JBIS SECURITIES

Trading Academy
 1. INTRODUCTION
TO THE STOCK
MARKET.

All the fundamental basics of

stock market.

www.jbissecurities.com 2
What are stock or
Shares?

A stock (also known as equity) is a security that represents the

ownership of a fraction of a corporation. This entitles the owner of the
stock to a proportion of the corporation’s assets and profits equal to how
much stock they own.
Units of stock are called “shares”. Whenever a company plans to raise
capital, it can issue stocks or it can try to borrow some money. They are
the securities that represents a part of ownership in the corporation. Some
stocks pay monthly, quarterly or annual dividends are a portion of the
issuing company’s earnings.

www.jbissecurities.com 3
What is StockExchange?
A Stock Exchange is a govt. institution
which provide the facilities and infrastructures for the traders to buy and
sell the share of a company. Major stock exchanges in India are NSE and
BSE. Here, securities are purchased and sold out as per certain well-
defined rules and regulations. It provides a convenient and secured
mechanism or platform for transactions in different securities. Such
securities include shares and debentures issued by public companies
which are duly listed at the stock exchange, and bonds and debentures
issued by government, public corporations and municipal and port trust
bodies. Stock exchanges are indispensable for the smooth and orderly of
corporate sector in a free market economy.

www.jbissecurities.com 4
 A stockbroker is a middleman
Who is a StockBroker? who has the authority to buy and
sell stocks and securities in a stock
exchange on the investor’s behalf stocks are traded through
exchanges. Such a person or a company is known as a stockbroker.
Stockbrokers are generally associated with a stockbroking firm, but
they can also be an independent person.
For providing this service, a stockbroker charges a commission or a fee.
When understanding stockbroker meaning, one should note that a
stockbroker
is performing a service for the investor. The role of a broker is to buy and
sell shares for a client. Stockbrokers also play another vital role; they
provide information that helps an investor make correct investment
decisions.

www.jbissecurities.com 5
 What is StockMarket?

Stock market refers to the collection of market and exchanges where

regular activities of buying, selling and issuance of shares of publicly- held
companies take place. Such financial activities are conducted through
institutionalized formal exchanges or over-the-counter (OTC) market places
which operate under a defined set of regulations.
The stock market or equity market offers opportunity to investors to
increase their income without the high risk of entering into their own
businesses with high overheads and startup costs. On the other hand,
selling of stocks did help the companies themselves expand exponentially.

www.jbissecurities.com 6
What is IPO?

IPO means Initial Public Offering. It is a process by which a privately

held company becomes a publicly-traded company by offering its
shares to the public for the first time. A private company that has a
handful of shareholders shares the ownership by going public by
trading its shares. Through the IPO, the company gets its name listed
on the stock exchange. An IPO is generally initiated to infuse the new
equity capital to the firm, to facilitate easy trading of the existing
assets, to raise capital for the future or to monetize the investments
made by existing stockholders.

www.jbissecurities.com 7
Demat account?
A Demat account is also known as
Dematerialized account. Demat account
is used to hold the shares and securities of publicly traded companies
in an electronic form. With a Demat account, you can hold a wide
variety of investments such as bonds, equity shares, government
securities, mutual funds, and exchange traded funds. Similar to a bank
account, a Demat account is either credited or debited each time you
buy or sell shares of a company. It not only eliminates unnecessary
paperwork, but also helps streamline the process of share trading. All
of the Demat accounts in India are maintained by two organizations,
namely National Securities Depository Limited (NSDL) & Central
Depository Services Limited (CDSL).

www.jbissecurities.com 8
Players in the Stock
Market

Retail Traders Institutional Traders

Retail trader are just Institutional traders are big players
normal individuals like and it is not individuals but a group
us. of individuals an organizations.
They trade with limited They pool fund from the public and
capital. trade in the market with huge capital
They have professional traders etc.
Insurance companies, mutual fund,
banks, corporate companies.

www.jbissecurities.com 9
TYPES OF TRADING

TRADING STYLE TIME FRAME TIME PERIOD OF TRADE

SCALPING Short Term 1 Minute

DAY TRADING Short Term 5 & 15 Minute
SWING TRADING Short/Medium Term Hourly and Daily
POSITION TRADING Long Term Daily/Monthly

www.jbissecurities.com 10
SCALPING Scalping is a trading style that
specializes in profiting off small price
changes and making a fast profit off
reselling. In day trading, scalping is a term for a strategy to prioritize
making high volumes off small profits . Scalping requires a trader to have
a strict exit strategy because one large loss could eliminate the many
small gains the trader worked to obtain. Thus, having the right tools—
such as a live feed, a direct-access broker, and the stamina to place
many trades—is required for this strategy to be successful . A successful
stock scalper will have a much higher ratio of winning trades versus
losing ones, while keeping profits roughly equal or slightly bigger than
losses . A pure scalper will make a number of trades each day—perhaps
in the hundreds.

www.jbissecurities.com 11
Day Traders/Intraday
Traders

Day trading usually refers to the practice of purchasing and selling a

security within a single trading day. While it can occur in any
marketplace, it is most common in the foreign exchange (forex) and
stock markets. Day traders are typically well-educated and well-
funded. They use high amounts of leverage and short-term trading
strategies to capitalize on small price movements that occur in highly
liquid stocks or currencies.

www.jbissecurities.com 12
SwingTraders

Swing trading involves holding a position either long or short for

more than one trading session, but usually not longer than several
weeks or a couple of months. This is a general time frame, as some
trades may last longer than a couple of months, yet the trader may still
consider them swing trades.
Swing trading is one of the most popular forms of active trading,
where traders look for intermediate-term opportunities using various
forms of technical analysis. If you are interested in swing trading, you
should be intimately familiar with technical analysis.

www.jbissecurities.com 13
SHORT TERM INVESTORS

Short term traders are those who buy and sell stocks for a shorter
period of time less than1 year. They sell the stocks after some months if
it hits good price range and move to another stocks. It is used as an
alternative to the more traditional buy-and-hold strategy, in which you’d
hold a position for weeks, months or even years.
Short-term trading focuses mainly on price action, rather than the
long-term fundamentals of an asset. This trading style attempts to
profit from quick moves in market prices, and so seeks out market
volatility around key economic data releases, company earnings and
political events.

www.jbissecurities.com 14
LONG TERM INVESTORS

Long term investors are those who buy stock and hold it for many
years and gaining profits for a longer Period of time. Usually it
requires a huge amount of capital to make good capital gain from
Long Term Investing.
Long-term investors should invest in sustainable companies that
are likely to be around for the long term. Whether a company is
sustainable is based partially on standard measures like market
share and profitability , but it’s also an assessment of culture.

www.jbissecurities.com 15
DELIVERY OR INTRADAY

In delivery trade an investor is not required to buy and sell shares

within the same day. In such trading the investor can hold the
shares for a longer-term depending on his/her willingness. The
duration can change from two days to even to decades or more.
In intraday trading an investor buys and sells shares on the same
day during the market houses. In case an investor forgets to sell the
position or buy
( in case of a short sell),the trades are executed automatically during
the closing hours.

www.jbissecurities.com 16
 LEVERAGE
Leverage is like a loan, offered by a
broker or financial intermediary to a trader can use it to invest in a stock
that they would not be able to afford on their own.
So if trader were to use leverage would be increasing the trader buying
capacity, without spending additionally from the trader’s pocket.
Leverage is an advantage for the intraday traders. Different broker
provides different leverages. Getting leverage is always an advantage for
traders and at the same time it is also very risk for if not use with out
proper plan, you will ruin all your money with in seconds.
e.g. ; The advantage of this is that if you have 10000 Rs as your trading
capital and your broker gives you 10x leverage that means you can buy
or sell stocks with 100000.

www.jbissecurities.com 17
SHORTSELLING It is a method of trading where a Day
Trader can make money even if the
market crashes. Short selling is the
trading where an investor sells shares that he does not at the time of
selling . Its sells them in the hope that the price of those shares will
decline, and he will get profit by buying back those shares at a lower
price.
Normally we buy stocks at lower price and sell at higher price and the
difference between these is the profit.
But there is also another provision that if the market goes down then we
can sell the stocks first and then latter we can buy it at a lower price so
still we are in profit. But this option is available only in intraday. If you
never exit you position before the market close then automatically it will
square off at 3:15 pm at the CMP.
www.jbissecurities.com 18
 CHART

A chart in stock market is just an indication which shows the

prices of a certain stock of a company in each and every given
time frame. Which helps a trader to analyse how much the
price goes up and goes down in every time frame.
There are different types of chart available like graphs, line chart, bar
chart etc.… But we use CANDLE STICK Chart Pattern

www.jbissecurities.com 19
CANDLE STICK PATTERN

It is very easy to analyse and understand the opening price and closing
price of a stocks in the given time frame and also to know the highest
price and the Lowest price range the stock goes in that particular time
frame.

www.jbissecurities.com 20
CANDLE STICK PATTERN

Bullish Candle Bearish Candle

High High
Close Open

Open Close
Low Low

www.jbissecurities.com 21
 STOP LOSS

Stop loss defined as an advance order to sell an asset when it

reaches a particular price point. It is used to limit loss or gain in a trade.
By placing a stop loss order, the investor instructs the broker/agent to
sell a security when it reaches a pre set price limit.
This is an automatic order that an investor places with the
broker/agent by paying a certain amount of brokerage. It is a method
of controlling your losses or limiting your losses. The only thing that
you can control in the market is your loss and its not your profit.
Example :- It is an advance order to sell the stock that you bought, if it
reaches a particular price downfall, so you can limit your loss in a
lesser amount.

www.jbissecurities.com 22
Important Websites

NSE https://www1.nseindia.com
Nifty50 https://www.niftyindices.com
Trading View https://in.tradingview.com
Money Control https://www.moneycontrol.com
Opstra https://opstra.definedge.com/
Sensibull https://sensibull.com/

www.jbissecurities.com 23