INTELLECTUAL TRADING

  An inside bar pattern doesn’t come around often. If you ask, why is it? So the answer is, it’s mostly due to the fact that this particular strategy requires a trend that is strong but not exhausted. As markets spend most of their time consolidating or ranging, so finding a favorable inside bar  setup within a trending market can be a difficult task. Now, you might be having a question  that what is inside the bar chart pattern? What is Inside Bar Pattern? As the name suggests, an inside bar chart pattern engulf inside of a large candle, some call it  as a mother bar. It’s a pattern that forms after a large move in the market and represents a  period of consolidation. The inside bar pattern can be a very powerful price action signal if you understand how to  trade it properly. Matching lows and highs are acceptable, however the inside bars range  must not be outside of the mother candle by even 1 point. Facts about Inside Bar Pattern Inside bar patter...

Nifty BeES, a combination of a share and a mutual fund unit, trades on the capital market segment of NSE. Nifty BeES (Benchmark Exchange Traded Scheme)—the first exchange traded fund (ETF) in India—seeks to provide investment returns that closely correspond to the total returns of securities as represented by the S&P CNX Nifty Index. Nifty BeES, a combination of a share and a mutual fund unit, trades on the capital market segment of NSE (National Stock Exchange). Each Nifty BeES unit is 1/10th of the S&P CNX Nifty Index value. Nifty BeES units are traded and settled in dematerialised form like any other share in the rolling settlement. Thus, it allows you to trade real-time on NSE and gives you real-time indicative NAV (net asset value).  Nifty BeES offers the benefits of diversification, index tracking and low expenses. Nifty BeES can be bought / sold like a share through any NSE terminal at prices available on the screen. The underlying portfolio of Nifty BeES ...

Put/Call ratio (PCR)  :  is a popular derivative indicator, specifically designed to help traders gauge the overall sentiment (mood) of the market. The ratio is calculated either on the basis of options trading volumes or on the basis of the open interest for a particular period. If the ratio is more than 1, it means that more puts have been traded during the day and if it is less than 1, it means more calls have been traded. The PCR can be calculated for the options segment as a whole, which includes individual stocks as well as indices. How to Analyse Put Call Ratio ? PCR as a Contrarian Indicator Put / Call Ratio Interpretation If put-call ratio is increasing during correction in up-trending market and Implied volatility is falling Bullish Indication. It means the put writers are aggressively writing at dips. If put-call ratio is steadily rising during the day along with Nifty spot. Bullish Indication. If put-call ratio is increasing with sharp rise in Impli...

Choose simplicity over complexity KISS - Keep it Simple and Straightforward. Learn the basics of trading and technical analysis and apply them. Complexity may sell, but simplicity will make money.  Make your own investment decisions The best person to take an investment or trading decision for you is you.  Maintain proper temperament Stay calm and disciplined and follow your process.  Be patient Patience is a skill every trader has to develop. No trader or investor becomes an overnight success. It takes time.  Concentrate your stock investments Don't have more than ten positions open at any one time.  Practice inactivity, not hyperactivity At times, doing nothing is the best strategy. Traders shouldn't mistake activity for achievement.  Don't look at the ticker One should do adequate research of the stock before taking a position. Then let it run its course.  Stay within your circle of competence A trader should stick to areas he unde...

Brian Tracy discusses these in great detail in his seminar on self confidence  https://www.youtube.com/watch?v=ogX2DEmb3BU These laws were taught in mystery schools in Egypt, and have been rediscovered to carve a path to success.  Law of Cause and Effect We hear the saying “everything happens for a reason” around us everywhere, and this law states exactly that. Each thing has a cause and there is something it affects. Our thoughts are causes. We think about something or doing something and it affects what we do, leading to a particular result.  Law of Belief This law holds that whatever you believe, with feeling, becomes your reality. You see things that agree with your beliefs and act on them accordingly, and you ignore things inconsistent with your beliefs. This is taught to us over time and gets reinforced by emotions and experiences. As mentioned before, beliefs can be controlled. You can decide what belief to put your energy into. Law of Expectat...

All about the re-introduced Long Term Capital Gains Tax (LTCG tax) in India There currently seems to be a havoc in the markets and the reason is apparently owed to be the newly re-introduced tax  (after 14 years)  on Long Term Capital Gains tax (LTCG), as announced by Arun Jaitley in the Union Budget of 2018. What is meant by LTCG or Long-Term Capital Gains? LTCG is an abbreviation for Long-Term Capital Gains.  It basically refers to any profit made on an investment held for a minimum of 12 months. Several other countries like Australia, China and Canada had already inculcated tax on LTCG into their financial systems a long time back.              Concept of grandfathering : Grandfathering is a clause or regulation within a law which gives the luxury to any person or any businesses to not abide by that law. It is an alteration of the rule which allow any investor or investment technique to follow the...

What is Bear Market? Markets in which the price of an investment falls over a continued period of time is referred as Bear market. It generally occurs when the prices of an underlying security drop by around 20% or more from its 52-week high along with a sharp fall in the benchmark index.  In the bear market, according to the Dow Theory, when a stock enters its lower top lower bottom chart structure, it is considered as a weak stock. Lower top lower bottom chart structure occurs when a stock fails to go past its previous high and manages to breach its previous low.  On similar lines, tracking the Japanese Candlesticks, a stock is considered to enter a bearish phase if the time frame is higher than weekly charts, and forms a Gravestone Doji as well as a Bearish Engulfing pattern in addition to various other candlestick patterns.

Yes Bank goes ex-split in the ratio 5:1 on 21 Sep 2017, that is, 5 split shares  are issued for every one share held in the Demat account of all eligible shareholders. Effect on Holdings: When a stock is split, the share price reduces, in this case by a factor of 5. So if you held Yes Bank shares at an average price of Rs.1600, the price of each share after the 5:1 split will be 1600/5 = Rs.320. Your share price gets divided by 5. Please note that when a stock splits, it’s face value reduces. Here, Yes Bank face value reduces from 10 to 2 and the number of shares increases 5 times. But since the price of each stock reduces by 5 times, your investment value in Yes Bank remains the same. P&L of holdings: Your P&L for Yes Bank holdings will show an artificial drop of about 80% on the ex-date of 21 Sep and the record date of 22 Sep. The split shares will be credited to your Demat at the end of the Record date of 21 Sep and it will be visible in your Kite holdi...

Liquidity represents the order book with limit orders at Bid and Ask prices levels.  Volume typically represents higher number of executed orders or trading transactions. Higher liquidity not necessarily has to transform into high volumes unless the active buyer or seller who places the market order are aggressive. And also low trading volume does not mean low liquidity. liquidity != Volume Security Wise Delivery Volume means no of shares marked for delivery from the total traded quantity . In layman terms, it tells how many investors are willing to accept the shares in their demat account.  A higher delivery quantity means serious trading and balance is intraday play. Volume !=  Delivery Quantity  Most of the analysts give importance to volume or traded quantity. On the other hand, as an investor I give more importance to Deliverable Quantity/Delivery Percentage. Importance of Delivery Percentage Delivery volume is not able to capture the sharp de...