Rajendra's - PYT- Seminar VIZAG 06-03-2021- DAY 1.pptx

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1. By, Rajendra Balusu INH200007016 TRADING TECHNIQUES

2. WELCOME TO THE FAMILY OF TIGER’s!

3. TIGER Waiting for Prey

4. HISTORY OF STOCK EXCHANGE Stock exchange was established by “East India company” in 18 th century . In India it was established in 1850 with 22 stock brokers opposite to town hall Bombay .This stock exchange is known as oldest stock exchange of Asia.

5. BROKER AND JOBBER  BROKER: He is one acts as a intermediary on behalf of others. A broker in a stock exchange ,is a commission agent who transacts business in securities on behalf of non members.  JOBBER: He is not allowed to deal with the public directly .He deals with brokers who are engaged with the investors . Thus, the securities is bought by the jobber from members and sells to members who are operating on the stock exchange as broker.

6. DIFFERENCES BETWEEN A JOBBER AND A BROKER JOBBER  A jobber is an independent dealer in securities, purchasing or selling securities on his own account  A jobber deals only with the brokers ,does not deal with the general public  A jobber earns profit from his operations i.e., buying and selling activities  Each jobber specializes in certain group of securities BROKER  A broker deals with the jobber on behalf of his clients. in other words, a broker is a middleman between a jobber and clients  A broker is merely an agent, buying or selling securities on behalf of his clients  A broker gets only commission for his dealings  The broker deals in all types of securities

7.  SPECULATION : It is the transaction of members to buy or sell securities on stock exchange with a view to make profits to anticipated raise or fall in price of securities.  SPECULATOR : Dealer in stock exchange who indulge in speculation are called speculator . They do not take delivery of securities purchased or sold by them , but only pay or rescue the difference between the purchase price and sale price . The different types of speculators are  BULL  BEAR  STAG  LAME DUCK SPECULATION AND SPECULATOR

8.  BULL {TEJIWALA} Speculator who expects the future raise in price of securities he buys the securities to sell them at future date at the higher price. This is called as bull because his activities resembles as a bull , as the bull tends to throw its victims up in the air through its horns. In simple the bull speculator tries to raise the price of securities by placing a big purchase orders.

9.  BEAR {MANDIWALA} Speculator who expects future fall in prices , it does an agreement to sell securities at future date at the present market rate . This is called as bear because his altitude resembles with bear , as the bear tends to stamp its victims down to earth through its paws .

10.  STAG {DEER} operates in new issue of market . Just like a bull speculator . It applies large number of shares in the issue market only by paying , application money , allotment money. He is not a genuine investor because , he sells the allotted securities at the premium and makes profit.

11.  LAME DUCK Speculator when the bear operator finds it difficult to deliver the securities to the consumer on a particular day as agreed upon , struggles as a lame duck in fulfilling his commitment . This happens when the prices do not fall as expected by the bear and the other party is not willing to postpone the settlement to the next period.

12. BOMBAY STOCK EXCHANGE It is oldest and first stock exchange of India established in the year 1875. First it was started under banyan tree opposite to town hall of Bombay over 22 stock brokers.

13. NATIONAL STOCK EXCHANGE OF INDIA(NSE OR NSEI ) NSE of India is the leading stock exchange of India, covering 370 cities and towns in the country. It was established in1994 as a TAX company. It was established by 21 leading financial institutions and banks like the IDBI,ICICI,IFCI,LIC,SBI,etc .

14. Market Conditions Bulls Bullish characteristics are when the market is showing confidence, prices increase and market indicators rise. Conditions: ▪ Unemployment is low ▪ Stock Rising ▪ Prices going up Prices hover at the same level and then go down, indices fall and volumes are stagnant. Conditions: ▪ Unemployment is high ▪ Stocks decreasing ▪ Prices going down Bear

15. “Trend is your friend” It is one of most famous saying which is heard in the stock markets across the globe. Whether you believe it not, if you follow this thumb rule, you will rarely end up losing money in stock market.

16. Technical Analysis Technical Analysis is the forecasting of future financial price movements based on an examination of past price movements. Like weather forecasting, technical analysis does not result in absolute predictions about the future. Instead, technical analysis can help investors anticipate what is "likely" to happen to prices over time. Technical analysis uses a wide variety of charts that show price over time.

17. Technicians say that a market's price reflects all relevant information, so their analysis looks more at "internals" than at "externals" such as news events. Price action also tends to repeat itself because investors collectively tend toward patterned behavior -- hence technicians' focus on identifiable trends and conditions. Market action discounts everything Prices move in trends History tends to repeat itself

18. Understanding the stock market…

19. Trade Plans A  trading plan  is a systematic method for identifying and  trading  securities that takes into consideration a number of variables including time, risk and the investor's objectives.

20. Day Trading Rules A (Day)trading strategy tells you when to enter and when to exit trades. A trading plan is more comprehensive than a trading strategy. A trading plan covers at least seven elements: The  market(s)  you want to trade. The  timeframes  you want to trade, e.g. 15 min, 30 min, tick or range bars.

21. A brief description of the strategies you want to trade and when to use what strategy. Stock Open and High are same is shorting Opportunities. Stock Open and Low are same is Buying Opportunities. The  entry rules  of the strategies.

22. 7. The  exit rules  of the strategies. 8. Other important rules , e.g. when to trade and when not to trade. 9. The  money management approach  you are using.

23. You mean to tell me…

24. Trading techniques Active  trading  is the act of buying and selling securities based on short-term movements to profit from the price movements on a short-term  stock  chart. The mentality associated with an active  trading strategy  differs from the long-term, buy-and-hold  strategy .

25. Their are four of the most common active trading strategies and the built-in costs of each strategy. Day Trading Position Trading Swing Trading Investor

26. Day Trading Day trading is speculation, specifically buying and selling financial instruments within the same trading day. Strictly, day trading is trading only within a day, such that all positions are closed before the market closes for the trading day.

27. Position Trading A position trader is someone who holds a position, usually stocks, for the long-term; from weeks to months, and even years. They are less concerned with short-term fluctuations and the news of the day unless it impacts the big picture behind the stock they are trading.

28. Swing Trading Swing Trading is a short-term trading method that can be used when trading stocks and options. Whereas Day Trading positions last less than one day, Swing Trading positions typically last two to six days, but may last as long as two weeks.

29. How to identify stocks for Intraday Tips to Choose the Right Intraday Trading Stocks: Trade Only in Liquid Stocks Stay Away from Volatile Stocks Trade in Good Correlation Stocks Follow the Market Trend before deciding the Right Stock Pick the Stock you are most confident in after Research

30. Trade Only in Liquid Stocks Liquidity is the most important intraday trading tip while choosing the right stocks to trade during the day. Liquid stocks have huge trading volumes where by larger quantities can be purchased and sold without significantly affecting the price.

31. Stay Away from Volatile Stocks It is commonly noticed that a low daily volume of traded stocks or those where some huge news is expected move in an unpredictable way. Trade in Good Correlation Stocks An intraday tip for choosing the right stock is to opt for those that have a higher correlation with major sectors and indices. This means when the index or the sector sees an upward movement, the stock price also increases. Stocks that move according to the sentiment of the group are reliable and often follow the expected movement of the sector.

32. Follow the Trend One of the most important intraday trading tips is to remember that moving with the trend is always beneficial. During a bull run in the stock market, traders must try to identify stocks that can potentially rise. On the other hand, during the bear run, finding stocks that are likely to decline is advisable.

33. Opportunities and traps 1. Avoid the herd mentality The typical buyer's decision is usually heavily influenced by the actions of his acquaintances, neighbors or relatives. Thus, if everybody around is investing in a particular stock, the tendency for potential investors is to do the same. But this strategy is bound to backfire in the long run. No need to say that you should always avoid having the herd mentality if you don't want to lose your hard-earned money in stock markets. The world's greatest investor Warren Buffett was surely not wrong when he said, "Be fearful when others are greedy, and be greedy when others are fearful!"

34. 2. Take informed decision Proper research should always be undertaken before investing in stocks. But that is rarely done. Investors generally go by the name of a company or the industry they belong to. This is, however, not the right way of putting one's money into the stock market.

35. 3. Invest in business you understand Never invest in a stock. Invest in a business instead. And invest in a business you understand. In other words, before investing in a company, you should know what business the company is in.

36. 4.Don't try to time the market One thing that even Warren Buffett doesn't do is to try to time the stock market, although he does have a very strong view on the price levels appropriate to individual shares. A majority of investors, however, do just the opposite, something that financial planners have always been warning them to avoid, and thus lose their hard-earned money in the process.

37. 5. Follow a disciplined investment approach Historically it has been witnessed that even great bull runs have shown bouts of panic moments. The volatility witnessed in the markets has inevitably made investors lose money despite the great bull runs.

38. 6. Create a broad portfolio Diversification of portfolio across asset classes and instruments is the key factor to earn optimum returns on investments with minimum risk. Level of diversification depends on each investor's risk taking capacity.

39. Bull, bear, and snakes…

40. Methods of stock selection New product, service or management The biggest winners of the past had one thing in common: New products, new services, new leadership, new pricing or a new condition in the industry. Supply and demand Look for heavy-volume accumulation by institutional investors, particularly at key moments like when the stock is breaking above prior resistance levels.

41. Leader or laggard Buy leading stocks from the leading industry groups. Institutional sponsorship For a stock to be a top performer, it must have institutional support to fuel its price movement. Market direction Three out of four stocks follow the market’s trend, so trade in sync with the market. 

42. QUESSCROP 20-11-20 O-410 H-473 L-407 14-01-21 O-570 H-663 L-561 PRICE with volume Breakout Chart Volume with Price Breakout

43. Results IMPACT BIOCON GAP Down with huge selling Consolidation Zone 22-01-21 O-422 H-423 L-376

44. BIRLACORPN GAP UP OPENING IMPACT Price 704 Here it taken Support But trend Positive If it closes below this gap technical short term trend Weak GAP UP Open 12 th Feb 21 Price 842

45. Why stock market traders lose money Trading during the first half-hour of the session Failing to hear the market's message Ignoring which phase the market is in Failing to reduce position size when warranted Failing to treat every trade as just another trade

46. Over-eagerness in booking profits Trading for emotional highs  Failing to realize that trading decisions are not about consensus building

47. Trading food chain…

48. Risk Reward Ratio RISK TO REWARD 1:3 ATLEAST 1: 1.5. VALUE OF STOCK TO BE TRADED EQUALLY RESPECT & EXECUTE STOPS & TRAILING STOPS. BOOKING PROFITS REGULARLY. NOT MORE THAN 10% OF THE CAPITAL IN EACH TRADE.

49. SUMMING UP ENTRY EXIT POINTS STOP LOSS & TRAILING STOP PEER CHARTS VOLUME IMPORTANCE GAPS IMPORTANCE ALL TIME HIGHS & LOWS

50. Forget me not Don’t act at the open, wait for 5-10min to judge the market mood. Always trade with SL preferably trailing stop.. Never let profit turn into loss Don’t average your loss Take big profits & small losses Futures linear gains, options for low risk traders

51. Forget me not Don’t formulate new opinions during market hours Trade when market is more liquid, 1 st & last hour is best time Markets are never wrong, Opinions often are Learn from your mistakes Monitor your Investments; No Investments are for ever

52. Forget me not Never permit speculative ventures to turn into investment Revenge trading – trying to make back a loss – carries with it far too much emotion and is always costly. Ban wishful thinking in markets Prepare well for each day as everyday is a new day Smartest Looser is the Biggest Winner

53. DO & DON’Ts Don’t get out of a trade when you are afraid get out when your trailing stop or stop loss is hit. Don’t enter a trade when you are greedy for profits get in when you get an entry signal. Don’t take a huge position size because you are greedy for profits, trade a planned position size based on risk and probability of the entry. Don’t trade based on your personal opinions trade based on a robust methodology. Don’t trade based on tips, trade based on your own trading plan. Don’t have a target price let a trade go as far as it will trend.

54. Don’t marry your stock, do marry your risk management plan. Don’t trade with your ego but do trade with confidence after you have done your homework. Don’t just copy another trader’s strategy but do find a strategy that fits your own personality. Don’t try to trade based on future predictions but do trade the current price action.

55. BULLISH SECTORS PRIVATE BANKS AUTO SPACE METALS IT CHEMACALS & SPECALITY CHEMICALS AVOIDABLE SECTORS INFRA SPACE (HUGE DEBT HAVING COMPANIES) FMCG

56. Rakesh Jhunjhunwala Trading Ideas HAPPY TRADING WITH LOTS OF PROFITS