Day 1 – Swing Trading

Hi people

Here i am going to tell you some scrips that might possibly show some good run in the coming days in market.

Bullish Engulfing:

  1. Greaves cotton – 153.3 to 156.8
  2. polyplex – 441.05 to 444.15
  3. Ziocom – 28.4 to 33.25
  4. Mayuruniq – 364.35 to 364.8

Out of the above 4 stocks, Ziocom had a stellar performance. It appreciated 20 % in a single day. Lets see what happens in the coming days.

Bullish MaruBozu:

  1. Jensonicol – 8.65 to 8.99
  2. Ziocom – 28.4 to 33.25

As you can see, Ziocom formed both Bullish MaruBuzo and Bullish Engulfing and with large volumes. This confirms that stock is starting to uptrend now.

I am tracking Ziocom, lets see how it fares in the coming sessions.

Day 1

Hi People

Although i am trading since 3,4 months, i have never shared my trading experiences with anyone anytime. But then i felt that people need to know the experiences of a trader before they get into trading markets. Hence i started to write here. Below, i will explain about my trading experience of today, what mistakes i have made, what good things that i have done and what is the learning of the day.

As you can see from my order summary, i have traded shares of escorts, HDIL, Tata motors, Adaniports, Hindunilever.

For escorts, i entered at 701 with a strict stop-loss of 699 and target of 707. But it was volatile, so it hit my stop loss and so i had to lose 200 in that. After hitting my stop-loss it went to reach 717 in the afternoon. Had i stayed with my order for some more time, i could have obtained a profit of 717-701 * 100 = 1600. But the thing about stock market is that you never know what’s gonna happen in the future or even in the next minute. What if the stock plummeted to 690 or 680?. Then my losses would have been 1000 or 2000. That’s too much. Hence it is better to put strict stop-loss of 1 or 2 rupees and exit if needed. Coming to the strategy, i entered the trade seeing that MACD is below the signal line and is below zero line and is gradually moving closer to signal line. So i thought after some time MACD will cross signal line and will go up. But it again retracted for a brief moment, hence i had to book losses.

HDIL – This stock was suggested in one of the Telegram groups, so i just blindly entered with 500 shares. I waited long but the stock didn’t show any improvement. Si i had to exit with 1 rupee loss which means 500 rupees loss. Lesson learnt: Never blindly trust any telegram admin. they are only as good as you are if not worse.

Tata motors – bought 100 shares of this stock and it looks like its not trending, hence i sold it for a loss of 50 rupees

After losing 750 in the morning session, i took a break, slept and then went to lunch. Then all of a sudden i remember using Zerodha Pi to do some trades earlier. It felt nostalgic. Hence i immediately logged into Pi, randomly took some scrip – Adani ports and did a quick scalp trade. I got 15 rupees profit. Although this 15 rupees is not exactly considered as a profit as if we included the brokerage and taxes, it will finally be in a red zone, but it somehow boosted my confidence in playing with charts and ordering on the charts itself. It gives you so much clarity and confidence when you put orders on charts itself.

So gathering momentum from my Adani ports scalp, i quickly selected Hindunilever stock. I opened the hourly gainers page and saw this scrip showing some good trend. I know when there is trend we should enter quickly and reap some profits and exit immediately. hence i opened this chart, placed orders on chart itself and to tell you frankly, it was a seamless experience. I placed a buy order and sell order on the chart itself and it executed within seconds and i hadn’t even worried about getting my order executed or increasing or decreasing the price to get executed. Overall i gained some 270 all because of order placing on PI charts.

Considering my above experience, i have decided to use Zerodha Pi for my future trading sessions as i wasn’t so successful in using Zerodha kite to reap any profits. I decided that i will trade in the early market hours on Pi platform and do some quick scalp trades on a huge lot size. Lets see what will happen to my strategy.

Day 1: Rs -466.1

Trading Diaries

Hi people

I had always wanted to write something and share it online, but i couldn’t find topics to write everyday. At last, i found one thing which i can write about everyday or i should say every weekday. That is about stock trading. I started investing or rather i should say dumping my money in share markets from this January 2017. First i opened an account in Zerodha.  Zerodha is so  convenient for traders as their brokerage costs are very less compared to its peers. Since then my trading journey has been a roller coaster ride. I have seen some profits, many losses.  I have lost money sometimes because of   my greed and sometimes because of lack of money management.

through this blog, i will share my trading experiences everyday and also will post some screen shots of my trades that day and the total profit or loss that i generated. Also i will post about stocks selected for swing trading   and some resources to learn about trading.

 

Decoding our restaurant bills

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Did you ever wonder how those initial cheap and economic offers at the KFC’s, the McD’s and the Ohri’s and The Chutneys become suddenly expensive towards the end?

Did you imagine how much are you paying to the government as a tax or how much you can save if you prefer dining at your home through takeaways and home deliveries.?

Did you observe any VAT or service charge when you order through Foodpanda or Swiggy?

Well, its time to get enlightened and stop getting cheated by the corporates.

We’ll discuss how the restaurants charge us or how the seemingly small bill on the menu cards sum up to ridiculously big bills when you initiate paying.

When you go to a restaurant and order any food, let the food costs you Rs 100. Now this is the cost mentioned on the menu card. After you eat your ordered dish you find that the amount that you need to pay is way more than 100. What happened?

Well every purchase contains 3 factors.

  1. Service charge
  2. Service tax
  3. VAT

Lets discuss what’s the difference between these and how much these 3 add to your final bill.

Service charge:  This is the amount levied by the restaurant which can vary from 5-10%. This amount is collected purely as an alternative to tip that is to be shared among the staff. The restaurant shouldn’t take a paisa into its profits from this service charge. So basically service charge is the amount charged by the restaurant waiters or bearers for serving you. Mind you, since you are paying the service charge, you needn’t pay any extra tip to the waiter again.

Service tax: Service tax is the tax levied by the central government. This is calculated as 15% of 40% of bill amount. That essentially equates to 6% of the total bill. This 15% includes the recently added Swachh Bharat cess and Krishi Kalyan cess of 0.5 % each.

Since this is a tax levied by the Central government, no amount is credited to the state government in which the restaurant is located.

VAT: VAT means Value added tax. This is the tax levied by the state governments on the customers. This can range from 5-25 % on the cost of the food.

This tax is different for food and alcohols. If you find 2 VAT’s in your bill then that definitely indicates that you’ve ordered alocohol along with food.

So at the end of the day or at the end of your meal you are making the governments richer after making your tummies fuller. You are being charged a minimum of 6+5+5 = 16% on your food cost to a maximum of 6+10+25 = 41% on your food cost.

There are some positive points in the above discussion.

The 15% Service tax has to be levied only on 40% of your bill. If you find any restaurant charging 15% on your total bill you can report it to the proper department to investigate.

You needn’t pay service charge and tip. Either one is normally done but not both.

When you order through food delivery apps, you shouldn’t be charged with service charge since service charge is what you need to pay towards the restaurant waiter for serving you and in the case of home delivery you are your own waiter.

Also VAT shouldnt be levied on packaged food or bottle water. So next time you find VAT being levied illegally on these two categories you can report it.

The above discussion can be summarized beautifully in the below picture ( Copyrights with the original owner, i dont own any art of this image).Untitled

 

 

 

Anatomy of petrol prices

Petrol-price-in-India-to-be-increased-by-Rs-7.50-by-midnight-tonight-no-recall-in-sight-2

A wall street analyst once said, ” Petrol prices and gold prices are like the stock markets, No matter what they are bound to increase”. But if you observe the present trend of crude oil prices you might think that analyst didn’t do his home work well.

Well, the fact is he is right. The prices are bound to increase. What we are seeing is only a short term relief. Barrel crude oil cost $110 1.5 years back. Now it plummeted to $40.

There are various reasons for it. But the real  question is whether we, the people of India are reaping the benefits of low crude oil prices? Answer is a sad NO.

let’s see what’s preventing us from reaping those benefits. But before that let’s discuss the causes of low crude oil  prices.

  1. United States’s production of shale gas efficiently at low costs: Shale gas refers to natural gas that is trapped within shale formations. Shales are fine-grained sedimentary rocks that can be rich resources of petroleum and natural gas. Sedimentary rocks are rocks formed by the accumulation of sediments at the Earth’s surface and within bodies of water.
  2. This shale gas production was not cost effective until now. But then, scientists developed methods to extract shale gas at low cost. Thus, US is producing its own gas without depending much on OPEC countries. This lead to a gap in demand and supply.
  3. All the gas utilised by US is now sitting at the production houses. OPEC countries didn’t decrease their crude oil production rate as they value their market share in the oil production.
  4. So we have more crude oil and less demand, which essentially decreased the prices of crude oil.
  5. Another reason why OPEC countries doesnt want to decrease their production is because of pressure from US. Its starch rival Russia is one of the biggest exporter of crude oil and so lower crude oil prices will destabilize Russia’s economy and eventually weaken it.
  6. Because of lower crude oil prices, Russia slid into a negative GDP growth rate and is currently one of the worst inflated countries joining the sides of Brazil etc.

All these events lead to fall of barrel crude oil price from $110 to $ 30, which is a 266% decrease in crude oil prices. So naturally one question comes in the mind of common mind. “Why are the petrol prices not reduced???”

The answer is”TAX” and “RUPEE DEPRECATION”

Yes. Even though we are getting crude oil at lower costs, Indian government started increasing taxes on petrol in the form of VAT. So essentially whatever reduction in price was there, it was all balanced by the increase in tax on crude oil. Let us deconstruct the tax on petrol before it reaches to us. Also, the value of Indian rupee decreased continuously. So we have to shed more rupees in order to buy the same petro dollar.

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Also, let’s observe the different stages where tax is levied and what we get finally.img.png

Above picture shows clearly how much tax we are paying for a litre of petrol.

In a tax-free hypothetical world, we should get the petrol for as little as 20 rupees. But in todays world we are shedding 60 rupees. That means 40 rupees is being collected as tax.

 

This is the reason why even though the oil prices drop, we still continue to pay high for petrol and diesel.

repo_rate

Let us first understand the meaning of repo rate and reverse repo rate and then we’ll go deep into what it means to the common man

  1. Repo rate is the rate at which RBI lends money to commercial banks in the event of any shortfall of funds. It is the key instrument of monetary policy to control inflation
  2. Reverse Repo is the rate at which banks purchase government securities from RBI to lend it money and earn interest.
  3. MSF is an emergency borrowing (during cash shortage) by banks from RBI
  4. During inflation, RBI tends to increase repo rate. This will discourage banks to take  money from RBI which in turn creates low cash reserves with the banks.
  5. So people will be discouraged to take loans from banks as banks now lend them at a high-interest rate citing the high repo rate.
  6. So the purchasing capacity of the consumer decreases thereby decreasing the demand in the market which in turn decreases the inflation in the market ( Afterall inflation is because of high demand and low availability)
  7. Now when repo rates are cut which means the interest rate at which RBI lends money to banks are decreased, banks readily take money from RBI and they give loans to consumers at lesser interest rates. This will, in turn, encourage consumers to take loans readily and thereby purchase goods from  the market. Thus the spending capacity of the consumer increases, growth of the companies increases which leads to the growth of the whole nation.
  8. Coming to present situation, RBI has reduced the repo rates to 6.5%, a 0.25% cut against the expected 0.5% and reverse repo rate has been hiked by 0.5% to 6%
  9. While the CRR has been kept unchanged at 4%, MSF has been trimmed by 0.75% to 7%
  10. RBI expects the economy to grow by 7.6% in the FY2016-17 and has kept the inflation target at 5% for FY2016-17