Beginner's guide to start trading in the Stock Market | #Learn2Trade
Hello, hello, hello! Greetings friends! I am your friend Vivek Bajaj A student of mine wants to learn to trade I said I will definitely teach trading, but not just to you. I will teach all my students online for free In this video series, I will sit and chat with my student and try to teach her how to trade and let's see if she is able to trade in the end or not. Hello Annapurna! Hello Sir! How are you? I am good sir. How are you? I am good too Annapurna is a millennial She has completed her Masters? Right sir She is my friend's niece One day my friend called and told me that she has an interest in trading, so please guide her It's good to know that the young generation is interested in trading seriously First of all, let me congratulate you that you have thought about trading Thank you, sir It's a very good career if pursued properly That's why I have come to you for guidance I will try my best to teach you Whatever best I can do, I will give you my best But before I start; as this is a new series that I am starting We will start with the basic and then try to move to advanced so that you can start trading Let's understand your educational background and why do you want to trade I have completed my BCom (Honours) in finance I had a slight interest in the stock market from the start but kept it on the side Because I belong to a business family, I went to pursue Masters in Entrepreneurship Post that I have been working in a startup for experience since a year now What I realized was that my money kept accumulating in the bank account and was stagnating So I thought why not put it to better use? Try to multiply it and get more income So I thought why not start with trading Absolutely You have studied entrepreneurship and you want to step into trading and become an entrepreneur The first lesson is that Trading is an Entrepreneurship You do it for yourself and you are not answerable to anyone. You work with your own money with limitations If you are into intraday trading, then you enter in the morning and exit in the evening Not taking anything back home It's like no debtor, no creditor Everything's going to happen in the day Or if you are into positions where you can estimate your buying price and your earnings Trading is a noble occupation.
where you are an entrepreneur but like I said, it's not easy It looks glamourous and interesting but it's very important to learn the basics So let's start Let's start with the journey and see if I can help Annapurna become a trader or not To all the viewers, if you know any youngster with a similar profile who are also interested to learn trading then please share this video with them we will start with the basics and try to teach the concept that works for me and has helped me earn and try to inspire youngsters to take up a career in trading So let's start with the basics You can ask whatever question comes to your mind and don't worry about the time limit Ask any number of questions you want. We will record multiple videos for the same What is the first question in your mind now? Sir, how do you trade? How does your trading setup look like? So you are at my office desk and here you can see my entire trading setup. I am a professional trader and I have been trading in the market for 15 to 16 years now The trading setup for a professional will be different from that of a novice So if you see my setup I have removed the two screens that used to be on the top I have reduced it since I am not involved in intraday active trading now Nowadays I am more involved in active investing and passive trading i.e., I carry my position for some days now But when I was an intraday trader, I had 4 monitors in front of me One was for real-time news updates Another was to track real-time ticker updates There used to be ticker-reading in the olden days Every action in the market used to be shown in the ticker Which stock is up or down used to be shown in the ticker continuously That was one screen that I had One other screen was to monitor the graphs which shows the technicals As you can see that there is a graph with multiple lines moving It's like a snake moving inside the screen All you have to do is predict the movement of this snake This is trading So that's the graph And on this another screen, the tool that I have developed, StockEdge which helps me with my homework at the end of the day And all my analysis and notes are there in the StockEdge So that's always open on one of the screens So 4 screens, and one laptop which is in front of me To track my emails or any other actionable item This is a typical trading setup of a professional trader Don't get worried by the complexities Not sure which screen to check when This is a professional trader's setup which will build over a period of time I'll suggest you keep one laptop or desktop in front of you to keep and track the tools that I am going to mention, will be sufficient The mobile apps are also very active nowadays 70% of the time we are using a mobile app So keep a mobile phone and a desktop/laptop to start off But what I would suggest that if and when you become a full-time trader then a bare minimum setup should have a laptop, a smartphone, and 2 more screens There's actually just one CPU connected to two screens. If I move my mouse, you will be able to see There's just one computer with two monitors. It has a dual display card which is easily available nowadays
This is the setup you should aspire to have If you are able to achieve this setup, it implies that you are a professional trader now Your target should be to get this setup So this is my trading setup This is just the hardware setup Let's come to the software setup now The software setup you should have as a trader Trading is forming judgement on the fluctuating prices of the stocks Like, investing and trading are two different things You question the price of the stock in the market when investing You feel that the price is wrong The price either should have been up or down that we call evaluating the fair value what should be the right price of the stock Trading is different The price in the market is always correct while trading I need to evaluate whether the price is going to go up or down Okay. Understood What will you do when the price goes up? I will buy Absolutely What will you do if you feel that the prices are going to go down? I will sell Exactly! It's simple All you have to do is buy and sell The biggest question here is how much duration do you want to trade for? What is the duration of your trade? Do you want to predict the price movement of a stock for 2 days, 2 weeks, or 2 months Every duration will differ The price movement might go up steeply and do down steeply just within 2 hours So if you buy and sell, your duration will just be those 2 hours But a stock might show a steep rise within a span of 2 months, then your duration will be 2 months So as a trader, the first question that you need to answer is that what is the duration of your trade? Do you want to trade within 5 minutes, i.e. do intraday trading? Or do you want to hold your position for some days, i.e., do swing trading So it's either intraday trading or swing trading. What do you want to do? Intraday trading or Swing trading I want to start off with swing trading So you want to hold the shares you buy for some days Then you need to observe the price movement on a swing basis Technical Analysis gives the flexibility to help you link the price with your objective. This is a very brilliant study. Let me show you
This is a stock. What do you understand from this chart? Are you able to understand it? I am unable to understand so many lines Aren't there too many lines to make it complex for you? Let's go to a simple chart I'll nake a chart with a new layout to simplify it The name of this software is Trading View I use it for advanced technical charting And the other software that I use is StockEdge, developed by me Even StockEdge has charts Use StockEdge to analyse the overview data of fundamentals, technicals at the end of the day Use Trading View for advanced technical charts This is my setup that I have defined How do you feel after seeing this chart? I am able to understand this at least This is the daily chart Daily chart maps the closing price of a scrip every day Let's take the example of the State Bank of India when I am typing State Bank of India, it shows SBIN, that is its code The code of a stock is defined by the exchange This is the share price of the State Bank of India What can you see? What is going on in the charts? This is the daily price, which plots the closing price per day and creates a graph accordingly What can you make out of this? So they plot a day's price per day. So this is plotted from June to November No, this is from June till today This is till February. This is the zoomed-in view, if you zoom out, you will get old data as well If I am into swing trading, do I observe such old data? Absolutely. If you are into swing trading, then we don't need to see such old data We will only check the chart for the past 3 to 4 months. Now we will see a chart for past 12 months to understand what's happening in the SBI You will be able to see multiple towers along with the line chart What are these towers? This is Volume, as in how much is being traded The number of volumes being traded Okay? If the price rises with a volume of 100 shares and if the price rises with a volume of 1000 shares Which is more relevant? Price rise with a volume of 1000 shares More people trading, with an increase in price, indicates of conviction of more people in it Technical analysis is when you study the price and volume together This is the daily chart, which shows the end of the day chart with volume What can you make out of the chart? What has happened in the State Bank of India? The price has gone up drastically in the past few days It means bullish market What happened here? There must have been some market event It means the bearish market This is the bullish market and this is the bearish market You must have heard about bull and bear. Bull means an increase in price and bear means a decrease in price
Price action indicates a bullish or a bearish or a mid-range known as the consolidation range The price is resting and planning its way forward It's a race and everyone is running. People in the share market are also running Where will you place your bets on? On the price which runs higher An increasing price implies bullish A decreasing price implies bearish Consolidated implies that the price is resting and planning its way forward So you can see a bearish trend in the chart. When did this bearish trend start? What happened last February, March, and April? Corona! Corona led to a decrease in the price of not just this share but the entire stock market Then the price was resting for some time, this is known as the consolidation range When it was done resting, it started preparing for a new race It ran up very steeply This is known as breakout But the previous high When it is consolidating, this was the high that it had created It lit up like fire after breaking the previous high It started a new run post the breakout Initially, the prices decreased, then consolidated and then increased again This is technical analysis Breakout is when the prices start running up again? Correct Break - out Break-down Why do we use the term bull for an increase in price and the term bear for a decrease in price? This is a good question, to which I don't have an answer to. Try to guess You will not know any answer Just think why do we use the term bull for an increase in price and the term bear for a decrease in price? Maybe because when bull runs, it gets crazed out Even the bear does the same thing Bull's horns are facing upwards and a bear's nose is facing downwards Hence when a bull trend is upwards and a bear trend is downwards. This is the story There are more animals in the market which we will discuss later A bullish market is created when there is a breakout A bearish market is created when there is a breakdown As a trader you need to identify both bullish and bearish trend as you can benefit from both You will benefit by buying in the bullish market and by selling in the bearish market How do you sell in the bearish market? We will have these conceptual discussions later You have understood the broad concept that you need to buy in the bullish market All you need to do is predict a bearish or a bullish trend whether it is going towards a bullish trend or a bearish trend You need to predict this as per your time duration, whether you are predicting for the next few minutes, or hours You need to change the charts accordingly You will follow the daily charts for swing trading But if your trade duration is less Then I won't see the daily charts I will change the tenure of the chart to a 2-hourly chart It plots the closing price every 2 hours I can change 2-hourly to hourly as well I have a question Why do we plot the closing price? We plot the closing price as this is a line chart We plot the closing price in the line chart If I convert the chart to a candlestick chart This is how a candlestick looks like It is a very interesting pattern that will be discussed later Candlestick plots high, low, opening and closing, all in this one pattern.
Following closing price in the line chart is a convention Because the closing price is more relevant The trends in between does not really matter as much in the line chart All the price movement is relevant as per the candlestick chart We can take out inferences through the different patterns of candlestick Let's use the line chart for now This is an hourly line chart We can convert it to a 5-minute line chart or 1-minute line chart This is SBI's 5-minute chart There was a bullish trend in the morning Now there is a correction in the market after some pause You might feel after seeing the 5-minute chart that the stock might fall As there is a downward trend But there is an upward trend as per the daily chart This is where you might get confused in identifying the upward and the downward trend Identifying the trend in the price movement of the stock depends on your objective If you are trading in small tenure, then you can see a negative trend. when it's going up or down, a trend is being created if the trend is downwards in a small tenure, then I will trade for a small duration if the trend is upwards in a small tenure, then I will trade for a small duration The first thing that is important to understand is the tenure of your trade Do you want to trade more for a small time period or do you want to trade less but effectively in the longer time period I have another question How do I define the time period? Should it be a range or a fixed time period? There is no need for a fixed time period that needs to be defined for trading It is price dependant You can square up the stock as soon as the desired price is achieved, be it 2 days or 20 days Price is more relevant for you, and not time I'll square up when I have earned I'll square up when my stop loss is hit Stop Loss? We will discuss this later We will have more conversations on it in the upcoming videos But you have understood the basic structure I have a trading infrastructure. I follow technicals for trading My trading setup is based on the duration of my trading I have another question You have shown me hourly as well as daily charts. Which one should I follow? Depends on your objective If my objective is swing trading and my price is achieved in 2 days But I feel that it might go up again after 5 days So should I hold or should I sell? We will discuss the trading strategies in the upcoming videos Sometimes you happen to mix up two tenure I have a setup where I check the end of the day chart and 2-hourly chart Any price movement of a stock in the market can be identified through small-tenure charts Obviously Small tenure charts will provide first-hand information because if the trend is changing then a 5-minute chart or an hourly chart will inform you first The large tenure charts will inform you later I will share my setup with you where you will see how can you integrate the daily chart with a 2-hour chart and create your own model which can be used for swing trading For Intraday trading, you might want to integrate a 5-minute chart with an hourly chart I will teach you how to do that setup later But you have an overview of trading now You are familiar with charting now We will also discuss what data to check post your dinner in the StockEdge App The time post your dinner after 8 pm What time do you have dinner? 8:30 pm After probably chilling till 9:30 pm, use StockEdge App for your homework so that you are better prepared for the market the next day we will discuss how to do that Finally, where will we transact? We transact through the trading terminal Open an account with any broker and he will give you access to the trading terminal I have the trading terminal open. It's very simple You can see all the stocks, its bid price, ask price, last edit price, which you can use to trade I will discuss in detail about the trading terminal and how to use it You can see the prices going up and down in the trading terminal And this is the price at which you trade You buy at ask price and sell at bid price. I will discuss this over a period of time
There is market watch, offer book, trade book and a lot more information Your trading setup should have technical charts, StockEdge, which has much more than technical charts and a trading terminal you can get all 3 in your laptop. Trading Terminal is also available in app nowadays all the brokers provide the service you can use the phone to trade and a laptop to analyse What about news? You can put on the news What you need to remember is the news that you are consuming is outdated Someone has already acted on it If you act as per the news, then you are just to lose your money If you follow the charts, then assume that the charts already has captured all the news News is biased and is given so that you act according to the people who are putting out the news which generally leads to loss of money Don't follow the news in the market hour, just follow the charts Technical charts and price will give you the hint itself Do not trade on the day of an event like a new RBI Policy Trade post the event The market is not going anywhere, neither are we. So why the rush to trade? We are here to make money Okay? Okay Friends, this was just the first chapter where I have explained the basic setup for trading Hope you all have liked the video We will discuss all the grassroots basics of trading And will try to help Annapurna become a trader It will be a lottery for me if you are also able to become a trader I would love to train as many people through this medium The more you share, the more people will be able to get educated I will be able to tell people the right way to participate in the market Thank you for watching this video Thank you Annapurna for your time Thank you sir Let's meet again Next time, next class