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How To Trade The Earnings Season

New traders do not know how to trade the earnings season. This post will help you to trade the earnings season. If you do not know when the earning season comes – they fall end of fiscal quarter. This means that earnings seasons fall in January, April, July and October. Corporate earnings are released to the public during earning season – stocks move a lot during this season at least for 5 trading days after the result is out.

If you are a momentum trader you will find earning season to be a great time to enter trades. You can take the benefit of gap up and down in reaction to quarterly earnings reports. Especially the mid caps will give you great opportunity to trade. On top of that finding direction gets easy as well. If the earnings are as per expectation of the market the stock will likely go up, if the earnings are not as per expectation of the market or bad, the stock will go down. You can take trades accordingly. read more

Volatility is Average But India VIX Still High

Part of my free newsletter dated: 24-Oct-2018

Last few days volatility has become average but India VIX is still high. By the time you check it may have changed but right now at 11.17 am on 24-10-18 it is 18.51 – down -2.78% from yesterdays close.

Below 16 is comfortable zone to trade derivatives. I feel within 10 days it should come down to near 16.

What you can do?

You can chose to trade or not. My principal of trading is very different than what you keep reading in other websites or videos. When in confusion or very volatile times go non-directional or just do not trade. Not forcing yourself to trade should also be mastered. Just trading for the sake of trading is fun not business. And business is not fun – you have to be serious. read more

Warning Huge Gap Down Opening in Nifty

Note: This is text of my newsletter sent to my email subscribers on 11-Oct-2018 before the stock markets opened.

By the time this email reaches you, you will see that the damage has been done to all Future/Call long traders yesterday. I hope it is not you.

Today Nifty will gap down open by almost 300 points. Just see what the damage a gap up or down can do to a naked option or future trader.

This is the loss of a naked (UN-hedged) future trader in SINGLE LOT ONLY:

300 (points) * 75 (lot size) = Rs.22,500/-. Loss of a greedy trader trading 10 lots = Rs.2,25,000/- gone in a single day. 🙁 read more

What You Should Do In Falling Markets

Post date: 09-Oct-2018

Last one month graph of Nifty:

Sep-Oct 2018 Nifty

Last one month markets have fallen badly. I am sure your investments may have also gone down. Same with me. This is normal. Do not worry. When you own stocks be ready to hold in though times. But when stocks fall its a good news too. Treat this as a discount sale in stock markets.

What you can and should do in falling markets:

1. Look for quality stocks and buy them over a period of one or two months. For example by some on 10th, 20th and last day of the month. That way you will average out. I have yesterday emailed my nifty course subscribers name of some stocks that they can buy and keep for sometime for good returns. read more

India VIX over 17 What It Means

Post date: 03-Oct-2018

Take a look at India VIX today 03-Oct-2018 at 11.28 am:

India VIX 03-10-18

Update: India VIX date 04-Oct-2018 at 10.15 am:

India VIX 04-Oct-18

Source: http://www.moneycontrol.com/indian-indices/india-vix-36.html – Note India VIX changes as the trading progresses.

Stock markets are inversely proportional to India VIX. Here is the fall on Nifty on 04-Oct-2018 at 10.15 am:

NSE 04-Oct-18

Source https://money.rediff.com/index.html

Update: India VIX date 08-Oct-2018:

India VIX 08-Oct-18

Note see that intraday high was 21.76.

And NSE close on 08-Oct-2018: read more

Well to start with frankly I do not like intraday trading. The reasons are plenty. Here are a few:

1. You cannot keep your legs on two boats and sail through. You are likely to fall down. What I mean is if you have a job and you trade intraday too then it gets hard to manage both job and intraday trading. If you get caught then you may lose your job. Well it has happened to me.

2. Too much brokerage. Even if you make some day profits and some day loss – the brokerage will take away 20% of your profits and increase the loss by 30%. Effectively even if you are a good intraday trader you will be left with very less money. read more

Why Indian Stock Market Is Falling

Article Date: 25-Sep-2018

Reasons can be plenty for stock markets to fall. A few of them has hit Indian market recently therefore approx 8% fall in last 30 days.

Here is Nifty fall in last one month Aug-Sep 2018:

Nifty One Month Aug-Sep-2018


Source: moneycontrol.com

If I have to describe in two words why such a sudden fall then it is – PANIC SELLING.

Here is the panic indicator in stock markets – INDIA VIX:

India VIX on 25-Sep-18


Source: moneycontrol.com

Panic selling has come due to these reasons:

Reason 1) Stock Yes Bank

Reason: RBI denying MD & CEO Rana Kapoor a term extension beyond January 31, 2019.
Why: Reserve Bank of India (RBI), found non-performing assets to have been four times as large on 31 March 2018, than was then acknowledged in audited results. If found to be true then the last financial year of profit is inflated as much as 44%. These were the assets that come under NPA (Non Performing Assets) or Bad Loans. Which means the comoany is not making a profit that it was showing to the country. read more

Life Time Savings Gone in Stock Trading

What happens when there is no risk management and you lose your life time savings in stock trading? Yes this happens to some people who cannot stop their greed and keep trading on hope.

I got one email from one such now retired from job trader. Here is the transcripts from the email: (Read to know how selling good company shares at the wrong time can be painful, and its not always wrong to diversify your investments and invest in at least one real estate apart from your home of course if you can afford. Please note that this is contrary to what financial experts keep writing not to invest in real estate. If invested for more than 10 years in a prime location in real estate it will certainly give a great profit when you sell it – or if you have two kids you can gift your home to one kid and your real estate investment to your other kid. Both will be happy and money will remain in the house. Please also note that property in prime locations are vanishing fast. I do not think our next generation will find new apartments in prime location. Anyway real estate investment is not the topic here so I stop here.) read more

When And How To Become A Full Time Trader

We all want to leave our jobs and become a full time traders. This is good but there are certain things that you should keep in mind before leaving your job.

See the feelings of a person not happy in his job thinking of becoming a full time trader after doing my course:

Here are some important points that you should remember before leaving your job and becoming a full time trader:

  • You cannot become a full time trader with Rs. 10,000, 15,000 or even 1 lakh. At least 10 lakh is required to become a full time trader. With this 10 lakhs you will be able to live a modest simple life.
  • You must have another 10 lakh in your bank account for emergencies. For emergencies you cannot take money out from your trading account.
  • Risk management is very important whether you are a full time trader or a part time trader. You must not risk more than 5% of your trading capital in one trade. For example if for one trade money blocked is 1 lakh then you cannot lose more than 5000 in this trade else your account will vanish in no time.
  • If for three months you are continuously loosing then forget about becoming a full time trader.
  • If seeing profit in a small account slowly increase the amount size to make it almost 10 lakh. Once you are able to trade 10 lakh account profitably for 6 months at least then only think about becoming a full time trader.
  • That you have intention to become a full time trader should be known clearly to your spouse/parents if unmarried. You cannot leave your job without mental support of your spouse/parents. If she/he/they are not happy with your decision then the stress prevailing in the house will disturb your trade set ups – you will not be able to concentrate. Family support is required to become a full time trader.
  • If you are making good profits in a 10 lakh account then it makes sense to increase the money in your trading account to try to make more. But you should not add 5 lakhs at one time. Increase it by 10% a month as you make profits. Add 10% more only after three months of profits.
  • If a positional trader you must hedge your trades for overnight risk management.
  • Keep a low profile and never boast to your friends/relatives/neighbors about your trading income. They will start asking you too many questions and will ask you for tips as well. Well my friends used to do. So a few months back I told them (a lie) that after suffering huge losses for two months I stopped trading and am freelancing here and there. They fear asking me tips now 🙂

I have given you correct and true information on when and how you should become a full time trader or take trading as a business. I am sure you must have read a lot of different stories from people in many websites but frankly this is the only truth – full time traders do not live a fancy lifestyle as advertised by tips providers. But yes we do not have a boss to order us anything – however we do have other problems like which trade to take – how much capital to invest – risk to keep etc. read more

Why Should You Trade On Collateral Margin

In India derivative stock/index trading is done on cash. Frankly its foolish. Do you know future and option shorting can be done free of cost? By free of cost I do not mean that you do not need cash to trade futures and option selling – you need. But you can easily use this money to buy quality stocks and keep in your demat account and ask for collateral margin from your broker and trade futures and options with that money without bringing extra money in your trading account.

What Is Collateral Margin?

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