Author: JOSMA ETTUMANUR
Publisher: Scriptor Publication
Published: 2022-02-11
Total Pages:
ISBN-13: 9392203357
DOWNLOAD EBOOK →
This is a nontechnical book on stock trading and this does not propagate any strategy. This is for common man. Strategies in stock market are like Jackfruit that fell up on a rabbit. Rabbits are not there always to be killed by a falling jack fruit. Many people in rural towns in India are still suspicious about the stock market. They are unaware of the lakhs and crores lying in the stock market as for many of them it is something that steals your money. „You invest in land, your money doubles in few years. Gold will not let you down ....‟ These are advices that you hear again and again. Very few say nice things about the stock market as they have heard only about losses in shares. It is like a puzzle that a common man finds hard to understand. In stock market „Mr. A‟ lost money, „Mrs. B‟ lost money and still, you claim you can mint money there. How is this possible?‟ One of the reasons for this illiteracy about the stock market is the use of technical meters and standards to people who cannot understand Fibonacci, Camarilla, head and shoulder pattern or such technical meters to explain the stock movement. In real terms, stocks move as per situations prevalent and new investors and traders who try to evaluate this on pure technical basis to invest may lose money as all are not capable of this assessment and it is not necessary to think that stocks move accordingly always. Newcomers need just overall directions based on the performance and this book gives just that. This does 6 not propagate intraday trading. Some like Yes bank and Adani Power are included as we are sure about a better future in those counters although their balance sheet shows a net loss. Please understand that there are lakhs of housewives and fixed employed people who are slow and silent in buying and selling stocks over a period of time and enlarging their wealth. You cannot sell land in one day. You have to be careful in keeping gold which is an asset but will not grow that much except in certain volatile times. And fixed deposits are safe but give you peanuts as interest in return. But the stocks that are mentioned here are ones which gave their holder three times to 12 times their value in one year! To give an example a stock called Intellect Design Arena which deals in IT financials cost Rs44 in March 2020. In March 2021 its price is above Rs 750 (now 848) Suppose a poor man or woman who earns paltry sums had bought just 100 shares of Intellect Design Arena during the start of Corona chaos. Now it is Rs75000 which may help them sizably for something. Or in other words, a lady sold one sovereign or 8gram gold last year and bought 500 shares of Intellect Design Arena. This year her investment in this particular share grows to Rs375000 with which she can buy 75 grams or nine sovereign gold. (And the Gold rate has come down now) These are rough estimates to show the potential in certain stocks. And all stocks are not the same in growth. Now after all what is a stock or share? It is a part or smallest unit of ownership of a company registered audited and listed as per all government norms. It is offered to the public to invest in them. If the company 7 grows and makes a profit, the price of the shares of that company will grow and you can sell them at ease in profit. Remember that as everything is computerized and controlled by National Stock Exchange and Bombay Stock Exchange buying or selling shares can be done in a second‟s time being anywhere in the world and no need to go anywhere to collect the money as it comes into your registered bank account within two days if you have sold shares of any company. And how can you buy and sell shares? Now stock broking firms are opened at all nooks and corners of the country. You can go there or simply sit at home and open an account online through which you can buy and sell. Remember that certain share prices move up and down several times a day and you may get profit at low cost in a day and be tempted to do intraday trading as it is called. But do remember that when you gain someone had lost. So next day you could be the victim and avoid day trading which can sometimes grab your funds. Here we are not discussing same-day trading because cartels and „operators‟ are active in high jacking certain stocks by which some stocks will appear going up tempting us to buy. But in the next moment, it comes down in few seconds giving you losses. But if you are holding those shares you need not sell them on the same day. Next day or in the next opportunity you will get a chance to sell in profit. Buy Today Sell Tomorrow (BTST) or Delivery (buying forever) are schemes under which you can avoid loss and wait till the stock price comes up. For this, stock selection is important as all share prices will not come up every time. But in Intraday or same day or day trade, you have to close the deal around 3 8 PM regardless of profit or loss. So, it is a game of time also. Between 9.15 and 3.15 PM, you can mint money or lose money if it is a day trade. Being a small timeframe, you may not understand back scene tactics of players or operators, or brokers who form cartels and take certain stocks to their control. So, the share price moves up and down which may add profit to the operators but losses to the ordinary trader as he does not understand that it is a game plan. This is only about intraday trading. But what happens otherwise? You bought a reputed stock like State Bank of India at Rs150 in May 2020 giving full price, ie,100 shares at Rs15000. On 2021 February 18 the price was Rs427 or the investment became Rs 42700 in nine months. If you deposit 15000 rupees in SBI for nine months as a deposit it will not earn you even Rs1000 as interest. The difference between a thousand and 27 thousand is what this book is about. On a certain day of May 2020, the SBI share price went down to Rs155 when you decided to enter for a same-day trade. It closed at Rs150 and you are forced to sell at that price at a loss of Five rupees per share. This is an example of how losses are created for individuals. But if you bought it to hold on BTST (for three days) on the second day it became Rs160 and on the sixth day (if bought on delivery) it became Rs171. Or after one month, the price was Rs194. And it has never gone down. So, if you sell then, you get 26.6% profit in one month! These are actual rates. The importance of stock selection is another factor. A person who had bought 2000 Adani Green shares at Rs32 in 2018 was advised by his broker company staff to change into a „promising‟ new realty stock at Rs60. Now Adani 9 Green is Rs1300 a share and the other one is Rs20 a share. What he lost is 2000 x 1268 or 25,36000 lakhs! Understand that all staff at broker firms do not read stock market stuff and do research. They simply advise what they heard somewhere or what their company promotes as some brokers do the role of market-making for certain companies for a price. Sometimes shares like Adani Green or Adani Power may get affected by market scams and people frantically sell. Now in such situations, you have to look at whether the problem is within the company or in the market. If it is outside the company need not worry. The market will take care of that and the share price will bounce back as everything in the company is working well. Then why people are attracted to Intraday or same-day trading? It is because brokers used to offer leverage or Margin money to you for Intraday. If you have Rs10000, you get leverage or margin of 40000 to two lakhs. Or four times to 20 times. (Now this has been reduced and warned to be stopped by SEBI) So you can buy more. If it is profit, it will be more and if it is loss it will be also many folds. The Stop-loss mechanism becomes useless in volatile stocks. Here share trading becomes a game like azz football or cricket when you cannot decide in advance which team will win. As it is a matter of hours you do not have much choice. Whether it is loss or profit you have to close at 3 PM. Or else the broker‟s system will automatically square off your trade. Through this process, many people lose their money. This book gives an answer to these questions and gives you details of the 77 most profitmaking stocks in the Indian stock market last year. This book is not intended to 10 teach you technically about trading or do not say anything about various theories and charts that schools teach you in this regard. So anyone can understand the book and buy shares. Since share prices move up and down on a daily basis some data were revised in this book and hence it is strictly not the 2021 March data.
