Attention Viewers

Our Recommendations are purely for day trading purpose. Trading successfully with this informations requires the following basic things.

1) Demat account and online trading account with the same broking house.

2) High speed internet connections preferably broadband.

3) Live Streaming Quotes with nifty and nifty Futures in single window. ( Suggested india infoline, sharekhan, indiabulls).

4) Time to continously sit in front of online terminal during market hours.

5) Required margin amount to trade Futures. (minimum Rs:40,000 per lot).

So all the above mentioned is possible only for persons who are doing business or those who depend for income only from share market. Is there any possibilities for others who are in various job to earn extra money from share market?

Yes.

There is something called momentum or position trading. Here if we know confirm that a particular stock will rise in a period of time, we can buy and sell it with some profit.

We will be giving those recommendations also. But this is not the right time as there are lot of volatility in the market. We are expecting market to stabilize in the range 2596 - 2250 anyhow we have to wait till nifty to go above 3250 for doing successful short term or momentum trade.

Note : Usually rediff,sify,yahoo will show the values delay by atleast 10 mins. To See online nifty values without delay go to nse home page, select indices tab,select statistics and then select Index Watch (Live) or
Online Indices Charts .
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Is the Pain Over ???

Most of us had started showing interest in the Share Market only after 2001, after the IT boom. Investing or trading in Share Market is considered as a good option only after this period because it was giving high returns. To be true, it was the beginning of Bull Market.

OK, what happened in Stock Market before that. While we were trying to collect information about that, we came across the past datas in one of the site which we are presenting here in simplified way as a table. In the table each period whether downside or upide was not a non stop movement but has 10 - 15% rally or corrections in between.

With this past data, can we correlate our current trend after January 2008. If so, what interpretations can be made and what conclusions can we get?

As per this data, hope we are near to the bottoming of Nifty. This is our own interpretation, and details of it in another post. Any alternative thoughts, please do comment.

INVEST vs TRADE 3 (cont...)

Friends welcome to the final part of this discussion. So now every one of us should be clear that "we are not going to be a regular investor blindly investing in some stock for years."

Let us call ourselves as TRADERS.

What is the strategy we are going to follow?

Going to carry a trade (buying & selling) with profit. The duration for trade can be within days, months or years.

Simply "We are going to trade & ride the TREND, based on technicals"

We are going to learn about this in detail under the label Technical Analysis.

Viewers if you have any general market queries mention it in comments. We will be answering them every weekend under the label Weekly Queries (Individual stock queries will be answered the next day in comments itself)

Advance thanks for your comments.

INVEST vs TRADE 2 (cont...)

We had taken only strong and good companies as example.

In first part Nifty moved up strongly in 2 years period (Jan 2006 to Jan 2008) but why Unitech gave profit, Sasken gave loss and Infosys with no loss &and no gain.

In second part Nifty crashed a lot Jan 2008 to July 2008 but here Sasken gave profit, Unitech gave loss and infosys still remains at same price.

Why we had taken this topic at this early stage is because most of them enters the market by saying I will invest for 3 years or more horizon in good company and will not care about the stock within that period.

Let us consider 3 different individuals each had invested Rs. 10,000 in Jan 2006 & their values on Jan 2008 as well as on July 2008.

X invested in Unitech: Rs. 6,25,000 + (Jan 2008),,,,,, Rs. 2,25,000 (July 2008)

Y invested in Sasken: Rs. 1,870 + (March 2008),,,,,, Rs. 3,300 (July 2008)

Z invested in Infosys: Rs. 10,000 (Jan 2008),,,,, Rs. 10,000 (July 2008).

Every one looks at X and there by investing their entire savings in a single company for longer term say 5 years or 10 years. One factor which really hurts is even professionals, financial consultants and analysts are also recommending this. No one cares what happened to Y and Z.

Few Questions for Today:

Can any one predict and recommend you that "This particular stock will give you exactly this percentage returns in next 5 years"?

Can any one predict the exact price of Gold in next 2 years?

Can any one predict the exact price of Oil in a year time?

World is full of uncertainity and stock market is no exception. So Friends this is not the right place for investment with guaranteed returns in fixed time period. The better place for you will be Bank's FD or RD, Govt Bonds etc...

Those who have risk appetite and ready to swim in the stock market can come with us to learn and get maximum benefit in the coming posts.

INVEST vs TRADE

For all those who enter share market, have a confusion whether to trade or invest. Here we are not going to bet which one is the best but to clear you the pros and cons of both.

Before that just recollect different types of investment(short, medium and long term). One thing which we are not going to deal is about day-trading(needs lot of exposure to stock market)

Let us go with the following examples.

1) Unitech --> Stock Price as on Jan 2006 is Rs. 8/- & as on Jan 2008 is Rs. 500/-

2) Sasken Communications --> Stock Price as on Jan 2006 is Rs. 450/- & as on March 2008 is Rs. 85 /-

3) Infosys Tech --> stock Price as on Jan 2006 is Rs. 1500/- & as on Jan 2008 is Rs. 1400/-

What is your observation?
As a lay man, Unitech is good, Infosys is safe, and Sasken is worst company.
As a professional, Unitech is in uptrend, Infosys is in Sideways trend and Sasken is in downtrend.

Let us come to the interesting second part of the same example.

1) Unitech --> Stock price as on Jan 2008 is Rs. 500/- as on July 2008 is Rs. 160/-

2) Sasken --> Stock price as on March 2008 is Rs. 85/- as on July 2008 is Rs. 150/-

3) Infosys --> Stock price as on Jan 2008 is Rs. 1,400/- as on July 2008 is Rs. 1600/-

What to say now?

Every thing is changed. Unitech is in downtrend, Sasken is in Uptrend and infosys a liitle bit uptrend or exactly sideways trend.

What we are going to conclude from this ???????????

What to do in Stock market?

What are Shares?

A share or stock is a document issued by a company, which entitles its holder to be one of the owners of the company. A share is issued by a company or can be purchased from the stock market.

A company's stock price reflects what investors think about the stock, not necessarily what the company is "worth."

* Owning a stock or a share means you are a partial owner of the company, and you get voting rights in certain company issues
* Over the long run, stocks have historically averaged about 10% annual returns However, stocks offer noguarantee of any returns and can lose value, even in the long run
* Investments in stocks can generate returns through dividends, even if the price

What we are going to do with Shares?

We can either do investment or trading with shares. To be more clear consider these 2 cases as example.

case 1: You are having lot of savings, so buying a land in some remote place. You will just monitor the land every now and then by continuing your normal actviites. After a span of time say 3-4 years, the land value would be increased. So you will sell that at higher price and will buy some other plot in different area (or) you will keep the land for few more years if you think the price of the land will go up more.

case 2: You are having some savings and through some source you came to know that the price of a particular item is going to increase shortly. You will buy as much of that item and once the price increases you will sell all that item at high price and will go in search of other such opportunity.


So, Here in Share market, by owning a share you can earn a portion (dividend) and selling shares you get capital gain. So, your return is the dividend plus the capital gain. However, you also run a risk of making a capital loss if you have sold the share at a price below your buying price.

case 1: Instead of land you are buying Shares. This is called as Investment. Investment are of 3 types depending upon the time frame.

Long Term Investment: 1 -3 years (No tax for the gain)
Medium Term Investment: 6 - 12 months
Short Term Investment: less than 3 months

case 2: Instead of any particular item you are dealing with any particular shares. Trading is of 2 important types

Day Trading: buying and selling on the same day
Position Trading: buying and selling on different days

It is for you to decide what you are going to be? An investor or Trader.............

Pre requisites for doing online share trading / investing

Bank account: This is the normal savings or current account in your name in any of the nationalized bank in India. Mostly your broker will help you in opening zero balance account with any of the banks they have tie up. Be sure to get your login ID and password from the bank to do online trading.

Pan card: Kindly apply for pan card issued by IT department. This is essential for opening demat account.

Other requirements are valid address proof, a cancelled cheque of your bank account and two passport size photos.

Demat account: Demat refers to a dematerialised account.

Just as you have to open an account with a bank if you want to save your money, make cheque payments etc, Nowadays, you need to open a demat account if you want to buy or sell stocks.DPs are like bank branches.
To get a list, visit the NSDL and CDSL websites and see who the registered DPs (depository participant ) are.

Trading account: from Broking House:

Also called as brokers who will carry out transactions like buying and selling of shares you wish. For this they charge a small percentage known as brokerage. For this you open an account with brokers called trading account

You do not have to take the same DP that your broker takes. You can choose your own. It is advisable to have both the accounts with the single house which makes your online trading safe.

Few list DP and broking houses are sharekhan, icici direct, India infoline, India bulls, reliance money, etc.,