Now a days Trading has become one of the second business for everybody who has monthly income.
Those who have money can Trade but most of those who trade doesn't know what exactly trade is all about.

Just in curiousity they start trading, however at the end of the day they will be a losser.
This blog is a place where the bigners can learn what is trading, how can they trade without loss.
The best part of trading is not making profit rather they should know how to avoid loss.

India’s Top 10 Stock Broking House


Many times new investor or trader gets confusion for open a D Mat and trading Account in Broking house. Many of Broking House promises to you for better service but clients get problem due to trading session in theirs Broker house firm.
Here we are giving list of India’s top 10 Broking House on base of survey of investor and trader of many cities. In their views following Broking Houses gives best and reliable services
8. SMC

Stock-broking-companies list






Candlestick chart




A candlestick chart is a style of bar-chart used primarily to describe price movements of a security (finance), derivative, or currency over time.
It is a combination of a line-chart and a bar-chart, in that each bar represents the range of price movement over a given time interval. It is most often used in technical analysis of equity and currency price patterns. They appear superficially similar to error bars, but are unrelated.


Candlestick layout





The basic candlestick

Candlesticks are usually composed of the body (black or white), and an upper and a lower shadow (wick). The wick illustrates the highest and lowest traded prices of a security during the time interval represented. The body illustrates the opening and closing trades. If the security closed higher than it opened, the body is white or unfilled, with the opening price at the bottom of the body and the closing price at the top. If the security closed lower than it opened, the body is black, with the opening price at the top and the closing price at the bottom. A candlestick need not have either a body or a wick.
To better highlight price movements, modern candlestick charts (especially those displayed digitally) often replace the black or white of the candlestick body with colors such as red (for a lower closing) and blue or green (for a higher closing).

Candlestick simple patterns





There are multiple forms of candlestick chart patterns, with the simplest depicted at right. Here is a quick overview of their names:
White candlestick - signals uptrend movement (those occur in different lengths; the longer the body, the more significant the price increase)
Black candlestick - signals downtrend movement (those occur in different lengths; the longer the body, the more significant the price decrease)
Long lower shadow - bullish signal (the lower wick must be at least the body's size; the longer the lower wick, the more reliable the signal)
Long upper shadow - bearish signal (the upper wick must be at least the body's size; the longer the upper wick, the more reliable the signal)
Hammer - a bullish pattern during a downtrend (long lower wick and small or no body); Shaven head - a bullish pattern during a downtrend & a bearish pattern during an uptrend (no upper wick); Hanging man - bearish pattern during an uptrend (long lower wick, small or no body; wick has the multiple length of the body.
Inverted hammer - signals bottom reversal, however confirmation must be obtained from next trade (may be either a white or black body); Shaven bottom - signaling bottom reversal, however confirmation must be obtained from next trade (no lower wick); Shooting star - a bearish pattern during an uptrend (small body, long upper wick, small or no lower wick)
Spinning top white - neutral pattern, meaningful in combination with other candlestick patterns
Spinning top black - neutral pattern, meaningful in combination with other candlestick patterns
Doji - neutral pattern, meaningful in combination with other candlestick patterns
Long legged doji - signals a top reversal
Dragonfly doji - signals trend reversal (no upper wick, long lower wick)
Gravestone doji - signals trend reversal (no lower wick, long upper wick)
Marubozu white - dominant bullish trades, continued bullish trend (no upper, no lower wick)
Marubozu black - dominant bearish trades, continued bearish trend (no upper, no lower wick)

Complex Patterns





Itimoku Kinkô Hyô, the applied candlestick chart commonly used in Japan.
In addition to the rather simple patterns depicted in the section above, there are more complex and difficult patterns which have been identified since the charting method's inception.
Candlestick charts also convey more information than other forms of charts, such as bar charts. Just as with bar charts, they display the absolute values of the open, high, low, and closing price for a given period. But they also show how those prices are relative to the prior periods' prices, so one can tell by looking at one bar if the price action is higher or lower than the prior one. They are also visually easier to look at [citation needed], and can be colorized for even better definition.
Use of candlestick charts
Candlestick charts are a visual aid for decision making in stock, forex, commodity, and options trading. For example, when the bar is white and high relative to other time periods, it means buyers are very bullish. The opposite is true for a black bar.
Open-high-low-close chart
An open-high-low-close chart (also OHLC chart, or simply bar chart) is a type of chart typically used to illustrate movements in the price of a financial instrument over time. Each vertical line on the chart shows the price range (the highest and lowest prices) over one unit of time, e.g. one day or one hour. Tick marks project from each side of the line indicating the opening price (e.g. for a daily bar chart this would be the starting price for that day) on the left, and the closing price for that time period on the right. The bars may be shown in different hues depending on whether prices rose or fell in that period.
The Japanese candlestick chart is another way of displaying market price data, with the opening and closing prices defining a rectangle within the range for each time unit. Both charts show the exact same data, i.e. the opening, high, low, and closing prices during a particular time frame. Some traders find the candlestick chart easier to read.

Demat account


In India, a demat account, the abbreviation for dematerialised account, is a type of banking account which dematerializes paper-based physical stock shares. The dematerialised account is used to avoid holding physical shares: the shares are bought and sold through a stock broker.
This account is popular in India. PHISICALLY ONLY 500 SHARES CAN BE TRADED AS PROVISION GIVEN BY SEBI . As of April 2006, it became mandatory that any person holding a demat account should possess a Permanent Account Number (PAN),
1.Fill demat request form (DRF) (obtained from a depository participant or DP with whom your depository account is opened).
2.Deface the share certificate(s) you want to dematerialise by writing across Surrendered for dematerialisation.
3.Submit the DRF & share certificate(s) to DP. DP would forward them to the issuer / their R&T Agent .
4.After dematerialisation, your depository account with your DP, would be credited with the dematerialised securities.
The Benefits
- A safe and convenient way to hold securities;
- Immediate transfer of securities;
- No stamp duty on transfer of securities;
- Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc.;
- Reduction in paperwork involved in transfer of securities;
- Reduction in transaction cost;
- No odd lot problem, even one share can be sold;
- Nomination facility;
- Change in address recorded with DP gets registered with all companies in which investor holds securities electronically eliminating the need to correspond with each of them separately;
- Transmission of securities is done by DP eliminating correspondence with companies;
- Automatic credit into demat account of shares, arising out of bonus/split/consolidation/merger etc.
- Holding investments in equity and debt instruments in a single account.
Required Documents
The extent of documentation required to open a demat account may vary according to your relationship with the institution. If you plan to open a demat account with a bank, a savings, current and, or other account for which the holder has been issued a check book, such holder has an edge over the non-account holder. In fact, banks usually offer additional incentives to customers who open a demat account with them. Along with the application form, your photographs (with co-applicants) and proof of identity/residence/date of birth have to be submitted. The DPs also ask for a DP-client agreement to be executed on non-judicial stamp paper. Here is a broad list:
- A cancelled check, preferably MICR
- Proof of Identification
- Proof of Address
- Proof of PAN card (mandatory)
- Recent photographs, one and/or more
For proof of identification and, or address self-attested facsimile copies of PAN card, Voter’s ID, Passport, Ration card, Driver’s license, Photo credit card, Employee ID card, Bank attestation, latest IT returns and, or latest Electricity/Landline phone bill are sufficient. While they only ask for photocopies of the documents, they will need the originals for verification.

Points to remember while opening your trading account

- Enquire about brokerage rates and taxes you have to pay for your trading account.

- You have to open the trading account with the agent who is offering you the lowest brokerage rates.

- Different brokerage rates are available for different trading methods like delivery trading and intraday (day trading) trading.

- Before opening your account try to insist the agent to get demo of there online trading software or terminal and check your reliability and Speed.

- Also confirm about there charges and any hidden charges if you have to pay.
Please properly verify above points and then decide with whom you would like to open the trading account.
Now you have your on online trading account, let’s go for another most important requirement needed for you to start your online trading account.

Group A, B1, B2, S, T, TS, & Z classification of BSE

The Bombay Stock Exchange (BSE), India’s leading stock exchange, has classified Equity scripts into categories A, B1, B2, S, T, TS, & Z to provide a guidance to the investors. The classification is on the basis of several factors like market capitalization, trading volumes and numbers, track records, profits, dividends, shareholding patterns, and some qualitative aspects.
As on February 2008 following criterion are used for classifying stocks into various categories by the Bombay Stock Exchange (BSE).
Group A:
It is the most tracked class of scripts consisting of about 200 scripts. Market capitalization is one key factor in deciding which scrip should be classified in Group A.
At present there are 216 companies in the A group.
Group S:
“The Exchange has introduced a new segment named “BSE Indonext” w.e.f. January 7, 2005. The “S” Group represents scripts forming part of the “BSE-Indonext” segment. “S” group consists of scripts from “B1” & “B2” group on BSE and companies exclusively listed on regional stock exchanges having capital of 3 crores to 30 crores. All trades in this segment are done through BOLT system under S group.”
Group Z:
“The ‘Z’ group was introduced by the Exchange in July 1999 and includes the companies which have failed to comply with the listing requirements of the Exchange and/or have failed to resolve investor complaints or have not made the required arrangements with both the Depositories, viz., Central Depository Services (I) Ltd. (CDSL) and National Securities Depository Ltd. (NSDL) for dematerialization of their securities.”
Group B1 & B2:
All companies not included in group ‘A’, ‘S’ or ‘Z’ are clubbed under this category. B1 is ranked higher than B2.
B1 and B2 groups will be merged as a single Group B effective from March 2008.
Group T:
“It consists of scripts which are traded on trade to trade basis.”
Group TS:
“The “TS” Group consists of scripts in the “BSE-Indonext” segments which are settled on a trade to trade basis as a surveillance measure.”Besides these equity groups there are two other groups i.e. Fixed Income Securities (Group F) and Government Securities (Group G).     

Initial public offering (IPO)

When a company reaches a certain stage in its growth, it may decide to issue stock, or go public, with an initial public offering (IPO). The goal may be to raise capital, to provide liquidity for the existing shareholders, or a number of other reasons.
Any company planning an IPO must register its offering with the Securities and Exchange Commission (SEC).
In most cases, the company works with an investment bank, which underwrites the offering. That means marketing the shares being offered to the public at a set price with the expectation of making a profit.
(An initial public stock offering (IPO) referred to simply as an "offering" or "flotation," is when a company issues common stock or shares to the public for the first time. They are often issued by smaller, younger companies seeking capital to expand, but can also be done by large privately-owned companies looking to become publicly traded.
In an IPO the issuer may obtain the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), best offering price and time to bring it to market.
An IPO can be a risky investment. For the individual investor, it is tough to predict what the stock or shares will do on its initial day of trading and in the near future since there is often little historical data with which to analyze the company. Also, most IPOs are of companies going through a transitory growth period, and they are therefore subject to additional uncertainty regarding their future value.)

Stock Formulas

Stock Formulas  used to date: 

PE Ratio = Price / Earnings
Return on equity they earn ______ on every $ of equity = earnings per share / stockholders equity
DPS = dividends per share (yearly)
Dividend yield = dividends per share / stock price
Dividend pay out ratio = dividends per share / earnings per share
Total return = (ending price + div. income received / beginning price) - 1
Earnings per share = current (last 12 months)
Earnings per share = earnings available to shareholders / # shares outstanding
Earnings per share growth = return on equity x (1-Pay out ratio)
Pay out ratio =  dividends per share / earnings per share
Net working capital = current assets - current liabilities
Profit margin = net income / net sales
Turn over = net sales / total assets
Leverage = total assets / current earnings
For every sales dollar, they earn___________ = net income / net sales
For every dollar they invested they got ________ worth of sales = net sales / total assets
For every $1 they have ______ working for them = Total assets / shareholders equity –
Internal growth or implied sustainable growth = return on equity  x (1 - pay out ratio)
NAV per share, net asset value per share = total value of portfolio / number of shares outstanding in fund
Retention ratio = (1- pay out ratio) 

Stock Market Related Definitions



The January effect - Historical tendency for stock prices to increase in January more than any other month
Market Order - Buy or sell for whatever you can get for it ASAP.
Stop Order - A Stop Order is when you tell the broker to trade your stock once it reaches a certain price (above or below what you bought it at).  Once it hits that price, it turns into a "market order" and gets executed at whatever the going rate is.
Limit Order - A Limit Order is where you tell the broker to ONLY execute at a specific price (above or below).  Example - buy 100 shares at no more than 20.  Or sell 100 for no less than 20.
NAV - Net Asset Value - Current value of a mutual fund
CAPM - Capital Asset Pricing Model - Values various investments based on their risk vs. return characteristics
Round Lot - Stocks are sold in lots of 100.
Odd Lot - When stocks are sold in quantities less than 100
Specific risk - The risk associated with buying only one stock.
Penny stocks - Stocks that are priced at under $5.00 each share and can even be priced under $1.00.
The greater fool theory - Buying something for no other reason than the belief that you will be able to sell it to some other sucker for a higher price
Long position - When you buy a stock with the hope that it will increase in price.
Short Position - When you sell a stock (that is borrowed) with the hope that it will decrease in price (so that you can buy them cheaper to replace the stock you borrowed).  Short sellers think the price will decrease.
Markets - are self-regulating
SEC – Securities and Exchange Commision - enforcement agency – insider transactions – try to ensure a fair market. (Officers, directors, key employees cannot buy or sell share of the company without filling a report)
Insider transactions - Officers, directors, key employees cannot buy or sell share of the company without filling a report with the SEC.
Penny stocks – brokers selling small companies (usually non-NYSE members)
Full service broker – has polished stuff on everything – usually cost approximately 2% of transaction (broker gets 1/3 of that)
Discount broker – no advice or recommendations
Beta - tends to show how a stock will move relative to the market.  If beta is greater then 1, it will tend to move more than the market (because of specific risk)
Alpha - the characteristic line showing the specific risk if alpha is zero then no specific risk.
Bull market – when asset prices are rising
Bear market when asset prices are falling
Inflation - not good for stocks or bonds
Long position - Buying stocks is said to be long (expect increase in stock’s price)
Short position - Short selling -  Selling a borrowed stock. Short selling corrects overpriced stocks.  (Going short is anticipating the market decreasing)
Margin - borrowing from broker (Borrow after $25000 is spent @ 11%, maximum = $50,000)  Margin deposit can be T-bills, cash, or non-margin stocks
Squeeze on the shorts – people trying to cover their short interest causes prices to increase.