27 September 2010
I am A CA IPCC student , and want to generate money for my future business plans for withdrawal after 5 to 6 years.
I want to start my trading with just2000 after the brokers fees of750. What i want to know is my plan seems to be working or not My plan Goes as follows
" I buy a share seeing the top gainers in the last week but having a market price of less then( Ra ) 20. for ex : the share i am seeing this week is Birla power which had its day opening and day low of 1.95 and a day high of 2.30 i want to buy that share tomorrow at2.25 or something near about and just earn 2 or 3 paisa and also to this i want to buy and sell this stock like this 50 to 200 times in the 5 hours span " is my plan feasible because this plan really seem to be really really tempting to me because according to my calculation money would get doubled in week if i earn 10 to 20% return daily which in fact means my money would be really multiplied very very early into thousand and millions very quickly..!!
there is a software by many share brokers dese days.. i intend to use of Kotak Mahindra Bank which displays the current rate of the share with every mili second the rates changing even at the speed of 256 kbps...
i learned about the brokrages and commission and analysed that small stock is not feasible for me but a price of about 20 if rises to 22 by seeing the graph can really make me earn a lot..!! even the brokrages are just 10 paisa or 15 paisa per 100rs. which means if i invest2000 in a stock of say 20 and sell it at 22 then my net earnings would be (100*2 - 60{2000/100*.15*2} (brokrage) - 25.5(ltcg)) = 114.5 and if i am able to earn just even 2 times or Four times a day would go to 10 -20% of d earnings
even if i do not get a 10 percent return on a stock instead i earn1 income per share then i earn14 per transaction and if i am able to earn1 from 10 or 15 diff low priced share daily i would make the same return of around 10% And what if the share price is10 and then i get a increase of 1...!!
and now u would ask how would i know that which shares are doin good then i refer to this site http://www.daytradingshares.com/ Please correct me if i am wrong..!
Please tell me is this plan feasible..?? Please tell me the mistakes in my plan if it is not feasible..??
27 September 2010
Your plan mathematically is correct.
You should understand that your assumption here is that the shares you buy will go "up". This is similar to the assumption (mortgage / house values will always go "up") which created global recession and collapse of Lehman Brothers. Surely, if you are able to time the market in the way mentioned, it is possible. But I believe it is a too idealistic situation than real one.
27 September 2010
what i actually think is that by seeing the graph we can see the how the price goees up and down and what is the top price range and a low range so that we can buy a share which may in certain time may rise by 1 rs. only i.e if a use d graph and see the price is going on changing very frequently then we can buy that share..!!
27 September 2010
Ankur very well plan and strategy.
But you should know certain things: 1. Its very difficult to study the market by graphs also. 2. You need to see alot stuff like the change in value of share depends on the market or it is not affected. 3. For small shares you also have to see that there is minimum brokerage to be paid. 4. Try to play on Moneycontrol.com with the balance of 25 lacs. its jst the game type where u can apply your strategy and see that you earn or loose at the end. if you think you make profit than you can do it in real life.
I am studying charts and graphs of share market since last 5 years. But till today i am not sometimes sure what will be the future....
1. Can u tell me some tips personally sir or u can help me in learning how can i do study on graphs and on share trading.. 2.I am really thinking of starting this plan but i know i am still at a novoice level and that is the reason i want to know from the experts what i can do to gain some profits..!!
27 September 2010
Download from google the Candlestick charts and graphs... read it.. see the past charts... predict for the present that did it really happened wat u interpreted.... you can also find some books regarding candlestick charts and all from the market or on google also.... i will advice jst to see the market and dont to jump right now....
29 September 2010
Author Ankur should clearly understand the risk involved in this plan as CA Shivang in his own notes mentioned. " I am studying charts and graphs of share market since last 5 years. But till today i am not sometimes sure what will be the future...."
There is enough research out there which suggests that you cannot predict stock market movements (also forex rates). The more you try to gather info, the more you know that you cant predict.
Ankur's assumptions yield him 100% returns over a week. Even if we take it as 2 week's, a $100 investment turns into $3.3 billion in one year. If we also note this strategy is purely based on technicals and not based on fundamentals. So we are looking at patterns, movements and think that the next moment of future is based on the previous moment. Lot of statistics. Remember the saying "There are lies, damn lies and statistics"
Having said that I admit that there could be "risky returns" out there to take out of market when the market is not efficient. It may be possible to make those risky returns in Indian Market which people believe to be not fully efficient. But the "risky" side of the it should be more understood than the "return" side. I would, therefore, be keenly interested to know the outcome of this interesting exercise after 1 year, if possible.
29 September 2010
My mistake the brokrage would not be rs 60 it will be rs thur rising my income to rs 170 instead off 114 Sir i would just like all of u experts if it was just one months pocket money(rs. 2000)or u can take it as ur monthly income which can give you a 10 - 15 times or many times more after a year.. will u go for this venture...!! if u will say yes then i will go for this venture after learning more..!!
30 September 2010
its not that easy ankur as u mite b thinking.....u know if that cud b d case then i ,,u and every1 here wud have gone Dhirubhai's route... problem is today u earn 10% next day again 10% but very next day u mite loose 50% ... so till u dont have sure inputs then only get into this....
CAclubindia
