help newbie with basic questions

hanman_the_protector · #1 26th August 2007, 09:01 AM

friends iv been in th cash/capital market for a while now but want to slowly also trade the futures market i have some really basic question which have not been answered after reading the icici direct eduction section and other website, my questions mainly pertain to TA,

1)If I look at say (just a hypothetical eg) Infosys spot/cash chart and find it is in a downtrend, I decide to short by selling infosys futures.

a)do I need to look at the futures chart as well
b)why are there 3 futures charts on nseindia, (august, sept, oct)
c)if i need to look at the futures charts as well which one should I look at (aug ,sept, oct)?

2) As there are three charts are they

a)Different independent charts
b)Same chart with differnt time frames of one month each for eg each chart only shows respective month so if they're the same chart can i draw all three months back to back to get one continuous chart?

3)To decide to sell the infy futures should i check for a downtrend in the futures chart (again which one) or the cash chart?

4)In case they are 3 different independent charts how do i know whether to sell aug, sept or oct futures? My intention is to ride the downtrend as long as it lasts so i have no time frame?

would really appreciate you guys answers on this, even though they are simpe questions.

vijbala · #2 26th August 2007, 07:50 PM

When you follow realtime chart it is better to follow cash chart, as there is quick trading hence the charts are smooth.
There are always three months contract available though the current month have high volume.
It depends on how long you are planning to hold the contract to decide which one to trade: current,next or far month contract.

hanman_the_protector · #3 27th August 2007, 12:09 AM

vijbala thanks for the generalization but i would really appreciate if you or any other members could out of the kindness of their hearts answer my questions specifically, I'm sure my questions would be very simple for most of you, btw I only trade EOD not RT

hanman_the_protector · #4 9th September 2007, 01:49 AM

Come on guys even a small answer will do what ever you know, no ones judging you.

what about Mr. Amarnath ........

you say you trade forex , commodities, futures since so many years etc.... surely this question is too simple for you if you actually trade these assets.?

No?

Mr. amarnath surely this question is trivial for you? Or is isn't it?

Would really appreciate an answer from you, what ever you can.

ccmb420 · #5 10th September 2007, 11:51 AM

May not be the proper place to post , but is an excellent Post, see Message 5 at
http://www.traderji.com/words-wisdom...tml#post113029
Colud not resisit posting!!!

THETRADER · #6 10th September 2007, 08:34 PM

Quote:

Originally Posted by hanman_the_protector

friends iv been in th cash/capital market for a while now but want to slowly also trade the futures market i have some really basic question which have not been answered after reading the icici direct eduction section and other website, my questions mainly pertain to TA,

1)If I look at say (just a hypothetical eg) Infosys spot/cash chart and find it is in a downtrend, I decide to short by selling infosys futures.

a)do I need to look at the futures chart as well
b)why are there 3 futures charts on nseindia, (august, sept, oct)
c)if i need to look at the futures charts as well which one should I look at (aug ,sept, oct)?

2) As there are three charts are they

a)Different independent charts
b)Same chart with differnt time frames of one month each for eg each chart only shows respective month so if they're the same chart can i draw all three months back to back to get one continuous chart?

3)To decide to sell the infy futures should i check for a downtrend in the futures chart (again which one) or the cash chart?

4)In case they are 3 different independent charts how do i know whether to sell aug, sept or oct futures? My intention is to ride the downtrend as long as it lasts so i have no time frame?

would really appreciate you guys answers on this, even though they are simpe questions.

1a. I prefer looking at the futures chart, as this would normally discount the dividend, etc.,
2a. The 3 charts are for the 3 contracts expiring by the month indicated. BTW, Futures contract expire on the last thursday of the month (unless changed by NSE), and, will be settled on the basis of closing price (last 1/2 hr weighted average price).
3a. Current month is the one which has more volumes, and, preferable to trade with this. Volumes for the next month contract towards the end of current month expiry, during which time, you could switch to the next month.

I think these will answer your other questions as well. If not, kindly ask.

yoogi · #7 12th September 2007, 09:06 AM

Not at all a pro.

1. I see only EOD chart data on cash market only. Divident discounts & shorting/long trend is usually in the CMP diffrences of cash and F&O. Realy doesnt bother much about it.

2. I trade far month contracts, if I am planning to place limit orders and if the discount is great there (nowadays for Nifty) That ensures some protection as it appreciates as the expiry approaches and roll-overs are reduced.

If timing is concerned I place market orders on current month as it is less slippage b'cos of liquidity,

THETRADER · #8 12th September 2007, 07:51 PM

Hi yoogi

My preference for trading is with a stoploss, and, stoploss figures are necessarily with respect to the same future contract, and, not the underlying spot, due to obvious reasons.

Carryforward costs are negative with Nifty these days, indicating uncertainity of future sustainability, and, so it is a strategy that gives you returns when it is bullish.

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