MMTC

Stock Market Expert /

BE Mech VJTI /
PGDFM MIT Pune.

About the Author:

Author of this well-crafted MMT Course Booklet is Mr. Tushar Ghone. Let’s take a quick glance
about him right from his early days to being a successful trader himself and curating one of the
best Stock Market Trading Course in India.

Being from a humble Maharashtrian background, he always knew the Importance of his
education and was completely focused towards his Career. This determination and never say
“NO” attitude let him into one Prestigious Engineering colleges in Maharashtra and all of India
i.e., VJTI. He graduated as a Mechanical Engineer. His interest in the Stock Market began right
from his college days but due Financial Constraints he couldn’t go for an MBA directly and
rather chose to go for a Job.

For the next 17 years he excelled in the Oil and Gas Industry. Simultaneously in his mid-career,
he completed his Post Graduation in Financial Management from MIT Pune. He has worked for
many International firms in India and abroad. To name a few: Toyo Japan, Japan Gas
Corporation, Halliburton Singapore, Kellogg Brown and Root Singapore, Petrofac Dubai, Wood
Group CCC – Oman, Petrokon Brunei, Cameroon Groups Malaysia and Ocean-us South Korea.

Finally, his passion for Indian Stock Market made him leave his job as an Engineering Manager.
He had been learning in depth Financial investing Concepts through Market Leaders viz.
Warren Buffet, Peter Lynch, William O’Neil. He realized the concept of Wealth Creation through
Equity Market is unknown in India. Hence, he took the responsibility in his hand to teach every

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keen individual about the various ways and strategies to make money in the Indian Stock
Market.

And here comes the climax we are waiting for, he co-founded Tstock Mantra Investments along
with his wife Mrs. Amruta Ghone (MBA Finance) and curated an in-house Money Making
Trading Course for every individual out there who wants to learn the best strategies to make
money through Trading or Investing.

AUTHOR: TUSHAR GHONE.

COMPILED BY: VIRANG ZAVERI & AKSHAY SINGH

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Preface

Our main intention to make this MMTC course is to spread knowledge about trading. We have
observed that in the market there are multiple courses but none of them teaching from the
application point of view. We at MMTC not only guide our students to learn theory and
techniques of trading but live market trading with techniques taught to you in the course, this will
help to boost your confidence in trading. This booklet provides you a holistic view of our course
and the contents that we will teach you. Start from DAY 1 which includes not just basic but in-
depth knowledge of technical analysis to commodity and forex trading in DAY 5 & 6.

Benefits from this course

⚫ 6 Months training support
⚫ 6 Month Friday 9.30 pm live webinar
⚫ Course completion certificate
⚫ 2 years access to the course videos
⚫ 24X7 Support
⚫ The student blog for individual queries
⚫ Referral prizes
⚫ Upcoming App

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Course Summary
DAY 1- Basic of the stock market, if you already have some knowledge then these chapters will
brush up your concepts of basic. If you are new to the market then there is unlimited learning
from day 1 to build your base for further concepts. Important chapters included in this module
are such as money management, types of trading, etc.

DAY 2 - This module is the heart of this course. It includes all the concepts of technical analysis
from basic such as reading candlesticks to Elliot Wave and Fibonacci retracement.

DAY 3- In this module, you will learn how to apply all the techniques of technical analysis that
you learned in the previous module. After application, we will teach you to do paper trading and
methods of stock selection with the screener.

DAY 4- In this module, you will learn about the basics of derivatives such as future and options.
We had provided detailed guidance on naked hedging strategies with examples so that you can
understand them in a better way. Basics of futures & options with trading strategies used are
also provided in this module.

DAY 5- You should never limit yourself to just one kind of securities but try other ones too. So in
this, we will teach you detail about commodity trading and trading methods, technical analysis
specific to trading.

DAY 6- In this module, you will learn about forex trading strategies. Different strategies are
used for different currencies we have explained that in much detail. You will learn about which
currency to trade and which is not good for trading and other technical analysis strategies.

Instructions while completing the course:

⚫ Try to complete the entire course in 7days
⚫ Our Survey has shown those students who complete the course in this duration has
80%Chances of becoming successful Trader/investor.
⚫ Do paper Trading /Mock trading for the first 10 trades.
⚫ Always use disciple sheet
⚫ Use the recommended Free app for Paper trading.
⚫ Attend Friday 9.00 pm practice session without fail for at least 3months
⚫ Try to solve the quiz
⚫ Try to use the student blog for any queries.

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INDEX

Content Page No.

DAY 1 6
DAY 2 16
DAY3 41
DAY 4 57
DAY 5 74
DAY 6 87

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DAY1 / CHAPTER1:
A. Instructions while watching the video chapters:
This chapter is must watch for beginners in the stock market and understand how the
stock market works.

B. Key Points:

Following are the key things Students should understand What is the
Share / Share market & How the stock market works?

1. Companies go for an IPO to get funds for expansion or growth of their business.

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2. There is 2 main Index in the Indian stock market for the equity segment i.e. Nifty
& Sensex.

3. Sensex includes the top 30 companies and Nifty includes the top 50 companies
by market capitalization from different sectors.

4. There are two kinds of analysis Fundamental and technical. In the fundamental
analysis, we look for multiple factors like economic view, financial statement, etc.
In technical analysis, we look for past trends, indicators, etc.

5. Ways by which we can earn from the stock market are:

● IPO
● Mutual Fund
● Long term portfolio
● Trading

6. In trading, we can do scalping, intraday, swing, positional

7. Position sizing points to remember:

● Don’t move your stop loss, vary your lot size
● Don’t lose more than 5-10% of your trading capital in a single trade

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Following is the Basic Core Concepts of Trading , Student
should understand.
8. Any Stock or index never mover in a straight line, it follows wave patter called
primary and secondary waves.

9. A trading strategy should be to buy during the end of the secondary wave and at
the start of the next primary wave.

Below is the graph of Reward Vs Risk and 4 quadrant of Trading

Zone.

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10. In the risk-reward ratio intr Trading, the risk is the money lost when you hit the
stop loss. The reward is the profit made when the target is achieved.
11. As a Trader, you should always remember to be in the Low Risk / High Reward
Zone. How it is possible you will learn in upcoming chapters.

Below is the graph of Risk / Reward Ratio.

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12. According to this data in the graph of risk-reward ratio:

● X-axis tells, how many correct trades you take for a particular risk/reward ratio to
remain profitable.
● Say if your risk/reward is 1:1 and out of 10 trades only 2 are correct then you will
incur a loss.
● If your risk/reward ratio is 1:5 and then out of 10 trades only 2 are correct then
you will pe profitable.

13. If you have 1 lakh savings, it is advised that 70% should be in the mutual fund or
stock portfolio, 15-20% in swing trading, 10% in intraday.

C. Students Activity

Question 1- Name the company with the highest market capitalization in Nifty 50?
Answer : __________________________________

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Question 2- Name the company with the highest weightage in Nifty Bank?
Answer : __________________________________

Question 3- Find out points ( A, B, C ) as entry, stop loss, target.

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Question 4- Find out Points (A, B, C) as entry, exit, stop loss.

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Question 5- If your risk amount is 1000 rupees in trade and stop loss is 5 rupees,
calculate the number of shares you can trade.

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D.Answer Bank

Q1- Reliance

Q2- HDFC bank

Q3-

Entry-B

Stop-loss- A

Target - c

Q4-

Entry - A

Stop-loss- B

Target- C

Q5-

Number of shares can take trade = Amount at-risk/Stop loss Difference

1000/5 = 200 ( Shares)

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DAY 2

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DAY 2
A.
Analysis Process.

1. When a Stock or an Index is selected manually or by scanner, complete

analysis should be done in order to take a trade.

2. Firstly, Basic analysis to be done with Candlesticks, Support &

Resistance, Volume Indicator, Trend line, Price Action and this should be
supported by our Retesting Concept.

3. Later when all the above aspects are met, advance analysis such as RSI,
Bollinger Bands, Fibonacci and Elliot waves should be used to Support the
above analysis.

B. What will you learn after completion of the DAY 2 Chapters?

These Chapters will make sure you are 100% aware about all the necessary
tools required to take a successful Trade.

C. Key Points Chapter 1.

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1. For a Positional Trade or a Swing Trade, analysis is done on Weekly Time

frame Chart.
2. For short term trade I.E., one to two weeks, analysis is done on Daily Time
frame Chart.
3. For Intraday trades, analysis is done on Hourly or 15mins or 5mins Time
frame Chart.

D. Key Points Chapter 2.

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1. For a bullish green candle, Stock opens low and closes high and tail of the
Candle indicates the high and low made by the candle in that particular time
frame.
2. For a bearish red candle, Stock opens high and closes low and tail of the
Candle indicates the high and low made by the candle in that particular time
frame.

Two Candlestick Pattern

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1. Bullish Engulfing is a Bullish reversal pattern. Larger Green candle
should completely engulf the smaller red candle body.
2. Bearish Engulfing is a Bearish reversal pattern. Larger Red candle
should completely engulf the smaller Green candle body.
3. Previous trend for a Bullish Engulfing should be downtrend.
4. Previous trend for a bearish Engulfing should be uptrend.
5. Next Candle should give a Strong confirmation.

1. It is only observed in a cluster of candles. Hammer is reversal candle.

2. For hammer candle to identify and confirm, previous trend should be
downtrend and after hammer candle stock should go up.

DOJI
1. DOJI is a neutral and indecision candle.

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1. For Bullish Doji, previous trend should be Downtrend then an

indecision candle Doji should form indicating a Stop in down trend and
then finally an uptrend should be seen.
2. For Bearish Doji, previous trend should be Uptrend then an indecision
candle Doji should form indicating a Stop in Uptrend and then finally
and downtrend should be seen.

Let us talk about the ENTRY CANDLE and Stoploss

1. In Two candlestick pattern like the Bullish Engulfing pattern, Entry
should be taken if the candle after the engulfing candle opens above
the closing of engulfing candle. Entry should be taken at the opening
of that candle. Stoploss should be at the bottom of engulfing pattern.
2. In Three candlestick pattern like the Bullish Doji pattern, Entry should
be taken if the candle opens above the closing of third candle. Entry at
the opening of that candle. Stoploss should be at the bottom of DOJI.

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E. Key Points Chapter 3.

1. A Support is a horizontal floor where pressure to buy is strong enough to

overcome pressure to sell more.
2. A Resistance is a horizontal ceiling where pressure to sell is strong enough
to overcome pressure to buy more.

3. If stock penetrates support and resistance line it is called a Breakout.

4. Other Important factor to remember while trading is Retesting. Retesting is a
very important confirmation for any trade to be accurate. Safe traders should
definitely wait for Retesting.

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1. Entry should be on the basis of candlestick meaning candlestick pattern should

also give confirmation. Entry after a Retesting is a double confirmation.
2. First Target should be till the previous Node.

F. Key Points Chapter 4.

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1. A Trailing Stop Loss is an order that “locks in” profits as the price moves in our
favor.
2. Super Trend is the Indicator used to indicate trailing stop loss.

G. Key points Chapter 5.

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1. Volume is an important factor for confirmation before taking a trade.

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H. Key Points Chapter 6.

1. Trendlines acts as support and resistance. Only different being Trendlines are
sloping lines and not horizontal lines.
2. There are two types, namely uptrend and downtrend.

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1. When you take a bullish Entry, Stoploss will be the trendline acting as
support.
2. First Target will be till the Previous node.

I. Key Points Chapter 7.

1. There are two types of Price Pattern I.E., Continuation and Reversal
Patterns.
2. In Continuation pattern the underlying trend is Intact. Examples of
Continuation patterns are Flag, Cup and Handle, Triangle, Rectangle, etc.
3. In Reversal pattern the underlying trend gets reversed. Examples pf
Reverse patterns are Double Top/Double Bottom, Head and Shoulder/
Reverse head and shoulder, etc.

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Flag Pattern.

1. Flag pattern is a very bullish or bearish Continuation pattern. It forms a pole

and flag.
2. Target is length of the pole from bottom of the flag.
3. Entry should only be on the opening of next candle after the breakout candle.
4. Stoploss should be half the breakout candle or Super trend.
5. Flag should consist of more than 13-14 Candles.

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Other Continuation Patterns.

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1. Cup and Handle is a Strong Continuation Pattern.
2. Previous trend in a Bullish Cup and Handle should be an Uptrend.
3. Retesting which is a MMTC concept should be observed properly and trade
should be taken after retesting.
4. Target is equal to the length of resistance/breakout line to the bottom of CUP.
5. Stoploss should be at the resistance turned support line.

1. Double Bottom and Double Top are strong reversal patterns.

2. Doble bottom occurs following an extended downtrend. It is a ‘W’ shaped
pattern.
3. Entry can be either at the starting of second wave (aggressive traders) or after
the neckline (safe traders).
4. If entry is taken at the starting of second wave, Target 1 will be the neckline
and Target 2 will be the point from which stock started its downtrend.
5. Head and Shoulders is rarely seen but it is a strong pattern.

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6. Entry should be taken after the retesting is done above the neckline.
7. Stoploss is near the bottom of right shoulder.
8. Target is the length of the head.

J. Key Points Chapter 8

1. Lagging Indicators are used to spot trends that are already in place on
the basis of past events.
2. Examples of Lagging Indicators are Moving Averages, MACD, Super
trend, etc.
3. Leading Indicators aim to signal trend changes before they develop.
They have predictive qualities.
4. Examples of Leading Indicators are RSI, Stochastic, William %R, etc.

Important Indicators that we use:

1. Bollinger Bands
2. Relative Strength Index
3. Simple Moving Average
4. Volume Indicator.

Bollinger Bands.

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1. Bollinger Bands consist of 3 bands, middle band being a 20 period SMA.

2. We should take a long trade only when stock (and confirmation candlesticks
pattern) is between upper band and 20-period SMA band. If you want to go
short then candlesticks should be below 20-period SMA.
3. If 2 or 3 candlesticks pattern is seen near lower Bollinger bands, then we can
take a long call. Target should be upper Bollinger band. Stoploss should be
lower Bollinger band.
4. Bulge is created because of volatility. After a bulge a narrow squeeze is
usually seen. If squeeze is for a long time, it will give a big breakout.
5. Riding the bands is when stock continuously moves up touching the upper BB.
6. Traders should beware of fake breakouts.

Relative Strength Index

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1. 0-30 or 0-20 is considered as the oversold zone and 70-100 or 80-100 is

considered as the overbought zone.
2. When stock is near the oversold zone, trader can buy. When stock is near the
overbought zone, trader should sell.
3. One more concept is Convergence and Divergence.
4. If stock is moving down, but RSI shows convergence then there is a possibility
that the stock might move up.
5. If stock is moving up, but RSI shows divergence then there is a possibility that
the stock might move down.
If stock moves below 5-period SMA, then it is an indication that stock has become
week. If it touches or penetrates below 20-period SMA strictly EXIT.

K. Key Points Chapter 9.

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1. Fibonacci Retracement Levels are horizontal lines that indicate where

Support and Resistance are likely to occur.
2. When stop Looks bullish, Fibonacci is marked from a bottom point to the
Peak of that wave. (2 points are considered)
3. Entry should be taken when stock retraces and a bullish candlestick is
formed near that retracement levels. I.E., 38.24%, 50%,..
4. First Target should be at the peak of previous wave I.e., till where we
stretched our Fibonacci Retracement.

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1. Fibonacci Extensions are basically used for indicating Targets.

2. Fibonacci Extensions are located by identifying 3 points I.E., first,
bottom of wave, then next Peak of wave and third till retracement.
3. First Target can be positioned at 0.618 or 61.8% and next target can
be 1.

L. Key Points Chapter 10.

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1. Elliot Wave theory is based on the hypothesis that stock prices move
between optimism and pessimism of all market participants’ psychology
and wide swings in the participants’ psychology makes stock prices move
in a certain patterns/trends.
2. There are 5 Impulsive waves and 3 corrective waves. 1, 3, 5, a, c are
Impulsive waves. 2, 4, b are corrective waves.

Rules of waves.
1. Wave 1: Wave 1 is usually a weak rally with only small number of traders
participating in the market. This is because fundamental news is still
negative.
2. Wave 2: Wave 2 is a sell off once wave 1 is over and these sell off is very
sharp. But wave 2 never extends beyond the starting point of wave 1.
Wave 2 finally ends without making new lows and prices turn for another
rally.

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3. Wave 3: The initial stage of the wave 3 is a slow rally. Practically lot of sell
side positions are there in the market and when markets rally and finally
sell side positions are closed when top of wave 1 is crossed. This is the
time when top of wave 1 is crossed market participants are convinced
about the rally and there is sudden buy side interest in the market. Wave 3
is usually the largest and most powerful wave of impulsive trend.
4. Wave 4: Finally wave 3 ends as traders who were long from the lower
levels takes profits, hence profit taking starts. lesser volume than wave 3.
While profit taking is on, majority of the market participants are convinced
that trend is up. Wave 4 should not decline below the Tip of Wave 1.
5. Wave 5: Prices make new high but lacks volume. The wave 5 lacks the
strength witnessed in wave 3 rallies and finally markets tops out and enter
new phase.
6. Wave a: Wave A is the beginning of a new bear market; fundamental
news is still positive and nobody is ready to accept the fact that markets
can decline.
7. Wave b: Wave B is basically a small rally which gives the feeling that Bull
Run has again started but prices fail to make new high and typical volume
characteristic here is that Volume in Wave B is lesser than Wave A.
8. Wave c: Here prices again start declining and volume also pick up and it’s
in Wave C that everyone realizes that market decline is likely to continue
and hence market participation on the sell side increases.

M. Key Points Chapter 11.

1. Zerodha, Investing.com, Tradingview.in, are few of the free charting

software you can use.

STUDENT ACTIVITY.

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1. For a Swing Trade, what time frame charts are used to analyze the underlying
asset?

2. Identify the Candlestick pattern.

3. If a trader entered a trade at 105, Current stock price is 120, Support is at 100,
Resistance is at 130. Which of the following is an appropriate trailing stop
loss?
A. 105
B. 130
C. 115
D. None of the above.

4. Which of the following is not a Reversal Pattern?

A. Double Bottom
B. Head & Shoulder
C. Cup & Handle
D. None of the above

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5. What is the previous trend in Double Bottom pattern?

6. For a long trade, when should the trader enter on the basis of Bollinger
Bands?

7. If the stock is moving downwards but RSI shows convergence, in which

direction the stock will possibly move?

8. When should the trader take an entry on the basis of Fibonacci

Retracements?
A. When stock is in uptrend I.E., primary wave.
B. After the retracement is complete at 38.24%, 50% levels, etc.
C. When stock hits stoploss.
D. None of the above.

9. Wave 3 of Elliot waves should be shorter than wave 1. Sate true or false.

Answers:
Ans – 1: Weekly Time frame charts.

Ans – 2: Bearish Engulfing.

Ans – 3: 115
Ans – 4: Cup & Handle
Ans – 5: Downtrend
Ans – 6: When the stock is at lower Bollinger bands and bullish 2 or 3 candlestick
pattern is formed.

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Ans – 7: Upward
Ans – 8: B
Ans – 9: False

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DAY 3

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A. Instructions while watching the video chapters:

This chapter is must watch for beginners in the stock market and understand how the
stock market works.

B. Key points.

The stock selection process for trading

In the top-bottom approach, we first check the overall trend of the market then the
sector of that sector then stock analysis. Say if nifty 50 is down, the sector is down and
if we are taking long trade then it is possible that we will end up making a loss. If nifty 50
is up and the sector is also up then go for a long trade.

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To analyze the nifty 50 trends we can use super trend. If all the candles are above the
super trend then we should look for a long trade and if candles are below super trend
then look for a short trade.
For swing, trade looks in the weekly time frame if candles are above or below the super
trend. For intraday look in the daily time frame whether candles are above or below the
super trend.

Automatic Screener

Steps for selection of stocks in intraday

1. Check trend in nifty Daily ( Uptrend/Downtrend).
2. Run Scan on chartink.Bullish scanner if nifty is in uptrend, bearish scanner if nifty
is in the downtrend.
3. Select stock with bullish engulfing or 3 candlestick patterns.
4. Check sector trend bullish/bearish for double confirmation.
5. Find target/stop loss/entry
6. Take entry in 3rd candle in 2 candlestick pattern and in 4th candle for 4
candlestick pattern.

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Steps for selection for stocks in swing and positional.

1. Check trend in the nifty weekly time frame (uptrend/downtrend).
2. Run scan on chartink. Bullish if daily nifty is up and bearish if daily nifty is down.
3. Select stocks with bullish or 3 candlestick patterns.
4. Check sector trend bullish/bearish for double confirmation.
5. Find target/stop loss/entry
6. Take entry in 3rd candle in 2 candlestick pattern and in 4th candle for 4
candlestick pattern.

Manual Screening

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In Manual screening, we can select stocks based on 52 weeks high and low. Go
long on stocks making Higher highs and go short on stocks making lower lows.

Steps for selection of stocks for Intraday manually.

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1. Check trend in nifty daily (uptrend/downtrend)
2. Manually stock selection in F&O Section from NSE site ( making 52 week
high/low)
3. Select stock with bullish engulfing or 3 candlestick patterns in the hourly time
frame.
4. Check sector trend bullish/bearish for double confirmation.
5. Find target/stop loss/entry
6. Take entry in 3rd candle in 2 candlestick pattern and in 4th candle for 4
candlestick pattern.

Steps for selection of stocks for Swing/position manually

1. Manually stock selection in F&O Section from NSE site ( making week 52
high/low)
2. Select stock with bullish engulfing or 3 candlestick patterns in the daily time
frame
3. Check sector trend bullish/bearish for double confirmation.
4. Find target/stop loss/entry
5. Take entry in 3rd candle in 2 candlestick pattern and in 4th candle for 4
candlestick pattern.

Steps to get 52 Weeks high/ low stocks

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Scalping is mostly done in F&O Segment as there we get a big lot size and good
liquidity.
It’s a short trade of a max of 20-30 minutes.
In scalping quick entry and exit are required.
Simple Moving average indicators are good for scalping trading. It is the average of the
closing price. For 5 simple moving averages, it is the average of the closing prices of
the last 5 candles.

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Moving average line tells us the trend of the market.

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Flow chart for scalping with a simple moving average

1. Check nifty 50 in the 15-minute chart, if 5SMA is above 13 & 20 SMA
2. Use bullish 5 min scalper if nifty 5 SMA is above 13 & 20 SMA.
3. If nifty 5SMA is below 13 & 20 SMA use a bearish 5-minute scalper.

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Scalper screener Settings.

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C.Activity

Q 1- According to the top-bottom approach should we go long or short in HDFC bank in

January of 2021?

Q2- Can we go long at this point?

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Q3- Where we will exit accordion to 5 SMA trailing stop loss?

Q4-What is a bottom-top approach and is it good than a top-bottom approach?

Q5-Can we take trade here long or short?

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D. Answers

Ans1- Long trade because the stock is following nifty 50 and sector in an uptrend.

Ans2- As the stock has already moved up, we should wait for a correction or retesting.

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Ans3- When the candle closes below 5 SMA that should be our trailing stop loss.

Ans4- Top-bottom approach is much reliable because in the end stock follows the
market and Index.

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Ans5- We should not take trade here as it’s a choppy market. Wait for a proper
breakout of either support or resistance.

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DAY 4

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(A) KEY Points

What are Options

1. If you are risk-averse and want to try your hand in derivatives then the option is
for you. Unlike in the futures contract, there was an equal possibility of profit and
loss in the option contract here is the possibility of unlimited profit but limited loss.
2. In a future contract where both buyer and seller are obliged to fulfill the contract,
here in options only the seller of the contract is obliged to do that.
3. There are two types of options contracts, that are American & European
contracts.
4. The key difference between them is, American contract can be exercised any
time before expiry while the European contract can only be exercised on expiry.
5. Indian market follows the European contract system.
6. The formula to calculate profit and loss for an option buyer is ( ( Current Market
Price- Strike price) - Premium).
7. The formula to calculate profit and loss for an option seller is ( ( Premium -
Current Market Price- Strike price)

Call & Put Option

1. When market sentiment is bullish traders usually buy call options or sell put
options. When sentiment is bearish traders either buy a put option or sell a call
option.

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2. Call buyer - Had the right to buy the option contract but not the obligation to fulfill
the contract. They will only make a profit when the price of the underlying
security goes up.

3. Call Seller - Has the obligation to sell the underlying security at expiry. They will
make a profit when the price of an underlying security goes down.

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4. Put buyer - They have the right to buy the underlying security but not the
obligation to fulfill the contract.

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5. Put Seller - They have the obligation to buy the underlying security.

Option Strategies

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Futures

Futures contracts were primarily started for hedging purposes. Hedging means security
against loss due to a sudden market moment in the spot price of underlying assets. It’s
not new in the market, from old times people used to do future contracts such as
farmers, now it’s part of commodity futures.

Terminologies in Future contract

Spot price
It is the current market price of the underlying assets from which the futures
contract is derived.

Future price
It is the future price of a contract derived from the spot price. There are various
models for pricing futures contracts such as the Cash And Carry Model,
Expectancy Model, which includes multiple factors like spot price, Cost Of carry.

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Initial Margin.
It is the minimum capital that you have to pay to buy/sell the futures contract. It is
a certain percentage of the total capital of the futures contract. Say you buy 1 lot
of future contracts which contain 1000 shares and whose price is 100 per share,
total capital required will be 100,000. But you don’t have to pay the whole capital
to trade in futures. Say your broker provides 8 times leverage, then the initial
margin required by you is only 12,500 (100,000/8 = 12500) to trade this contract.

Cost of carry
It is nothing but the basis computed in annualized terms, as good as the rate of
interest for carrying the position forward.

Rollover
It is a close estimate of how many future positions are actually being carried over
to the next month series.

RollCost
It is the difference in the next and current month’s future price.

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Open Interest
It is the total number of outstanding unsettled contracts in the market. One buyer
and seller make up the one contract in the market. An increase in the open
interest indicated an inflow of new capital in the market and a decrease in open
interest indicates an outflow of capital.

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DO and Don’ts in future contract

1. Use strict stop loss
2. Never carry forward future contracts till the time you have a 3% stop loss.
3. Avoid illiquid future contract
4. Don’t keep multiple future contracts for trading
5. If on intraday you are making a profit then only trade in futures.

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(B)Activities

Q1- In which option strategy we required a high amount of capital?

a) Naked strategy
b) Hedging Strategy
c) Both

Q2. When the market view is highly bullish, which hedging strategies are used?
a) Buy call
b) Put ratio spread
c) Short straddle
d) Long straddle

Q3.When the market is moderately bullish, which hedging strategies are used?
a) Buy call
b) Put ratio spread
c) Short straddle
d) Long straddle

Q4.When the market is range-bound, which hedging strategies are used?

a) Buy call
b) Put ratio spread
c) Short straddle

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d) Long straddle

Q5.When the market is uncertain but volatile, which hedging strategies are used?
a) Buy call
b) Put ratio spread
c) Short straddle
d) Long straddle

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(C)Answers

Answer 1- (b)Hedging Strategy

Answer 2- (a)Buy Call

Answer 3- (b) Put ratio spread

Answer 4 - (c) Short straddle

Answer 5 - (d) Long Straddle

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DAY 5

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A.Key Points

1. Commodities trading is the oldest trading segment in the world.

2. Most of the successful traders worldwide are from the commodities market.
3. Technical analysis works great in the commodity market.
4. Very limited commodities to keep watch and trade.
5. There are two places where commodity trading takes place in the Indian market
i.e MCX & NCDEX.

6. Commodities are linked with the international market, so limited chance of

manipulation.
7. Beginners in commodities trading should start with MCX.
8. In NCDEX, the presence of local market commodities is high, leads to higher
chances of manipulation.

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Dos & Dont’s in Commodities

1. In some contracts, physical delivery is compulsory if you failed to square off the
trade before expiry. So Square off 4 days before expiry.
2. Avoid overnight carry position in the commodities market.

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3. Avoid options in commodities
4. Avoid average concepts in commodities
5. 5 pm to 9 pm is the best time to trade and 6 pm is a momentum time.

Crude

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Crude oil Technical analysis and strategy

● No need for a discipline sheet use a brokerage calculator.
● Recheck inventories figure for overall weekly trend
● Trend identification by daily charts in Bollinger bands.

Summary
● In daily candle stock price should be above 20 SMA of Bollinger bands then go
long, if below go short.
● If 5 minute SMA crosses above 20 SMA in the daily time frame then go long.
● Exit only if the 5-minute candle closes properly below the 20 SMA line.
● If the 5-minute candle is not going below 20 SMA and again moved above the 5
SMA line go long and if the 5-minute candle closes below the 5 SMA line exit it.
● If a 5-minute candle goes below 20 SMA, wait for 5 SMA to cross above 20 SMA.

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Natural Gas.

Natural Gas Technical analysis & Strategy

● No need for a discipline sheet, use a brokerage calculator.
● Research inventories figures for overall weekly trends.
● Trend identification by daily charts in Bollinger bands.Bollinger with 5 & 20 SMA
in the 15-minute time frame.

Summary

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● In daily candle, the price should be above 20 SMA of BB bands then go long.
Below 20 SMA go short.
● If daily uptrend, go long in 15 minutes time frame if 5 SMA crosses above 20
SMA.
● Exit only if 15 minutes candle properly closes below 20 SMA line.
● If 15 minutes candle is not going below 20 SMA and again moved above 5 SMA
line, go long and exit if 15 minutes candle closes below 5 SMA line.
● If a 15-minute candle goes below 20 SMA. Again wait for 5 SMA to cross above
20 SMA.

Silver

Silver Technical Analysis & Strategies

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● No need for a discipline sheet, use a brokerage calculator.
● Trend identification by daily charts in Bollinger bands.
● Bollinger + 5 & 20 SMA in hour time frame .

Gold

Gold technical analysis and strategies

● No need for a discipline sheet, use a brokerage calculator.
● Trend identification by daily charts in Bollinger bands
● Bollinger + 5 & 20 SMA in 1 hour.

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Base Metals

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B.Activities

Q1- Indian Commodities market is?

a) MCX

b) NCDEX

c) Both

d) None

Q2- Which metals are regarded as bullions?

a) Gold

b) Silver

c) Copper

d) Both gold and silver

Q3- Which organization manages the supply and control oil prices?

a) WTO

b) IMF

c) OPEC

d) WBG

Q4- When crude inventory goes down, it’s the price?

a) Goes up

b) Goes down

c) Both up and down ( fluctuate)

d) No change

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Q5- Factors that can affect crude prices are?

a) OPEC output and supply

b) Refinery utilization rate

c) U.S crude and product inventories

d) All of the above

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C.Answers

Answer1 - D

Answer2 - D

Answer3 - C

Answer4 - A

Answer5- D

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DAY 6

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DAY 6
A. What will you learn after completion of the DAY 6 Chapters?
These Chapters will make sure you know in-depth about the Currency
FOREX market and it’s trading strategies.

B. Key Points Chapter 1.

What are FOREX Markets or Currency Markets?

FOREX or Currency markets is a decentralised or OTC global marketplace

that determines the exchange rate for currencies around the world. Traders
can buy, sell, and speculate on currencies.

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1. Globally, most of the trading is done in Currency markets as compared to

Equity and Futures markets.
2. In India FOREX trading is not that popular but it is increasing at a decent
pace.

1. As you can see India does not come in first 10 most traded Currencies by
value.
2. In India only USD-INR, EURO-INR, JPY-INR and GBP-INR are traded.

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3. In India, If traders want to trade currency, they can only trade in futures
and options market.

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4. Base Currency is always the TOP part and Quote Currency is always the
BOTTOM part. Example: In USD/INR, USD is Base and INR is Quote
currency.
5. Lot size in Currency Markets is always 1000.
6. Settlement is always in INR.

7. New pairs have started trading in India such as EURO-USD, GBP-USD,

and JPY-USD.
8. Their settlement is done is INR only.
9. Margin of only 3% is to be kept. Therefore, in Currency markets traders can
get great leverage and with limited Capital traders can earn more.

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10. Above mentioned points are the main reasons USD-INR is the most traded
currency in INDIA.

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11. It is observed, NIFTY is inversely proportional to USD/INR. I.E., If NIFTY

goes down there are chances USD/INR might go up and vice versa.
12. Volatility of NIFTY and USD/INR is directly proportional. I.E., If NIFTY
goes down there are chances USD/INR might also go down.
13. Advantages of Currency Markets.
a) High Liquidity
b) No operators
c) RBI Intervention
d) High Leverage.

C. Key Points Chapter 2

1. Concept of trading in USD/INR

a) Always take Intraday Trade.
b) Do at least 10 trades in Mock trading & use trade log sheet
c) Take maximum 4 to 5 trades in a day of 15-20mins.
d) Use stoploss and target as per strategy.

2. Trade Strategy in USD/INR

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a) Example: To enter a Long trade see if there is a bullish 2 or 3

candlesticks pattern at the bottom of Trendline supported by a
Support line at the trendline. This should also be supported by
the 5-period SMA crossover of 9-period SMA from below. For
next confirmation, we should also see that RSI is near oversold
zone to take a long trade.

b) For a Short trade you need to see exactly the opposite.

c) You should EXIT a trade when any 15mins candlestick closes

below 9-period SMA.

d) Before taking a trade, we should also analyse the US Dollar

index once. We can compare US Dollar and USD-INR, they are
mostly directly proportional.

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3.

Practical trading will be covered the video lectures. All strategies to

trade USD/INR will be taught.

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4.

Discipline Sheets are very important to maintain while taking a trade for
your own reference and data. It will be taught is detail in video lectures.

D. Key Points Chapter 3

1. Concept of Trading in JPY/INR

a) Always take Intraday Trade
b) Do at least 10 trades in Mock trading & use trade log sheet
c) Take maximum 4 to 5 trades in a day of 15-20mins

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d) Use stoploss and target as per strategy.

2. Trade Strategy JPY/INR

a) Indicators used = Trend lines + Moving averages (5&? SMA) + RSI.
‘?’ will be explained in detail in video lecture.

b) Time frame = 15mins chart. JPY/INR can be traded with the help of
Trendlines only.

c) To enter a Long trade, see if there is a bullish 2 or 3 candlesticks

pattern at the bottom of Trendline supported by a Support line at
the trendline. Support and Resistance lines can be drawn for
confirmation.

d) Aggressive traders can EXIT simply on the basis of trendlines,

support and resistance. In case of safe traders, If Any 15mins
candlestick closes below 9 SMA, we should EXIT the trade.

e) Aggressive traders can trade JPY/INR only on the basis of

Trendlines. Safe traders Can support the analysis with 5-period
SMA crossover of 9-period SMA confirmation and also see the
overbought/oversold confirmation.

f) Also keep in mind that moving average will not work in small
channels, it will only work in in Big Channels.

g) We should never enter the trade if the currency is trading in

between of trendlines or channel. It should trade near bottom or
touch the trendline to take a long trade.

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3. JPY/INR can be traded only on the basis of Trendlines. To see how
tune in to our video lectures.

Practical trading only on the basis of Trendlines.

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4.

Discipline Sheets are very important to maintain while taking a trade for
your own reference and data. It will be taught is detail in video lectures.

E. Key points Chapter 4.

1. Concept of Trading in GBP/INR

e) Always take Intraday Trade
f) Do at least 10 trades in Mock trading & use trade log sheet
g) Take maximum 4 to 5 trades in a day of 15-20mins
h) Use stoploss and target as per strategy.

2. Trade Strategy GBP/INR

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a) GBP-INR can be traded on the basis of trendlines or channels and

it can also be traded on the basis of Moving averages. They can be
supported by RSI if needed.

b) To enter a Long trade, see if there is a bullish 2 or 3 candlesticks

pattern at the bottom of Trendline supported by a Support line at
the trendline. Avoid entering the trade if the currency is trading in
between of trendlines or channel. It should trade near bottom or
touch the trendline to take a long trade.

c) On the basis of Moving Averages, we can consider either 5-period

SMA and 13-period SMA combination OR 5-period SMA and 9-
period SMA. For a long trade, if 5-period SMA crossovers 13-period
SMA or 9-period SMA from below, we can take a trade. It should be
at the bottom of the channel for long trade.

d) We should EXIT if any candle closes below 9-period SMA or 13-

period SMA.

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e) It is advisable to take 5-period and 13-period SMA combination as it
is observed to be more accurate.

f) Safe traders can consider all the above factors before entering a
Trade.

3. GBP-INR gives better Directional move than USD-INR, JPY-INR, and

EURO-INR.

4.

Look at the Directional Move we have analysed. To learn in detail about

how to capture such Directional Moves tune into our Course Video.

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F. Key Points Chapter 5.

1. EURO-INR and GBP-INR used to move similarly but when Britain moved
out of the European Union, we can see few changes in their movements.
Most of the time they follow the same direction.

2. Trading Concept and Trading Strategy of EURO-INR is very much similar

to that of GBP-INR. You can refer point ‘E’.

3. Only difference is that if EURO-INR gives 1% move, GBP-INR might give

1.5-2% move. GBP-INR gives more move than EURO-INR.

STUDENT ACTIVITY.

1. If retail investors want to trade Currency, they can only trade in Futures and
Options. State True or False.
2. In GBP-INR which is the base currency and in which currency settlement will
happen?
3. Most of the times Nifty and USD-INR moves in the same direction. State true or
false.
4. Which of the following is not an advantage of currency market?
A. High leverage
B. No Operators
C. Risk-free segment to trade

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D. High Liquidity
5. Which Currency can be traded only on basis of Trendlines?
6. Which Currency gives the best Directional move?

ANSWERS:
Ans 1: True
Ans 2: Base currency=GBP Settlement=INR
Ans 3: False
Ans 4: Risk-free segment to trade
Ans 5: JPY-INR
Ans 6: GBP-INR

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