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Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

Full-time traders who treat their work as a business are the ones who succeed. But the trading business can get very lonely very quickly. This might psychologically hinder your productivity but there are a few steps you can take to drastically improve your trading productivity. Here are a few of them. But Before we get started on your journey to increase your trading productivity, we believe that you deserve one of the best trading accounts from one of the top brokers in share market.With Zebu, you get access to an extensive online trading platformwith which you can create the right trading system. The first step is to create alerts. Set price notifications based on what you’re looking for. Alerts allow you to be informed about price changes or other changes at a specific time of day without having to sit in front of your computer all day long. To make the most of the rest of the day, you can take a break from the computer and take in the latest market news. An investor’s ability to react quickly to market changes is helped by the timely distribution of alerts. Alerts have the potential to significantly boost output. Create a system for your job and keep to it. A person’s productivity is directly related to the amount of time spent working. As you trade the market, come up with a plan for yourself. You’ll be more motivated to work on improving your trading performance if you establish a system. Keeping to a routine you’ve established for yourself is the cherry on top. Instead of waiting for the market to shift in your favour, traders who focus on ethics and stick to a process are more likely to become more profitable in the long run. Examine your area of expertise Re-examine recent trades in your trading journal. It will assist you in refining your approach. You can get a sense of how successful your trades have been by going over your previous transactions and determining whether or not they were profitable. Is it better to hang on to the traded stock for a longer period of time or not? Will you make money or lose money? And there are many more questions you can answer by going over your previous trades. The present market trends might also be better understood by looking back at your trades. It’s essential to review your work to determine where you’re doing well and where you need to improve, as well as where you should focus your efforts in the future. Every great trader keeps a journal of their accomplishments. Fresh air is good for you. Taking a breath of fresh air might help you relax and improve your physical and emotional health. You’ll feel better about yourself, your lungs will be clearer, your immune system will be stronger, and you’ll have a calmer mindset, which is especially important for trading. Trading on the stock market puts traders under constant stress, therefore it’s critical that they take a break and get some fresh air to de-stress. Taking a break has been shown to enhance output. Take some time to unwind and do something you enjoy. Make an effort to engage in activities other than trading, such as listening to music, binge-watching your favourite television show, or even taking a walk by the ocean alone. Pre-market, market-time, and post-market analysis can take up to eight hours of a trader’s day, which can sometimes get boring. With such a demanding schedule, mental equilibrium is essential. It is important to take a break from work in order to maintain a healthy work-life balance. When traders relax, their energy system is rejuvenated and they are able to start fresh with their trading strategies, which increases their productivity. As one of the top brokers in share market, we believe that you deserve one of the best trading accounts that we have to offer, where you get access to an extensive online trading platform with which you can create the right trading system. Get in touch with us to know more.

Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

International corporate heavyweights have set up shop in India because of the country’s size, the scope for innovation, and the soundness of its financial sector. From a highly regulated environment to a more liberalised one, India’s robust and stable financial sector has gradually evolved. It has been ranked as the third most attractive investment location in the world by UNCTAD’s World Investment Prospects Survey. Due to the country’s liberal rules, the Indian market offers enormous potential for profit. Furthermore, currency trading in India is becoming the go-to place for traders from around the world to transact day and night, thanks to this dynamic environment. In India, the foreign exchange market, also known as the currency trading market, serves as a marketplace for the exchange of foreign currencies. Market information in a nutshell The NSE, BSE, MCX-SX, and United Stock Exchange all offer trading platforms for currency futures. With Zebu’s lowest brokerage fees, and our credibility as one of India’s best share market brokers, we guarantee that you will have access to the best trading accounts in the country. The currency market is open from 9:00 a.m. to 5:00 p.m. on weekdays. For currency trading, there is no cash or equity form, like we use in the Indian stock market. To begin trading, you will need a broker, but you will not require a DEMAT account in order to do so. In the foreign exchange market, we can only deal in the futures and options segments. Forex trading in India has shown an upward trend with the introduction of futures derivatives. Individuals and investors were previously only able to trade with banks and major corporations before this change. Both banks and enterprises were given greater freedom to store and trade foreign currencies as a result of India’s currency liberalisation. Derivative products were necessary as trading laws were loosened to facilitate the integration of global and local economies. What is the rationale for using derivatives to manage risk? As with other financial instruments, the value of a currency fluctuates widely in response to changes in the broader economy and politics. Inflation, foreign commerce, and interest rates are all critical, but the most critical is political stability. Governments can influence the value of their currencies by intervening in the foreign exchange market through the actions of their central banks. They either flood the market with their own currency to reduce the price or buy to raise the price in order to make a statement. The currency trading market in India can also become unstable due to large orders by large firms. Foreign exchange supply is increased when a country’s exports rise. Additionally, market participants’ expectations of national economic performance and their faith in the economy of their respective countries also play a role. Currency trading in India could be severely disrupted as a result of these operations. For a long time, any one entity can’t control India’s currency trading market because of its enormous size and volume. Because of their enhanced transparency, liquidity, counter-party assurance, and accessibility, exchange-traded currency futures are an ideal hedging instrument. Due to its size, volume, and frequency of trade, currency trading in India is a substantial contributor to the national economy. As businesses of all sizes make up the majority of the economy, everything that helps them grows the national economy. Currency trading can be a rewarding endeavour if you keep abreast of global market developments. You can explore these options and more with Zebu. Our lowest brokerage fees allow you to purchase the index fund of your choice effortlessly, making yours one of the best trading accounts for currency trading.

Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

The Basic Rules Of Position Sizing Most successful traders, whether they trade the forex, index, equity, or commodities markets, vouch for the relevance of position sizing in their performance. And why shouldn’t they? Without proper position sizing strategies, you could be putting a large portion of your trading capital in danger. Finally, the higher the risk you incur in each trade, the more likely it is that your trading account will be closed. While it is true that the trade might sometimes provide the much-desired large win, most skilled traders will tell you that it is advisable to limit your position size rather than raise your risk needlessly. Before you secure your trades with position sizing rules, ensure that you use the best broker for trading with the lowest brokerage on offer. Zebu empowers your online stock trading journey with a state-of-the-art trading platform as well. Let’s take a look at what position sizing is and why it’s so important, as well as the best position sizing tactics you’ll need to learn in order to enhance your trading. What exactly is position sizing? Setting the correct transaction size to buy or sell a certain instrument, or determining the Rupees amount that a trader will use to start a new trade, is the most basic definition of position sizing. It may appear easy, but it can be rather complex. Before you enter a trade, you should understand how much risk you are incurring and how it will affect your trading account. Furthermore, traders must regularly review their positions to ensure that everything is under control. Keep in mind that markets move swiftly! Furthermore, traders must keep margin requirements and margin stop out levels in mind. What is the significance of position sizing? As you can expect, opening positions with arbitrary position sizes or based on gut instinct will result in disaster. Position sizing is concerned with avoiding excessive losses. If you have a good risk management strategy and stick to it, you are unlikely to lose a large amount of your cash on a single trade. It will also provide you with an opportunity to retain your focus on your account as a whole and all your open positions. It is especially common for short-term traders who must react rapidly to new developments to lose oversight and forget how much risk they already have running before opening fresh positions. This is why it is so important: a successful trader is also a good risk manager. However, position sizing is about more than just avoiding excessive losses. It also provides you with the opportunity to improve your performance. A risk-averse trader who is only ready to risk a small fraction of his capital must realise that he will never generate significant returns. As you can see, position sizing is all about striking the appropriate balance – allowing yourself to maximise profits while avoiding excessive losses. Proper position sizing along with profit-taking tactics can assist traders in developing the optimal strategy for entering and leaving all trades. How do you calculate the size of your position? Let’s have a look at a handful of popular position sizing approaches you can use to improve your trading and make better use of position size. Position sizing strategies that work well 1. Fixed rupee value The simplest method to include position sizing into your trading strategy is to use a fixed Rupees amount. This may be especially useful for those who are new to trading or have a little quantity of capital. All you have to do is set aside a certain amount of money for each trade you make. For example, if you have Rs 10,000 in trading capital, you could want to set aside Rs 1,000 for each trade. That is, instead of investing the entire cash into one deal, you can divide it into ten. This instantly reduces the amount of risk you take with each trade. It will also aid in the preservation of your capital if the first few deals you make turn out to be losses. 2. Fixed percentage The most often utilised position sizing approach by traders is a fixed percentage risk each trade. On each trade, you put a small portion of your total cash at risk. Depending on the financial asset you’re trading — for example, equity, metals, oil, or indices – most successful traders would agree that a 1 – 2 percent per trade risk is a decent starting point. If you employ the set % risk per trade strategy with a Rs 10,000 trading capital, you should only risk Rs 100 – Rs 200 per trade. The beautiful thing about this method is that it forces you to focus on the percentage risk rather than the monetary value. Then, as your capital rises from Rs 10,000 to Rs 20,000, your 1% risk every trade rises from Rs 100 to Rs 200. Similarly, if your capital falls, you still risk 1%, but it will be a smaller Rupees amount. If you don’t, you’ll quickly discover that the large risks you incur in each trade will quickly deplete your trading cash. 3. Use of leverage While leverage is one of the primary draws for traders to the equity, index, and commodities markets, we all know that leverage can be a double-edged sword. It has the ability to amplify both successes and defeats. Many trading platforms give leverage ranging from 3:1, 5:1, 10:1, or even 20:1. However, when it comes to leverage, keep in mind that you do not have to employ the utmost level of leverage. Just because it’s on sale doesn’t mean you have to take advantage of it. It is preferable to utilise less leverage to ensure that you are limiting your risk exposure. If you use too much leverage, you increase your chances of experiencing a capital loss or a margin call if a trade goes against you. 4. Kelly’s Criterion Let’s have a look at the Kelly Criterion formula: W − [(1-W)/R] = Kelly % It computes the percentage of your account you should put at risk (K per cent). It is equal to your trading strategy’s historical win % minus the inverse of the strategy win ratio divided by your profit/loss ratio. The proportion you receive from that equation represents the stance you should take. For example, if you get 0.05, you should risk 5% of your capital per trade. These are 4 of the very basic position sizing rules and points to keep in mind while trading. In a world where trading is one of the riskiest businesses to be in, following the rules of position sizing can drastically improve your risk management. As we mentioned before, we at Zebu offer the lowest brokeragefor trading and, as a result, have emerged at as one of the best brokers for trading. Take your online stock trading to the next level with us – please get in touch with us to know more.

Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

Every trader would love to trade a well-funded trading account – with a minimum balance of INR 10,00,000 – but only a small percentage of us are able to do so. Most traders, especially those who are starting their trading careers, start with a small account. Trading with a limited account requires tight risk management and money management due to the lack of a cushion for mistakes or unexpected losses. For example, if a trading account only covers its minimum margin by Rs 20,000 and suffers a Rs 30,000 loss, the account will become untradeable until more funds are deposited. When it comes to online stock trading with a smaller capital, you need the best trading platform to back up your trading decisions. As one of the best share market brokers, we have created an online platform that is fully loaded with indicators, scanners and other tools to make trading easy. Here are some pointers for people with a modest trading account. The Constraints of a Small Account Trading with a small account is far more difficult than trading with a large account. Large accounts are protected against mistakes, unexpected losing streaks, and even bad traders, but small accounts do not have this protection. Even if you can afford losing streaks, trading with a small account has psychological concerns that make it difficult to trade well. For example, if a trader knows that they can only afford one loss in their trades, their account can be untradeable (due to a lack of needed margin), and the pressure to make a profitable trade is great. There are also differences in what a small-account trader is legally permitted to do. Large accounts can trade every available market, however, small accounts may only be allowed to trade specific markets in specific ways. Large accounts permit more flexible trading, such as several contracts and short positions, whereas small accounts may be restricted to long positions that can be covered with cash. Here’s our advice With all of the difficulties, it might appear that trading a small account profitably is impossible. However, this is not the case, and many traders, including experienced traders, trade small accounts profitably. Using Leverage in Trading Trading with leverage gives traders the opportunity to make upto 4X in profits for the trades they are right about. When day trading individual stocks, for example, you can normally trade up to four times the amount of funds in your account. Trading the same underlying stock in the options requires only about 15% of the trade’s value in cash. Trade with Caution Traders with well-funded accounts can afford to take high-risk bets, such as those with substantial stop losses in relation to their targets. Small-account traders must be extra cautious, ensuring that their risk-to-reward and win-to-loss ratios are calculated and used effectively. Follow the 1 per cent risk rule Trading with the 1% risk rule gives a small account the same cushion (against mistakes and unexpected losses) as a large account. Because it is a very successful risk management approach, many expert traders adhere to the 1% risk rule regardless of the size of their trading accounts. In conclusion Some traders are sure that trading accounts with insufficient capital cannot be profitable. This assertion is false. Small trading accounts may be more difficult to trade successfully, but if done right, there is no reason why they cannot be profitable. Small account traders can make a solid livelihood from trading, but they must manage the stress that is often associated with undercapitalization. The biggest focus should be on risk management and its strategies, especially the 1 per cent risk rule. With these considerations in mind, you may be able to grow your capital considerably. Profitable trading is one approach to grow a modest account, but if you’re conservative and follow the 1 per cent risk limit, the growth may be slower than you’d want. You could pursue higher risk/higher return transactions, but this exposes you to the chance of losing your entire account. Many traders with a small account may discover that they require additional sources of income, such as a day job, in order to substantially increase capital. When it comes to online stock trading and growing your trading account, another important aspect for you to consider is the shar market brokers you trust. At Zebu, we offer the best trading platform that is packed with features that you will help you make better trading decisions. If you would like to know more, please get in touch with us now.

Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

How To Backtest Your Strategy Manually There are numerous applications and trading platforms available now that allow you to backtest your strategy. However, you may not always have these tools available, or you may want to see the complexities of your strategy in action. The good thing is that you can independently backtest your strategy. All you need is your trading strategy and historical data to accomplish this. Even if you do it manually, backtesting a plan is not difficult. However, employing a programme or a platform makes things much easier. What exactly is backtesting? Backtesting is the foundation of developing trading techniques and edges. During a backtest, a new approach is tested against historical data to determine its effectiveness. This has a lot of advantages, such as being able to watch the plan in action and evaluating whether or not any of the parameters need to be changed in order for it to function. If a trader’s backtesting provides positive outcomes, he or she may have faith in the approach. If a backtest does not produce acceptable results, adjustments will most likely be required. You might also find out that the strategy you devised isn’t worth pursuing. While backtesting is a terrific idea, it must be done with extreme caution. As we’ll see later, it’s entirely feasible that a method that performed admirably in the backtest may fail miserably on real-time data. There are, however, solutions to this difficulty. How to Backtest Your Strategy Manually Backtesting is typically performed by those who are familiar with coding. Those who are unable to code must rely on a backtesting platform. If you decide to manually test your approach, you can simply choose any chart that provides access to the indicators required for your plan. TradingView and MT4/MT5 now offer the finest free options. Let’s look at how to manually backtest your plan now. Or, you can use your trading platform’s in-build charts as well. For example, Zebu comes with an impeccable trading platform that you can use to manually backtest your strategy. You can view charts in multiple time frames and use a host of indicators and screeners to backtest your strategy. 1. Develop the Strategy Before you can backtest a strategy, you need to develop one in the first place. It is critical that you do not test half-heartedly since this would be a waste of your time. Create a trading plan based on your understanding of the market. When you’re done, take a good, long look at it and try to examine each individual parameter. If something does not appear to be correct, make the necessary changes before proceeding to backtest. Your entry/exit signals, conditions, timeframe, and risk per trade are all important considerations. After you’ve finished developing your plan, you may begin backtesting it. 2. Choose your charts Choose the market in which you want to backtest your data. Once you’ve found the market, open the chart you’re using and choose a timeframe from the past. Traders typically backtest their method for at least a few years. While some traders believe that scrolling back to the beginning of the chart is necessary, this is not the case. You should be alright as long as you can backtest your technique over a prolonged period of time. A sample size of around ten years gives enough history to build a reasonable sample size. Then, using the tools on your chart, pull up all of the indicators you’ll need for your trades. Ascertain that your chart is properly configured with all of the trading tools that will be required during the backtest. You are now ready to begin your backtest. When you choose a share broker for backtesting and trading, ensure that you choose the best online trading platform like Zebu. Our charts, along with the wide range of indicators we have can help you formulate the most complex as well as easy trading strategies and backtest them manually. In addition to this, we also support your trading with the lowest brokerage for intraday trading. 3. Perform Manual Backtesting on Your Strategy You might have already figured out what to do next! Backtest your method by moving the chart ahead bar by bar. This entails recording trades anytime your trading method suggests it. Recording your trades is actually pretty simple, and it can be done using either a physical journal or software like Microsoft Excel. It is not difficult to keep track of your trades, but it can be time-consuming. When a trade signal is generated, all you need to do is record the entry point, stop-loss, date and time, and any other information that may be relevant to the trade. Many traders like to mention other nuggets that their trading method is informing them, such as the risk to reward ratio, and so on. When you’re ready to exit the trade, make a note of your return as well as the exit point. After that, you simply repeat the procedure. Backtesting, as you may have guessed, can be tedious and time-consuming. Remember that backtesting a decade of data will most likely take at least a few hours. As a result, when you sit down to backtest a technique, make sure you have the time. The Drawbacks of Manual Backtesting The issue with manual backtesting is that you can make mistakes when tracking the data. In addition, when backtesting your technique, there is a psychological component involved. Because you can see the data ahead of you, you may not wind up executing the trades that your method suggests. People usually try to excuse this by saying, “I wouldn’t have made that trade in real life.” Simply do not do this! If a trade fulfills your criteria, make a note of it! If you are able to authentically and honestly note down your trades while backtesting manually, then you do not have to sprint for expensive programs and data plans to backtest. Your journal or excel sheet would suffice. As we have mentioned before, when you choose to start with manual backtesting, you need an online trading platform that accommodates every complexity of your trading system. As a leading share broker, we at Zeu have created an online trading platform that comes with a host of indicators to help you formulate and backtest a strategy. In addition to this, we also support your trading efforts by giving the lowest brokerage for intraday trading.

Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

One of the decisions that new traders must make is whether to be a discretionary or a system trader. Discretionary trading is trading that is based on a decision. Based on current market conditions, the trader determines which deals to execute. System trading, on the other hand, is based on rules. The trading system determines which deals to execute; current market conditions are irrelevant. Discretionary and system trading can both be profitable. That is, the decision should be made based on the trader’s personality. Some traders may immediately determine which kind of trading is best for them; others may need to try both sorts before deciding. Whether you are a system trader or a discretionary trader, we provide you with the best trading accounts to choose from. As one of the top brokers in share market, we provide one of the lowest brokerage fees to help you make as many trades as you would like for the day. The Benefits and Drawbacks of Discretionary Trading The trader picks the transactions to make based on the information available at the moment in discretionary trading. A discretionary trader can (and should) nonetheless stick to a trading plan with well-defined trading guidelines. They will use their discretion in accepting the trade and managing it. A discretionary trader, for example, may study their charts and discover that all of their requirements for a long trade have been met. Nonetheless, they may decline to make the trade since the volatility for the day is too low, and so the price is unlikely to reach the profit target for the trade. The benefit of discretionary trading is that it is responsive to market situations. You may have an excellent trading system, but if you are aware that it performs poorly in particular market conditions, you can avoid those trades. Alternatively, if you see your strategy performs well in other conditions, you might increase your position size somewhat during such times to optimise gains. The disadvantage of a discretionary method is that many traders are prone to second-guessing themselves. They may be inept at determining when to trade and when not to trade; consequently, a more methodical approach would be preferable. Discretionary systems are vulnerable to trader psychology; being overly greedy or scared can quickly erode the profitability of a discretionary trading system. System Trading Benefits and Drawbacks The choice to make a trade in system trading is totally dependent on the trading system. System trading choices are final. They do not allow the dealer to decline a trade at his or her discretion. If the criteria are met, the trade is executed. A system trader may study their charts and discover that their trading system’s requirements for a short trade have been met. They will complete the transaction without any further deliberation. This is true even if their “gut” tells them it isn’t a good trade. System trading techniques can frequently be automated since the rules are so well defined that a program can carry them out on the trader’s behalf. Once a program has been built to determine when the requirements of a trading system have been completed, the program can make the trade without the trader’s involvement. This involves entry, management, and exit. The system trading approach has the advantage of being immune to the trader’s psychological whims. The system accepts all trades regardless of how the trader feels. The disadvantage is that systematic trading is not very adaptable. Trades are always accepted as long as the terms are met, even in less advantageous conditions. More rules can be introduced to the system to help overcome this problem, however, this often results in the loss of some winning trades. Discovering Your Personal Style Discretionary trading and system trading both aim to make money, but in slightly different ways. The two systems may even make many of the identical trades. Each will most likely be better suited to different types of traders. Discretionary trading is ideal for traders who desire complete control over their trading decisions, including entry, stop loss, and exit. Discretionary traders frequently feel uneasy about handing over total management of their trading to software. Discretionary trading is also for folks who just want to adjust their transactions to current market conditions. System trading, on the other hand, is ideal for traders that value speed, precision, and accuracy in their trading. System traders have no reservations about using a computer program to make trading choices for them. They may cherish the sense of diminished responsibility that this provides. Can You Use Both Methods? It is feasible to be a discretionary trader who employs system trading. However, it is not viable to be a system trader who also employs discretionary trading. A discretionary trader, for example, may use a trading system for their entries and take every deal that the system identifies. They can then manage and exit their deals at their leisure. A system trader does not have this option because they must adhere to their trading method exactly. If a system trader makes a decision without following the rules of their strategy, then he/she becomes a discretionary trader. All of your trades, whether you are a discretionary trader or a system trader, need to be complemented by the lowest brokerage and the best trading accounts you can find. As one of the top brokers in share market, we at Zebu offer low brokerage trading accounts and a high-end trading platform to execute your strategies. To know more, please get in touch with us now.

Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

In the stock market, averaging is a group of trading strategies that use the basic principle of lowering or raising your share prices to deal with market changes. There are many different types of averaging strategies that a trader can use in different types of markets. For example, in an early bull market, the price of your stock can drop because of averaging. When strong fundamentals like an increase in PAT and steady revenue growth help, one can add to their stock holdings in small amounts. In a down market, on the other hand, an averaging strategy is used to lower one’s risk of losing money, which makes the units bought more profitable. So, averaging is not just for losing trades. You can use this guide to learn about the different ways you can average your stocks out. Averaging involves executing a number of trades before you exhaust your capital. That is why you need the best online trading company that provides you with the best stock trading platform. We at Zebu find that it is our obligation to provide our traders with the best trading accounts so that they can average their investments with ease. Here are some of the different averaging strategies used by traders in the stock market. 1. Average down This is one of the most common ways to average. It is done by buying more shares after the price of the stock drops after the first one is bought. This means that the average cost of all the shares you own goes down. This also means that the breakeven point goes down, which makes it easier to make money. This is shown in the following example. Here is an example: Ramesh and Suresh think that ITC’s stock price is going to rise. Assume that both of them have a capital of Rs 1 lakh and need to make a profit of Rs 5,000. Ramesh invests a lump sum of Rs 1,00,000 in ITC at 100 (1000 shares). For him to make a profit of Rs 1,500, ITC needs to move up to 105. Suresh, on the other hand, expects some volatility in the stock for the short term. So he invests Rs 50,000 at 100 (500 shares), Rs 25,000 at 98 (255 shares) and Rs 25,000 at 96 (260 shares). HE has averaged down and holds 1015 shares at an average of 98.47. For Suresh to make a profit of Rs 1,500, ITC’s share price needs to move just to Rs 103.44. In this scenario, Suresh has clearly made a better decision since he divided his capital to buy the shares at lower prices. In other words, he has averaged his cost for a better risk-reward ratio. 2. Average up A lot of people use the strategy of averaging up when the market is going up, which is called a “bull market.” Traders use this strategy if they know that the original trend of the stock is still going strong and has a lot of room for growth. Ramesh, who thinks ITC stock is going to rise, buys 100 shares at 1,660. In the next few days, let’s say that the price of ITC stock rises from this point. Now that he’s sure he’s right, Ramesh buys 100 shares each at a price of 1960 and 2250. As Ramesh thought the stock would go up at these prices, he took his total transaction cost to 5,87,000. If you want to buy 300 shares of XYZ, this is how you can improve your conviction. Suresh had the same bullish expectation and didn’t average up his position and was left with his initial 100 shares instead. At the end of ITC’s bull run, Ramesh will be left with more profits than Suresh. Another important averaging technique is the Pyramid strategy. Traders average by breaking down their position size by investing a larger sum at the first price and keep reducing their quantity of shares as the price moves as per their expectations. However, it is a very risky strategy reserved only for experienced traders. For the sake of capital protection, we will not be getting into a detailed explanation of the strategy. To sum up, averaging is a common way to trade in the stock market. It means scaling up or down on the price of a share to handle the volatility of the market. Since it can become complex if it is not executed properly, you need the best trading accounts to average your trades and investments. As a leading online trading company, we provide you with the best stock trading platform to average effortlessly.

Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

Financial Independence, Retire Early (FIRE) is a movement of individuals committed to extreme savings and investing strategy that enables them to retire significantly sooner than typical budgets and retirement plans allow. FIRE was born out of Vicki Robin and Joe Dominguez’s 1992 best-selling book Your Money or Your Life. It came to reflect the book’s central premise: People should analyse every expense in terms of the number of work hours required to pay for it. The FIRE retirement movement is a direct challenge to the traditional retirement age of 65 and the business that has developed to encourage people to plan for it. By allocating the majority of their income to savings, members of the FIRE movement aspire to be able to retire decades before they reach 65 and live entirely off tiny withdrawals from their holdings. The concept of FIRE is extremely popular with millennials and there is no reason that Gen Z Indians will not follow suit. Followers of FIRE work for several years and save up to 70% of their annual salary. When their savings accumulate to approximately 30 times their annual expenses, or approximately $1 million, they may decide to quit their jobs or retire entirely. At Zebu, we understand that traders and investors with very high aspirations need nothing short of the best Indian trading platform with its plethora of features and scanners. As one of the top brokers in share market in India, we have the privilege of providing our users with their best trading accounts. To fund their living expenses after early retirement, FIRE enthusiasts make small annual withdrawals from their investments, often between 3% and 4% of the sum. Depending on the size of their funds and desired lifestyle, this may require extraordinary care in monitoring costs as well as a commitment to investment upkeep and reallocation. Types of FIRE Fat FIRE—This option is for the conventional worker who wishes to save significantly more than the average worker but does not wish to sacrifice their existing way of living. It is often not feasible without a high salary and active savings and investing plans. Lean FIRE—This involves a strong dedication to minimalism and extreme savings, necessitating a significantly more restricted lifestyle. Numerous Lean FIRE devotees live on less than $25,000 per year. Barista FIRE—This is for those who choose to reside in the grey area between the two options above. They abandoned their typical 9-to-5 occupations but maintain a less-than-minimalist existence through a combination of part-time work and savings. The former enables individuals to receive health insurance, while the latter stops them from withdrawing assets from their retirement accounts. Who Is FIRE Really For? The majority of people believe that FIRE is only for people who have a big salary, typically in the six figures. Indeed, if your goal is to retire in your 30s or 40s, this is almost certainly true. However, there is much for everyone to learn from the movement’s ideals, which can help individuals save for retirement and even attain an early retirement, albeit not quite as early as 40. And keep in mind that the first part of FIRE stands for financial independence, which, if attained, enables you to work at something you enjoy rather than something you have to do. According to author Robin, FIRE is about more than early retirement; it teaches you how to consume less while living better. Meticulous planning The FIRE movement emphasises the necessity of developing a clear strategy and sticking to it, which are principles that will assist anyone in saving for retirement and building a sizable emergency fund. Economic self-control To attain a FIRE retirement, you must maximise your income while keeping your spending to a minimum. While retiring by 40 requires extreme measures, everyone can benefit from creating and adhering to a budget while working as hard as possible to earn as much money as possible, whether through a better job, adding a second one, or creating additional revenue streams through side hustles or rental property ownership. A prudent investment Nobody can retire comfortably if they do not invest in their retirement funds. FIRE devotees invest a greater percentage of their income than the ordinary person would. However, the notion of setting aside a fixed proportion of your salary each month for investment — and beginning as soon as possible — will enable you to grow your retirement savings to a level that will ensure your financial stability in your later years. According to Robin’s comments, the book’s purpose is not to impart a master plan for early retirement; rather, it is to demonstrate how to live better while spending less in order to live a more fulfilling life while consuming less of the world’s resources. If you are a FIRE enthusiast, we would love to support your goals with the best trading accounts from Zebu. As one of the top brokers in share market, we have created the best Indian trading platform for waiting for you to take charge of your financial future. To know more about our products and services, please get in touch with us now.

Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

Fundamental analysis is about getting to know a company, its business, and its future plans better. It includes reading and analysing annual reports and financial statements to get a sense of the company’s strengths and weaknesses, as well as its competitors. Before you get started on your journey of investments, we believe that you deserve one of the best trading accounts from one of the top brokers in share market. With Zebu, you get access to a state-of-the-art online trading platform with which you can perform comprehensive fundamental and technical analysis. A few of the important parameters while doing fundamental analysis are: 1. Net Profit Net profit can mean different things to different people. Net means “after all the deductions.” It’s common to think of net profit as profit after all the operating costs have been taken out, especially the fixed costs or overheads. Gross profit gives investors the difference between sales and direct costs of goods sold before operating costs or overheads are taken into account. This is not the case here. It is also called Profit After Tax (PAT), which is the profit figure that is left after taxes are taken out of the profit. 2. Profit Margins The earnings of a company don’t tell the entire story. Earning more money is good, but if the cost goes up more than the revenue, the profit margin doesn’t get better. The profit margin shows how much money the company makes from each rupee of sales. This measure is very useful when you want to compare businesses in the same industry. On the basis of a simple formula: Net income / Revenue = Profit margin In this case, a higher profit margin means that the company is better able to control its costs than its competitors are. The profit margin is shown in percentages. If a company makes 10 paise for every rupee they make, then the profit margin is 10%. This means that the company makes 10 paise for every rupee they make. 3. Return on Equity Ratio Return on Equity (ROE) shows how well a company does at making money. It is a ratio of revenue and profits to the value of the company’s stock. Find out how much profit a company can make with the money its shareholders have put into it. A simple way to do this is to look at the return on equity ratio, The Return on Equity Ratio is calculated as shown. Return on equity = Net Income / Shareholder’s Equity It is calculated in rupees. This factor is important because it tells you about a lot of other things, like leverage (debt of the company), revenue, profits and margins, returns to shareholders. For example, a company called XYZ Ltd. made a net profit (before dividends) of Rs. 1,00,000. During the year, it paid out dividends of Rs. 10,000. XYZ Ltd. also had 500, Rs.50 par common shares on the market during the year, as well. That’s how the ROE would be calculated then. ROE = 1,00,000–10,000/500*50 = Rs. 3.6. Simply put, those who own shares in the company will get back Rs. 3.6 for every rupee they invest in the company. 4. Price to Earnings (P/E) Ratio People often use the Price-to-Earnings (P/E) ratio to figure out how much a share of a company is worth. It tells us how much money the company makes per share in the market today. We can figure out the Price of earnings, or PE ratio, as shown below. In simple terms, PE = Price per Share / Earnings per Share This also helps when you want to compare businesses. Then companies should figure out their EPS and then figure out how much their PE ratio value is. A high P/E means that the stock is priced high compared to its earnings. Companies with higher P/E seem to be more expensive. However, this measure, as well as other financial ratios, must be compared to other companies in the same industry or to the company’s own P/E history to be useful. If company XYZ has a share that costs 50 rupees, and its earnings per share for the year are 10 rupees per share. The P/E Ratio is 50/10, which is 5. 5. Price-to-Book (P/B) Ratio A Price-to-Book (P/B) ratio is used to compare a stock’s value on the market to its value on the books. Calculating the P/B ratio is the way to figure out if you’re paying too much for the stock because it shows how much money the company would have leftover if it were to close down today. P/BV Ratio = Current Market Price per Share / Book Value per Share Book Value per Share = Book Value / Total number of shares Having a higher P/B ratio than 1 means that the share price is higher than what the company’s assets would be sold for, which means that the share price is higher. The difference shows what investors think about the future growth of the company. XYZ company, for example, has 10,000 shares trading at Rs.10 each. This year, the company recorded a net value of Rs. 50,000 on its balance sheet. The price-to-book ratio of the corporation would be as follows: 50,000 / 10,000 = Book Value per Share P/BV Ratio = 10 / 5 P/BV Ratio = 2 The company’s market price is two times its book value. This signifies that the company’s stock is worth twice as much as the balance sheet’s net worth. Also, because investors are ready to pay more for the business’s shares than they are worth, this company would be called overvalued. Zebu is the house of the best online trading platform in the country – as one of the top brokers in share market, we have provided the best trading accounts for our users. Think of the most complex analysis that you need to do and Zebull Smart Trader from Zebu will make it possible for you. If you would like to know more, please get in touch with us now.

Large Cap vs Mid Cap vs Small Cap: Key Differences That Actually Matter

Until a few years ago, almost no one was interested in annuities as a source of post-retirement income. In the last three or four years, members of the NPS have been interested in the concept of annuities and how they may be used to create income. Unfortunately, annuities, at least those offered in India, are prohibitively expensive, inefficient, and incapable of mitigating inflation, which is, after all, the greatest long-term threat to anyone’s retirement income. As a result, retirees should consider alternative sources of income (whether fixed income or equity-based). Indeed, even the Pension Fund Regulatory and Development Authority (PFRDA), which now requires that 40% of a retiree’s money accumulated in the National Pension System (NPS) be used to purchase an annuity, is considering adding a non-annuity withdrawal plan in its place. PFRDA recognises that annuity should not be the only option and may not even be the most appropriate one. Before you get started on your post-retirement plan, you need the best stock trading platform with the lowest brokerages to realise maximum profits from your investments. As one of the fastest growing and best brokerage firms in the country, we have created a suite of products to help you analyse stocks and make an informed decision. Developing a post-retirement income plan begins with an evaluation of your monthly income requirement and available money to determine if there is a meeting ground. Clearly, in the early years, there is little that can be done to alter this equation. As a general guideline, an initial withdrawal rate of no more than 6% is optimal. Anything more tends to increase the risk of capital depletion. Indeed, the lesser the withdrawal, the better. Keeping a close eye on spending, in the beginning, will pay dividends afterwards. If you can make do with less, that would be ideal. Increasing the withdrawal ratio exposes you to significant risk down the road because when you are attempting to develop a long-term withdrawal strategy from your investment, you must be prudent enough not to deplete your cash. Of course, there are times when a retiree may experience market misfortune. Interest rates may also tend to drop over extended periods of time in fixed income. You must choose an asset allocation strategy based on all of these considerations. Almost certainly, you will realise that an all-fixed-income strategy is insufficient. To sustain a rising inflation-beating income, a fixed income plan must accept a withdrawal rate that cannot exceed 4% and should preferably be lower. To put the concept into perspective, a withdrawal plan permits you to withdraw a significant portion of your income while leaving a tiny portion of your growth. Assume you have Rs 1000 and it increases by 8%. By deducting 6%, you retain a small portion of the appreciation to support a bigger income the next year. However, if you consume it all, your capital will remain constant, which is undesirable given that you will almost certainly require a higher income during the next 25 years. Given the reality of inflation and increased medical costs in old life, there is very little chance you will require less money in ten years. As a result, you must leave a portion of your growth and not consume it entirely. Not only that, the less money you borrow today, the more secure you will be later. As a result, you’ll need to consider a conservative allocation, perhaps 15% to 35% in equity, depending on the size of your investment. If your capital is restricted, you might have to undertake more risk in equity. If you have more than sufficient capital, you can afford to have a lower equity allocation. The optimal strategy is to take away at most (ideally less than) 80% of the appreciation in the current year and then leave 20% there. This way, you’ll have some room for capital growth, which is how you’ll need to adjust it. This way, your income will rise faster in good times, but you will not deplete your capital in poor times, and it will remain fair. This level of discipline will provide a financially secure retirement. Whether you are starting your investment journey at retirement or are looking for a reliable trading and investment platform to grow your capital, then Zebu is the answer for you. As one of the best brokerage firms in the country, we have created Zebull, our best stock trading platform. We charge the lowest brokerage for derivative trading and will help you realise your financial goals. To know more about our products and services, please get in touch with us now.