Genuine Advice for new online share traders

Are you new to the stock market and are you looking for some genuine advice? Then this might be just right for you. It has been observed that new traders succumb to various different pitfalls due to the lack of knowledge, lack of capital and emotional excesses like excitement, greed and fear. In this post, I will give you 10 unique advices that will help you survive in the markets for the years to come!

Be sure of the fact that you can never always be sure – Just as in life, there are no guarantees in the stock market. In a large marketplace where there are active buyers and sellers, there is always an element of uncertainty. The stock market is an information discounting mechanism which means that the future expectations are factored in even before they happen. It’s great to be sure of something, but as a trader you’ll need to make peace with that fact you can be wrong too. It paves the way for a winner’s mind-set.

Never go against the trend – This is a universally preached rule but hardly practiced with sincerity. Traders tend to hunt for discount while picking stocks and it’s generally a good thing but there is a catch. Bargain hunting along the trend is advisable but not against it. More amount of money is lost trying to catch a reversal than any other behavioural trading error in the markets.

Take home some profits before profits are taken away from you – In trading, it is important to book your profits regularly because unrealized (MTM) profits is not equal to money in the bank. Unless you close your positions, your profitability is vulnerable and subject to change. Of course, you can end up making more profits if you hold on too but as a rule of thumb, it is important to realize your profits. This will motivate you to maintain discipline and become a long-term player in the stock markets.

Never go long in a falling market with leverage – Buying a stock cheap is a good thing but not when you’re buying in a falling market with a leveraged position (Margin/ futures/options). Be aware of the fact that leverage reduces your tolerance to volatility and time. To add to the risk, traders often average down buying more in the hope of breaking even on the losing trade. This strategy is a risky one and must be avoided all costs. Rupee cost averaging is only appropriate for medium to long-term investors. If you intend to average your costs, avoid leverage. Instead utilize the power of leverage to trade with the wind rather than against it.

Stable returns are more important than jackpot trades – Steady regular returns are more important than jackpot trades because they are generally more cautious and justify the risk you take per trade. Always stick to a trading plan which has a higher probability of success even if the returns are lower. When huge profit making opportunities arise from time to time you will be in a better position to exploit them. Trading is like driving on the road. You will have to wait for a freeway to hit top speed, until then you must be sustainable.

Never expect markets to be rational unless you want to be wrong – The famous economist John Maynard Keynes said, “Markets can remain irrational longer than you can remain solvent”. Stock valuations are a result of investors’ expectations. Hence if the expectations are irrational, the prices of stocks will be too. The takeaway from this is that as a trader, it is best to give the market the benefit of the doubt and listen to what it is saying rather than trying to impose rationality upon it.

Increase your hit rate instead of spinning in fortune’s wheel – To be a successful trader, you should be able to have higher number of winning trades on average. A higher success ratio will increase your confidence in the long-run and also help you scale up your trading significantly as you will trust your decisions. With a mediocre success ratio per trade, you will be highly dependent on probability and luck.

Never wait for the top to sell because it’s like aiming in the dark – Trying to call a high is a difficult endeavour. The presence of a large number of buyers and sellers makes it difficult to predict the exact number which will mark the peak of a stock. Hence, it is best to avoid doing that. It is more beneficial to look at the range of stock prices. This is how successful professional investors enter and exit trades. There are different ways of determining the range but some useful ones are average traded price (ATP) and volume weighted average price (VWAP).

Don’t overtrade – When you feel like you’re overtrading, it’s best to take a break and go away. It is important to observe your own behaviour and know when to take a step back. It’s important to understand that the markets are always ripe with opportunities and taking a break doesn’t deprive you of them.

Make hay when the sun shines – In other words, take advantage of the opportunities available currently and make the most of them while the conditions are good. As a trader, you will have to be able to recognize and call a trend right. The maximum amount of money is made when the going is good. During such times is when the multi bagger opportunities present themselves.

Trading is a journey rather than a destination. Much like an athlete, constant focus and improvisation will lead to fruitful results in the long-run. The education aspect of trading lasts a lifetime and is very useful in running any business enterprise because the rules are essentially the same.

About the Author

Tejas Khoday is the Co-Founder of FYERS (An innovative stock market investment platform).

ABOUT FYERS:

FYERS is one among the stockbrokers in India having their own in-house trading platforms. FYERS offer stockbroking + technology in a unique way to its’ customers. FYERS is the first online stockbroker in India to launch Thematic Investing, which is the most unique equity investment platform in India. Nowadays, online trading in stocks appeal the young and new entrants. This is where FYERS provide valuable advice having a team of experts for online trading in shares.

Reality of GST implementation and its effect on different sectors

In India, there are 29 states and hence there are 29 state laws for VAT and Sales taxes, 1 service tax, 1 excise duty. So, in total there are 32 tax laws.

The misconception of GST is that it is 1 nation and 1 tax. The truth is that there is going to be one Central GST (CGST), 29 State GST (SGST) and 1 Integrated GST (IGST) for interstate transactions. In effect, it we’re going to have 31 laws replacing the currently existing 32 laws. Under the 101st amendment of the constitution, we have a new article called the article 246 (A) which says, parliament and states can levy taxes on the supply of goods and services. In the future, this can potentially result in each state government levying its own GST as every state is sovereign in its power to impose its own taxes. The implication of the law is that in a federal government structure such as ours, implementation of GST can be complicated and ineffective.

Although it was designed for convenience, it will increase the compliance burden and costs for small businessmen and service providers as it requires filing GST 3 times in a month and 36 times per year for each state. In addition, they will have to file 12 TDS returns and 1 annual return. Under the current structure of Service tax, they must file returns only twice a year. SMEs don’t have the bandwidth to comply this sort of regulation. The migration to GST might turn out to be a bigger challenge than expected by experts due to these reasons.

Also, the slab rates are disadvantageous for businesses and go as high as 28%. Wherever the government has to forego VAT and Service Tax. The potential for tax evasion is likely to increase as SMEs can report turnover under ₹20 lacs per annum and operate multiple entities to escape GST.

The rollout of GST will benefit sectors which are reliant on logistics and distribution costs such as the FMCG sector, E-commerce and retail. It also helps bring down the total price of the products sold. The automobile sector will be especially benefit as their products are high ticket purchases and a small saving can result in a big spike in sales volumes. The service sector will be negatively affected as taxes for the end user will go up 3% and the airlines sector will be the worst affected if the tax slab remains at 18%.

Real estate prices may revise downwards due to a higher GST. Although input tax credits can be availed and the overall effect will be neutral, the perception of buyers will be negative in the medium term. The rental yields may also be negatively affected as the tax burden is higher on a month on month basis for tenants.

About the Author

Tejas Khoday is the Co-Founder of FYERS (An innovative stock market investment platform).

ABOUT FYERS:

FYERS is one among the stockbrokers in India having their own in-house trading platforms. FYERS offer stockbroking + technology in a unique way to its’ customers. FYERS is the first online stockbroker in India to launch Thematic Investing, which is the most unique equity investment platform in India. Nowadays, online trading in stocks appeal the young and new entrants. This is where FYERS provide valuable advice having a team of experts for online trading in shares.

8 Reasons You Can’t Afford to miss bitcoin pioneer Amit Bhardwaj’s e-book, ‘Cryptocurrency for Beginners’

It’s raining gold, and I mean it, Bitcoin prices in the last one year has only headed north. Today the price of 1 BTC is equivalent is more that USD 2000. In the last five months since January 2017, the value of BTC has doubled in absolute value when compared to the dollar.

For those who are still new to this:

Cryptocurrencies are a kind of money, so long as people ascribe value to them and use them to pay for things. The main benefit is the blockchain (aka distributed ledger) on which they're based. Blockchains let you transact without needing the blessing of a third party or banker middleman. Bitcoin is a kind of cryptocurrency that uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Although other cryptocurrencies have come before, Bitcoin is the first decentralized cryptocurrency - Its reputation has spawned copies and evolution in the space.

Bitcoin was the first successful implementation of a blockchain, and it's optimized almost entirely for transferring value securely over the Internet. People like to call it "digital gold."

Amit Bhardwaj, founder of Amaze Mining & Research Limited, pioneering e-book, ‘Cryptocurrency for Beginners’ looks at how layman can invest in cryptocurrency. The book seeks to provide context and clarity on the relatively unexplored and technology-dense world of cryptocurrencies, in a beginner friendly way.  This is his third book in the series, after ‘Cryptocurrency Trading for Beginners’ & ‘Cryptocurrency Mining for Beginners’.

 

Cryptocurrencies are set to transform the world, and you don’t want to be left behind in investing in the same

 

Here are your top eight reasons to grab a copy of the e-book, ‘Cryptocurrency for Beginners’:

 

  1. The world of blockchain and bitcoins has not been dealt with such amazing clarity of thought earlier

 

  1. A step by step guide in investing in Cryptocurrency

 

  1. Vivid info graphs and easily relatable instances is what sets this e-book apart

 

  1. This is your one-stop guide, if you are seeking answers to the most critical aspects of Cryptocurrencies like how cryptocurrencies work, the future of cryptocurrency, how secure they are, the practical use of bitcoin and other cryptocurrencies around the world, regulations governing them and basics of cryptocurrency mining and trading

 

  1. The book empowers readers with requisite knowledge of the concept of blockchain and helps them appreciate its massive potential

 

  1. Don’t worry, one doesn’t need to be familiar with the blockchain & bitcoin world to get started with the book. But yes, once you read through the book you can juggle the world of blockchain and bitcoins with ease and be become a pro in digital transaction

 

  1. The e-book, priced at just INR. 1, 499 can be downloaded at http://Studyblockchain.org. (Come on! You can forgo your weekend pizza & movie to make some money!)

 

 

  1. A part of the sale proceeds is going towards supporting the initiatives of Wockhardt Foundation and CRY. (Add some brownie points to your list of Karma)
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