The DECMA 2018 experience

MY NOTES FROM DECMA 2018 (10-11^th March 2018)

My guidelines and expectations from DECMA ‘18

When I decided to go for DECMA ’18, I was clear about one thing. I have a fully functional trading system which I have worked very hard to tailor to my specifics and my personal goals and I am not going to be influenced by any other system that I may come across during the presentations there, No matter how tempting it may be. My goal for attending this conference was to be able to “keep myself open” to various techniques /ideas and use them * IF and ONLY IF *it adds value to my own system or helps fine tune it better………The goal was also to be able to listen to successful traders, investors, interact with them , learn from their mistakes and enrich your own perspective about the market….And last but not the least, make new friends as we ride this behemoth called the markets…

Keeping the above context in mind, here are my personal learnings from each of these sessions. Bear in mind, that these are essentially notes to myself and therefore although I intend to share this with a wider group, this is me talking to myself. This is less about content and more about my personal takeaways based on my past experiences/personality. The actual content, I believe will be shared by the organizers in due course.

Session 1: Heiken Ashi: The noiseless candle stick (Brijesh Bhatia)

·         Have studied, understood and tested it in the past.

·         It is very effective for trend following systems and helps reduce noise (rather I would say candle fake outs)

·         But have not been comfortable with the logical stops it provides for the time zones I trade in…….Found that to be beyond my comfort zone.

·         So while it cuts out the short term noise (1-2 days) and allows you to stay in the trend longer, the stop losses also are bigger………

·         The technique explained by Brijesh was very good but for the nature of trading and timeframes I use, data has shown me that it does not suit my risk appetite.

·         Thanks Brijesh for showing your technique of using it. Maybe at a later date, I can touch base with Brijesh and seek some advise on any possible ways to make it more suitable for my risk appetite.

Session 2: Multibagger Stocks- Techno Funda analysis (Zafar Shaikh)

·         Gels with our philosophy of buy good stocks cheap using technical analysis.

·         Interesting method of using MA (high or low) for the range instead of the standard close.. Have not seen it before. Will look to evaluate it as a good indication of moving out of a big time frame range……

·         Charts used were quarterly whereas I have traditionally looked at monthly charts….Will have to see how many of my target acquisitions have been there long enough for sufficient quarterly data on charts.

·         Something to check, evaluate and consider for long term investing.

·         Benner fib cycle is an interesting read……..only read for knowledge…nothing to apply in my opinion ……but will re-consider if reading proves me wrong.

·         Thanks Zafar for great technique of getting into multibaggers early

Session 3: Junaid Shaikh (HPLR Trading)

·         As per Junaid, Ztrend is a modified version of heiken Ashi.

·         Junaid shared a good logical system using Ztrend and Stochastic

·         Will read and understand the differences between Heiken Ashi and Ztrend. Will see if it helps with the personal drawbacks I saw with Heiken Ashi.

·         Zunaid also specifically stressed on the need to stick to the system even during bad times but managing risk via position sizing…

·         Thanks Zunaid for the introduction to Ztrend which I hadn’t known about before.

Session 4: More on RSI (Mukta Dhamankar)

·         Mostly to do with how RSI works. OB/OS concepts, divergences, hidden divergences.

·         RSI is a key ingredient of my trading hence have done a lot of research/study/backtest/trade it extensively so nothing new in this session

·         Generally agreed with Mukta’s application of RSI but feel RSI is such a tool where lot of fine tuning skill and multi time frame analysis is needed.

·         Personally happy with my use of RSI and its much deeper application with Wycoff theories.  Feel it’s a very powerful tool and very comfortable with it being a very essential part of my system.

·         Thanks Mukta for the review of RSI

Session 5: Spotting Multibagger stocks (D Prasad)

·         My personal knowledge of fundamentals is very weak..its an area which I need to work on.

·         So I too use technicals to enter good stocks (generally once chased by several funds managers, top investment gurus etc)

·         Finding resonance with D Prasad’s technique of using RSI except that we prefer to enter below RSI 50 levels but after seeing a rounding pattern developing after an accumulation cycle on big time frame charts and RSI beginning to move upwards. (Basically incorporating Wycoff theories, RSI and Long term demand/supply levels)

·         Thanks D Prasad for your inputs for a couple of additional pointers I can use (especially use of Ichimoku)

Session 6 : Vaida Bajar ni Chavi – Kanti Kaka patterns ( Mehul Bosamia)

·         Now this was something I had never heard before

·         Made for a fascinating story on how a gandhian studied and interpreted the market as deeply as he did way back in the 70’s

·         The rules for each of the patterns seemed to be precise and the names of patterns even more interesting

·         Some of the patterns were Dhruv, Gulant, Habess, Gangotri, Uchalan, Aariya.

·         Essentially this seemed to be similar to candlestick patterns with Gujrati names but each of the patterns had specific rules of application and usage….

·         Would love to read more about it when the presentations are mailed.

·         A special thanks to Mehul Bosamia for sharing and bringing such valuable literature to the forefront.

Session 7: Money management techniques (Vivek Gadodia)

·         This session was a positive reinforcement of my own philosophy of trading the market which is to focus on capital protection and the money will flow.

·         It is a very very important aspect (maybe even the most important aspect) as stressed on by Vivek. Very satisfied with my personal focus in that area and feel good about it. Feels like you are on the right track……few ticks on my personal checklist to stay ahead of the game….

·         Defend and then attack being the overriding message here….

·         Message taken and cast in stone….

·         Thanks Vivek for the reinforcement of good practices.

Session 8:  Evolution of a trader (Sriram Balasubramaniam)

·         Fascinating story on his personal journey on the stock markets, a roller coaster ride

·         Overriding theme was to make sure you take risk but to take risks that you can “AFFORD” to take, ones that will allow you to sleep peacefully at night.

·         Thanks Sriram for sharing your inspiring story with huge life lessons!!!

Session 9: Pros and cons of full time trading (Madan Kumar)

·         A very very positive reinforcement of everything, I (and my partners) have been aware of and have been working very hard to ensure we stay on path

·         Resonated very closely with our own trials and tribulations (including awkward family situations) as we started this journey

·         Listening to Madan, felt a sense of re-assurance that we are on the right track and focused on doing the right things.

·         System, discipline, blind execution being the corner stone for being successful consistently.

·         Felt great about the fact that we seem to be having a lot of ticks on our personal checklist for being a successful trader and Madan exemplifies the results we hope to achieve in a few years by staying focused on continuing to do the right things.

·         Felt great that our thinking on the pros and cons, our philosophy and our approach to trading as a full-time profession resonated with that of Madan’s.

·         Our market hours normally includes watching TV series and a game of squash, counter strikes or time in the gym (as a way to stay away from the screen and not bother with the noise) ….Almost a déjà vu feeling when Madan spoke about the same.

·         Also a huge resonance with “Sitting is the new smoking” thinking…..Trading makes your life style lousy and working hard to not make it that way.

·         Overriding theme for me……Trading is simple, NOT EASY, stay on track and the big money will come.

·         Thanks Madan for sharing your thoughts. Your talk in itself was worth making this trip for me (as well as many others, I am sure). Others were a huge huge bonus…..

Session 10: On Volatilitys Edge (Dr.Prashant Mullick)

·         Primarily an options buyer, so interesting to learn about the thought processes on the other side (conditions that suit option sellers)

·         Need to explore the possibilities of shorting higher strikes against current ATM long positions and if it gives an additional edge by reducing risk

·         You can get very creative with options but a deep understanding is a must

·         Thanks Prashant for the very insightful session……..Options is a science (and maths😊) in itself….will need tons and tons of coffee.

Session 11: How to predict the probability of derivatives expiry move (Chandan Taparia)

·         Had a good idea about how to look at open interest and the trading range.

·         Chandans idea of also using the VWAP seemed very interesting. Will keep tab on that

·         Good pointers to also look at comparing relative roll over costs to get a clue about weakening or strengthening trends.

·         Thanks Chandan for the valuable inputs.

Session 12:  How to trade like a monk (Naresh Nambisan)

·         Again a positive reinforcement of the demand supply theory (long term supports/resistances)

·         The secret is to have conviction in your ideas. Trust your charts …baaki sab bakwaas…..couldnt agree more

·         The secret is also to be very focused and cut out the noise around you. Only your system matters.

·         Thanks Naresh for the reinforcements.

Session 13: Psychology of successful traders (Rakesh Pujara)

·         Shared the psychological makeup of successful traders. Happy to realise that most of the stuff is WIP and therefore we have a strong foundation.

·         Thanks Rakesh for highlighting the important aspects.

Session 14: Failed Breakouts (Ankit Chowdary)

·         Not conditioned to be a breakout trader but still was interesting to see some aspects that confirm a breakout

·         The rules to judge the high probability of a breakout seemed well laid out….

·         Will be interesting to try it some time (or not!)

·         Thanks Ankit for the clear rules

Session 15: Market Profile (Rishi Umrania)

·         This is a subject which I had heard a great deal about in recent times and was the first time I was seeing a presentation on it.

·         Admittedly was a little overwhelmed by it though got the messaging with the super Mario game analogy

·         Seemed to be a deep subject which required some basic understanding of construction of the chart and logic (it was beyond the scope of this session)

·         Will touch base with some practitioners to understand this in greater deal at some point (not a priority)

·         Thanks Rishi for the insight into it.

Session 16: What are the current straddles and strangles telling us about the markets (Abhijit Phatak)

·         Great insights into how to use straddles and strangles to get a sense of the market moves

·         Hadn’t thought about straddles in this context so very insightful…

·         Had tons of questions but time constraints meant AP had to run through the slides quickly

·         Hope to see a seminar soon where this can be discussed further

·         It is a subject of deep interest.

·         Thanks AP for the brief but enlightening session

Session 17: P&F and sector Analysis (Prashant Shah)

·         Have absolutely no exposure to P&F and therefore this session was of great interest

·         Understood the construction method and found the counting method to be fantastic

·         Have to read more and understand the subject through Prashants publications

·         Time constraints meant that it had to be a very short session

·         Looking forward to the webinar to understand this subject.

·         Thanks Prashant for the introduction …will look to engage more on this one

My Actionables:

·         Review these notes periodically and add the things I need to explore/learn about/test into the task list with defined deadlines.

·         Happy to note from these sessions that we seem to doing lot of right things….thats a confidence boost….Make sure to keep focused and work hard not to stray..

A general comment that I wanted to make but did not get a chance to:

An interesting question that came up a few times during the conference was whether going bust is a necessary condition to being successful in trading? My take on it is this:

Humans are conditioned not to learn from others experiences. We see that during our growing up years when we don’t obey our parents and then they say you will realise when your kids do the same to you…..or we feel we can drive or play better than the next person….I guess you get the drift. Most humans think they are smarter than the next guy ………..The very same thinking manifests itself in trading when most people feel I am smarter and won’t make the same mistakes others do when infact they are more of the same…..Human emotions are the same across the board and They WILL make the same mistakes, only the scale may differ………..humans really ONLY learn from their own experiences (think swimming , cycling, driving etc etc) …..A person who is capable of learning from others mistakes is Super human and super humans aren’t easy to find…….Therefore when you see most first generation successful traders saying they have gone bust a few times…..it is the point when fate has given them a supreme motivation to put their heads down, focus, pick themselves up and learn from their OWN mistakes and that’s what makes them disciplined in future eventually making them successful.

The motivation to stay disciplined stems from the inherent fear of never wanting to experience emotional horrors of indiscipline again.

So No!, it is not necessary to go bust to be a successful trader but do you have it in you to grind through the process or do you think the process is for lameducks??

OVERALL its been a great experience. The organization of the event and the logistic support was wonderful. All sessions started and ended on time (again a sign of discipline inspite of the scale of the event). Everything seemed to have worked like clockwork so a big kudos to the define edge team………THANK YOU VERY MUCH……..My personal expectations were exceeded and provided more value than I expected so I am definitely going the next time as well……….