A complete guide to Stock Market Sunil Kale

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1 Dear Reader, First, I will like to congratulate you on this occasion as you are entering in to new area. I welcome you for reading this book. Let s make profits in stock markets, by understanding the basics in becoming a better Investor. I am sure; every page will say something new to you. This book-series will bring you to new area. The area, common peoples just ignored since from inception. I feel this is not the area of ignorance. If you are ignoring, may be you are sacrificing the huge good opportunities. Hope you know some peoples who are doing this business since from last few generations. Many common peoples are just away from such classic field. What I am feeling that this condition is just due to lack of knowledge, so I am trying to give some required knowledge through this series of books. Normally we wake at morning, do our routine job; we don't have time to watch, observe here n there. Stock market is one among many of the possibilities available to earn money for common peoples. By doing some small things, we can change our future; any one can do business or investment in stock market. If you want to do investment, this does not required special time; you can surely do this without disturbing your normal life. If you want to do business in stock market, this is a vast n complex area. To do business, some one must know the fundamentals, technical as well as other related information of business. I think, what we are doing today, will reflect tomorrow, right? I am sure if you are hard-worker, bright future is waiting for you! When we will be with right knowledge, money will get in fewer efforts...right? One should try to get advance knowledge in his field for proficiency. This book series will give you all basic as well as advance knowledge related to equity market. You are the person, who wants knowledge, who wants to do hard work, you will ask how you know...right? Because you are exploring the possibilities and this book-series will be the end of your search! My series of books will give you all deep knowledge, you have to implement this knowledge in stock market and very soon you will see earning money is so easy. Friends, there are always opportunities just we have to explore, must have that vision to see those opportunity, and very soon those opportunities turns in to success! Every Market expert advises to do your stock analysis before investing in the stock market, but nobody tells you how. Well, I will tell about how to do stock analysis using various fundamentals and technical tools in my books. This book will guide you regarding fundamentals of investing, some advanced techniques of trading and planning for the future. Taken a closer look at investment opportunities available. This book will enable you to invest wisely in stock market, whether you are first time investor or a day trader. On yearly basis, you can earn more return from your investment by studying or applying some few principles of investment. Keep in mind that "Their is never a wrong time to do the right things..." so be prepare... go ahead, start now, success will be surely yours! I am certain that you will benefit from this initiative of me. Need of investing (not saving) Let s first under-stand why you need to invest, you need to realize that you lose when you just save and do not invest. That is because the value of the rupee decreases every year due to inflation. Thus you need to generate an additional income and that can be possible only by Investment. In saving, growth of money didn t happen (piggy bank) while in investment, growth of capital, money happens (see next pages, investment examples of Unitech, Infosys given.) Before starting investing you need to put on paper couple of very basic but at the same time very important things. Firstly how much money do you have for investing? What is the initial sum you can afford to put into market? How much could you add to your investing portfolio every month? Whether Page 1

2 we have a lot or just a little money when we take a deep look at our money management, we can pretty much always see that there is some money that could be used to put into investing instead of just spending it for something else. Yes, you can do this. Power of Compounding: Start investing now: why? Read this article Start investing now, compounding is having great power. If you contributed some amount each month for the next ten years and then nothing afterwards, or if you contributed nothing for the first ten years, then contributed the same amount each month for the next 40 years, you would have about the same amount. So start investing early as soon as possible, even right now. Examples of compounding. Todays Investment Rs. Then per month for 20 years If rate of return Total amount after 20 years Rs. If rate of return Total amount after 20 years Rs /- 500/- 15% 8,19,519/- 20% 16,02,804/ /- 1000/- 15% 17,20,870/- 20% 33,97,296/ /- 2500/- 15% 40,97,594/- 20% 80,14,020/- 1,00,000/- 5000/- 20% 1,60,28,041/- 30% 6,17,67,763/- Have you seen power of compounding? So friends, don t be late, start as soon as possible. Lets become corepati in few years. Now we have got a way to become corepati. You may invest in mutual funds, equity, real estate or any other option of your choice, just examine the returns and go ahead. With my books, you will become a good personal finance manager, a good technical analyst. **You may get calculators on different web-sites for calculation of such other compounding returns. Developing Right Attitude: You need discipline: Develop a plan, and stick with it. As you continue to learn, you'll become more confident that you're on the right track. Alter your asset allocation based on changes in your personal situation, not because of some short-term fluctuation. You must be confident: Let your intelligence, not your emotions, make your decisions for you. Mistakes will make you losses and you should learn from those mistakes and in future such mistakes should be avoided. Remember that, there are only few mistakes, which happen repeatedly with peoples. If you did not repeat any past mistake, in few days you will notice that all mistakes are finished. Best investors always re-evaluate their investment strategy from time to time. This strategy should be based on pure facts and not the assumptions or guesses. Be with patience: Don't let your emotions be ruled by today's performance. In most cases, you shouldn't even be watching the day-to-day performance, unless you like to. Also, don't ever feel like it's now or never. Don't be pressured into an investment you don't yet understand or feel comfortable with. Stick to your earlier plans. Stocks investment: As you are becoming personal finance manager, plan your future, plan your investment, plan your objective. There are many ways to invest money. Of course, we have to decide which investment will be remaining more suitable and profitable to us, to our investing objective. Page 2

3 We can invest in to shares of different companies available in market. Shares may be called as equities, stock or security. The different names are used at different places. When we buy some shares, we become a part owner of the business/company. Why parts owner? Because, we purchase some shares and not all shares of company. This entitles us to vote at the shareholders' meeting and allows us to receive benefits that the company made in its business. These benefits are of many types but if it is in cash it is called as dividend. So if company makes profit, we will get dividend. (Only profit making companies will be able to give dividend) Stock investment is normally more risky as compare to other investment because stocks rate gets fluctuate with time and as per company performance. If performance of company is good, their will be more demand for shares and as demand is more, the rate of shares will be go up as time passes. So wise, knowledgeable decision can gives a tremendous returns as compare to other investment. There are many more examples in stock market, where our investment becomes double or triple in just few months or in a year. So be ready, you have also this chance to double your investment. (I hope you would like to do this, but this requires clear concepts, strong foundation with sharp knowledge and clear business plan. I am going to supply this to you through my series of these books, just you have to grasp properly and to implement it in to market at real time.) Here, High-risk gives high profit or high loss becomes the mantra of stock market. We have to take risk but that risk should be less risky means safe, take calculated risk. That will gives us more return. We travel on road by following traffic rules, we drive our bike with helmet, drive our car with belts, and all these are somewhat examples of calculated risk. New comers in Stock Market: The good news is that you probably are on right track, well aware about your investment. You are on your way to making your money work for you. Even now, there are many stocks in stock market, which consists high risk and may give more profit in short term but if you are new with market, its wise to remain as a observer for some time. Yes, there is the opportunity for big profits, but they require some specialised knowledge. So get this knowledge first and then go ahead. If you don't know what you are doing, you could get yourself into a lot of trouble. New investors should focus on building a financial foundation before doing business in stock market Overview of Indian Economy India with its economy is growing faster than expected. Let's see some of the facts, which prove these things. Very soon it is predicted that India will be near a top position in the world. The data below is collected from various research reports, let s review the same. India is the second fastest growing major economy in the world, with a GDP growth rate of above 7.0% till at the end of year Our economy is diverse and consisting agriculture, handicrafts, textile, manufacturing, and a multitude of services. Services are a growing sector and are playing an increasingly important role of India's economy. Globally, India is a major exporter of highly skilled workers in software and financial services. Locally, the large numbers of young and educated peoples, who are fluent in English, are gradually transforming India as an important 'back-office' destination for global companies for the outsourcing of their customer services and technical support. Economy of India is the fourth largest in the world as measured by purchasing power parity index. Before 1990, India was having strict control over foreign trade and Foreign Direct Investment. But since early 1990s, India has gradually opened up its markets through economic reforms by reducing government controls on foreign trade and investment. Poverty in India was serious problem but declined significantly since independence, mainly due to the green revolution and economic reforms. In 1999, Goldman Sachs in a report has predicted that India's GDP will overtake France and Italy by 2020, Germany, UK and Russia by 2025 and Japan by By 2035 it is expected to reach as 3rd largest economy of the world behind China and US. Goldman Sachs has made these predictions based on India's expected growth rate of 5.3 to 6.1% in various periods, whereas we are growing Page 3

4 faster and faster, India is registering more than 8% growth rate for the last 5 years. Economics experts and various studies conducted across the globe predicted that India and China to rule the world in the 21st century. Presently US is largest economy and very soon focus will shift from US and Europe to India and China. According to some experts, the share of the US in world GDP is expected to fall (from 21 per cent to 18 per cent) and that of India to rise (from 6 per cent to 11 per cent in 2025). If this happens, India will emerge as the third pole in the global economy after the US and China. It is expected that the transformation into a tri-polar economy will be complete by India, which is now the fourth largest economy in terms of purchasing power parity, will overtake Japan and become third major economic power within 10 years. Above are some of the points, which tell us how India is going ahead in the world, and how India's economy is growing. India, Asia's third largest economy, has contributed significantly to maintaining the growth momentum in the region. All above data tells us that there are lots of opportunities ahead, just we have to explore and find out from collection. Do You Know? Foreigners are earning money from our market My friends, why we Indian are behind? How many days we are just thinking to enter to such growing economy. You can be a part of such growth story via stock market entrance. Be fast, be Sharp, Get well knowledgeable and ocean of wealth (really ocean of wealth) is just for you. Hello! For your wealth creation efforts, best of luck from me! Let's go ahead! Investment Returns: Let s see returns on different types of investment between 1980 and Stock Market: 17.5% p.a. Bank Fixed Deposits: 9.0% p.a. Gold Investment: 5.7% p.a. During this time Inflation grew at near about 7.1% p.a. *Source: Data compiled from the RBI handbook of Statistics, NCDEX (*Figures may change slightly.) Even though, equity investment is considered to be risky, history tells us that, long term benefits of stock investment are very good as compare to other investment Investing Vs trading The biggest difference between them is the length of time you holds the asset. Investor is more interested in the long-term price appreciation of his assets. He is not generally concerned about short-term fluctuations in prices. An investor relies mostly on Fundamental Analysis, which is the analytical method of predicting long-term prospects of a particular asset. Most investors adopt a buy and hold approach to assets, which simply means they buy shares of some company and hold onto them for a long time. This approach can be dangerous in an extremely volatile market. Traders, on the other hand, are attempting to profit on just those short-term price fluctuations. The amount of time an active trader holds onto an asset is very short: in many cases minutes, or sometimes seconds. If you can catch just index points on an average day, you can make a comfortable living as a Trader. Traders make their decisions from Technical Analysis study, a form of marketing analysis that attempts to predict short-term price fluctuations. Our whole book series will makes you a good technical trader as well as a wise technical investor. Stockholders Benefits I think, next given is a prominent benefit among many for any stockholder. Page 4

5 Capital Appreciation / Growth Following are some of the examples which show how company s performance improved over time and how Investor gets tremendous returns to their investment. Let's see some of the prominent examples. Unitech: You may see graph of Unitech ltd on any technical graph providing website. You will observe that on date 23/4/2003, stock was available at 65 paise only. The same stock on date 17/05/2007 was at Rs.600/-. Now it's your job to find out % return on capital in this period. You can see the graph of this company from BSE or NSE web sites also. In company like Unitech ltd, If you invest only 10000/- at rate of 65 paise per share (on 23/04/2003) you will get Rs. 92,30, on 17/05/2007. The period is only of near about four years. (The stock was not at 65 paisa, but the rate comes after adjusting splitting and bonus that company given to investors from time to time. It is adjusted price. What is splitting and bonus? All these terms are explained in chapter no 22, Corporate Actions of first book) This is the power of stock market and stocks investment. Just finds out % return and make comparison with your other investment like our favorite bank fixed deposits (if any!). If you invest 10000/- in bank for four year, what will be today's amount? You may (surly will) say that who knows this in early days? You are right, but ask yourself what is solution for this? Next, you have to find out solution for this. Yes, such early findings can be spotted out with the help of stock market analysis/study. My all books will teach you, just go ahead, learn new things and understand new happenings and at last believe yourself. I am sure, You will be having solution at your hand, you will be able to discover such hidden gems in early stage, if such happens (surely will) then in very few days you will be at very different place in life, Lets start, Best of Luck! Infosys : Our next candidate is Infosys technology ltd. This will be greatest investment if made than any other investment. Let's see how? INFOSYS had given shares to public in Actually share was of 10/- but the issue was with premium 85/- so the total amount of one share was 95/-. From start of company, it's performing well and day by day it s growing. Since from inception, company giving bonus and shares are splitting. The price gets arranged as per ratio and the investors get huge money return on their investment. Those who purchase 100 shares at that time (say at rate of 95/- in year1993) of Rs.9500/- and if hold continuously till today, he/she will be having near about 15,000 shares or may be more. This growth in number of shares is due to bonus and splitting of original 100 shares only. Every year company gives dividend to those investor who are having shares with them on record date. This total amount is also not small. Now today, if we consider market rate of Infosys is about 2200/- per share. If you makes calculation, you may feel that your calculation goes wrong, but when you repeat you will get same result and result is the huge amount above Rs.3,00,00,000/- (Don't think that this figure as a printing mistake, its 3 crore). Now calculate the % of return on the investment for 17 years period. Bottom-line: You can see record of many index stocks with others, which are really impressive over period of time. So don't waste your so precious time, just right now, go ahead, find out the new opportunities, explore the world of information, and invest wisely and timely. In both examples, have you seen the basic investment? Stock market didn't required huge amount to make a person crorpati. Just, a person wants the proper vision, patience and last may be the good luck! Stock Market Business overview Introduction First of all, I am considering that you are familiar with computers, at least you know the Page 5

6 functioning of computer. You know the web sites searching and you can open web pages easily for information collections. We are in information age so we must be that much familiar with computers, right? How one can earn money in Stock Market? In stock market, one can do business or investment. For simplicity, if shares purchase and sell within a year that becomes business. If you buy shares and sell after one year, which is considered as investment. Dealing in market requires paying brokerage to broker. Brokerage is nothing but the amount charged by broker on your business transactions. Brokerage will be charged on any case whether you are in profit or loss. This may be different from broker to broker. Any one can invest money in stock market. Normally we buy and sell shares and the difference of this trade will be our profit or loss. We can do business in two ways, lets see. Do You Know? Stock Exchange is a place where buying and selling of shares happens. Buying and selling of same security in one day (Intra-day) should be happen only on one exchange, means buying on one exchange and selling on another exchange is not allowed, if done will results in fine for trade, Auction happens. If shares are in delivery, then you can sell on any exchange. Stock market exchanges are a real or virtual location for the sale and purchase of private equities. Here, supply and demand in stock markets is driven by various factors, which affect the price of stocks Intraday Intraday means, during the course of a Trading Day. This also called as day trading. In this type, buying and selling of shares takes place in one day. The difference between buy and sell value will be profit or loss and that will be reflected in account. In such cases, shares will be not transfer to demat account, as there is no need of storage. In this type, you required less brokerage normally 5 paisa for Rs.100/- for one side trade buy or sell (10 paisa on total trade for Rs. 100/-). If intra-day, normally you can do 6 to 10 times more business in available deposit. (If your deposit is 10,000/- with broker, you can buy shares up to Rs.60,000/- or 1,00,000/-. Profit or loss on whole amount will be applicable to you. If you earn 2,000/- on buying of 1,00,000/-, see the returns, double your amount in just five trades and you can do many trades in one day only. This is the power of intraday trade in stock market, off-course lot of risk is attached with such trades, but we must learn to manage risk, this book series will guide you time to time. Normally on exchange, 70% to 80% businesses are done in intraday. Delivery In this type, shares buying are taking place in one day but selling of those shares is not taking place in same day. Selling takes place may be in next coming days. In this case, the shares are transfer to the demat account. The brokerage is more than intraday and will be normally 50 paisa for Rs.100/- for one side trade (1/- for Rs.100/-, if consider both buying and selling.) Here, you can buy shares about 2 to 3 times on your available deposit. (If your deposit is 10,000/- with broker, you can buy shares up to Rs.20,000/- or 30,000/- Index: Do you know? Indexes/indices are made to measure change. These are calculated by combining several stocks. Changes in economy are directly or indirectly reflected in Index. Market indexes are intended to represent an entire stock market and thus track the market's changes over time. There are many indexes on one exchange. Stocks, which are in index, are of different sectors. These are normally leaders in their respective sectors. Index is having some base value and base year. Index total value is measure against this base value from a specific date. By comparing such a way, we can understand the overall change happen in market, economy. Normally if change is percentage term, it is more understandable. Page 6

7 If you are a market participant specially a trader no random trades please! If you are an intraday trader and you want to trade for a whole month, you must be more precise, more alert. The rules of every trade, stop loss limit should be followed strictly, no any excuse, NO ANY! Think before the trade and your loss limit. If on first day of month your loss limit for month breaches, do rest for full month because you don't have money to spend. If you really don't want rest for all month, be alert from start! In market, who wants to do trade for a long time, he/she have to make such rules and must (MUST) follow them in any case. If you are trader, rest for one month, do analysis, watch market continuously, daily and seriously. Don't trade a single stock for a month, if possible. This will test your patience, consider this as a test. Understand BETA value of every stock of your trade Beta measures a stock's volatility, the degree to which its price fluctuates in relation to the overall market or is a measure of the stock volatility in comparison to the market index or benchmark index. This is also known as "beta coefficient". Investment analysts use the Greek letter 'ß' to represent beta. Normally beta value indicates correlation of stock with benchmark index. Index beta value is considered as one. Beta value of stocks may be one, more than one or less than one. Beta value is very important in portfolio hedging. You can make insurance of your holdings; very detail information with examples is given in books. Online trading: In this form of trading, your broker provides you an Internet trading account that allows you to buy and sell shares at your convenience. Broker also provides trading software through which buying and selling can be done. You no longer have to call your broker to place a trade. Just start computer, go online and login with login ID and password provided to you. You can select any shares you want to buy or sell and execute the trade order! It's very simple and easy. The required money is already deposited with broker on your account or if you having online account with bank, you can transfer money at any time from your saving account to trading account and vice-versa. Millions of customers trade online daily. Actually this doesn't required any special skill or knowledge of computer, If you can check your , then you can trade online. Online trading is quite convenient and easy. Day trading: Day trading may call as Intra-day trading. There are both advantages and disadvantages in day trading. This reduces risk in some case while in some other cases the risk gets increased. You must be well familiar with all fundamental and technical tools. Buying and selling rules must be made before trading. Psychological part is very important, also more sharpness is required to do intra-day trading. But when you are master then why to wait for so many days to see growth of your capital, right? Shares prices goes up or down in market time only, so one can buy or sell shares only when there are sure chances of price increase or decrease. One very common problem while trading stock: Many market participants may have experienced this situation. "They bought XYZ Company at Rs.500 and after this transaction the stock price dropped to Rs.400." After this they sold XYZ Company at Rs.400 and it went up to Rs.600 very soon. In such transactions, the buyer simply made unnecessary loss. Is their any solution? We have discussed this in very detail in our book. While doing a business... Be well prepared before business, reading coming line may shock you! In equity trading, 80% of all stock traders end up losing money. Nowadays everybody saying our market is growing; our economy is growing then why 80% traders are loosing money. The historical record also shows that our economies, markets all are growing then what is the problem with these traders? There are some mistakes that happen regularly with this lobby. I have very well explored some of these mistakes. Just relax; our book series comes with all solutions. These mistakes happen repeatedly Page 7

8 and still even experienced traders do them again and again. You don't do these mistakes else you will be in club of losers lobby. If any trader understands stated mistakes and implement the stated remedy, I am very sure, this will bring a revolution in life of any trader. My book series is for such a purpose. This series will bring revolutionary changes in life of any trader. With this book series, earning profit from market is trader s right and it should get to him. When earning profit is so simple, why so much losers? Just imagine, If you held Infosys in your demat account since from 15 years, what will be result today? (Those who invested 10,000/- in Infosys at start, today he/she will get near about 3 cr from this investment don't believe? We seen already, it s true.) You will find traders who loose money many times even in Infosys within these 15years, then why many loose? I have found the reasons behind this loss. Just read our books. You will get almost all problems solutions. Day trading business gives lots of money to trader but trader must be liable to protect that money. While doing intraday trading, be alert; be sharp, be a hard worker then surely success will be yours No one can stop you! If you want to transform your life, just read my whole 3 books, (books-series) and follow the stated simple rules, very soon you will be on different height and it s my solid promise Handling fear & greed: Fear is a stronger emotion than greed. Fear and greed both creates big problems for most of the investors or traders. The research shows that, people buys shares at bull market and sells shares at end of their bear market, normally at the bottom and almost always at a loss. Because they don't remain extra patience at that time to hold the stock. When they sell, in very few days the prices start to recover and bull phase of market starts. This investor who still believe that market and specially shares in which he/she done trade before, will go down more. Day by day that goes up and when it's at much higher level from bottom, again this investor/trader buys it; same things are repeated again and again. Even people lose money in other ways, too, during the strong bull markets he/she doesn't accept bull phase at start when prices are going high. He/she wants prices come to down and again lose happens due to short selling. This happens in very normal case, if you done investment in market before, you may (surely) have experience of such situation We have solution, our book series is the ultimate, final solution. Just take experience and mail me the response, I am with you. A way to success: I believe almost every small trader repeats his mistakes often and thinks that he will not make the same mistake next time in future. First decide whether you are investor or trader. Both have different role. If you thinking long term asset building, avoid Intra day trading & daily trading to be a successful investor. If you are thinking of trading, then make plan accordingly. Don't get frustrated when market stays sideways. Also understand that you can not totally avoid losses, but overall returns in the market are more important. Our book series is just for guiding you in any role of you. I think, you don t need to refer any book or to do any class after reading and understanding of this book-series. This book-series is must for everyone who is directly or indirectly related to stock market. This book series will save your lots of money in advance. No one can predict accurately, exactly the daily trend of any Stock Market whether it is Indian or global. The stock analysts try to explain why market fell or rose but usually the only reason for any market to rise is that they have fallen reasonably and the reason to fall is that the markets have rose reasonably. When market goes down, everyone says (even well experienced persons in the market) that it will go down and when it goes up, upward targets are given even few minutes before big fall so be a analyst and make self decisions. Don't use tips. Be a master yourself! The main purpose behind writing this series is to make masters through common people. If you are stock market participant, especially intraday trader, you must be a master in technical analysis. You must be good technical analyst. After that, you must understand local as well as Page 8

9 global factors impact on our economy, market. Understanding of ADR and GDR levels, global stock markets, crude oil levels, different metal levels etc in different global markets is very important. Our books are for a hardcore intraday trader as well as for the best short term as well as long tem investors. Let s see, this book series will be a revolutionary concept in future. Bottom-line: At the last, do investment with knowledge. Knowledge of fundamentals, technicals, local as well as global economy factors etc. Invest in only those shares, which are very well known to you. Don t use tips strictly. Make your own tips and then invest. If you are not able to make own tips, first be a master then by preparation, make your own tips and then only do buying or selling of shares. Many people use another friend s advice and tips that actually takes same information from others and the chain continues. Don t hurry in this business. Even everyone knows very well that expending money is easier than earning. Human being always tries to find out easy way, don t use shortcuts. Doing study and finding proper stock takes time and patience. So many people just ignore this way and follows easy way. Don t trap in such manner; don t use easy ways to earn quick money. Be a hard worker and soon you will be smart investor or trader. With this understanding & with my books, you will surely not do wrong trade. My books will makes you a stock market master with a good trader & investor Be a sharp trader or a wise investor. I think, at any time, for any one, earning money is important through stock market. With me, you will be a good money maker! Surely, at any time, through any market, you will earn a lot. Analysis: Broadly, analysis of any stock or market can be done in two ways. One is fundamental analysis and other is technical analysis. In first book, we are going study fundamental analysis. My second book is specially and only for technical analysis. Let s see very superficially, the basic difference between these two different analysis types. Fundamental analysis: Fundamental analysis is studying of supply and demand and so the market action. The purpose of fundamental analysis is to predict stock s future movements. Primarily, this is used for long-term price prediction of stock. Fundamental analysts depend on corporate events like quarterly results and special announcements like earnings guidance and policy changes in operations to generate a buy / sell recommendation. We are going to study fundamental analysis in details. Fundamental analysis is nothing but the study of everything that can affect the shares, stock value. This analysis does study of Economy Analysis, Industry Analysis and finally Company Analysis. The condition of any company like financial condition (Balance sheets, Profit and Loss account statements, Cash Flow statements etc), management is studied. With the help of this analysis, we can find out whether the stock is under-priced, over-priced or fare-priced. This is used for long-term price prediction. All about this analysis is given in first book. Technical analysis: Technical analysis is a set of principles and analytical tools. Those principles and technical tools are used to analyse and to make predictions about the individual stock or market as a whole. Technical analysis mainly means the study of price and volume. This consists of lots of technical indicators and oscillators. Primarily, this is used for purpose of short-term price prediction of stock. Exact entry and exit points can be find out with the help of this analysis. You can answer the questions like when stock will rise? Fall? How much rise? Fall? What will be stop loss? Etc. Actually, this analysis is somewhat opposite of fundamental analysis. Technical Analysis is study of charts and chart patterns. Charts are of price and volume. Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts and other tools to identify patterns that Page 9

10 can suggest future activity. Technical analysts believe that the historical performance of stocks and markets are indications of future performance. A hardcore technical analyst did not want any economy, industry data. He did not require any news channel or newspaper or Internet for information. This analysis is use for short-term price prediction. Exact entry and exit signals can be predicted in advance with the help of technical analysis. Technical analysis results are very powerful; you must be EXPERT in technical analysis, and then see, how easy earning money is? Even in some few seconds, you can earn in many thousands! Technical Indicators: These are parts of technical analysis. As the name suggests, technical indicators are used to indicate trends and possible turning points in stock prices. Technical Indicators are calculated based on a particular stock's price pattern. Data such as opening price, closing price, highs, lows, as well as the volume, are used to create many technical indicators. The indicators generally take the stock's price data from the last few periods. In summary, Technical Indicators are used to indicate trends and predict future stock price movement. These indicators are commonly displayed in graphical form above or below the stocks price chart. When technical indicators are used in combination with other forms of technical analysis, such as the chart patterns we have learned so far, technical indicators can be a powerful compliment which traders can use to assist in their trading decisions. In our technical book, we have studied various types of Indicators like lagging Indicators & leading Indicators with examples. Technical Oscillators: An oscillator is an indicator that fluctuates above and below a centerline or between set levels as its value changes over time. Oscillators can remain at extreme levels (overbought or oversold) for extended periods, but they cannot trend for a sustained period. In our technical book, we have studied various types of Oscillators like Centered Oscillators & Banded Oscillators with examples. Anyone, who is market participant, must understand these indicators and oscillators use and importance. Trading plan: If you want to be a successful, want to become a successful trader or Investor, then be quick. Take a pen, paper and make a trading plan, is a must, that too in writing. A trading plan can provide you with the sound framework that you need to succeed in the stock-market. A sound trading plan is required because, during trading hours, emotions turn smart people into idiots. Therefore, you have to avoid having to make decisions during those hours. If you are with plan, just follow the plan. Trading is a business, so you have to treat it as such if you want to succeed. Reading some books, buying a charting program, opening a brokerage account and starting to trade is not a business plan - it is a recipe for disaster. Yes! You read right and I write correct! "If you don't follow a written trading plan, your success will be far away from you." Many traders are not having trading plan, they give their money away through costly mistakes, this is a real fact, I have seen in the market. Importance: Trading plan helps you to maintain the consistency. It is very important to have trading plan because it allows you to truly measure how successful you are as a trader. Your trading plan will keep you on target. Read it every day and stick to it. If you have a successful business plan, it guides you to success. Whether it's by luck or experience, everyone can make money in the market. However, the difference between a losing trader and a successful trader is the plan and consistency in success. Page 10

11 Unfortunately many traders, investors ignore this important element of the business of trading. Please remember that trading is a business, and your goal is to make money. Your trading plan is nothing more than a guide for how to navigate through the uncertainty and randomness of the stock market. If you do not have a trading plan, you should not be trading (because lot of chance to failure!) Read trading plan everyday and stick to it. You can have all the trading tools in the world, but if you don't have a plan on how you will use them, you will never be successful. Remember, you are starting a business, and if you want your business to succeed, you need to have a PLAN! Our Technical analysis books one chapter is fully dedicated for this purpose you will be able to design a very good trading plan by understanding this chapter. Remember! Don't blame a car, it's a driver who is responsible to lose the race! About Books-Series: This series contains total three books. If you want to become master, then these books are for you. The purpose behind writing this series is to get all information about stock market to the readers at one place. We normally didn't get all complete information in any book. These books provide all necessary, important and comprehensive information to readers in one go. This series is purely focused on Understanding & Mastering Stock-Market completely & consists three parts and hence three books. These books are very useful for all stock market participants. A complete understanding of all these books is mandatory (must!) for every one who want to come in stock market or who wants to remain here for long time. Here is a little info about series books: A complete set of information on Equity market is given in: Part One: Equity Market. A complete set of information on Technical Analysis is given in: Part Two: Technical Analysis A complete set of information on Derivatives (F&O) is given in: Part Three: Derivatives (Futures & Options) I hope you would like this initiative of me. I am sure; all three books are very comprehensive and consists almost all necessary information required to my readers. (All those who are new comers as well as professionals or experienced traders in stock market) Thanks for your interest! In this book series, I have tried to give all essential information to earn money from stock Market. This much knowledge is mandatory to those, who want to remain in market for long time. Read all books carefully, just understanding is not important, implementation is must! Please, don t ignore anything. If you are not doing proper study before investment, this is a bad sign and it may happen that the future might be not as bright as you think. Don t gamble. If you are gambling, don't blame your luck. In such case, a bad luck is pre-decided and invited by you. This is a serious business and requires well-planed study. Always and at all time, don't use your heart use your head A complete set of information on Equity market is given in: Part One: Equity Market. Now a days, people are very much knowledgeable but still are not aware all about the their investments. Our investment should be safe and more profitable in less time. This happens only with proper study, analysis of stock or company in which you wants to invest. Many people just use tips given by their friends or by other unauthentic sources and invest. You must and must be well aware about your investment because loss or profit will happen with you and not with the tips giver. In the stock market, for any stock, fundamentals plays vital role. If you consider long term, Page 11

12 these are very important and are a prominent reason behind stock price move. For any stock, the long term price move is always decided with the help of fundamentals. Technicals from technical analysis are responsible for short term price move; refer my second book on Technical Analysis for more details. This book is totally dedicated to investment, fundamental analysis and hence the overall Equity Market. HOW THIS BOOK IS ORGANISED? This book consists six sections: Investment Basics Understanding Stock Market Fundamental Analysis Understanding Mutual Funds Internatinal Stock Markets Something Extra! Section One: Investment Basics Section one gives all information about the basic things of investment. This first section contains only two chapters. These chapters make you familiar with basic concepts of investment. Chapter one gives information about investment and its compounding power. Chapter two tell you the different investment opportunities with their comparison. Section first ends here! Section Two: Understanding Stock Market This section consist chapters from three (3rd) to twenty-eight (28th). Chapter 3 gives information all about Indian Economy. Fourth chapter specially focus on equity investment. If you want to do business in stock market, the basic requirements are discussed in next chapter five. Chapter six is for all about stock s basics. You must be familiar with these terms before going ahead. If you are a stock holder, what are your benefits? The answer will be obtained after reading chapter seven. Chapter eight is for SEBI, a market regulator. Chapter nine gives information about different exchanges. Chapter ten is for market index. Hope you know Sensex and Nifty. This chapter is all about them. Chapter eleven is for Depositories, NSDL & CDSL. Chapter twelve is for clearing & settlement. All about how money, shares physical transactions happen at exchange level. Thirteen chapter makes you familiar with terms bulls & bears. Next chapter fourteen tell all about orders and order management. Different types of orders are studied in same chapter. Different recommendations are studied in fifteen chapter. Next chapter sixteen is especially for stop loss orders. Short selling of stocks is studied in chapter seventeen. Different circuits (price locks) are studied in chapter eighteen. Beta value, which plays important role in portfolio management, is studied in chapter nineteen. Chapter twenty is especially for IPO. Detail information on subject IPO is discussed in this chapter. Chapter 21 is for debenture and bonds. Different corporate benefits are given to valid stock holders, these with different dates like cum date and ex-date are discussed in chapter 22. Chapter 23 is for understanding Remat and Demat processes. Chapter 24 is for understanding Economic Times newspaper. Chapter 25 gives information on online trading. Next chapter 26 is also gives information about trading but day trading. The next chapter 27focus on different trading mistakes by trader. One should avoid such mistakes to earn more profit. Chapter 28 tells sensex history. History about big falls and big gains in one day. Here ends section two. Section Three: Fundamental Analysis Section three consist chapters from 29 to 34. Chapter 29 is for understanding the concept of analysis. Different types of analysis are discussed. Next chapter is especially on fundamental analysis. Information on economy, Industry and company study is given. The next chapter 31 gives information on different annual reports of company. Especially reports like Balance Sheet, Profit and Loss report. Chapter 32 is for P/E ratio, important ratio while doing fundamental analysis. Chapter 33 does study of different ratios. Lots of ratio s detail information is given. These are useful to access especially financial health of company. Chapter 34 gives information on GDP, WPI, CPI and Inflation. Detail information on topic like inflation is very important. This section three ends here! Page 12

13 Section Four: Understanding Mutual Funds Section four contains only one chapter no 35, Mutual Fund. Very details information on mutual fund is given. Different funds returns are given for comparison purpose only. Off course the data is quite old, but the purpose behind such data is to just compare the returns & that fulfilled. Section Five: International Stock Markets Section five consist chapter from 36 to 40. Chapter 36 is all about different internationally important stock exchange. The next chapter no 37gives information on topics like ADR, GDR. Chapter 38 gives information on different top crashes in international markets. Crashes in USA are given in next chapter 39. Chapter 40 discusses different financials systems which plays important role at international level. This section ends here. Section Six: Something Extra! This is last section and is for to give some extra information to my readers. This section consists chapters from 41 to 50. Chapter 41 gives information on NCFM certification. Next chapter 42 gives information on portfolio management. Chapter 43 discuss advance techniques like hedging & arbitrage. Chapter 44 discuss all about banks. Different concepts like Repo-rate, ReverseReporate, PLR, SLR, etc are discussed. Chapter 45 & 46 is for famous stock market guru s, both Indian as well as International. Chapter 47 discusses important term related to stock market. Chapter 48 gives some famous stock market quotes. Chapter 49 is informative and gives information on SEBI s different guidelines to investors. Last chapter 50 is for our readers. When I gave my dummy copy of book to them, they give me spontaneous reactions, those are given here with disclaimer at last. Section six ends here! Some times, Remember! or Do You Know? paragraphs are used. These contain additional information about the topic discussed or it may be about the topic which is coming to discuss. Whenever, wherever the space is available, I have added some My Jokes collected from different sources, normally at the end of chapter. Different cartoon faces are also used in book. I hope you like this different initiative of me. A complete set of information on Technical Analysis is given in: Part Two: Technical Analysis I welcome you for reading this book; let s make profits in stock markets. By understanding technical analysis you will surely become a better Investor, trader. Many people s even traders are unknown about these simple techniques to earn money and so they work hard. I know, you are the person who do smart work and not hard work. I request you to read my all books of this series because this much knowledge is mandatory, if you want to remain in stock market for a long. Every books every page will say something new to you. In the stock market, technicals from technical analysis are the reason behind every move. (Offcourse fundamentals should be (are) supportive refer my first book on Equity Market) I have seen lot of ignorance by peoples who are well known about technical analysis. Ignorance due to lack of knowledge is acceptable right? If you are a trader, always think what you are doing. In this book, I have tried to give all essential knowledge about technical analysis. This much knowledge is mandatory to those, who want to remain in market for long time. Please, don t ignore anything. There are also some people, who may know all technicals, concepts very well still they just ignore and trade. This is just gambling try to understand the difference between luck n bad-luck. We already had seen that, if you are gambling, don't blame your luck. In such case, a bad luck is pre-decided and invited by you. This book will guide you regarding different technicals of investing & trading, some advanced techniques of trading and planning for the future. This book will enable you to invest wisely in Page 13

14 stock market, whether you are first time investor or a day trader. I think "their is never a wrong time to do the right things..."so be prepare... go ahead, start now, success will be surely yours. I am certain that you will benefit from this initiative of me! HOW THIS BOOK IS ORGANISED? This book consists five sections: Basics of Technical Analysis Understanding Chart Patterns Understanding Indicators & Oscillators Advance Technical Analysis Something Extra! Section One: Basics of Technical Analysis Section one gives all information about the basic things of technical analysis. This section consists 19 chapters. All these chapters make you familiar with basic concepts of technical analysis. Chapter one gives information about history of technical analysis, why it is needed? some of the steps in technical analysis. Chapter two gives information about the basic terms used in technical analysis. Chapter three gives information about the charts, their types, etc. The next fourth chapter gives information all about different trends. Fifth chapter gives information about support & resistance levels for charts. Detail information on trendlines is given in chapter sixth. Seventh chapter looks into bar charts, trends in bar charts with different reversal signals. Chapter eight makes you informed about different gaps and gap types. Here ends the section first! Section Two: Understanding Chart Patterns This section is totally devoted to different chart patterns. This consists of total eleven chapters. Chapters from nine (9) to nineteen (19). Ninth chapter gives information about different chart patterns. From chapter ten to nineteen, different chart patterns with their structure, price targets are studied. These pattern recognisation and deciding trading strategies are very important for any trader or investor. These patterns may be are bullish as well as bearish. Section Three: Indicators Section two consists chapters from twenty (20th) to thirty-six (36th) and gives information all about different indicators used in technical analysis. The indicators are used to give early warning signals while doing trading. Chapter twenty consists basic information about Indicators, their types. The information about oscillator, their types also given. Chapter 21st consists of basics of Indicators. You must be familiar with these basics for well understanding of next coming indicators in detail. Chapter 22nd gives information on different types of indicators which we are going to study in coming chapters. Different types of indicators with examples are given. From chapter 23rd to 37th study of different indicators in detail is given. Here after 36th chapter, section two ends! Section Four: Advance Technical Analysis Section three consists only four chapters, chapters from 37th to 40th. These all are advance topics in technical analysis. Chapter no 37th is for understanding Dow Theory in details. Chapter 38th consist details study of Fibonacci study. This chapter gives detail information on Fibonacci Series, Different levels of Retracement & Projection, Fibonacci Arcs, Fibonacci Fan Lines, and Fibonacci Time Zones. The next chapter 39th gives detail information on The Elliot Wave Theory. The last chapter does study of Gann Study. Here section three ends! Section Five: Something Extra! This section is last section and really for the purpose of giving something extra to my readers. This section consist chapter 41st to 45th. Chapter 41st consist information about Pivot points. Page 14

15 You can find out different support n resistance level for any stock, index with pivot point calculators. The next chapter 42nd gives information about Risk-reward ratio and Pullback. You must know this ratio before entering trade. Chapter 43rd gives some classic trading strategies for intra-day trader. The next chapter 44th gives well information on trading plan. You must have, if you are in market! The last 45th chapter is for glossary. Some important terms glossary is given. Section four ends here! Some times, Remember! or Do You Know? Paragraphs are used. These contain additional information about the topic discussed or it may be about the topic which is coming to discuss. Whenever, wherever the space is available, I have added some collected sentences (motivational quotes - under head QUOTE FOR TODAY) just for motivational purpose. These sentences are from well known, famous personalities. Part Three: Derivatives (Futures & Options) A complete set of information on Derivatives (F&O) is given in this book Few words about Derivatives: Firstly, I would like to congratulate you as you are entering into new area of Derivatives market, (Futures and Option) really a classic field of stock market. This is a stock market area where you can really earn in millions. This book is the last and essential, must book on this series. You know, my purpose behind writing this whole series is to make masters from the common persons, investors or novice traders. I am sure you are ready to become a master! From many traders point of view, derivative market stock trading especially intraday trading are the most complicated, risky. I think this is a most misunderstood. It is good source for earning money available. There are so many peoples; traders who get attracted by stock market especially option market, may be because of profit opportunities available. However, most of these peoples (even good traders) loose money. They focus on the wrong options and sometimes they are also simply on the wrong side of trading. Very less analysis, no trade preparation, incomplete knowledge, etc are some of the reason behind failures. I think, in most cases the reason is that the behavior of stock market is not properly understood by them. Remember, in stock market, there are no perfect rules to rule the stock market neither it is a matter of luck or chance. We have to develop our strategy, rules, trading plan properly, wisely. We already saw all these concepts, facts in our earlier discussion. To be a Master, trade timely and earn properly, wisely, you must be familiar with my all books of this series, this is must! No shortcuts. You must be good technical analyst; my second book on technical analysis will make you a good technical analyst! Always be Informed > Think Strategically, Technically > Decide Timely > Earn Profits. (***Just stop gambling from now!!!) People round the globe are making money from shares, equities and equity investment. This is true fact else stock market will not get peoples to trade. Every year there is increase in volume of market participants. Many of them started with small money in hand and with hardly any previous experience on the stock market and they are doing well now. How do they succeed? Do they make profits from the very first investment? Most of them loose money in the beginning! But secrete is that they make themselves ready with proper study. Which study? Just do study of my all three books of this series. Page 15

16 My all books of this series are nothing but the recipe for success! No False Promise! Just study them properly and completely. After that, tell me the result. My all books are with simple strategies from my Real Life Experience of trading. Friend, think strategically, technically. Just stop gambling from now and learn NOW How to get 100% sure results!! I have explained to you how you can earn maximum profit & cut your losses while participating in stock market. With different stock investing strategies, you cannot lose even when the stock falls to zero. Your profit potential, however, is not limited. Third book lays out such strategies with which you can profit from both upward & downward movements at the same time. Of course, there are risks but the key to success is to minimize and control risk. That's what my all books teaches you. Part III: Overview Index For simplicity, this books overview index is given. SECTION 1: UNDERSTANDING FUTURES CHAPTER 1. UNDERSTANDING DERIVATIVES CHAPTER 2. FORWARD CONTRACTS CHAPTER 3. FUTURES CHAPTER 4. OPTIONS CHAPTER 5. SWAPS CHAPTER 6. DERIVATIVE PRODUCTS CHAPTER 7. HOW DERIVATIVES WORKS? (QUESTION & ANSWER WAY!) CHAPTER 8. LIQUIDITY, VOLUME & OPEN INTEREST CHAPTER 9. COST OF CARRY CHAPTER 10. MARGINS CHAPTER 11. CLEARING & SETTLEMENT CHAPTER 12. ELIGIBILITY CRITERIA SECTION II: UNDERSTANDING OPTIONS CHAPTER 13: UNDERSTANDING OPTIONS CHAPTER 14. USES OF OPTIONS CHAPTER 15. HOW OPTIONS WORKS? (QUESTION & ANSWER WAY!) CHAPTER 16. VALUATION OF OPTION CHAPTER 17. VOLATILITY CHAPTER 18. OPTION CONTRACTS SPECIFICATION CHAPTER 19. THE OPTION GREEKS CHAPTER 20. OPTION STRATEGIES CHAPTER 21. BULLISH STRATEGIES CHAPTER 22. BEARISH STRATEGIES CHAPTER 23. VOLATILE STRATEGIES: (EVENT-DRIVEN) CHAPTER 24. NEUTRAL STRATEGIES CHAPTER 25. UNDERSTANDING OPTION SPREADS CHAPTER 26. GLOSSARY SECTION III: UNDERSTANDING CANDLESTICKS CHAPTER 27. INTRODUCTIONS TO CANDLESTICKS CHAPTER 28. CHART PATTERNS CHAPTER 29. BULLISH REVERSAL CHART PATTERNS CHAPTER 30. BULLISH CONTINUATION CHART PATTERNS CHAPTER 31. BEARISH REVERSAL CHART PATTERNS CHAPTER 32. BEARISH CONTINUATION CHART PATTERNS CHAPTER 33. NEUTRAL REVERSAL CHART PATTERNS CHAPTER 34. NEUTRAL CONTINUATION CHART PATTERNS CHAPTER 35. DOJI A CLEAR TREND REVERSAL SIGNAL CHAPTER 36. OBTAINING BUY AND SELL SIGNALS CHAPTER 37. RECOGNISING REVERSAL SIGNALS Page 16

17 Some times, Remember! or Do You Know? Paragraphs are used. These contain additional information about the topic discussed or it may be about the topic which is coming to discuss. Whenever, wherever the space is available, I have added some quick intraday trading tips collected from technical book, my own experiences under head TIPS FOR THE DAY just for sharp trading, traders motivational purpose. These sentences are my own experiences, observations. These are very useful for any one. Stock market mastery is not easy task. Many strategies that are otherwise not easy to understand, but I have tried to explain it in the easiest way possible. In this book, I have given lots of effective strategies, tools for you. Apply them to get maximum returns against your investments! With us, let s be sharp, Success will be yours! My books will makes you sharp, it s my promise! Stock market is full of opportunities, is a great ocean of wealth. How much you have to take is depend upon you. It matters, whether you are with spoon or bucket! Best of luck... For your new findings & exploring bright future! Wishing you an abundance of wealth, health, happiness & joy Happy Investing & Trading! All these books are now available in MARATHI LANGUAGE. This is first time creation in history of stock market. All three books in both languages are comes in book-set (box pack). My seventh book (Marathi book maza pravas) comes freely with above any book set =============================================== My believe those who loves you, his/her best wishes are always with you! My best wishes are always with you Happy Positional Investing & Sharp Trading! Page 17