Zebu blog

Tag: trading

  • Open Interest Analysis 101: Understanding the Basics

    Traders employ the open interest analysis approach to assess the market’s underlying activity. It may be used to spot patterns, understand market mood, and execute good trades. We’ll go through the fundamentals of open interest analysis in this blog post, including what it is and how it can help you trade better.

    Let’s define open interest first. The total number of contracts that are still open in a given market is known as open interest. It is the quantity of contracts that have been purchased or sold but have not yet been countered by another transaction. Open interest, then, is the number of trades that have been made but not yet completed.

    There are several methods to use open interest to spot patterns and market sentiment. For instance, increasing open interest may signal a greater influx of buyers, while declining open interest may signal a greater influx of selling. So, if you are looking to buy a call option, make sure that others are also agreeing with your view based on the open interest.

    The strength of a trend may also be determined using open interest. For instance, a strong bullish trend may be indicated if the open interest is increasing while the price is also increasing. On the other hand, if the price is declining and the open interest is increasing, this can point to a strong negative trend.

    Identifying possible trading opportunities may also be done using open interest. For instance, if open interest is high in a certain market, it can mean that there is a lot of trade going on there. This may indicate that there is a lot of market liquidity, which would make it simpler to initiate and close trades. Furthermore, if open interest is low in a certain market, it can be a sign that there is less trading activity there, which might make it more challenging to initiate and exit trades.

    It is essential to remember that while making trading decisions, open interest should not be employed alone. Along with other market indicators like price and volume, it should be used. Open interest should only be used as a confirmation tool because it is not a leading signal.

    To sum up, open interest analysis is an effective instrument that traders may use to assess the underlying market activity. It may be used to spot patterns, comprehend market mood, and execute wise trades. Traders may better comprehend the market and make wiser trading decisions by grasping the fundamentals of open interest analysis.

    Please be aware that open interest analysis should be used in conjunction with other indicators and analytical tools as it is just one of many tools that traders use to assess the market. The risk involved in trading on the financial markets and the fact that previous performance does not guarantee future success should also be kept in mind. Before making any investment decisions, it is always advisable to speak with a financial counsellor.

  • Things To Do Before Becoming A Trader

    When it comes to investing, stock trading gives more weight to short-term profits than long-term ones. It can be dangerous to jump in without knowing what to do.

    How do you trade stocks?

    When you trade stocks, you buy and sell shares of companies to make money off of daily price changes. Traders keep a close eye on these stocks’ short-term price changes and then try to buy low and sell high.
    Traditional stock market investors tend to be in it for the long term, while stock traders focus on the short term.

    If you trade individual stocks at the right time, you can make quick money, but you also risk losing a lot of money. The fortunes of a single company can rise faster than the market as a whole, but they can also fall just as quickly.

    If you have the money and want to learn how to trade, you can trade stocks quickly from your computer or phone thanks to online brokerages.

    Ways to trade stocks

    There are two main ways to trade stocks:
    When an investor makes 10 or more trades per month, this is called “active trading.” Most of the time, they use a strategy that depends heavily on timing the market. They try to make money in the coming weeks or months by taking advantage of short-term events (at the company level or based on market fluctuations) like results, RBI policies and global economic events.

    Day trading is the strategy used by investors who buy, sell, and close their positions in the same stock all on the same trading day. They don’t care much about how the businesses they’re investing in work. The goal of a day trader is to make some money in the next few minutes, hours, or days by taking advantage of price changes that happen every day.

    How to buy and sell stock
    If you’re new to trading stocks, you should know that most investors do best by keeping things simple and putting their money in a mix of low-cost index funds. This is the key to long-term outperformance.

    So, if you want to trade stocks, you need to do five things:

    1. Get a trading account

    To trade stocks, you need to put money into a brokerage account, which is a special kind of account made for holding investments. You can open an account with Zebu in just a few minutes if you don’t already have one. But don’t worry, just because you open an account, you’re not investing your money yet. It just lets you know that you can do it when you’re ready.

    2. Set a stock trading budget

    Even if you’re good at trading stocks, putting more than 10% of your portfolio in a single stock can make your savings too vulnerable to changes.

    If you want to start investing, you could start by putting away Rs 2,000 a month. When you have Rs 2,000, you could put Rs 500 into an investment. Think of the Rs 500 you don’t invest as a parachute. It might not be necessary, but it’s there just in case. Other things to do and not to do are:

    Trade with the money that you can afford to lose.

    Don’t spend money that you need to use soon for things like a down payment or school.

    Cut that 10 percent if you don’t have a good emergency fund and aren’t putting 10 to 15 percent of your income into a retirement account.

    .3. Figure out how to use market orders and stop orders

    Once you have a brokerage account with Zebu and a budget, you can use the website or trading platform to buy and sell stocks. You’ll be given a number of order types to choose from, which will decide how your trade goes. In our guide on how to buy stocks, we explain these in more detail, but here are the two most common types:

    Market order: The stock is bought or sold as soon as possible at the best price.

    Limit order: Buys or sells the stock only at a price you set or higher. For a buy order, the limit price is the most you’re willing to pay, and the order will only go through if the stock’s price falls to or below that amount.

    4. Use a “paper trading account” to get some practice

    Try investing in the market without putting any money in it yet to see how it works.

    Choose a stock and keep an eye on it for three to six months to see how it does. You can also learn about the market with the help of tools like online paper trading. Customers can test their trading skills and build a track record with stock market simulators before putting real money on the line.

    5. Use a good benchmark to measure your returns

    This is important advice for all investors, not just those who are very active. When picking stocks, the main goal is to beat a benchmark index. That could be the Nifty 50 index, which is often used as a stand-in for “the market,” the Sensex, or other smaller indexes made up of companies based on size, industry, and location.

    Measuring results is very important, and if a serious investor can’t beat the benchmark, which is hard for even professional investors to do, it makes financial sense to invest in a low-cost index mutual fund or ETF, which is basically a basket of stocks whose performance is close to that of one of the benchmark indexes.

    And these are the basic dos and don’ts for beginner traders. Stay tuned for more on this subject.

  • 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.

  • 10 Things To Keep In Mind If You Want To Become A Successful Trader

    When you are new to trading and are Googling what it takes to be a successful trader, you’ll quickly become familiar with terms like “plan your trade; trade your plan” and “minimise your losses.”

    And the amount of information available can soon overwhelm you. So, here is a simple, 10-step Gyan about what you should do in the first year of trading.

    Each of the guidelines below is vital, but their combined impact is powerful. Remembering these can considerably boost your chances of market success. But before we get into the article, make sure to always choose an online trading platform that offers either lowest brokerage or zero brokerage intraday trading.

    Never trade without a plan.

    A trading plan details a trader’s entrance, exit, and money management criteria for each buy. With today’s technology, it is easy to test a trading strategy before risking actual money. Backtesting allows you to test your trade concept using past data to see if it works. Once a plan is devised and backtested well, it can be employed in real trading. Your job is to simply keep to the strategy. Trading outside the trading plan, even if profitable, is considered a bad strategy.

    Trading As A Business

    Trading should be treated as a full-time or part-time business, not a pastime or profession. As a hobby, there is no genuine commitment to learning. A job without a regular income might be frustrating. Trading is a business with costs, losses, taxes, stress, and risk. As a trader, you are a tiny business owner who must research and plan to optimise your profits.

    Embrace Technology

    Trading is a cutthroat sport. It’s safe to presume that the most successful traders use all available technology. Traders can use charting software to view and analyse markets in limitless ways. Using a good and trusted online trading platform with the lowest brokerage or zero brokerage for intraday trading is another important strategy. Backtesting an idea with historical data saves money. We can track trading from anywhere with our smartphones. A high-speed internet connection, for example, can considerably improve trading performance. Technology and keeping up with new products may be exciting and lucrative in trade.

    Preserve your trading capital.
    Saving money for a trading account requires time and effort. It’s considerably harder when you have to do it again. Notably, safeguarding your trading capital does not imply never losing a trade. Every trader loses. Protecting capital means not taking needless risks and protecting your trading enterprise.

    Become a Student Of The Market

    Consider your career in trading as lifelong learning. Traders must keep learning every day. Remember that learning about markets and their nuances is a lifetime endeavour. Studying hard helps traders grasp economic information and help them develop an edge over the others. The ability to focus and observe allows traders to refine their skills. Politics, news, economics, and even the weather affect the markets. The market is fluid. Traders are better prepared for the future if they understand the past and current markets.

    Don’t Trade More Than You Can Afford to Lose

    First, be sure that all of the funds in your trading account are genuinely expendable. If it isn’t, you should save. Money in a trading account should not be used to pay for college or the mortgage. It is dangerous to use the money for trading that is earmarked for critical expenses. Money loss is bad enough. It’s even worse if it’s capital that should never have been risked.

    Develop a Fact-Based Methodology

    Developing a strong trading strategy takes time. It’s easy to fall for the online trading scams that promise trading strategies “so easy it’s like printing money.” Facts, not emotions or hope, should guide the creation of a trading strategy. In general, traders who are not in a hurry to learn can sort through the internet’s vast amount of data more easily. Suppose you wanted to change careers, but you needed to spend a year or two in college to be qualified to apply for a job in the new field. Learning to trade takes at least the same amount of effort and research.

    Use a Stop Loss

    As a trader, you set your own stop loss. The stop loss might be in rupees or percentages, but it restricts the trader’s risk. Using a stop-loss reduces tension when trading since we know we will only lose a certain amount. Even if a trade is profitable, not having a stop loss is undesirable. The trading plan’s guidelines allow for lost trades to be exited with a stop loss. The aim is to profit from every trade, but that is unrealistic. Using a precautionary stop-loss reduces losses.

    Know When to Sell

    Inefficient trading plans and ineffective traders are the worst combinations for a trading career. If you feel like your trading strategy is not responding well over a period of time, then take the time out to re-assess and develop your strategy again. An unsuccessful trading plan is an issue that has to be solved. It is not the end of a trading career.

    An ineffective trader is one who sets a trading plan but is unable to follow it. External stress, bad habits, and inactivity all contribute to this issue. Traders who are not in top trading condition may consider resting. After resolving any issues, the trader can resume operations.

    Remain Focused on Trading

    Trade with a big picture in mind. It’s normal to lose trades; it’s part of trading. A winning deal is only one step towards a successful business. And the cumulative profits matter.

    A trader’s performance improves once they accept wins and losses as part of the business. That is not to imply we cannot be happy about a successful deal, but we must also be aware of the possibility of a loss. Setting realistic goals is important for a trading career. Your company should make a reasonable profit in a reasonable time. Expecting to be a multi-millionaire by Tuesday is a recipe for disaster.

    Conclusion

    Understanding the value of each trading rule and how they interact can help a trader build a profitable trading firm. Traders who follow these criteria with discipline and patience might boost their chances of success in a highly competitive market.

  • Everything That Zebu Was Upto In 2021

    Being one of the fastest-growing brokerage firms in India, we feel that it is our responsibility to educate investors and traders and empower them with the right technological tools they need to make informed financial decisions. In that aspect, we have been our end-user tools like Zebu and Smart Trader.
    constantly updating

    Here are the products and services that were updated to become more feature-packed for our customers.

    1. Zebu Web
    Zebu is the web application from Zebu that allows traders and investors to make use of a plethora of indicators and screeners to form their biases for intraday trading, swing trading or long-term investments. With our latest upgrade to the mobile version, users can now view and make use of the average MTM to exit a trade properly.

    2. Smart Trader Web
    This is a standalone trading application that can be downloaded and installed on a PC. This year, we launched the mobile version of the same to help traders access their trades very quickly. These web and mobile versions come with additional functionalities like advanced charting and screening, as opposed to the ones you can find in the regular apps from Zebu.

    3. New eKYC system
    Opening an account with Zebu has never been easier with our new eKYC system that enables paperless and real-time customer onboarding. With frictionless digital onboarding in place, any customer can quickly open an account online in a few hours.

    4. Online ReKYC
    With our new paperless systems, you can do a reKYC at specific intervals to stay compliant with SEBI’s regulations. You can even effortlessly change or update your personal information in a few clicks.

    5. Online SGB
    Sovereign Gold Bonds are Government securities denominated in multiples of gram(s) of gold. They are substitutes for investment in physical gold. On redemption, cash is deposited into the investor’s registered bank account. These Bonds are issued by the Reserve Bank of India on behalf of the Government of India and are traded on a stock exchange. Zebu makes it easy for you to make an investment in SGB.

    6. Upgraded Website
    With an extremely easy-to-use UI and improved usability, we have launched a new and responsive website for Zebu. You can access more information about the products and stay up-to-date on any updates from us.

    7. Single sign-on
    An SSO component adds an additional layer of security to your trading account with us. API users can also use this to log in to their accounts without their credentials.

    8. UPI fund transfer
    Users can now use their default UPI gateways to add funds to their accounts. The money will be added to the customers’ ledger without any latency.

    9. Online pledge
    Our customers can use our highly secure online platform to pledge their securities without providing any physical documents.

    10. Span calculator
    Clients can now easily calculate margin requirements for their trades and investments through a real-time calculator.

    Outreach through financial education


    Our Founder & CEO Mr. Vijaykumar has written information-rich articles for Vikatan, a regional magazine in Tamil Nadu. These articles contain insights and information that will allow readers to connect the dots between news events and their impact on the share market.

    Here are a few titles of the articles he has authored.

    1. The Reserve Bank ordered the dissolution of the board of directors of SREI and recommended a three-member panel to run the company.
    This article follows the measures taken by the RBI to restructure SREI and bring it back on track to become more accountable to its employees, customers and shareholders.

    2. What’s the problem with China’s Evergrand real estate company?
    This one outlines the problems of the company Evergrand in China. The debt-ridden company suddenly seemed to put on a clown show for the public by constantly shifting its business focus.

    3. T1 settlement from SEBI
    This is his take on SEBI’s new rule to change settlement duration from T+2 to T+1. He shares his insights on what this means for traders and investors.

    4. Can start-up companies invest when it comes to IPOs? Lessons from Zomato
    In this article, Mr. Vijaykumar analyses the IPO of Zomato and drives a few lessons that can empower retail investors going in for the next few IPOs of the year.

    5. Can I buy a stock just by looking at the PE ratio? Attention investors
    PE ratio forms an integral part of fundamental analysis and in this article, he explains its relevance in today’s investment decisions.

    6. Recession… But why is the stock market rising? Answer to the question of investors
    In this article, he helps new traders and investors understand the relationship between inflation and market movements.


    At Zebu, we work constantly to improve our products and services. We always appreciate any feedback that we can incorporate to improve your experience with us. We would love to hear from you at grievance@zebuetrade.com