Monday, 15 May 2017

Key Take Away: from the Book "Trading in Zone" by Mark Douglas

Shivaraj

Key Notes:
1. We don't have to know anything about What Markets are going to do Next in order to make Money...
2. Market is the Paradox of Thousands of People's thoughts, contradictions to each other.
3. We need to learn how to redefine our trading activities in such a way that we truly accept the Risk, and we're no longer afraid.
4. We need to remain Disciplined, Focused and above all, Confident in spite of the Adverse conditions. 


                  

Bhushan Unnarkar

Technical Analysis has been in practice since beginning but people started getting aware of it gradually with time. Though Fundamental Analysis tries to analyses the valuations of a company through various models which rely on historical data, it doesn’t consider traders as a variable (important aspect of demand and supply). These traders don’t actually take decisions rationally all the time as it is not necessary that they understand the fundamental aspects that affect the prices. Hence a fundamental analyst may find it difficult to stay in trade especially when volatility is high.

THE SHIFT TO TECHNICAL ANALYSIS

Several traders participate in market daily and with time they develop a behaviour pattern that keeps on repeating. Technical Analysis helps us to identify such patterns. Technical analysis thus develops opportunities in market which a trader can reap benefit of.

THE SHIFT TO MENTAL ANALYSIS

Through Technical analysis many traders predict the trend of the market. But there is difference between predicting and actually getting in and out of the trades successfully.

There are many traders in market at a given time but very few people are accurate for most number of times. These people think differently. Learning how to identify an opportunity to buy or sell doesn’t mean that one has learned how to think like a trader. Successful traders have altogether a different mindset, they are more focused and disciplined above all they are confident even in adverse conditions. This makes them resistant to fears, panic and trading errors. 

Traders know that they are risk takers as outcome of each and every trade is unpredictable but they fail to accept the possible consequences of the concerned risk. It’s natural that no one wants to make a loss or accept defeat but successful traders understand when a trade is not working and it doesn’t affect them emotionally. If you're afraid of being wrong, your fear will act upon your perception of market information in a way that will cause you to do something that ends up making you wrong. As a matter of fact, because every person who trades is a market variable, it can be said that any single trader can cause virtually anything to happen. This means that no matter how much you learn about the behavior of the market, no matter how brilliant an analyst you become, you will never learn enough to anticipate every possible way that the market can make you wrong or cause you to lose money. So if you are afraid of being wrong or losing money, it means you will never learn enough to compensate for the negative effects these fears will have on your ability to be objective and your ability to act without hesitation. In other words, you won't be confident in the face of constant uncertainty.

As long as you are prone to errors that are the result of rationalizing, justifying, hesitating you will not be able to trust yourself. If you can't trust yourself to be objective and to always act in your own best interests, achieving consistent results will be next to impossible. Trying to do something that looks so simple may well be the most exasperating thing you will ever attempt to do. The irony is that, when you have the appropriate attitude, when you have acquired a "trader’s mind-set" and can remain confident in the face of constant uncertainty, trading will be as easy and simple as you probably thought it was when you first started out. The solution is to develop attitude and beliefs about trading in such a way that makes you fearless but also doesn’t allow you to be reckless.




Kiran Chandrashekar

In the beginning: fundamental analysis

1) Fundamental analysis isn't the only real or proper way to make trading decisions, technical analysis is also one.
2) Many traders usually don't have the slightest concept of the fundamental supply and demand factors that are supposed to affect prices.
3) At any given moment much of the trading activity is prompted by a response to emotional factors that are completely outside the parameters of the fundamental model.

The shift to technical analysis:

1) In technical analysis, individuals develop behaviour patterns and a group of individuals, interacting with one another on a consistent basis, form patterns are observable and quantifiable and they repeat themselves with statistical reliability.
2) For projecting future price movement, technical analysis has turned out to be far superior to a purely fundamental approach.

The shift to mental analysis:

1) Right mindset is required to encash the opportunity using either technical or fundamental analysis.
2) With right mindset for trading, the gap between the possibilities available and their bottom-line performance can be closed.
3) The best traders think differently from the rest.
4) Risk is inevitable, it's the most important trading skill to be learnt.
5) Most traders experience emotional pain and financial disaster without discipline, right attitude, calculated risk and belief.
6) Source of our trading difficulties is internal, derived from our state of mind.

Sandhya Godavarthy
The risk inherent in a trade should not effect our decision in the subsequent trades...this is called accepting the risk in the true sense.

To achieve a consistency in our wins we need a technique.

Market can always throw a variable at you which you did  not think of or consider in your analysis.
Accepting the inherent risk in your trade is the steeping stone to build your confidence, this helps in clearing the filter which makes you interpret any market information with  a negative connotation and forcing you to derive losses from you trades.

Savio Dourado

Fundamental analysis (FA) was earlier considered the only real or proper way to make trading decisions. Though FA considered various variables through their mathematical models, they rarely factored in other traders ( who have the ability to move prices) as variables.

Though Technical analysis (TA)existed earlier, it was not widely used, but now ( along with the info FA gives)has turned out to be a far superior to a purely Fundamental approach.

However to get the best of both worlds( TA & FA) and to master the art of trading (closing the gap between the possibilities available and the bottom line performance) and to become consistent winners we need to have discipline and the right mental attitude.

We are not consistent winners because we start our trading careers with a fundamental lack of understanding of what it means to be a trader, skills involved and the depth to which the skills need to be developed. Most of us (traders)  have no concept what it means to be risk takers.

Consistent winners remain disciplined, focused and confident in the face of consistent uncertainty. They have developed a skill that defines their trading activity in a way that allows them to completely accept the risk. This skill allows them to think objectively and analyse the market information of what are the possibilities available.

The best traders have developed attitudes that gives them the mental flexibility to flow in and out of trades based on the information the market provides. They have an attitude of not becoming reckless.

We need to learn how to adjust our attitudes and beliefs about trading in such a way that we can trade without the slightest bit of fear, but at the same time keep a framework in place that does not allow us to become reckless.

The book promises to teach us these skills in the chapters ahead.

Hanuram Lal

This chapter describes about the road to success: Fundamental, Technical or Mental Analysis.

Person whoever puts into trade becomes a trader but are you a master in trade? can you become a successful trader?

You can't think like a trader until you attain a mindset that allows you to remain disciplined, focused and confident in spite of adverse conditions.

Mastering in trading is possible who have closed the gap between the possibilities available and their bottom-line performance.

The successful traders think differently from the rest of the traders. The best traders aren't afraid, because they have developed attitudes that give them the greatest degree of mental flexibility to flow in and out of trades based on what the market is telling them about the possibilities from its perspective. At the same time, the best traders have developed attitudes that prevent them from getting reckless.

Most of the traders gets emotional pain and financial disastrous as we started trading career with out proper guidance. Trading environment is different than normal environment, most of the perspectives, attitudes and principles which works well in our daily life's may not work in trading environment.

Trading is inherently risky. there is no guaranteed outcome so losing money is always possible.but the best traders will take the risk, learned to accept the risk. They trade with out any hesitation. so if you will learn to accept the risk, you will be a successful trader.

The successful trader that you want to become is a future projection of yourself that you have to grow into. Growth implies expansion, learning, and creating a new way of expressing yourself.

Shivaraj

This book provides an insight of factors that affect Traders mindset. It is important to remember that Market is Unique at any given point of time. 

We need to understand our Risk(Stop Loss) and Target before entering into any trade. Only disciplined approach in trading can lead to success.
Most importantly we need to accept/recognize our mistakes and try to overcome in the subsequent trades.

The book is really awesome. Below are the lines I noted and will read very frequently.

I. “Taking responsibility is the cornerstone of a winning attitude”.

II. Our state of mind makes whatever we perceive outside of us seem indisputable. Our state of mind is always the absolute truth. If you feel confident you are confident. If you feel afraid, then you are afraid. You can’t dispute the quality of energy that is flowing through your mind and body at any given moment. Since you know as an undisputable fact how you feel you can conclude that you can know the truth of what you are perceiving outside of yourself in the same moment. The problem is that how we feel is always absolute truth, however, the beliefs that triggered the state of mind or feeling may or may not be true relative to the possibilities that exist in the market at any given moment.

III. We can “know” what our edge looks like, and we can “know” exactly how much we will risk to find out if that edge is going to work. We can “know” that we have “rules of engagement” to manage the trade and take profits. That is all we can know.

IV.
A probabilistic mindset pertaining to trading consists of five fundamental truths.

1. Anything can happen.

2. You don’t need to know what is going to happen next in order to make money.

3. There is a random distribution between wins and losses for any given set of variables that define an edge.

4. An edge is nothing more than an indication of a higher probability of one thing happening over another.

5. Every moment in the market is unique.


V.
 I am a consistent winner because:

1. I objectively identify my edges.

2. I predefine the risk of every trade.

3. I completely accept the risk or I am willing to let go of the trade.

4. I act on my edges without reservation or hesitation

5. I pay myself as the market makes money available to me.

6. I continually monitor my susceptibility for making errors.

7. I understand the absolute necessity of these principles of consistent success and, therefore, I never violate them.

Prashant Patel

According to me, this book is wonderful in designing the mind set of a Trader.  The author has very well explained that how the mind set of trader help him trading and gives him proper judgement about taking his trades.  If a trader follow rules, he will be always in right side of the trade. The trader has to develop a positive mind set and build the self trust which will lead him to achieve his goals. The trade has to keep in mind many aspects of trading like having proper knowledge of the stocks, technical, fundamental and the most - his self confidence.  Trader should not end up saying that market is always giving him losses. Trader has to treat stock market as his business and should learn and earn on his own by risking small affordable capital. 

Key Take Aways from the Book "Trading in Zone" - Chapter 1 by Mark Douglas by Suresh


1) Fundamental analysis doesn't take fellow traders (especially the traders who can manipulate the price, whom we call as OPERATOR) into consideration. It often tells what the price should have been rather than what it is now
2) Technical analysis helps us to anticipate the future price movements based on certain patterns and historical data. It gives endless opportunities for entering into trade.

Mental analysis -  
                  

3) Even if we have understood markets and come to level of predicting directions, we would not have earned as much profits as we would have expected.

4) Even if we have identified certain patterns and expected it to move in the expected direction, we would not have entered into the trade. Instead, we keep thinking how much money we could have made. This is called as psychological gap.

5) Only very few successful traders trades in real market as easy(without fear) as they do virtual trading.

6) Difference between successful consistent traders and normal traders - thinking in a different way.

7) The defining characteristic that separates the consistent winners from everyone else is this: The winners
have attained a mindset of attitude that allows them to remain disciplined, focused, and, above all, confident in spite of the adverse conditions. As a result, they are no longer susceptible to the common fears and trading errors.

8) Best trader accepts the risk and all possible outcomes before putting a trade.

9) Successful trader is the one who executes a trade without any slighetest of doubt and conflict in mind. With the same mentality, trader will exit in loss if it is not going as desired and admit that trade is not working. And this loss won't create a emotional discomfort in successful trader's mind

10) Loss making trades will not make successful consistent traders lose their focus, discipline and confidence.

11) If we don't accept the risks involved, then we will try to avoid the risk. Avoiding the risks will have disastrous effects on trading loss.

12) When we learn the trading skill of risk aceptance, market wont be able to generate information that we interpret as painful. Market is just the information which tells what all possibilities exist.

13) There is no trader who hasn't done the following:
      a) Entering into trade before market has generated th signal
      b) Entering into a trade very late
      b) Exiting trade soon
      c) Turning profitable trade into loss making trade
      d) Accumulating a big loss by convincing ourselves to not to exit on time
     e) Having a small stoploss - After hitting the stoploss, price might have moved in the direction as we would have expected
These are some of the errors of traders



14) These are not market generated errors. Market is neutral. It just moves, generates informations and provides us with opportunities to take some action.

15) These errors are due to faulty attitudes and perspectives. These will make make traders more fearful instead of making them confident.

16) The differnece between best traders and normal traders is that that best traders are not afraid.They aren't afraid because they have developed attitudes that give them the greatest degree of mental flexibility to flow in and out of trades based on what the market is telling them about the possibilities from its perspective. At the same time, the best traders have developed attitudes that prevent them from getting reckless.

17) When we are afraid -> narrow our focus - we cant think properly and cant take appropriate action; cant think about any other possibilities; cant think about available information in the market; cant think about what we have learnt previously. 

18) If we don't understand how our beliefs and attitude affects our perception about market information, it will look like market behaviour is causing us inconsistency. Then we will think to study more about the market behaviour to be more consistent.

19) But the tricky part is, we can't master the markets and anticipate every movement of markets as so many persons are involved in this price movements and each person has different perceptions.

20) So if we are afraid about being wrong or losing money, we can't be confident in trading. Unless we accept completely the risk involved, we will end up in wrong side of trading due to self generated errors.
21) Market analysis is required to identify the opportunities for trading. But market analysis alone can't make a trader, a successful consistent trader. Market analysis won't solve the problem which are created by lack of discipline, lack of confidence or improper focus. 

22) Confident and fear are two important factors. To remain confident in this uncertain world of markets, we require trust in ourselves. We will gain this trust only if we learn to override our natural inclination to think in ways that are counterproductive to being a consistently successful trader.

23) Learning about the markets alone wont help us to be a successful trader. We have to define our trading activities in a such a way that we have truly accepted the risks and not afraid at all about negative outcomes.

24) When we attain a mindset that truly accepts the risks, market information (price variations) won't be painful to us.  When we don't perceive market information in painful ways- we won't hesitate, jump into markets early, hoping for a movement in the price or hope market to save us from the loss.

25) When we have appropriate attitude(trader's mindset) and remain confident in uncertain markets, trading will be very easy.

26) We need to adjust our attitudes and belief about trading in such a way that we trade without any hesitation and fear with a proper framework in place.

Conclusion : Have trader's mindset. If we accept the risks completely in a trade, we wont be afraid and will trade confidently and without hesitation. Be disciplined, focussed and confident. Use the market information without any bias or inclination. Have a framework and trade confidently. 



Sunday, 7 May 2017

My Trades - Equities - May 2017

Click here to view my Trades - Equity - January 2017
  
Click here to view my Trades - Equity - February 2017
  
Click here to view my Trades - Equity - March 2017
  
Click here to view my Performance Report



Date: 1st May, 2017

Time: 14:18 IST

Jet Airways


Indigo


Time: 21:49 IST

I am looking forward to some major moves in aviation stocks. I will buy Jet airways and Indigo in coming days. Since both are in F&O, I will try to cover by option strategy once momentum is visible in  these stocks.

Muthoot Finance - I will buy on correction at 382 and will sell at 395




Date: 2nd May, 2017


Time: 10:30 IST

Muthoot finance - I bought at 382.

Time: 15:00 IST

Muthoot finance - I sold at 395 which I bought at 382 today morning.

Time: 20:44 IST

Crude - I am expecting breakdown in crude oil.


Time: 21:29 IST

DHFL 

1) If it open flat tomorrow, I will buy at 441.2/443 with the stoploss of 439. I will sell when it reaches 458.
2) If it opens at premium around 452, I will short it at 458 with stoploss of 462 and cover it at 441/443

Date: 3rd May, 2017

Time: 09:04 IST


Nifty - I feel support is at 9280/9181 and resistance at 9350/9380

Oil and auto sector looks positive to me

RBL - Results were strong. Higher provisions led to lower than expected profits.
I feel first support is at 567/568 and if it holds, then it may go to levels of 581. If it fails to hold 567 levels, it may go to second support level of 562.

Time: 09:30 IST


DHFL - I bought around 443 levels.

Time: 13:00 IST


DHFL - I sold around 451 levels which I bought around 443

Date: 5th May, 2017

Time: 07:25 IST

Crude - I will cover at 2850 which I shorted at 3130. It is trading at 2910 now.



Time: 10:05 IST

Crude - I covered at 2850.

Date: 6th May, 2017

Time: 07:01 IST

Tata Motors - Descending triangle formation - Important to see how negative is the volume breakout.
Sustaining will depend on result announcement of consolidated numbers
Positive is W pattern with 50% consolidation move. It is hard to believe in fall in short term. It might break and I think it will be false breakout.

Date: 8th May, 2017

Time: 15:29 IST

I am buying HDIL and MRPL for BTST.

Time: 23:20 IST

Indigo

I personaly - Will Be betting on June - Thats is Post result - I expect some bounce - Let it correct - More if it wants. I will Buy June Expiry Options - Once IT Melts More


Date: 9th May, 2017

Time: 09:15 IST

HDIL - Opened at 1.7% higher. I am trailing my stoploss. I bought at 92.9 yesterday at close.

Time: 10:00 IST

HDIL - Made high of 99.85. Trailing stoploss
MRPL - Holding

Indigo


I am expecting following Intraday Day Band

Low - 1112/1072( Extended)

High - 1158/ 1170( Extended)


Time: 10:45 IST

MRPL - I am keeping my stoploss at 132 on closing basis for the positionswhich I bought today.

Date: 10th May, 2017

Time: 08:48 IST

Nifty - I feel support is at 9280/9250 levels and resistance at 9380/9420

Capital goods sector looks good to me

L&T - I will buy L&T on technical basis at 1715 and sell it at 1800

Siemens


Resistance - 1453 ( Broken - Sustained)  1508 / Lower Support 1408

Time: 12:13 IST

Axis Bank - I will buy 540 CE at 8 with a stoploss of 5

Time: 14:19 IST

PFS - I am buying at 48.5 as it has given breakout


Date: 11th May, 2017

Time: 09:36 IST

Axis bank - I sold 540 CE at 9 which I bought at 8.

Time: 11:23 IST

Axis bank - I sold all my positions at 534.

Time: 13:27 IST

PFS - I am keeping my stoploss at 47.5 on closing basis.

Time: 20:17 IST

I have decreased Trading bets - as i am Not so comfortable Trading out on streched values-
Its lethal to trade when I feel Standing at Peak.
I will trade but less .I will trade but with probability of higher percentage of winning

Date: 12th May, 2017

Time: 10:30 IST

Rel Infra - I will buy around 603 levels with astoploss of 594 on closing basis. I will sell at 621/628/644
I am trading 620 CE based on the above cash levels.

Date: 13th May, 2017

Time: 10:49 IST

Ducon Infratech - I will buy for long term  at 35 and will sell at 90. I am waiting for correction from the current level of 48.

JaiPrakash Associates - I will buy at 11.55/ 10.30 and will sell at 22. I will buy with a time period of 9 months.

PTC India Financial services - I will buy at 48.2 with a stoploss of 47.5. I will sell at 60


Date: 15th May, 2017

Time: 09:05 IST

Nifty - I feel Nifty supports at 9380/9320 and resistance at 9450/9500

TVS Motors - I am buying with a stoploss of 505 and will sell at 545. It is currently quoting at 517.

Time: 10:18 IST

HDIL - I will buy at 97 with a stoploss of 94.5 and will sell at 103.

Time: 10:29 IST

UPL - I will buy 860 CE at 9 with a stoploss of 7.

Time: 11:02 IST

UPL - 860 CE is up by 10%. I am keep on booking my profits,

Time: 11:07 IST

UPL - 860 CE is quoting at 11. I am keep on booking my profits

Time: 11:38 IST

Karnataka Bank - I will buy at 168.3 with a stoploss of 166.3. I will sell at 172.8/176/181.4

Time: 13:21 IST

Karnataka Bank - My stoploss is hit.

Time: 19:49 IST



Nickel - I have bought at 586/581. I feel it is ready for fresh move.

Date: 16th May, 2017

Time: 09:19 IST

HDIL - Quoting at 101.5. My buy level is 97. I am trailing my stoploss.

Time: 09:27 IST

TVS motors - I am selling my positions at 533.75 which I bought around 517.

Time: 15:03 IST

NCC - I am buying 105 CE at 2 with a stoploss of 1. I will sell around 4. 
I am keeping stoploss of 98.5 in cash. I will sell at 106.

Date: 17th May, 2017

Time: 08:53 IST

Nifty - I feel Nifty supports at 9450/9380 and resistance at 9550/9600

Time: 09:21 IST

NCC - I sold 105 CE at 2.5 which I bought at 2. 4000 Rs return on 16000.

Time: 12:41 IST

JustDial - I am buying justdial 530 call at 19 and selling 580 call 6*2, with a maximum loss 7

Date: 18th May, 2017

Time: 09:00 IST

Nifty - I feel Nifty supports at 9450/9420 and resistance at 9550/9600

Time: 09:15 IST

MRPL - I sold all my positions at 142.

PFS - I exited at my stoploss level of 47.5 which I bought at 48.2

Date: 19th May, 2017

Time: 09:00 IST

Nifty - I feel Nifty supports at 9380/9350 and resistance at 9480/9550

Date: 22nd May, 2017

Time: 09:00 IST

Nifty - I feel Nifty supports at 9380/9350 and resistance at 9480/9550

Time: 09:55 IST

Tata Motors - I am seeing huge volumes as results will be out tomorrow

Time: 13:24 IST

RelCapital - I will buy June 600 PE at 8.5 with a stoploss of 4. I will sell at 17

Time: 13:42 IST

RelCapital - Trading at day's low.

Time: 14:48 IST

Bharti Infratel - I will buy May 390 CE at 4.5 with a stoploss of 3.5. I will sell at 8

Time: 15:14 IST

RelCapital - I sold June 600 PE partly at 10

Date: 23rd May, 2017

Time: 09:00 IST

Nifty - I feel Nifty supports at 9420/9380 and resistance at 9480/9550

Bharti Infratel - I am sensing long term reversal on structural move

Time: 09:20 IST

Bharti Infratel - I exited at my stoploss level of 3.5.

Time: 09:55 IST

RelCapital - I sold all my positions in June 600 PE at 20 which I bought at 8.5

Time: 12:40 IST

Tata Steel - I will buy June 520 CE at 8.5 with a stoploss of 5.5. I will sell around 14.

Time: 12:56 IST

Tata Steel - I partly exited at 10

Date: 24th May, 2017

Time: 09:00 IST

Nifty - I feel Nifty supports at 9350/9320 and resistance at 9450/9480

Tata Motors - Numbers impressive, valuation attractive, see investment target of 635

Time: 09:20 IST

Tata Motors - Made a high of 473

Time: 14:36 IST

Tata Motors -I feel it is Well postioned for larger move - seems some delivery pick up

Time: 15:28 IST

Tata Motors - I am buying June 500 CE at 8 as BTST trade.

Date: 25th May, 2017

Time: 09:00 IST

Nifty - I feel Nifty is rangebound between 9450 and 9320

I am not into leverage exposure at this nifty level. I am trading with strict stoploss - am finding most of the stocks attractive but lacking broader support.
I am waiting for reversal pattern to form a base before trading

Time: 15:07 IST

Tata Motors - June 460 CE is trading at 26 which I bought at 9


Date: 26th May, 2017

Time: 09:51 IST

Tata Steel - I sold June 520 CE at 13 with a profit of 9000 at 13

Time: 09:55 IST

Tata Steel - June 520 CE made a high of 14.5

Time: 15:28 IST

UPL - I am buying at 837 levels as BTST trade

Date: 28th May, 2017

Time: 19:53 IST

Pincon spirits

Preferential - Issue - 57,06128( Done)
Right issue for - 75 Cr proposed to sebi
Masala Bonds - For 300 cr on LSE - Appointed bankers and are in discussion

I am expecting a Topline of 1800 Cr
Liquor Shops - 33
I am buying at 66 levels and will sell at 100

Time: 19:55 IST

Reliance communication - Posted a loss of 1285 cr against profit of 360 cr. I am expecting it to touch 21 levels.

Date: 29th May, 2017

Time: 12:50 IST

UPL - I sold at 855 which I bought at 837 levels on friday.

Date: 31st May, 2017

Time: 13:20 IST

Escorts -

Consolidating - 695

Mrp - 679

I will Buy Above - 685 ( Hourly Close) for  Intraday

SL - 679

Tuesday, 2 May 2017

Dheeraj VS Kamlesh


Monday, 1 May 2017

ROE- Return on Equity

Important Ratio

ROE- Return on Equity

Return on equity= Net income earned/ Total Equity

Now suppose equity( owners fund or invested capital by owners)of a company is 1 crore and the company has following net income figures

Q1- 5 lakhs
Q2- 7 Lakhs
Q3- 4 Lakhs
Q4- 9 Lakhs

Now total net income of the company is 25 lakhs....

So ROE is 25 lakhs/1 crore
Which is 25%

So basically ROE is nothing but the returns a company is earning on its invested capital....


Written by - #Yash
Edited by  - #Raj
                    #ow

Dividend


Dividend is amount of profits paid by a company to its shareholders.

Why is dividend important?
When a company pays dividend it is a signal to the shareholders that the cash situation of the company is good and it is not only making paper profits but also cash profits.

------------------------------------------------

See there is a difference between both of them..

If a company is making profits but all its profits are with debtors then company is not in good shape or not functioning well....The collection cycle of the company is not proper and it may face cash crunches in future. Cash is required for daily operations and if company is facing problem then it may have to borrow funds for working  capital which is not a good sign.

Second situation is company making book profits as well as cash profits...In this case the financial situation of the company is good...The company is making sales as well as able to collect the money from Debtors

-------------------------------------------------

Now when a company pays dividend it gives a signal to the investors that the company is not facing any cash problem and the company is doing well

In next post we are going to discuss the two important ratios

Dividend payout and dividend yield....

Written by - #Yash
Edited by  - #Raj
                    #ow

Live Questions and Answer Session with Puneet Marwah


                  

Sharath P
1. India Cements 2. Rattan India Power

India cements - Stock has broken ascending triangle formation ; stock has more credentials, one of the best scripts, Numbers will take time to move forward. Motilal Oswal has invested in it. Buy stock in corelation to government spending on infrastructure. BUY around 203-204 for a target price of 270-280

Rattan India Power - flag pattern formation seen; Can BUY around 8.28 levels ; Resistance seen around 9 - 9.30 levels. Can consolidate for 2-3 months. If it breaks resistance with good volumes it can move upto 12-14 levels. Rounding Bottom Formation. Cup and Handle pattern in the making. Stop Loss at 7.50 If stop loss is broken with higher volumes and sustain below it then exit.

Pratik Mehta
I have bought Bank Nifty Monthly 22000 Put Option at 220. Views on the same.

Some heat left in PSU Banking stocks whereas Private Bank Stocks can see some correction. 21800 is a strong support. Advised to exit at Cost to Cost or in minor loss.

Thank You for your selfless service everytime. :-)





Sunil Bisht
About geecee ventures

Hold for 3 month target 170

Views on Dmart
Valuation is too high. Exit at current levels. And enter in tata motors.

Thanks Puneet sir and Deepa mam for the efforts.

Mohit vyas

Whts ur view on jaysharee tea
It's a good stock to hold 
One can enter the script at 102 levels with target 140
Recently in tht counter 2 to 3 lakh shared were bought

Magna electrocasting view?
technical view : exit
buy about 217-218 levels
potential currently to 201 or fall down..so better to exit.
liquidate and move to tatamotors soon.

Praveen
ONGC 185 CE view?
This month will be range bound so better exit with little profits or exit at supports 185 is support 189 is next resistance. can go until 235 its for delivery and longterm view. 

ONGC counter for it to move good points nifty should move about 150 to 200 points, this is highly liquid counter and just be very cautious if you are putting money on options.

looking to book with 2-3 profits or cost to cost exit.

DHFL 420 PE
look for targets around 14-15 and exit. 

evening start formation on it so it may test 406 levels but since this month will be range bound so just keep booking profits or else premium will be lost quickly.

RAHUL RANA
1. Whether to hold investment in Moser Baer Shares.
2. Whether to hold investment in JK Tyre Shares.

Ans1: Business model in itself is confusing, shaky and unconvincing of the above said company related to solar and storage media. Better to be out of scrip.

Ans2: Bought at 120. Hold with SL 145.




PSM Fans Thoughts on Trading in the Zone by Mark Douglas - Summary by Brian


Trading in the Zone by Mark Douglas - Summary by Brian29 Pages131 KB
On the learning curve, we have started group book reading. Here is what our group read and learnt from first ever joint reading.

Nayan started the conversation:
1. Create your won your trading rules: Every successful traders has their won set of trading rules and they adhere to that rules. It doesn't mean that create your won trading rules always gives you profit but it will maximize your profit with minimum loss. 

2. Understand the risk: It is important to not only understand but also accept that trades come with certain risk.

3. Alligning  Mental Environment  

A probabilistic mindset pertaining to trading consists of following fundamental truth 
a. Anything can happen.
b. You don't need to know what is going to happened next order to make money.
c. Every moments market is unique.  

4. Think Like a Traders 
a. Build the self trust necessary to operate in unlimited environment.
b. Learn the flawlessly execute trading system.
c. Train the mind to think about the  probability.
d. Create a strong belief yourself.  

5. Creating  a Belief in consistency 
a. I objectively identify my edges.
b. I predefined the risk of every trade I do.
c. I completely accept the risk or I am willing to go of the trade.
d. I continually monitor my susceptibility for  making errors.
e. I understand the absolute necessity of these principles of consistent success and there fore I never violate them. 


                  

Yogini adds: Every trader has a number of common stages in his trading life, some money-making and most loss making. While most of the enthusiasts give up trading after making losses in the earlier stages, very few really analyze their experience, and try to improve things.

It is easier for a novice to think that losses are caused because of lack of knowledge about market. But it’s untrue. Many people forget that apart from market behavior, fundamental know-how and technical analysis, there is one more very crucial factor in trading. The book discusses in detail about this factor – probably the most important one – trader’s thought process. In fact, in trader’s life the only consistent and therefore reliable thing that works in his favor is his own mindset.

Emotions like fear, greed, anxiety and others are attached to financial losses. Each of these emotions drives decision making capacity of a person. Once you are able to control your emotions, any ups and downs of the market do not affect your mental stability and your profitability, too. The book guides well on how to shift your focus from being reactive to being proactive with your emotions. While there are lot of sources available to learn techniques of trading, this book talks about mastering your mind - which decides how to use the such sources.

To me - this book is much an answer as to why the same trading environment makes some people win and some people lose their money.


Savio continues: The Summary of “Trading in the zone “by Mark Douglas very beautifully clears our fundas of what we should know, do and expect as a trader.

I have personally picked up the following as a novice trader
  • We start trading without being in the learning mode and honing our skills. We are so dependent of tips we receive.
  • We do not understand the conceot of Risk taking.
  • We do not have our rules and risks predefined.
  • We do not take the trouble to learn and master the various terminologies, concepts, variables (that very often confuse us) and trading skills so that we in the long run can be successful traders by mitigating the risk involved
  • We tend to blame others instead of shouldering the responsibility.We must learn from our mistakes and discipline ourselves not to repeat
  • We tend to be greedy and reinvest all we earn (to make more) instead of paying ourselves when we profit from a trade




Rahul says: The most important aspect of trading is emotional quotient, and it depends upon number of factors such as the amount of risk taken, leverage, stop loss etc. we as a trader have to objectively place ourselves in the right direction equipped with various known variables related to your trade. When you completely aware of your risk, potential profit etc half of your trading stress comes down and you trade with much ease unlike like novice traders whose heartbeat fluctuates with the fluctuation of stock prices. 

Kiran adds:  The author focus mainly on physiological mind shift a trader needs to have. The attitude and belief a trader has to have on taking risk and responsibilities is inevitable. There are many repeated statements made on the psychological mindset a trader has to have, which is considered as a need to be stressed on. The impact of psychological effect is greater than the market risk. He says it by justifying a trader with right mindset will have right attitude and belief and knows how to react to the market changes . I do agree with the author, trading well is mainly having right mindset with right attitude, belief, taking calculated risk, taking responsibilities, thinking like a trader (3 stages , they are mechanical stage (trading skills), creating a belief in consistency (calculated risk, tracking, monitoring, etc) and the last stage is  exercise (accepting the risk, trading in sample sizes (micro level)). It's essential to start working on psychological mindset which a good trader needs to possess before one starts trading.

Govardhan continues: I think it’s a superb book for new Traders. This book has showered some light on the Psychological aspects of trading. I will now take full responsibility and risk for losing a trade and I don’t bombard myself with excess knowledge about indicators and other stuff. Thank you Deepa and Puneeth for your outstanding efforts. Thanks for the good book.

Kumaraguru asserted: Excellent book...Recommend every fresher like me to read it. Key highlights are the seven steps of consistency and five fundamental truths. I have faced most of the issues mentioned in the book. I was trying to find the root cause of my failed trades and this book clearly explains it. I will practice the steps mentioned in book for achieving consistency as a trader...





Hanuram Responded as: This book tells about the mindset of all kind of traders. Traders should remain focused, disciplined, confident in the face of constant uncertainty. Learn the skill of risk acceptance.

Traders need to develop rules and boundaries which should be created by an internal structure to prevent the possibility of exposing in to damaging trades

To be successful trader you must deactivate limiting beliefs, create new empowering beliefs and work on your mental and emotional attitude.

Most of trading errors (four fears) are being wrong, losing money, missing out and leaving money on the table

Sandhya Summarized: This book should be one of the initial books a person should read while entering into stock markets. The way a person is checked for a cultural fit into the organization, the belief system of the person trading or investing in stock markets should be judged in the same manner.

The belief system a person carries with him or has created with him over the years as a result of his experiences plays a major role in the way he perceives market information and the way he acts on it.
The associations that we create for a positive or negative incident in our mind prejudice our decisions in the market.

Risk acceptance is one such attribute of people which is heavily influenced by our past experiences and complete understanding of this trait of a person is the key to his success in markets. Risk acceptance is not equivalent to the setting of stop loss in trades but being nonchalant to the result of the trade. Not letting the result of a trade (irrespective of whether it is positive or negative) affect your other decisions of trade. This can be practiced by developing an edge (probability of an event) which is not affected by market behavior.

Markets behave uniquely every moment and it is our need that defines a particular point of time as profit or loss, at any point of time market will behave in accordance with its various variables which are difficult to time.

It's only when you are at peace with this uncertainty that you can resolve your internal conflict which will let you be in harmony with the uniqueness of the market and only then can you consider yourself to have accepted the risk.


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