Best Five Books For Stock Trading

Trading involves dedication and awareness. Dedication provides the willingness to be in the game while awareness makes trader exposed to the happenings in the market currently. Sometimes they do so by reading books and sometimes they things are arranged that way. I tried to find out about the best books available fro stock trading. There were many, some I have heard and read, some I have not heard and not read. Here a list of Five Books that I ranked and hope that it would help if someone is interested in stock trading books.

1.Trading For Living: Psychology, Trading Tactics, Money Management

Dr. Alexander Elder has artistically created a art. This is a not just a book for stock trader, it's an art that glorifies the beauty in stock trading and also the personal fulfillment involved in it.

2.How to Make Money in Stocks: A Winning System in Good Times or Bad: A Winning System in Good Times Or Bad

Learning from the greatest winner and being smart from the beginning, the book tells us as the title specifies: How to Make Money in Stocks.

3.The disciplined trader: developing winning attitudes

Mark Douglas

4.Technical Analysis of the Financial Markets: A Comprehensive Guide to Trading Methods and Applications

John J. Murphy

5.Reminiscences of a Stock Operator

by Edwin Lefèvre 

These books are able to provide any armature all essential knowledge about stock trading. For further knowledge and information I recommend any interested people to be updated about the market elements, remember,  Awareness. Here a list of five best magazines too.

Global Bank Could be the Stocks to buy, April 28, 2014

Global IME Bank Limited is a commercial bank whose profit has sky rocketed in this current fiscal year.

In it's unaudited quarterly report for the third quarter, it says,  the commercial bank has Rs. 72.88 crore as net profit. It was Rs. 36.10 last year. This is 102% rise in the profit which makes the stocks of Global IME Bank a must buy stock for now. 

Its EPS = Rs 23.61 
Its net worth per share= 147.16.

Who earns more, Stocks traders or Brokers?

"Name of the game: Move the money from your client's pocket into your pocket."
"But if you can make client money, it's advantageous to everyone. Correct?"
"No"

Stocks Traders are the Neil Armstrong in stocks market. They always ready to take risk. Sometimes they fail, Sometimes they don't. When ever anyone ask the question about the superiority between brokers and traders they forget one important thing. The quantity of trading. It's the whole picture that describes the trade. It's what people forget. They forget that a broker is not serving only them, there are thousands of clients. A whole picture. Whole Stocks Market. A single trade will make a small amount of money for a trader but for a broker, they are like repeating the whole process again and again. For how long? As long as there are people who are willing to sell and purchase shares in share market.

Traders are confined to invest money in limited range. They have constraints that are clearly defined. But brokers are always free. They are not bounded by any rules and limitations. They make money by commissions on trade. These commissions varies between countries. While a trader is making money on single trade, at the same time, a broker is making two deals. One deal is with you and another is with other client who is whether purchasing your stocks or selling the stocks. This is where brokers make more money. Actually a lot more than expected.

So, what's generally thought is, traders are one who makes more money by trading stocks. As conclusion they might be making more money in a single trade than a stocks trader. But, when it comes to large quantity and the frequency, brokers are always making money. The are making money when the market is going up, they are making money when the market is going down. What actually is happening right now is the traders take risk while brokers take the responsibility of trade only. Brokers are free from the obligation of pure profit in the stocks they trader.

Five obvious reactions:The way people react to sudden spikes.

It's always obvious that people react to changes in the environment. People react to changes around them. In case of stocks market, people react to changes in market index, changes in price, changes in company's position in the market and all other changes. But it's so interesting to see people react to those sudden spikes in the market. These reaction includes various activities but i am only discussing five of them here.

Happy to sell:

This is the most anticipated reaction of all those stock holders who are waiting to sell their stocks. They are eagerly waiting to sell their stocks. If sudden spikes are observed then this is their obvious reaction. The are happy to sell. A highly potential stocks are owned by such type of stocks traders and they show this behavior which provides huge amount of stocks in market.

Sad because stocks are already sold:

This reaction is felt by many traders who had stocks that are sold already before it's price hiked. It's more like a wish for change in the decision they are already made. Now, it's already sold, it's too late to purchase the same stock. To deal with such part, they often wait for the stock's price to fall so that they will purchase it again later. This reaction is normal and those who cannot let go such sad reaction will find it hard to be a stocks trader.

Waiting to rise more:

Some people always want more. It's the reaction that makes them greedy. The hunger for more and more. It's kind of like drug. The more greedy you are, the more greedy you will become. Waiting for stocks price to rise further more sometime may become costlier then expected.

Waiting to fall:

This reaction is shown by those people who failed to anticipate correct selling price and had already sold the stocks they had. Now they want to hold that stocks again, what will they do? Wait for the stock's price to fall.

Buy and sell as fast as you can:

Normally, in order to show this reaction traders purchase huge volume of shares while it's rising. The anticipation is carefully analyzed and if it seems fulfilling then it's seen. Since there is no long term holding time, little increase in price is also seen as a stimulant for selling. This trend of buying while stocks is rising makes a trader more risk taker but at the same time more profit is made in short run.

Five Best Financial Magazines to read.

The magazine world is filled with so much variety and it's a challenge that people, mostly investors have to face: Which is the best financial Magazine? The answer unveils the secret to success in the financial world. Many people are searching information that could be beneficial and lead to success. We should never forget that we know what we read, we know what others tell us and we become who we know. Magazines are always there showcase the information we are searching for. Reading them is always beneficial. Here is the list of my five best financial magazines to read.

The Economist:
It's a magazine that covers international affairs. There are information about science, politics, innovation and financial changes all around the world. It even covers the news. The Economist is powerful enough to make the reader aware about present scenario in financial world.

 




Bloomberg Market Magazine:
Bloomberg Market Magazine is the part of Bloomberg L.P. It provides specific information about various companies world wide. There are illustrations and analysis about changes in companies, government and financial world. It's not just a Market Magazine, it's a world of knowledge.

 


Barron's: 
It's a financial magazine and it contains thorough stock analysis. The key feature is stock analysis that attracts me. In addition to that, there are various opinions and ideas written by experts and also the data of various stocks at present in the market. There is online subscription facility too.

Fortune:
Fortune magazine provides the list of America's largest companies. They are those companies which are desired by people and which are expected to make good amount of profits.

 

www.Tradersmagazine.com:
It's an magazine that provides information about various company's activity. It does not directly deal with the financial part of the companies but it provides information about various changes in organization due to sudden activity of the organization. It provides assistance to the traders to anticipate possible change in company's current position.

When should you sell your stocks?

The decision of selling stocks is influenced mainly by the desired to make profit by selling at higher price than the purchase price. The greed is what makes the market good. Some get what they want: more profits, some don't get what they want. As it's said that the greed is good and now it seems legal. Selling with greed is normal now and it's legal. No-one is going to tell you that you have broken the rules by at higher price. Normally what people do is simple. One person sells at the price that seem to be high enough to sell and at the same time another buys it thinking that it will grow further more. This is fundamental rule of selling stock. There is buyer and seller simultaneously because only one seller and only one buyer cannot exist.

Now we have both buyer and seller, when should a seller sell? This question also provide answer to the next question: when should a buyer buy stocks?
There are so many rules that people make while selling and buying stocks. This article is about selling stocks of companies and it covers the fundamentals of selling. Here are three simple yet powerful steps that can bring bring you fortune.

Analyze the stock's price:
See the trend, learn from people you know in the related field, search and search for information about the institution you hold and most important of all be updated to the possible next move. If there is positive activities happening in near future then hold else sell. Remember the trend is important, understanding how thing are going on is important because most probably the next thing that will happen in near future might be similar to the present.

Do not give an emotional judgement on selling:
Trust the logical part of decision making process, make it rational. If some one going to tell you that you are most probably going to face loss in the stocks you hold then do not just blindly believe in their words only. Judge, evaluate, understand what is actually going on in the market, make rules to trade stocks safely, rationalize your thoughts and most important of all remember that it's a game, if one wins then other loses. The decision is all yours, whether to be a winner or a looser.

Knowing the limits of your stocks:
Some people might suggest that selling stocks is best when it's highly overvalued, others might suggest to sell when there are buyers available at certain price and some even try to play safe with limited profit margin. The most important of all is the knowing the limits and current price of stocks. The historical data is never useless. They provide possible price of the stocks and knowing the highest and the lowest is better inorder to know the present position and take necessary steps accordingly.

Five things that you need to analyze before you make a purchase in share market.

Stocks are affected by various factors in an economy. If a person is thinking about becoming a part time trader then it is strongly advised to rethink that decision. However, there are a list of things that any armature can prioritize before trading.

1. Trend of the stock price.
Stock price trend provides the information about the steadiness of price of the stock we are focusing to purchase. If there is too many multiple stocks you are currently focusing then, serious focus towards their price change is necessary. Realizing trend will provide substantial information about possible price of the stock in near future. If you have analytic skills then you will be able to see the pattern in the graph of the price of the stock. There is so certainty in the prediction made about the price after trend analysis but there's certain amount of probability in it.

Every traders can get the benefits from the graph of the price vs time of any stock they are targeting to purchase. This is to make sure that a trader is aware about possible price of the stock in certain time in future.


2. Earning per share analysis.
EPS provide the information about the earning made by the organization on per share basis. EPS tells us how much return is provide by the organization on a single share. This information is different from the overall profit any organization is making. It is about how much a single share is earning in an accounting period. High EPS provides more dividend for share holder, but more net profit does not ensures such certainty. If share holders are not getting enough rate of return or dividend then they are not going to pay more amount of money for that share in the market.

3. Payback period.
Any establishment, organization or institution is attractive enough only when it can provide back all the investment made by the investor in short time period. The investor is always concerned about the prevailing interest rate, rate of return, cost of capital and time value of money. In order to choose the company which will be providing dividend in short time period we must examine the EPS, dividend policy and prevailing payback period of the organization. If it's short then it's not so risky to invest.

4.Company's image
Company's image serve as assets for the organization. It is representation of the company in the consumer's mind. If it's strong, then consumer will never raise question on it's performance. If it's weak, then no-matter how much a company is making profit, people will never accept that it's a good company that they can rely upon. It's just like people are always ready to purchase the stocks of Cocacola company. They completely trust that it's going to make profit always.

5.purchasing Price.
We all believe that we make profit while selling, but we don't. The real profit is made at the moment we make purchase. If the purchasing price is less, then we will make more profit even though we have sell the product at low price. At certain point we have to sell it anyway. So, the less we pay for the stock, the more we make profit after selling it.


Also read:
How to know if a bank is going to do well in future?

Information is main element for stocks traders.

If  bees know that people are watching their beehive and they are planning to make smoke and steal the honey they make, would they still be making honey without thinking anything else? They will sift to a secure location. Same thing happens with us. A simple information can be valuable for making a profitable trade in future. The value of information is so high that at times people even neglect the fundamentals and focus only one prevailing information. This might cause the dis-balance in the system. What ever the information is, we do not make profit on loses and we do not make money on poorly backed financial securities. The main focus always should be the information and it's validation.

Nepalese stock traders are all in the same track next to the international stock traders. Everyone is trying to make money from buying and selling. They purchase at high price and sell at low price. Sometimes all the factors that causes change in the stock price are seen and heard clearly. The vividness is bold and people know what is causing sudden spike and what's causing sudden depletion of the share price. A little and legal information can make you thousand in various cases. They are like gold mines and people are trying to utilize the information on the map to get the gold. Sometimes it helps to make profit of thousands and sometimes it puts traders in loses.

Let's say a trader is ready to be updated to the latest information about institutions he is targeting for trading stocks. What's next? Next move is the subscription of various articles, channel, newsletters,magazine and newspapers. These are the resources for finding information need for us. In Nepal we have, Arthik Abhiyan, Sharesansar, Nepal share market,mero lagani and many more. These sites provide information about various contemporary market situations. The use of these information determines whether to make profit or to stay doing nothing in the stocks market. The habit of reading financial medias is always a necessity for a trader in any scenario.

Now, a trader know about what's likely to happen. The next thing to do is to validate the information and predict the possible changes that is going to occur at certain time in future. If we know that two banks are going into merger then after merger their capital is merged and they operate as a single bank and this will increase the price of the stock of the bank. So, information is vital for stocks traders.

Understanding the stocks market while trading stocks.

The stocks market is a place where we trade stocks. All the traders have only one motive in stock market: "Making profits and lots of it." Everyone among the traders have only one motive in stocks market, sell stocks at price more than the buying price. They all are trying to make money from trade and ultimate action involves taking money of one trader by another trader. But it's not illegal, it's all legal.

Stocks market have huge crowd of people. Some of them are experts in the field of trading stocks and some of them are armatures and they all are trading same thing: stocks. All are trying their best to maximize the profits they can make. Some do make large amount of money and some do not. It's just like a war. If one wins in war, then the other party must lose. This is exactly what happens in Stocks market. If a trader earns more money then another trader loses money. Just like in gamble.

Next element is the broker who arranges the meeting of a buyer and the seller. Buyers set limit and place bid, seller puts price of the share and if everything goes okay then the transaction takes place. Here, broker takes commission and there is tax on capital gain also. Huge amount of money is taken away in the form of capital gain tax. Further more there is commission for the broker too.

Final element of the stocks market up to now is government. It makes sure stock market is regulated in some under developed countries. There is no regulation in developed countries and they all are trying to create some profit as the trader trades his or her amount.

Rules are the protector for playing safe while trading your stocks.

When the logical explanation for any changes in the market is not relinquishing your thoughts then the only option you can choose to justify market behavior is the rules which guide you while trading. These rules are necessary, not only for proving the existence of cause and effect behavior in share market but also to make sure that playing safe is also a part of trading stocks. Rules may not allow a trader to make sudden unexpected trading activity but it also ensures the ability of trader to make safe investment. They are like safety valves. They are used when internal pressure is too much inside a container and before the container explodes, the pressure is balanced by these safety valves. Same thing happens in stocks market. The traders use rules they formulate to have a safe and secured environment for trading stocks.

Sometimes all the trader encounter a unique situation which provides opportunity for the trader. They can choose to think out of the box or to think in way that could make them safe. Choosing to follow rules is far more easy than to seek and try to find environment which is not explored by other people. When unexpected events occurs, the trader can use the experience acquired and make decision on the basis of that experience. This makes a trader vulnerable to any possible event in the national or international scenario. In situations like that rules are life savers. They provide a guide line for what to do and  what not to do.

Rules provide a base on which traders can actually make the decisions. If a traders makes decision about using rules then it consist of buying rule, selling rule and holding rule. A simple eight standard mathematics provides the idea of buying and selling. Share market is a business. It's financial business. The fundamentals of business remains same for it too. It's buying at low cost and selling at higher cost. Then a trader should always try to purchase all the stocks which are to be traded at low cost as possible. When purchasing price is reduced from the beginning then even slight increase in selling price will provide seller a little more profit than purchasing same product at high price.
Next: selling rule.  While selling a trader must make logical decision about the stock he or she sell. If the decision of selling is not made in right time when the price is appropriate, then it might increase the  opportunity cost and leave a minimum amount of profit instead of maximum. It provides traders a base to judge the moment to sell and place right selling amount.
Finally holding rule. If the return is not suitable at the moment then it's best to hold the stocks. Even though holding stocks can put a burden of stable asset to trader, it also ensures a suitable and expected return on investment. Holding for long time without proper reason of benefit is never useful and it should be avoid as far as possible.

Gamble, Fear, Stocks and Trading Success might be interrelated.

When people view the Stocks Trading profession they focus on the knowledge that traders hold before the trader makes any trading. In many cases these traders are not well informed about the possible move of the institution they are focusing. They simply analyze the trend and if possible find out more about the institution. However, most of the time, any investment made by the trader is a gamble. It's a respectful game where gambler is regarded as sophisticated and educated about the next move that is to be taken. While gambling people don't know the outcome and they are completely unknown about what's going to be next for them. Similar to that, while trading no one knows whether the stock price will go up or down. It's more like rules that makes a gambler safe than luck and it's rules that make stock traders safe than information. But, sudden flow of money and sudden win in gambling does not come without fear.

Fear of losing the investment is always in the mind of every trader. Some people fear that they might lose money. Some fear they might not get enough. Whatever the case is, they fear. Fear is necessary but when it's for self-defense. In order to protect your investment if take action, eg: if you think that the price of stocks of 'A' Bank is  going to deplete by 20% and you should sell it now, they it's best for you to sell. This will influence other tradings too. If Rockefeller was not confident about his bonds, if he feared about the bond's price to decrease he would have done same thing that most of the American businessman did in his time. Understanding and taking control of fear is important when trading success is necessary.

Trading Stocks is an adventurous profession. Balance between various parts of life necessary while following this profession. Not only stocks trading, balance is necessary in all aspects of life. Trading stocks provides a test of gambling and fear. In order to success a trader must keep balance and understand the environment in which all the activities are going on and try to make rules that can protects from sudden unexpected changes in the environment. While most of the traders are running for immediate success, a successful trader always makes his own rules and indulge in every trade, every gamble which come along the way. Most important of all is the entertainment of the game. Winner and Loser are part of the game and what really sticks around is the sportsmanship and the dedication to the game.

Feeling stressful is not a compulsion for stock trader, it's a choice.

We all find various things in our life which causes disappointments. There are so many things which go in a way we never anticipate. As things like that happen, we as a normal human being feel sad. When things are beyond our control stress starts to rule our mind. We feel that we are bound to do something that is not in our control. Then the result is a stressful mind. But it's not that stress is completely a bad thing. The main theme is the balance between various aspects of life.

As a stock trader when your money is on the verge of predictable loss, in some situations when the price of stock a trader has invested falls down seriously, the fear of loosing money might even haunt the trader even in sleep. Its emotional part of stock trader.This definitely causes high stress level in traders. That is why so many people are broker now. Rather than investing their own money and multiplying their wealth, they are all taking commissions and investing others money. They feel secure in such type of activity because they are not investing their money. It's the other people's money and they are free from the risk.

The main reason a person feel stress while trading stock is the change that could happen in stock price. There is always risk involved in such investment for any type of people. It's because nobody knows what will happen next in stock market, people starts to feel insecure about there investment and then stress starts to rule. They feel that it's a compulsion for them to be stressful. There's only one solution to it. It is to enjoy each trade you make and make every trade on the basis of all available information. Most of the information about the institution you are focusing is available in openly. Some are provided by people you know who are in higher position. The use of information provides you a base for making decision which is explain on rational grounds. When you have logic about the trade you do then you find that trade as a single activity, it's a one time activity and you don't have to think about it.

Normally we all have depressed as well as excited situations. Most of the successful people in stock market are always excited about the work. They do the job with certainty and forget the outcome. So stress for a stock trader is a choice. Next time when you trade, ask yourself,"if the price goes down should I be sad about it or see something different in the activity of the company?"

How does share price fluctuate before and after merger between banks?

"How does share price fluctuate before and after merger between banks?"
 This is the question that most of the people think they know and they want to believe that they are capable to predict how it actually moves. To some extent they are correct but what lies inside the real mechanism will blow your mind. The question itself suggest that people want to know what will be the price of the stocks after merger. The mechanism incorporates in itself various complex processes that is explained easily by experts.In this post we are going to see the pattern of stock price changes that occurs before and after merger of the bank. There is no middle part here because all the transaction of shares are halted during the process of merger.

Normally, when the process of the merger starts then all transactions of the shares of banks which are going into merger are halted. The transaction stops at the price currently prevailing then. That market price per share will be recorded as the last transaction price of the share. This last transaction price is taken as the base price while continue the trading of the stocks after the completion of the merger. This price is continued later and it is kept as the starting price of the stock after merger takes place and trading of the new bank takes place.

After the merger the magic starts to work. The combined capital investments, in some cases acquisitions provides high opportunity situation for the institution. There are various sectors and budgets after merger that  the bank can easily provide necessary capital. These all add up to an effective signalling effect. It works psychologically. People start to think that the bank will produce more profit. Those people who want to get profit from shares in bank will purchase the share of the bank. This creates demand. Other people who are witnessing the transaction in the stock market will see that more and more people are purchasing the stock of the bank which has gone into merger recently.

How long will the price hike continue?
It continues normally till people find other opportunities. Competitors are always there and if there is any possible reason for low purchase price for people then the price starts to deplete.

How do you verify your share certificate in Nepal?

Most of the institutions whose stocks are launched in public are provided to public by investment banks. These banks are also called underwriters or registrars. They handle all the procedure for banks that are processing to launch their IPO. The underwriter arranges all the necessary things which are needed for issuing share of any bank or institution.

When an individual or prospects are willing to purchase share of a bank and the underwriters are ready to issue the shares, public offering is made. This process involves various work from setting the duration for the application to be accepted to providing information about possible share division to all applicant.

After receiving application from all interested people, appropriate process is implemented to determine the percentage of share to be given to all applicant.

Then comes verification part. If the share holder is not interested to sell his or her share, then they can simply hold the share certificate and receive dividend. But if the share holder is interested to sell his or her share then verification of the share certificate is necessary to sell the share.

For the verification, an application is to filled with detail information.

A Share verification application.

Proper information should be provided and the signature should be clearly signed. Two of these forms should be filled and presented to the registrar of the bank. They will check the detail and verify your certificate is everything is fine. Then you will have a verified share certificate which can be easily traded in the market.

Being Emotional Could Be Costly

If you choose to earn your living by doing something that you don't want to do then it will start to make you feel bad for doing it. So the only thing that you need to do is to find out about things that you really want to do. If you are interested in buying and selling shares then being a stock trader can be so much interesting and fun for you. The real part that makes the game of buying and selling stocks is handling the emotions that any traders goes through during the over all process.

It's always emotion that wins in most of the decision we make. Why should you know about it?

Knowing about emotional decisions we make every day is a key factor while making money in purchase or sell of anything. It will provide us the direction of our path, whether we are making profit or we are going to lose in a particular matter. The basics is always the same, putting some logic to whatever we do; there's only one thing that's different. It's the way we think.

Normally we react according to the environmental factors we are exposed to. While so many people around us are selling the stock because they are anticipating that stock's price will go down soon, a rational mind thinks about the reasons for depletion in stock price. Some random prediction can make people feel that there are risk involved, but logical explanation always provides strong base for proper decision.

It's always important to understand that emotions are need while we survive and interact with other people and at the same time when there are situation where decision should be based on logic, it's best to avoid emotional part and think rationally.  Logic never make arbitrary decision, it makes precise and powerful decisions which will not make you poor.