Shyam gour

  Technical Analysis 1.1 – Overview we now know that developing a well researched point of view is critical for stock market success. A good point of view should have a directional view and should also include information such as: 1. Price at which one should buy and sell stocks 2. Risk involved 3. Expected reward 4. Expected holding period 1.2 – Technical Analysis, what is it? Technical Analysis is a research technique to identify trading opportunities in market based on the actions of market participants. The actions of markets participants can be visualized by means of a stock chart. Over time, patterns are formed within these charts and each pattern conveys a certain message. The job of a technical analyst is to identify these patterns and develop a point of view. 1.3 – Setting expectations Often market participants approach technical analysis as a quick and easy way to make a windfall gain in the markets.If you approach TA as a quick and easy way to make money in markets, trad...

IPO, OFS, and FPO   Supplementary Note IPO, OFS, and FPO – How are they different? IPO Initial Public Offering is when a company is introduced in to the publicly traded stock markets for the very first time. The primary reason for going public is to raise capital which would be to fund expansion projects or cash out early investors. After the IPO is listed on the exchange and is traded in the secondary market, promoters of the company might still want additional capital for which there are three options available: Rights Issue, Offer for Sale and Follow-on Public Offer. Rights Issue The promoters can choose to raise additional capital from its existing shareholders by offering them new shares at a discounted price (generally lower than Market Price).  it limits the company to raise the capital from a small number of investors who are already holding shares of the company and might not want to invest more. OFS The promoters can choose to offer the secondary issue of shares to t...

Getting started! At this stage, it is extremely important for you to understand why we have so many different learning modules, and how these modules are interrelated. To give you a head up, here are some of  the modules that we will cover in Varsity. 1.Introduction to Stock Markets 2.Technical analysis 3. Fundamental Analysis 4. Futures Trading 5.Option Theory 6.Option Strategies 7.Quantitative Concepts 8.Commodity Markets 9.Risk Management & Trading Philosophy 10.Trading Strategies & Systems 11.Financial Modeling for Investment practice 13.1 - So many modules – how are they interrelated? In order to be successful in the markets, what according to you is the single most important factor? Success in markets is easily defined – if you make money consistently you are successful, and if you don’t you are not! chances are you will think about factors such as risk management, discipline, market timing, access to information etc as the key to be successful in markets. While one...

Clearing and Settlement 10.1 - Overview As a trader or an investor you need not actually worry about how the trades are cleared and settled as there are professional intermediaries to carry out this function seamlessly for you. 10.2 - What happens when you buy a stock? Day 1 – The trade (T Day), Monday The day you make the transaction is referred to as the trade date, represented as ‘T Day’.By the end of trade day your broker will debit Rs.100,000/- and the applicable charges towards your purchase.   So an amount of Rs.100,000/- plus Rs.126.32/- (which includes all the applicable charges) totaling  Rs.100,126.32/- will be debited from your trading account the day you make the transaction. Do  remember, the money goes out of your account but the stock has not come into your DEMAT account yet. Also, on the same day the broker generates a ‘contract note’ and sends you a copy of the same. A contract note is like a bill generated detailing every transaction your made. This i...

The Trading Terminal 9.1 – Overview When a market participant wants to transact in the market, he can do so by opting one of the options: 1. Call the stock broker, and trade usually called “Call & Trade” 2. Use a web browser to access the markets 3. Use the trading software called the Trading Terminal It allows you to do multiple things such as transacting in shares, tracking your Profit & Loss, tracking market movements, following news, managing your funds, viewing stock charts, accessing trading tools etc.  To keep this chapter as practical as possible let us set two basic tasks to using the TT. 1. Buy 1 share of ITC, and 2. Track the price of Infosys we will be using Zerodha’s web platform ‘Kite’ 9.2 – The login process  The process involves entering your password and answering two secret questions, the answers to which only you know. 9.3 – The Market watch Keeping the first task in mind we will load ITC Ltd onto the market watch. To do this we simply have to type i...

Commonly Used Jargons The objective of this chapter is to help you learn some of the common market terminologies, and concepts associated with it. Bull Market (Bullish) – if the stock market index is going up during a particular time period, then it is referred to as the bull market. Bear Market (Bearish) – if the stock market index is going down during a particular time period, then it is referred to as the bear market. Trend - A term ‘trend’ usually refers to the general market direction, and its associated strength. For example, if the market is declining fast, the trend is said to be bearish. If the market is trading flat with no movement then the trend is said to be sideways. Face value of a stock – Face value (FV) or par value of a stock indicates the fixed denomination of a share. Usually when dividends and stock split are announced they are issued keeping the face value in perspective. For example the FV of Infosys is 5, and if they announce an annual dividend of Rs.63 that me...

The Stock Markets Index 7.1 - Overview a real time summary on the traffic situation how would you got it? it is unlikely you would check each and every road in the city to find the answer. The wiser thing for you to do would be to quickly check, a few important roads and junctions across the four directions of the city and observe how the traffic is moving. If you observe chaotic conditions then you would simply summarize the traffic situation as chaotic, else traffic can be considered normal. if I were to ask you how the stock market is moving today, how would you answer my question?  It would be clumsy to check each and every company, figure out if they are up or down for the day and then give a detailed answer. you would just check few important companies across key industrial sectors. If majority of these companies are moving up you would say markets are up. So essentially identify a few companies to represent the broader markets. 7.2 - The Index The important companies are pre...