Beginner's Guide to a Trading Terminal | #Learn2Trade
Welcome to the Learn2Trade series and today is class number three and I am taking a class on trading and I am trying to make Annapurna a trader. How are you Annapurna? I am good sir. How are you? I am good too. It's session number 3 today. Right sir. I had taught you in the past 2 classes as well and you were asked to practice it. Where have you reached? I am following Stockedge very religiously and I’m sure with time, I will be able to start with TradingView as well soon. I will not complain because TradingView looks complicated and since it’s your first time in the market, it takes time to understand all the lines and charts.
But I will explain along with our discussions and then you will understand Try to give around half an hour to an hour to the market daily. Because of you don’t put effort, even the market won’t give returns. Let’s start today’s class. I have explained the basic structure in the initial 2 classes. what should be your infra and which software to use as a trader. Basic structure. Let's first take your questions and then we will discuss some points You had shown a trading terminal, but when I went online I got confused on which trading terminal to use Trading terminal is a platform to buy and sell Trading terminal is the exchange for you Trading terminal is not provided by the exchange Exchange matches the order they match the order between the buyer and the seller and confirms the trade It is done by the Exchange's server Exchange appoints the brokers. So your question should be there are a lot of brokers, how do I choose?
There are two kinds of brokers. One of them is the neighbourhood broker friend of your father who will be a broker or will you have a friend, who has started brokerage. You can open an account with them All the brokers will give access to a trading terminal Let's look at this trading terminal It is lit up with lights and it's installed in the laptop It might be in the form of EMC file. You have to download the file enter the login and the password to enter the trading terminal Another is a web-based trading terminal, you visit the broker's website You log in through the user ID, password and it shows the web UI Like Facebook or any other platform that has a web UI The third is mobile, you can download the mobile app, you are trading through it There is only one Login Id and password. You can only login from one device It cannot be logged in from multiple devices It can only be logged in through one device due to security reasons Traditional brokers are like mom and pop shops. Neighbourhood brokers
Other are the online tech brokers these are discount brokers or tech-enabled brokers everything is done online through them from account opening to relationship management It has it's own advantages. Since it's online the transaction cost is low But there is no good customer support for help Neighbourhood brokers are readily available Since you are new in the market In my opinion, you should opt for a neighbourhood broker who can guide you as well I really like this broker known as Kotak Securities. They even have a bank You will find it near your home or you can even open an account online This is my preference, you can choose yours. It's not like I am an agent I am just advising you It's a knowledge-driven broker, you will keep getting new inputs and they will help you out with any issue according to me you can open an account with them The process of account opening is very simple. You can check it out in their website You probably know better when it comes to looking online as you are a millennial At the back of mind I am thinking about opting for a discount broker, as it will be more convenientt It's not that it's very prompt to open an account with the discount broker All traditional brokers also have an online platform Even if you go to Kotak Securities, you will be able to open an account instantly as account opening is not broker dependant It's known as KYC KYC is know your client All the offline KYC's Earlier there used to thick forms. The broker got it at home to be signed
He used to attach the attested document. It became a kit which was a client's KYC Now it's e-KYC everything is done online, upload the document, upload the photo, and the whole process is concluded in 15:20 minutes, within a day or two, you get the account you get the email about it Download the trading terminal through any broker you will get the entire process on the email you will not get stuck there. It's a very trivial issue The actual problem is post that. What to do after opening the account and downloading the terminal? After downloading/logging in to the terminal, you will see something like this I have already added the stock price in it, you will see the stocks, prices, bid, ask, LTP, percentage change, ATP, volume. These are different columns we will discuss all the columns for a better understanding of what it is indicating These are the columns that I have added. The first is the trading symbol
Can you see names under the trading symbol? What is this? You can't see? I will try to zoom in. No, I can't This is Hindalco. The one beneath it is Naukri Have you heard of Naukri? naukri.com naukri.com. It is listed. Did you know it's listed? No See now you know that it's listed. Naukri EQ
EQ means Equity? Yes. Thank god you didn't say Emotional Quotient EQ means equity. There are different segments in the market like EQ, trade to trade, BE There are different segments. I will tell you the relevance of each segment later. But we have to see the EQ segment largely because EQ has liquidity and is meant for retail investor It's very simple This is the bid quantity after EQ which denotes how many people want to buy This is the bid price, at what price do they want to buy? then there is the ask rate, at what price people want to sell then there is ask quantity, how much people want to sell this off. Now tell me which price will be lower? Bid Price or Ask Price Bid price as people want to buy stocks at a cheaper price they want to sell at a higher price. Why do people want to buy at a cheaper price? Why don't the buyers opt for the ask price? buying at a cheaper price so that they can sell at a higher price and book profit people who are in hurry and feel that the prices can go up or down, trade at the existing price whoever wants to buy will buy at the ask price and will sell at the bid price. These are traits of people who are in a hurry to trade and want to enter the trade at any price
This is called Market Price You can buy at the price being offered through the broker or the trading terminal This is called market price In our common language, we say take it by hitting the market The traditional brokers say take the price in the market But if you say that you want to buy at a specific price, then it's called limit price Suppose the ongoing rate is 5321, but you want to buy at 5320 when you place the order in the terminal, you will use place at your price, and if it doesn't sell at that price then it will be outstanding The order will be there in the terminal but as a passive order when the price goes down, then it will fulfill your order The order will only be valid for a day and will be canceled, if not fulfilled, at the end of the day You will have to add it again tomorrow. It's called good till day It is only valid for today In the olden times, there was the concept of good till cancel. It implies that the order was valid till it's canceled What is the point of this? I might not remember, I have put a price to it I want to sell at that particular price itself. I don't want the market price, I want to sell at my price
suppose you're putting money into real estate. Your father must have dealt in it we won't buy at any price I will only buy at a specific price per square feet Otherwise, I will wait. I'm in no rush whoever shows desperation he will get a wrong price in the market, an expensive price. whoever sits back and waits to trade at a price of his choice he will trade at a better price. Both have its own advantages and disadvantages which we will discuss with time then there is LTP. Last Traded Price
what was the last price at which a stock was traded. It's self-explanatory as you can see 5328 5328.10, 5327.90, 5327.95, 5330 Did you observe anything? It's moving at 5 paise 5330 5329.95. It's moving at 5 paise. What is this 5 paise? It's the minimum at which price moves. It's called tick size. Each tick in the Indian stock market is at 5 paise It will not move by anything less than 5 paise. No It will either increase or decrease by 5 paise. Not by anything less than that
It can move by more than 5 paise but not less than 5 paise Is there a maximum limit to it as well? No, no upper limit. If it's an illiquid stock then 5300 Like MRF. Its stock price is at 96000 Should I add MRF? will you see? NSE MRF Scrip already present. I have already added MRF This is the buyer and seller price of MRF. If I click on F6, I can see the depth Depth implies top 5 buyers and sellers helps me to find out how many people are interested in buying and how many people are interested in selling. This is known as market depth there is buyer at 97716 in MRF and seller at 97760. There's a huge gap between the buyers and sellers
Tick size is only 5 paise. 90 paise, 95 paise But there is a difference of almost 50 to ₹ 60 in the bid and ask the maximum can be anything, minimum will be 5 paise the question should arise that there's a huge gap, which might mean that it is too illiquid was another question in it, last time you mentioned that you should consider if the volume traded is high but what if the volume traded is only done by one person. How do we know that? Very good question. The more people in it along with highly traded volume indicates a wide market participation A higher participation reflects a genuine market There's a theory called Efficient Market Hypothesis Its most important component is that wide market participation denotes that the entry and exit are genuine If there are few people buying and few people who are selling, then the chance of manipulation is high Do you want to deal in stock with high chances of manipulation? No, especially if you are trading You would want to enter and exit as soon as possible while trading If I had to spend more time because I do not get the liquidity, then the chances of my loss are high This concept is known as impact cost Impact cost means the amount spent on that impact Impact is the difference between the bid and ask If you look at this stock. It is ₹ 97000
but the impact cost is not high if considered in percentage terms If the stock was of ₹ 500 and the difference of ₹ 40 in bid and ask, then the impact cost would have been high. If the difference between bid and ask is Rs. 40 on a Rs. 500 stock then the impact cost is almost 8% impact cost of ₹ 50 in a ₹ 97000 stock is about 0.5% Okay, then you should select those stocks in which the impact cost is the least, in which the dept is good enough and has liquidity. Let me provide a simple way to identify this There are different indices in the market. I will explain the concept of indices later There is this NSE index called NSE 500 There are 500 stocks in it which NSE has decided that these 500 stocks represent NSE as 500 index these stocks are all liquid So if you are going to trade then the first criteria should be that is it liquid, and is it a part of NSE 500 stocks If yes, then you will trade in it or you will avoid it Sir, there was another question, I saw that day too, you are focusing more on NSE. Why not BSE? Why just NSE? I don't have a personal preference
because everybody is in NSE the volume is high and has more depth Like I have said, trade where the liquidity is high No broker will ask you to trade on any one Broker has provided access to both Now look at this terminal, when I was adding MRF I got the option of both NSE and BSE in the drop down It's upto me on what I want to select Generally, NSE has higher liquidity as there is more participation in it so you can work on NSE. But it doesn't matter frankly speaking You need to see which market has more depth. You would want to participate in it Let's discuss more on the trading terminal. I have already explained the important columns to you like bid, ask, bid quantity, ask quantity Let's discuss other columns as well This is percentage change which shows the change in percentage between yesterday's price and today's price percentage is more important. If a stock of 100 is 120 today, then the % change will be 20% But if a scrip of 10000 is now 10100, then the change is only 1% it's important to track the movement in % terms then there is ATP. This is a very interesting concept ATP is average traded price Have you studied Statistics? Yes You must know average? Yes. There are two averages - simple and weighted
ATP is weighted average Simple average is calculated by taking all the price and dividing it by the total number. How do you calculate weighted average? By assigning weights. Which weights? Weights are generally given. So I'm guessing the volume are the weights ATP is a very interesting concept. If explained in layman's language MRF's today's ATP is Rs.97,302 till now. What does this mean?
It means that it's traded at a very high volume. At what price? At 97302 It means that if there is a buyer, they have bought it at this price Try to understand this very important concept Inside the market there are big people, there are small people, big people are there to earn money because they bring in a lot of money small people don't earn a lot in the market. This is a fact. Don't be scared about it We have to believe that we are small and people are there to take our money and we have to save ourselves from it This is a game.
People who can track the movement of big people will win. Do you agree? Yes The big traders don't just work on one price If they work on one price, then people will take notice so they work in a staggered way they keep buying as the price increases. This is known as accumulation If you want to make the best case judgment to know the trading price of the big people it's through ATP Ok, because they must have taken something in the lower price, then at higher prices ATP gives you the price at which the big people have bought or so;d Let me tell you another simple concept MRF's ATP is 97302. If you notice the ATP is increasing when we had started it was 97301.9 and now it's 97302.75. Why did it increase?
This means that the buy price has increased along with an increase in weights there is more trade on the higher price, along with higher volumes leading to an increase in the average This is a good sign. More people want to buy this stock you get the buying/selling propensity of big people by integrating the ATP and the current market price we will make a separate video on how to trade using ATP If you are doing intraday trading then ATP is very big role. I'll explain later then let's go to volume. It means the no. of shares traded then there's open. What is the open price of the stock yesterday's close price and today's open price are same or can differ? It should be. But as per my knowledge, people still trade after the market closes There's no trade, there are activities which leads to a change in the sentiments of the market which can lead to an increase/decrease in the open price there can be a difference between the previous close and today's open Then there's high. The highest price which it has reached today till now
Then there's low. The lowest price which it has reached today till now then there is previous close, i.e., yesterday's close Remember in the first video I had told you about open high low close you questioned why do we polt only close? I had answered that either a candlestick or a bar chart shows open, high, low, close this is how the open, high, low and close are determined. It's price then there's net change which means the change in the absolute terms You must be seeing an arrow, a green arrow It means that the trade price has increased from the previous tick It is a symbolic way of saying that there is an uptrend at asmall tick then there is 52-week high. 52-week means? Past 1 year the highest price in the past 1 year of this scrip 52-week low. the lowest price in the past one year is in front of me
Generally, there are bears on a stock trading near its 52-week high there are bulls on a stock trading near its 52-week low We will record a separate video on selecting stocks by its 52-week high price and 52 week low price Remember we will record a separate video on it This is my trading screen where I have created my watchlist You can design the watchlist according to you This is my trading screen You can add your own columns If I select here, I can add a lot more columns Each software has its own layout, so let's not get into that But I have shown my layout whenever you get the terminal link from the broker, create your own layout similarly there are more features apart from the marketwatch If you press F1, you get the buying order, if you press F2, you get the selling order Red indicates selling, while blue indicates buying You need to add quantity, price, and all these details to place a buy order after you place the order there is an order confirmation window you can get all the details in the menu at the top all the brokers will share a demo video of using the software. You need to put in some effort as every broker has a unique system initially, exchange used to provide a terminal. Now they don't. BSE does now, which can be used to trade in NSE All the advanced brokers provide their own terminal nowadays download it, spend some time and prepare it as per you This is very important after generating the idea, doing all the homework, you must be able to use the terminal as well This template is according to you, whatever parameters you are tracking 52-week high, 52-week low, high, low, open and close I can design as per my requirements with more or less parameters You get the options in the software A simpler template will not clutter your mind a lot to help you think correctly more details help in better analysis? you need to rememeber that I am a professional trader I have so many screens and I can think after watching these numbers you have just started so let's go one step at a time a simpler and clean template will help you in better decision making we will use this template after we have installed four screens, and become a professional trader which columns should I add when starting off the one that I have shown you is fair enough Just focus on these columns. you can remove 52-week high, 52-week low as it's not required now It is more relevant for end of the day research using StockEdge But this is the basic This should be there in front of you to think better and you will be able to see what is going on Mobile app's layout is different. It varies from broker to broker. More or less these data points are available in the app
Okay? Okay Let's end this video now I have explained the terminal's structure to Annapurna and she has promised me that she will set it up soon You can choose your own broker We will go deep in the next video we will discuss strategies and stock identification in the next video as we have understood the operations we can go to strategies next Are you liking it? I'm sure you must I'm trying to explain in very simple language I have made a commitment to make her a trader, you also stay tuned and share this video with people so that More people who are of Annapurna profile who want to trade also come to the market and learn things and trade in the right way, so stay connected with my initiative and keep sharing Thank you Bye