FAQ

1. What is www.crnindia.com? Ans. It is a site on the Internet which focuses only on the Technical Analysis of the Stock Market. It tells you the trend of the Indian Stock Market on Intraday Basis. It also studies the trends of Nasdaq and Dow related stocks. The trend is determined purely from technical angle using graphs which in turn study the demand and supply of a particular stock. Once you are clear of the trend, you can take your positions accordingly, and know when to enter and exit the market. 2. Why don’t you incorporate fundamental analysis also on your site as it also effects the price of a stock? Ans. Along with the fundamental factors, at any given point of time , there are so many other factors which effect the price of a stock. It might be the newspaper report, the game of the operator, the FII buying/selling, fund buying, or the company coming with good or bad results. These things confuse a trader. And the technical analysis i.e. the graph reflects the effect of all these factors in the price of a stock. Thus the price of a stock at any given point of time reflects everything at that moment of time. 3. How can you read the graphs so nicely and it has been seen that at times the technical analysts are totally wrong in their analysis or it has been seen that two technical analysts are different in their views? Ans. Well each and every technical analyst has a different way of predicting the graph as per his or her experience. The way we go by is that we have developed a system where by we see the stocks from a particular angle (which is elaborated on the site), and on the basis of it we trade. 4. Do you recommend to take deliveries also? Ans. The short term trader need not buy deliveries but the weekly traders can take deliveries. But for both of them, the set of indicators and timing is different. A daily trader has to monitor his stocks on a daily basis whereas a weekly trader who takes deliveries has only to monitor his stocks every week only i.e. on Saturday or Sunday. 5. What is the guarantee that a person will make profit on your advice? Ans. We don’t guarantee anything, but we help you to minimize your losses and try and help you in increasing your profits. We assume that initially every trader goes through three stages. First he has to give losses, second stage he breakseven i.e. no profit no loss and third stage he starts earning profits. (85 percent traders finish themselves at the first stage only). More details on this are on the site. 6. What is Technical Analysis? Ans. Technical Analysis is the study of market action, primarily through the use of charts, for the purpose of forecasting future trends. It is an art of identifying trend changes at an early stage and to maintain an investment posture until the weight of evidence indicates that trend has reversed. Technical Analysis is the science of recording, in geographical form, the actual history of trading in a certain stock or in the averages and then deducing from that pictured history the probable future trend. 7. What are the Basic Assumptions underlying Technical Analysis? Ans. The Assumptions are :-Market Value is determined solely by interaction of demand and supply.Demand and Supply are governed by numerous factors, both rational and irrational.Ignoring minor fluctuations in the market, stock prices tend to move in trends which persists for an appreciable length of time.Changes in trend are caused by shifts in demand and supply.Shift in demand and supply, no matter they occur can be detected sooner or later in charts of market action.Some chart patterns tend to repeat themselves. 8. What are the main considerations in Technical Analysis? Ans. The main considerations are as follows :-Price: Changes in price reflect in investor attitudes and demand and supply of securities.Time: The degree of movements in price is a function of time. The longer it takes for a reversal in trend for instance, the greater the price changes that would follow.Volume: The intensity of price changes is reflected in the volume transactions that accompany the changes. An increase is not strong enough.Breadth: Study of Breadth of market indicators, the extent to which the price changes have taken place in the market in accordance with a certain overall limit. 9. What are the four fears that a trader fears most? Ans. The four fears are:Fear of being wrong.Fear of losing money.Fear of missing out.Fear of leaving money on the table.These fears account for most of our fears. An opportunity comes every now and then, but our either of the fears does not let us take full advantage of it, e g we enter the trade too soon – before the market generated a signal or too late – long after the market generated the signal or taken a larger loss because we moved the stop. 10. What is the worst that can happen to a trader? Ans. The worst that can happen is when a trader places too much importance on his present trade so much so as to make it a life and death issue (over exposure). Most traders place too much significance and meaning on each trade, making it difficult to cut losses or admit they are wrong.  11. What is the best Trading style you recommend for traders? Ans. Every trader has his own style of trading. Some traders take a buy and sell positions as per their subjective style, i.e. with a combination of a lot of factors like fundamental, tips , graphs, etc. But I suggest a mechanical trading for all traders who have been giving losses or are not making profits.   12. What is this Mechanical Style of Trading? Ans. Here you know what to do in any situation of your trading and you take the position without hesitation. Here you dont decide the entry and exit, but your You are mentally relaxed in this style of trading. Here the fear and greed are not there. Fear and Greed are the two biggest reasons of your giving losses. In the mechanical style, you define your system with the help of technical tools and go on taking the buy and sell signals accordingly. You have to take at least 10 signals within your system 13. Can I expect 100% return on my investment in on year? Ans. Yes you may get this return but only after exercising a lot of control over your your greed and fear. You will have you work on a proper system and trade on it and believe in yourself. To start with I would recommend you to play in just options only i.e. buy calls when the trend is up and buy puts when the trend is down. Also remember that to achieve a 100% return per year, chances are equally strong that you lose your entire capital if you make more than three mistakes say of not cutting your trades when they are going in a loss. Also remember that to get a good return the market need not go up only. Even a falling market gives good return only a sideways market is troublesome. See track record “Results of Daily Trading” & “Results of Intraday Trading“ 14. Is it not possible for you to give a list of five stocks which i can buy and keep and sell them later at a good price? Ans. We follow technicals and only go on holding a stock in delivery till the trend of cash stocks is up. But the moment trend of stock market when the trend is up we again buy the stock though it might come expensive next time but who knows if it had to fall further from where we sold.  15. Can I make a 100% safe return of 24% in stock market, at present? Ans. With stock market, the100% safety word can never be used. But when markets are in a bullish mood, one does get a return of 24% annually which is nearly 100% safe. You will have to buy in cash delivery say ACC and sell it in future. Every month you get a premium in future. But for this your brokerage cost has to be very low. There are a lot of NSE brokers who give very low brokerage for arbitrage opportunities. For delivery the y charge 0.10%-0.25% and for future selling buying they charge a brokerage of .01%-.03%. These status very with volumes. 16. Why do I get tension sometimes while trading? Tension occurs mainly when you are overtrading and have no rules and stop losses. Refer to Trading Rules  17. Can this site really help me to make money? Ans.  Yes, Certainly help you. But only if we both understand each others needs I will help you to understand my system & you help me to understand your requirements. Then we both can walk together towards positive results by controlling our fear & I greed.  18. Can you give me an entry & exit level? Ans.  Yes, we can give you entry & eject levels. To start with we will ask you to start trading in Nifty Futures as they are less volatile.  19. What is the support I can expect from you? Ans.  You can get two types of support from us 1st is for Intraday Trading which is for very short term players sitting in front of terminals. For intraday trading we give support on future stocks & not a cash stocks.2nd is daily trading where we give you the levels on various stocks which you can follow as per the trend of the share. And also we generally follow the trend of the market.  20. I do not know whether I am a Short term Trader or a Long term Trader? Ans.  Answer to such a question will require a lot of interaction between you & me. For that we will be provided with personal consultancy which will help to solve such confusions and many more which come in the mind of the trader when he trades in the volatile market.
1. I cannot do short selling as my psychological set up is only for buying and then selling. What do you suggest me to do? Ans. 70% of investors have never indulged in short selling as the thought of selling doesn’t appeal to their psychological set up. Rather most of investors are optimistic people who only think that stocks can go up. In fact the short sellers are very highly skilled traders. Some people think of short sellers as wealth destroyers whereas on the other hand  they give a lot of liquidity to the stock markets. The reality is that stock markets are cyclic in nature and they tend to go up and down. In fact it has been seen that generally the fall is more steeper than the rise. If you wish to short sell the stock, you need to borrow from someone to sell it in the stock market and later buy back the stock and return to the person from whom you borrowed. In the Indian Stock Market you can trade in futures of stock as well as in  index and can short sell them and later cover them before the expiry. An interesting fact about short seller is that, they are the buyers when market falls as they will buy their shorts which gives a cushion to the market. Different stocks exchanges in different countries have their own rules with regard to short selling and at times when there is too much of negative news, short selling is banned for sometime.   2. How could I achieve success in stock market? Ans. There are two steps to achieve success in the stock market. 1.) How not to lose :- When you learn what to do and what not to do in order to lose nothing means you have won the half battle. Only then you can learn how to gain or what to do in order to win. A new investor should do paper trading in order to get the market knowledge before actually entering into the market. 2.) How to gain :- How to gain requires deep understanding about the market trends and fluctuations . A new investor can safeguard himself by taking the route of mutual fund.   3.3. Is it sound to invest in a particular sector or one should go for the best possible combination of stocks of different sectors? Ans. It is better to invest in a basket of sectors if you are investing for a long term as it will spread your risk across the sectors with the result that any loss in one sector will be compensated with the profit in the other sector. “Never put all the eggs in the same basket”   4. What is the future of BPO (Business Process Outsourcing) industry in Indian market? How will the listing of shares of call centers in stock exchange effect other sectors? Ans. Future of BPO sector is very good in India, as India is a low cost service provider . It also has abundant manpower skills which are highly qualified and are available at one third (1/3) to one fifth (1/5) the cost in developed countries. BPO stocks are likely to do good. The direct call center stocks have still not been listed on the stock exchanges but companies like Wipro, Infosys, HCL etc. having BPO centers which are already listed on the stock exchange are already doing very well.   5. Insurance and stock market are two entirely opposite markets. How far it is justified for insurance companies to invest into stock market?ake profit on your advice? Ans. t sounds very strange that insurance companies who are not supposed to be taking risk directly in stock market invest in stock markets which is a very risky field. But insurance companies have to deploy their funds and give return to their investors or policy holders. The insurance companies invest very little percent (15% in the equity as per Insurance Regulatory and Development Authority norms) in the risky market.   6. What is put call ratio (PCR)? Ans. Put call ratio (PCR) can be judged for a particular stock or index or all the available option stocks. In the Indian stock market context investors generally talk more about the PCR of nifty which can be found by the total number of nifty puts divided by total numbers of nifty calls (Nifty Puts/ Nifty Calls). The data can be available from the Nse site. PCR ratio has not been able to give clear guidance of the trend of Indian stock market.   7. How much capital one should invest in stock trading? Ans. Capital to invest for a person depends upon the certain circumstances. 1.) Time and efforts one plans to put into :- One should see for oneself what kind of a trader one is. If you are a full time trader and this is your only profession then probably you will have to invest more than 80% of your capital. But if you are a part time investor then you should invest your disposal surplus money only. 2.) Experience in the market :- If you are transacting from years , you will continue along the same lines, by applying new techniques to your operations whereas if it is a new field for you or just a hobby, you should move slowly. 3.) Capacity to invest (or to bear the risk) :- Some people are at a young age so they can afford to be more risky whereas if you are on the verge of retirement then probably you will have to take less risk so less investment in the stock market.   8.  Should I go in for margin trading i.e. trade in risky instruments like futures as I have to pay very less margin? Ans. Margin trading means you have x amount of money and wish to have a 4x or 5x exposure in the market. Margin trading will make you more risky and with more risk there is a more opportunity for a faster gain. If you wish to take risk, you should be clear as to what risk you can take and how much you can afford. In a future stock buying or selling, the margin transaction will make you buy more stocks than you have money to pay for. My strong advice to you is to always maintain stop loss i.e. the maximum loss after which you need to close the position because if a trade goes against you then your entire margin can be wiped out. Try and not  play with more than 10% of your disposable money in margin trading.   9. I could do a little experiment but the trading game is not one for me as  I want to have a proper system for trading. What do you think about it? Ans. Yes, you are right. Trading in stock markets is not something of a game as the loss and profit is in real terms, chances of a new comer making a loss is more than 80%. Before actually trading with your hard cash, it is better that you develop some sort of a system which you have tested on the previous trading days, assuming the previous trading days you treated as if you are trading live. For example, if you wish to develop a system which says that whenever a 25 day moving average (DMA) crosses a 40 day moving average (DMA) from below, you are going to buy that stock and when a 25 DMA is going to cut the 40 DMA from top you are going to sell. Now you should test whether this crossover of 25 DMA and 40 DMA gave profitable trades in last six months or not. If  you find that in last six months this crossover gave you profits, then this is a small system developed for you and then you blindly follow the system and start making profits. While doing system trading, you need to be quite confident on your system as if you are not confident then you would not be able to take all trades as you might get panicky once the system generates negative trades giving losses. This system trading has its own advantages as you are able to take objective decisions and do not get confused as to whether you should buy or sell. You may refine and make your system better with practice.   10. What do you mean by positive and negative divergence? Ans. Positive and negative divergence basically refers to the technical charts in which the stock and the indicator in question move in different directions and it is the indicator which gives you the hint towards direction which the stock is likely to take. You cannot understand the positive and negative divergence without really seeing the chart in front of you.     11. How can I buy shares? Ans. There are two ways to buy shares. 1.) Primary market :- When a company makes a new issue of shares and offers directly to the public is known as primary market. It is also called an initial public offering (IPO). The investors either apply on the basis of the issue price or need to bid by the book building process. 2.) Secondary market :- Buying shares of a company which is already listed in the stock exchange is called secondary market. The shares in secondary market are bought through brokers.      12. What should be the kind of psychology or traits one should not have while trading in the stock market?2 Ans. A good trader should not be a pessimist and unsure of himself. One who lacks confidence is sure to meet his end very soon. One should not be interested in trying to listen to gossip, believe in rumors and should rather base his investment decisions on solid fundamental and technical information. There is no easy answer to tell whether one is doing right or wrong in the stock market. But if you are giving losses that should be sufficient to tell that you are going wrong. The entry and exit are the most important points for an investor to take care of because if the initial entry is made at higher prices, then the panic and risk associated with higher prices is there.    13. What is an IPO? Ans. When a company either listed or non listed (brand new) comes out with its new issue and invites public to buy directly from them rather buying from brokers is called initial public offering (IPO).   14. Why companies come out with an IPO? Ans. Companies need money for growth and expansion, purchasing new machinery, building infrastructure or even repay their debt. Therefore companies ask people to invest and issue IPO. People who invest get returns in the form of dividend declared by the company at the end of every financial year or are able to sell the stock in the stock market when the market price of the stock goes up and hence make profit out of it.     15. What is the benefit of picking up shares from IPO rather than buying from stock market? Ans. Often companies issue their shares at par or at economic rate to attract public and when the shares get listed in the stock exchange generally the prices go up. Short term traders immediately sell those shares and make profits. Long term investors wait for their eggs to hatch properly before selling.   16. What if I don’t want to sell my shares soon? Ans. IPO also offers investors the chance to grow with the growing company. Investors get dividend as a reward for investing at the end of every financial year. Sometimes companies also offer premium shares to the existing share holders as a bonus.     17. Buying from primary market is quiet complex process, application often gets rejected. So, why I should  go through a difficult process? Ans. Good company often gets over subscription (demand for shares more than number of shares offered). In this scenario the company either rejects some applications and return the entire amount within 21 days or allot shares on pro rata basis (partial allotment) and adjust the surplus money in the subsequent calls. Sometimes the companies have a green shoe option whereby they retain a certain extra percentage of money and issue slightly more shares than original.     18. What is the procedure of applying shares through IPO? Ans. IPO are generally heavily advertised in the media and newspaper because companies want to ensure the success of their issue. Through this advertisement Companies also get a good publicity for their product. One must go through the prospectus very carefully as every detail about the subscription is clearly mentioned in it. The information is also available on company’s site or SEBI web site. Fill up the application form carefully. Application form are available at any broker’s office or on some street kiosks in the financial area of a city. Fill it up and deposit along  with application money in the form of cheque or bank demand draft. If you get subscription pay the subsequent call money on time in order to get relief from penalty or forfeiture.