Concepts of Trading

I have started my learning in markets the hard way paying huge tution fees to the market and Vig to the brokers. Starting with fundamentals and by necessity learning by trial and error in brokerage trading rooms reminding of Reminiscences of a Stockoperator 's description way back in 1997.

1. As my journey continued with rich information contained in web 2.0 , I am fortunate to discover giants in the field of speculation, trading psychology and derivatives including Victor, Brett, Taleb.
2. Where as the beginning trader starts with Technical analysis and Charts , solid foundation may be possible only with CONCEPTS of TRADING.
3. TA when understood in terms of concepts like Trend, Momemtum, mean reversion, Low risk entry, classification of tools for ranging and trending markets,Day Structure assesment,Execution in countertrend,Allowing the market to show top or bottom formation, Sticking to timeframe,and understanding the Technical indicator built up rather than mechanical rules will put the developing trader in a formidable position.
4. I find much appreciation for the way the material of NSE Technical Analysis program is prepared in the lines of emphasing the concepts of Trading. The flow of the content in TA is very smooth and connected.

Short cut to approximating IV,HV

Some of the benefits of sharing market information is the trainer achieves more clarity on specific concepts.

1. In delivering NSE program on derivatives , I came across a shortcut to approximating Implied Volatility(IV) and Historical Volatility(HV).
2. Normal approach to caluculating HV involves statistical caluculation.
3. Devangshu Datta of BS describes a thumb rule approach to estimating HV. It involves calculating the daily  HIGH - LOW range as a % of Futures settle price. You can take say, a 20-day moving average of this in order to get a smoother value. This can be used as a proxy for HV.
4. For estimating IV, We can take nearest to money call option and nearest to money put option premiums and calculate the breakevens to derive a range. For ex Nifty at 5280, 5300C (premium 100) and 5250 P (128) can be considered. A strangle breaks even outside 5558 -5022. This 536 points can be expressed as a percentage of NIFTY 5300 approx 10% as a estimate of IV. 
5. Black-Scholes options caluculator gives more precision but a thumbrule approx can be done as above

Technical Analysis @Manipal Education

The training program  jointly delivered by me along with another colleague gone very well.

1. NSE's Technical analysis material supplied to the participants provided unique way of classifying TA
2. Students liked the classification of TA tool kit and what tools to apply to Trending, Range-bound markets and transitioning markets from Bull to range-bound and vice versa.
3. Audience participation is very good with practicing traders and even top management from some brokerages thrown in.
4. I could bring value to the process through my emphasis on trading psychology and risk management mostly adopted from Trader Feed.
5. Intraday trading strategies with pivots is one chapter on the TA course.
6. I could personally appreciate how the basic concepts of TA can help the beginning trader have a grip on the market perception.
7. So many commentaries on  Financial Press and TV  became evident after going through this process along with my co-learners.
8. Much of the philosophy and terminology was effectively internalised by the participants by the end of the workshop as they were freely using the jargon.
9. Illustration of many concepts were done using  TAME and ShareKhan 's TradeTiger platform.
10. TA concepts when viewed in a foundational sense clarified many of my hazy opinion on TA.

NSE - MANIPAL Training Program on DERIVATIVES

I had the pleasure of taking classes for NSE-Manipal Training program on Derivatives at Hyderabad.

1. The educational material of NSE is absolutely top class.
2. The 14-hour program covered all Market Design, Microstructure and Analysis
3. Audience interacted very well  with diverse profiles from JPMorgan, Dr Reddy Labs, Stockbroking employees like Kantilal Chaganlal, India Infoline, and Independent traders.
4. I could discuss various indicators for derivatives analysis like  OI, CoC, PCR, IV by taking reference to DEVANGSHU DATTA's article in BUSINESS STANDARD - Smart Investor JULY 2007
5. Interpretation and understanding of Derivatives analysis by Devangshu Datta in Tuesday's BS will be very helpful to investors & traders in interpreting market direction.
6. Participants could appreciate the role of market design in taking trading decisions.

Simplifying the TRADING Framework

Today I had an aha moment trying to explain a methodology to understand price action to a new student of Markets and Trading.

1. The need for reference points which act as handles for the trader is emphasised.
2. These price handles will make the trader make sense of randomness
3. New and developing trader could feel a sense of elation at understanding the complex world of  Trading
4. When you can write your trading style on the back of your visiting card you can easily explain the approach to traders.

Understanding Investments

INVESTMENTS is a subject that is better understood and interpreted through a quantitative and statistical lens. This will avoid many biases of narrative distortion,selective recounting and other heuristics mentioned in behavioral finance.

1. I would think INVESTMENTS by BKM & Pitabas Mohanty with good indian examples and data will help students of Investments learn the right way.
2. Practicing with data from NSE website, Yahoo Finance, BSE website is the way to feel and understand finance theory.
3. MBA Course curriculum is enriched in OU & JNTU. BlackSwan Financial Markets School plans to associate with MBA Colleges and B-Schools in Interpreting SAPM, Investments Courses with practical approach and live trading.
4. Bridge Course for BCom/BBA students can also be implemented.

Finance Education in Hyderabad

As I ventured into financial markets education space in Hyderabad, I happened  to meet many interesting people.

1. My  deepest regard for Dr KG Ray of VJIM for his emphasis on Empirical Research and grooming students on research methodology.I learnt a lot from him  academically even though there are minor differences with style of admin. I can vouch for the superiority of VJIM's PGDM program, its pedagogy, curriculum, student culture and Vibrant atmosphere with top class infrastructure.
2. Mr Vishnu Mohan of Firstmove Advisors for his clarity and confidence of his techno-Fundamental approach.
3. Damodar Sai for his Intraday  and Technical analysis skills.
4. Harsha for his expertise in Commodities Trading and advisory.

Different ways of approaching the Market

Some of my random observations interacting with market participants and self styled portfolio advisors

1. Need to appreciate that there are many ways of approaching the market from different angles
2. Market comprises of different risk and time frames. Both long and short may be right when viewed from different time frames
3. Market consists of RISK. It is like a raw material made available to the participants.They can manufacture their own risk ( dish)
4. Experts trying to tell about their succesful tips but unwilling to discuss methodology and concepts of Trading.

Trading the Earnings Season & FY 2009-10 Results

Always the results season offers good opportunities and volatility for the Intraday equities Trader.

1. I would like to be ready and prepared for this earnings season
2. Infosys results on April 13 before Market opening ( BMO). Early results are expected to be in-line as market is not showing any trembling. Surprises happen in the direction of Trend ?
3. Identifying stocks in play (SIP) as per SMB Training
4. Proper stock selection provides most of the edge in this season
5. Information regarding the exact timing of company announcements of their results is not available to me ?
6. How far the announcements are priced in the stock and expectations
7. Post earnings announcement drift( PEAD) is some thing traders have to be careful about.
8. Interesting post on playing the earnings season

NCMP Level 4 Modules @ BLACKSWAN

BlackSwan FMB-School is launching NCMP Level 4 Training from May 10

• The modules we are covering are  
• 
  
  
   1 Capital Market (Dealers) Module
• 
  
   
  2 Commodities Market Module
  
  
   
  3 Derivatives Market (Dealers) Module
  
  
   
  4 FIMMDA-NSE Debt Market (Basic) Module
  
  
   
  5 Financial Markets: A Beginners’ Module
  
  
   
  6 Mutual Funds : A Beginners' Module
  
  
   
  7 NSDL–Depository Operations Module
  
  
   
  8 Options Trading Strategies Module
  
  
   
  9 Securities Market (Basic) Module
  
  
   
  10 Currency Derivatives: A Beginner’s Module
  
  
   
  11 Equity Derivatives: A Beginner's Module
  
  
   
  12 Interest Rate Derivatives: A Beginner’s Module
  
  
   
  13 Investment Analysis and Portfolio Management
  
  
• BlackSwan aims to add value by access to Live Trading facilities, Thorough discussion of concepts, Using standard reference books like 
• INVESTMENTS - Bodie, Kane, Marcus, Mohanty
• TRADING & EXCHANGES - Larry Harris
• HANDBOOK Of FIXED INCOME SECURITIES - Fabozzi
NCMP can become a gold standard of Financial Market Education BlackSwan has the will and knowledge resources to provide 24- Carat Financial Market & Trading Education to  a very large audience.

Benefits of not Trading alone

Since I started trading from an office , I noticed several changes.

1. Compared to home trading, I am more in control
2. It is difficult to go on tilt when your co-traders are observing you
3. I am trading more responsibly as I am assuming the role of a mentor as described by Dr Brett in The Daily Trading Coach
4. Some distractions relating to admin tasks may arise
5. Running a training and also trading operation gives me that emotional satisfaction of sharing ideas and developing clarity of thought
    
6. I hope this will exert positive influence on all the traders I encounter and associate with in this journey

Some very fine posts  regarding this topic are

• Doug Tucker on Trading Methods & usefulness of trading groups 
• Dr Brett on Networking

Professional Trading Course

BlackSwan FMB-School is launching for the first time in Hyderabad CERTIFIED PROFESSIONAL ACTIVE TRADER Course.

1. My inspiration for this is derived from SMB training in US and CD integrated in Indian Context.
2. BlackSwan would like to provide solid basic foundation for trading in the markets.
3. Association with RLP securities will help in providing sufficient Intraday exposure to the active traders
4. Components of this course will be in the lines of Active Traders Course
5. All ingredients required for stock speculation like Intraday Fundamentals, Chart reading, Risk management, Trading psychology, Understanding macro data, Reacting to news will be dealt.
6. A disciplined environment and lessons from How not to run a trading operation will guide this effort.
7. Giving best chance to the active trader to succeed is the motto.
   

NCMP @ BlackSwan FMB-School

BlackSwan Training can add value to financial market training.  We are starting with NSE Certified Market Professional ( NCMP) a high quality program from NSE. Their study material is of top quality.

1. How BlackSwan can add value  to NCFM certifications ?
2. I believe it is in detailed explanation and discussion of concepts
3. Providing live trading environment for students to observe markets
4. Learning about the thinking process of active investors and traders
5. Access to standard text books and case studies of International quality
6. Team work and seminars information sharing
7. Training by NCMP Level 4 Professional - ID 28075
8. Training by NSE Certified Trainer
9. Access to real time traders
10. Highly educated and qualified persons to give lectures

If the above combination is irresistible to any keen student of markets, BlackSwan is here to help  you find satisfaction and success in Markets.

Financial Market Education in India

Financial Markets have grown both in volumes and reach in the past decade.

1. The amount of literature available on Trading, Market structure, Various instruments has exploded.
2. Media focus on Markets has also increased phenomenally. Local Channels are also taking to business programming in a big way.
3. I would like to highlight some of the education providers I have come across in my research in the process of establishing BlackSwan Financial Markets B-School.
4. Finance Certifications : a) Kredent Academy

b) Ideators

c) NISM

d) ITM Financial Markets

e)BLB institute

f) FTKMC

g) Mansukh Institute for Finance

h) Equity Rush

i) APTART

j) Pristine Careers

k) Ace 3 levels

l) IQFI

m) Quantamatics

n) Torux

o) CD integrated

p) Inspire education

q) iicm india

r)iifp india

s) Kunvarji Academy

t) finosys

Role of Fundamentals in Intraday Trading

In my new journey of BlackSwan Financial Markets B-School and setting up a broking office in association with RLP Securities I would like to share some of my observations

1. The role of comprehensive view of Market Context. Often beginning traders may be looking at price levels or chart patterns, where as they need to put all this into sectoral context, Traders Behavioral reaction patterns, planning the trade in terms of risk
2. It is taking time for me to get reconciled with lack of control when the trader is given a free hand and the limitless environment of trading will make the trader go aggressive at the wrong time.
3. As often the Chair admonishes in DailySpec, beginning traders fail to scratch the trade, when survival is very near.
4. The importance of survival cannot be overstated
5. Market tuition fees must be paid so that it repeatedly drills the riskmanagement rules into the trader's head.
6. The importance of market context was highlighted on Friday's trade when I am trying to trade Pharma stocks from the Short side.
7. Often CNBC's hyping of certain stocks or sectors may give the intraday trader fade the sentiment extremes.

NSE Certified Market Professional Level 4

I am glad to announce that I have received NCMP Level 4 certificate from NSE.

1. NCMP  Level 4 is awarded to candidates who have cleared 9 + Modules.
2. I particularly liked its new addition IAPM module which has lot of relevance and market interpretation scope  with an MBA ( Finance) equivalent course content in it.
3. IAPM has been taught by me in various B-Schools with my major text being BKM,Nofsinger
4. BlackSwan is launching a 3-month full time/weekend batch for intensive training in NCMP Level 4 Course.
5. This course comes with a hostel accomodation, Placement tie ups with Brokerages, and Certicication assurance else fee refund options.

Importance of Trading Environment

Intraday Trading needs to be conducted in a conducive environment.

1. As Intraday Trading needs intense concentration , the trader needs to avoid all distractions.

2. The trader needs to access his meditative flow state.

3. There needs to be no opinion sharing itch among fellow traders unless there is a clearly defined protocol. This reminds me of how Victor writes about Trading Operation.

4.Need for maintaining silence in the trading room.

5. I am willing to admit that these unnecessary mistakes cost me yesterday and I paid the market a huge tution fee.

Pursuit of ShortCuts

In my interaction with many investors in the process of operating Blackswan FMB-School my observations

1.Pursuit of Shortcuts in the form of TIPS and sure-shot recommendations by investors surprise me .

2. How pursuit of money is put on top of market understanding and pursuit of knowledge

3.Market should give the participant energy rather than draining it

4. Having some framework or method in place of no method


I believe only when the market participants enjoy the journey they can go up the learning curve and increase their expertise.

Grand Strategy in Trading

As a student of market,grown up on traderfeed by Dr Brett , I find his posts resonating in my trading approach.

1. In my recent effort to build a Trading & Markets Monastry in Hyderabad , I had immense satisfaction in interacting with Beginning Traders and Students.

2. I had associated with RLP securities in this venture to offer trading facilities. My need for intraday flexibility and easy approachability of top management together with sppedy response fitted with RLP.

3 My basic approach of Risk Management,Viewing every Trade idea as a hypothesis, having a Grand Framework for Trading ( Mostly derived from Dr Brett), Identifying the particular traders' niche, I am trying to instill in my co-traders and speculators.

4 I am fortunate to find able friends like Mr VVM Reddy an IIT Chennai Grad and and an expert physics tutor for IITJEE. He is very enthusiastic about fundamental research and deep value investing. Another trading friend Mr Venkatgiri an engineer who is very keen on learning trading and analytics.

Intraday Trading - Best practices

BlackSwan is organising a seminar on Intraday Trading - Best Practices at Hyderabad.

1.Our office is at Flat 402, Srigurudatta Towers, Nizampet X Roads,Hyderabad -72
2.The motivation is derived from Dr Brett's articles on Trader Training,SMB Capital , Trading RM
3.Approaching the markets with a basic foundation on risk,trading psychology and structured way for continuous feedback.