THINK WISE, BUY RIGHT & SIT TIGHT

I personally believe that to do something perfectly , one should simply know what not to do while  doing that something. If you are very clear about the hurdles, you will by-pass them and do the task in an enhanced way. When trading, there are also certain fingertips or the thumb rules that one must stick to and we will see it does wonders. I will quickly count some of the "Not-to-do" mistakes while trading or investing and also make you aware of certain interesting facts.

Few amazing principles to boost your trading:-

• THUMB RULE :::- NEVER END YOUR INVESTMENTS IN A LOSS AND IF IT'S AN INTRADAY TRADE, MAINTAIN A STRICT STOPLOSS.
• NEVER BUY OR SELL A STOCK WHEN IT IS MAKING FRESH LOWS OR HIGHS RESPECTIVELY.
• DO NOT EXCEED THE PURCHASE VALUE MUCH MORE THAN THE CAPITAL AVAILABLE WITH YOU FOR TRADING. NOT FOLLOWING THIS RULE MAY INCUR SEVERE LOSSES AND MAY EVEN WIPE OUT YOUR EARLIER PROFITS AS WELL AS SOME PART OF YOUR INITIAL CAPITAL. 
• USE THE CONCEPT OF AVERAGE NOT TO END IN A LOSS BUT TO END PROFITABLY.  IN SIMPLE WORDS, AVERAGE TO PROFIT AND NOT TO REDUCE YOUR LOSSES.
• IN A BULLISH MARKET, DON'T TAKE A SHORT POSITION (ESPECIALLY IN AN INTRADAY TRADE, IF YOU STILL WANT TO EXPERIMENT USE THE  "FUTURES" OPTION)
• AFTER EVERY BULLISH RUN OF 100-200 POINTS IN NIFTY (NSE), WAIT FOR THE CORRECTION TO TAKE PLACE AND THEN CREATE POSITIONS.
• IN A BEARISH MARKET, NEVER LONG POSITIONS UNLESS U FEEL ITS THE RIGHT ENTRY POINT. (SUPPOSE NIFTY IS DOWN 20 POINTS @11AM, WAIT TILL 3:15PM ATLEAST TO TAKE A LONG POSITION FOR A BTST TRADE OR A SWING TRADE).
• INVEST IN COMPANIES WITH SOUND FUNDAMENTALS, STRONG MANAGEMENT AND MINIMUM DEBT. REMEMBER A LOAN OR A DEBT IS NEVER CONSIDERED AN EARNING. IT IS TO BE PAID BACK TO THE LENDER ALONG WITH AN EXTRA SUM OFTEN KNOWN AS INTEREST.
• NOBODY IN THIS WORLD UNDERSTANDS THE MARKETS COMPLETELY. IF SOMEBODY CLAIMS HE DOES, HE IS SURE TO BE THE NEXT WARREN BUFFET.
• RETAIL INVESTORS LIKE ME & YOU CAN'T MAKE THE MARKET MOVE IN EITHER DIRECTION BUT WHAT WE CAN DO IS FOLLOW THE BIG BOYS VERY CLOSELY AND BUY SOMETHING WHEN THEY BUY AND SELL SOMETHING WHEN THEY SELL. BY DOING THIS, IF THE BIG BOYS ARE MAKING BILLIONS; WE CAN ATLEAST MAKE MILLIONS.
• NEVER TRADE OR INVEST WITH THE BORROWED MONEY UNLESS YOU ARE TOO CONFIDENT OF YOUR TRADING SKILLS.
• SWING TRADE (1-15 DAYS) IS THE BEST TYPE OF TRADING THAT SUITS THE INDIAN MARKETS.
• BOOK PROFITS WHENEVER YOU HAVE A PROFIT LYING ON THE TABLE. EVEN IF YOUR MIND DOESN'T LET YOU DO SO, AT LEAST TAKE A STOPLOSS AT SOME DECENT LEVEL COVERING YOUR PROFIT REGION SO THAT AT THE END OF THE DAY YOU DON'T END IN LOSS. eg. YOU HAVE 100 SHARES OF COMPANY xxx @INR X. IT ROSE TO X+5. YOU DIDN'T BOOK PROFITS AND IT CAME DOWN TO X-15 IN THE DAY TRADE. WHEN YOU END YOUR DAY, IT WILL SHOW SOME INR 1500(-) MTM INSTEAD OF A INR 500 PROFIT FOR THAT PARTICULAR TRADE. ALSO YOU WILL END UP PAYING A BROKERAGE FOR INVESTMENT INSTEAD OF A BROKERAGE FOR INTRADAY TRADE.

          BROKERAGE DIFFERENCE:-

          INVESTMENT BROKERAGE= 10 * INTRADAY BROKERAGE

• LOOK FOR QIP (QUALIFIED INSTITUTIONS PLACEMENT) OF SOME VERY GOOD COMPANIES. THEY ARE QUICK BOOST TO YOUR PORTFOLIO. eg. THE BEST EXAMPLE IS OF "YES BANK GLOBAL QIP" DATED 5TH JUNE, 2014 WHICH WAS OVERSUBSCRIBED (5 TIMES THE AMOUNT THEY WANTED).
• STOCK SELECTION IS VERY IMPORTANT. REMEBER NOT EVERY STOCK RISE IN THE RISING MARKET AND ALSO NOT EVERY STOCK FALL IN THE FALLING MARKET.
• THERE IS NO PLACE FOR YOUR "EMOTIONS & FEAR" IN THE MARKET.
• IF YOU ARE TRADING FOR MAKING A PROFIT OF INR x, PLEASE BE PREPARED FOR A LOSS OF INR x TOO.
• THERE IS NOTHING KNOWN AS "TIPS FOR TRADING" IN THE MARKET. HAD IT BEEN THE CASE, MOST OF THE PEOPLE WHO LOVE TO TALK ABOUT MARKET ON PUBLIC FORUMS WOULD HAVE BEEN MAKING HUGE MIONEY (THEIR WEALTH GENERALLY EXCEEDS CRORES IN SOME OR THE OTHER FORM & BY THE RULE OF 50-60% ON INVESTMENTS & 100-120% ON INTRADAY TRADES) BUT THAT'S NOT THE TRUE CASE.
• LISTEN TO RECOMMENDATIONS FROM BROKERAGE HOUSES BECAUSE THEY CARRY SOME SENSE BUT PLEASE DON'T BLINDLY COPY THEM. MODIFY THEIR TRADING RECOMMENDATION ACCORDING TO YOUR PORTFOLIO (CHANGE THE BUYING PRICE, STOPLOSS, TARGET PRICE).
• THE FASTEST & THE SMARTEST WAY TO MAKE MONEY IS TO TRADE FUTURE. BROKERAGE IS SAME AS THAT OF INTRADAY TRADE (LOW BROKERAGE) AND CAN BE KEPT FOR A PERIOD OF 30 DAYS. NIFTY PERMITS 144 COMPANIES TO BE TRADED IN FUTURE. THIS ALSO INVOLVES A VERY SMALL MARGIN TO PURCHASE LARGE QUANTITIES (FIXED LOT SIZE) OF SHARES. eg. IF YOU WANT TO PURCHASE 125 SHARES (LOT SIZE OF SBI) OF SBI, YOU WILL END UP PAYING INR 342875; THE SAME CAN BE PURCHASED IN FUTURE BY PAYING INR 64554 (ONE-FIFTH OF THE TOTAL PRICE). THE ONLY PROBLEM THAT ARISE IN TRADING FUTURE IS "MTM" & "30 DAY BOUNDATION".
• IT IS ALWAYS ADVISABLE TO PLAY A GAME THE RULES OF WHICH ARE CRYSTAL CLEAR TO US.
• MONEY IS PRECIOUS, HARD-EARNED; DON'T LOSE IT.
• NOT EVERY DAY IS A BUYING OPPORTUNITY; WAIT FOR THE RIGHT TIME TO ENTER THE MARKET.

THINK WISE, BUY RIGHT & SIT TIGHT.

Disclaimer :

I may or may not have holding in the stocks I have mentioned. The mention above is purely advisory in nature and is not binding on any reader.

HAVE A GOOD DAY !!!

INDIAN MARKETS ON 26 MAY 2014

What to do before May series expiry on 29th May ???

Factors that will rule the market :-

• American markets (Dow Jones & Nasdaq) both closed up 0.38% & 0.76% respectively on May 24.
• May series Nifty expiry expected between 7450-7500.
• A.P. HC vacates status quo order on Sun Pharma-Ranbaxy merger.
• High expectations as Modi becomes PM (finally happening for what this bull run began).
• Renuka Sugars sells 7.5% stake in NCDEX.
• Caledonia sells 3% stake in DHFL.
• BHEL commissions hydro power project in Himachal Pradesh.
• SREI Infra to raise 2500cr via security issuance in FY15.
• Govt. denies raising FII limit in HDFC Bank, Axis bank also done with limit on FII buying.
• Indian ADRs: Tata Motors rises 3.5%, Wipro gains 3%

What to buy :-

• Focus on stocks which have good fundamentals, parent company is debt free or under minimum debt, strong management and which are undervalued (may not have risen in the current bull run or have not risen in line with the markets)
• Bullish on Sun Pharma as the Sun Pharma-Ranbaxy merger is on.
• Fresh investments may be made in ICICI Bank or Yes Bank as they have lot of space for FII buying.
• Higher levels of May series expiry favour PSU banks (SBI, PNB, Bank of Baroda, Allahabad bank, Andhra Bank, United Bank)
• From Auto sector, prefer Bajaj Auto, M&M & Ashok Leyland.
• Bullish on Power stocks (Adani Power, Rel Power, Torrent Power, NTPC) 
• Bullish on LT & BHEL.
• Rel Infra may touch 785.
• Prefer Titan for a target of 355.
• Start accumulating Infosys & Wipro for longer run.
• Prefer Whirlpool ; target of 350
• Keep buying media stocks on every decline.
• Buy BhartiAirtel, Idea & Rcom on declines for portfolio ; 2G spectrum to be allocated soon.
• Infra and Reality shares to touch new heights ; 100 mega cities on NDAs plans.

Market opening:-

• NIFTY up 125bps on 7493.
• Rel Infra up 4.5% (763), IRB Infra up 14%.
• M&M up by 6.7% (1244).
• LT up by 7.2% (1628).
• Sunpharma up 2.2% (607).
• Whirlpool up 4.81% (317).
• Torrent power up (4.5%), Adani Power up (3%), Tata power up (3%).
• BHEL up (7%) & Renuka Sugars up (2.52%).
• All PSU banks up by more than 2% (PNB up by 2.5%).
• ICICI Bank & Yes Bank up by 2%.
• Andhra Bank up by 12% (104.50)
• Wipro up by 2.65% & Tata motors up by 4%.

Conclusion:-

Markets closed at the same levels from where they started in the morning after NIFTY showed 100 in red line on the screens. Good buying opportunity seen at these levels keeping in mind the expiry levels for the May series.

Disclaimer :

I may or may not have holding in the stocks I prefer or suggest to buy. The suggestions above are purely advisory in nature and are not binding on any reader.

Have a good day !!!

WHY INVEST IN INDIAN EQUITY MARKET ???

Why prefer Indian Equity Market ???

I love the beauty of the Indian market, for what I have seen in the recent past. I am sure the stats that am going to provide to you will surely make you fall for this market. Hold your breathe and read next what the reality is !!! (Mentioning some "A" category stocks)

Stock                     Price in August 2013                   Current Market Price

SBI                                             1475                                                                2754

AXIS BANK                              782                                                                  1865

ICICI BANK                              783                                                                  1500

YES BANK                                220                                                                   564

PNB                                           410                                                                   1040  

BANK OF BARODA                440                                                                    960

L&T                                           690                                                                   1520

M&M                                        760                                                                    1160                                     

RELIANCE                               780                                                                    1127

DHFL                                        104                                                                     340

LICHFL                                    155                                                                      330    

ADANI ENTERPRISES           135                                                                      515 

HDFC BANK                           560                                                                      800

DLF                                          122                                                                       220

MARUTI                                  1250                                                                    2400

BAJAJ AUTO                          1730                                                                    2000

HERO MOTOCORP               1570                                                                    2350

TATA STEEL                           198                                                                       480

TATA MOTORS                      270                                                                       450

UNITED SPIRITS                   2000                                                                      2800                      

JAIN IRRIGATION                  48                                                                         123

LUPIN                                     740                                                                         940                      

SUN PHARMA                      480                                                                          585

TCS                                       1390                                                                        2140                

INFY                                     2390                                                                        3100    

There are more than 1000 scripts on the exchanges. These are some of the major scripts which are traded with good volume. Most of the scripts have almost doubled in the last ONE year.This is the major reason why I love trading in Indian equities.

I would prefer the Agro space, Consumer goods space, Capital goods space, Media space, Power sector and the PSU Banks which have been lately sufferers of their bad NPAs. With the economy on the rising trend, these sectors are sure to rise. Pharma space on the other hand being a defensive sector is a must for the portfolio.

See you.....In the next article we would focus on some other stats and what to buy now and for what time period. Byeeeeeeeeeeeeeeee.....

                         

Quick Money-Making Simplified (STOCK TRADING)

Posting the very 1st article on my blog...

Like most of you guys am also a technical person (formally),but nothing much interests me from my own field. What convinces me to write this piece of information is the addiction that I have got to this Financial Jungle-Stock trading. In my opinion it is one of the best thing one (not 1 but any1) can do without much of effective or prior knowledge of this field and also anytime, anywhere with the use of our laptops or the very friendly mobiles.

Thanks Sharekhan, because of you guys am tempted to write here for others. I am not promoting this brokerage house but their very cordial Relationship Managers and user friendly software (Trade Tiger) are worth mentioning here. I started this when I was pursuing some course with a very reputed institute as a part time hobby and to take a feel of this financial jargon. I never knew someday I would feel a sort of  addiction to it and would start seeing good career prospects in the field of capital investments.

Why trade OR Why only trade ???

The easiest way to make money is Stock trading. Market means a movement in prices and price movement is a simple game of "Demand & Supply". There is money in the rising (long) as well as in the falling (short)  market. What all you need is a mobile (better if you have a laptop), a bank account with a cheque book, a PAN card and an identity proof (better if u have an aadhar card).

Market = Price Movement

Price Movement = Demand & Supply

Now I come to why only trade ???

A person who has just started his career wouldn't think of investing in a property (you guys must be aware that real estate investments are always big in amount and possess certain other risks with them), can think of buying gold for investment purpose but I find this investment obsolete (taking gold in physical form because of the deductions made at the time when you want to convert it into liquid cash). The only good option that remains open is Equity investment or Mutual Fund investment through SIPs (Systematic Investment Plan). MFs also trade in the same Equity markets where we can trade directly without making them intermediaries in the profit-making process. I call equity trading simple and easy because you can start with any amount of your choice (better if it is anything above INR 1000). 

When trade ???

Any hour of the day (Monday to Friday) between 9:15AM-3:30PM. The best part is weekends off. This is the time when the 2 popular exchanges where we trade are open for traders. Any trader can trade for some 3-5% return in a single day (average) and an investor can trade for some 7-10% return on his investments on a monthly basis (average). This field is highly subsidized. Brokerage houses allow some 5-10 times leverage to intra-day traders and some 2-4 times to investors (for a maximum period of 5 days)

What to trade ???

You have the option to trade a variety of things-

1) Stocks

2) Currency

3) Agro-commodities

4) Comodities (Bullions,oil,gas,etc)

But we will confine ourselves to Stocks trading only. You can trade any Indian Stock you want provided it is listed on either BSE or NSE. The scripts are categorized as according to their standing in the market. Better scripts attract higher leverages from brokers and there may be some scripts for which you should have the full amount in your trading account. I will discuss the brokerage and other aspects in the coming articles. But let us very quickly know who are running the Indian market- 

1) FIIs - The Big Big Boys

2) Professionals or Investment Bankers - The Bigger Boys (they trade for MFs)

3) RBIs monetary policy
4) Monthly expiry of contracts-The Most Volatile Day of the Month

5) Federal Reserve Bank (Central Bank of America) conclusions.

6) Any news in a particular stock.

7) Quarterly Results of Companies.

8) Dollar-Rupee relation
9) US markets (opening bell) & European markets (market movement after 2PM)

10) International and National events

The big list of the controllers seem scaring but they are all inter-related to each other in some or the other way. I will talk about this relationship later. To begin, trade any XYZ stock and try to consolidate your profits.

No one, not even the big boys in the market have a perfect trading strategy. They trade, fail or succeed, learn from their mistakes and also from mistakes of others and trade better the next time. Nobody in the world knows where the market is heading to and when it will crash. Everybody just speculates. Few hit it correct and so they become famous to give advice or tips on the TV channels. But I tell you I have seen most of them failing and not even hitting the targets equivalent to a decent success rate.

It is very truly said by India's Warren Buffet Mr. Rakesh Jhunjhunwala, "You can't make money from borrowed tips". It has to be your choice, your understanding of the buying, selling and stop loss levels. All these 3 vary from trader to trader. It is that everybody's satisfaction level is different (I may end up with 2-3 bottles of beer  followed by heavy dinner but my friend Repzzz may want more as "Yeh dil maange more") !!!

How much to trade ???

The very simple answer to this question is Trade as much as you can but remember that you don't take undue advantage of the leverage that your broker is providing you and you don't land yourself in trouble. The best way to make sure shot money is to utilize the minimum leverage for intra-day trades and stick to your capital for investments. Investment should be on a SIP basis for better and enhanced returns. I will talk about what I meant by enhanced returns here in my next article and show it to you with some rough calculations that I have done for myself. This is the beginning of a Bull market from May 16, 2014.

 Don't hesitate to trade but then don do over-trading too as excess of anything is harmful for health !!! 

There is a lot more to the story of financial markets because the process of money-making is limitless.....

See u guys...In the next article we will see how easily money can be made by the process that we have just started !!!