As the equity market is touching new highs there are more and more people who are finding themselves interested in the markets. The obvious reason behind this new interest is the amount of returns that other people are getting from the markets and the temptation getting buildup in the mind of others who are not getting the same. This is not a new thing every time the market goes up there are people who come in. They are the ones who become the buyers for those who are already in. These new buyers buy shares at high prices and when they go to sell these shares there is no one to buy these shares, Result? Markest crashes. These new people in such cases get out and book losses. These are the only people who spread a bad word for the market and start saying that the market is a gamble. If you are entering the market like these people please read ahead.
Markets are still very highly valued. So the possibilities of market crash are higher. So if you are planning to invest at these levels study the stock well first. But frankly it is not possible for everyone. so there are two way outs.
1)Intra day trading: Many people think it as a gamble. But it is not so. In case of gamble there is no logic for winning. but in trading there are many logical considerations if you understand at least a few of them you can find out the best stock for that day put your money on it. The best thing for intraday is that you can buy up to 15 times of your actual capacity(depending upon the margin provided by you broker) whereas in case of delivery based you can buy only as much as the funds available with you. So in intraday trading your broker invests more money on your behalf hence you are liable to pay only the loss if the same occurs if your call is correct and you gain, you are not required to pay even a singly paisa on the contrary the market pays you the entire profit. Another best thing about the Intra day trading is that you can sell the shares first and buy them in the evening. This is commonly called as shortselling, which is not allowed for Delivery basis. Again there are some other benefits like less brokerage etc.
Only drawback of intra day trading is that you have to give a lot of time to it and need to have some qualities like general information about current afairs, loss bearing capacity etc.
2)Mutual Funds:The second option is divert your money in the form of Systematic Investment Plan(SIP) to professional fund managers through Mutual Funds. Due to SIP you will get the benefit of falling and will be able to get the advantage of Falling Markets by reducing your average price,
So both the ways are available. Now the choice is yours.
Rgds.,
Japan Shah
japan.shah@aol.in
Sunday, July 15, 2007
Do's and Dont's in Intra-Day Trading...
It seemingly looks to be the simplest and the most rewarding. But in intraday trading one has to be very fast and quick and have to be on your toes always, so there are certain rules which one has to keep in mind.
If index is in positive from yesterday and the share you are holding is in minus then it should be cut and if intraday trend of index is in buy then one should buy a stock in which is in plus.
If index is in minus then one should look to short stocks which are minus and not stocks which are in plus.
It is not necessary that a stock which is weak today during intraday trading might be weak tomorrow also, simultaneously if a stock is strong today might not be strong tomorrow.
If US Markets have gone up overnight, the markets here in all probability will open strong, so one should be quite careful when buying stocks as the general psychology of public is to buy when good news is there.
Being a contrarians is very important while trading intraday.
Stop loss is a must while trading intraday.
Always trade in very liquid stocks i.e. which have very high volume because as entry and exit can be very fast in such stocks.
Do paper trading before you actually start trading so that when you start making paper profits, then shift to actual trading.
Keep your volume constant e.g.: if you trade in five lots of nifty future then trade in five lots only. This position can be increased only when you are satisfied with your trading for a month. It should not be that one day you buy five lots and next day you trade in ten lots and third day you get a loss and stop trading for two days.
Fear and Greed are at maximum levels while trading intraday so always have less position when you are new to intraday trading as otherwise you will be mostly under tension.
Rgds.,
Japan Shah
japan.shah@aol.in
If index is in positive from yesterday and the share you are holding is in minus then it should be cut and if intraday trend of index is in buy then one should buy a stock in which is in plus.
If index is in minus then one should look to short stocks which are minus and not stocks which are in plus.
It is not necessary that a stock which is weak today during intraday trading might be weak tomorrow also, simultaneously if a stock is strong today might not be strong tomorrow.
If US Markets have gone up overnight, the markets here in all probability will open strong, so one should be quite careful when buying stocks as the general psychology of public is to buy when good news is there.
Being a contrarians is very important while trading intraday.
Stop loss is a must while trading intraday.
Always trade in very liquid stocks i.e. which have very high volume because as entry and exit can be very fast in such stocks.
Do paper trading before you actually start trading so that when you start making paper profits, then shift to actual trading.
Keep your volume constant e.g.: if you trade in five lots of nifty future then trade in five lots only. This position can be increased only when you are satisfied with your trading for a month. It should not be that one day you buy five lots and next day you trade in ten lots and third day you get a loss and stop trading for two days.
Fear and Greed are at maximum levels while trading intraday so always have less position when you are new to intraday trading as otherwise you will be mostly under tension.
Rgds.,
Japan Shah
japan.shah@aol.in
Tuesday, July 3, 2007
Nomura, Japan's firm eyes Indian Equity Business
Japan's biggest broker, Nomura Holdings, may consider acquisitions as a possible route to enter India's booming stockbroking business, an executive said on Tuesday.
Hiromasa Yamazaki, head of Nomura's global equities business, said the firm wants to build a cash equities and derivatives business in India, Asia's third-biggest economy, either from its own resources or through acquisition.
"We want to enter India just simply because of the huge growth potential there. Anything is possible for Nomura," Yamazaki said in an interview.
He said Nomura hopes to double its profit from equity business outside Japan in about five years.
Indian newspapers reported last month that Tokyo-based Nomura may buy a 35 percent stake in unlisted financial services group Enam for 14 billion rupees ($340 million).
Yamazaki declined to comment on those reports, but said Nomura wants to develop its equities operation as well as other businesses in India.
Other foreign players such as Citigroup, Merrill Lynch and BNP Paribas have invested in India's fast-growing brokers as the local stock market booms.
India's main stock index rose 73 percent in 2003, 13 percent in 2004, 42 percent in 2005 and 47 percent last year. So far this year it is up 7.4 percent.
Yamazaki said Nomura Securities is also looking at other Asian emerging markets such as Indonesia and Vietnam to build its equities business and, beyond Asia, to expanding into Russia.
Nomura Holdings and Daiwa Securities Group are trying to expand business beyond their home market to catch up with rivals such as Goldman Sachs and UBS.
Daiwa Securities SMBC, Japan's second-biggest broker, aims to more than double profits from its foreign businesses by 2012 as its parent announced a 100 billion yen ($807 million) Asia investment plan, the brokerage firm's president Shin Yoshidome told Reuters last month.
Yamazaki said Nomura's international equity business -- which excludes investment banking -- contributes around a quarter of the securities firm's profits, which he wants to double in five years to 50 percent. He said the expansion would also see revenue from its international business grow to 50 percent over the next 2-3 years.
Yamazaki said Nomura plans to focus on derivatives, options trading, futures and a specialized business for hedge funds called "synthetic prime brokerage", which helps funds use share swaps to structure trades.
He said the synthetic prime brokerage will be one of the key products for global hedge funds seeking access to the Japanese market and Asia.
Yamazaki said one reason why Japanese brokerage firms are looking beyond their home market is that Japanese investors want to diversify their investment portfolios.
rgds.,
Japan Shah
japan.shah@gmail.com
Hiromasa Yamazaki, head of Nomura's global equities business, said the firm wants to build a cash equities and derivatives business in India, Asia's third-biggest economy, either from its own resources or through acquisition.
"We want to enter India just simply because of the huge growth potential there. Anything is possible for Nomura," Yamazaki said in an interview.
He said Nomura hopes to double its profit from equity business outside Japan in about five years.
Indian newspapers reported last month that Tokyo-based Nomura may buy a 35 percent stake in unlisted financial services group Enam for 14 billion rupees ($340 million).
Yamazaki declined to comment on those reports, but said Nomura wants to develop its equities operation as well as other businesses in India.
Other foreign players such as Citigroup, Merrill Lynch and BNP Paribas have invested in India's fast-growing brokers as the local stock market booms.
India's main stock index rose 73 percent in 2003, 13 percent in 2004, 42 percent in 2005 and 47 percent last year. So far this year it is up 7.4 percent.
Yamazaki said Nomura Securities is also looking at other Asian emerging markets such as Indonesia and Vietnam to build its equities business and, beyond Asia, to expanding into Russia.
Nomura Holdings and Daiwa Securities Group are trying to expand business beyond their home market to catch up with rivals such as Goldman Sachs and UBS.
Daiwa Securities SMBC, Japan's second-biggest broker, aims to more than double profits from its foreign businesses by 2012 as its parent announced a 100 billion yen ($807 million) Asia investment plan, the brokerage firm's president Shin Yoshidome told Reuters last month.
Yamazaki said Nomura's international equity business -- which excludes investment banking -- contributes around a quarter of the securities firm's profits, which he wants to double in five years to 50 percent. He said the expansion would also see revenue from its international business grow to 50 percent over the next 2-3 years.
Yamazaki said Nomura plans to focus on derivatives, options trading, futures and a specialized business for hedge funds called "synthetic prime brokerage", which helps funds use share swaps to structure trades.
He said the synthetic prime brokerage will be one of the key products for global hedge funds seeking access to the Japanese market and Asia.
Yamazaki said one reason why Japanese brokerage firms are looking beyond their home market is that Japanese investors want to diversify their investment portfolios.
rgds.,
Japan Shah
japan.shah@gmail.com
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