One of the most important thing in the market: Never take anything personal and never get emotional with anything. A good trade does not make you smart and a bad trade does not make you an idiot. In the market - Luck plays a big role and sometimes you can do all the right things and still get bad results, and a bad result even in good market.
Let me share one example: Persistent Systems
Persistent Systems checked all the boxes that one looks for before any stock makes a big move.
Tick check: A stock in Bull Market
Tick check: Stock formed a Big Bullish Base for another big move
Tick check: Stock making a momentum move after base formation with institutional endorsement behind it
CLSA India Strategy: Cut 3 Percentage Point From Infosys & Add To Persistent
— CNBC-TV18 (@CNBCTV18Live) April 27, 2016
That's not all - the stock makes a pullback move - tests the support of 200 dma - making it compelling text book opportunity.
BUT WHAT'S THE END RESULT: A stock breaking all the support and Falling in a rising market
Persistent Systems trade as per the "Science of Stock Price Action" theory has failed. It can still be a good stock but remember when one makes a trade, one follows a certain methodology and ideally one should stick to that. One of the big mistakes people make: they buy for one reason and hold for a totally different reason.
Always remember, never seek a perfect system in trading because there is no perfect system. One has to learn how to take good with the bad. In market - the focus has to be on the process. All one needs to ask: What did I do wrong while following the process?
Science of Stock Price Action
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Disclaimer – The state of the market notes is Deepak’s perspective on the market. The column is purely for educational purpose. Nothing contained herein is a solicitation to trade or a recommendation of a specific trade. By reading this publication you agree to make no trade relying in whole or in part on the comments of the writers