Complete Share Market Course - Beginner to Expert

Module 1: Share Market Basics (Week 1)

1.1 Share Market क्या है?

• Stock Market की परिभाषा

• Share और Stock में अंतर

• Market का इतिहास

• भारतीय Stock Exchanges (BSE, NSE)

1.2 Market Participants

• Investors vs Traders

• Brokers और Sub-brokers

• Market Makers

• Regulators (SEBI की भूमिका)

1.3 Basic Terminologies

• Share, Stock, Equity

• Bull Market vs Bear Market

• IPO, FPO, Rights Issue

• Dividend, Bonus, Stock Split

• Market Cap, P/E Ratio

• 52-week High/Low

Module 2: Trading Basics (Week 2)

2.1 Trading Account Setup

• Demat Account क्या है?

• Trading Account vs Demat Account

• Account खोलने की process

• KYC Requirements

• Popular Brokers comparison

2.2 Order Types

• Market Order vs Limit Order

• Stop Loss Order

• Good Till Cancelled (GTC)

• Immediate or Cancel (IOC)

• Fill or Kill (FOK)

2.3 Trading Platforms

• Web-based Trading

• Mobile Apps

• Desktop Applications

• Trading Terminal features

Module 3: Fundamental Analysis (Week 3)

3.1 Company Analysis

• Annual Reports कैसे पढ़ें

• Balance Sheet analysis

• Profit & Loss Statement

• Cash Flow Statement

• Key Financial Ratios

3.2 Financial Ratios

• Profitability Ratios (ROE, ROA, Net Margin)

• Liquidity Ratios (Current Ratio, Quick Ratio)

• Leverage Ratios (Debt-to-Equity)

• Efficiency Ratios (Asset Turnover)

• Valuation Ratios (P/E, P/B, EV/EBITDA)

3.3 Industry Analysis

• Sector-wise analysis

• Industry lifecycle

• Competitive analysis

• SWOT Analysis

Module 4: Technical Analysis (Week 4-5)

4.1 Technical Analysis की Foundation

• Technical Analysis क्या है?

• Fundamental vs Technical Analysis

• Technical Analysis के 3 Basic Assumptions

• Price Action की importance

• Volume का significance

4.2 Chart Types और Time Frames

Chart Types:

• Line Charts - Basic price movement

• Bar Charts - OHLC data

• Candlestick Charts - Japanese candlesticks

• Point & Figure Charts

• Renko Charts

Time Frames:

• Intraday Charts (1min, 5min, 15min, 1hr)

• Daily Charts

• Weekly Charts

• Monthly Charts

• Time frame selection strategy

4.3 Candlestick Patterns (Complete Guide)

Single Candlestick Patterns:

• Doji - Market indecision

• Hammer - Bullish reversal

• Shooting Star - Bearish reversal

• Spinning Top - Indecision

• Marubozu - Strong momentum

• Hanging Man - Bearish signal

Double Candlestick Patterns:

• Bullish/Bearish Engulfing

• Piercing Pattern

• Dark Cloud Cover

• Harami Pattern

• Tweezer Top/Bottom

Triple Candlestick Patterns:

• Morning Star - Bullish reversal

• Evening Star - Bearish reversal

• Three White Soldiers

• Three Black Crows

• Abandoned Baby

4.4 Support और Resistance (Advanced)

• Support/Resistance की concept

• Psychological levels

• Round numbers का importance

• Multiple touches का significance

• Support से Resistance में conversion

• Resistance से Support में conversion

• Dynamic Support/Resistance

4.5 Trend Analysis

Trend की पहचान:

• Uptrend - Higher Highs, Higher Lows

• Downtrend - Lower Highs, Lower Lows

• Sideways Trend - Range bound market

Trend Lines:

• Trend line कैसे draw करें

• Trend line की validity

• Trend line break का significance

• Channel Lines

• Trend reversal signals

4.6 Technical Indicators (Comprehensive)

Trend Following Indicators:

• Simple Moving Average (SMA)

• Exponential Moving Average (EMA)

• Weighted Moving Average (WMA)

• Moving Average Crossovers

• MACD (Moving Average Convergence Divergence)

• ADX (Average Directional Index)

• Parabolic SAR

Momentum Oscillators:

• RSI (Relative Strength Index)

• Stochastic Oscillator

• Williams %R

• CCI (Commodity Channel Index)

• Rate of Change (ROC)

Volume Indicators:

• Volume

• On-Balance Volume (OBV)

• Volume Price Trend (VPT)

• Accumulation/Distribution Line

• Chaikin Money Flow

Volatility Indicators:

• Bollinger Bands

• Average True Range (ATR)

• Volatility Index

4.7 Chart Patterns (Complete Guide)

Reversal Patterns:

• Head and Shoulders (Bullish/Bearish)

• Double Top/Bottom

• Triple Top/Bottom

• Rounding Top/Bottom

• V-Top/V-Bottom

Continuation Patterns:

• Triangles (Ascending, Descending, Symmetrical)

• Flags और Pennants

• Rectangle

• Wedges (Rising/Falling)

• Cup and Handle

Other Important Patterns:

• Gap Analysis (Common, Breakaway, Runaway, Exhaustion)

• Diamond Pattern

• Island Reversal

4.8 Fibonacci Analysis

• Fibonacci Retracement levels

• Key levels: 23.6%, 38.2%, 50%, 61.8%, 78.6%

• Fibonacci Extension

• Fibonacci Fan

• Fibonacci Time Zones

• Trading strategies using Fibonacci

4.9 Elliott Wave Theory

• Elliott Wave की basics

• 5-wave impulse pattern

• 3-wave corrective pattern

• Wave degrees

• Fibonacci ratios in Elliott Waves

• Practical application

4.10 Multiple Time Frame Analysis

• Top-down approach

• Higher time frame trend

• Lower time frame entry

• Confluence factors

• Time frame synchronization

Module 5: Risk Management (Week 5)

5.1 Risk Assessment

• Risk के प्रकार

• Risk Tolerance assessment

• Portfolio Risk

• Market Risk vs Specific Risk

5.2 Risk Management Strategies

• Position Sizing

• Stop Loss strategies

• Portfolio Diversification

• Hedging techniques

• Asset Allocation

5.3 Money Management

• 1% Rule

• Risk-Reward Ratio

• Kelly Criterion

• Position sizing formulas

Module 6: Trading Strategies (Week 6-7)

6.1 Intraday Trading Strategies

Scalping:

• 1-5 minute charts

• Quick profits

• High frequency trading

• Tools और indicators

Day Trading:

• Opening range breakout

• Gap trading strategy

• Momentum trading

• News-based trading

Swing Trading:

• Multi-day positions

• Technical pattern based

• Trend following

• Mean reversion strategies

6.2 Positional Trading

• Long-term positions (weeks to months)

• Fundamental + Technical combination

• Sector rotation strategy

• Value investing approach

6.3 Options Trading Strategies

Basic Strategies:

• Call और Put buying

• Covered Call

• Protective Put

• Cash Secured Put

Intermediate Strategies:

• Straddle और Strangle

• Iron Condor

• Butterfly Spread

• Calendar Spread

Advanced Strategies:

• Iron Butterfly

• Ratio Spreads

• Synthetic positions

• Arbitrage opportunities

6.4 Futures Trading

• Futures contract basics

• Margin requirements

• Rollover strategies

• Hedging with futures

• Arbitrage opportunities

Module 7: Advanced Topics (Week 8-9)

7.1 Derivatives (Detailed)

Options:

• Option Greeks (Delta, Gamma, Theta, Vega, Rho)

• Implied Volatility

• Time decay

• Option pricing models

Futures:

• Contango और Backwardation

• Basis trading

• Spread trading

• Currency futures

7.2 Commodity Trading

• Commodity markets overview

• MCX trading

• Gold, Silver, Crude oil analysis

• Agricultural commodities

• Seasonal patterns

7.3 Currency Trading (Forex)

• Currency pairs

• Major, Minor, Exotic pairs

• Fundamental factors

• Technical analysis in forex

• Carry trade strategy

7.4 Algorithmic Trading

• Algorithm basics

• Backtesting

• Popular strategies

• Risk management in algo trading

• Regulatory requirements

Module 8: Portfolio Management (Week 10)

8.1 Portfolio Construction

• Asset allocation strategies

• Diversification principles

• Modern Portfolio Theory

• Risk parity approach

• Factor investing

8.2 Portfolio Optimization

• Sharpe Ratio

• Sortino Ratio

• Maximum Drawdown

• Beta और Alpha

• Portfolio rebalancing

8.3 Mutual Funds और ETFs

• Types of mutual funds

• SIP vs Lump sum

• ETF advantages

• Index funds

• Tax implications

Module 9: Tax Planning (Week 11)

9.1 Capital Gains Tax

• Short-term vs Long-term gains

• Tax rates

• STCG और LTCG calculation

• Securities Transaction Tax (STT)

9.2 Tax Saving Strategies

• Tax loss harvesting

• ELSS funds

• Section 80C benefits

• Tax-efficient investing

Module 10: Psychology & Discipline (Week 12)

10.1 Trading Psychology

• Fear और Greed

• Overconfidence bias

• Loss aversion

• Confirmation bias

• Mental accounting

10.2 Discipline और Control

• Trading plan बनाना

• Discipline maintain करना

• Emotional control

• Stress management

• Record keeping

10.3 Common Mistakes

• Revenge trading

• Overtrading

• Not using stop loss

• Averaging losing positions

• FOMO (Fear of Missing Out)

Practical Assignments & Exercises

Assignment 1: Market Research

• 5 companies का fundamental analysis

• Financial ratios calculation

• Investment recommendation

Assignment 2: Technical Analysis

• Chart pattern identification

• Indicator-based analysis

• Entry और exit points

Assignment 3: Portfolio Creation

• Virtual portfolio बनाना

• Risk management implementation

• Performance tracking

Assignment 4: Trading Plan

• Complete trading strategy

• Risk management rules

• Monthly performance review

Resources और Tools

Essential Websites

• NSE India, BSE India

• Moneycontrol, Economic Times

• Screener.in, Tijori Finance

• TradingView, ChartInk

Mobile Apps

• Zerodha Kite, Upstox Pro

• Groww, Angel Broking

• ET Markets, Moneycontrol

Books Recommendation

• "The Intelligent Investor" - Benjamin Graham

• "Technical Analysis of Financial Markets" - John Murphy

• "Market Wizards" - Jack Schwager

• "One Up On Wall Street" - Peter Lynch

Journals और Newspapers

• Economic Times

• Business Standard

• Financial Express

• Dalal Street Investment Journal

Module 1: Share Market Basics (Week 1)

Welcome to the first module of the Share Market Mastery: From Beginner to Expert course! This module introduces you to the fundamentals of the share market, its participants, and essential terminologies. By the end of Week 1, you’ll have a clear understanding of how the stock market works and the key concepts needed to start your investment journey.

Duration: 1 Week (Self-paced)
Objective: Build a strong foundation in share market basics, understand key players, and learn essential terms.
Target Audience: Beginners with no prior knowledge of the share market.

1.1 Share Market क्या है? (What is the Share Market?)

The share market, also known as the stock market, is a platform where buyers and sellers trade shares of publicly listed companies. It’s a marketplace for raising capital and investing in businesses.

Key Points:

• Stock Market की परिभाषा (Definition of Stock Market)
  The stock market is an organized system where shares (ownership units of a company) are bought and sold. It allows companies to raise funds and investors to earn returns through price appreciation or dividends.
  Example: If you buy shares of Reliance Industries, you own a small part of the company.
  
  

• Share और Stock में अंतर (Difference Between Share and Stock)
  
  

  • Share: A single unit of ownership in a company. Example: You buy 10 shares of Tata Motors.

  • Stock: The collective ownership of all shares in a company. Example: Tata Motors’ stock represents all its shares.

  • In practice, the terms are often used interchangeably.

• Market का इतिहास (History of the Stock Market)
  
  

  • The concept of stock markets began in the 17th century with the Dutch East India Company issuing shares.

  • In India, the Bombay Stock Exchange (BSE), established in 1875, is Asia’s oldest stock exchange.

  • The National Stock Exchange (NSE), founded in 1992, introduced modern electronic trading.

• भारतीय Stock Exchanges (BSE, NSE)
  
  

  • BSE (Bombay Stock Exchange): India’s oldest exchange, with the Sensex as its benchmark index (tracks top 30 companies).

  • NSE (National Stock Exchange): India’s largest exchange, with the Nifty 50 as its benchmark index (tracks top 50 companies).

  • Both facilitate trading, ensure transparency, and are regulated by SEBI (Securities and Exchange Board of India).

Learning Activity: Research the current Sensex and Nifty 50 values. Compare their performance over the last month.

1.2 Market Participants (बाजार के प्रतिभागी)

The share market involves various participants who ensure its smooth functioning. Understanding their roles is crucial for beginners.

Key Participants:

• Investors vs Traders
  
  

  • Investors: Buy shares for long-term wealth creation, focusing on company growth and dividends. Example: Investing in HDFC Bank for 5-10 years.

  • Traders: Buy and sell shares for short-term profits based on price movements. Example: Intraday trading in Infosys.

  • Difference: Investors focus on fundamentals; traders focus on price action.

• Brokers और Sub-brokers
  
  

  • Brokers: Licensed intermediaries who execute trades on behalf of clients (e.g., Zerodha, Upstox). They provide trading platforms and charge brokerage fees.

  • Sub-brokers: Agents of brokers who assist clients but don’t directly execute trades.

  • Example: You open a Demat account with Zerodha to trade shares.

• Market Makers
  
  

  • Entities (often large institutions) that provide liquidity by continuously quoting buy and sell prices.

  • They ensure you can buy or sell shares even in low-volume stocks.

  • Example: Large brokers or institutions in high-frequency trading.

• Regulators (SEBI की भूमिका)
  
  

  • SEBI (Securities and Exchange Board of India): The regulatory body that oversees the Indian stock market.

  • Roles: Protects investors, ensures fair practices, regulates companies and brokers, prevents fraud like insider trading.

  • Example: SEBI mandates companies to disclose financial results quarterly.

Learning Activity: Visit the SEBI website (www.sebi.gov.in) and explore its investor education section.

1.3 Basic Terminologies (मूल शब्दावली)

Understanding key terms is essential for navigating the share market. Below are the most important ones for beginners.

Key Terms:

• Share, Stock, Equity
  
  

  • Share: A single unit of ownership in a company.

  • Stock: The total collection of a company’s shares.

  • Equity: Another term for shares, representing ownership in a company.

  • Example: Owning 100 equity shares of Maruti Suzuki means you own a small part of the company.

• Bull Market vs Bear Market
  
  

  • Bull Market: A period when stock prices are rising, and investor confidence is high. Example: Post-COVID market rally in 2021.

  • Bear Market: A period when stock prices are falling, and pessimism prevails. Example: Market crash in March 2020.

  • Tip: Bull markets favor buying; bear markets may offer buying opportunities at lower prices.

• IPO, FPO, Rights Issue
  
  

  • IPO (Initial Public Offering): When a company offers its shares to the public for the first time to raise capital. Example: Zomato’s IPO in 2021.

  • FPO (Follow-on Public Offering): When a listed company issues additional shares to raise more funds.

  • Rights Issue: When a company offers additional shares to existing shareholders at a discounted price.

  • Example: Reliance Industries’ rights issue in 2020.

• Dividend, Bonus, Stock Split
  
  

  • Dividend: A portion of a company’s profits paid to shareholders, usually quarterly or annually. Example: TCS pays regular dividends.

  • Bonus: Free additional shares given to shareholders. Example: 1:1 bonus means 1 extra share for every share held.

  • Stock Split: Dividing existing shares to reduce the price per share, making it affordable. Example: A 2:1 split halves the share price and doubles the number of shares.

• Market Cap, P/E Ratio
  
  

  • Market Capitalization: Total value of a company’s shares (Share Price × Total Shares).

    • Types: Large-cap (>₹20,000 Cr), Mid-cap (₹5,000-20,000 Cr), Small-cap (<₹5,000 Cr).

    • Example: Reliance Industries is a large-cap company.

  • P/E Ratio (Price-to-Earnings): Share price divided by earnings per share (EPS). Indicates if a stock is overvalued or undervalued.

    • Example: A P/E of 20 means investors pay ₹20 for every ₹1 of earnings.

• 52-week High/Low
  
  

  • The highest and lowest price of a stock in the past 52 weeks.

  • Helps gauge a stock’s price range and volatility.

  • Example: If Infosys’ 52-week high is ₹1,900 and low is ₹1,200, it shows its price range over the year.

Learning Activity: Look up the IPO details of a recent company (e.g., Paytm or Nykaa) and note its issue price and current price. Calculate its market cap using an online tool like Screener.in.

Key Takeaways

• The share market is a platform for trading company ownership (shares).

• BSE and NSE are India’s primary stock exchanges, regulated by SEBI.

• Investors aim for long-term growth, while traders focus on short-term profits.

• Understanding terms like IPO, dividend, and P/E ratio is crucial for making informed decisions.

Weekly Quiz

1. What is the difference between a share and a stock?

2. Name two roles of SEBI in the share market.

3. Explain the difference between a bull and bear market.

4. What happens to your shares in a 2:1 stock split?

5. Calculate the market cap of a company with 10 crore shares priced at ₹500 each.

Additional Resources

• Recommended Reading: “Zerodha Varsity - Module 1” (Free online resource).

• Tools: Check Sensex/Nifty updates on Moneycontrol or NSE India website.

• Community: Join our website’s forum to discuss Module 1 concepts with other learners.

Module 2: Trading Basics (Week 2)

Welcome to Module 2 of the Share Market Mastery: From Beginner to Expert course! This module focuses on the practical aspects of starting your trading journey. You’ll learn how to set up trading and Demat accounts, understand different order types, and explore trading platforms. By the end of Week 2, you’ll be ready to place your first trade confidently.

Duration: 1 Week (Self-paced)
Objective: Learn to set up trading accounts, understand order types, and navigate trading platforms effectively.
Target Audience: Beginners ready to take their first steps in trading.

2.1 Trading Account Setup (ट्रेडिंग अकाउंट सेटअप)

To trade in the share market, you need a Demat and trading account. This section explains what they are, how to set them up, and how to choose the right broker.

Key Points:

• Demat Account क्या है? (What is a Demat Account?)
  
  

  • A Demat (Dematerialized) account holds your shares and securities in electronic form, replacing physical share certificates.

  • It’s like a bank account for your shares, allowing you to buy, sell, and store them securely.

  • Example: If you buy 50 shares of Infosys, they are credited to your Demat account.

• Trading Account vs Demat Account
  
  

  • Demat Account: Stores shares and securities (like a safe).

  • Trading Account: Used to place buy/sell orders in the market (like a trading desk).

  • Difference: You need both to trade—Demat holds your shares, while the trading account facilitates transactions.

  • Example: You use a trading account to buy Reliance shares, which are then stored in your Demat account.

• Account खोलने की प्रक्रिया (Process of Opening an Account)
  
  

  • Step 1: Choose a broker (e.g., Zerodha, Upstox, Angel One).

  • Step 2: Visit the broker’s website or app and select “Open Account.”

  • Step 3: Fill in personal details (name, phone, email).

  • Step 4: Complete KYC (Know Your Customer) requirements.

  • Step 5: Link your bank account for fund transfers.

  • Step 6: Sign the agreement and get your account activated (usually within 1-3 days).

  • Most brokers offer paperless account opening with e-KYC.

• KYC Requirements
  
  

  • Documents needed:

    • PAN card (mandatory for tax purposes).

    • Aadhaar card (for e-KYC and address proof).

    • Bank proof (canceled cheque or bank statement).

    • Passport-size photograph (for some brokers).

  • KYC ensures compliance with SEBI regulations and prevents fraud.

  • Example: Aadhaar-based e-KYC allows instant verification via OTP.

• Popular Brokers Comparison
  
  

  • Zerodha: Low brokerage (₹20/order for intraday), user-friendly Kite platform, great for beginners.

  • Upstox: Zero brokerage for delivery trades, fast platform, good for mobile trading.

  • Angel One: Full-service broker, offers advisory services, higher fees.

  • Groww: Simple interface, ideal for beginners, zero brokerage for delivery.

  • Comparison Factors: Brokerage fees, platform usability, research tools, customer support.

  • Tip: Choose a discount broker like Zerodha or Upstox for lower costs if you’re a beginner.

Learning Activity: Research three brokers (e.g., Zerodha, Upstox, Groww) and compare their brokerage fees and features. Choose one to open a demo or real account.

2.2 Order Types (ऑर्डर के प्रकार)

Understanding different order types is crucial for executing trades effectively. This section explains the most common order types used in the share market.

Key Points:

• Market Order vs Limit Order
  
  

  • Market Order: Buy or sell a stock at the current market price.

    • Pros: Executes immediately.

    • Cons: Price may vary slightly due to market fluctuations.

    • Example: You place a market order to buy 10 shares of TCS at ₹3,500; it executes at the best available price.

  • Limit Order: Buy or sell a stock at a specific price or better.

    • Pros: Gives price control.

    • Cons: May not execute if the price isn’t met.

    • Example: You set a limit order to buy TCS at ₹3,450; it only executes if the price drops to ₹3,450 or lower.

• Stop Loss Order
  
  

  • An order to sell a stock automatically if it reaches a specified price to limit losses.

  • Types:

    • Stop Loss Market: Sells at the market price once triggered.

    • Stop Loss Limit: Sells at a specific price once triggered.

  • Example: You own Reliance shares at ₹2,500 and set a stop-loss at ₹2,400 to limit losses if the price falls.

• Good Till Cancelled (GTC)
  
  

  • An order that remains active until it’s executed or manually canceled.

  • Useful for limit orders you want to keep open for days/weeks.

  • Example: You place a GTC limit order to buy HDFC Bank at ₹1,400, and it stays active until the price is met or you cancel it.

• Immediate or Cancel (IOC)
  
  

  • An order that must be executed immediately; any unexecuted portion is canceled.

  • Useful for traders needing quick execution.

  • Example: You place an IOC order to buy 100 shares of SBI; if only 60 are available, the remaining 40 are canceled.

• Fill or Kill (FOK)
  
  

  • An order that must be executed in full immediately or canceled entirely.

  • Used in large trades to avoid partial fills.

  • Example: You place an FOK order for 1,000 shares of ITC; if 1,000 shares aren’t available, the order is canceled.

Learning Activity: Practice placing a market order and a limit order using a broker’s demo account. Note the differences in execution.

2.3 Trading Platforms (ट्रेडिंग प्लेटफॉर्म)

Trading platforms are tools provided by brokers to execute trades, analyze markets, and manage portfolios. This section covers the types of platforms and their features.

Key Points:

• Web-based Trading
  
  

  • Platforms accessible via browsers (e.g., Zerodha Kite, Upstox Pro Web).

  • Pros: No installation needed, works on any device with internet.

  • Cons: May be slower than desktop apps, depends on internet quality.

  • Example: Zerodha Kite Web offers charts, watchlists, and order placement in a browser.

• Mobile Apps
  
  

  • Trading apps for smartphones (e.g., Zerodha Kite App, Groww App).

  • Pros: Trade on the go, real-time notifications, user-friendly for beginners.

  • Cons: Limited screen size for advanced charting.

  • Example: Upstox Pro App allows quick order placement and portfolio tracking.

• Desktop Applications
  
  

  • Software installed on your computer (e.g., Zerodha Pi, Angel One Trade).

  • Pros: Faster execution, advanced charting, customizable interface.

  • Cons: Requires installation, not portable.

  • Example: Zerodha Pi is ideal for traders needing advanced technical analysis tools.

• Trading Terminal Features
  
  

  • Charts: Candlestick, line, or bar charts for technical analysis.

  • Watchlists: Track your favorite stocks in real-time.

  • Order Book: View pending, executed, or canceled orders.

  • Portfolio Tracker: Monitor your holdings, profits, and losses.

  • Market Depth: See buy/sell orders at different price levels.

  • Alerts: Set price or news alerts for stocks.

  • Example: Zerodha Kite’s charting tool lets you apply indicators like Moving Averages or RSI.

Learning Activity: Download a trading app (e.g., Zerodha Kite or Groww) and explore its features like watchlists, charts, and order placement. Create a watchlist of 5 stocks.

Key Takeaways

• A Demat account stores shares, while a trading account is used to buy/sell them.

• KYC compliance (PAN, Aadhaar) is mandatory for account opening.

• Order types like market, limit, and stop-loss help control trades and manage risks.

• Trading platforms (web, mobile, desktop) offer tools for analysis and execution.

Weekly Quiz

1. What is the difference between a Demat and a trading account?

2. List two documents required for KYC.

3. Explain the difference between a market order and a limit order.

4. What happens to an IOC order if it’s not fully executed immediately?

5. Name three features of a trading platform.

Additional Resources

• Recommended Reading: “Zerodha Varsity - Module 2” (Free online resource).

• Tools: Explore trading platforms like Zerodha Kite or Upstox Pro in demo mode.

• Community: Join our website’s forum to share your experience with account setup and platform usage.

Module 3: Fundamental Analysis (Week 3)

Welcome to Module 3 of the Share Market Mastery: From Beginner to Expert course! This module introduces fundamental analysis, a method to evaluate a company’s financial health and growth potential for long-term investing. You’ll learn to analyze financial statements, understand key ratios, and assess industries. By the end of Week 3, you’ll be able to identify fundamentally strong companies for investment.

Duration: 1 Week (Self-paced)
Objective: Master fundamental analysis to evaluate companies and industries for informed investment decisions.
Target Audience: Beginners to intermediate learners looking to invest based on company fundamentals.

3.1 Company Analysis (कंपनी विश्लेषण)

Fundamental analysis starts with understanding a company’s financial health by analyzing its reports and statements. This section covers how to read key documents and interpret financial metrics.

Key Points:

• Annual Reports कैसे पढ़ें (How to Read Annual Reports)
  
  

  • An annual report is a comprehensive document published yearly by companies, detailing their financial performance, strategy, and operations.

  • Key Sections:

    • Management Discussion and Analysis (MD&A): Explains the company’s performance and future plans.

    • Financial Statements: Includes balance sheet, profit & loss (P&L), and cash flow statements.

    • Notes to Accounts: Provides details on accounting policies and assumptions.

    • Auditor’s Report: Confirms the accuracy of financial data.

  • Where to Find: Available on company websites, BSE/NSE websites, or platforms like Screener.in.

  • Example: Read Reliance Industries’ annual report to understand its business segments (e.g., telecom, retail, energy).

• Balance Sheet Analysis (बैलेंस शीट विश्लेषण)
  
  

  • A balance sheet shows a company’s assets, liabilities, and equity at a specific point in time.

  • Components:

    • Assets: What the company owns (e.g., cash, property, inventory).

    • Liabilities: What the company owes (e.g., loans, payables).

    • Equity: Shareholders’ ownership (Assets - Liabilities).

  • Analysis Tips:

    • Check if assets are growing steadily.

    • Look for low or manageable debt levels.

    • Ensure equity is positive and growing.

  • Example: If TCS has ₹50,000 Cr in assets and ₹10,000 Cr in liabilities, its equity is ₹40,000 Cr, indicating financial strength.

• Profit & Loss Statement (लाभ-हानि विवरण)
  
  

  • The P&L statement shows a company’s revenues, expenses, and profits over a period (quarterly or yearly).

  • Components:

    • Revenue: Income from sales or services (e.g., Maruti’s car sales).

    • Expenses: Costs like raw materials, salaries, and marketing.

    • Net Profit: Revenue minus expenses (bottom line).

  • Analysis Tips:

    • Look for consistent revenue growth.

    • Check if expenses are under control.

    • Higher net profit margins indicate efficiency.

  • Example: If Infosys reports ₹1,00,000 Cr revenue and ₹20,000 Cr net profit, its profit margin is 20%.

• Cash Flow Statement (नकदी प्रवाह विवरण)
  
  

  • Tracks the flow of cash in and out of a company, divided into three activities:

    • Operating Activities: Cash from core business (e.g., HDFC Bank’s loan interest).

    • Investing Activities: Cash used for investments (e.g., buying machinery).

    • Financing Activities: Cash from loans, dividends, or share issuance.

  • Analysis Tips:

    • Positive operating cash flow indicates a healthy business.

    • Negative investing cash flow may signal growth (e.g., buying assets).

    • Watch for excessive borrowing in financing activities.

  • Example: A company like Tata Motors with strong operating cash flow can fund its growth without heavy debt.

• Key Financial Ratios (मुख्य वित्तीय अनुपात)
  
  

  • Ratios summarize a company’s performance (covered in detail in 3.2).

  • Examples: Return on Equity (ROE), Debt-to-Equity, P/E Ratio.

  • Use ratios to compare companies within the same industry.

  • Example: Compare ROE of HDFC Bank and ICICI Bank to assess profitability.

Learning Activity: Download the latest annual report of a company like Bajaj Finance from its website or Screener.in. Identify the MD&A section, revenue, and net profit from its P&L statement.

3.2 Financial Ratios (वित्तीय अनुपात)

Financial ratios help quantify a company’s performance, efficiency, and valuation. This section explains key ratios used in fundamental analysis.

Key Points:

• Profitability Ratios (लाभप्रदता अनुपात)
  
  

  • Measure a company’s ability to generate profits.

  • Return on Equity (ROE): Net Income ÷ Shareholders’ Equity. Shows how well a company uses shareholders’ money.

    • Example: ROE of 15% means ₹15 profit for every ₹100 of equity.

  • Return on Assets (ROA): Net Income ÷ Total Assets. Measures asset efficiency.

    • Example: ROA of 10% means ₹10 profit per ₹100 of assets.

  • Net Margin: Net Profit ÷ Revenue. Indicates profit after all expenses.

    • Example: A 20% net margin means ₹20 profit per ₹100 revenue.

• Liquidity Ratios (तरलता अनुपात)
  
  

  • Assess a company’s ability to meet short-term obligations.

  • Current Ratio: Current Assets ÷ Current Liabilities. Should be >1 for financial health.

    • Example: A current ratio of 2 means ₹2 in assets for every ₹1 in liabilities.

  • Quick Ratio: (Current Assets - Inventory) ÷ Current Liabilities. Excludes inventory for a stricter measure.

    • Example: A quick ratio of 1.5 indicates strong liquidity without relying on inventory sales.

• Leverage Ratios (उत्तोलन अनुपात)
  
  

  • Measure a company’s debt levels.

  • Debt-to-Equity Ratio: Total Debt ÷ Shareholders’ Equity. Lower ratios indicate less reliance on debt.

    • Example: A ratio of 0.5 means ₹50 debt per ₹100 equity, suggesting low leverage.

  • Analysis Tip: Compare with industry averages (e.g., banks may have higher debt than IT firms).

• Efficiency Ratios (दक्षता अनुपात)
  
  

  • Evaluate how well a company uses its resources.

  • Asset Turnover Ratio: Revenue ÷ Total Assets. Shows revenue generated per unit of assets.

    • Example: A ratio of 1 means ₹1 revenue per ₹1 of assets.

  • Analysis Tip: Higher ratios indicate better efficiency (e.g., FMCG companies like HUL).

• Valuation Ratios (मूल्यांकन अनुपात)
  
  

  • Help determine if a stock is overvalued or undervalued.

  • Price-to-Earnings (P/E): Share Price ÷ Earnings Per Share (EPS). Indicates how much investors pay for ₹1 of earnings.

    • Example: A P/E of 25 means ₹25 per ₹1 of earnings.

  • Price-to-Book (P/B): Share Price ÷ Book Value Per Share. Compares market value to book value.

    • Example: A P/B of 2 means the market values the company at twice its book value.

  • EV/EBITDA: Enterprise Value ÷ Earnings Before Interest, Taxes, Depreciation, and Amortization. Measures overall valuation.

    • Example: Lower EV/EBITDA suggests a stock may be undervalued.

Learning Activity: Use Screener.in to find the ROE, P/E, and Debt-to-Equity ratios of two companies (e.g., Reliance Industries and TCS). Compare their profitability and valuation.

3.3 Industry Analysis (उद्योग विश्लेषण)

Understanding the industry a company operates in is crucial for assessing its growth potential. This section covers how to analyze industries and their competitive landscape.

Key Points:

• Sector-wise Analysis (सेक्टर-वार विश्लेषण)
  
  

  • Divide the market into sectors like IT, Banking, FMCG, Auto, Pharma, etc.

  • Analyze sector trends:

    • Growth Drivers: E.g., digitalization boosts IT (TCS, Infosys).

    • Challenges: E.g., regulatory changes impact banking (HDFC Bank).

  • Use sources like Economic Times or Moneycontrol for sector updates.

  • Example: The EV sector is growing due to government policies, benefiting companies like Tata Motors.

• Industry Lifecycle (उद्योग जीवन चक्र)
  
  

  • Industries go through stages:

    • Introduction: New industry, high risk (e.g., green energy).

    • Growth: Rapid expansion, high returns (e.g., fintech like Paytm).

    • Maturity: Stable growth, steady profits (e.g., FMCG like HUL).

    • Decline: Shrinking demand (e.g., traditional print media).

  • Investment Tip: Growth-stage industries offer higher returns but higher risks.

  • Example: The telecom industry (Reliance Jio) is in the maturity stage in India.

• Competitive Analysis (प्रतिस्पर्धी विश्लेषण)
  
  

  • Identify key players in the industry and their market share.

  • Analyze competitive advantages (e.g., brand, technology, cost leadership).

  • Example: In FMCG, HUL’s strong distribution network gives it an edge over competitors like Dabur.

  • Tools: Porter’s Five Forces (bargaining power of buyers/suppliers, threat of new entrants/substitutes, rivalry).

• SWOT Analysis (SWOT विश्लेषण)
  
  

  • Strengths: Internal advantages (e.g., Infosys’ strong cash reserves).

  • Weaknesses: Internal limitations (e.g., high debt in some real estate firms).

  • Opportunities: External growth potential (e.g., renewable energy for Tata Power).

  • Threats: External risks (e.g., regulatory changes for pharma companies).

  • Example: SWOT for Maruti Suzuki:

    • Strengths: Market leader, wide dealership network.

    • Weaknesses: Dependence on small-car segment.

    • Opportunities: Growth in EV market.

    • Threats: Competition from Hyundai, Tata Motors.

Learning Activity: Choose an industry (e.g., Banking or Auto) and perform a SWOT analysis for one company (e.g., SBI or Maruti Suzuki). Use news articles or Screener.in for data.

Key Takeaways

• Annual reports provide critical insights into a company’s performance and strategy.

• Financial statements (balance sheet, P&L, cash flow) reveal a company’s health.

• Key ratios like ROE, P/E, and Debt-to-Equity help compare companies.

• Industry analysis identifies growth potential and competitive dynamics.

Weekly Quiz

1. What are the three main financial statements in an annual report?

2. Calculate the ROE if a company has ₹500 Cr net income and ₹2,500 Cr equity.

3. What does a high P/E ratio indicate about a stock’s valuation?

4. Name two stages of the industry lifecycle.

5. List one strength and one opportunity for a company like Reliance Industries.

Additional Resources

• Recommended Reading: “The Intelligent Investor” by Benjamin Graham (Chapter on Financial Analysis).

• Tools: Use Screener.in for financial data and Moneycontrol for industry news.

• Community: Share your SWOT analysis in our website’s forum for feedback from other learners.

Module 4: Technical Analysis (Weeks 4-5)

Welcome to Module 4 of the Share Market Mastery: From Beginner to Expert course! This module introduces technical analysis, a powerful method to predict price movements using charts, patterns, and indicators. Over two weeks, you’ll learn to analyze market trends, identify trading opportunities, and develop strategies. By the end, you’ll be equipped to make data-driven trading decisions.

Duration: 2 Weeks (Self-paced)
Objective: Master technical analysis to identify trends, patterns, and trading signals for short-term and long-term trades.
Target Audience: Beginners to intermediate learners transitioning to active trading.

4.1 Technical Analysis की Foundation (टेक्निकल एनालिसिस का आधार)

Technical analysis involves studying past price and volume data to predict future market movements. This section lays the groundwork for understanding its principles.

Key Points:

• Technical Analysis क्या है? (What is Technical Analysis?)
  
  

  • A method to analyze stock prices using charts, patterns, and indicators.

  • Focuses on price and volume data rather than company fundamentals.

  • Example: Using a chart to predict if Reliance Industries’ stock will rise or fall.

• Fundamental vs Technical Analysis
  
  

  • Fundamental Analysis: Evaluates a company’s financial health (e.g., revenue, profits). Best for long-term investing.

  • Technical Analysis: Analyzes price trends and patterns. Best for short-term trading.

  • Example: Fundamental analysis checks TCS’s earnings; technical analysis studies its price chart.

• Technical Analysis के 3 Basic Assumptions
  
  

  • Price Discounts Everything: All known information (e.g., earnings, news) is reflected in the price.

  • Price Moves in Trends: Prices follow trends (up, down, or sideways) until a reversal occurs.

  • History Repeats Itself: Patterns and behaviors tend to recur due to human psychology.

  • Example: A stock’s repeated rise after hitting a support level reflects historical patterns.

• Price Action की Importance
  
  

  • Price action is the movement of a stock’s price over time, shown on charts.

  • Traders use price action to identify trends, reversals, and key levels.

  • Example: A sharp rise in HDFC Bank’s price after a breakout signals bullish momentum.

• Volume का Significance
  
  

  • Volume measures the number of shares traded in a period.

  • High volume confirms trends or reversals; low volume indicates weak moves.

  • Example: A price breakout in Tata Motors with high volume is more reliable than one with low volume.

Learning Activity: Visit TradingView or Zerodha Kite, select a stock (e.g., Infosys), and observe its price action and volume for the last month.

4.2 Chart Types और Time Frames (चार्ट प्रकार और समय-सीमा)

Charts visualize price movements, and time frames determine the granularity of analysis. This section covers chart types and how to choose the right time frame.

Key Points:

• Chart Types
  
  

  • Line Charts: Show closing prices over time. Simple but limited.

    • Example: Used for quick trend analysis of Sensex.

  • Bar Charts (OHLC): Show Open, High, Low, Close prices for each period.

    • Example: Displays daily price range of SBI.

  • Candlestick Charts (Japanese Candlesticks): Show OHLC with visual patterns, widely used for pattern analysis.

    • Example: A bullish candlestick for Maruti Suzuki signals buying interest.

  • Point & Figure Charts: Focus on price movements, ignoring time and volume. Used for long-term trends.

  • Renko Charts: Plot price changes as bricks, ignoring time. Useful for trend clarity.

• Time Frames
  
  

  • Intraday Charts: 1-min, 5-min, 15-min, 1-hour. Used for day trading.

    • Example: 5-min chart for intraday trading in Reliance.

  • Daily Charts: Show daily price movements. Ideal for swing trading.

  • Weekly Charts: Show weekly trends. Good for medium-term analysis.

  • Monthly Charts: Show long-term trends. Best for investors.

  • Time Frame Selection Strategy:

    • Day traders: Use 1-min to 1-hour charts.

    • Swing traders: Use daily or weekly charts.

    • Long-term investors: Use weekly or monthly charts.

    • Example: Use a daily chart for swing trading Tata Steel, but a monthly chart for long-term investment.

Learning Activity: Open a candlestick chart of a stock (e.g., HDFC Bank) on TradingView. Switch between 15-min, daily, and weekly time frames to observe differences in trends.

4.3 Candlestick Patterns (Complete Guide) (कैंडलस्टिक पैटर्न)

Candlestick patterns help predict price reversals or continuations. This section covers key patterns for trading decisions.

Key Points:

• Single Candlestick Patterns
  
  

  • Doji: Shows market indecision (open ≈ close). Signals potential reversal.

    • Example: A Doji in Infosys after a downtrend suggests a reversal.

  • Hammer: Bullish reversal with a small body and long lower wick.

    • Example: A Hammer in SBI at a support level signals buying.

  • Shooting Star: Bearish reversal with a small body and long upper wick.

  • Spinning Top: Small body with long wicks, indicating indecision.

  • Marubozu: Long body with no/minimal wicks, showing strong momentum.

  • Hanging Man: Bearish signal at the top of an uptrend, similar to Hammer.

• Double Candlestick Patterns
  
  

  • Bullish/Bearish Engulfing: Larger candle engulfs the previous smaller one, signaling reversal.

    • Example: Bullish Engulfing in Reliance indicates an uptrend.

  • Piercing Pattern: Bullish reversal where a bullish candle covers half of the prior bearish candle.

  • Dark Cloud Cover: Bearish reversal, opposite of Piercing.

  • Harami Pattern: Small candle within the body of a larger one, signaling indecision.

  • Tweezer Top/Bottom: Two candles with matching highs/lows, indicating reversal.

• Triple Candlestick Patterns
  
  

  • Morning Star: Bullish reversal with a short middle candle between a bearish and bullish candle.

  • Evening Star: Bearish reversal, opposite of Morning Star.

  • Three White Soldiers: Three consecutive bullish candles, signaling strong uptrend.

  • Three Black Crows: Three consecutive bearish candles, signaling strong downtrend.

  • Abandoned Baby: Rare reversal pattern with a gap and Doji, signaling strong reversal.

Learning Activity: Identify at least three candlestick patterns (e.g., Hammer, Bullish Engulfing, Morning Star) on a daily chart of a stock like Tata Motors using TradingView.

4.4 Support और Resistance (Advanced) (समर्थन और प्रतिरोध)

Support and resistance levels are critical price points where stocks tend to reverse or consolidate.

Key Points:

• Support/Resistance की Concept
  
  

  • Support: Price level where buying interest prevents further decline.

  • Resistance: Price level where selling pressure prevents further rise.

  • Example: If ITC consistently bounces from ₹400, it’s a support level.

• Psychological Levels and Round Numbers
  
  

  • Prices like ₹500, ₹1,000 attract attention due to human psychology.

  • Example: Reliance’s resistance at ₹3,000 is a psychological barrier.

• Multiple Touches का Significance
  
  

  • A level tested multiple times (e.g., support at ₹1,500 for HDFC Bank) is stronger.

  • Example: More touches increase reliability of the level.

• Support से Resistance में Conversion (and Vice Versa)
  
  

  • A broken support becomes resistance, and a broken resistance becomes support.

  • Example: If TCS breaks support at ₹3,500, it may act as resistance later.

• Dynamic Support/Resistance
  
  

  • Moving averages (e.g., 50-day MA) act as dynamic support/resistance.

  • Example: A stock bouncing off its 200-day MA indicates dynamic support.

Learning Activity: On a daily chart of a stock (e.g., Bajaj Finance), identify one support and one resistance level. Note any round number or multiple-touch levels.

4.5 Trend Analysis (ट्रेंड विश्लेषण)

Identifying trends helps traders align with the market’s direction.

Key Points:

• Trend की पहचान (Identifying Trends)
  
  

  • Uptrend: Higher highs and higher lows. Indicates bullish market.

  • Downtrend: Lower highs and lower lows. Indicates bearish market.

  • Sideways Trend: Range-bound prices with no clear direction.

  • Example: Reliance in 2021 showed a clear uptrend with higher highs.

• Trend Lines
  
  

  • How to Draw: Connect at least two highs (downtrend) or lows (uptrend).

  • Validity: A trend line with more touches is more reliable.

  • Break Significance: A trend line break signals a potential reversal or continuation.

  • Example: Draw an uptrend line on Infosys’ daily chart connecting higher lows.

• Channel Lines
  
  

  • Parallel lines enclosing price movements in a trend.

  • Example: A bullish channel in TCS shows price oscillating between trend lines.

• Trend Reversal Signals
  
  

  • Break of trend line, candlestick patterns, or indicator signals (e.g., RSI divergence).

  • Example: A break below a trend line in SBI signals a potential downtrend.

Learning Activity: Draw a trend line and channel on a weekly chart of a stock (e.g., Maruti Suzuki) using TradingView. Identify if it’s an uptrend, downtrend, or sideways.

4.6 Technical Indicators (Comprehensive) (टेक्निकल इंडिकेटर्स)

Indicators provide mathematical insights into price trends and momentum.

Key Points:

• Trend Following Indicators
  
  

  • Simple Moving Average (SMA): Average price over a period (e.g., 50-day SMA).

  • Exponential Moving Average (EMA): Weighted average, more sensitive to recent prices.

  • Weighted Moving Average (WMA): Gives more weight to recent prices.

  • Moving Average Crossovers: Bullish (short MA crosses above long MA) or bearish (opposite).

  • MACD: Difference between two EMAs, with a signal line for buy/sell signals.

  • ADX: Measures trend strength (above 25 indicates strong trend).

  • Parabolic SAR: Dots indicating trend direction and potential reversals.

• Momentum Oscillators
  
  

  • RSI (Relative Strength Index): Measures overbought (>70) or oversold (<30) conditions.

  • Stochastic Oscillator: Compares closing price to price range, signaling momentum.

  • Williams %R: Similar to Stochastic, measures overbought/oversold.

  • CCI (Commodity Channel Index): Identifies overbought/oversold levels.

  • Rate of Change (ROC): Measures price change speed.

• Volume Indicators
  
  

  • Volume: High volume confirms price moves.

  • On-Balance Volume (OBV): Tracks volume to predict price changes.

  • Volume Price Trend (VPT): Combines price and volume.

  • Accumulation/Distribution Line: Measures buying/selling pressure.

  • Chaikin Money Flow: Combines price and volume for trend strength.

• Volatility Indicators
  
  

  • Bollinger Bands: Bands around a moving average, indicating volatility.

  • Average True Range (ATR): Measures price volatility.

  • Volatility Index: Tracks market volatility (e.g., India VIX).

Learning Activity: Apply RSI and 50-day SMA to a stock (e.g., Tata Steel) on TradingView. Identify overbearth/oversold signals and trend direction.

4.7 Chart Patterns (Complete Guide) (चार्ट पैटर्न)

Chart patterns signal potential reversals or continuations in price movements.

Key Points:

• Reversal Patterns
  
  

  • Head and Shoulders (Bullish/Bearish): Signals trend reversal with three peaks.

  • Double Top/Bottom: Two peaks/troughs indicating reversal.

  • Triple Top/Bottom: Three peaks/troughs, stronger signal.

  • Rounding Top/Bottom: Gradual reversal pattern.

  • V-Top/V-Bottom: Sharp reversal pattern.

• Continuation Patterns
  
  

  • Triangles (Ascending, Descending, Symmetrical): Indicate continuation after consolidation.

  • Flags and Pennants: Short-term consolidation before trend resumes.

  • Rectangle: Range-bound continuation pattern.

  • Wedges (Rising/Falling): Indicate continuation or reversal.

  • Cup and Handle: Bullish continuation pattern.

• Other Important Patterns
  
  

  • Gap Analysis: Gaps (Common, Breakaway, Runaway, Exhaustion) indicate significant price moves.

  • Diamond Pattern: Rare reversal pattern.

  • Island Reversal: Gap-based reversal pattern.

Learning Activity: Identify a Head and Shoulders or Triangle pattern on a daily chart of a stock (e.g., ITC) using TradingView.

4.8 Fibonacci Analysis (फिबोनाची विश्लेषण)

Fibonacci tools help identify potential support, resistance, and price targets.

Key Points:

• Fibonacci Retracement Levels
  
  

  • Key levels: 23.6%, 38.2%, 50%, 61.8%, 78.6%.

  • Used to find support/resistance during pullbacks.

  • Example: A pullback in Reliance to 61.8% level signals a buying opportunity.

• Fibonacci Extension
  
  

  • Predicts price targets after a breakout (e.g., 161.8%, 261.8%).

  • Example: Extending a rally in TCS to find the next target.

• Fibonacci Fan/Time Zones
  
  

  • Fan: Diagonal lines for dynamic support/resistance.

  • Time Zones: Predicts time-based reversals.

• Trading Strategies: Combine Fibonacci with candlestick patterns or indicators for confluence.
  
  

Learning Activity: Apply Fibonacci retracement to a stock (e.g., Bajaj Finance) after a recent rally or decline. Identify the 61.8% level.

4.9 Elliott Wave Theory (एलियट वेव सिद्धांत)

Elliott Wave Theory predicts price movements based on wave patterns driven by market psychology.

Key Points:

• Elliott Wave Basics
  
  

  • Prices move in a 5-wave impulse (trend) and 3-wave corrective pattern.

  • Example: An uptrend in Infosys follows a 5-wave pattern.

• Wave Degrees
  
  

  • Waves occur on multiple time frames (e.g., daily, weekly).

  • Example: A daily wave may be part of a larger weekly wave.

• Fibonacci Ratios in Elliott Waves
  
  

  • Waves often align with Fibonacci levels (e.g., Wave 3 is 161.8% of Wave 1).

  • Example: Use Fibonacci to predict Wave 5 in HDFC Bank.

• Practical Application: Combine with trend lines and indicators for accuracy.
  
  

Learning Activity: Identify a 5-wave pattern on a weekly chart of a stock (e.g., Reliance) using TradingView.

4.10 Multiple Time Frame Analysis (मल्टीपल टाइम फ्रेम एनालिसिस)

Analyzing multiple time frames improves trading accuracy by aligning trends and entries.

Key Points:

• Top-Down Approach
  
  

  • Start with a higher time frame (e.g., weekly) to identify the trend.

  • Use a lower time frame (e.g., daily or 4-hour) for precise entries.

• Confluence Factors
  
  

  • Combine support/resistance, candlestick patterns, and indicators across time frames.

  • Example: A bullish engulfing on a daily chart at a weekly support level is a strong buy signal.

• Time Frame Synchronization
  
  

  • Ensure lower time frame trades align with higher time frame trends.

  • Example: Buy TCS on a 15-min chart only if the daily chart shows an uptrend.

Learning Activity: Analyze a stock (e.g., SBI) using a weekly chart for trend and a daily chart for entry points. Note confluence factors.

Key Takeaways

• Technical analysis predicts price movements using charts, patterns, and indicators.

• Candlestick patterns, support/resistance, and trends are core tools for trading.

• Indicators like RSI, MACD, and Bollinger Bands enhance decision-making.

• Fibonacci and Elliott Wave theories add precision to trend and reversal analysis.

• Multiple time frame analysis improves trade accuracy.

Weekly Quiz (Weeks 4-5)

1. What are the three basic assumptions of technical analysis?

2. Name two single candlestick patterns and their significance.

3. How do you identify an uptrend using price action?

4. Explain the difference between SMA and EMA.

5. What is the significance of the 61.8% Fibonacci retracement level?

Additional Resources

• Recommended Reading: “Technical Analysis of the Financial Markets” by John J. Murphy.

• Tools: Use TradingView or Zerodha Kite for charting and indicator analysis.

• Community: Share your chart patterns or Fibonacci analysis in our website’s forum for feedback.

Module 5: Risk Management (Week 5)

Welcome to Module 5 of the Share Market Mastery: From Beginner to Expert course! This module focuses on risk management, a crucial skill to protect your capital and achieve consistent returns in the share market. You’ll learn to assess risks, implement strategies to minimize losses, and manage your money effectively. By the end of Week 5, you’ll be equipped to trade and invest with confidence while controlling risks.

Duration: 1 Week (Self-paced)
Objective: Master risk assessment and management techniques to safeguard your investments and optimize returns.
Target Audience: Beginners to intermediate learners aiming to trade or invest safely.

5.1 Risk Assessment (जोखिम मूल्यांकन)

Understanding and assessing risks is the first step to managing them. This section covers the types of risks and how to evaluate your risk tolerance.

Key Points:

• Risk के प्रकार (Types of Risk)
  
  

  • Market Risk (बाजार जोखिम): Risk of losses due to overall market movements (e.g., Sensex or Nifty crashes).

  • Specific Risk (विशिष्ट जोखिम): Risk tied to a specific company or sector (e.g., a scandal in Reliance Industries).

  • Liquidity Risk: Difficulty selling a stock due to low trading volume (e.g., small-cap stocks).

  • Credit Risk: Risk of default by a company issuing bonds.

  • Operational Risk: Losses due to internal issues (e.g., fraud or system failures in a company).

  • Example: A market crash in March 2020 affected all stocks (market risk), while a fraud in a company like Yes Bank is a specific risk.

• Risk Tolerance Assessment (जोखिम सहनशीलता मूल्यांकन)
  
  

  • Risk tolerance is your ability and willingness to bear losses.

  • Factors: Age, income, financial goals, investment horizon.

  • Low Risk Tolerance: Prefer stable investments (e.g., large-cap stocks like HUL, fixed deposits).

  • High Risk Tolerance: Comfortable with volatile assets (e.g., small-cap stocks, derivatives).

  • Example: A young professional with stable income may have higher risk tolerance than a retiree.

• Portfolio Risk (पोर्टफोलियो जोखिम)
  
  

  • Risk arising from the composition of your investments.

  • Over-concentration in one stock or sector increases risk.

  • Example: A portfolio with only IT stocks (e.g., TCS, Infosys) is riskier if the IT sector declines.

• Market Risk vs Specific Risk
  
  

  • Market Risk: Affects all stocks (e.g., economic downturns, interest rate hikes). Mitigated by diversification.

  • Specific Risk: Affects individual companies (e.g., poor earnings by Tata Motors). Mitigated by research.

  • Example: Diversifying across sectors (e.g., IT, banking, FMCG) reduces specific risk but not market risk.

Learning Activity: Assess your risk tolerance by answering: How much loss can you tolerate on a ₹1,00,000 investment? List three risks you face in a stock like Adani Enterprises.

5.2 Risk Management Strategies (जोखिम प्रबंधन रणनीतियाँ)

Effective risk management strategies protect your capital and enhance profitability. This section covers key techniques.

Key Points:

• Position Sizing (पोजीशन साइजिंग)
  
  

  • Determines how much capital to allocate to a single trade.

  • Rule: Never risk more than 1-2% of your portfolio on one trade.

  • Example: With a ₹5,00,000 portfolio, risk only ₹5,000-₹10,000 per trade.

  • Formula: Position Size = (Portfolio Size × Risk %) ÷ (Entry Price - Stop Loss Price).

• Stop Loss Strategies (स्टॉप लॉस रणनीतियाँ)
  
  

  • A stop-loss order automatically sells a stock if it falls to a set price, limiting losses.

  • Types:

    • Fixed Stop Loss: Set a percentage (e.g., 5% below entry).

    • Trailing Stop Loss: Adjusts with price rises to lock in profits.

  • Example: Buy Reliance at ₹2,500 with a 5% stop loss at ₹2,375 to limit losses.

• Portfolio Diversification (पोर्टफोलियो विविधीकरण)
  
  

  • Spread investments across sectors, asset classes, and stocks to reduce risk.

  • Ideal: 8-15 stocks across 4-5 sectors (e.g., IT, banking, FMCG, auto).

  • Example: A portfolio with TCS (IT), HDFC Bank (banking), and HUL (FMCG) is diversified.

  • Avoid over-diversification (e.g., 50+ stocks), which dilutes returns.

• Hedging Techniques (हेजिंग तकनीक)
  
  

  • Use derivatives (e.g., options, futures) to offset potential losses.

  • Example: Buy a put option on Infosys to protect against a price fall.

  • Other methods: Invest in gold or bonds to hedge equity market crashes.

• Asset Allocation (एसेट आवंटन)
  
  

  • Divide capital across asset classes (e.g., equity, debt, cash).

  • Example Allocation: 60% equity (stocks), 30% debt (bonds, FDs), 10% cash.

  • Adjust based on risk tolerance and market conditions.

  • Example: During volatile markets, increase cash or debt allocation.

Learning Activity: Create a sample portfolio of ₹1,00,000 with 5 stocks across different sectors. Set a stop-loss for each stock and calculate position sizes using the 1% rule.

5.3 Money Management (धन प्रबंधन)

Money management ensures disciplined trading and long-term success. This section covers key principles and formulas.

Key Points:

• 1% Rule
  
  

  • Never risk more than 1% of your portfolio on a single trade.

  • Example: For a ₹10,00,000 portfolio, risk ₹10,000 per trade. If the stop-loss is ₹50 below the entry price, buy 200 shares (₹10,000 ÷ ₹50).

  • Protects capital during losing streaks.

• Risk-Reward Ratio (जोखिम-लाभ अनुपात)
  
  

  • Compares potential profit to potential loss.

  • Ideal ratio: 1:2 or higher (e.g., risk ₹1 to gain ₹2).

  • Example: Buy SBI at ₹500, with a stop-loss at ₹490 (risk ₹10) and target at ₹520 (reward ₹20). Risk-reward = 1:2.

  • Only take trades with favorable ratios.

• Kelly Criterion
  
  

  • A formula to optimize position sizing based on win probability and risk-reward.

  • Formula: Kelly % = W - [(1 - W) ÷ R], where W = win probability, R = risk-reward ratio.

  • Example: If win probability is 60% and risk-reward is 1:2, Kelly % = 0.6 - [(1 - 0.6) ÷ 2] = 0.4 (40% of capital per trade).

  • Use conservatively (e.g., half Kelly) to avoid overexposure.

• Position Sizing Formulas
  
  

  • Fixed Percentage: Risk a fixed % (e.g., 1%) of portfolio per trade.

  • Volatility-Based Sizing: Adjust position size based on stock volatility (e.g., use ATR).

  • Example: For a ₹5,00,000 portfolio, risking 1% (₹5,000) on a stock with a ₹25 stop-loss distance, buy 200 shares (₹5,000 ÷ ₹25).

Learning Activity: Calculate the position size for a trade in Tata Motors with a ₹10,00,000 portfolio, risking 1%, entry at ₹1,000, and stop-loss at ₹950. Determine the risk-reward ratio if the target is ₹1,050.

Key Takeaways

• Risk assessment identifies market, specific, and portfolio risks.

• Strategies like position sizing, stop-loss, and diversification minimize losses.

• Money management principles (1% rule, risk-reward ratio) ensure disciplined trading.

• Hedging and asset allocation protect against market volatility.

Weekly Quiz

1. Name three types of risks in the share market.

2. How does portfolio diversification reduce risk?

3. Calculate the position size for a ₹2,00,000 portfolio, risking 1%, with a ₹20 stop-loss distance.

4. What is the risk-reward ratio if you buy a stock at ₹200, set a stop-loss at ₹190, and target ₹220?

5. Explain the purpose of a trailing stop-loss.

Additional Resources

• Recommended Reading: “The Disciplined Trader” by Mark Douglas (Chapter on Risk Management).

• Tools: Use Zerodha Kite or TradingView to practice setting stop-loss orders.

• Community: Share your sample portfolio and risk management plan in our website’s forum for feedback.

Module 6: Trading Strategies (Weeks 6-7)

Welcome to Module 6 of the Share Market Mastery: From Beginner to Expert course! This module dives into various trading strategies, from short-term intraday techniques to long-term positional trading, and introduces derivatives like options and futures. Over two weeks, you’ll learn to apply technical and fundamental analysis to execute profitable trades. By the end, you’ll have a toolkit of strategies to suit different market conditions and trading styles.

Duration: 2 Weeks (Self-paced)
Objective: Master a range of trading strategies to maximize profits and manage risks effectively.
Target Audience: Beginners to advanced learners ready to apply technical and fundamental analysis in trading.

6.1 Intraday Trading Strategies (इंट्राडे ट्रेडिंग रणनीतियाँ)

Intraday trading involves buying and selling stocks within the same trading day to profit from short-term price movements. This section covers key intraday strategies.

Key Points:

• Scalping
  
  

  • Overview: High-frequency trading on 1-5 minute charts for small, quick profits.

  • Execution: Enter and exit trades within minutes, targeting small price moves (e.g., ₹2-5 per share).

  • Tools and Indicators:

    • Use RSI, Bollinger Bands, and Volume for entry/exit signals.

    • Example: Scalp Reliance Industries using a 5-min chart when RSI shows oversold (<30).

  • Risk Management: Tight stop-loss (e.g., 0.5-1%) and high discipline.

  • Example: Buy TCS at ₹3,500, sell at ₹3,510, with a stop-loss at ₹3,490.

• Day Trading
  
  

  • Opening Range Breakout (ORB): Trade the breakout of the first 15-30 minutes’ high/low.

    • Example: If HDFC Bank’s 15-min range is ₹1,600-₹1,620, buy above ₹1,620 or sell below ₹1,600.

  • Gap Trading Strategy: Trade price gaps at market open due to overnight news.

    • Example: If Infosys gaps up to ₹1,900 from ₹1,850, trade the continuation or reversal.

  • Momentum Trading: Trade stocks with strong price movement and high volume.

    • Example: Buy Tata Motors during a 2% surge with high volume.

  • News-Based Trading: Trade based on earnings, policy changes, or events.

    • Example: Buy SBI after a positive RBI policy announcement.

  • Tools: Use 15-min/1-hour charts, MACD, and VWAP (Volume Weighted Average Price).

• Swing Trading
  
  

  • Overview: Hold positions for days to weeks, capturing larger price swings.

  • Technical Pattern Based: Trade chart patterns like Head and Shoulders, Triangles, or Breakouts.

    • Example: Buy Maruti Suzuki on a breakout above a resistance level at ₹10,000.

  • Trend Following: Trade in the direction of the trend using moving averages or ADX.

    • Example: Buy Bajaj Finance in an uptrend confirmed by 50-day EMA.

  • Mean Reversion Strategies: Trade when prices deviate from their average, expecting a return.

    • Example: Buy ITC when it drops below its 200-day MA, expecting a bounce.

  • Tools: Daily/4-hour charts, RSI, and Fibonacci retracement.

Learning Activity: Practice an Opening Range Breakout strategy on a stock (e.g., Reliance Industries) using a 15-min chart on TradingView. Set a stop-loss and target based on the breakout range.

6.2 Positional Trading (पोजीशनल ट्रेडिंग)

Positional trading involves holding stocks for weeks to months, combining fundamental and technical analysis for larger gains.

Key Points:

• Long-Term Positions (Weeks to Months)
  
  

  • Focus on stocks with strong fundamentals and technical setups.

  • Example: Hold HDFC Bank for 3 months based on strong earnings and an uptrend.

• Fundamental + Technical Combination
  
  

  • Fundamental: Select stocks with high ROE, low debt, and growth potential (e.g., TCS with consistent revenue growth).

  • Technical: Enter trades using chart patterns, moving averages, or support levels.

  • Example: Buy Infosys after a bullish breakout above ₹1,800, supported by strong quarterly results.

• Sector Rotation Strategy
  
  

  • Shift investments to sectors showing strength (e.g., IT during digitalization, pharma during health crises).

  • Example: Rotate from banking (SBI) to renewable energy (Tata Power) during green energy policy announcements.

• Value Investing Approach
  
  

  • Buy undervalued stocks with strong fundamentals (low P/E, high dividend yield).

  • Example: Invest in HUL if its P/E is below the industry average, indicating undervaluation.

  • Use tools like Screener.in to find value stocks.

Learning Activity: Identify a stock for positional trading (e.g., Bajaj Finance) using fundamental (ROE, P/E) and technical (trend, support) analysis. Plan a trade with entry, stop-loss, and target.

6.3 Options Trading Strategies (ऑप्शंस ट्रेडिंग रणनीतियाँ)

Options are derivatives that give the right (but not obligation) to buy or sell a stock at a specific price. This section covers basic, intermediate, and advanced options strategies.

Key Points:

• Basic Strategies
  
  

  • Call और Put Buying:

    • Call: Bet on price increase (e.g., buy a Reliance ₹2,500 Call if expecting a rise).

    • Put: Bet on price decrease (e.g., buy a TCS ₹3,500 Put if expecting a fall).

  • Covered Call: Own the stock and sell a call option to earn premium.

    • Example: Own 100 SBI shares at ₹500, sell a ₹520 Call for extra income.

  • Protective Put: Buy a put to hedge a stock holding.

    • Example: Own Infosys at ₹1,800, buy a ₹1,750 Put to limit downside.

  • Cash Secured Put: Sell a put and keep cash to buy the stock if assigned.

    • Example: Sell a ₹400 Put on ITC, ready to buy at ₹400 if the price falls.

• Intermediate Strategies
  
  

  • Straddle and Strangle: Bet on large price moves (up or down).

    • Straddle: Buy a Call and Put at the same strike (e.g., Nifty ₹22,000 Call and Put).

    • Strangle: Buy a Call and Put at different strikes (e.g., Nifty ₹22,000 Call, ₹21,800 Put).

  • Iron Condor: Sell out-of-the-money Call and Put, buy further OTM Call and Put to limit risk.

    • Example: Use on Nifty for low-volatility markets.

  • Butterfly Spread: Combine multiple options to profit from a specific price range.

    • Example: Buy and sell Nifty Calls to target a range-bound market.

  • Calendar Spread: Sell a near-term option and buy a longer-term option at the same strike.

    • Example: Sell a 1-month TCS Call, buy a 3-month TCS Call.

• Advanced Strategies
  
  

  • Iron Butterfly: Sell at-the-money Call and Put, buy OTM Call and Put for balanced risk.

  • Ratio Spreads: Buy and sell options in different ratios (e.g., buy 1 Call, sell 2 Calls).

  • Synthetic Positions: Mimic stock ownership using options (e.g., buy Call, sell Put).

  • Arbitrage Opportunities: Exploit price differences between options or markets.

    • Example: Buy a cheap Call on BSE and sell an expensive Call on NSE.

Learning Activity: Simulate a Covered Call strategy on a stock (e.g., HDFC Bank) using a demo account on Zerodha. Calculate potential profit and risk.

6.4 Futures Trading (फ्यूचर्स ट्रेडिंग)

Futures are contracts to buy or sell a stock or index at a set price on a future date. This section covers the basics and strategies.

Key Points:

• Futures Contract Basics
  
  

  • Agreements to buy/sell at a fixed price on a specific date.

  • Example: Buy a Nifty Futures contract at ₹22,000 for delivery next month.

  • Traded on exchanges like NSE with standardized lot sizes (e.g., Nifty lot = 25 units).

• Margin Requirements
  
  

  • Futures require an initial margin (e.g., 10-20% of contract value) and maintenance margin.

  • Example: For a ₹10,00,000 Nifty Futures contract, deposit ₹1,00,000 as margin.

  • Leverage increases both profits and risks.

• Rollover Strategies
  
  

  • Roll over a futures contract to the next month before expiry to maintain exposure.

  • Example: Roll over a Reliance Futures contract from October to November.

  • Consider roll-over costs (spread between contracts).

• Hedging with Futures
  
  

  • Use futures to offset risks in a stock portfolio.

  • Example: Hold TCS shares and sell TCS Futures to hedge against a price drop.

• Arbitrage Opportunities
  
  

  • Exploit price differences between futures and spot markets.

  • Example: Buy Reliance in the cash market at ₹2,500 and sell Futures at ₹2,520 for a risk-free profit.

Learning Activity: Analyze a Nifty Futures contract on NSE’s website. Calculate the margin required for one lot and plan a hedging strategy for a ₹5,00,000 portfolio.

Key Takeaways

• Intraday strategies like scalping and day trading focus on short-term price moves.

• Positional trading combines fundamental and technical analysis for longer-term gains.

• Options strategies (e.g., Covered Call, Straddle) cater to different risk profiles.

• Futures trading offers leverage but requires careful margin and risk management.

Weekly Quiz (Weeks 6-7)

1. What is the difference between scalping and swing trading?

2. Explain the Opening Range Breakout strategy with an example.

3. How does a Protective Put work in options trading?

4. Calculate the profit for a Covered Call if you own 100 shares at ₹500, sell a ₹520 Call for ₹10, and the stock reaches ₹530.

5. What is the purpose of rolling over a futures contract?

Additional Resources

• Recommended Reading: “Options, Futures, and Other Derivatives” by John C. Hull (basic chapters).

• Tools: Use Zerodha Kite or TradingView to practice intraday and options strategies in demo mode.

• Community: Share your trading strategy results in our website’s forum for feedback.

Module 7: Advanced Topics (Weeks 8-9)

Welcome to Module 7 of the Share Market Mastery: From Beginner to Expert course! This module explores advanced trading concepts, including derivatives (options and futures), commodity trading, currency trading (forex), and algorithmic trading. Over two weeks, you’ll gain in-depth knowledge to trade complex instruments and markets. By the end, you’ll be equipped to diversify your trading strategies and tackle advanced market opportunities.

Duration: 2 Weeks (Self-paced)
Objective: Master advanced trading concepts and strategies to trade derivatives, commodities, currencies, and algorithmic systems effectively.
Target Audience: Intermediate to advanced learners with a solid foundation in trading and analysis.

7.1 Derivatives (Detailed) (डेरिवेटिव्स)

Derivatives are financial contracts derived from underlying assets like stocks or indices. This section dives deeper into options and futures, building on Module 6.

Key Points:

• Options (विकल्प)
  
  

  • Option Greeks (Delta, Gamma, Theta, Vega, Rho)

    • Delta: Measures how much an option’s price changes with a ₹1 change in the underlying stock.

      • Example: A Delta of 0.5 means a ₹1 rise in Reliance’s price increases the Call option by ₹0.50.

    • Gamma: Measures the rate of change in Delta. High Gamma means Delta changes quickly.

    • Theta: Measures time decay; options lose value as expiry approaches.

      • Example: A Nifty Call loses value daily due to Theta.

    • Vega: Measures sensitivity to implied volatility. Higher volatility increases option prices.

    • Rho: Measures sensitivity to interest rates (less impactful in India).

  • Implied Volatility (IV): Market’s expectation of future volatility, affecting option prices.

    • Example: High IV before earnings increases Nifty option premiums.

  • Time Decay: Options lose value as expiry nears, especially out-of-the-money options.

  • Option Pricing Models: Black-Scholes and Binomial models calculate fair option prices based on stock price, strike price, time, volatility, and interest rates.

    • Example: Use Zerodha’s Option Calculator to estimate fair prices for TCS options.

• Futures (फ्यूचर्स)
  
  

  • Contango and Backwardation

    • Contango: Futures price > spot price, common in rising markets.

      • Example: If Nifty spot is ₹22,000 and futures is ₹22,200, it’s in contango.

    • Backwardation: Futures price < spot price, common in falling markets.

      • Example: If Nifty spot is ₹22,000 and futures is ₹21,800, it’s in backwardation.

  • Basis Trading: Profit from the difference between spot and futures prices.

    • Example: Buy Reliance in the cash market at ₹2,500 and sell futures at ₹2,520.

  • Spread Trading: Trade the price difference between two futures contracts (e.g., different expiry months).

    • Example: Buy Nifty October futures and sell November futures to profit from spread narrowing.

  • Currency Futures: Contracts on currency pairs (e.g., USD/INR) traded on NSE.

    • Example: Trade USD/INR futures to speculate on rupee appreciation.

Learning Activity: Use Zerodha Kite to analyze the Delta and Theta of a Nifty Call option. Check the futures price of Reliance Industries to identify contango or backwardation.

7.2 Commodity Trading (कमोडिटी ट्रेडिंग)

Commodity trading involves buying and selling raw materials like metals, energy, and agricultural products. In India, it’s primarily done on the Multi Commodity Exchange (MCX).

Key Points:

• Commodity Markets Overview
  
  

  • Commodities include metals (gold, silver), energy (crude oil, natural gas), and agricultural products (cotton, soybeans).

  • MCX is India’s primary commodity exchange, regulated by SEBI.

  • Example: Trade gold futures on MCX to hedge against inflation.

• MCX Trading
  
  

  • Offers futures contracts with specific lot sizes (e.g., 100 grams for gold).

  • Requires margin, similar to equity futures.

  • Example: Buy a gold futures contract at ₹60,000/10 grams with a 10% margin.

• Gold, Silver, Crude Oil Analysis
  
  

  • Gold/Silver: Driven by global prices, inflation, and rupee-dollar rates.

    • Example: Gold prices rise during economic uncertainty.

  • Crude Oil: Influenced by OPEC decisions, global demand, and geopolitical events.

    • Example: Crude oil spikes during Middle East tensions.

  • Use technical indicators (e.g., RSI, Bollinger Bands) and fundamental news for analysis.

• Agricultural Commodities
  
  

  • Include wheat, cotton, soybean, etc., affected by weather and supply-demand.

  • Example: Cotton prices rise during poor monsoon seasons.

• Seasonal Patterns
  
  

  • Commodities follow seasonal trends (e.g., agricultural commodities peak during harvest).

  • Example: Analyze historical MCX data to spot gold’s seasonal rally in festive seasons (Diwali).

Learning Activity: Check MCX gold and crude oil prices on Moneycontrol. Identify a recent trend using a daily chart and RSI on TradingView.

7.3 Currency Trading (Forex) (मुद्रा ट्रेडिंग)

Forex trading involves trading currency pairs to profit from exchange rate movements. In India, forex trading is limited to currency futures on exchanges like NSE.

Key Points:

• Currency Pairs
  
  

  • Major Pairs: USD/INR, EUR/USD, USD/JPY (high liquidity).

  • Minor Pairs: EUR/GBP, AUD/NZD (less liquid).

  • Exotic Pairs: USD/INR with other emerging currencies (higher spreads).

  • Example: Trade USD/INR futures on NSE to speculate on rupee movement.

• Fundamental Factors
  
  

  • Interest rates, inflation, trade balance, and RBI policies.

  • Example: A US interest rate hike strengthens USD/INR, making the rupee weaker.

• Technical Analysis in Forex
  
  

  • Use candlestick patterns, Fibonacci, and indicators like MACD or RSI.

  • Example: Trade USD/INR on a breakout above a resistance level on a daily chart.

• Carry Trade Strategy
  
  

  • Borrow in a low-interest currency and invest in a high-interest currency.

  • Example: Borrow in JPY (low rates) and buy INR (higher rates) to earn interest differential.

  • Risk: Exchange rate fluctuations can erase gains.

Learning Activity: Analyze the USD/INR pair on NSE’s website or TradingView. Identify a trend using a 4-hour chart and apply a Fibonacci retracement.

7.4 Algorithmic Trading (एल्गोरिदमिक ट्रेडिंग)

Algorithmic trading uses computer programs to execute trades based on predefined rules, improving speed and efficiency.

Key Points:

• Algorithm Basics (एल्गोरिदम मूल बातें)
  
  

  • Algorithms automate trading decisions using technical indicators, price patterns, or statistical models.

  • Example: A simple algo buys TCS when its 50-day SMA crosses above the 200-day SMA.

• Backtesting
  
  

  • Test algorithms on historical data to evaluate performance.

  • Tools: Python (Pandas, Backtrader), Zerodha Streak, or Amibroker.

  • Example: Backtest a momentum strategy on Nifty using 1-year historical data.

• Popular Strategies
  
  

  • Mean Reversion: Trade when prices deviate from their average.

  • Momentum: Trade in the direction of strong price moves.

  • Arbitrage: Exploit price differences between markets (e.g., NSE vs BSE).

  • Market Making: Provide liquidity by quoting buy/sell prices.

  • Example: Code a mean reversion algo for Reliance using Python.

• Risk Management in Algo Trading
  
  

  • Set stop-loss, position sizing, and maximum drawdown limits.

  • Monitor for technical glitches or market anomalies.

  • Example: Limit algo trades to 1% portfolio risk per trade.

• Regulatory Requirements
  
  

  • In India, algo trading is regulated by SEBI.

  • Requirements: Approval from exchanges, risk controls, and audit trails.

  • Example: Ensure your algo complies with NSE’s risk management guidelines.

Learning Activity: Use Zerodha Streak or a demo platform to create a simple algo (e.g., buy Nifty when RSI < 30). Backtest it on a 6-month daily chart.

Key Takeaways

• Options trading requires understanding Greeks, volatility, and time decay.

• Futures trading involves strategies like basis trading and hedging, with concepts like contango.

• Commodity trading on MCX focuses on metals, energy, and agricultural products with seasonal patterns.

• Forex trading in India uses currency futures, driven by fundamentals and technicals.

• Algorithmic trading automates strategies but requires backtesting and regulatory compliance.

Weekly Quiz (Weeks 8-9)

1. What is the role of Theta in options trading?

2. Explain the difference between contango and backwardation in futures.

3. Name two fundamental factors affecting USD/INR currency trading.

4. How does backtesting improve algorithmic trading strategies?

5. Identify a seasonal pattern for gold trading in India.

Additional Resources

• Recommended Reading: “Options as a Strategic Investment” by Lawrence G. McMillan (for options), “Algorithmic Trading” by Ernest P. Chan (for algo trading).

• Tools: Use Zerodha Kite for options/futures, MCX for commodities, and Python for algo trading.

• Community: Share your algo or commodity analysis in our website’s forum for feedback.

Module 8: Portfolio Management (Week 10)

Welcome to Module 8 of the Share Market Mastery: From Beginner to Expert course! This module focuses on portfolio management, teaching you how to construct, optimize, and maintain a diversified investment portfolio. You’ll learn about asset allocation, portfolio optimization techniques, and the role of mutual funds and ETFs. By the end of Week 10, you’ll be able to build a portfolio aligned with your financial goals and risk tolerance.

Duration: 1 Week (Self-paced)
Objective: Master portfolio construction, optimization, and investment vehicles like mutual funds and ETFs to achieve long-term financial success.
Target Audience: Beginners to advanced learners aiming to manage investments effectively.

8.1 Portfolio Construction (पोर्टफोलियो निर्माण)

Portfolio construction involves selecting and allocating investments to balance risk and return. This section covers key strategies and principles.

Key Points:

• Asset Allocation Strategies (एसेट आवंटन रणनीतियाँ)
  
  

  • Divide capital across asset classes (e.g., equity, debt, cash, gold) based on goals and risk tolerance.

  • Types:

    • Strategic Allocation: Fixed allocation (e.g., 60% equity, 30% debt, 10% gold).

    • Tactical Allocation: Adjust based on market conditions (e.g., increase cash during volatility).

    • Dynamic Allocation: Regularly adjust based on performance and goals.

  • Example: A young investor may allocate 70% to equity (e.g., Reliance, TCS), 20% to debt (bonds), and 10% to gold.

• Diversification Principles (विविधीकरण सिद्धांत)
  
  

  • Spread investments across sectors, asset classes, and geographies to reduce risk.

  • Avoid over-concentration (e.g., only IT stocks like Infosys and TCS).

  • Example: A diversified portfolio includes HDFC Bank (banking), HUL (FMCG), and Tata Motors (auto).

• Modern Portfolio Theory (MPT) (आधुनिक पोर्टफोलियो सिद्धांत)
  
  

  • Developed by Harry Markowitz, MPT emphasizes maximizing returns for a given risk level.

  • Uses the Efficient Frontier to find optimal asset combinations.

  • Key: Diversification reduces risk without sacrificing returns.

  • Example: Combine low-correlated assets (e.g., Nifty 50 stocks and government bonds) for better risk-adjusted returns.

• Risk Parity Approach
  
  

  • Allocate capital so each asset contributes equally to portfolio risk.

  • Example: If equity is riskier, allocate less capital to it compared to bonds.

  • Useful for balanced portfolios in volatile markets.

• Factor Investing
  
  

  • Invest based on factors like value (low P/E), momentum (trending stocks), or quality (high ROE).

  • Example: Select stocks like Bajaj Finance (quality) or ITC (value) based on factor analysis.

  • Tools: Use Screener.in to filter stocks by factors.

Learning Activity: Create a sample portfolio of ₹5,00,000 with 60% equity, 30% debt, and 10% gold. Select 5 stocks across different sectors (e.g., banking, IT, FMCG) and explain your allocation.

8.2 Portfolio Optimization (पोर्टफोलियो अनुकूलन)

Portfolio optimization aims to maximize returns and minimize risk using quantitative metrics and rebalancing strategies.

Key Points:

• Sharpe Ratio
  
  

  • Measures risk-adjusted returns: (Portfolio Return - Risk-Free Rate) ÷ Portfolio Standard Deviation.

  • Higher Sharpe Ratio indicates better performance.

  • Example: A portfolio with 12% return, 5% risk-free rate (FD), and 10% volatility has a Sharpe Ratio of (12-5)/10 = 0.7.

  • Goal: Aim for a Sharpe Ratio > 1.

• Sortino Ratio
  
  

  • Similar to Sharpe but focuses on downside risk (negative volatility).

  • Formula: (Portfolio Return - Risk-Free Rate) ÷ Downside Deviation.

  • Example: A portfolio with less downside volatility has a higher Sortino Ratio, indicating better protection against losses.

• Maximum Drawdown
  
  

  • Measures the largest peak-to-trough loss in a portfolio.

  • Example: If a ₹10,00,000 portfolio drops to ₹8,00,000, the maximum drawdown is 20%.

  • Use to assess worst-case scenarios.

• Beta और Alpha
  
  

  • Beta: Measures portfolio volatility relative to the market (e.g., Nifty).

    • Beta = 1: Moves with the market.

    • Beta > 1: More volatile (e.g., small-cap stocks).

    • Beta < 1: Less volatile (e.g., HUL).

  • Alpha: Excess return over the market’s expected return.

    • Example: If a portfolio returns 15% and Nifty returns 10% with a Beta of 1, Alpha = 5%.

  • Example: A portfolio with SBI (high Beta) and HUL (low Beta) balances volatility.

• Portfolio Rebalancing (पोर्टफोलियो पुनर्संतुलन)
  
  

  • Adjust portfolio to maintain original allocation (e.g., 60% equity, 30% debt).

  • Frequency: Quarterly, semi-annually, or when allocation deviates significantly (e.g., >5%).

  • Example: If equity grows to 70% due to a market rally, sell some stocks and buy bonds to restore 60% equity.

Learning Activity: Calculate the Sharpe Ratio for a portfolio with 10% annual return, 5% risk-free rate, and 12% standard deviation. Plan a rebalancing strategy for a ₹2,00,000 portfolio with 50% equity, 40% debt, and 10% cash.

8.3 Mutual Funds और ETFs (म्यूचुअल फंड्स और ईटीएफ)

Mutual funds and ETFs are investment vehicles that offer diversification and professional management, ideal for passive investors.

Key Points:

• Types of Mutual Funds (म्यूचुअल फंड्स के प्रकार)
  
  

  • Equity Funds: Invest in stocks (e.g., SBI Bluechip Fund for large-cap stocks).

  • Debt Funds: Invest in bonds (e.g., HDFC Liquid Fund for low risk).

  • Hybrid Funds: Mix equity and debt (e.g., ICICI Balanced Advantage Fund).

  • ELSS Funds: Equity funds with tax benefits under Section 80C (e.g., Axis Long Term Equity Fund).

  • Example: Choose an ELSS fund for tax-saving and long-term growth.

• SIP vs Lump Sum (एसआईपी बनाम एकमुश्त)
  
  

  • Systematic Investment Plan (SIP): Invest fixed amounts regularly (e.g., ₹5,000/month in Mirae Asset Large Cap Fund).

    • Benefits: Rupee cost averaging, disciplined investing.

  • Lump Sum: Invest a large amount at once (e.g., ₹1,00,000 in a fund).

    • Best in falling markets for better entry prices.

  • Example: Start a ₹10,000/month SIP in a Nifty 50 fund for long-term wealth creation.

• ETF Advantages (ईटीएफ के फायदे)
  
  

  • Exchange-Traded Funds (ETFs) trade like stocks on exchanges (e.g., Nippon India Nifty 50 ETF).

  • Benefits: Low expense ratios, liquidity, diversification.

  • Example: Buy Nifty BeES to track the Nifty 50 index with low costs.

• Index Funds
  
  

  • Mutual funds or ETFs tracking indices (e.g., UTI Nifty Index Fund).

  • Benefits: Low cost, passive investing, market-matching returns.

  • Example: Invest in an Sensex index fund for broad market exposure.

• Tax Implications (कर निहितार्थ)
  
  

  • Equity Funds/ETFs:

    • Long-term capital gains (LTCG) > 1 year: 10% tax on gains above ₹1,00,000.

    • Short-term capital gains (STCG) < 1 year: 15% tax.

  • Debt Funds:

    • LTCG > 3 years: 20% with indexation.

    • STCG < 3 years: Taxed as per income slab.

  • ELSS Funds: 3-year lock-in, tax benefit under Section 80C up to ₹1,50,000.

  • Example: Gains from a Nifty ETF held for 2 years are taxed at 10% above ₹1,00,000.

Learning Activity: Research two mutual funds (e.g., one equity, one debt) and one ETF (e.g., Nifty BeES) on Moneycontrol. Compare their returns, expense ratios, and tax implications. Plan a ₹50,000 SIP investment.

Key Takeaways

• Portfolio construction balances risk and return through asset allocation and diversification.

• Optimization tools like Sharpe Ratio, Beta, and rebalancing enhance performance.

• Mutual funds and ETFs offer diversified, low-cost investment options for passive investors.

• Tax planning is crucial for maximizing returns from funds and ETFs.

Weekly Quiz

1. What is the difference between strategic and tactical asset allocation?

2. Calculate the Sharpe Ratio for a portfolio with 15% return, 5% risk-free rate, and 10% volatility.

3. How does diversification reduce portfolio risk?

4. Explain the tax treatment of ELSS funds in India.

5. What is the purpose of portfolio rebalancing?

rebuild

Additional Resources

• Recommended Reading: “The Intelligent Investor” by Benjamin Graham (Chapter on Portfolio Management).

• Tools: Use Screener.in for stock selection and Moneycontrol for mutual fund/ETF data.

• Community: Share your portfolio plan or mutual fund analysis in our website’s forum for feedback.

Module 9: Tax Planning (Week 11)

Welcome to Module 9 of the Share Market Mastery: From Beginner to Expert course! This module focuses on tax planning in the share market, covering capital gains tax and strategies to minimize tax liability. By understanding tax rules and leveraging tax-saving opportunities, you can maximize your investment returns. By the end of Week 11, you’ll be equipped to make tax-efficient investment decisions in the Indian market.

Duration: 1 Week (Self-paced)
Objective: Understand capital gains tax, calculate tax liabilities, and implement tax-saving strategies for share market investments.
Target Audience: Beginners to advanced learners aiming to optimize returns through tax planning.

9.1 Capital Gains Tax (पूंजीगत लाभ कर)

Capital gains tax applies to profits from selling shares, mutual funds, or other securities. This section explains the types of capital gains, tax rates, and related taxes in India.

Key Points:

• Short-term vs Long-term Gains (अल्पकालिक बनाम दीर्घकालिक लाभ)
  
  

  • Short-Term Capital Gains (STCG): Profits from selling equity shares or equity-oriented mutual funds held for less than 1 year.

    • Example: Sell Reliance shares bought at ₹2,500 for ₹2,700 within 6 months; the ₹200 profit is STCG.

  • Long-Term Capital Gains (LTCG): Profits from selling equity shares or equity-oriented mutual funds held for more than 1 year.

    • Example: Sell TCS shares bought at ₹3,000 for ₹3,500 after 2 years; the ₹500 profit is LTCG.

  • Debt Funds: STCG for holdings < 3 years; LTCG for holdings > 3 years.

• Tax Rates (कर दरें)
  
  

  • STCG (Equity): Taxed at 15% (plus cess and surcharge, if applicable).

    • Example: ₹50,000 STCG incurs ₹7,500 tax (15%).

  • LTCG (Equity): Taxed at 10% on gains above ₹1,00,000 per year (plus cess).

    • Example: ₹2,00,000 LTCG incurs ₹10,000 tax (10% on ₹1,00,000 after exemption).

  • Debt Funds:

    • STCG: Taxed as per income tax slab (e.g., 30% for high earners).

    • LTCG: Taxed at 20% with indexation (adjusts purchase price for inflation).

• STCG और LTCG Calculation (Calculation of STCG and LTCG)
  
  

  • Formula: Capital Gain = Selling Price - (Purchase Price + Expenses).

    • Expenses include brokerage, STT, and other charges.

  • Example: Buy 100 HDFC Bank shares at ₹1,500 (total ₹1,50,000) and sell at ₹1,800 (total ₹1,80,000) after 6 months.

    • STCG = ₹1,80,000 - ₹1,50,000 = ₹30,000.

    • Tax = ₹30,000 × 15% = ₹4,500.

  • Example: Sell 100 TCS shares after 2 years for ₹3,50,000 (bought at ₹2,50,000).

    • LTCG = ₹3,50,000 - ₹2,50,000 = ₹1,00,000.

    • Tax = ₹0 (within ₹1,00,000 exemption).

• Securities Transaction Tax (STT)
  
  

  • A tax levied on every stock market transaction, paid at the time of buying/selling.

  • Rates (as of 2025):

    • Equity delivery: 0.1% on both buy and sell.

    • Equity intraday: 0.025% on sell side.

    • Futures: 0.01% on sell side.

    • Options: 0.05% on sell side (premium).

  • Example: Buy ₹1,00,000 worth of Infosys shares (delivery); STT = ₹100 (0.1%).

  • Note: STT is deductible as an expense when calculating capital gains.

Learning Activity: Calculate STCG and LTCG for a trade: Buy 200 shares of SBI at ₹500 and sell at ₹600 after 8 months (STCG) and after 14 months (LTCG). Include STT (0.1%) and brokerage (0.5%) in calculations.

9.2 Tax Saving Strategies (कर बचत रणनीतियाँ)

Tax-saving strategies help reduce your tax liability while maximizing investment returns. This section covers key approaches for share market investors.

Key Points:

• Tax Loss Harvesting (टैक्स लॉस हार्वेस्टिंग)
  
  

  • Sell loss-making stocks to offset capital gains, reducing tax liability.

  • Example: Sell Tata Motors at a ₹20,000 loss to offset a ₹20,000 STCG from Reliance, making the gain tax-free.

  • Rule: Losses can be set off against gains in the same year; unused losses can be carried forward for 8 years.

  • Tip: Avoid “wash sales” (repurchasing the same stock within 30 days) to comply with tax rules.

• ELSS Funds (इक्विटी लिंक्ड सेविंग स्कीम)
  
  

  • Equity mutual funds with a 3-year lock-in, offering tax benefits under Section 80C.

  • Investment up to ₹1,50,000 per year is deductible from taxable income.

  • Example: Invest ₹1,00,000 in Axis Long Term Equity Fund; reduce taxable income by ₹1,00,000, saving ₹30,000 tax (30% slab).

  • Returns are subject to LTCG tax (10% above ₹1,00,000).

• Section 80C Benefits (धारा 80सी लाभ)
  
  

  • Section 80C allows deductions up to ₹1,50,000 for investments like ELSS, PPF, EPF, and insurance.

  • ELSS is the only market-linked option under 80C, offering higher return potential.

  • Example: Combine ₹1,00,000 in ELSS and ₹50,000 in PPF to fully utilize the ₹1,50,000 limit.

• Tax-Efficient Investing (कर-कुशल निवेश)
  
  

  • Prefer long-term investments to benefit from LTCG exemption (₹1,00,000/year).

  • Choose index funds or ETFs with low turnover to minimize taxable events.

  • Example: Invest in Nifty BeES ETF; hold for >1 year to avail LTCG tax benefits.

  • Use debt funds for long-term holdings to benefit from indexation (reduces LTCG tax).

Learning Activity: Plan a tax-saving strategy for a ₹10,00,000 portfolio. Include ₹1,00,000 in an ELSS fund and use tax loss harvesting to offset ₹50,000 in STCG. Calculate the tax saved.

Key Takeaways

• STCG (equity) is taxed at 15%, while LTCG is taxed at 10% above ₹1,00,000.

• STT is a transaction tax deducted at source, included in capital gains calculations.

• Tax loss harvesting and ELSS funds reduce tax liability effectively.

• Section 80C offers up to ₹1,50,000 deduction, with ELSS as a market-linked option.

• Tax-efficient investing prioritizes long-term holdings and low-turnover funds.

Weekly Quiz

1. What is the difference between STCG and LTCG for equity shares?

2. Calculate the tax on ₹1,50,000 LTCG from selling shares held for 2 years.

3. How does tax loss harvesting reduce tax liability?

4. What is the tax benefit of investing ₹1,50,000 in an ELSS fund for someone in the 20% tax slab?

5. Explain the role of STT in share market transactions.

Additional Resources

• Recommended Reading: “Taxmann’s Guide to Income Tax” for Indian tax rules.

• Tools: Use Zerodha’s tax reports or Moneycontrol for tax calculators.

• Community: Share your tax-saving plan in our website’s forum for feedback.

Module 10: Psychology & Discipline (Week 12)

Welcome to Module 10 of the Share Market Mastery: From Beginner to Expert course! This final module focuses on trading psychology, discipline, and avoiding common mistakes to ensure long-term success in the share market. You’ll also complete practical assignments to apply everything you’ve learned. By the end of Week 12, you’ll have the mental tools, discipline, and a comprehensive trading plan to trade confidently and consistently.

Duration: 1 Week (Self-paced)
Objective: Master trading psychology, maintain discipline, avoid common pitfalls, and apply course knowledge through practical assignments.
Target Audience: Beginners to advanced learners ready to integrate psychological discipline with trading skills.

10.1 Trading Psychology (ट्रेडिंग मनोविज्ञान)

Trading psychology refers to the emotions and mental biases that influence trading decisions. Mastering your mindset is key to consistent success.

Key Points:

• Fear और Greed (डर और लालच)
  
  

  • Fear: Causes panic selling during market dips or hesitation to enter trades.

    • Example: Selling Reliance shares at a loss during a market crash due to fear.

  • Greed: Leads to chasing overvalued stocks or holding winners too long.

    • Example: Buying Adani stocks at peak prices hoping for more gains.

  • Solution: Stick to a trading plan and predefined rules.

• Overconfidence Bias (अति आत्मविश्वास)
  
  

  • Believing you’re always right after a few wins, leading to reckless trades.

  • Example: Doubling position size in TCS after a winning streak without analysis.

  • Solution: Analyze every trade objectively and follow risk management.

• Loss Aversion (हानि से बचाव)
  
  

  • Fear of losses outweighs the joy of gains, causing irrational decisions.

  • Example: Holding a losing Tata Motors position hoping it recovers.

  • Solution: Use stop-loss orders to limit losses.

• Confirmation Bias (पुष्टिकरण पक्षपात)
  
  

  • Seeking information that supports your beliefs and ignoring contrary evidence.

  • Example: Buying Infosys based only on positive news while ignoring weak earnings.

  • Solution: Research both bullish and bearish perspectives before trading.

• Mental Accounting
  
  

  • Treating money differently based on its source (e.g., treating profits as “free money”).

  • Example: Risking all profits from a winning SBI trade on a risky stock.

  • Solution: Treat all capital equally and apply consistent risk management.

Learning Activity: Reflect on a recent trade or investment decision. Identify if fear, greed, or any bias influenced your choice. Write down how you could have acted differently.

10.2 Discipline और Control (अनुशासन और नियंत्रण)

Discipline is the backbone of successful trading. This section covers how to maintain control and stay consistent.

Key Points:

• Trading Plan बनाना (Creating a Trading Plan)
  
  

  • A written plan outlining your goals, strategies, risk management, and rules.

  • Components:

    • Trading style (e.g., intraday, swing, positional).

    • Entry/exit criteria (e.g., based on RSI, breakouts).

    • Risk per trade (e.g., 1% of portfolio).

    • Review schedule (e.g., weekly performance analysis).

  • Example: A plan to swing trade HDFC Bank using 50-day EMA crossovers with a 1:2 risk-reward ratio.

• Discipline Maintain करना (Maintaining Discipline)
  
  

  • Follow your trading plan without deviation, even during emotional highs or lows.

  • Example: Stick to a stop-loss of ₹490 on SBI even if you “feel” it will recover.

  • Use tools like trading journals to track adherence.

• Emotional Control (भावनात्मक नियंत्रण)
  
  

  • Avoid impulsive decisions driven by market noise or emotions.

  • Techniques: Meditation, setting trading hours, avoiding over-monitoring.

  • Example: Take a break after a losing trade to avoid rash decisions.

• Stress Management (तनाव प्रबंधन)
  
  

  • Trading can be stressful; manage it to stay focused.

  • Techniques: Regular breaks, exercise, and setting realistic expectations.

  • Example: Limit screen time to 2 hours for intraday trading to reduce stress.

• Record Keeping (रिकॉर्ड रखना)
  
  

  • Maintain a trading journal to log all trades, including entry/exit prices, reasons, and outcomes.

  • Example: Record a trade in Tata Steel with entry at ₹1,500, exit at ₹1,550, and lessons learned.

  • Use tools like Excel or apps like Zerodha’s trade log.

Learning Activity: Create a basic trading plan for swing trading with a ₹5,00,000 portfolio. Include entry/exit rules, risk management, and a sample trade journal entry.

10.3 Common Mistakes (आम गलतियाँ)

Avoiding common trading mistakes is crucial for long-term success. This section highlights pitfalls and how to overcome them.

Key Points:

• Revenge Trading (बदला लेने वाला ट्रेडिंग)
  
  

  • Taking impulsive trades to recover losses quickly.

  • Example: Doubling position size in Infosys after a loss to “make up” for it.

  • Solution: Take a break and stick to your risk management rules.

• Overtrading (अत्यधिक ट्रेडिंग)
  
  

  • Trading too frequently, leading to high costs and losses.

  • Example: Making 10 intraday trades in Reliance daily without clear signals.

  • Solution: Limit trades to high-probability setups (e.g., 1-2 per day).

• Not Using Stop Loss (स्टॉप लॉस का उपयोग न करना)
  
  

  • Failing to set stop-loss orders, exposing you to large losses.

  • Example: Holding a falling Bajaj Finance stock without a stop-loss, losing 20%.

  • Solution: Always set a stop-loss (e.g., 1-2% below entry).

• Averaging Losing Positions (हानि वाली पोजीशन का औसत करना)
  
  

  • Buying more of a losing stock to lower the average cost, increasing risk.

  • Example: Buying more Tata Motors at ₹800 after buying at ₹1,000, hoping for a recovery.

  • Solution: Cut losses early and avoid emotional attachment to trades.

• FOMO (Fear of Missing Out) (छूटने का डर)
  
  

  • Entering trades due to hype or market rallies without analysis.

  • Example: Buying Adani stocks at peak prices during a rally without research.

  • Solution: Wait for confirmation signals (e.g., pullbacks or breakouts) before entering.

Learning Activity: Review a recent market trend (e.g., a rally in PSU stocks). Identify if you made any of these mistakes and propose a disciplined alternative approach.

Practical Assignments & Exercises (प्रैक्टिकल असाइनमेंट और अभ्यास)

These assignments consolidate learning from the entire course, allowing you to apply fundamental, technical, and risk management skills.

Assignment 1: Market Research (मार्केट रिसर्च)

• Task: Conduct fundamental analysis on 5 companies from different sectors (e.g., Reliance [energy], TCS [IT], HUL [FMCG], HDFC Bank [banking], Tata Motors [auto]).

• Steps:

  • Use Screener.in to analyze financial statements (balance sheet, P&L, cash flow).

  • Calculate key ratios: ROE, P/E, Debt-to-Equity, and Net Profit Margin.

  • Make an investment recommendation (buy, hold, or sell) with justification.

• Example: For TCS, calculate ROE (Net Income ÷ Equity) and P/E (Price ÷ EPS). Recommend a buy if ROE > 20% and P/E is below industry average.

• Deliverable: A 1-page report per company summarizing findings and recommendations.

Assignment 2: Technical Analysis (टेक्निकल एनालिसिस)

• Task: Analyze a stock (e.g., Bajaj Finance) using technical analysis.

• Steps:

  • Identify a chart pattern (e.g., Head and Shoulders, Triangle) on a daily or weekly chart using TradingView.

  • Apply two indicators (e.g., RSI, MACD) to confirm signals.

  • Define entry, exit, and stop-loss points with a risk-reward ratio of at least 1:2.

• Example: Identify a Bullish Engulfing pattern in SBI with RSI < 30. Enter at ₹500, stop-loss at ₹480, target at ₹540 (1:2 ratio).

• Deliverable: A chart screenshot with annotations and a 1-page trade plan.

Assignment 3: Portfolio Creation (पोर्टफोलियो निर्माण)