Archive for August, 2016

The stock market enthrals everyone. It is the land where fortunes are made and futures are shaped. It is also known for its notoriety in taking away the wealth of people and making them go bankrupt. Nonetheless, most venture out to the markets in the hope of making their pot of gold. At least once in a lifetime, people do try their hand in investing and trading. Success here depends upon their earnestness, determination, discipline and a formal and professional approach towards the market.

The market offers many opportunities for those who can see them. Various instruments and a wide variety of financial products make the choice wide. Trading and investing is thus customised to suit ones need.

Investing in the market is a matter of sowing the seeds today for reaping the fruits tomorrow. Investors pick potentially growth-oriented stocks, invest in them and monitor them on a monthly or yearly basis.

Trading requires one to watch the market regularly. Intraday traders do not leave their screens throughout the day and are glued to their computers. Swing and positional traders, however, have more flexibility and are far more relaxed in their approach. Whilst some traders trade full time to generate all their income from the market, others use the market to generate a second source of income. The latter have a primary occupation which may be a business or a job and only trade the markets to generate additional income.

A person doing a regular job or running his business does not have the time to be in front of his screen all the time. He thus prefers to be a swing trader. He takes a trade today to close it in a few days and watches his trade, as it progresses, on a daily basis. He analyses the market regularly in the morning or at night and identifies the stocks he would like to long or short. He marks his levels, places his orders and puts his stop loss order as soon as the market opens. Many traders even place their orders after market hours as they do not have the time to wait for the market to open. Many people have internet restrictions at their jobs and hence monitor the price of their stocks through their smartphones.

These days, thanks to bracket orders, you can also do intraday trading without looking at the market for the whole day.

Trading is very simple for those who have the discipline and a professional approach. It can not only be used to create wealth but also to generate a regular income. Anyone can become a trader. A businessman, an employee, a student, a housewife or a professional have the potential of becoming good traders. The market is probably the only place where money is not earned. It is made on a regular basis!

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Free Stock Market Training at Hyderabad by Mr. Vashishtha M.Tech. (IIT) on Sat 20 Aug 16. Limited seats. Book your seat now.

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Want to learn how to make consistent money from Stock Market with less risk. The method of trading is revealed. Learn how to build your own stock portfolio.

Learn to generate income from stock market using technical analysis and fundamental analysis. You will also get to know that dealing in share market is all about managing your risks i.e. risk management.

To attend a free online Stock market training by him, available in both Hindi and English, click on the link below, register, and free recording will come to you.

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Trading is a game of profit and losses, wins and defeats. It is a game of odds where high probability is the key to successful trading. A trader identifies a trade with a high probability of success and trades it using professional skills and prudent risk management. If the trade moves in his favor he stands to gain a big amount and if it goes against him he tends to lose a very small amount.

The novice trader, sadly though, understands the importance of risk management after going through many big losses and depleting his trading account considerably. Before he realizes his mistake, he has lost   more than 50% of his trading account if he is lucky. Most though, lose everything and give up trading.

With every wrong trade, the trader depletes his account size by a certain amount and then fervently tries to recover it .This back and forth movement normally follows a pattern. He goes back two notches and moves ahead one notch and thus never really is able to recover his losses. He gets entrapped in this whirlpool and like deadly quick sand, he is pulled into it till the death of his account.

Let us say, that a trader has a trading capital of Rs.1 lac. He suffers of loss of Rs.50, 000/- or 50%. Most would say that he just needs a recovery of 50% to be at par once again but this is not the case. He will need to recover by 100% actually to come to par again. This may be explained as under:

He has lost 50% (50,000/- out of 100,000/- trading capital)

He has to gain 100% (50,000/- out of the remaining 50,000/- trading capital)

Thus, simply put, if a trader has a drawdown of 50%, he will have to make a recovery of 100% to be at par.

Drawdown and recovery are very important aspects of risk management and should always be give deep thought. Planning ones losses in advance can help one to recover from them swiftly or avoid them completely altogether.

Successful trading is more about prudent risk management rather than the accuracy of the trade itself.

Copyright : Pathfinders Trainings / 9022330009

Liquidity & Volatility

Posted: August 10, 2016 in Uncategorized

A new trader preparing to set out on his trading journey, begins to familiarize himself with the language of the markets and comes across various terms which have very little meaning to him at that stage. As he moves along, though, he realizes their importance and place in trading. Two of the most widely used terms, both in words and action, are liquidity and volatility. As the trader moves along he realizes that there can be no successful trade without truly understanding these two terms.

So what exactly are liquidity and volatility? How should one use them to advantage in trading?

Simply put, liquidity may be defined as the ability of the market to easily facilitate the buying and selling of a particular instrument without causing drastic movements in the price. Hence if there are sufficient number of buyers for a particular instrument at a particular price and a sufficient number of sellers for the same instrument at the same price the instrument may be considered liquid. A trader or investor may easily be able to buy or sell an instrument at his desired price and desired quantity since there are sufficient number of sellers and buyers to facilitate him in doing so.

Consequently, when there are not sufficient buyers and sellers in the market to easily facilitate the buying and selling of a particular instrument at a particular price, it causes great fluctuations in the price of the instrument. These fluctuations in price are termed as volatility. A trader or investor who wishes to buy a particular instrument at a particular price may not find a seller at that price and vice versa. He will then be forced to buy and sell at a higher or lower price.

Thus, whilst filtering an instrument for trade, it becomes imperative to choose an instrument which is highly liquid and enables the trader to execute his trading plan smoothly without any eventualities. His orders will get filled in with ease and he will obtain the desired profit or exit at a predetermined loss. On the other hand, a volatile instrument may give him the desired price movement but may not allow him to enter and exit at his desired price thus causing un-called for losses.

Financial markets are constantly manipulated by the big players who thrive on the mistakes of the small players.

It is thus a matter of great wisdom to consider these factors whilst planning and executing ones trade successfully.

Copyright : Pathfinders Trainings / 9022330009


Posted: August 10, 2016 in Uncategorized