Hottest Trend In The Stock Market With Profit Making Trading Jargon:

Hottest trends in the stock market with profit making trading jargon:

1)?Demand: The traditional stock market terms - “Support & Resistance” have their own deficiency. What works better & which has been proved to be successful is “evaluating the demand”. Demand can be evaluated in the chart with technical parameters & tools. Fundamental demand can be evaluated with economic data, interest rates & corporate results

2)?Supply: Again, this is yet another traditional stock market term as discussed in the above point. Supply determines the pricing of stocks. The law of supply & demand seeks to explain the relationship between the availability and desire of a product and its price. Supply can be evaluated in the chart with technical parameters & tools. ?

3)?Price Action: The price action is a method of billable negotiation in the analysis of the basic movements of the price, to generate signals of entry & exit in trades and that stands out for its reliability and for not requiring the use of indicators. ??

4)?Alpha & Beta: Alpha is the excess return on an investment after adjusting for market related volatility and random fluctuations.Beta is the numeric value that measures the fluctuations of a stock to changes in the overall stock market.

5)?Buy the dip: The logic here is that it makes sense to buy stocks when prices are falling because you will end up buying more and once the price starts going up again, you will benefit. Another trick here is – no one knows how low the stock prices will fall. However, we follow technical strategies to evaluate this to a large extent.???

6)?Churn: Churn essentially refers to buying and selling of stocks in a portfolio. The Devil’s financial directory says - Churning has become a common form of financial hara-firi, in which speculators who mistakenly call themselves investors, rapidly trade their portfolios over & over again.?????

7)?Don’t put all eggs in one basket: This means ensuring that as a retail investor you spread your investment around & don’t bet all your money on one stock, one mutual fund, one asset class and so on. The reality is – most retail investors give this very useful cliché a total miss.??

8)?Use Quasi-Algo tools: We use a very advanced trading platform which enables us to use innovative trading tools which are embedded with the trading platform. Since these are quasi-algo tools which help us take trading decisions in a jiffy, we train our “Student Traders” who join us for learning trading, to use these quasi-algo tools very effectively. This technique has given us excellent results. This has helped us to create our own community of successful traders.??????

9)?Earnings & excel: A company’s stock price is the discounted value of the future earnings. The trouble is that nobody knows for sure what the future earnings are likely to be. And this is where excel and the ingenuity of the money people comes in. The point being that future earnings can always be manufactured on an excel sheet, as they were by one analyst who projected earnings till 2041 to justify loss making Zomato’s very high issue price in its IPO.?????

10) FIIs: Foreigners who invest in Indian stock market. They typically sell when the price levels are high and they buy when the price levels are low. The Indian retail investors help them in doing this by buying high and selling low.

11) Growth stock: A term used to where current earnings of a company do not justify its high stock price. The reason offered is that the market is discounting the huge-prospects of future earnings. What is going to be the future earnings? We don’t know. So, whether the growth stock is actually a growth stock or just a spin off offered by the money people, only time can tell.???

12) Hold: Money people do not like to use the word “sell” when it comes to a stock because the more money they manage, the more money they make. Given that, when they recommend holding on to a stock, it’s a euphemism which means sell.

13) India growth story: It’s the money people’s way of telling us that Indian stocks are going to do well and we don’t really want to get onto details talking about it. So, just listen to us , buy, buy and buy… actually, accumulate.

14) Position size planning: Before getting into any trade, we should know the probability of winning the trade & the risk involved if we lose the trade. When we do a position size planning, we come to know the maximum risk of a trade, even before entering in. This is taught for our student traders even before they start taking trades.

15) Jomo not Fomo: This is to appeal to zoomers & millennials, the money people have started talking about how investors get into the stock market late in the day due to the fear of missing out(FOMO). But they rarely talk about the joy of missing out (JOMO) when investors miss investing in something that was being talked up but then crashes!?

16) Long term: This perhaps means a period of time at-least a decade away from now.

17) Momentum: Many a time, the price of a stock keeps going up, simply because it has been going up. There is no explanation for it, but the money people can’t say that. They need to have a confident sounding explanation for everything.

18)New era: American economist Robert Shiller defines - Speculative market expansions have often been associated with proper perceptions that the future is brighter or less uncertain than it was in the past. The term new era has periodically been used to describe these times.???

19) Other people’s money: The term at the heart of what the money people do to make money - they manage OPM. Given that it’s not their own money, time and again, more often than not, OPM becomes Opium. It is important for retail investors not to fall in love with a fund manager and put all their eggs in one basket.

20) Predictions: Lot of money management business runs around making confident predictions about what will happen - tomorrow morning, one month from now, a decade from now, and so on. Typically, the future is always bright in this world simply because the brighter the predicted future, the more money investors are likely to invest and the more the money people are likely to make.

21) Quantitative easing: Money people, from being full time money managers, go on to being part time economists as well. This is another fancy term which is used to hide what it really means. When central banks print money and pump it into the financial system, in order to drive down interest rates, so that people and firms can borrow and spend more - it’s called Quantitative Easing. ???

22) Research: Involves the use of excel in order to justify a conclusion that has already been made. It’s the art of dragging excel cells to arrive at a number that the boss needs.

23) This time it’s different: Higher returns always come with higher risk. Now its cryptos in the recent past and dotcom stocks before it. Nonetheless, people in the business of selling these investments, then and now, have liked us to believe that this time it’s different and taking risk is not risky.

24) Uncertainty: Term rarely used by the money people in the business of making confident definitive predictions right down to the last decimal point.

25) Value: One of those terms which is used often but is rarely understood. When money people use it in the context of a stock, they mean that the price of that stock has been unusually beaten down and we have bought it on the assumption that it is likely to go up in the days to come. In simple terms - buying quality merchandise when its marked down.

26) X: If the price of a stock goes from Rs.100 to Rs.500, you and I would perhaps say, the price is now five times of what it was. For the money people the price is now 5X of what it used to be.

27) Yield: A term, the use of which makes the money people actually sound more sophisticated than they really are. Yield is just return and the money people are always in search of a higher yield.

28) New economy companies: Zomato - Need we say more?

You would have observed that some the jargon will sound very real and some are conveyed for the money people from the mint. However, the stock market jargon mentioned might sound very apt for the fund managers of some of the big fund houses.?

It’s up to you to understand what it really means for a retail trader & investor.?

Please give your comments and observations in the comments section.

#teachingtrading #investing #algotrading ???