day 2 explains the basic of trading concepts, make me to understand the basic terms while trading, and teach the actives like long short buy order sell order, intraday, positional and also teach as how to make money without risk involvement in disciplined way

  • : Trading of shares in a stock exchange takes place through Registered Stockbrokers, Transfer Agent Broker is responsible for placing trader’s order to the exchange after verifying the depts in account, Broker is responsible for any misplaced orders and the brokers’s deposit will be considered to handle the settlement of misplaced orders. Exchange is the place where trading happens. Exchange will communicate only to brokers for any clarifications related to orders. SEBI defines the rules and regulations for all stack holders in stock marketing and support the resolve the functional issues in stock market. Govt does not have active role in stock marketing other than regulating the activities through SEBI. However the changes in Govt policies may have direct or indirect impact in the stock market.
  • : All the traders are connected to exchange only through certified brokers. Exchange will take from brokers deposit if any misplaced orders from their client, to solve the settlement with counter party.
  • : Stock trading is the place where people can multiply their money in short time, hence people choose stock trading. But if the trading is done without complete analysis and trading plan, the risk of losing money is higher than the reward High money high risk, low money low risk
  • : Yes it is possible to buy stocks from BSE and sell it on NSE. But You cannot buy a stock on BSE and then sell it the same day in NSE or purchase it on NSE and sell the same day on BSE. Even if you try doing it, you incur a penalty of short selling which is you sold something you don't have and so are charged 20% as penalty
  • : Even if we quote higher price the exchange will consider that we are ready to pay up to the quoted price and gets the order executed at the current prevailing market price.
  • : The order needs to be placed using DEMAT account with the details on the share price, quantity and buy or sell order. This will be routed to exchange through broker. The order will be valid until 3.30PM of the trading day and all the remaining orders will get cancelled after that. The most common types of orders are market orders, limit orders, and stop-loss orders.
  • : If we buy a stock expecting the price of the share to go high then is said to be creating long position. On the contrary if we sell a stock expecting the price to go down it is called Short Position. Selling the stock that is already bought is long unwinding and Buying a stock that has been already sold is Short covering.
  • : Stock trading can be considered both as a Business and Gambling. It all depends on the way we approach the market. If we trade with mere speculation without any proper trading plan it is considered as Gambling, however if we trade the market with proper plan with understanding the risk/reward ratio and execute the trade if and only the reward ratio is greater than the risk, then we can consider it as a Business.
  • : The stock price is decided by the buyers and sellers in the market, supply and demand After a company goes public and starts trading on the exchange, its price is determined by supply and demand for its shares in the market. If there is a high demand for its shares due to favorable factors, the price would increase. If the company's future growth potential doesn't look good, sellers of the stock could drive down its price
  • : Position trading involves holding trades for weeks, months or even years. Position trading is another form of investing Intraday trading refers to purchase and sale of shares with in the market day .Here,the chances for huge profit as well as for losses also more.It depends on the trading day sentiment.
  • : when a trader feels the stock price will move down and he doesn't have stocks with him, still he can sell the stock at a high price now and buy before the contract expires. Consequence here he if the stock price climbs up instead of down he must buy at any cost before the contract expires and close it or he will be fined heavily by the exchange
  • : Trade plan is Mental Preparation, Set Risk Level, What position, Target, Set Exit Rules, Set Entry Rules. A Trade Plan is essential to have a knowledge on why we do the particular trade and be disciplined about it.
  • : Stock price doesn't affect the monetary aspects of a company, coz the stocks sold in primary market and that money has been used by the company, the stocks sold in secondary market and its price does not affect the company
2 Comments
  1. Naresh 2 years ago

    Hi sir,
    Your work is really good…. keep doing this

  2. Author
    Charles RJ 2 years ago

    Thanks naresh ji

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