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Trader Mindset

The document discusses the key differences between traders and investors, with traders taking short-term positions and focusing on technical analysis while investors have a long-term horizon and focus on fundamental analysis. It also provides an overview of how trades are executed, the different types of stocks, and technical versus fundamental analysis approaches.

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shankar.ayapilla
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121 views

Trader Mindset

The document discusses the key differences between traders and investors, with traders taking short-term positions and focusing on technical analysis while investors have a long-term horizon and focus on fundamental analysis. It also provides an overview of how trades are executed, the different types of stocks, and technical versus fundamental analysis approaches.

Uploaded by

shankar.ayapilla
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Characteristasrerics of a Trader

 Trader is a short term to mid term investor.


 He does mostly by position.
 Mostly swings between stocks.
 Trader picks stocks from the market based on Technical Analysis.
 Trader looks for short term returns/ gains from the market.
 Trader mostly trades intraday.

Characteristics of an Investor.

 Investor has a long term time horizaon


 Investor makes his trades based on the Price Valuation
 Investor make his Investment based on the Fundament Analysis.
 Investor does not look for Gains/Returns .. Investor looks for Wealth Creation.
 Investors are mostly Long term i.e Monthly and Yearly.

Short term : 1 day , 1 week and less than 1 day i.e 1 hour , 30 mins and even 5 mins time frame.

Long terms : 1 year , 1 month , 1 week time frame.

How is a trade taken.

1) Demat Account : A platform where you will be able to buy and sell securities and any
portfolio is maintained by the DMAT account.
Zerodha , HDFC Securities , UPstocks , Groww ,Angel one and IIFL securities Lot many
platforms are available.

2) Portfolio is nothing but a set of stocks bought and kept in your account for long term
purposes.
3) CDSL/NDSL – Account is automatically created by the SEBI.
4) SEBI – Security Exchange Board of India.

If you see the market as a Gambling Zone it is a gambling Zone , some people made
malractices and used illegal metohods to make money , SCAM 1992 – Harshad Mehta.

BSE : Bombay stock Exchange (SENSEX)


NSE : National Stock Exchange ( NIFTY)

Before any company starts its journey into Public Space , It has to undergo an Offering which
is called Initial Public Offering ( IPO)
Underwriters - they also publish market research information.
Initia Public offering.
Maxium traders put money in IPO’s , SENSEX and NIFTY.

First gets listed in BSE ---


There are 3 categories of stocks
LARGECAP- the capital size of that stocks is more than 20000 crores
Generally these stocks are prices above 1000 and above per share.
Investors / Retail and Institutional Investors.
We buy Mutual Funds ---Financial Institutions into the Financial markets. (BUY and SELL
securities in BULK ---causing movement of the prices every day.
Insititutional investors are market movers. They can be considered as Wholesales Buyers
and sellers.
Example : FII( Foreign Insitutional Investors and DII (Domestic Insitutional Investors)

MIDCAP :
Any stocks which have a capital market size which is less than 5000crs and between 20000
crs to 1000 crores is categorized as Midcap stocks ( Midcap stock ranges between 60 to
1000 rupees per share
MOST OF THE RETAIL INVESTORS WOULD LOVE TO PICK /INVEST IN MIDCAP STOCKS…
Midcap has the potential to become a largecap in the long run.
Midcaps are volatile , leading buyand selling og shares ( trading in day to day basis)

SMALLCAP below 5000 crores is SMALL cap.


Small cap shares are very Volatile in nature. They correct heavily when the market is
corrected.
Small cap shares prices are generally Penny stocks.
Operators mostly play in this zone of the stock.
Stocks have very high movement and prices can change drastically when market becomes
volatitle.
It is advised to stay away from small cap stocks as much as possible and Invest in
fundamentally strong Small cap stocks.
Small cap stocks which are good fundamentally have the potential to grow multifold and
then eventually return multibagger returns in the long term.
INVESTORS and HNI usually pick such kind of shares.

STOCK MARKET IS A PLACE TO EARN MONEY LIFETIME NOT EARN LIFETIME MONEY…

IT IS GOING TO BE A GAMBLE AND PEOPLE WITH THAT MINDSET WILL LOOSE MONEY..

That’s why majority of the people loose hard earned money in the stock market.

YOUR TREND IS YOUR FRIEND.

Fundamental Analysis:

Investment - Fundamental Analysis

P/E ratio, P/B ratio, EPS, EBITDA

Valuation of the stock in comparison with its peers in the sector is important( Price )
Qualified Charted Accountants and Business Rating Agencies determine the Stock which could be a
potential Investment pick.

Timeframe is important

Screener

Technical Analysis:

1) Traders paradise
2) Stock Quality = no relation.
3) Here the price is the important factor, what price we are taking.
4) Return of the profit / Loss is important
5) Chart IQ and Traders view
6) Chart

Chart :

STOCK MARKET IS A DEVICE FOR TRANSFERRING MONEY FROM WEAK HANDS TO STRONG
HANDS>

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