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Should we follow FII & DII?

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If there is one thing sure about the  stock markets , it is the uncertain and unpredictable behavior of the market. With no certainty of future direction, small traders often in the search of telltale sign from the big Institutional investors, be it Domestic Institutional Investors or Foreign Intuitional Investors. These set of baffling questions always arise in the thought of small traders? Are the  institutional investors  buying or selling any stocks? Which sectors are FII & DII betting huge on?       What are the FII and DII saying about the market and the economic conditions of the country in the coming months and year?       Which sector gonna perform well in next 6-12 months according to FII & DII.    There’s a big misperception among small traders, that FII and DII knows in advance when and  which sector or economy gonna do well. But the truth is they are also as clueless as small traders. But only t...
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Why market breadth indicator is the holy grail for traders?

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Market breadth is the only reliable indicator in the market which tells us the underlying sentiment of the current market. We should always first analyze the underlying sentiment of the market before putting our hard earned money on the line. Now the question might arise in your mind how do we check the market breadth of the market? Wait! I’m not going to tell you that “Go to NSEINDIA.COM website and check how many stocks advanced versus how many stocks declined today”. This isn’t the proper way to check market breadth of the market. Trading is not so easy; you have to do some work to get the information. First of all, you have got to download ‘NSE BHAVCOPY’ from their official site, then after downloading the sheet, open it now on your excel in computer. Then delete every column on the sheet except “SYMBOL, CLOSE & PREVIOUS CLOSE column. Then write the formula on next column to get the percentage change of today. The excel formula for % change in stocks is:    ...
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Benefit of working after market hours.

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When we work during market hours, we feel more rushed from inside and take emotional decisions because price keeps going up and down and color keeps changing from red to green and green to red while market is active. IMHO, market hours is not a perfect time to take any trading decisions. We should take rest or read any book or article on the Internet to reset out brain during market hours. When the market is closed, we should be fully prepared to work with more calmer and refreshed mindset so we can take better and rational decisions.  In trading, we should always find a way to minimize our emotionally driven decisions. 
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These trading rules can be applied by everyone.

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As everyone knows rules are more important in trading than any other things. I have been writing these rules on my personal trading journal for the past 3 years. Following these rules might help you to make money during bull market, and alert you to stay in cash during bear market. As we grow more in  experience, more rules will be coming and we will be refining our approach along with our rules. Some technical rules listed here might not suit your approach, because one size doesn't fit all.  Learn to take a small loss. Don't invest in same sector that you have already invested in. Only trade stocks which is outperforming the Index. Always  trade in the direction of the primary trend in your   chosen time frame. Be patient, wait for the right opportunity in the market. Stay in cash, when the general market is below 20-50 EMA. Always keep the position size of your trades constant. Let your winning trade run as far as it goes with ATR or EMA TSL. Al...
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Pearls of wisdom from Basant Maheshwari

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All large investors started small. If the corpus was built on salary or non-market related income then you always seek risk averse strategies. If you start on inherited wealth you’ll do below average to average returns. You have to start poor. Having nothing to lose is an advantage! The first 10 Lakhs needs a lot of self control. You have to stop spending to reach here. The next 15 Lakhs needs skill. You have to grow what you’ve saved. From 25 Lakh to 50 Lakhs it’s self control. You have to stop thinking of buying a home, car, Holiday, TV etc.  if you’ve hit 50 Lakhs wealth creation will become a habit. But it’s not the end. You have to still be hungry for more. You can’t buy ETF's and large cap stable names. You have to look at growing not protecting. And the best wealth decisions won’t come out of a consensus opinion.  The final trick is to see if you are doing well and people are scaring you off. ‘Bech de’ if that’s happening you are ok. If you are not...
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Complete stock analysis for stock traders.

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(1) Which stage is this stock is in? For example: Accumulation, mark up, distribution, mark down. (2) Is the stock you are analyzing in an uptrend or downtrend? For example: Uptrend consist of HH, HL. Downtrend consist of LH, LL. (3) How strong is the trend of your stock? For example: ADX above 25 level. Trend is moving in 40 degree angle. Price is above short term Moving Averages. Price is above primary trendline. (4) What wave is this stock in? For example: Wave 1, Wave 2, Wave 3, Wave 4 or Wave 5. (5) What do the moving averages telling me? For example: Moving average is flattish or trending higher with price. (6) Are there any chart pattern forming in your stock? For example: Always look for pattern in the context of current trend.  (7) Is the price chart of your stock is smooth or sloppy? For example: Price trend is moving in random or non-random fashion. (8) What does the volume pattern tells me? For...
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Stop doing lists in trading.

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1. Give up emotional engagement with every tick of the price movement of your trade.  2. Give up your own opinions. 3. Stop watching price 2-3 times a day. 4. Stop being emotional after every losing trades. 5. Stop making expectation of profit in every trade. 6. Stop entering trades based on hope and fear. 7. Stop trying to predict the future price movement and start trading the present moment price. 8. Stop trading until you find good Risk-Reward set up for your trading. 9. Stop confusing yourself with so many methods and start choosing one that fits your personality. 10. Stop breaking your trading rules. Discipline is an edge in trading. 11. Stop expecting getting rich quickly, start building wealth through compounding annual returns. 
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