Monthly vs Yearly SIP Investing: Which is Better?
Now that you've learned everything there is to know about SIP investing, the big issue is: what is the ideal investment tenure? Should you make a monthly or annual SIP investment? Though many individuals are familiar with monthly SIPs, they are less familiar with annual SIPs. Assume Mr. A sets aside a portion of his monthly salary for the SIP investment before paying any other costs. He doesn't have to worry about the investment frequency as long as his cash flow and investment frequency are both the same. It gets tough when he does not have a consistent cash flow because his investments will suffer. In such cases, he may want to explore a yearly SIP investment. People who are unable to make decisions based on what suits them and what does not can use basic calculations before making a decision. There are a number of SIP calculators online that can help you compare returns based on whether you invest monthly or annually. The calculations are based on the mutual fund's NAV history, and the results can be derived for any investment period if the NAV data for that period is available. Are you also interested in other investment opportunities that can give you high returns? Then consider Zebu to get started, as a reputed share broker company we offer lowest brokerage options and a seamless online trading platform to help you with your investment journey. Which SIP Investment yields the highest returns? It is widely assumed that more disciplined SIP investment yields higher returns. Regular investing will help you stay on top of market volatility because you will be investing at both high and low points. The average outcome will be perfect. If the market rises on the date of the investment for a SIP investment with a large gap between investment times, you will lose out on the rewards. On the other hand, if you are investing on a daily basis, you do not need to be concerned with market movement or keep a close eye on it. This is because you invest on a regular basis and the market is available to you at all times. When it comes to returns, the longer the investment time, the less variation there will be in the return value, regardless of the tenure you choose. According to research, the difference between daily, monthly, and quarterly SIP investments is only 1 to 2 percentage points. Even while daily SIP investments have always yielded higher returns, they have always been marginal. Cash Flow and SIP Investment SIP investments should always be assigned to your cash flow and income, as we've said many times before. A monthly SIP should be the most convenient option for salaried folks because they receive their pay on a monthly basis and can invest on a regular basis. They can easily provide their banks an ECS command to ensure that money is deducted from their accounts on a specific date. It's best to keep the debit for the first week of each month so that you can prepare for the rest of your expenses. They must ensure that they have sufficient finances to make the SIP investment on a daily basis and that the investment is not stopped. The key benefit of having a daily SIP investment is that it allows you to average your investment costs. However, daily SIP investments are generally not suggested for a variety of reasons. The most typical reason is that your bank may refuse to transfer funds from your account on a daily basis. Second, there is a danger that you will miss a payment, which will jeopardise your investment. The last and most essential one is that calculating the tax due to capital gains will be a major headache. Because quarterly SIPs are not adept at capturing market changes, it is best to stick to monthly SIPs. Having a daily SIP investment can also result in 25-30 bank transfer entries, which might be difficult to keep track of. As a result, the best time to invest in SIPs is on a monthly basis. Risk Factor When selecting a SIP investment option, it's important to consider the risk factor as well as the cash flow factor. The lower the SIP investment frequency, the greater the danger, because the market will vary and you will be unable to keep track of it. The frequency with which you invest should be determined by your willingness to incur risks. In such cases, monthly SIP investment is usually recommended because it gives you an advantage over other tenures, as well as the benefit of averaging rupee cost and assisting with cash flow management. Even if you receive a large sum, stay organised and invest wisely. At the end of the day, the decision is yours to make, and you have a greater understanding of your wealth objectives. As a reputed share broker company we offer lowest brokerage options and a seamless online trading platform to help you with your investment journey. Contact Zebu to know more on how to get started on your share market investment journey.
Mar 30, 2022
The What, How and Why of SIPs
SIPs are simply the way in which you plan your investments. You can start investing little sums, one instalment at a time, over a period of years with the help of a SIP investment and develop your wealth. Compounding is at work here, and if you keep investing for a long time, it will pay off handsomely. It is the amount of time you spend investing that matters, and not when you start investing. When it comes to starting investments today, the first two things that come to mind are mutual fund investments and systematic investment plans (SIPs). Mutual funds can help you not only build wealth but also save money and achieve financial independence. SIP investments, like mutual fund investments, are becoming increasingly popular. SIP allows you to buy mutual fund units at your convenience and within your budget. To minimise any last-minute payment inconsistencies, investors usually strive to maintain the SIP debit date close to the salary date. The money is automatically deducted from your bank account based on the bank's standing instructions. It also helps in the formation of financial discipline in investors. However if you consider investing or trading in share market, we at Zebu a share trading company offer the lowest brokerage for intraday trading and are one of top brokers in share market. How Do You Begin SIP Investing? You can purchase mutual funds directly from direct fund companies, either online or offline, or both. Depending on your option, you can open a SIP account by visiting your nearest bank or by going online. The funds can be purchased in a flat sum or over time through a systematic investment plan (SIP). Agents can also assist you in purchasing mutual funds. To begin trading, all you need to do is open a trading account and complete the mandatory KYC. And we at Zebu are here to help you with that. Please get in touch with us to know more about investing in SIPs and how you can build your wealth. How Do You Pick the Best Mutual Fund? There are so many investment options available today that deciding which one is best for you can be incredibly challenging. The various mutual fund plans are further classified as equity, debt, or hybrid funds. The mutual fund you've chosen should be a good fit for your long-term objectives. If your objective is to retire early, for example, you should choose a fund that will help you increase your money in the shortest amount of time. Make it a point to look at the fund's long-term record, the fund manager's performance, and the expense ratio. All of this information can be found on the fund's website. Which Option Should You Pick? Almost all of the funds available these days provide you with the option of choosing between two options: dividend or growth. If you choose the dividend fund option, you will be paid on a regular basis according to the fund's due date. The growth option, on the other hand, allows you to reinvest your dividends, resulting in higher returns and a higher net asset value. Depending on your needs and preferences, you can select one of the two possibilities. Which should you choose: Direct or Regular? Almost every fund on the market today has two options: direct or regular. There are no intermediaries in the direct one because it is sold straight by the fund houses. The traditional one has agents and mediators in the middle, resulting in a greater expense ratio and lesser profits. Direct funds are a superior option if you're seeking long-term investment options. What should the quantity of investment be? The biggest advantage of SIP investing is that you can invest any amount you like, even as little as INR500 every month. Minimum values vary depending on the scheme. You can use a SIP calculator to figure out how much to invest in order to get the desired end result. For example, if you require Rs 1 crore in the next 20 years, you should invest INR.10000 every month in a scheme that will provide you with 12% annual returns. Returns All of the funds' returns are calculated according to the specified dates, and they are also available on the fund's website. Take your time to learn about the fund's short and long-term returns to gain a clear picture of its performance. Risks There's an old adage that great risks lead to great rewards. SIP investments work in a similar way. You can easily earn some decent profits if you are ready to take chances. The returns are primarily determined by the market's volatility and how it operates. The equity funds are invested in stocks, and the returns are entirely contingent on the stock's market success. Debt funds are low-risk investments that often invest in government bonds and treasury bills, among other things. However, due to the microeconomics involved, even these cannot be considered risk-free. Tax When you try to redeem your investment after the fund's duration has ended, the units you invested are redeemed on a first-in, first-out basis. The units you bought, in the beginning, will be redeemed first, followed by the units you bought afterwards. Long-term capital gains tax exemption is available for equity funds that are considered long-term investments. If you opt to redeem stock units before the one-year period is through, you will be subject to a 14.5 per cent short-term capital gain tax. For an amount up to Rs 10 lakh each year, equity returns are tax-free. Debt fund investments are only deemed long-term investments until they have been successfully completed for three years, at which point you will be eligible for tax benefits. This money is taxed at a 38.45 per cent rate. How do you keep track of your SIP? SIPs, like any other investment, must be tracked. You just cannot leave them unattended, despite the fact that they are considered safe and reliable. The performance of mutual funds can be tracked using their statements. If you notice any discrepancies and the fund's performance falls short of your expectations, you can switch it at any time or redeem the units you deposited. As we mentioned earlier if you are planning to invest or trade, we at Zebu a share trading company offer the lowest brokerage for intraday trading and are one of top brokers in share market.
Mar 29, 2022
8 Reasons Why You Should Invest In ETFs
For most people, earning is mainly for accumulating wealth. Building wealth is a long process that varies from person to person. You should plan your investments based on what financial goal you want to reach and how much risk you are ready to take. Mutual fund investing can be a good option for someone who wishes to invest for a long time. They can demonstrate that they are an investment instrument that can assist average investors in outperforming inflation. ETFs have grown in popularity among both seasoned and new-age investors in India since their launch. They are the type of mutual fund that you invest in to add liquidity to your portfolio. Before we get into the reasons why you should invest in EFTs, it is important to know that you need to analyse them for maximum profits. At Zebu, one of the fastest-growing brokerage firms in the country, we have created the best Indian trading platform with the lowest brokerage for intraday trading. If you would like to simplify your option trading game, we are here to help you out. What are exchange-traded funds (ETFs)? An ETF is an open-ended scheme that replicates/tracks the specified index according to SEBI's categorization. This fund must invest at least 95% of its total assets in securities from a certain index (which is being copied or monitored). To put it another way, an exchange-traded fund (ETF) is similar to an index mutual fund in that it tracks a certain index, such as the NIFTY 100, and it is not actively managed. ETFs, unlike index funds, are marketable securities that may be bought, sold, and traded at an exchange throughout the day, just like any other corporate stock. Why Invest in ETFs? ETFs are distinctive in a number of aspects, making them a rewarding investment alternative. 1. Exchange-traded funds (ETFs) provide liquidity. ETF owners benefit from liquidity as well as broad diversification in their mutual fund portfolio. There is no lock-in because they are open-ended funds. This allows ETF holders the option of withdrawing their assets as needed. 2. ETFs are inexpensive. The expense ratio for owning an ETF is lower than that of most mutual funds because they aren't actively managed like most mutual funds. When there are no management fees or commissions, the incremental value of the total fund may increase. When kept for the long term, an exchange-traded fund with a low expense ratio can add to your dividends. 3. ETFs provide a great deal of freedom. ETFs, unlike mutual funds, can be bought and sold on stock exchanges. These funds, like intraday trading, can be exchanged on a daily basis. These can be shorted and sold for a profit, and all of this can be done in a single day within market hours. 4. ETFs help you diversify your investment portfolio. ETFs can expose investors to a wide range of market areas. One can, for example, invest in Gold ETFs, which normally track the price of actual gold as their benchmark. This allows investors to purchase commodities such as gold through exchange-traded funds (ETFs). 5. Exchange-traded funds (ETFs) are one-time transactions. When you buy a mutual fund, you're buying a basket of equities made up of small shares spread across a variety of assets. However, you can buy an ETF in a single transaction, which is the same as owning a tiny portfolio. This aids investors in tracking performance. For example, if you invest in a gold ETF, you must track the performance of gold as a commodity on a daily basis, and this makes things a lot easier for you. 6. There is no lock-in period for ETFs. ETFs have no maturity term because they can be exchanged on a daily basis. This not only provides liquidity, but also gives the investor the freedom to sell their holdings whenever they want. Since there is no lock-in period, ETFs are extremely attractive investment options. 7. Efficient taxation ETFs are taxed the same as other equity-oriented investment plans since they are treated as such. 8. Passively Managed This implies that investors don't have to keep track of each and every investment their ETF has. The fund manager makes certain that the portfolio closely mimics the benchmark index with the least amount of tracking error possible. As we mentioned before, investing or trading you need the right tools. We at Zebu offer the best Indian trading platform and the lowest brokerage for intraday trading. As one of the best brokerage firms in the country, we have created a powerful trading platform that makes investing easy for you. To know more about its features, please get in touch with us now.
Mar 28, 2022
What Is a Follow-On Public Offer and How Does It Work?
A follow-on public offer (FPO) is when a publicly-traded firm that has already been listed on a stock market issues shares to the general public. Companies might use a follow-on public offer to obtain extra capital for a variety of reasons, including expanding their business operations, reducing debt, and so on. However, the company must have already gone public through an initial public offering (IPO), in which it sells shares to the general public for the first time. Also, the shares issued through the FPO must be open to the whole public, not only current stockholders. The company's performance determines the share price during the initial public offering (IPO), and the company hopes to attain the desired price per share during the IPO listing. The share price for FPO, on the other hand, is market-driven because the stock is already traded on the stock exchange. As a result, the investor can better grasp the company's value before making a purchase. In addition, the price of follow-on public shares is often lower than the current trading price. The corporation may seek an FPO for a variety of reasons, including the need for finances to pay down debt or make an acquisition. Existing shareholders may be interested in cashing out their existing interests in some situations. Companies in other cases wish to raise funds in order to refinance their debt at cheap interest rates. As a result, before applying for an FPO, investors must be careful and assess the reasons behind the company's offering. Before you start investing or trading, we recommended going with one of the best brokerage firms in the country like Zebu. As a top broker in share market we have created one of the best stock trading platforms for you to use and invest. Types of Follow On Public Offers Depending on how ownership is transferred to new shareholders, there are two sorts of follow-on public offers. FPO diluted The first type of FPO is a diluted FPO, in which the corporation issues more new shares. As a result, the number of outstanding shares of the corporation rises, lowering earnings per share. The money raised in this way is usually used to pay down debt or restructure the capital structure of a company. FPO non-diluted When existing shareholders of a corporation sell their shares to the public, it is known as a non-diluted FPO. Rather than going to the corporation, the revenues of the sale go to the shareholders. As a result, the shareholder incurs no financial loss. Founders, promoters, board of directors, and pre-IPO investors are typically among these shareholders. The earnings per share stay steady because no new shares are issued and existing shares are offered for sale. Secondary market offerings are another name for non-diluted FPO. Furthermore, this sort of FPO has no benefits for the company and is just utilised to change the ownership structure of shares. What Motivates Businesses to Make a Follow-On Public Offer? In most cases, firms issue extra shares in order to inject more capital into the company. The following are some of the reasons why a corporation might need to raise money: If the company's debts are too significant, the revenues from the sale may be used to pay down the debt. This allows them to escape debt covenants that may limit their ability to operate their business. To grow its existing equity shares and rebalance its capital structure while maintaining the ideal debt to equity ratio, a corporation may issue more shares. When an initial public offering (IPO) fails to attract the funds required for the company's expansion ambitions, a follow-on public offering is used to issue more shares. Finally, rather than accumulating debt, a firm decides to raise cash by issuing shares, which can be useful for financing new initiatives, acquisitions, or commercial operations. The Benefits of Investing in a Follow-On Public Offer Investing in an FPO can be more beneficial to investors than investing in an IPO since investors have a better understanding of the firm, its management, and business practises. Investors can also consult historical stock market performance, earnings reports, and a wealth of other information. The share prices are slightly lower than those traded on the stock market when corporations issue shares through FPO. This allows investors to make a risk-free return by purchasing and reselling shares on the secondary market. Many investors engage in arbitrage trading, which involves purchasing shares in an FPO at a cheap price and selling them at a higher price on the market to profit. An FPO has a significantly lesser risk than an IPO. As a result, just like any other investment, FPO needs investors to do their homework on the firm and its past success. It is, however, considerably easier to investigate and is better suited to investors who have a thorough grasp of risk. Also, investors will be able to purchase company shares at a reduced price as a result of this arrangement. As one of the top brokers in share market we have created the best stock trading platform for you to invest in wisely. Our tool is designed to help investors and traders alike to analyse a company with a wide range of indicators and screeners as per your strategy. As one of the best brokerage firms in the country, we invite you to open a trading and investment account with us.
Mar 27, 2022
Trading The Head And Shoulders Pattern
The head and shoulders chart pattern, which shows a baseline with three peaks, the middle peak being the highest, is a common and easy-to-spot pattern in technical analysis. It is mainly used to detect a bullish-to-bearish trend reversal.
The pattern can be employed by all sorts of traders and investors because it appears in all time periods. The chart pattern gives crucial and immediately visible levels, making entry levels stop levels, and target goals simple to apply.
Before you start investing or trading, always consider going with one of the best
Mar 26, 2022
A Comparison of Limit and Stop Orders: An Overview
A Comparison of Limit and Stop Orders: An Overview
You can be more particular about how you want your broker to fill your trades with different sorts of orders. When you place a limit or stop order, you're telling your broker that you don't want your order to be executed at the market price (the current price at which a stock is trading); instead, you want it to be executed when the stock price matches a price that you specify.
Before the comparison of Limit and Stop Orders we would like you to know that at Zebu, one of the fastest-growing brokerage firms in the country, we have created the
Mar 25, 2022
Everything You Need to Know About Trailing Stop Losses
Online brokers are always looking for new ways to keep investor losses to a minimum. One of the most popular downside protection techniques is a stop-loss order, which automatically sells a position at the current market price if the price drops to a specified level, preventing further losses. Before we get into the basics of trailing stop loss, it’s important to know that it takes a certain level of experience before you can become profitable. However, if you would like to get started, you need access to the best trading platform from one of the best online share brokers in the country. At Zebu, we give you all of this and more - we also offer the lowest brokerage for intraday trading. Trailing stop-loss order Traders can improve the effectiveness of a stop-loss order by combining it with a trailing stop, which is a trade order in which the stop-loss price is set at a percentage or rupee amount below the market price. When the price goes up, the trailing stop goes up with it. The new stop-loss price remains at the level it was dragged to when the price finally stops climbing, automatically safeguarding an investor's downside while locking in profits when the price achieves new highs. Trailing stops can be used with regular stop-loss orders on stock, options, and futures exchanges. The Functions of a Trailing Stop Consider the following scenario for a better understanding of how trailing stops work: Buy price: Rs 100 Price at the time of setting a trailing SL: Rs 100.5 Trailing amount: Rs 1 Immediate SL: 99.5 If the market goes up to 101, the trailing SL will be moved up to 100. If the price goes back to 100, your SL order will be triggered and you will exit with a slight loss (considering slippage, taxes, and fees). It's critical to avoid the need to reset your trailing stop during market dips, or your effective stop-loss will be lower than intended. When you notice momentum peaking in the charts, especially when the stock is hitting a new high, it's also a good idea to rein in a trailing stop-loss. It's critical to assess your maximum risk tolerance when using classic stop-losses with trailing stops. Set a stop-loss at 2% below the current stock price and a trailing stop at 2.5 percent below the current stock price, for example. As the price of the stock rises, the trailing stop will outperform the fixed stop, making it redundant. To make this approach work on current trades, you'll need to select a trailing stop value that takes into account the stock's regular price movements while catching just the genuine price decline. This can be accomplished by analysing a stock for several days before engaging in active trading. Furthermore, when using a trailing stop, there is the risk of setting it too tight during the early phases of the stock's support. The consequence will be the same in this situation, with the stop being triggered by a temporary price downturn, leaving traders concerned about a perceived loss. This might be a difficult mental pill to take. You need the lowest brokerage for intraday trading as well as the best trading platform. As a leading online share broker, we at Zebu have created the perfect trading platform with an extensive amount of features to simplify trading for you.
Mar 24, 2022
Ways To Determine The Ideal Stop Loss
When it comes to trading, no one wants to lose money. That is why it is critical to establish a floor of security for your position. Stop-loss orders are used in this situation. Many investors, however, struggle to determine where to place their stop-loss levels. If your stop-loss orders are placed far away from your entry price, you can lose a lot of money. However, you can get out of a position too rapidly if you set your stop-losses too close together. So, how do you know where your stop-loss order should be placed? When you start trading, it is important to have one of the best trading accounts from the best share broker in terms of the number of indicators you can use. Our online trading platform that gives you the widest range of leading as well as lagging indicators for you to choose from. With us, you can execute any complex strategy with any number of indicators. What Is a Stop-Loss Order and How Does It Work? A stop-loss order instructs a broker to sell stocks at a certain price if they reach it. These orders aid in minimizing an investor's loss in a security position. As an example, if you set your stop-loss order at 10% below the price at which you bought the security, your loss will be limited to 10%. If you buy Company X stock for Rs 100 per share, for example, you can place a stop-loss order for Rs 90. This will limit your losses to 10%. Your shares will be sold at the present price if Company X's stock falls below Rs 90. Choosing a Stop-Loss Order Targeting a permitted risk level is the key to determining where to place a stop-loss order. This price should be calculated wisely to minimize loss. There are numerous theories about where to place a stop-loss order. Technical traders are continuously looking for new ways to time the market, and different types of stop or limit orders have diverse applications based on the timing strategies used. Some theories employ universal stops, such as a 6% trailing stop on all stocks, while others employ security- or pattern-specific stops, such as average true range percentage stops. Methods of Stop-Loss placements The above-mentioned percentage technique is one of the most common. There's also the support strategy, which involves placing hard stops at a certain price. This strategy may be a little more difficult to master. You'll need to determine the stock's most recent support level. You can put your stop-loss order slightly below that level once you've figured that out. The moving average method is the other option. Stop-losses are placed just below the moving average price when using this method. Swing traders frequently use the multiple-day high/low strategy, in which stops are set at the lowest price of a given trading day. Lows, for example, may be replaced at the two-day low. Indicator stops based on larger trend analysis may be used by more patient traders. Other technical indicators, like the relative strength index, are frequently used in conjunction with indicator stops. What to Think About When Using Stop-Loss Orders When it comes to stop-loss orders, there are a few things to keep in mind as an investor: Stop-loss orders are not for active traders who monitor every move of the price. Stop-loss orders aren't ideal for huge blocks of stock because you risk losing more money in the long run. Also, never assume that your stop-loss order has been executed. Always wait for a confirmation of your order. Final Thoughts To select stop-loss placements, traders should assess their personal risk tolerances. To determine whether retracements are common, specific markets or securities should be investigated. Retracement-prone securities require a more active stop-loss and re-entry approach. Stop-losses are a type of profit-capture and risk-management strategy, but they do not ensure profitability. Creating a trading strategy is an art. You need the best trading accounts from the best share broker to give you access to all types of leading and lagging indicators. This is exactly what we offer at Zebu. We have created a highly advanced online trading platform that helps you take the best possible trades. To know more about Zebull Smart Trader, please get in touch with us now.
Mar 23, 2022
Stop-loss Hunting And How You Can Identify It
What Is the Definition of Stop Hunting? Stop hunting is a method for forcing some market players out of positions by raising the price of an asset to a level where numerous others have placed stop-loss orders. The simultaneous activation of several stop losses causes extreme volatility, which can give a unique opportunity for investors looking to trade in this situation. Before we give you an explainer on stop-loss hunting, it is important to know that you need to analyse them for maximum profits. At Zebu, one of the fastest-growing brokerage firms in the country, we have created the best Indian trading platform with the lowest brokerage for intraday trading. If you would like to simplify your option trading game, we are here to help you out. Stop hunting is motivated by the fact that when a large number of stop losses are triggered, the price of an asset might change dramatically. Traders benefit from price volatility because it gives prospective trading opportunities. Assume that ABC Company's stock is currently trading at INR 100 and appears to be moving lower. Many traders may set their stop losses just below Rs 100, at Rs 99, so that they may still hold on to their stocks and profit from an upward move while reducing their losses. Traders foresee a rush of sell orders if the price falls below Rs 100, as many stop losses will be activated. This will push the price lower, allowing some traders to profit from the drop and possibly even open a bullish position on the expected recovery to the previous range. Stop-Loss and Stop-Hunting Orders Stop-loss orders are slightly more difficult than a standard market or limit order. An investor will put a stop-loss order with their broker to sell a security when it hits a specific price. If you own shares of XYZ Inc., which are presently trading at Rs 1500, and you want to protect yourself against a substantial drop, one option is to place a stop-loss order to sell your XYZ holdings at Rs 1475. Your stop-loss order is triggered and changes into a market order if XYZ falls below Rs 1475. Your XYZ positions would be liquidated at the best price available. Stop-loss orders are used to limit the amount of money that an investor can lose on a long position. A stop-loss order can also be used to safeguard a short position. Stop-loss hunting Stop hunting is a simple process. Any asset with a large enough market cap will trade in a more or less defined trading zone with support and resistance points. Stop losses on the downside tend to be crowded in a narrow band just below resistance, while stop losses on the upside tend to be clustered just above support. Due to their market influence, larger traders looking to add to or exit a position might change the price action with volume trades that amount to stop hunting. Increased volume with a clear directional push will usually signal this on the charts. For example, before breaking through, the price action can bounce twice off support on growing volume. Smaller traders take advantage of this stop hunting tendency to profit from the short-term volatility it generates. You can participate in stop hunting on the downside with a short position or consider it an opportunity to begin a long position at a price lower than the current trading range, depending on your method and indicators. As we mentioned before, stop-loss hunting needs the best Indian trading platform and the lowest brokerage for intraday trading. As one of the best brokerage firms in the country, we have created a powerful trading platform that makes option analysis easy for you. To know more about its features, please get in touch with us now.
Mar 22, 2022
Everything You Need To Know About Paper Trading
With the rise of high-speed trading and algorithmic trading in the markets, day trading has become extremely competitive. But it is an extremely difficult field to succeed in. That is why you need to practise as much as possible. Executing paper trading requires a huge amount of analysis and the lowest brokerages you can find in India. As one of the fastest-growing stock broker companies in India, we at Zebu have created the best trading platform for calendar spreads and other futures and options strategies. What Is Paper Trading and How Does It Work? Simulated trading, often known as paper trading, allows aspiring traders to buy and sell stocks without risking real money. Investors might be able to replicate trading with a basic spreadsheet or even pen and paper, but day traders would find it difficult to manually record tens of transactions per day and calculate their profits and losses. However, there are many online platforms that provide paper trading accounts for people to practise with before investing real money in the market. This allows them to try out different techniques and get some practice with the software. Consider paper trading platforms that offer live market feeds before you start with real money while looking for the ideal place to practise your trades. This is critical since you'll want to be able to trade without having to wait for delayed feeds or orders to be processed. TradingView is a commonly used market simulator that most traders get started with. To utilise the simulator, day traders on these platforms will need to open an account, which may include depositing the minimum funding requirements. The good news is that traders can practise with the simulator before risking their money on live transactions. It's important to remember that there are some distinctions between simulated and live trading. Simulators may not account for slippage, spreads, or commissions, which can have a substantial impact on day trading returns on a technical level. On a psychological level, traders may find it simpler to follow trading system guidelines when there isn't any money at stake—especially if the trading system isn't performing well. Paper Trading Suggestions The way you trade on a given day is primarily determined by the approach you utilise. Some day traders, for example, rely solely on "feel" and must rely on paper trading accounts, whereas others utilise automated trading systems and backtest hundreds of systems before paper trading only the most promising. Traders should pick the finest broker platform for their needs depending on their trading preferences and then practise trading on those accounts. Here is where Zebu comes in. When paper trading, it's critical to keep a detailed record of your trades and to follow your approach over a long enough time frame. Some methods may only work in bull markets, leaving traders vulnerable when the market turns bearish. In order to verify that their strategies hold up successfully and deliver the maximum risk-adjusted returns, it's critical to test enough stocks in different market scenarios. Finally, paper trading isn't only a one-time activity. Day traders should use the paper trading capabilities on their brokerage accounts on a frequent basis to test new and experimental tactics before entering the market. For day traders who risk tens of thousands of rupees in hundreds of trades every day, simple mistakes can be extremely costly. As a result, paper trading is an essential component of long-term success. Advantages of Paper Trading Starting with a paper trading account can help you learn more quickly. However, there are additional advantages to self-education. To begin with, there is no risk. You don't lose anything because you aren't utilising real money. You can assess your mistakes and develop a winning plan. This also helps you gain confidence and gives you the opportunity to practice the tactics and strategies required to be a good day trader, such as profit or loss taking and pre-market preparation. Finally, it reduces the amount of stress associated with trading. You may focus on your strategies in a calm environment, removing the emotional aspect of trading. Paper Trading's Drawbacks While paper trading will provide you with the necessary practice, there are a few drawbacks. You don't get a sense of how fees and commissions affect your trades because it doesn't use actual money. These simulators also don't truly depict market reality, including lows and highs, as well as the emotion that comes with trading. As a result, keep in mind that this is a simulated environment where you can practice your trading talents. Practice Makes Perfect If you are new to trading or investment, spend as much time as possible with paper trading before entering the live markets. Make an effort to experiment with new strategies and ideas so that you can become more comfortable. Ultimately, the goal of paper trading is to shorten your learning curve. When it comes to executing paper trading, you need access to the best trading platform from one of the most reliable stock broker companies in the country. We also complement our platform with the lowest brokerage for trading. Please get in touch with us to know more about our services and products.
Mar 21, 2022
10 Awesome Stock Market Movies To Binge This Long Weekend
A picture is worth a thousand words, and a movie may express an entire tale in a single scene or even a single line of speech. There is so much to be learned from the media that we now have access to. Even issues like the economics, stock market, and trade have spawned a slew of critically acclaimed films over the last few decades. For those interested in learning how to make a living in the stock market, here is a list of some of the top stock market movies. Since it is a long weekend, the best time to binge them is now. 1. Rogue Trader (1999) This film is based on a true story about a successful derivatives trader who took one too many risks, causing the bank where he worked to collapse. This film can help viewers comprehend how derivatives contracts work. 2. Wall Street (1987) Wall Street is a film about a young stockbroker who uses insider knowledge to earn a promotion and becomes involved in stock price manipulation and insider trading, all while avoiding being caught by the authorities. 3. Bazaar (2018) Bazaar is a thriller based on the life of a stock trader. Rizwan becomes caught in insider trading and shady networks after being hired for his trading expertise. It's a good look into what it takes to work in the stock market as a movie about the subject. 4. Inside Job (2010) It's a five-part documentary that looks at the banking practices and policies that led up to the 2008 financial crisis. This critically praised documentary delves into the real-life causes and ramifications of such a tragic incident. 5. The Big Short (2015) The Big Short is based on the real-life financial crisis of 2008, and it tells three stories: Michael Burry's successful fund endeavour, Jared Venett's entry into the CDS market, and how Geller and Shipley earn from shorting. It's a fantastic stock market film, and while it concentrates mostly on debt securities, it covers a lot of fundamental trading principles and offers viewers an idea of how unanticipated occurrences can affect the market. 6. Trading Places (1983) Trading Places is a lighter watch, a comedic stock market film about a con artist and commodity broker whose places are exchanged for the sake of a wager, and their revenge scheme on the two millionaires who placed the bet. 7. Gafla (2006) The film portrays a middle-class man's journey as he tries his luck in the stock market and becomes involved in a crime, which was inspired by a real-life swindle perpetrated by Harshad Mehta in 1992. 8. The Wolf of Wall Street (2013) The life and career of Wall Street stockbroker Jordan Belfort were depicted in this Hollywood blockbuster, which received critical praise. The film traces Belfort's journey from an entry-level position to massive losses due to Black Monday, to a pump-and-dump penny stock scheme, and finally to the launch of his new firm, which is probed by the US SEC and FBI. It is undoubtedly one of the best stock market movies, as it depicts the finance sector and its rotten underbelly. 9. Too Big to Fail (2011) Another film about the 2008 financial crisis, Too Big To Fail, focuses on the necessity of financial institution stability and how hazardous their failure could be for the entire economy. 10. Money Monster (2016) After Budwell loses all of his savings owing to the advice of a financial expert on a TV show, he pursues the expert and his team and holds them hostage in order to obtain information about the stock's decline. The film is a fantastic stock market movie to see since it emphasises the importance of not blindly trusting so-called market experts. To sum it up Real-life and art continue to be influenced by one another. While many of these stock market films deal with subjects such as corruption and criminality, they nonetheless teach us a lot about the market. By watching these wonderful films that provide some insight into the workings of the global markets, you may combine education and fun. Prospective investors can register a brokerage account online right now to get started on their financial adventure.
Mar 20, 2022
Popular Indicators Used For Options Trading
Traders can use a variety of technical indicators depending on their trading style and the type of securities they are trading. This article focuses on a few key technical indicators that are often used by options traders. Options Trading can help you grow a small account into a much larger one. However, you can enjoy all of that with the lowest brokerage you can find for options trading. Zebu gives you this and more. As one of the best in the country, you also get the best trading accounts from us. Please get in touch with us to know more. What Makes Options Trading Unique In short-term trading, technical indicators are often used to help the trader in determining: Range of a move The movement's direction (which way?) How long will the price move? How long will the price move? The holding period is important since options are subject to time decay. A stock trader can keep a position indefinitely, whereas an options trader is limited by the option's expiration date and its term. Momentum indicators, which tend to detect overbought and oversold levels, are popular among options traders due to the time restrictions. Let's take a look at some of the most common indicators utilised by options traders, such as momentum and others. The Relative Strength Index (RSI) The relative strength index is a momentum indicator that compares the amount of recent gains to recent losses over a given period of time to determine overbought and oversold conditions in a security. RSI readings vary from 0 to 100, with a value more than 70 indicating overbought levels and less than 30 suggesting oversold levels. Individual stocks, rather than indexes, benefit from RSI because stocks exhibit overbought and oversold positions more frequently than indexes. The ideal choices for short-term trading based on RSI are options on highly liquid, high-beta stocks. Money Flow Index The Money Flow Index is a momentum indicator that takes into account both price and volume. Volume-weighted RSI is another name for it. The MFI indicator is a "trading pressure" indicator that gauges the entry and outflow of money into an asset over a given period of time (usually 14 days). A value of more than 80 suggests an overbought stock, while a reading of less than 20 indicates an oversold stock. MFI is more suited to stock-based options trading (rather than index-based) and longer-duration contracts due to its reliance on volume data. The MFI can be a leading signal of a trend change when it goes in the opposite direction as the stock price. Put-Call Ratio (PCR) The put-call ratio compares the amount of trade in put and call options. Changes in the put-call ratio's value, rather than its absolute value, indicate a shift in general market opinion. When the ratio of puts to calls is greater than one, it indicates bearishness. When call volume exceeds put volume by more than one, the ratio is less than one, suggesting bullishness. Traders, on the other hand, regard the put-call ratio as a contrarian indication. Open Interest The open or unsettled contracts in options are referred to as open interest. The OI may not always suggest a specific uptrend or downtrend, but it does give insight into the strength of a trend. Increased open interest signals new capital influx and, as a result, the continuation of the current trend, whereas dropping OI signals a weakening trend. While you take care of your options trading strategy, we take care of the rest. As one of the fastest-growing best trading accounts as well as the lowest brokerages for options trading To know more about our services and products, please get in touch with us now.
Mar 19, 2022