ALL TIME TOP GOLDEN RULES FOR TRADING:

ALL TIME TOP GOLDEN RULES FOR TRADING:

1.     Always trade with an actual stoploss.

2.     Trade with adequate capital. Otherwise you can easily lose out early.

3.     Make a trading system of signals which determine your entry and exit. Don’t do it on your hunch or guesswork of market and stock moves. Test your trading system/rules until it proves itself wrong.

4.     Never trade on loan money.

5.     Never risk more than 5% of your trading margin on one single trade.

6.     Forget the result of your last trade; be it profit or loss. Every new trade is new game.

7.     Always keep your risk reward ratio above 1.5 or 2 or more.

8.     Never ever average your losing trades.

9.     Let your profitable trades run.

10. Stop trading/take break after consistent series of losses or profits.

11. Be completely clear why you are trading. Don’t trade for only money. Trading is a journey and not a destination. Trading is not a job, it is a business. Expect not to get paid for days, weeks, months and even for a full year as in business. Trade because you love it. Never trade for fun, excitement or kill the boredom.

12.If you are completely new, start with paper trading, but don’t remain in paper trading. If you are relatively old then start with smaller positions and increase your volume as you go ahead with development of your trading system and right trading mental attitude.

13.Remain emotionally detached and completely rational.

How To Develop A Trading System?

How To Develop A Trading System

           

How to develop a trading system and what are the key “ingredients” in a trading system.  The word ingredients is interesting because I think that trading plans or systems should mimic the way we might bake a cake – meaning, it’s important that there are very specific steps involved in taking a trade  setup, and that you need to know exactly what to do when you’re right or wrong.

 

Here are 5 key phases of development of a trading system:

1.    Logic of the trading system

a.    Use If / Then conditional statements that turn into conditional thought process

b.    Make some of the components dynamic

c.    Price is purest form of analysis. How did the market respond the last time this happened

2.    Syntax – Setup takes place before the trading signal.

a.    What conditions are present prior to entry?

b.    What causes entry?

c.    Stop placement (know where your analysis is wrong)

d.    Profit target (reasonable expectation about where the market will go when you are right)

3.    Testing

a.    Test for 30-50 trades (minimum) historically in one or multiple markets.

b.    How did it perform when you followed the exact rules?

c.    What was the max draw-down?

10 years trend in Equity ownership in India among Promoters, MFs, FIIS, and Retail Investors:

10 years trend in Equity ownership in India among Promoters, MFs, FIIS, and Retail Investors:

Here you can see in the table illustrating the changes in equity ownership in stock market share holding pattern over the last more than 10 years among promoters, FIIs, Mutual funds, and retail investors among others.

Reail investors have pulled out Rs.66000 crore out of equities in the year 2012-13.

We can see that the stake held by promoters has remained at average 50% over the decade, however we strongly believe this trend will change and the average promoters' shareholding in Indian stock markets during the next decade shall be over 40% but below 45%. The rest will be held by FII and FDI investors in the next few years and then and then only retail and mutual fund participation may be able to increase their pie out of the promoter stake decline in market capitalization of the Indian stock markets.

SHANGHAI COMPOSITE INDEX IN DANGER OF BREACHING 2000 AND GOING DOWN

The possible Indian Stock Market Nifty Movement in Next 12 months

The State of the Markets as on today and Where are they heading?

Indian Stock Markets, Nifty, Sensex Future in Next 12 months:

We saw NIFTY touching 6111.80 on 29 Jan 2013, which was almost 2 year high for Indian Stock Markets.

As we had explained how the markets can rise in coming months in our last article of September 2012, the market almost behaved in the anticipated fashion.

(Please read the article at below link giving explanation with charts. Also find how we predicted a US Stock Markets present bull run)

http://www.meghainvestments.blogspot.in/2012/10/where-are-market-heading-as-on-25.html

We will, in this article discuss what could be the course of the Indian Stock Markets in the coming months. We will also give a short commentary on global markets which comprises of US, Europe and Asian markets other than India.

THE PRESENT STATUS:

The markets behaved haywire in January and gave hopes of a new year long and more bull run by making almost more than 2 year highs.

What to do in Balrampur Chini Mills Ltd. DOUBLE BOTTOM AND GRAVESTONE DOJI FORMATION

What to do in Balrampur Chini Mills Ltd.
DOUBLE BOTTOM AND GRAVESTONE DOJI FORMATION
cmp-45.50
As on 10.11 AM on 2/04/2013.
Click on charts to enlarge.

Contact us OR Become member to get accurate TGT, SL level and HOLDING DURATION.

Technical analysis and stock movements as well recommendations are subject to changes in market condition and news flow of company and the economy. So please remain updated with us. Or contact us directly in case of any query on info@meghainvestments.com or 09377008708

Book Excerpts of "HOT COMMODITIES", how anyone can invest profitably in the world’s best market” by Jim Rogers

EXCERPTS FROM BOOK

“HOT COMMODITIES, how anyone can invest profitably in the world’s best market” by Jim Rogers

Publish date= 1994

Introduction and prologue by us:

Jim Rogers founded the famous Quantum Fund along with George Soros. However, he became more famous after he successfully predicted and aggressively advocated, in the early years of first decade of twenty first century; for case for a bull market across commodities. He wrote this book basically to express his views on the same and giving out information about trading and investing in commodities.

It was a precious reading at the time of launch. However, even after now close to a decade since the book was first published (2004), the lessons on commodity investing and importantly the approach towards it has not vanished.

There are very good explanation about some of the most important commodities in detail and their history as well.

One has to keep in mind, that today, in the investment world as we know it, commodities are not an entirely a new asset class. However, while this book was written, it was not. It was only beginning to start to get recognition, and perhaps one of the strong important factors was this book itself.  Since, then in last 5-8 years, commodities have an ‘official’ asset class for diversification, rather than an element ‘included passively into equities’. Hundreds and thousands of commodity specific funds have been introduced by investment companies across the world. The advent of Commodity ETFs have given enormous boost to them and the almost long lasting position of commodities seem to have been cemented into the investment world of this new century.

Below are some of the important excerpts from the book,

●       ……I had always been interested in current affairs and history, and it was a revelation to learn that someone on Wall Street would actually pay me for figuring out that a revolution in Chile would drive up the price for copper.

●       CRB Commodity Yearbook is a bible for all those who want to track commodities.

●       I vaguely recall studying the CRB charts for various raw materials; when I saw a sharp rise, I analyzed why the prices of that commodity went up so quickly.

●       Whenever someone claims that investing has become different this time around, I grab my money and run.

●       There should be consistency, stability and transparency in an index.

●       The Rogers Raw Materials Index Fund International Commodities Index opened for business August 1, 1998 based on the Rogers International Commodities Index (RICI). It features a basket of 36 commodities.

●       I was now old enough to know that anytime you move away from the herd, the herd will criticize you, indeed revile you; it will call you ‘crazy’.

Happy Holi & Dhuleti !

Minimum Public Float stipulation, 190 companies still don’t care SEBI

Minimum Public Float stipulation, 190 companies still don’t care SEBI;

The information was provided by  Corporate Affairs Minister Sachin Pilot in Lok Sabha in a written reply of a question asked to him.
According to Sebi, companies could meet the norms by many routes including Offer for Sale, Institutional Placement Programme, bonus and rights issues to public shareholders.In a circular issued in August 2012, the market regulator had said that companies seeking to achieve MPS by ways, other than prescribed, could approach it.
The answer also noted that It is also mentioned in the circular that listed entities desirous of seeking any relaxation from the available methods may approach Sebi with appropriate details. So we can confer that there will be more extensions to many companies in specific or another extension to deadline in general for the MPS stipulatin.

The SEBI stretched the minimum public float requirement for listed firms one year in 2012 for their convenience till June 2013. But it looks after two years of extension of limit, still many companies don’t care about it.

As on December, 2012 at total of 190 companies, including 14 PSUs, are yet to meet this minimum prescribed public shareholding norms. As on that date these stake was worth Rs.30,000 crore.  Sebi has also initiated consultations with non-compliant companies to resolve all outstanding issues for ensuring adherence to this requirement. But it is highly contemptuous as the market condition of debt as well as equity does not seem to be very good for a fund raising or stake dilution even environment.

BSE India Web Review

BSE and NSE are the two main bourses in India (while the third MCX-SX is just on the way to open). Out of it, BSE is the oldest stock exchange of Asia while second oldest in the whole world founded in 1875.

In this article we are going to give review on www.bseindia.com which is the official website of Bombay Stock Exchange India Ltd.

BSE website is worth a huge applaud (same with NSE), when they are compared with their counterparts in other countries. BSE website is more featureful and useful to not just investors, and traders and general public trying to find general information but also the professionals in capital markets.

BSE has this ‘Market Galaxy’ window on its home page which pops open when you click on ‘full view’ option. This gives the names of the stocks along with the happenings like high turnover than usual, yearly high, yearly low, lifetime high, lifetime low etc. This helps user to find the most active stocks. This feature also adds curiosity excitement to its website use.

Global Indices traded on NSE India and BSE India

Click below to find product details and specification about the global indices being trades on NSE, Global Indices listed on NSE, World indices traded on NSE India

http://www.nseindia.com/products/content/gi/product_gi.htm

Below I the link for live prices of Dow Jones, S&P500, FTSE100 futures and options traded on NSE

http://www.nseindia.com/live_market/dynaContent/live_watch/derivative_stock_watch.htm?cat=GI

DETAILS OF GLOBAL INDICES TRADED ON BSE- Brazil, Russia, South Africa, China

http://www.bseindia.com/markets/Derivatives/DeriReports/AboutFI.aspx?expandable=4#2

Below is the CONTRACT SPECIFICATIONS OF FTSE/JSE Top40 futures of South Africa’s Johannesburg Stock Exchange, Brazil’s Bovespa, Russia’s MICEX, Hang Seng of China

http://www.bseindia.com/markets/Derivatives/DeriReports/ContractSpecificationFI.aspx?expandable=4#a

(However, it seems there is no trading on BSE for the global indices at all, not a single contract traded as on today)

Global Central Banks purchases most gold since 1964

Global Central Banks purchases most gold since 1964

According to data released by World Gold Council, the central banks added 534.6 tonnes of gold to reserves in 2012, the most since 1964.

It is also expected that more than 250 tonnes will be bought again in 2013 and 2014.

The WGC also says that central banks are increasing purchases of gold, yen and china’s currency to reduce their dollar and euro holding as a percentage of total reserves.

565$ billion inflow in global mutual fund industry in 2012

565$ billion inflow in global mutual fund industry in 2012

The global mutual fund industry witnessed a growth of 3.9% in 2012 with an inflow of 565$ billion. This excludes 535$ billion in fixed income funds during 2012. The AUM or asset under management also increased 39% between 2007 and the end of 2012.

The fixed income flows consist of almost 95% of the long term flow, rest you can imagine.

In the USA also the open end funds and ETF witnessed sharp rise in inflows to pre-crisis levels which led to industry assets rising to record of $10.6 trillion.

The management fee earned by non-money market funds netted 8.3$ billion in 2012, which was 9.7$ billion in 2007.

Predict NIFTY closing and Win CASH Prize & Free Profits !!

FM declines any money-laundering attempt via P-NOTES. P-NOTES notional value 1.38 lakh crore at the end of 2011

FM declines any moneylaundering attempt via P-NOTES. P-NOTES notional value 1.38 lakh crore at the end of 2011.

In reply to a question asked in Loksabha, Finance Minister P Chidambaram on Friday said the Securities and Exchange Board of India and the enforcement directorate have not come across any instance of Participatory Notes, through which foreign institutional investors invest in Indian stock markets, being used for money laundering.

At the end of December 2012, the notional value of outstanding PNs stood at Rs 1.51 lakh crore, higher than Rs 1.38 lakh crore at the end of 2011.
Currently FIIs issuing PNs has to report details such as name, location, type and jurisdiction of the end beneficial owner of the instrument on a monthly basis to market regulator Sebi.
FIIs are also required to provide an undertaking that they have not issued the PNs to Indian residents or non-resident Indians and KYC compliance norms have been followed for beneficial owner of the PN.

A PN is a derivative instrument issued by Sebi registered FIIs against underlying Indian securities. The investor in PN has neither ownership of the underlying Indian securities nor any voting rights.

What is the global benchmark futures contract for Corn/Maize/

What is the global benchmark corn/maize futures contract?

Global corn futures benchmark contract used to trade on MATIF, which was a commodities exchange in Paris.

It was merged in Euronext and traded on LIFFE platform of the Euronext.

Below is the link for contract specifications,

https://globalderivatives.nyx.com/en/contract/content/29461/contract-specification

You can find delayed prices of the same on below link,

https://globalderivatives.nyx.com/en/products/commodities-futures/EMA-DPAR

You can get corn futures prices traded on CBOT (Chicago Board of Trade) here,

http://data.tradingcharts.com/futures/quotes/C.html

Thank you for not investing in Equities: Satirical article by Samir Arora on importance of investing in stock market

Thank you for not investing in Equities: Satirical article by Samir Arora on importance of investing in stock market

“As it happens, retail investors are helping markets more by staying out than by investing in equities. So from a purely selfish point of view, we (current equity market participants) do not mind if you stay away from equities. Keep your money in low interest bearing savings accounts and this will help banks raise cheap funds.

Then, while you earn taxable 9% per year in fixed deposits and 4% in savings accounts, we will continue to buy HDFC Bank, IndusInd Bank, Yes Bank and the like, which are up 3.5 times, 11 times and 5.9 times respectively since December 2008. Also, remember to pay all your EMI installments on time so that retail loans made by private banks do not get into trouble and we can continue do well owing their stocks.

STT on Options on Expiry day

STT on Options on Expiry day:
If on expiry day you are getting money then book profit, rather than letting the options expire.

Short Mid Term Outlook on ABB, BHEL, SIEMENS, IGL and Bharat Forge

Short and Mid Term Trading Guideline for Futures and Options Stocks.
All stocks are futures and options list stocks, so short selling can also be advised along with buying.
Charts are analysed for the cash segment only and not the future price move charts.
The date of analysis is 18-02-2013. 01.00 pm.
We are updating views on all stocks in NSE FO List few by few. Please find more list in older posts. Wait for remaining in the forthcoming posts.

12. ABB CMP-612, can test 545 levels in near future. If that level is breached than a new range of 350-550 will be open meaning there by it will become short on evey rise stock till it reaches 350 and buy at oversold levels inbetween.
13. BHEL, CMP-205 is trading at very very critical level. 193 is a very strong long term support. if this level is broken it will slip towards 151 levels and below that it can slip to even lower levels.
14. SIEMENS has already broken important levels of 622 and 588. Now it is trying to head to lower levels. It free fall sharply without big pull-backs as there are not significant support levels till 350 which is suppport of neckline of previous inverse head and shoulder pattern.
15. IGL is trading at 260. It is very encouraging that after the one day slump from 370 levels to 200 levels in April 2012. Also since it has been rising steadily by forming higher high and higher bottom formation in last 1 year. We can hope that it will rise towards 400 levels if it sustains this trend. So buy on current levels and at every dip is recommended. Also, the oil and gas sector is abuzz with many positive structural and fundamental changes which is positive in many senses.
16. Bharat Forge CMP=225 is howering around very critical support level of 220. We may say that it has broken this support levels already. So lower levels are more likely than higher.

Contact us OR Become member to get accurate TGT, SL level and HOLDING DURATION.

Technical analysis and stock movements as well recommendations are subject to changes in market condition and news flow of company and the economy. So please remain updated with us. Or contact us directly in case of any query on info@meghainvestments.com or 09377008708

Investors have many misconceptions and misunderstanding regarding Stock Market Indices

There are many misconceptions and misunderstanding relating to the benchmark indices SENSEX and NIFTY among the investors and traders.

Below are some of them,

• ·         All stocks follow the index.
  ·         Generally the stocks are completely correlated with the benchmark indices i.e. when the benchmark index goes up all stocks go up and when the benchmark index go down all stocks go down.
  ·         When the benchmark index has risen all stocks in the index has risen and when the benchmark index has fallen all stocks in the index have declined.
  ·         You cannot get positive return in index and non index stock when the benchmark index has declined. You get return only when the benchmark index has risen.
  ·         The index is same. It is a separate entity itself and there are no changes in its formation or its characteristics. The index is same as it was in 1980, as it was in 2000 or 2008 as it is in 2012. (In reality, Index is ever changing i.e their constituent gets changed year by year. Today the index is not same as it was in 1980 or 2000 or 2008. The index in fact is the showcase of the volatility and market behavior of today and not yesterday)