Tight markets provide less opportunity.

The broad markets have gone tight with a prolonged sideways pattern in their moves. Nifty is caught in a non-trending zone since 7th March 2012. Along with it many front line stocks too have gone sideways providing less opportunities for traders to make money in the markets now. Whipsaw trades have increased and even stocks that have strong trends have began to fail.

How to trade in such turbulent times? It is these type of situations that puts a trader into second guessing his system. They begin to optimize the trading system and finally end up creating something which they know least. By the time they are finished with tweaking, markets begin to move in a different direction and they loose again. Instead, staying with a tested system, trading its signals with minimum risk will enable any trader to keep their trading accounts intact for the next move to come.

Loses in trading are expenses as in any business. Staying with the system by taking all its generated calls, building a good diversified portfolio is another way of minimizing losses. In the long run the equity curve will have a steady growth. Instead if we jump between systems, it will show very poorly on our equity curves.  When we take a look at them, we will our min playing truant with our capital. Every trade that comes have two objectives in them, one is the trade closing with a profit and the other is learning from its experience. A trader may or may not have the first option, but learning experience is sure in every trade. If we miss to learn from our own experience, the act becomes a waste of effort.

This is where record keeping helps a lot. If you maintain a record of all the trades that we execute, over a period you will have a collection of trades which gives you knowledge, only you can get exclusively. By looking back and learning from your experience you can identify the mistakes committed or some patterns which are not so good to trade. In the next trades if you don't repeat the same mistakes or pass on trades that have losing patterns, the benefits derived from it is enormous. Over a period if you continue with discipline, you will become a seasoned trader.