Book: The Little Book of Trading.

The Little Book of Trading is reviewed in this website
Here are some excerpts from the review:

This book is mostly about inspiration from successful (Trend Following) stories. This latest Covel instalment revolves around some famous Trend Following personalities. And successful stories are one of the best ways to get inspiration and motivation.
Below are the personalities/firms covered with chosen quote(s) from each chapter.
Sunrise Capital (Gary Davis, Jack Forrest, Rick Slaughter)

Trend Following can be simple, but sticking with it is the hard part.
Make sure you never miss a potential big trend. You always want to put some kind of trade when your system says enter as your price trigger hits. If you are wrong, you have stops to protect your capital, to protect your downside. After all, you never know which move is going to be the mother of all moves.
Kevin Bruce

There is great truth in the idea that if you take care of the downside, the upside will take care of itself.

Larry Hite
Hite has two basic rules about trading and life:
1) If you don’t bet, you can’t win.
2) If you lose all your chips, you can’t bet

Eric Crittenden and Cole Wilcox

Wilcox, for example, has a constant process of asking, “Am I wrong?” while he sees everyone else asking, “Am I right?” If you don’t ask the correct probing question with genuine curiosity, like a scientist, you cannot arrive at the correct answer.
The scientific method doesn’t allow you to prove anything. All you can do is disprove theories, and then, with a preponderance of evidence still left, you can accept and keep the remainder as long as you can’t disprove it.

A few key lessons from Basso helped Crittendedn and Wilcox from the beginning. Basso was blunt, “It really is simple. You hold your winners, have discipline and cut your losers. You take what the market gives and you’ll be successful in this business”. Crittenden added: “One. Don’t over-bet. Two. Diversify across markets.”

My Notes: Please read the original post at the website given in the first paragraph for the full review.

Response to comments August 30

RS writes: Today you said on ET you went long at 4845 however it was around 4865 when it was said on TV. Also you said you are short in intermediate account. Can you tell how to manage / what quantity should be traded for such 1-2 day moves and for short term?

My Notes: I speak when I am asked to do so. Therefore, my positions were taken when the setup was complete, while I disclosed it when I was asked to speak. I have a bearish ratio spread in my intermediate trade account. I use different instruments for short term trading and intermediate positions otherwise it could become very confusing. Usually my volumes for short term trades are less than the intermediate positions.

RS also asks: Have 2 queries a) How to trade the White Marubozu (well almost) in this scenario and in your trading experience, what’s the high probability setup following the same b) Sometime back u had sugegsted Street Smarts and Marc Rivalland’s book. Could you please tell a few more good books on Swing trades with strategies et al.

My Notes:
a. the White Marubozo is a price bar which opens at the low and closes at the high of the day. This is what the Nifty did on Monday. It also made a wide range bar, so we can call it a long white marubozo. A Marubozo is a signal that bulls are strong. We should expect follow through after such a pattern. In my previous post I explained that traders should look to buy on dips / consolidation.

b. An interesting book is ‘The Wallaby Trade’ which discusses divergence trades. Another excellent book is: Mechanical Trading Systems by Richard Weissman.

Sudhin asks: Under the next step you have used 55sma as your basic moving average for your bull and bear set up, why 55? is it because it is a fibonacci no. or this gave your the minimum whipsaws? Could you add 5highema which could given an early indication but off course there will be some whipsaws?

My Notes: I used 55 periods because it was a fibonacci number and seemed to fir the Nifty chart fairly well. You can use an average of 5 period Highs, but this is a method of identifying short term swings, not bull and bear markets.