Trading Rule – “Three Es of trading (Entry, Exit and Escape)”

NORMALLY WE ASSOCIATE TRADING WITH ENTRY AND EXIT ONLY. THERE ARE OTHER ASPECTS TO TRADING TOO. WHILE ENTRY AT THE RIGHT PRICE GIVES YOU ACCESS TO THE STOCK AT A REASONABLE PRICE, EXIT AT THE RIGHT PRICE ACTUALLY GIVES YOU THE PROFITS. TRADERS ALWAYS MAKE PROFITS WHEN THEY COVER THEIR POSITIONS. HOWEVER, THERE IS THE THIRD ASPECT OF ESCAPE. WHY DO YOU NEED TO ESCAPE FROM THE MARKETS? THERE COULD BE A VARIETY OF REASONS. FIRSTLY, YOU COULD BE STUCK IN A WRONG POSITION AND FINDING THE ESCAPE ROUTE IS MORE IMPORTANT THAN EXIT. SECONDLY, YOU COULD BE IN A TOTALLY VOLATILE MARKET Continue reading “Trading Rule – “Three Es of trading (Entry, Exit and Escape)””

Trading Rule – “Apply order types as applicable”

WHEN YOU ARE AN INTRADAY TRADER OR A SHORT TERM TRADER THE COST OF TRADING MATTERS A LOT. THEREFORE THE LEVEL OF ENTRY AND EXIT MUST BE PROPERLY TIMED. NORMALLY, IT IS NOT POSSIBLE TO ENTER THE BOTTOM OR EXIT AT THE TOP AND THAT IS WHERE THE ORDER TYPES COME IN HANDY. BASED ON YOUR EXPECTATIONS AND YOUR REQUIREMENTS, THE ORDER TYPE CAN HELP YOU GET THE BEST PRICE. WHILE A MARKET ORDER IS PLACED TO BE EXECUTED AT THE BEST AVAILABLE PRICE AND QUANTITY, THE LIMIT ORDERS DEFINES THE PRICE FOR EXECUTION. THE LIMIT ORDER WILL ONLY BE EXECUTED IF THE PRICE IS THE LIMIT PRICE OR BETTER, NOT OTHERWISE Continue reading “Trading Rule – “Apply order types as applicable””

Trading Rule – “Don’t try to outsmart the market”

WHAT DO WE UNDERSTAND BY THE TERM, “OUTSMARTING THE MARKET”? WHEN YOU START BELIEVING THAT YOU CAN ACTUALLY FOOL THE MARKET AND STEAL OPPORTUNITIES IN TRADING; THAT IS WHEN YOU GO WRONG. REMEMBER, THE MARKET HAS AN UNCANNY METHOD OF BEING RIGHT IN THE MUST TRYING OF CIRCUMSTANCES. HENCE AS A TRADER, YOUR FOCUS MUST BE TO BE HUMBLE ENOUGH TO ACCEPT THE SUPERIORITY OF THE MARKET AND TRADE WITHIN THE SIGNALS GIVEN BY THE MARKET. THE MARKET ALWAYS HAS A STORY TO TELL YOU. IT IS UP TO YOU TO LISTEN TO THE STORY, GRASP THE INTENT AND TRADE ACCORDINGLY Continue reading “Trading Rule – “Don’t try to outsmart the market””

Rupee & PFC Flows

Permanent Foreign Currency (PFC) flows are spooking the rupee

Source: Bloomberg Quint

Over the last few months, the INR has been on a consistent downtrend. From a level of around Rs.64/$, the INR has already gone beyond Rs.68/$ and traders are actually anticipating the level of 70/$ to be breached soon. Continue reading “Rupee & PFC Flows”

June Credit Policy

RBI could interject with a 25 basis points rate hike

Most reports coming out ahead of the June credit policy appear to be hinting at a status quo on rates. The RBI has been expressing concerns over prices but the Monetary Policy Committee (MPC) has generally veered towards a status quo on rates. Continue reading “June Credit Policy”