What is Money Management?

August 14, 2009

Money management is the process of analyzing trades for risk and potential profits, determining how much risk, if any, is acceptable and managing a trade position (if taken) to control risk and maximize profitability.
Many traders pay lip service to money management while spending the bulk of their time and energy trying to find the perfect [...]

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Risk Reward Ratio

August 14, 2009

Getting the risk reward equation right while trading
Risk / reward analysis is a very important aspect of initiating a trade. As the name suggests, risk / reward analysis helps to identify the potential return from a given trade compared to the amount of risk being taken. Ideally, you want at least a two-to-one ratio – [...]

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What is an IPO ?

August 14, 2009

What is an IPO and how to go about investing in it?
An initial public offering (IPO) occurs when a company first sells common shares to investors in the public. Generally, the company offers primary shares this way, although sometimes secondary shares are also sold as IPOs. This article contains:

What are the eligibility criteria for a [...]

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Intraday Trading is a Gamble !

August 14, 2009

“Intraday trading is a gamble”….. “Will loose mostly in it”…… “If you wish to make it in the
stock market then beware of day trading”…… Popular opinion on day trading goes somewhat in these lines.
However, if operated systematically, I am sure you can see profits in day trading too. I will definitely not say that you [...]

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Intraday Trading Strategies

August 14, 2009

DAY TRADER Β· (day trader), noun – A person whose goal is to make his or her profits from a security in the shortest amount of time [preferably during a single day].
Keep in mind, the stock market is not your friend. Much like war, in daytrading and/or short-term investing, you are pitting your wits against [...]

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What is Intraday Trading?

August 14, 2009

Day Trading involves taking a position in the markets with a view of squaring that position before the end of that day.

A day trader typically trades several times a day looking for fractions of a point to a few points per trade, but who close out all their positions by day’s end.

The [...]

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Investing in Mutual Funds

August 14, 2009

Mutual funds enable investors to pool their money and place it under professional investment management. The portfolio manager trades the fund’s underlying securities, realizing a gain or loss, and collects the dividend or interest income. The investment proceeds are then passed along to the individual investors.
For most mutual funds, shareholders are free to sell their [...]

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Valuation of Equities

August 14, 2009

Dividend Capitalisation Approach:
The intrinsic value (P0) of the stock paying a dividend ‘D’ and the expected price of ‘P1′ and the required rate of return ‘Rr’ is given by P0 = (D+ P1)/(1+Rr)
Therefore from the above formula, we can derive the required rate of return (Rr) as
Rr = (D/P0) + g
where (D/P0) [...]

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Basics of Fundamental Analysis

August 14, 2009

Fundamental analysis is a stock valuation method that uses financial and economic analysis to predict the movement of stock prices
The fundamental information that is analyzed can include a company’s financial reports, and non-finanical information such as estimates of the growth of demand for competing products, industry comparisons, and economy-wide changes.
Main Strategy
To a fundamentalist, the market [...]

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What is Fundamental Analysis

August 14, 2009

Fundamental analysis is the process of looking at a business at the basic or fundamental financial level. This type of analysis examines key ratios of a business to determine its financial health and gives you an idea of the value its stock.
Many investors use fundamental analysis alone or in combination with other tools to evaluate [...]

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