Namaste - My Learning of Trading in Nifty

[rajputz]

I will have to disagree with you guys on this.

FII's/DII's/Hedge Funds are never united. Look guys, this is Stock Market. One thing you need to understand is that Money attracts Money. If certain section of FII's are buying a stock, they need to buy from someone who holds the kind of supply this section of FII's need. Can retail ever supply that much? Well, let me say, they Can't. If FII's and rest of the Funds would be on the same side, who would sell? How would such huge OI positions be build up. You and me can never supply that kind of build up. Neither can we demand so much.

If every one was on the same side, why do fund managers of large funds have different performances? Statistically, only 5% of Fund managers beat the market. 30% give above average performance and the rest under perform the markets. The fact is we need to be on the right side of these winning funds. That should be our ultimate objective.

Tc

Completely Agree with you raunak sir.

They are in one direction and not united, thats what i mean. But in particular stock or indices there direction is same. They might be having different entry on different scrip.

 

[crown]

I will have to disagree with you guys on this.

FII's/DII's/Hedge Funds are never united. Look guys, this is Stock Market. One thing you need to understand is that Money attracts Money. If certain section of FII's are buying a stock, they need to buy from someone who holds the kind of supply this section of FII's need. Can retail ever supply that much? Well, let me say, they Can't. If FII's and rest of the Funds would be on the same side, who would sell? How would such huge OI positions be build up. You and me can never supply that kind of build up. Neither can we demand so much.

If every one was on the same side, why do fund managers of large funds have different performances? Statistically, only 5% of Fund managers beat the market. 30% give above average performance and the rest under perform the markets. The fact is we need to be on the right side of these winning funds. That should be our ultimate objective.

Tc

:clap:
Thanks Raunak Sir
I was actually having the same opinion as of yours and that is why soliciting comments on this issue to have more clarity.

Thanks again Raunak Sir

 

[crown]

Crown ,

That is the reason I always used "Majority" word in my posts below. When FII and other big investors work in a same direction , intentially / unintentially , then market moves in that direction.That is very obvious .

Now to the points can few(not Majority) of them inflate market to more/much more than fundamental values then Answer is NO. BUT they can play with low Mcap companies to take it to any high they want. Now look at the case of Harshad Mehta , Ketan Parikh etc... That is the reason why wise people advise to KEEP AWAY FROM PENNY STOCKS.

Also look at ABAN(Peak 4500+ , CMP=~850) , UNITECH(Peak 12000+ , CMP=~1200 ????) , EDUCOM(Peak 4500+ , CMP=~3000), SANRAA(Peak 10+ , CMP=~1) , CALS REF(Peak 15+ , CMP=~.30 ???)
These are the examples of cases where big money played in last bull market and they dumped these and now they have targeted new holy cows to play with.


Yes , you can know their moves without any Technical if you have Insiders there. That has very less chances so we try to follow their moves, with some lag, using Various Tools.

cheers

Thanks Raj bhai

So now, may I conclude that
Smart Money does play major role in the market.
Though, they can not generate the trend in itself, but are quite capable of influencing the price beyond reasonable ground.
When, they are unite, they can even change the direction or generate new trend. but usually, they are actually playing/competing against each other. Their major competition is among themselves only, because if they want to sell, they need big buyers which can only be people from their own community. The retailers loose their money due to their own fault, the Smart Money is just doing it against the other Smart Money and many times the retailers comes in between with the weak Smart Money.

And, the main point; there has to be some tools/reasons/basics/information on which they operate. For example a group of Smart Money namely xxx is buying, while another group namely yyy is selling. In that case, xxx has to have some basis or reasons to buy and yyy has to have some reasons to sell. Whosoever is correct come out as a winner.
Is this correct?

Or it is only the amount of money being played in between the buyers and sellers of Smart Money makes the difference.

I am asking such off the beat questions to ascertain the actual role of volume in trading, if I can.

Thanks to all for helping me

 

[bikashkumar11]

Crown Bhai
Thanks for everything!

 

[crown]

ऐसा आसां नहीं लहू रोना
दिल में ताक़त, जिगर में हाल कहाँ

I thought, it would not be much difficult to analyse the IIP data;
but on the contrary, I think it is one of the most difficult thing to do.

Nahi to sabhi kar lete. First of all, the data was not updated. The data is just till April 2010. Still looking to find out the complete data. Then again, there are some very complex issues in the data itself.

 

[crown]

Mil gaya...
mujhko data mil gaya..
jaise koi gul khil gaya...
:rofl:

 

[crown]

abhi aayega mera first and useless analysis bas 10 minute me
:rofl:

 

[crown]

analysis ready
will post it in the evening, after having lunch

 

[jagankris]

Thanks Raj bhai

So now, may I conclude that
Smart Money does play major role in the market.
Though, they can not generate the trend in itself, but are quite capable of influencing the price beyond reasonable ground.
When, they are unite, they can even change the direction or generate new trend. but usually, they are actually playing/competing against each other. Their major competition is among themselves only, because if they want to sell, they need big buyers which can only be people from their own community. The retailers loose their money due to their own fault, the Smart Money is just doing it against the other Smart Money and many times the retailers comes in between with the weak Smart Money.

And, the main point; there has to be some tools/reasons/basics/information on which they operate. For example a group of Smart Money namely xxx is buying, while another group namely yyy is selling. In that case, xxx has to have some basis or reasons to buy and yyy has to have some reasons to sell. Whosoever is correct come out as a winner.
Is this correct?

Or it is only the amount of money being played in between the buyers and sellers of Smart Money makes the difference.

I am asking such off the beat questions to ascertain the actual role of volume in trading, if I can.

Thanks to all for helping me

Crown Bhai,

Volume is a key element in understanding market dynamics.

Smart Money - Has high money power/Good SWs/Informed trades/well connected network.

A simple example of Smart money distribution - Just watch NSE bulk deals.
The SM will buy stocks in bulk (say few lakh shares).Due to surge in volume retailers will start buying the shares.Once enough cows come in they distribute in bulk for 1 rs profit.

Smart money initiates the selling and stops the demand
Stops news campaigns.
There will not be any talk about a particular stock trading at the support levels.
Smart money starts accumulating shares after a share has been beaten.
Low share prices - High volume - Smart money buying/accumulating - Weak players selling.
Or
Few weeks of stock prices consolidating in a narrow range with low volume.

Once the share price reaches high good news campaigning starts.
Brokers/Analysts will start talking about the stock.
High share prices - High volume - Smart money - Selling.

Thanks.

-JK

 

[crown]

Crown Bhai,

Volume is a key element in understanding market dynamics.

Smart Money - Has high money power/Good SWs/Informed trades/well connected network.

A simple example of Smart money distribution - Just watch NSE bulk deals.
The SM will buy stocks in bulk (say few lakh shares).Due to surge in volume retailers will start buying the shares.Once enough cows come in they distribute in bulk for 1 rs profit.

Smart money initiates the selling and stops the demand
Stops news campaigns.
There will not be any talk about a particular stock trading at the support levels.
Smart money starts accumulating shares after a share has been beaten.
Low share prices - High volume - Smart money buying/accumulating - Weak players selling.
Or
Few weeks of stock prices consolidating in a narrow range with low volume.

Once the share price reaches high good news campaigning starts.
Brokers/Analysts will start talking about the stock.
High share prices - High volume - Smart money - Selling.

Thanks.

-JK

Thanks Jagan

But it really does not occur in the market in the same way it has been described and taught in most of the TA books and seminars. Had it been so, people using VSA would have made millions, while on the contrary I found most of them confused most of the times. I myself tried to apply it, but the success rate are just 10%; and that is sufficient to understand that it is not as it is being displayed.


First of all, When it has been established (at least upto my understanding) that even Smart Money is not united at all; and even they are trapped by their counterpart Smart Money; I donot find it safe to just go by following the Smart Money.

Smart money starts accumulating shares after a share has been beaten.
Low share prices - High volume - Smart money buying/accumulating - Weak players selling.

there are times when one can see good volumes in a script at lower levels, and after a few days, it goes down breaking its previous support levels.

And, until the script really started its upside movement, it is very difficult to ascertain that the script is actually trading at its actual low price.

For example, if you see the chart of RIL for 28 July to 3 August; it fulfills all the conditions, which you mentioned. But the script went down immediately.
Now, it is very easy for anytell to pin-point some extra reasons for the downside move, but overall it is the volume which misguided; Or in other words, it is the volume which was not understood in the correct manner.