Rules of a Wall Street Master

The critical success factors in trading.The following rules taken from Vic Sperandeo's outstanding book Methods of a Wall Street Master, as he talks in detail about some of the more subjective success factors needed in this business.

1. Trade with the Plan. Stick to it. Every rationale, target, stop, and scenario should be thought out before the trade is entered. As Vic says, "confusion is your biggest enemy." The biggest thing you need to consider is your intended timeframe for the trade. If you know how long you want to hold the trade, the goals, stops, and volatility allowances will be easier to establish. But the bottom line is, plan your trade before you enter it.

2. The Trend Is Your Friend - Trade with the Trend. It's great to catch a reversal, but it's also very difficult. At least when taking a position with the market rather than against it, you can get off on the right foot. It all may change the next day, but you'll have at least a day's worth of cushion/gain. Taking a contrary position and praying for a reversal rarely works out well enough to make it worth doing.

3. Let Profits Run. Cut Losses Short. The second half (cut losses short) is the tougher part of this rule. It involves admitting that you were wrong. But in trading, rare is the case where you will eventually be proven right after being proven wrong. It's just not worth trying. If you struggle to cut losses short, you can counter-act that psychological devastation by letting your profits run (once your target is hit), and then telling yourself that not only were you right, you were really right, in that your target exit point was surpassed and you made a little more than originally planned. To do this, keep ratcheting up your stop-loss with each incremental gain above your original target.

4. Buy Weakness and Sell Strength. If you're waiting till the very end of a rally to make your exits, you've waited too long - you and about a million of your best friends are all thinking the same thing. Rarely does the end of a rally announce itself, and it never happens slowly enough to actually do anything about it (i.e. until it's basically too late). The same is true for bearish trades. This may seem contrary to # 3, and maybe in some ways it is. But the more important point of both of these rules is to maintain a trading discipline. The pros do, and so should you.

5. Don't Trade Off of Tips. A tip is rarely more than opinion, and frequently a bad one at that. Even if the tip comes from a friend, don't take it. If you have a hard time with this, go back to #2 - the trend is your friend. Burn this into your head! Unfortunately, in trading, a friend is not always a friend.

6. Never Trade If Your Success Depends on a Good (Lucky?) Execution. If getting a fill that is not currently marketable is critical, you may want to go back to #1 and make sure you're trading your plan. Great trade set-ups will always be great, even if you have to pay a little more to actually get into the trade. If you (or your broker) have to fight hard to get filled at a certain price, that's the market's way of telling you that this trade will not be an easy one to make profitable

India Can Average 9 Percent GDP Growth in 2007-12, Singh Says

India can sustain average economic growth of 9 percent annually between 2007 and 2012, Prime Minister Manmohan Singh said today.

Such growth is ``feasible'', Singh said at a meeting with chief ministers of India's states in New Delhi today, according to a copy of the speech made available to reporters.

India, the world's second-fastest growing major economy, wants to accelerate economic growth to 10 percent to cut poverty in the nation of 1.1 billion people. More than half the nation's population lives on less than $2 a day, according to World Bank estimates.

India's economy has grown more than 8 percent in six of the past seven quarters, gaining 9.2 percent in the three months to Sept. 30. China's $2.2 trillion economy, Asia's second-largest, expanded 10.4 percent in the quarter ended Sept. 30, the quickest pace among the world's 20 largest economies and almost four times the 2.6 percent gain in the 12 European nations sharing the euro.

EIHOTEL

EIHOTEL 5th wave started this could be a pole pennant in 5th wave sl can be near 102 with immediate target 111 ,114 and over all near 124
cheers
rish

Sensex Breaks on Through 14k… but Will the Run Last?

Just months after a May-June 2006 market meltdown to 9,000, Bombay’s Sensex index just crossed the crucial psychological 14,000 barrier for the first time ever, thanks to overwhelming strength in earnings growth from companies in IT, banking, telecom, infrastructure, construction and capital goods. This comes just months after we called for a breakthrough of the 13,000 level on optimistic predictions for the Indian economy.

But, has India become the next China? Not quite yet. Still, the numbers are impressive. In fact, GDP grew at an 8.9% clip for the quarter ended June 30. If it can maintain 8% growth this year, “that would be the fourth straight year it has reached that benchmark, making it one of Asia’s fastest-growing economies after China,” according to BusinessWeek.com. India’s GDP grew at a 9.2% clip in July-September 2006.

Even better, according to Bloomberg.com, “Growth in India’s economy is benefiting from Prime Minister Manmohan Singh’s decision to increase spending on roads, ports and other infrastructure by a quarter to 992 billion rupees ($21 billion) in the year that started April 1 in a bid to attract overseas manufacturing companies and spur growth to 10 percent over a decade. That will help cut poverty in a nation where 35 percent of 1.1 billion people lives on less than $1 a day.”

But while the economic news remains positive, India could be in store for some tough times. India inflation “rose a sixth of a percentage point to nudge the central bank’s ceiling of 5.50 percent… fanning economists’ expectations of another rate hike,” according to Gulf Daily News. Worse still, “Equity and housing markets look overbought and the current account has moved sharply into deficit. Besides interest-rate hikes by the Reserve Bank of India, little is being done by the government to orchestrate a soft landing,” according to The Economist.

According MonstersAndCritics.com, Ajay Dua, secretary for the department of industrial promotion and policy, says India faces three scenarios over the next 20 years: “There’s the ‘Bolly World’ scenario, which envisions “initial economic success, but which was not sustained. At the other end of the scale was ‘Pehla Bharat’ or India First with leapfrogging infrastructure, poverty alleviation, higher incomes and increased share in world trade. In between these was the ‘Atakta Bharat’ horror, which as the name implies, saw the country literally getting stuck as governance collapsed, the economy stumbled and social inequalities widened.”

And, according to DailyIndia.com, “Starting by saying he [Ajay] was ‘not in fear’ of the first, Ajay Dua, secretary (industrial policy) in the commerce ministry, went on to admit that ‘a whole lot of action is required’ to transit to the other. He also conceded to major shortcomings in the six key areas the Pehla Bharat model was predicated on. Be it poverty alleviation, agricultural and rural development, healthcare, access to education, leapfrogging infrastructure or adequate governance, Dua admitted, ‘we are not moving fast enough.’”

While the economy, according to Dua, has doubled during the last 15 years, consumer demand grew threefold, the manufacturing sector grew by 12% and the foreign trade jumped by 8%. Agriculture (an industry upon which 60% of India’s population relies) only grew 3%. IT growth has not trickled down to the farming sector. Twenty-six percent of Indians live below poverty levels. And terrorist attacks are impacting economic growth.

Worse, while the Indian economy continues at its blistering pace, India is facing a shortage of skilled workers in all fields, “and this could hamper its economic development,” according to Minister Manmohan Singh, as quoted in the International Herald Tribune. His comments, according to the source, “run contrary to the general picture of India portrayed by the government, which prefers to promote the image of an Indian economic renaissance based on the availability of low-wage skilled workers.”

The bullish rallies in India have been quite impressive. But how much longer will they last?

Ian L. Cooper,
Founder, Early Alert Trader and Death Cross