understanding the maths of swing trading

Let us say you hold 20 positions of same size in your 100k account. Then each position becomes 5k. Let us say a stock you buy goes up 10% after entry , how much is it going to contribute to your overall profit.

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Market tells you a lot from the way breakouts work.

Market tells you a lot from the way breakouts work.

If breakouts do not have immediate follow through it indicates weak conviction. This is the case currently. Many breakouts fade by end of the day.

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Aim for orbital change in 2012

Making real progress in life or trading or relationship or career is like a orbit jumping process.
Your task is to jump from lower orbit level to next higher orbit level in terms of success. The more orbits you can jump better is life for you.

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Invest in a setup idea….

What do I mean when I say invest in a setup idea.  It means go in to significant detail of the setup idea. In order to make a setup work you need to really internalize the setup and make it part of you.  That means studying historically how the setup worked. Studding 1000, 5000, 10000 past instances of the setup ideas. And then from that derive leanings. That process is what is the key to building a long term edge in trading a setup.

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Jesse Livermore and setups

Jesse Livermore was one of the most successful speculator . During his lifetime, Livermore gained and lost several multi-million dollar fortunes. Most notably, he was worth $3 million and $100 million after the 1907 and 1929 market crashes, respectively. $100 million in 1929 was close to billion of today or more. He did not lose all his money in market, lot was lost in divorce and colorful lifestyle. He committed a suicide.

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