Capitalmind
Capitalmind
Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial
Commentary

What I learnt at Traders Carnival

I presented at the Traders Carnival on Friday. Lots of learning, from some great traders present and overall, the impact to me has been of a yearning to return to a discipline that I love. The last few years have been a realization that trading requires patience and money; and while I can do something about one, I can’t easily fix the other.

So I had decided to work the money angle out first; you have to have enough in the bank to support your family for a long time, and then have capital left over for trading. I know it’s conservative and not a story of great sacrifice and all that, but I’m not out here to make a great story. I couldn’t care less if people talk about me after I die. (I’ll be dead anyway) What I care about is how I live, and if my story isn’t all that exciting, so be it.

But I digress.

The takeaways from the conference.

A great 3×5 strategy. Vish and Shiva presented a strategy they use – created by Vish and modified by Shiva. Vish created the original system and Shiva has modified it for his needs.

The system is an EMA (Exponential Moving Average) crossover strategy. Buy when the 3 EMA crosses over the 5 EMA and sell on the other way around. It always maintains a position, and the 3 and 5 EMAs tend to cross over fairly fast so you get about two-three trades a month.

These are pretty interesting strategies and Vish has been trading it on the Nifty and BankNifty full time. I’ve not tested this but they say the drawdown is about 30% or so (300 points on a Nifty for which you might allocate 50K as capital). I need to test this some more.

The 34-ema strategy. "Speculator" Naveen demonstrated a 34 EMA strategy which involves a retracement to the 34 EMA, a check on RSI(5 or 8) and then using swing pivots as stop losses with short term trades. Very interesting, and definitely worthy of attention. I don’t think this will be easy to automate or back-test though.

Prashant spoke about Technical Analysis, the history and even included a great book that I’m reading: Extraordinary Popular Delusions and the Madness of Crowds.

Krishna Kumar, who writes at MappingMarkets, had a great session about using disciplined trading and working with probabilities.

Kora Reddy (stocksiq.in) spoke of back-testing and how to use statistics to test and validate strategies.

I missed the sessions by Sriram and Abhijit, both great traders and with whom I constantly interact on Twitter. I also missed Vishal Malkan’s session.

Here are the slides that I presented.

 

Macro and markets from Deepak Shenoy

And of course, it was great to meet all of those that I speak with either on the comments on this blog or on twitter – indeed an honour.Thanks to @ra1nb0w (DJ) for organizing this event. Looking forward to more such meets!

The other thing I’ve realized is that I need to spend more time analyzing stocks and writing on the blog. I’ve become a little too macro, a little too detached, perhaps. So more on the way!