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Formula of Success in Trading

Most of the traders in the market are trying to find out a way of making successful trading career, there are many reasons behind this bold attempt of being an independent professional trader in stock market. This is a part of money market and money is not easy to earn here. We know that near 90-95% traders are not making continuous net profit in trading, while investing is little different. People may apply buy and hold strategy even in a wrong stock and sometimes it helps them to get back the invested money, may be after a long period of time but it is little easy part of market. Whereas trading is little tough indeed, we have specific time to hold futures or optoins segment contracts, we have to correct and that too quickly as options tends to lose time value over the holding time. Therefore we can understand that trading is little tough job to succeed. But how to get the success! The Formula of Success is -   Unless your trading strategy meets this minimum requirement of risk-rewar
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🟢 The Trading Mindset

We are emotional retail traders/investors who love to ride an adventurous journey in stock market irrespective of the risk and reward. We know that most of the retail investors are losing money in stocks and we kept searching for the holy grail trading strategy since years, that is not found yet and no guarantee when someone from us may find the sureshot trading system! The retail investors are having less access to the tradable information, we hear only that news which is made public for a purpose, generally published or forwarded to us because few of the biggies may have already used those information or for the purpose of making financial noise or may be those information are useless! Whenever we are hearing to any news or report regarding a company, ask yourself "why this information is public" and why such an important news is forwarded to retail investors through electronic, social or public media and how we can use them when everyone is already having the access on it.
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🟡 MYTH vs FACT

1. Option Selling is Easy Profit : Actually options are not trading instrument, they are created for hedging purpose. Option buyers mostly lose money if they hold it for longer time period. So, now a days, many new comers started selling options without considering the risk. Options writing/selling is not guaranteed profit making way, the GURU of options sellers world, who introduced this writing strategies to the whole world, James Cordier, blown up his fund after 14 years of option writing experience. Check this link https://www.youtube.com/watch?v=VNYNMM0hXXY  2. It is like an Insurance Business : A big NO! An Insurance doesn't guarantee you unlimited coverage, whereas a short position in option is coming with unlimited upside risk. It happens once or twice in a year but it comes with probability of unlimited loss, GUARANTEED. 3. Futures Trading also having Unlimited Risk : Futures trading comes with unlimited profit potential too! You can use Options to hedge your futures pos
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🟣 Implied Volatility: Calculate the Price Range of a Stock

  How can I understand how far a stock is likely to move?                                                                                                                                              The statistical distribution of prices :: Normal distribution & Log-normal distribution Normal Distribution gives equal chance of prices occurring either above or below the Mean (which is shown here as 0). We are going to use normal distribution for simplicity’s sake. If a price distribution is considered Normal , 68.20% of the time, you will be within 1 standard deviation. Mostly, stock exhibits a normal distribution/bell-curve. A normal distribution of data means most numbers in a data set are close to the average, or mean value, and relatively few examples are at either extreme. In layman’s terms, stocks trade near the current price and rarely make an extreme move. Implied volatility (IV) is one of the most important conc
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🟠 Hope in a Drizzle out of the Dust...

Nifty has closed below the Friday, the 13th low. Today's closing value was 8468.80 which indicates no interest in buying or fresh investment in market, however we are seeing good inflow of DII investment everyday. FII selling is continuing and the figure has crossed fifty thousand mark for the current year, which is worrisome indeed! This writing is definitely targeted for fresh minds who haven't seen any bear market fall earlier. Last time we experienced such market fall in year 2008 when Nifty dropped around 60% from the last high in nine months price fall. Now, Nifty has dropped only 33% from January, 2020 high in just one month correction. No need to mention that is very fast and furious in nature due to pandemic fear of coronavirus.  Let us recap once, how Nifty behaved in earlier bear markets; 2nd July,1990 : Nifty was trading at 347.44 level (yes, it was our beloved nifty index) 2nd March, 1992 : Nifty touched the high and closed at 1261.65 (that is more th
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🔵 FMCG Sector - The Hidden Gem in Market

Technical Newsletter                                                                                               2015 FMCG Sector - The Hidden Gem in Market The CNX FMCG Index is designed to reflect the behavior and performance of FMCGs (Fast Moving Consumer Goods) which are non-durable, mass consumption products and available off the shelf. The CNX FMCG Index comprises of 15 stocks from FMCG sector listed on the National Stock Exchange (NSE). FMCG sector is known as the defensive player in market for its continuous growth regardless to the market sentiment. In the year 2008-2009 when Nifty fallen by more than 60% in a sharp downfall, even that time this sector continued to provide positive returns to long term and short term investors.  We want to take this sector in focus due to its continuous growth supported by domestic demands. Most of the FMCG stocks are trading at high PE ratio and there is no sign t
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FII ACTIVITY - BLACKROCK INDIA EQUITIES FUND

Blackrock India Equities Fund bought 203,57,018 qnty of Bharti Airtel at the rate of Rs.423/- per share. It is showing that Blackrock is very much optimistic on Bharti group. They bought 164,93,193 qnty. of Bharti Infratel Ltd at the rate of Rs.473/- per share. But they have sold 39,48,726 numbers of Reliance Infrastructu Ltd at Rs.408/- per share. Blackrock is one of the few FIIs who are buying in this current fall in market. UPL Limited, Shree Cements Ltd. Marico Limited, Lupin Limited, Eicher Motors Ltd, Bharat Forge Ltd are also in their recent buying list.
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