iCharts Discussions

[jdpt]

Dear All,

I've been reading this forum for few months but i didn't find any thread for absolute beginner , So I planned to start a thread for them.

If you are a newbie, Please take the time to read this entire first post slowly and with focus & please do post continuously for your any doubts, questions, suggestions, complaints etc to encourage me.

Before i do start, I request to all seniors and ichart experts to do support to us & whenever we will go on wrong way, do correct to us to make our journey safe & happy.




Let's Start


Definition of a successful trader is having the ability to do three things:

Make profit
Keep profit
Repeat

If you can repeatedly do these three things, then you're on your way to being a superstar trader! But i warn you, it's no cakewalk.




MINIMUM REQUIREMENTS

If you are new to trading and/or you have had difficulty finding some consistent success, you must understand something. This is not a game and it's not a way to get rich quick. I suppose there is the odd exception of the person with a ton of money to play with, but if you approach this business without a business plan and the willingness to follow it, you are almost certainly doomed to failure. A doctor spends ten plus years in a grueling learning curve to be successful and earn a six figure income; anyone who thinks that their pot of gold in this business is a couple of months down the road is in for a rude awakening.
Below is a minimum requirement (in my opinion) to find out without losing your @#!@#$%$# if this business is for you. By following these recommendations, you will be treating trading like a business and you will be learning and gaining confidence. I think this is so important, I am going to make the following statement: If you start out in this business using no common sense, you have no one to blame other than yourself when you lose all your money. There is no reason to ever lose a dime of your money while learning to trade. A well thought-out business plan, common sense and hard work is required for anyone who wants a chance at success. Many people meet those requirements and still fail, but it does not mean you have to watch your bank account go to zero.


MINIMUM REQUIREMENTS / THIS IS A BUSINESS







WHATEVER / WHICHEVER WAY YOU DECIDE TO TRADE YOU MUST (AT A MINIMUM):
ON DAILY AND WEEKLY TIME-FRAMES, YOU ONLY DEMO-TRADE FOR THREE CONSECUTIVE PROFITABLE MONTHS IN A ROW. YOU DO NOT PROCEED TO STEP TWO UNTIL COMPLETED.
OPEN AN ACCOUNT WITH HALF OF THE INVESTMENT YOU INTENDED TO GO FULL WITH AND CONTINUE TO ONLY TRADE DAILY AND WEEKLY TIME-FRAMES UNTIL YOU ARE PROFITABLE THREE MONTHS IN A ROW MINIMUM. YOU NEVER RISK MORE THAN TWO PERCENT OF YOUR ACCOUNT ON ANY ONE TRADE. YOU DO NOT PROCEED TO STEP THREE UNTIL STEP TWO IS COMPLETED.
FUND A FULL ACCOUNT AND CONTINUE TO ONLY TRADE DAILY AND WEEKLY TIME-FRAMES UNTIL YOU ARE CONSISTENTLY BUILDING YOUR ACCOUNT FOR AT LEAST SIX MONTHS. YOU NEVER RISK MORE THAN 2 OR 3 PERCENT OF YOUR ACCOUNT ON ANY ONE TRADE.
IF AND WHEN YOU DECIDE TO DAYTRADE ON A SMALL TIME-FRAME AND YOU DON'T FOLLOW THIS TEMPLATE, AT A MINIMUM, YOU ARE ALMOST CERTAINLY GOING TO FIND YOURSELFE IN TROUBLE. IF YOU ARE GOING TO FOLLOW A SYSTEM OR ANY TRADING STYLE AND YOU DON'T FOLLOW THIS TEMPLATE AS FAR AS THE DEMO PROCESS, YOU ARE NOT TREATING IT AS A BUSINESS AND YOU HAVE NO ONE TO BLAME OTHER THAN YOURSELF IF YOU LOSE YOUR MONEY.
IF YOU EVER SUFFER THE LOSS OF 30 TO 35 PERCENT OF YOUR ACCOUNT, YOU STOP TRADING. PERIOD-PARAGRAPH. YOU GO BACK TO DEMO AND FIGURE OUT WHAT WENT WRONG. WHILE DOING THIS, YOU REFUND YOUR ACCOUNT BACK TO ITS ORIGINAL AMOUNT. YOU DO NOT GO BACK TO LIVE TRADING AGAIN UNTIL YOUR DEMO HAS SHOWN YOU WHAT WENT WRONG AND YOUR ACCOUNT IS BACK TO FULL STRENGTH BY WHATEVER MEANS. IF IT TAKES ONE MONTH OR SIX MONTHS, IT DOES NOT MATTER. YOU MUST FOLLOW THIS APPROACH IF YOU DON'T WANT BLOWN ACCOUNT AFTER BLOWN ACCOUNT.
Your goal should be this. Learn, learn and learn some more and don't do anything stupid while your getting your feet on the ground. The ultimate goal of any trader is to build an account to a size where just a few good trades a month produces a staggering income. Hardly anyone ever gets there because they don't treat it as a business. They do stupid things that they would never do in any other area of their life and it's because of the money that can be made. If it takes you a couple of years or even five or ten to reach the level of a staggering income, is it worth it? The choice is yours.




Thanks & Regards
JDPT

____________________
Just trade what you see.

[umesh1]

Dear jdpt
My Best wishes and support for you and welcome your step
Cheers

[jdpt]

Dear Umesh ji,


Thanks alot for your encouragement & support in advance.




Regards
JDPT

_____________________
Just trade what you see.

[jdpt]

Three Types of Market Analysis
To begin, let's look at three ways on how you would analyze and develop ideas to trade the

market. There are three basic types of market analysis:

1.Technical Analysis
2.Fundamental Analysis
3.Sentiment Analysis
There has always been a constant debate as to which analysis is better, but to tell you the truth, you need to know all three.


It's kind of like standing on a three-legged stool - if one of the legs is weak, the stool will break under your weight and you'll fall flat on your face. The same holds true in trading. If your analysis on any of the three types of trading is weak and you ignore it, there's a good chance that it will cause you to lose out on your trade!



Technical Analysis

Technical analysis is the framework in which traders study price movement. The theory is that a person can look at historical price movements and determine the current trading conditions and potential price movement. The main evidence for using technical analysis is that, theoretically, all current market information is reflected in price. If price reflects all the information that is out there, then price action is all one would really need to make a trade. Now, have you ever heard the old adage, "History tends to repeat itself"?Well, that's basically what technical analysis is all about! If a price level held as a key support or resistance in the past, traders will keep an eye out for it and base their trades around that historical price level.
Technical analysts look for similar patterns that have formed in the past, and will form trade ideas believing that price will act the same way that it did before.
(Look at Image1.1)




In the world of trading, when someone says technical analysis, the first thing that comes to mind is a chart. Technical analysts use charts because they are the easiest way to visualize historical data! You can look at past data to help you spot trends and patterns which could help you find some great trading opportunities. What's more is that with all the traders who rely on technical analysis out there, these price patterns and indicator signals tend to become self-fulfilling. As more and more traders look for certain price levels and chart patterns, the more likely that these patterns will manifest themselves in the markets



You should know though that technical analysis is VERY subjective.

Just because Karan & Arjun are looking at the exact same chart setup or indicators doesn't mean that they will come up with the same idea of where price may be headed.
The important thing is that you understand the concepts under technical analysis so you won't get nosebleeds whenever somebody starts talking about Fibonacci, Bollinger bands, or pivot points.



Fibonacci ? Bollinger Bands ? Pivot Points ? !!

Now i know you're thinking to yourself, "God, this guy is so smart. He use crazy words like 'Fibonacci' and 'Bollinger' . I can never learn this stuff!"
Don't worry yourself too much. After you're done your TA lesson, you too will be just as...
uhmmm... "smart" as me.



JDPT
______________________
Just Trade what you see.

[sivgates]

Best Wishes

Regards
Sivgates

[sonila]

jdpt,
v.good attempt.
pl continue.

[bala49]

Dear Jdpt,

You've started a great thread! Pl.continue . Wish u all the best!
(I wish you started this much earlier).

[g_kab35]

Good initiative...
My best wishes...

[jdpt]

Dear sivgates, sonila, bala49, g_kab39 a lot for your wishes & encouragement.



Regards
JDPT
______________________
Just Trade What You See.

[jdpt]

Fundamental Analysis

Fundamental analysis is a way of looking at the market by analyzing economic, social, and political forces that affects the supply and demand of an asset. If you think about it, this makes a whole lot of sense! Just like in your Economics class, it is supply and demand that determines price.

Fundamental analysis includes:
1.Economic analysis
2.Industry analysis
3.Company analysis
On the basis of these three analyses the intrinsic value of the shares are determined. This is considered as the true value of the share. If the intrinsic value is higher than the market price it is recommended to buy the share . If it is equal to market price hold the share and if it is less than the market price sell the shares.



The biggest part of fundamental analysis involves delving into the financial statements. Also known as quantitative analysis, this involves looking at revenue, expenses, assets, liabilities and all the other financial aspects of a company. Fundamental analysts look at this information to gain insight on a company's future performance. A good part of this tutorial will be spent learning about the balance sheet, income statement, cash flow statement and how they all fit together.
When talking about stocks, fundamental analysis is a technique that attempts to determine a security’s value by focusing on underlying factors that affect a company's actual business and its future prospects. On a broader scope, you can perform fundamental analysis on industries or the economy as a whole. The term simply refers to the analysis of the economic well-being of a financial entity as opposed to only its price movements.

Fundamental analysis serves to answer questions, such as:

Is the company’s revenue growing?
Is it actually making a profit?
Is it in a strong-enough position to beat out its competitors in the future?
Is it able to repay its debts?
Is management trying to "cook the books"?

Of course, these are very involved questions, and there are literally hundreds of others you might have about a company. It all really boils down to one question: Is the company’s stock a good investment? Think of fundamental analysis as a toolbox to help you answer this question.


JDPT
______________________
Just Trade What You See.

[sldesai]

very good article

[jdpt]

sldesai

[jdpt]

Sentiment Analysis

Price should theoretically accurately reflect all available market information.

Unfortunately for us traders, it isn't that simple. The markets do not simply reflect all

the information out there because traders will all just act the same way. Of course, that

isn't how things work.

Each trader has his own opinion or explanation of why the market is acting the way they do.

The market basically represents what all traders - you, Each trader's thoughts and opinions,

which are expressed through whatever position they take, helps form the overall sentiment of

the market.

The problem is that as traders, no matter how strongly you feel about a certain trade, you

can't move the markets in your favor (unless you're one of the Warren Buffett or Rakesh

Jhunjhunwala!). Even if you truly believe that the sensex & nifty is going to go up, but

everyone else is bearish on it, there's nothing much you can do about it.



As a trader, you have to take all this into consideration. It's up to you to gauge how the

market is feeling, whether it is bullish or bearish. Ultimately, it's also up to you to find

out how you want to incorporate market sentiment into your trading strategy. If you choose

to simply ignore market sentiment, that's your choice. But hey, we're telling you now, it's

your loss!

Being able to gauge market sentiment can be an important tool in your toolbox.



JDPT
______________________
Just Trade What You See.

[jdpt]

Types of Charts

Let's take a look at the three most popular types of charts:

Line chart
Bar chart
Candlestick chart
Now, we'll explain each of the charts, and let you know what you should know about each of them.

Line Charts

A simple line chart draws a line from one closing price to the next closing price. When strung together with a line, we can see the general price movement of Nifty over a period of time.

Here is an example of a line chart for Nifty.

[jdpt]

Bar Charts

A bar chart is a little more complex. It shows the opening and closing prices, as well as the highs and lows. The bottom of the vertical bar indicates the lowest traded price for that time period, while the top of the bar indicates the highest price paid.

The vertical bar itself indicates the Nifty's trading range as a whole.

The horizontal hash on the left side of the bar is the opening price, and the right-side horizontal hash is the closing price.

Here is an example of a bar chart for Nifty.