Reminiscences of a trade-learner , journey to become a PRO

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oilman5

Well-Known Member
#1
Hallo to all Traderji members,
i have a plan to write a book on certain aspect of trading.
It is not TA-FA -psychology , it is reality on market as i have seen in last 10 yr.Many a trader, know me as a successful trader, and personally i have necessary background on the subject matter,and many a view r expressed in my last thread.
So in structured way i try to give here essence of knowledge & experience.
Many a discussion with some of my fellow trader-friends which survives test of times shall be given.
3 chapters i have planned
I] FOR LEARNER (1 -4 YR IN MARKET)
II] FOR ADVANCED LEARNER (5-10 YR IN MARKET)
III)FOR EXPERT (10+ YR IN MARKET WITH >50% ANNUAL RETURN )
...........................................................
Views shall be taken from my past documents(5yr old), and if i find truth in it same will be given.
Only request - no interference till i could write 1st chapter.
To shape this knowledge , numerous source r used from India & abroad, including handpick traderji members. I am indebted them & God what i am today:clapping:
 

suri112000

Well-Known Member
#2
Hallo to all Traderji members,
i have a plan to write a book on certain aspect of trading.
It is not TA-FA -psychology , it is reality on market as i have seen in last 10 yr.Many a trader, know me as a successful trader, and personally i have necessary background on the subject matter,and many a view r expressed in my last thread.
So in structured way i try to give here essence of knowledge & experience.
Many a discussion with some of my fellow trader-friends which survives test of times shall be given.
3 chapters i have planned
I] FOR LEARNER (1 -4 YR IN MARKET)
II] FOR ADVANCED LEARNER (5-10 YR IN MARKET)
III)FOR EXPERT (10+ YR IN MARKET WITH >50% ANNUAL RETURN )
...........................................................
Views shall be taken from my past documents(5yr old), and if i find truth in it same will be given.
Only request - no interference till i could write 1st chapter.
To shape this knowledge , numerous source r used from India & abroad, including handpick traderji members. I am indebted them & God what i am today:clapping:
Happy to see you after a long time.

Wish you all the best in your new endeavour.
 
#3
Hallo to all Traderji members,
i have a plan to write a book on certain aspect of trading.
It is not TA-FA -psychology , it is reality on market as i have seen in last 10 yr.Many a trader, know me as a successful trader, and personally i have necessary background on the subject matter,and many a view r expressed in my last thread.
So in structured way i try to give here essence of knowledge & experience.
Many a discussion with some of my fellow trader-friends which survives test of times shall be given.
3 chapters i have planned
I] FOR LEARNER (1 -4 YR IN MARKET)
II] FOR ADVANCED LEARNER (5-10 YR IN MARKET)
III)FOR EXPERT (10+ YR IN MARKET WITH >50% ANNUAL RETURN )
...........................................................
Views shall be taken from my past documents(5yr old), and if i find truth in it same will be given.
Only request - no interference till i could write 1st chapter.
To shape this knowledge , numerous source r used from India & abroad, including handpick traderji members. I am indebted them & God what i am today:clapping:
Eagerly waiting .............nice to talk with you........all the best.....:thumb::thumb::thumb::thumb:
 

oilman5

Well-Known Member
#4
CHAPTER 1 : FOR LEARNER
..........................................
WHAT U HAVE TO UNDERSTAND ?(....means u have to think , give time to assimilate.
first is what u r ?
be honest to answer it...........say mr dhakkan.........an exceptional knowledgable fellow loses in market.........where as Mr SGM earns from market regular basis.
...........answer is right initiation.
u must have zeal to learn..........not zeal for trading.
.................................................. .....................
personal adaptibility..............another key theme.
.................................................. ........
in ur personal life .........u play different role, though u feel trader in u, can surpass other personality /role u play in life
Fact may be its incoherent with ur service life,family life.so u have to put trader in u..........in spl nursery.............to grow it up........under best care by u
IT TAKES TIME.

Aim to be a professional trader...........who gets 100% annual return from market........that is only purpose.normally it takes 4yr after initiation to become a pro.
since middleclass and concept of earn and learn imp...........it reqd some time before initiation..........from amateur to semi-pro.
so this amateur state to be defined...............approx. 4yr........gather knowledge......
take trade here and there..........some profit some loss..........many profits......then some big loss .......back to square one[ludo]............journey to take tips.......with mixed experience.....reading ta books /internet /message board/tv watch/fundamental of business..and economy........person may be lucky to be get A mentor........or learn by hard knock from market.
one thing is sure..................he knows by 4 yr,whether trading is for him...........so his next attempt is serious[if not perished already]
 

oilman5

Well-Known Member
#5
So amateur now knows value of knowledge, danger of half knowledge ......imp of risk analysis.........value of probability
can he be governed by price or by opinion....................will decide his fate.
.................................................. ......................
if opinion comebacks to prioratize fundamental analysis..........learn to be an analyst[an mba in finance or cfa in india]
study and investigate............write and talk.......sell product[to client name of shares.....a dream].............ofcourse buy it in name of relatives[to avoid insider trap]........yes its a way........workable...........big names do in india
so called fund managers..........+aggressive propaganda/marketting in tv channels
.................................................. ...............................................
problem of opinion is...........u can not use stop.basically amateur trades based on emotion...........forgetting its a game of maturity.
worst is..........a trade loss not booked
...........converted to an investment.............a bigger loss[i have lost enough in this trap]
 

oilman5

Well-Known Member
#6
i shall write now some basic.
..........................
since trading is a subject with greed,finance,invest and ofcourse maturity and adaptabilty.........i think a touch on finance /investment reqd.
...........................
in xii level........a/c , company , business r introduced also economics
so understand first.........debit/credit.
then ledger entry.......bank reconcilation statement

now learn balance sheet/profit & loss statement/cash flow. depreciation concept.
rule: asset=liability + owner's equity

go to the cost concept,how estimate r determined ,product price and value.
..........................
see how company-owner/CEO sees.basic idea of corporate finance.
budget concept .....forecasting.catch is assumption and actual performance checking
so when u understand this basic , look at macro economy.......govt has some agenda....what is it trying to implement.......so which sector /company may get back up.
economic cycle concept......boom-recession, affect of interest rate on modern economy and rbi policy r must to know.........to develop know why attitude.

.................................................. ....
can u look little bit to understand theory of compounding.....to understand discounting/future cash flow?so now u know dcf model and p/e idea ,
just study basic risk /reward analysis.combine all3, u have fair idea what should be the value of stock.
only 2 thing further. what is lying in future? perception of people.......read newspaper and price reflection.......u can now find sufficient oppurtunity
 

oilman5

Well-Known Member
#7
business: its an organized effort of individuals to produce and sell goods &services for profit.
...................
so organised effort must be there.
type A: produce product and then sell . make profit out of it.
type B: provide service , get profit.......service industry.
...................
service & goods MUST SATISFY customers.so needs and wants of customer r key determinant.so understand this .....who r ur potential customer and what may be needs.
.....................
let us try to understand production...............
5 factor
.............
1. land
2.labour
3. capital
4. info
5. enterpreneur : risk taker who start business, for a dream of profit.its his vision and practical application and ability to mould as per demand of position
...........................................
so now come resource............always consider its restricted or limited.understand......for any product production distribution and consumption.simple idea on wheat.......can help u to learn commodity concept /economics
Big picture comes from macro economics.business is applied economics......so understand scarcity and oppurtunity cost.
skilled labour ,capital normally scarce.
OPPURTUNITY COST : is next
best alternative use of resources. say i am studying mba full time at 30 yr with 4lac /annum ......so tuition fee 2lac + 6lac , oppurtunity cost as 1.5 yr study time 1.5x4lac=6lac to be considered for cost of education.
..............in business decision making tree , oppurtunity cost is very vital
...........................
back to basic: what to be produced and for whom?
what resources .......how to arrange
.........................so market economy [capitalism]and mixed economy
(classic case is indian oil marketing company,bpcl)
..........................
economic force : supply demand and equlibrium.........how price vary and percept of value is key theme.
for a company monopoly ,oligopoly[ a small number of big company controls ]r good for profit.
competition is ........company hates
............................
however due to free enterprise others r like to join.
growth of trade is policy a company. so any country's policy, present political boss , govt regulation .......+global concept is guideline
.........................
so for country's economic cycle ..........gdp, measuring growth,employment , inflation, balance of trade.....r key indicator
 

oilman5

Well-Known Member
#8
understand role of govt as regulator........rbi,sebi
....govt encouragement........to some industry
tax and law ......role as business supporter
lobbyist.......at election ,their flesh of pound after power equation........i dont have to name.
budget.........its relaxation /new custom-duty/vat
business law and ethics
.......................................
business sustainability and growth

understand environment at which a business work,adaptability to change with it.enemy other competitor has to be cut, gain more market share ......how much concession for buyer's market.
first".....input ...........PROCESSED .........output
2nd' feedback.......strategy......to play aggressive if favorable, cut loss if danger.......
if nomal just as per plan.........dont disturb system
slow but steady wins the race,.....motto.
............
fad....life style change of consumer
new technology
applied research....for development
global competition and oppurtunity
.....................
understand ownership.......sole proprieter vs. corporate.
organisation chart of a company and its management principle
authority vs. responsibility
effectiveness
contingency approach.......as reqd.
goal....planning........purpose.....action to achieve....feedback[review of performance]
.......rectification
......................................
scheduling and PERT r key tool
understand QC AND INVENTORY .......just in time
 

oilman5

Well-Known Member
#9
basic idea of marketing
.......................................
1. concept of utility:why buy?.....promotion of ideas,goods and services to create exchange against money to satisfy human needs. infact customer purchases a utility.
time and possesion r imp element for buyer.
exchange........buy and sell
buying: buying means why at what customer buy and ready to spend how much ?
selling: transfer of possesion from seller to customer to create possesion utility
.....................
hence for physical distribution .........transportation and storage r imp.
..................
risk taking:
1. introduction of new product
2. competition
3.potential loss from bad debt
4. obsolence , theft
....................
gathering info through market research ........its verification and implement it in decision
................
marketing: when supply began to overtake demand ,producer know ..........they have to sell goods to consumer whose basic need is satisfied.so selling better over the competitors..........sale depends on satisfying customer wants, advertising alone not enough.
.....................
market
...............
1.consumer market..........buyer r consumer
2.institutional market.....like hospital.club, school.........spread the need
3. reseller market.........intermediaries like wholesellers.......who buy and later sell for profit.
.........................
relation with an industry .........where to use and product utility
consumer motives..........activity and interest.
so speciality goods ..........consumer or for industry ....have to be seen
..........................
marketing concept starts with market research , developing a marketing strategy with 4p i.e. product price place [distribution] promotion [publicity]
feedback study...........to understand where we lag , our strengthzone .........effectively addressing customer needs,........distribution chain.......is publicity effective to improve performance
..............................
consumer concept:eonomic factor ........how much money consumer have.......their actual income and money avaiable to spend, disposable income........softloan strategy of bank.
future income pattern............with demography........so the target audiance for market ,and finally make them buyer.
finally......rational motive vs emotional insinct[of potential buyer with cash in hand].........they shall buy today /tomorrow,if not then day after............this is the concept , stockmarket....media,mf industry use .
on the otherhand industrial buy..........only after due diligence cost, reliability risk study
[just see how fii buy in indian market , getting out with profit]
.........................................
product and pricing
..............................
products r finished goods ,focal pt of business & tangible,can be inventoried.services r deeds,both can be judged by performance with an opinion of customer.
company can start productline i.e. a group of products , develop additional product to expand product line or atleast keep up innovation/advances in the same sector/industry group.
product differentiation: its the process of developing /promoting A product vs. similar product from other company.Object is to create spl image i.e. niche in market.
PRODUCT LIFE CYCLE:
...............................
INTRODUCTION GROWTH MATUIRITY DECLINE.
during introduction normally promotion occurs ,choose distribution channel carefully
during maturity products sale on its own ,need min promotion .........profitability increases.
in growth stage, to create brand loyalty more imp.
Later sales volume comes down ,competitive product launches ,consumers may switch to other brand ...........so the firm drops it from productline and try new product , developed by own R&D.a business analysis is done to evaluate and quantify new product's potential , vs positioning of competitors in market...........compare cost with alternate scenario/oppurtunity cost and firm's strategic objective.If all r promising........then only new one tobe developed, or otherwise try for imitation of existing self or competitor's high volume product with a minor change.
For justification BEP has to be studied for viability with alternate scenario.
So use.......test the market.
commercialise the market............go for branding.develop brand loyalty.
have a good warranty.then only comes pricing.
 

oilman5

Well-Known Member
#10
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funny part of pricing is .........it is as the eyes of beholder , so customer has to perceive.
so the concept......potential customer who can pay/spend.for service........its need based.So demand and supply is more imp concept.In reality producer tries to control pricing by perceived value of customer through adverising and relation maintaining.,so customers believe in greater value of product than its actual one.
pricing objective...........depends upon profit motive,market share penetration ,survival, ethical concern and company image.
.......................
for calculation gross profit margin and BEP has to seen with different scenario.understand realistic cost.penetrating pricing vs higher price for higher quality r entirely different concept........multiple unit discounting ,psychological threshold of customer to be considered.
then comes distribution channel........direct sale to consumer[mall concept] ,sell through dealer and through agent for industrial user.
door to door retailers and internet selling r new concept.
for inventory control, distribution centre has its role.
...........................................
so far i have idea on something INVESTMENT:
accountancy..........debit/credit,3statement..balance sheet,profit loss,cash flow,financial ratio analysis its implication
corporate finance..........budget and forecasting,debt/equity ratio, how to fund
costing.......of a product,value vs. perception,time value ,break even ,overhead, profitability
VALUATION..........discounted cash flow,firm valuation,relative valuation technique,dividend model,book value vs replacement value
........................................
statistics.........basic concept of probability, regression analysis, sd.....and qc
ECONOMICS.....stock market as lead indicator, demand/supply.cycle concept
business..........enterprenaur what makes him click,why a business fail,concept of monopoly and market share
MARKETING.........NEW PRODUCT aggressively develop market share, old product how to cut competition.......game of advertising
macro economy.......budgetary policy,rbi monetary and credit policy,la.repo...reverse repo........rate of interest .......inflation and its impact
INTERNATIONAL FINANCE..........forex,global village,cheap product ,political risk ,stable govt,fdi ,import export gatt,ppp and swap,money flow and money squeeze
BEHAVIORIAL FINANCE.........how crowd behave,how greed /fear affect individual and when in group.dream vs reality,wish hope,study on fallacy.........when one quits
VALUE OF MONEY.............time value discounting concept,cash in hand ,oppurtunty
TIME MANAGEMENT........priority,get organised,abc analysis,delegation,imp learn to plan then act.
self development.........SWOT ANALYSIS.pogress review
company.........product development,market niche,ir ,distribution channel,vision,fund management ,integrity
basic financial planning..........ur personal balance sheet.....asset vs liability,derisking and insurance concept, asset allocation , ur suitability as risk taker
BOND MARKET.........yield curve analysis,interest rate implication
COMMODITY MARKET.......CYCLE , WHERE LIES OPPURTUNITY
STOCK MARKET..........WHY , for whom no, neat/bolt function........concept of software
OPTION /FUTURE.........leverage tool, derisk vs speculation,pricing model like black scoles/binomial..........danger associated in trading
RISK RETURN STUDY.........risk premium,expected return ,variance, beta,capm
PORTFOLIO THEORY........efficient market, portfolio diversification,markowiz model ,indexing,sharpe ratio,portfolio performance ,arbitrage
FUNDAMENTAL..............INDUSTRY ANALYSIS,govt policy,burgain power of buyer,substitute product,PORTAR MODEL
..........................................................
 
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