Follow up - of Avoiding Business Media (Internet, Print, TV)

I stumbled across this report of Barron`s,
while going through BARRON`S for US options market data.

read the article and also go through the comments of viewers.

Listen to everybody But take your own decision which should be free from other`s views.


Learn & njoy.

Avoid Media (its brainwashing us)

This I marked that how media spreads fear among the participants of stock market. I am noting here two incidents which happened over weekend of 19th march to 22nd march, but over two different continents. INDIA & USA.
Incident #1.
After closing markets, RBI declared minor increase in REPO RATES, now i am no banker to estimate the effect of this on banks but all the business channels & news sites went ga-ga over this that move will adversely affect the market and may trigger fall. Each and every analyst went on saying that this negative news.
Till Friday 19th march we were in strong but matured uptrend (which started from 11th feb 2010) in nifty – so it was but obiviouis for everybody to say that this move of RBI will trigger change of trend.
Bloomberg (on TV & website) even went on saying that US STOCKS DROP AS INDIA INCRESED RATES....
(i think this is the biggest blunder done by any business media)

http://www.livemint.com/2010/03/21212947/The-impact-of-policy-rate-hike.html

http://www.bloomberg.com/apps/news?pid=20601087&sid=aKsbvRrAaYTE

But to everybody’s surprise on Monday 22nd march 2010, market opened huge gap down,
Than it gave + ORB, than it never came back to that low levels,
And rallied to cover all the losses.
The point is never listen to business channels their views may not necessarily may true.

Incident #2

This one happened in US, from 23rd to 26th march,
While media was clearly negative over health care bill which was supposed to pass on Sunday 25th march 2010, all analyst and Jim Cramer of mad money was confidently saying that if this bill pass than short all stocks on Monday and bla-bla-bla....

http://celebrifi.com/gossip/Mad-Money-Recap-Cramer-Apologizes-for-Missing-the-Rally-Post-Healthcare-CAT-1956427.html

http://www.businessandmedia.org/articles/2010/20100319055725.aspx

That bill got passed on Sunday, and every media was advising to be short, like cnbc.com etc,
DOW rallied.
This again fulfilled my belief that this business channels knows nothing about markets.
They can only tell what’s happening, just like news channels, which reports what happened in past. & can`t foretell - so why listen to them?

Wrong Entry = way to loose money

On 17^th march based on screen watching, I saw a breakout and went long in BN fut. at 9190., but it was in march series, but till 25^th march when nothing happened, I became impatient,

And thought of getting out, but i remembered that i started following system of mSAR religiously, so kept going, but it was expiry so i have to rollover, and I sold BN fut. at 9199, at around 11am. But at that time April fut. was trading at 9210, 10 pts premium than March fut.... now. Let me remind –some flashback of this march-April rollover drama.

Flashback,

After i took long position in march series on 17^th, around 19^th march , i thought of rollover and checked April fut. prices, it was trading at 15 pts discount to march fut price, so i thought its a good deal, without doing anything i m getting  15 points, but don’t know why i didn’t do it at that time thinking of that march fut. will make new high, (read ..Greed)

Time went on & expiry came, and today, its April fut. which is at 10 pts premium, so again without doing anything i lost that 15 pts + 10 = 25 pts..... I wanted to bang my head in wall.

So, i covered march fut & waited for April to cool down a bit, But BN has another plans and it blasted from that level, which it didn’t came again till I’m writing this (30.03.10)

After it went 9588, i decided to throw the towel in & join the party, but i forget that i was entering into trade @ worst time. i.e. on top most lvl , on highest high made by BN.

I bought at 9580 April fut. & it closed at 9435  on the day i bought i.e. at 29.03.10

Today it went till 9598, and closed at 9490. ( -90 pts)

Now system`s mSAR is at  9266, and i had kept 200 pts of S.L. lets c, which one hits.

Update: i sold that on 9455, fearing further loss & 100 pts stop loss hit , on 30^th march 2010.

Update #2 : it rallied back to 9550 on 31^st march.2010.

Lessons Learnt.

1)      Never indulge in greed of 5-20 pts when playing for Big Shots.

2)      Never enter the trade at top channel / near recent high

3)      Always tweak entries near SL/mSAR, so that optimum risk/reward is achieved.

4)      Read today at jagmohanji`s blog.  

Difference between Pro & amateur for Patience

            Amateur= only while losing

            Pro= when profiting (till exit signal)