Posts

Risk management is really important in trading?

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I Don't want to talk much on the topic before putting a real example of recent action in Nifty price action and traders lost a big part of their capital. Date- 15 March 2022 (3 days back) We got a superb Bearish pattern with high volume on the Nifty chart at a strong resistance level. People shorted with high conviction and a few bought Puts and others shorted Calls. & Next day what happened? Date- 16 March 2022 If someone shorted with full of their capital, they are bound to lose most of their capital in one day. Technical or Fundamental analysis is just a method of analyzing & believe me anything can fail but not you? why? we are not GOD or GODDESSES! The maximum we can do is keep a hold on Fear and greed while trading with proper logic, the above-given example was very good logic and this can happen multiple times. So, we need to maintain risk with the worst-case possible scenario in every trade to save your system to collapse someday with these kinds of crazy moves whic...

Is Russia-Ukraine war a Risk or Opportunity?

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war zone Broder market breakdown started with a trigger of the Russia-Ukraine war! Many people have lost their finances, families, and much more. So, no doubt war is one of the worst phases for any economy and with the effect of globalization, it is & will impact every economy and person in countries across the world.   Russian Index- MOEX Posting this small blog to show you the reality with a message of- DO NOT Panic! Indian Index- Nifty 50 Gold Chart in USD With great crisis comes the challenge of survival & great opportunities. Few financial Logical guidance that we should follow-  1) We don't know how long it will impact, so do not buy in lumpsum.  2) Weak die first, Sell you weak investment which you are holding without any logic with very high valuations and poor business forecast.  3) Gold is giving a huge breakout, so that can be a safe haven investment in the coming year.  4) Buy good businesses or good funds as an investment with a mindset of w...

How to predict volatility?

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Hi folks, Do you know more than 90% of traders lose money due to crazy moves of price during high volatility, this is predictable with the help of a proper understanding of candlestick patterns! I am a price action player & candles guide me 'what to expect next'. The below-posted case study will help you understand it. 1) It gives a bearish engulfing on the higher side of bank nifty... so, perfect short? NO!, 'coz there is a wick that breaks below the last 2 candles but could not sustain there which means there is not enough selling pressure to sustain at those lower areas. 2) Then what happened? It again recovered and came down with a kind of evening star pattern (bearish pattern), and earlier we had that wick which was a weak one, right... so, the maximum logical target can be that only? 3) The same thing happened and it again recovered from those areas where selling pressure is low, but this time the bullish candle is very powerful that it engulfs all the previous o...

Who wins when market fall?

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Is it possible to gain when everybody loses in the market? The answer is Y E S... Every time the market fall we see horrible news headlines the next day (Index dropped xx Points and investors lost lakhs of crores). I am not saying this is wrong or right, yes people lose the value of their assets(Shares, Bonds, and units of funds mostly) and the market is falling because people are selling and supply is higher but do all investors really lose something completely, N O.  Yes, we do lose the value of assets at that certain time but QUALITY & QUANTITY of asset remain the same, and here in this selling of market, few smart ones win while all lose their hopes and patience. These winners are those people who do not stop and continue investing in these cheaper investments with sustainable growth and great management businesses and also the people who keep doing their SIP's (Systematic investment plans) in good quality Funds. People who do are doing jobs or working anything doesn't ...

Understanding High Nifty P/E

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  Nifty50 index closed at 17,999.20 on 16th November 2021 and even after it is dropped more than 600 pts from high, the Price to earning ratio is still at 24.83 . This means buyers of nifty50 companies or index traders are ready to pay 24.83 multiple prices of their(Nifty 50 index constituents) earnings to buy the stocks or contracts. According to past events Nifty P/E considered being scary at these levels but how have situations changed for the Indian index this time? First, let's understand why and how the value of stocks increases! My Understanding-  When an investor is generating X amount of returns but then with the passage of time high liquidity kept the price of equity higher and bond yield decrease, then the investor has to take more risk to generate the same returns and more returns to balance out lower yield returns and slow growth of their safe-haven assets after so much of inflation in the assets and that can be done by investing the amount into the higher risk as...

Collapse of China Evergrande Group?

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  The Analysis Purpose- To Analyse the current scenario as well as continue loosening financial statements of China’s one of the biggest companies- Evergrande Group.   Scope- The data of this analysis was taken from verified news sources and from the last 2 Half-yearly reports. The scope focuses on the Financial ratio, growth ratio, Income statement, and cash flow statement. Overview   Evergrande is China’s second-largest property developer based in Guangzhou, the capital of the Guangdong region in the south of the country. Riding the wave of China’s property boom, Evergrande expanded to 280 cities and became the light of the country’s real estate sector, having more than 1,300 real estate projects. Based on the financial statements, the company’s Quarterly Operating Income for 30th June 2021 is 1,152 Million Hong Kong dollars, which is -96.08% from the previous Quarterly Operating Income. As of now, the company is under financial stress to pay critical payments towar...

Major breakout in the Edible oil industry [AVTNPL Technofunda Analysis]

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Disclaimer- This blog is written to spread awareness and education on analysis part and opportunities in the market, It is not a recommendation or advice for any investment or trade. This blog can be biased because the author is personally invested in the stock for time being. Industry process & outlook The production process of vegetable oil involves the removal of oil from plant components, typically seeds. This can be done via mechanical extraction using an oil mill or chemical extraction using a solvent. The extracted oil can then be purified and, if required, refined or chemically altered. Fig. 1 In India the Highest import of agricultural products is vegetable oil, the reason is simple here consumption is highest than production. Fig. 2. Fig. 3. India's Edible oil Import data As it is visible in the above picture that from the last few years imports are stabilized and now it is in a reducing trend from 2019-2020, growth in domestic production is visible which is very good...