Archive for the ‘Equity & Derivative Trading’ Category

Equity News Update

DOMESTIC NEWS

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Economy

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•The Food Price index increased 13.75 per cent in the week ended October16, sharply lower that the previous week’s annual rise of 15.53 per cent,mainly as vegetables continued to exert downward pressure on account ofa base effect.

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Power

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•Reliance Power Ltd has placed order for 30,000 MW capacity of Boiler,Turbine, Generator Packages (BTG) for its coal based power plants withShanghai Electric Group Co Ltd, the leading global supplier of powerequipments.

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Realty/ Construction

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•Nagarjuna Construction has bagged four projects worth 540 crore in thestates of Tamil Nadu and Uttar Pradesh.

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Capital Goods

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•BGR Energy Systems has bagged a 2,168-crore balance of plant (BoP)contract from Hyderabad-based Thermal Powertech Corporation of IndiaLtd. The project is funded by Rural Electrification Corporation (REC) as thelead lender with consortium of banks.

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Automobile

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•Maruti Suzuki India (MSI) is planning to ramp up its service centres by amassive 1,500 outlets by 2015 in line with its expansion of productioncapacity to over 17 lakh units annually. This enhancement is expected toresult in additional employment of about 22,000 people by the servicenetwork operators.Information Technology

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•Wipro Ltd, India’s No 3 software services provider, secured an IT servicescontract from Electricity North West Ltd, which operates the electricitydistribution network in north-west England.

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•Tata Consultancy Services announced an ASP (application service provider)initiative with Strate, the licensed Central Securities Depository (CSD) inSouth Africa. This joint venture with TCS, for the TCS BaNCS SecuritiesProcessing solution, will provide best-in-class and leading-edgetechnology to mid-tier players in the South African market.

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Pharmaceuticals

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•Strides Arcolab has received tentative approval from US Food and DrugAdministration (FDA) for one new drug application (ANDA) for fixed dosecombination of Lamivudine and Zidovudine tablets 150mg/300mg underthe expedited review provisions of the President’s Emergency Plan for AIDSRelief (PEPFAR).

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•Biocon will invest $161 million in a facility in Malaysia, joining a number ofIndian companies that have chosen to establish facilities in the South-EastAsian country.

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Oil & Gas

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•Petronet LNG plans to set up a 1,200-MW gas-based power plant linked toits Dahej terminal and will seek the approval of its board in a month. Theproject would be financed through internal accruals and debt. Thecompany has already acquired about 50 hectares of land for the project.

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INTERNATIONAL NEWS

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•US third quarter GDP expanded at a 2.0 percent annualized pace, followinga 1.7 percent rise the prior quarter. The latest figure matched analysts’projections for a 2.0 percent gain. Year-on-year, real GDP in the secondquarter is up 3.1 percent, compared 3.0 percent in the second quarter.

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•US new home sales rose 6.6 percent to an annual rate of 307,000 inSeptember from an annual rate of 288,000 in August. hile new home salesremain at relatively low levels, the annual rate has moved well off therecord low of 282,000 set in May. Nonetheless, the annual rate of newhome sales in September is still 21.5 percent below the rate seen in thesame month a year ago.

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•US New factory orders for durable goods in September rebounded 3.3percent, following a 1.0 percent decrease in August. The gain inSeptember came in significantly above the consensus forecast for a 1.6percent boost. Excluding transportation, new durables orders fell back 0.8percent, following a 1.9 percent increase in August.

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•US initial claims fell steeply to 434,000 in an October 23 week that isn’tskewed by special factors. The level is the lowest since July as is the fourweekaverage of 453,250. Given that July’s data were distorted byadjustment problems tied to auto retooling, the latest batch of data isperhaps the best so far of the recovery.

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Equity News 27th September – 1st October

DOMESTIC NEWS

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Economy

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·Food inflation, as measured by the Wholesale Price Index (WPI), rose to 15.46 per cent for the week ended September 11, primarily due to rise in prices of potatoes and onions. Food inflation stood at 14.77 per cent during the corresponding week in 2009 and at 15.1 per cent during the previous week ended September 4.
Realty/ Construction ·IVRCL Infrastructures & Projects Ltd (IVRCL) has bagged orders worth `750
crore for four laning and improvement of Karanji-Wani-Ghuggus – Chandrapur Road Maharashtra State Highway – 6&7 in Yavatmal and Chandrapur district on DBFOT basis.


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Cement

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·J K Lakshmi Cement would invest `1,800 crore over the next three-four years to double its cement production capacity to 10 million tonnes.

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Oil & Gas

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·GAIL India will make capital investment of around `40,000 crore ($8.8 billion) by 2014-15, mainly to expand its pipeline network and boost petrochemicals capacity.

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Telcommunication

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·Kavveri Telecom has bagged a contract worth `30 crore from one of the telecom operators for the supply of equipment and antennas. The order is to be completed within a year.

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·Bharti announced its entry into the fast-growing mobile handset business as group firm Beetel launched eight handsets in the price range of `1,750- 7,000. Bharti is India’s number one mobile service provider with over 140 million subscribers and the company recently acquired Zain Telecom in Africa to expand its footprint in 16 countries.

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Capital Goods

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·BHEL said it is in talks with SAIL and Vizag Steel to tie up for manufacturing high grade steel, while Korean steel maker Posco may join the proposed joint venture company as a technology partner.

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·Bharat Heavy Electricals Ltd has got a contract worth `2,665 crore ($583 million) to set up a 1,200 megawatts coal-fired power plant at Chhattisgarh in central India.

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Paint

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·Berger Paints India Limited has proposed to set up a paints manufacturing complex at Hindupur in Anantapur district of Andhra Pradesh comprising three units and involving an investment of around `350 crore.

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Pharmaceuticals

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·Aurobindo Pharma has received USFDA approvals for ampicillin and.sulbactam injections in bottle, single-use vial and bulk pack formats.

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Ampicillin and sulbactam is a sterile semi-synthetic penicillin product falling under the anti-infective segment.

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FMCG

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·Procter & Gamble India (P&G) is set to bring in one of its biggest global brands–Wella hair colour—as it looks to strengthen its health and beauty business in India. This is the first time that the detergents-to-diaper maker will enter the Indian hair colour market, which is dominated by L’Oreal India’s L’Oreal Excellence Crème and Garnier, and Godrej Consumer Products.

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INTERNATIONAL NEWS

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·US Fed left policy rates unchanged but appears to have begun preparations for additional easing-possibly at the post-election November FOMC. The fed funds target range was left unchanged at a range of zero to 0.25 percent and, again, the Fed stated that this rate is expected to remain low for an “extended period.”

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·US Housing starts showed unexpected strength in August with even the single-family component increasing. Housing starts in August jumped 10.5 percent after rising a modest 0.4 percent in July. The August annualized pace of 0.598 million units clearly topped analysts’ expectations for 0.550 million units and is actually up 2.2 percent on a year-ago basis. The gain in August was led by a 32.2 percent surge in multifamily starts, following a 36.0 percent increase in July. The single-family component rebounded 4.3
percent after dipping 6.7 percent in July.

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·US Existing home sales rose 7.6 percent in August to a 4.130 million annual rate, up substantially from July’s 3.840 million rate (revised from 3.830).

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Gains swept regions with supply coming down a bit, at a still extremely swollen 11.6 months. Prices are softening, down 1.9 percent to a median $178,600. The gain in sales was predicted by the pending homes sales report released early in the month, data that popped higher.

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COMBINING TECHNICAL ANALYSIS WITH OTHER RESEARCH TECHNIQUES

Though technical analysis as a research tool can be used in isolation but for the betterment of subject under study i.e. financial markets; we can employ other research tools in combination to technical for the best possible outcomes. Due to lack of technical knowhow, people opt for one of the many research tools available to us. On the other hand, markets are globalizing and probability of generating return is diminishing with the every passing day so to surpass the competition, one should have the basic knowledge of the other research tools as well so that they can deploy the same as and when required. Technical analysis is concerned with when and how to place money. It determines the optimal timing for a position and conclusions about how long to stay in a particular trade have significant importance for the kind of derivatives structure one may use.

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Using derivative instruments requires strong background as the nature of the product has several advantages and at the same time disadvantages if used without the proper understanding.

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So by combining the aforesaid research methodology, there are various trading possibility arises which ensure sustainability of return despite fluctuating market conditions. In emerging markets, these concepts are getting popular for the consistent return with minimum risk. Derivatives help to hedge the position in the underlying to avoid unmanageable losses.

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For success in any market condition, one need to know the prevailing trend which we can make out through technical analysis now comes the derivative part that what we can do within that trend for maximizing the return with the minimum risk. There are N numbers of trade possibilities once you generalize the market direction well. Technically, there are tools like Moving average, which indicates the prevailing trend once we overlay above the same on price chart so if the trend is up the bullish strategy like Bull call spread, call buying and many more. In other words, there are techniques for every market condition so understanding of derivative will give you an edge as the major segment of the market participant is still not clear over the profitable usability of the same so all you need is confirm the prevailing trend whether its’ up, down or sideways and design the strategy accordingly.

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To start with, it does require study of different terminology and their implications from the derivative segment that will ultimately be fruit full in future.

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By taking an example, the concept will be crystal clear. In the recent past, I have employed one of those techniques for trading Reliance industries. The related analysis is explained with the chart shown from the snap shot of the report dated 09th June, 2010.

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On the weekly charts, it was trading in uptrend channel with the slow pace of inclination. It tested the lower band of the channel thrice in the past and was trading around the same zone. With the help of Bollinger band, we noticed that the bottle neck pattern was formed which indicated possibility of sharp move either side in the near future with rise in volatility.

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Accordingly, we recommended buying straddle. Strategy – Buy CA 1000 June@ 30 and Buy PA 1000 June @ 21 so the total cost of building strategy was 30600 {total premium paid (i.e. 30+21= 51) * lot size of 300*2}for the target of overall rise in the premium paid by `20-30 (i.e. – `71-81) with the stop loss of decline in premium paid by Rs 10. ( i.e. `41) Though the overall trend was sideways but we witnessed that such opportunity may arise due to rise in volatility and trigger the position accordingly.

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Within a week, it outperformed the above mentioned target by good margin. The idea is to enhance the base so that the probability of beaten down in adverse situation reduces. Better defense is more important than attack and derivative provide the same against the market odds when one fails to realize that the deterioration may erode the capital if not tackled on time so it make sense to combine the derivative strategy with technical to get the optimal returns with calculated risk.

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News Round Up 2nd -6th August 2010

•India’s food ministry proposes to sell 2.74 million metric tonnes of food grain over the next six months from federal stocks in a bid to free-up warehouse space.

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•The government has allowed export of 3,00,000 tonnes of rice and wheat through diplomatic channels to Bangladesh and Nepal.

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•Soyabean Processors Association of India expects soybean production in the country at 85 lakh tonnes (lt), which is far below last year’s 95 lt.

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•Turmeric area in Andhra Pradesh stood at 0.53 lakh hectare against 0.41 lakh hectare, nearly 101 % of the normal area covered.

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•Water level in India’s main reservoirs was at 19 per cent of capacity on July 22, 2 per cent higher than the previous week’s level, government data showed.

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•Wholesale Price Index For food articles 9.67% on week ending 17 July against 12.47% previous week.

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•Commodity futures market regulator FMC may consider the creation of an appellate tribunal akin to that in stock markets for the resolution of disputes between clients and brokers.

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•Supply from the OPEC (except Iraq) has averaged 26.95 million barrels per day (bpd) this month, up from 26.75 million bpd in June, according to the survey of oil firms, OPEC officials and analysts.

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More Hybrid Varieties of Tur/Red Gram Set to Hit Market

Hello Friends here we come up with the Latest Agri Commodities updates from various parts of the country.

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More hybrid varieties of Tur/Red Gram set to hit market

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More hybrid varieties of Tur/Red Gram set to hit market

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The Hyderabad-based International Crops Research Institute for the Semi-Arid Tropics (Icrisat), a non-profit, non-political agricultural research organisation, is set to release three new hybrid varieties of pigeon pea (tur or red gram) for commercial multiplication by seed companies, a senior scientist said.

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“After the commercialization of cytoplasmic male sterility (CMS)-based pigeon pea hybrid (ICPH 2671) two years ago, we have developed three more hybrid varieties.

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The test results are promising and we will give parental lines to seed companies for multiplication later this year,” CL Laxmipathi Gowda, Global Theme Leader, Crop Improvement and Management, Icrisat, told reporters.

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In Other major Commodities Update, there are news of Cane farmers in Maharashtra set to rake in at least Rs 4k crore of additional income in the current 2009-10 season and South India planters’ income dropping to Rs 1,479 cr.

🙂

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Cane farmers to reap bonanza

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Cane farmers in Maharashtra are set to rake in at least Rs 4,000 crore of additional income in the current 2009-10 season due to better prices paid by sugar mills.

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During the previous 2008-09 season (October-September), mills in the State crushed 400.27 lakh tonnes (lt) of cane and paid an average final rate of Rs 1,513 a tonne to growers at their farm-gate.

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That translated into a total income of Rs 6,056 crore for the farmers.

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For the ongoing season, total crushing is expected at 455 lt, with the final farm-gate price of cane averaging around Rs 2,250 a tonne.

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That would result in an income of Rs 10,237 crore or Rs 4,181 crore more than what was paid out in 2008-09, said Mr Prakash Naiknavare, Managing Director, Maharashtra State Cooperative Sugar Factories Federation.

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🙂

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South India planters’ income drops Rs 1,479 cr:

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Going by the production figures and prices for coffee, tea, rubber, pepper,cardamom and vanilla, the plantation owners earned a total of Rs 14,834.84 crore in 2008.

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In 2009, it dropped to Rs 13,355.51 crore.

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Plantation industry sources said the data on the lower income for the growers do not take into account the rise in production costs.

This means, the plantation sector, as a whole, could have taken a bigger hit.

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The drop in rubber production has been a big drag on the income of the planters, who had to cope with Rs 10 a kg fall in prices.

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The average price in 2009 was Rs 97.56 a kg against Rs 107.74 in 2008.

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Currently, rubber prices average over Rs 130 a kg.

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🙂

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

How To Get Started in Online Investing? Final Part

Hello Friends here we come up with an extension of our previous blog “How To Get Started in Online Investing?” Part 1.

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How To Get Started in Online Investing?

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In previous blog, we have touched upon the questions, any beginner investors do have in their mind while going for investing.

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At the same time we had also tried to look in previous blog that what is Online Trading, resources needed first of all to invest online, few steps to start investing online and how SMC ONLINE helps investors in reaping the benefits of online trading.

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In this Blog, we would try to discuss about what are the further steps an investors need to take once the initial registrations are done with.

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🙂

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Once the registration formalities are done with, you would be required to load your online investing trading account with funds.

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Once Funds would be deposited you would need to look out for the stocks on which you would like to invest prima facie.

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One thing you should bear in mind that before investing, you should do the in-depth research about the company’s profile, performances and services.

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In this respect investing firms like SMC ONLINE comes to your rescue usually by helping you with their excellent research support, stocks recommendations and quality statistics.

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These things are really very important while you invest in buying the shares of any company.

As a wise investor you should keep your eyes open, and don’t blindly trust anyone.

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Another very important thing is RISK FACTOR.

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You’ll have to take the risk in terms of investing your money in the stock market.

Stock market is a bit similar to gambling.

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But there is a big difference between the risk and calculated risk.

For a beginner, you should only go for calculated risk.

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Don’t put your entire money in terms of buying the shares of a new company, even if the future potential of that company seems very high.

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Start slowly, understand the market, earn some decent amount of money first of all and then go for big trading.

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Once you have gotten started, you should start by learning a little bit about chart reading.

If you can read the charts you will have a good idea what is going on.

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And as I said earlier, I would conclude this topic by saying that any beginner investor should look for a broker firm that gives good value for money with their commission fees.

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🙂

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Stay Tuned for more and more on this 🙂

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However For More latest Industry,Stock Market and Economy News Updates, Click Here