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Article Written on: Thursday, 08 June 2017

Learn how volume in stock or derivative trading can help traders set up their winning trades.

What Is Volume?

Volume is a count of total trading done at a given period of time.

See today’s highest volume in Bank Nifty:

Source: https://www.nseindia.com/live_market/dynaContent/live_analysis/most_active_contracts.htm

You can find historical contract-wise price volume data of NSE here:
https://www.nseindia.com/products/content/derivatives/equities/historical_fo.htm read more

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Lots of traders trade only out of the money options. Read to know the reality of trading Out of The Money OTM options.

There are two types of speculative option traders:

1. Those who trade only ATM (At The Money) options, and
2. Those who trade only OTM (Out of The Money) options.

Very few trade In The Money ITM options.

Most traders start with At The Money options then move to Out of The Money Options to try their luck.

Buyers when they lose become sellers and sellers when they lose become buyers. And most option traders start trading with Index options. In India Nifty Options is the most traded options. read more

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Date: Monday, 05-June-2017

Nifty has rallied from 8000 levels to the highest in history today: 9685.15

Today highest:

Learn why you should avoid temptation to buy stocks in a bull rally, wait for a fall and then buy stocks as per your choice.

In a bull rally most investors get lured by temptation to participate in the rally and make quick money and end up getting caught at the peak.

In the history of stock markets which bull rally ran permanently? None. What goes up has to come down and what comes down has to go up. This is the nature of stock markets. read more

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Today on Saturday, 03-June-2017, at 7.07 am morning I received an SMS which was quite shocking.

Here is the screen shot:

Here is the text (spelling mistakes corrected):

Good morning Sir, I am from Telangana. I lost so much amount know, I am in Suicide condition sir please help me, I am coming to Kolkata. Please give me your address.

Please train me as yours brother and I will message through what’s up is showing yours, can I talk for 10 minutes on phone call when I call after yours time please tell me and help me sir. read more

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Any new and young aspiring investor or trader while opening a demat and trading account dreams big of making at least 10% return a month from stock trading. Almost all of them think they will double their money in one year, and then compound it.

Well same here, that’s the reason I lost money heavily when I started trading in 2007.

At that time people were not that smart or educated (though I am an MBA in Finance), I thought maybe this is the reason people think this way. Later India developed, our education system developed and I thought now people might have changed in ten years time in 2017. read more

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Read to know why many option sellers sell options on expiry day and try to make money.

A few months back I got an interesting email from one of my subscribers:

Dear Dilip ji,

Hi Sir,

I am your follower, though I am new to your course joined some days back, also familiar with market.

I wish to know from your vast experience, about:

1) Why bears/shorter select the expiry date or day before/near expiry only, for heavy selling?

Last time, on some expiry day only, the reason was Bank of Japan’s rate policy & on today’s expiry, reason is India’s surgical attack on LOC, whereas these reasons were already known for these bear community. read more

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Date: 26-May-2017

Sir John Templeton (1912-2008), one of the greatest investors and mutual fund managers of all time founded the Templeton Growth Fund in 1954. It started in US but was one of the first mutual funds in US to invest in many countries globally. India is also one of them. In India it is the Franklin Templeton India Mutual Fund.

Sir John Templeton once said, “bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria.”

Nifty from 8000 levels has now today as on 26-May-2017, has reached 9500+ level. This is an increase of 19% in a five months. read more

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Hedging is sort of Insurance. Like when we buy a car we also buy an insurance. Similarly other insurance products like life insurance, loan insurance etc. These are basically hedge against certain problems in our lives.

Hedging is the same. If take a trade and hedge it properly rest assured that the loss will be limited because hedge will make sure the losses are limited.

Hedge reduces or eliminates fear, one of the worst enemies of trading. It reduces fear because the trader knows that his loss is going to be limited. In that case hedging allows him to take a bigger trade. read more

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As soon as a trader enters the world of Options the first thing that comes in their mind is to buy options.

These are the reasons they start off by buying options as told by brokers, or friends or reading in websites:

1. Option buy has low risk – It is a myth. Agreed you can buy an option for less than 100 rupees but do not forget that it does not guarantee that it will make money. That 100 rupees can become ZERO. There is no business in the world where you buy something then there is a possibility of losing 100% of the money on it. Low risk if combined for one year can be very high risk. Ask any three year experienced option buyer how much he lost. I bet the average will be more than 1 lakh rupees. read more

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I know a lot of you want to either come to me for class room training or want me to visit their city for class room training.

I can understand why many people want it.

Here are a few reasons they told me:

1. They want to see me. It is strange, do you make money seeing me? If no then why you want to see me?

2. They want to ask questions face to face. This is fine but what is the difference between asking questions on email, mobile or whatsapp? It is the same. What is more important is the quality of the answer not the way the answer is delivered. read more

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