Investing in the stock market can offer several benefits. But these benefits also comes with lot of risk. Below are the list of some of the major benefits which can give you a clear picture on it.
1. Potential for Capital Appreciation:
Stocks have the potential to provide capital appreciation, which means that your investments can increase in value over time. As companies grow and become more profitable, their stock prices may rise, providing investors with capital gains. By investing in a diversified portfolio of stocks, you can increase your chances of earning strong returns over the long term.
2. Diversification:
Investing in the stock market can help you diversify your investment portfolio, reducing the risk of being overly exposed to any one particular asset class. By investing in a range of stocks across different industries and sectors, you can reduce the risk of your portfolio being negatively impacted by factors that affect only one industry or sector. This can help to smooth out the overall performance of your portfolio, making it more stable and predictable over the long term.
3. Dividend Income:
Some companies pay dividends to their shareholders, which can provide a steady stream of income for investors. Dividends are payments made by companies to their shareholders out of their profits, and can provide a regular source of income for investors. While not all companies pay dividends, many established, financially healthy companies do, and this can be a source of income for investors seeking a steady, reliable stream of returns.
4. Inflation Hedge:
Investing in the stock market can also help to protect your portfolio against inflation. Over the long term, stocks have historically provided higher returns than many other asset classes, such as bonds or cash. This means that, over time, your investments in stocks may increase in value at a rate that outpaces inflation, helping to maintain the purchasing power of your portfolio.
5. Access to Professional Management:
By investing in mutual funds or exchange-traded funds (ETFs), you can benefit from the expertise of professional fund managers who research and select stocks on your behalf. This can help to save time and effort for individual investors, who may not have the time or resources to research individual stocks themselves. By investing in professionally managed funds, you can benefit from the expertise of experienced managers who are dedicated to finding the best investment opportunities in the market.
6. Liquidity:
The stock market provides a high level of liquidity, meaning that it is easy to buy and sell shares in publicly traded companies. This means that, if you need to access your funds quickly, you can do so relatively easily. This is in contrast to other investment options, such as real estate or private equity, which can be more difficult to buy and sell quickly.
It is important to note, however, that investing in the stock market is not without risks. Stock prices can be volatile, and the market can experience significant fluctuations over short periods of time. As such, it is important for investors to have a long-term perspective when investing in stocks. It is also important to do your own research and seek advice from a financial professional before making any investment decisions.
In summary, investing in the stock market can provide a range of benefits, including potential for capital appreciation, diversification, dividend income, inflation protection, access to professional management, and liquidity. While investing in stocks can be risky, with careful research and a long-term perspective, it can be a valuable component of a well-diversified investment portfolio.
Today we will discuss the best stocks for long term investment. These stocks can give you a better return. Don’t miss the chance just go & invest in these stocks. These stocks are fundamentally & technically strong stocks. Let’s analyze some best stocks for long term investment.
1.RELAXO FOOTWEARS
Relaxo Footwears Limited is an Indian multinational footwear manufacturer based in New Delhi. It is the largest footwear manufacturer in India in terms of volume and second-largest in terms of revenue.[4][5] The company makes products under 10 brands including Flite, Sparx, Bahamas and Schoolmate.
Market Cap ₹ 23,716 Cr.
Debt ₹ 174 Cr.
ROE 14.0 %
Sales growth 12.5 %
Promoter holding 70.8 %
Stock P/E 102
Industry PE 55.1
ROCE 18.0 %
2.ALKYLAMINE
Incorporated in 1979 by Mr Yogesh Kothari, Alkyl Amines is a leading manufacturer of aliphatic amines in India. Aliphatic amines are products derived from Ammonia (NH3) by displacement of H2 in the Ammonia molecule by other radicals (R) such as Methyl, Ethyl and Propyl.
Market Cap ₹ 13,531 Cr.
Debt ₹ 23.3 Cr.
ROE 25.2 %
Sales growth 24.2 %
Promoter holding 72.0 %
Stock P/E 60.2
Industry PE 22.1
ROCE 33.0 %
3.ULTRACEMCO
UltraTech Cement Limited is an Indian cement company based in Mumbai, and a part of Aditya Birla Group. UltraTech is the largest manufacturer of grey cement, ready-mix concrete (RMC) and white cement in India with an installed capacity of 116.75 million tonnes per annum. It is the only company in the world to have a capacity of over 100 million tonnes in a single country, outside of China.
Today we are learning some strategies or techniques on how to deal with the share market and how to invest in the share market. Here, some legend investors share their knowledge & experience with us. These tips are more helpful for our trading/investing lifestyle.
Jack Schwager
Jack Schwager (born 1948) is an American trader and author. His books include Market Wizards (1989), The New Market Wizards (1992), Stock Market Wizards (2001).
Schwager is an eminent industry expert and author of a number of critically acclaimed financial books, including The Market Wizards series. He was one of the founders of Fund Seeder. Previously, he was a partner at a London-based hedge fund advisory firm, the Fortune Group (2001-2010). He has also been a Director of futures research for some of Wall Street’s leading firms.
Tips for individuals who want to trade:
Schwager advises individuals who want to pursue their career as traders to first do extensive reading. He doesn’t recommend any book in particular, but encourages individuals to just go and explore different books. Check on the web, go to a library or go to a bookstore, if you can still find one these days. However you do it, just pick up different things. Look at different things, See what they’re saying, Once you figure out where you’re gravitating to, read more on that,” he says.
He also advises traders to start thinking about ideas based on what they have read and how they could implement them in the market.
Then he recommends traders to evolve those ideas into some sort of a methodology for which they can define the rules and come up with risk management plans.
Traders can practise dummy trading to check whether their methodology has the required edge to become successful.
Finally, once traders feel they have an edge, they can start trading with small amounts of money and implement their strategies.
Gradually if one is trading with real money successfully, then one can increase the amount as per his comfort.
Tobias Carlisle
Tobias Carlisle is the Chief Investment Officer at Acquirers Funds, and is best known as the author of the book Deep Value: Why Activists Investors and Other Contrarians Battle for Control of Losing Corporations.
A graduate from the University of Queensland in Australia with degrees in Law and Business (Management), Carlisle has plenty of experience in investment management, business valuation, corporate governance and corporate law and has also worked as an analyst at an activist hedge fund.
7 principles of deep value investing
Carlisle lists out 7 simple principles for deep-value investing that one can follow to ensure solid returns in the long run.
Focus on cash flows: Carlisle feels a share of a company shouldn’t be considered a mere ticker symbol. When one invests in a stock, she becomes a partial owner of that business. This, Carlisle believes, has two important implications. First, a shareholder has rights and can exercise those rights by voting at meetings; and secondly, an owner pays attention to all that a company owns and owes, especially its cash.
Zig when the crowd zags: Carlisle encourages investors to follow a contrarian approach towards investing, and advises them to avoid following the herd. But he warns that before taking a contrarian approach, one should know the crowd’s consensus, which can be found in the difference between a stock price and its value.
Find a margin of safety: Deep value stocks have a built-in margin of safety, and they are undervalued because the possibility of a worst-case scenario is already priced in. That gives it a high upside/low downside bet, he says.
“The worst-case scenario provides a low downside. So you can’t lose much if you’re wrong. But if you’re right, the high upside can bring exceptional returns. So even if you’re right as often as you’re wrong, you do okay. Be more right than wrong, you will do great,” he says.
Be cautious of fast growing companies: Carlisle says fast-growing and profitable companies attract competition, leading to erosion of margins and profits. Although moats do help, strong and sustainable moats are hard to find, and it is tough to gauge whether a moat will remain strong and sustainable in the future, he says. Also, due to reversion to mean, over time, high growth and profit companies eventually become just average companies.
So Carlisle advises investors to look at companies that are currently facing difficulties and have prices that reflect those challenges.
Don’t have a concentrated portfolio: Carlisle believes a concentrated portfolio focuses only on a few high performing stocks for investment due to which it comes with two important trade-offs. First, a concentrated portfolio is more volatile than a diversified one, so a whole good year for the market can be a great year for the portfolio, but a bad year can turn out to be a terrible one.
Follow simple, concrete rules to avoid errors: Investors should follow simple concrete rules that can be both back-tested and battle-tested to avoid major errors. Back-testing checks the rules for theoretical strength, especially when tested in different countries and different stock markets. A battle-test can ensure the rules work in the real world. “No strategy has ever failed in theory. Almost all have failed in reality,” says he.
Have patience for long-term success: Carlisle says investors often misprice stocks of companies that are facing tough times. This, he feels, can be an opportunity for patient investors willing to put up with below-average results in the short term. Carlisle believes investors who follow a buy-and-hold strategy and wait for a turnaround to happen have an enduring edge as they are focused on the long-term gains.
Geraldine Weiss
Geraldine Weiss (born March 16, 1926) is the co-founder of Investment Quality Trends and is nicknamed “the Grande Dame of Dividends” and “The Dividend Detective” for her unconventional value approach investment style by focusing on a company’s dividends rather than earnings. Geraldine Weiss, known as the ‘blue chip stocks guru‘ is the founder of the advisory newsletter, Investment Quality Trends. She is also a co-author of two books.
Weiss says, she shortlists companies that meet six “blue chip” criteria:
The dividend must have been raised five times in the past 12 years
Have an “A” credit rating from S&P
At least five million shares must be outstanding
It must have at least 80 institutional investors
A total of 25 uninterrupted years of dividend payouts
Earnings improvements must have been recorded in at least seven of the past 12 years
Weiss’ 7 investing rules
Weiss came up with seven rules of investing from her years of experience in the investing world, which has helped investors of all ages from time to time to make better investment decisions.
Stocks must be undervalued as measured by its dividend yield on a historical basis
It must be a growth stock that has raised dividends at a compound annual rate of at least 10% over the past 12 years
It must be a stock that sells for two times its book value, or less
It must have a price-to-earnings ratio of 20 or less
It must have a dividend payout ratio of around 50% to ensure dividend safety plus room for growth
The company’s debt must be 50% or less of its market value
Today we are discussing the most important stock market terms which are essential for each & every beginner of the share market to know about it. When I entered the world of stock market then I search lots of words on google which consume plenty of my time. So, here we thought of explaining some of the important terms of the stock market.
https://www.youtube.com/watch?v=tHOssUgrkQA
Here are some stock market terms :
Buy – Buy is a term used to describe the purchase or acquisition of an item or service that’s typically paid for via an exchange of money or another asset. When buyers look to acquire something of value, they assign a monetary value to that product or service.
Sell – The term sell refers to the process of liquidating an asset in exchange for cash. In investment research, sell refers to an analyst’s recommendation to close out a long position in a stock because of the risk of a price decline.
The Bid Price – The bid price is the price that an investor is willing to pay for the security.
For example if an investor wanted to sell a stock, he or she would need to determine how much someone is willing to pay for it. This can be done by looking at the bid price. It represents the highest price that someone is willing to pay for the stock.
The Ask Price – The ask price is the price that an investor is willing to sell the security for.
For example if an investor wants to buy a stock, they need to determine how much someone is willing to sell it for. They look at the ask price, the lowest price someone is willing to sell the stock for.
Bid-Ask Spread – Bid-Ask spread is typically the difference between ask (offer/sell) price and bid (purchase/buy) price of security. Ask price is the value point at which the seller is ready to sell & bid price is the point at which a buyer is ready to buy. When the two value points match in a marketplace, i.e. when a buyer and a seller agree to the prices being offered by each other, a trade takes place. These prices are determined by two market forces – demand & supply, and the gap between these two forces defines the spread between buy-sell prices.
Bull Market – A bull market is the condition of a financial market in which prices are rising or are expected to rise. The term bull market is most often used to refer to the stock market but can be applied to anything that is traded, such as bonds, real estate, currencies, and commodities.
Bear Market – A bear market is a situation when the stock market experiences price declines over a period of time. Generally, a bear market is declared when the price of an investment falls at least 20% from its high.
In other words, a trend of falling stock prices for an extended period is considered a bear market.
Stop Loss – Stop Loss can be defined as an advance order to sell an asset when it reaches a particular price point. It is used to limit loss or gain in trade. The concept can be used for short-term as well as long-term trading. This is an automatic order that an investor places with the broker/agent by paying a certain amount of brokerage. Stop Loss is also known as ‘stop order’ or ‘stop market order’.
Lot Size – Lot size refers to the quantity of an item ordered for delivery on a specific date or manufactured in a single production run. In other words, lot size basically refers to the total quantity of a product ordered for manufacturing .
ForExample When we buy a pack of six chocolates, it refers to buying a single lot of chocolate.
Market Order – A market order is an order to buy or sell a stock at the market’s current best available price. A market order typically ensures an execution, but it doesn’t guarantee a specified price. Market orders are optimal when the primary goal is to execute the trade immediately. A market order is generally appropriate when you think a stock is priced right, when you are sure you want a fill on your order, or when you want an immediate execution.
Limit Order – A limit order is an order to buy or sell a stock with a restriction on the maximum price to be paid or the minimum price to be received (the limit price). If the order is filled, it will only be at the specified limit price or better. However, there is no assurance of execution. A limit order may be appropriate when you think you can buy at a price lower than—- or sell at aprice higher than—– the current quote.
Day Order – A day order is defined as an instruction from a trader to their broker, to buy or sell a certain asset. Setting a day order means that the deal has to be executed if an asset hits a specified price at any point during the trading day on which the order is made. The day order will expire if the price specified in the order is not met by time the market closes.
Volatility – Volatility measures the risk of a security. It is used in option pricing formulas to gauge the fluctuations in the returns of the underlying assets. Volatility indicates the pricing behavior of the security and helps estimate the fluctuations that may happen in a short period of time.
Averaging Down – When a trader purchases an asset, the asset’s price drops, and if the trader purchases more,it is referred to as averaging down. It is called averaging down because the average cost of the asset or financial instrument has been lowered. Because of this, the point at which a trade can become profitable has also been lowered.
15. Capitalization – Market capitalization is one of the most important characteristics that helps the investor determine the returns and the risk in the share. It also helps the investors choose the diversification criterion.
16. IPO –Initial Public Offering is the process by which a private company can go public by sale of its stocks to the general public. It could be a new, young company or an old company which decides to be listed on an exchange and hence goes public.
17. Portfolio – A collection of investments owned by the investor is called a portfolio. An investor may have just one stock or multiple securities in a portfolio. It contains a diverse range of financial instruments like shares, bonds, futures, options, etc.
18. Dividends – Dividend is a part of profit distributed by a corporation among its shareholders. When a company earns profit during a financial year, a part of that profit is usually distributed as dividend among its shareholders.
19. Agent – An agent is a stock brokerage firm which does the buying/selling of shares on behalf of the investor in the stock market.
20. SEBI – SECURITIES And EXCHANGE BOARD OF INDIAis the regulator that oversees the stock market in India. It provides a platform for investors and traders to trade efficiently, and for companies to raise capital fairly. It protects the interests of the investor and ensures accurate information is provided to the investors.
“Anyone can get lucky for a short period of time. But consistent outperformance over long periods is probably evidence of skill.” – Bill Miller
You don’t have to beat the market to be successful over time. There is risk involved, as there is in all investments, but the important thing is to balance the amount of risk you’re willing to take with the return you’re aiming for.
Different Kinds Of Stocks – First it’s important to understand what is a stock. When investors talk about stocks, they usually mean common stocks. A share of common stock represents a share of ownership in the company that issues it. The price of the stock goes up & down, depending on how the company performs & how investors think the company will perform in the future. The stock may or may not pay dividends,which usually come from profits. If profits fall, dividend payments may be cut or eliminated.
There are lots of reasons to own stocks & there are several different categories of stocks to fit your goals.
Growth Stocks – Growth stocks are companies that increase their revenue and earnings at a faster rate than the average business in their industry or the market as a whole. Growth investing, however, involves more than picking stocks that are going up. Often a growth company has developed an innovative product or service that is gaining share in existing markets, entering new markets, or even creating entirely new industries. Businesses that can grow faster than average for long periods tend to be rewarded by the market, delivering handsome returns to shareholders in the process. And, the faster they grow, the bigger the returns can be.
Unlike value stocks, high-growth stocks tend to be more expensive than the average stock in terms of metrics like price-to-earnings, price-to-sales, and price-to-free-cash-flow ratios. Investors buy them because of their record of earning growth & the expectation that they will continue generating capital gains over the long term.
Blue Chip Stock – Blue chip stocks are shares of very large and well-recognised companies with a long history of sound financial performance. These stocks are known to have capabilities to endure tough market conditions and give high returns in good market conditions. Blue chip stocks generally cost high, as they have good reputation and are often market leaders in their respective industries.
Income Stock – Income Stock is a form of security which provides regular dividends to the investors. This dividend steadily grows over time to adjust for dividend to inflation. Such stocks are mostly issued by companies with stable cash flow and well-established financial infrastructure. These companies have large market capitalization and usually operate at a mature stage in their growth graph.
Value Stock– Value Stocks earn the name when they are considered underpriced according to several measures of value described later in this booklet. A stock with an unusually low price in relation to the company’s earnings may be dubbed a value stock if it exhibits other signs of good health. Risk here can vary greatly.
A Smart Way To Buy Stocks – Choosing good or right stocks there is no secret to it. Information is the key. Having information or Knowledge about companies is more important than other factors. Information is even more important than timing. Good stocks tend to stay good, so you can take the time to investigate before invest.
There is Some Factors We Analysis Before Investing In Stocks:
Earning Per Share – Earnings per share or EPS is an important financial measure, which indicates the profitability of a company. It is calculated by dividing the company’s net income with its total number of outstanding shares. It is a tool that market participants use frequently to gauge the profitability of a company before buying its shares.
Price Earning Ratio – The Price Earnings Ratio (P/E Ratio) is the relationship between a company’s stock price and earnings per share (EPS). It is a popular ratio that gives investors a better sense of the value of the company. The P/E ratio shows the expectations of the market and is the price you must pay per unit of current earnings (or future earnings, as the case may be). Look for companies with P/E ratios lower than other companies in the same industry.
Dividend Yield –Dividend yield is the financial ratio that measures the quantum of cash dividends paid out to shareholders relative to the market value per share. It is computed by dividing the dividend per share by the market price per share and multiplying the result by 100. A company with a high dividend yield pays a substantial share of its profits in the form of dividends. Dividend yield of a company is always compared with the average of the industry to which the company belongs. For Long Term Investment. Look for a dividend to generate income to reinvest in the company. The target: a pattern of rising dividends supported by rising earnings.
Return On Equity – Look for a return on equity that is consistently high, compared with the return for other companies in the same industry, if that shows a strong pattern of growth. A steady return on equity of more than 15% may be a sign of a company that knows how to manage itself well.
More Clues To Value In a Stocks – The company’s industry is on the rise. Even though you can make money in a declining industry, you’re more likely to succeed in big & growing markets than in small or shrinking ones. Exciting young industries offer potential, but the staying power of any particular company is hard to predict.
The company is a leader in its industry. Being number one or two in its primary industry gives a company several advantages. As an industry leader it can influence pricing, rather than merely react to what others do. It has a bigger presence in the market. When the company introduces new products, those products stand a better chance of being accepted. Also the company can afford the research necessary to create those new products.
Reinvesting Your Dividends – Dividend reinvestment is using the cash dividend paid by a company or fund to buy more shares of that same investment. Any investor can use this strategy since most brokerage accounts have automatic dividend reinvestment programs that automate the purchase of new shares in that same stock, exchange-traded fund (ETF), or mutual fund. Similarly, many dividend-paying companies offer investors the opportunity to participate in a dividend reinvestment plan (also known as a DRIP). Meanwhile, even if a broker or company doesn’t provide an automatic dividend reinvestment plan, an investor can manually reinvest their payments. You can pocket the cash or reinvest the dividends to buy more shares of the company or fund. With dividend reinvestment, you are buying more shares with the dividend you’re paid, rather than pocketing the cash. Reinvesting can help you build wealth, but it may not be the right choice for every investor.
When To Sell Stocks –
Sometimes, there’s absolutely nothing wrong with a company or its stock. There are simply better investment opportunities elsewhere that would yield higher returns. Investors can then consider selling a less attractive stock (even at a loss!) if they believe they can get better returns by investing elsewhere.
Investors should seriously consider selling a stock if it so happens that their rationale for buying it was flawed, if the valuation was too optimistic, or if there are any additional risks associated with it.
If an investment’s price has plunged in a way that it causes investors to lose sleep over it, it is a signal for them to move their money elsewhere.
One tends to invest for the long term in India. However, one should consider selling if the stock price escalates to a point where it no longer reflects the underlying value of the business. Additionally, one should re-examine his/her evaluation of a company’s fundamentals when the stock suffers an unusual decline in its price. When bubble bursts, stock prices will not rise to the previous level until the fundamentals improve again. There will be no immediate rebound, as the drop is a correction of the previous mispricing.
Stock brokers play a most important role in the Brokerage Firm. Stock Brokers are the Middleman between the stock exchange and trader/client/customers. Stock Brokers are a Professional trader. They buy & sell shares on behalf of clients and their standing instructions. The stock broker may also be known as a registered representative or an investment advisor. Stock brokers maintains the number of transactions of individual clients of institutional customers. Brokerage firms & Broker dealers are sometimes referred to as stockbrokers. This includes both full service brokers & Discount brokers. As a representative of his clients, a stock broker seeks the best deals to buy and sell stock. They usually deal in all types of securities and also handle derivatives, such as Commodity Futures, Currency Market, Option Market, Future Market. They also advise their clients about when to make transactions and guide them about what to look for in market dealings. Stock brokers are paid in form of commissions which usually consist of a percentage of a value of the trade transaction in a stock market. Brokerage firms are also known as discount brokers as they offer trade transactions at a single price. A stock broker provides advisory services for investing in a stock market and in return an investor pays a fixed fee to them. Margin interest payments are charged to investors for borrowing against the brokerage account for investment in a stock market. They also take service charges from their clients for performing administrative tasks, such as for handling Individual Retirement Account (IRA) and for mailing stocks in the form of certificates.
Stockbroker Pros and Cons
The job of a stockbroker is not without its challenges. Here are some of the pros and cons of becoming a stockbroker:
Pros:
Great career option for people who have in-depth knowledge of the stock market.
Offers high commission-based income potential
Good fit for ambitious individuals with strong selling skills
Cons:
Must be able to handle rejection.
Extremely competitive work environment.
May require excessively long work hours.
May have difficulty building a significant client base due to availability of online trading.
IPO or Initial Public Offering is when the shares of a private companies are opened up to the public for the very first time. It is the first sale of the company’s stock to the public to raise funds or capital. IPOs are very attractive for investors as there is a high chance of the stock price multiplying from its initial offer.
An initial public offering (IPO) is one way to Buy shares of a company that is going public. It is a popular mode of investment because it has the potential to grow manifold in a short period of time.
Decision
The first step is to choose the right company’s IPO for investment and understand the past performance of companies & underlying companies before applying for IPO. Gain knowledge about the company through the prospectus of the company. You can find the prospectus of the company on Securities & Exchange Board of India (SEBI) website. The prospectus gives a fair idea about the company’s business plan & its purpose.
Funding
The next & second step is to arrange for the funding. You can use your savings to invest in an IPO. But worry not if you don’t have funds, several nationalized banks & private banks like ICICI, HDFC & popular stockbrokers, offer the facility to apply for loans to invest in IPO. So inquire about the Interest before you take a loan.
Demat-cum-trading account
The next step is a Demat account is a prerequisite to apply for an IPO. Demat accounts provide facilities to store your stocks or buying & selling stocks online. A Demat account can be opened by submitting your PAN card, Aadhar card, Address & Identity proofs. You can easly get many options for trading platform to trader with your shares.
Application Process
You can apply for an IPO through your trading account and Bank account. You need to understand ASBA (Application Supported by Blocked Amount) facility, which is compulsory for IPO Application. The ASBA is an application allowing the Banks to block money in your bank account at the time of placing for IPOs. The ASBA is available in both form physical & demat. The facility eliminates the use of demand draft & cheques. You need to specify your PAN, Demat account number, bank account number and bidding details in the application.
BIDDING
Bidding is the next step to be followed. You need to bid while applying for shares, as per the lot size is mentioned in the prospectus. Lot size is the minimum number of shares you have to apply for during an IPO. There is a bid price too. The company usually sets a price band. The upper limit is known as the Cap price while the lowest is called floor price. You have to bid for shares in this price range. Although you can revise your bid during an IPO, it is important to note that you will need to block the money required while bidding. The blocked amount stays in the bank account and earns interest till allotment.
Allotment
Once the bidding is completed, depending on the investor’s reaction to the IPO, you will be allotted the shares. One thing to keep in mind is, there are possibilities that you might get less than the number of shares you asked for or in some cases none at all. Such instances arise due to the massive demand in the market. When such incidents occur, the bank unblocks your bid money. However, if you get the full allotment of shares you’ll be issued with a Confirmatory Allotment Note (CAN) within 6 working days after closure of the IPO and the next process is to wait for the listing of stocks on the stock exchange.
Process to apply for IPO Online
Login to your online net-banking account
In the investment section,click on the IPO/e-IPO option.
Fill out your depository details and bank account details to complete the verification process.
After this, you are led to a screen titled “Invest in IPO”.
Select the IPO for which you would like to apply.
Enter the number of shares and the “bid price.”
Read the “Terms and conditions” on the documents before you place your bid.
Confirm and place your order by clicking on “Apply Now”.
Candlestick is the most popular & most usable chart in trading. Even most of the successful traders also advise to use this charts for trade. Candlestick chart is invented by MUNEHISA HOMMA.
This charts were developed in the 18th century by Munehisa Homma, a Japanese rice trader. He is considered as the father of the candlestick chart. He is one of the most successful trader in History. The Candlestick trading Bible is one of the most powerful trading systems in history. This trading system is based on Japanese candlestick patterns in combination with technical analysis. Learning Japanese candlestick is like learning a new language. We have to understand the psychology behind the candle formation, understand the candle pattern & most important thing is to understand the trends.
CANDLESTICKS BODY
Candlesticks have different colors and body size.
The most trading platforms were using White & Black color refers to Bullish & Bearish candlestick charts.But, at present it has been upgraded with colorful charts where white candle is denoted by Green Color & Black candle is denoted by Red color.Filled part of the candlestick is called the Real Body. Thin lines poking above & below the body are called Shadows/Tail.
If the candle closes above the open price, it indicates the market forms a bullish candlestick. Bullish candles always display as Green color.And if the candle closes below the open price, it indicates the market forms a bearish candlestick. Bearish candles always display as Red color.
But the color doesn’t matters, you can use whatever color you want.
Long v/s Short
Long bodies of candles shows strong buying & selling pressure. Bullish long candle indicates that buyers are more stronger than sellers and they are taking control of the market during this period of time. Conversely, a bearish long candle indicates that sellers are stronger than buyers & they are taking control of the market during this period of time.
Short & small bodies indicate a little buying & selling activity.Upper & lower shadows give us important information about the trading session. Candlestick with long shadows show that trading action occurred well past the open & close. Japanese candlesticks with short shadows indicates that most of the trading actions are confined near the open & close.
If a candlestick has a longer upper shadow, and short lower shadow, this means that buyers flexed their muscles and bid price higher. But for one reason or another, sellers comes in and drove the price back down to end the session back near its open price.
If a Japanese candlestick has a long lower shadow and short upper shadow, this means that sellers flashed their washboard abs and forced the price lower. But for one reason or another a buyer comes in and drove prices back up to end the session back near its open price.
CANDLESTICK PATTERNS
Candlestick patterns are one of the most powerful trading concepts, they are simple, easy to identify, & very profitable setups. Candlestick patterns are the language of the market. Here are some of the candlestick patterns that will help us in the market:
1. THE DOJI CANDLESTICK PATTERN
Doji is the most important Japanese Candlestick Pattern. When this candlestick forms, it tells us that the market Opens & Close at the same price which means that there is equality & indecision between buyers & sellers there is no one in control of the market. If the closing & opening prices are same, that means candle is giving us a single, that market is not able to decide which direction to take. The above chart shows how the market has changed the direction after the formation of the Doji candle pattern. If Doji forms in uptrend it gives a signal, that the buyers are failing to keep the price up & sellers are pushing the price back to the opening price. When Doji form in downtrend that indicates the market is ready to go up side & it gives a reversal signal.
2.THE DRAGONFLY DOJI PATTERN
Dragonfly Doji is a Bullish candlestick Pattern. Dragonfly Doji is formed when the open, high & close are the same & it has no upper shadow. An important identification of dragonfly doji is its long lower shadow. Indecision & trend reversal are indicators of the dragonfly Doji. The long lower tail suggests that the force of supply & demand are nearing a balance & that the direction of the trend may be nearing a major turning point.
The above chart shows how the downtrend market changes the direction of the market toward uptrend. The formation of dragonfly Doji with long lower tails shows us that there is a high buying pressure in the area. The war between Bull & Bear, attempted by the bear towards pushing price down, but here buyers are stronger than sellers.
3.THE GRAVESTONE DOJI
The gravestone doji is the Bearish version of the dragonfly doji. It is a bearish reversal candlestick which mostly occurs at the top of uptrends. The formation of the long upper tail is an indication that the market is testing a powerful supply or resistance area.
The image above is a perfect gravestone Doji. This pattern indicates that while buyers were able to push prices well above the open. Later in the day, sellers overwhelmed the market pushing the price back down. This is interpreted as a sign that bulls are losing their momentum and the market is ready for a reversal.
4.THE BEARISH ENGULFING BAR CANDLESTICK PATTERN
The bearish engulfing is one of the most important candlestick patterns. Engulfing bar is formed when it fully engulfs the previous candle.
The first candlestick shows that the bulls were in charge of the market, while the second shows that bearish pressure pushed the market price lower. The second period will open higher than the previous day but finish significantly lower.
The engulfing bar can engulf more than one previous candle, but to be considered an engulfing bar, at least one candle must be fully consumed. When this pattern occurs at the end of an Uptrend, this indicates that buyers are engulfed by sellers which signals a trend Reversal.
The pattern is also a sign for those in a long position to consider closing their trade.
5.THE BULLISH ENGULFING BAR PATTERN
A bullish engulfing pattern is the opposite of a bearish engulfing pattern. Many traders use this candlestick pattern to identify price reversals and continuations to support their trading strategies.
The bullish engulfing bar consists of two candlesticks, the first one is the small body, & the second is the engulfing candle. When a bullish engulfing candle forms at the end of downtrend the reversal is much more powerful as it represents a capitulation bottom. The color of the body is not important, what’s important is that the smaller one is totally engulfed by the second candlestick.
6.MORNING STAR CANDLESTICK
The Morning Star Pattern is considered as a BULLISH REVERSAL PATTERN. A morning star candlestick pattern can successfully predict or explain trends in price movements in the case of equity, currency trading or financial derivatives. This pattern occurs at the bottom of Downtrend near a support level, it is interpreted as a powerful trend Reversal Signal. The first candlestick is bearish. The second candle is small & this can be Bullish Or bearish. Second one produces indecision in the market, second candle could be a DOJI or any other CANDLE. The Third candle is a bullish candlestick that gapped up on the open & closed above midpoint of the body of the first day, this candlestick holds a significant trend reversal signal.
7.THE EVENING STAR PATTERN
The Evening Star Pattern is the opposite of the Morning star pattern. The evening star pattern is considered as a Bearish Reversal Pattern. This pattern occurs at the top of an Uptrend. The First candle is a Bullish candle. The second candle is a small candlestick, it can be bullish or bearish or it can be a DOJI or any other Candles. The third candle is a large bearish candle. In general the evening star pattern is the bearish version of the morning star pattern. Third candlestick gaping lower than the previous candlestick indicating a confirmation of the reversal & the beginning of new trend down.
8.HAMMER (BIN BAR)
The hammer is a reversal candlestick pattern when it occurs at the bottom of a Downtrend. Long lower shadow that indicates a bullish rejection from buyers & their intention to push the market.
Understand the psychology behind the formation of patterns , here sellers forcefully push the price down but that time of period buyers are more powerful than sellers which result in trend reversal.
9.SHOOTING STAR (BEARISH PIN BAR)
Shooting star is the Bearish version of the hammer. This candle is characterized by a small body. And long upper shadow. Shadow should be twice the length of the real body. This pattern occurs in an uptrend. It indicates a bearish reversal pattern.
It is one of the most powerful signals.
10.HARAMI PATTERN ( INSIDE BAR)
Harami pattern (Pregnant In Japanese) is considered as a Reversal & Continuation pattern, & it consists of two candlesticks. The first candle is the large candle, it is called the mother candle, followed by a smaller candle which is called the baby. Harami pattern to be valid, the second candle should close outside the previous one. This candlestick is considered as a Bearish Reversal Signal when it occurs at the top of an uptrend, and it is Bullish Signal when it occurs at the bottom of a Downtrend. Smaller body is totally covered by the previous mother candle. Don’t bother yourself with colors, the most important is that the smaller body closes inside of the first bigger.
11.TWEEZERS TOPS & BOTTOMS
The tweezers top formation is considered as a Bearish Reversal Pattern seen at the top of an Uptrend. The tweezers bottom formation is interpreted as a Bullish Reversal Pattern seen at the bottom of a Downtrend. The first one is a bullish candlestick followed by a bearish candlestick. And the tweezer bottom formation consists of two candlesticks as well. The tweezer bottom happens during a Downtrend.
Note:
The candlestick pattern is more workable in higher time frame (weekly, daily & 4hr.) compare to lower time frame. When candlestick pattern is form in the chart, than wait for confirmation & follow up.
Long bodies of candles shows strong buying & selling pressure. Bullish long candle indicates that buyers are more stronger than sellers and they are taking control of the market during this period of time. Conversely, a bearish long candle indicates that sellers are stronger than buyers & they are taking control of the market during this period of time.
