Do Not Overestimate Your Skills With Financial Leverage

leverage trading

There are several reasons why forex and CFD traders fail on the market, the most frequent one is due to a poorly used leverage.It is vital to learn how to handle leverage properly in order to achieve steady profits. Most novice traders underestimate the impact that wrongly used leverage can have on their capital. It is more than easy to completely destroy your financial funds if you do not have enough experience with the leverage.

With great power comes great responsibility

Leverage can work for us as well as against us. The leverage is a strong tool which usage has to be learned. Thanks to it we can earn loads of cash even with a relatively small capital. However, we can not forget how risky the use of leverage can be. Learning how to trade forex or CFDs with leverage is not a simple task and it takes its time. Most of the time will be probably spent on a practise demo account on which you can not earn a single penny. The results, however, will be in the end definitely worth it.

Beginner traders – Be careful here

Do not get all excited about the big leverage that brokers advertise in the attempt to attract new clients. 1:20 is the biggest leverage that beginning traders should use. Or they should trade even without it. Traders who have got enough experience can take advantage of a bigger leverage. When you are choosing a forex or CFD broker do not worry about the fact that it might not offer sufficient leverage. Because that almost never happens and advanced traders know that trading with huge leverage is not the best thing to do even tho they have the capital for it.

What brokers welcome and want from traders

Most brokers offer big leverage with a small minimum deposit. They try to compete with one another who can make forex and CFD more attractive for a new group of people. The majority of traders who already have got experience in trading either already trade somewhere or they have rather decided to quit this tough business. And because brokers need a constant increase in a number of new clients they provide the opportunity to trade to almost anybody.

And with the tempting offer to enter the place where many millionaires were born, good amount of people will get attracted by a low min. deposit requirements and by a big leverage that should make those huge earnings possible. But most of those people have no background in finance niche and they have a very low or no experience with forex or CFD trading.

And with the tempting offer to enter the place where many millionaires were born, good amount of people will get attracted by a low min. deposit requirements and by a big leverage that should make those huge earnings possible. But Such traders use in most cases big leverage and with the minimum knowledge about the market they wipe out their initial deposit in a blink of an eye. And why wouldn’t brokers welcome such clients? They always appreciate the money they get from them. So please, I urge you to be realistic and keep your expectations in check. Because if you do not do so you might be on your way towards destruction (well, at least the capital you have deposited might be).of those people have no background in finance niche and they have a very low or no experience with forex or CFD trading.

How to learn using the leverage properly

The best way to learn how to handle the leverage is to practise with it, trade with it. With the use of leverage, every pip heading towards your direction can mean significant earnings. For a unexperiencced trader, it will in most cases mean disaster. Practising with real funds is absurd, that is what demo accounts are for. So I encourage you to create one practise account and discover yourself how good you are with the leverage. After few months or better when you are absolutely certain that you can handle the use of leverage to your advantage, you can think about trading on a real account with real funds. The temptation to jump on a real account sooner than you are ready might cost you the hard made money you earned in your job, so think about your decision twice.



INTEREST –Extra money paid for using other money is called interest.

RATE-A fixed priced paid or charged for something.

Interest rate is the amount charge, expressed as a percentage of principal by a lender to a borrower for the use of assets.

Interest rates are typically noted on a annual basis known as annual percentage rate. (APR) The assets borrowed could be anything cash, consumer good large assets such as a vehicle or building. Interest is basically a rental or leasing charges to the borrower for the assets use. In case of large assets like vehicle or building the interest is sometimes known as lease rate. When the borrower is a low risk party, they will usually be charged a low interest rate. If the borrower is considered high risk the interest rate that they are charged will high.

NEGATIVE INTEREST RATE –Any interest rate that falls below zero is called negative interest rate it refers to case when deposits incur a charge for storage at a bank, than rather receiving interest income.

FIXED INTEREST RATE- A fixed interest rate will not change during the period of fixed rate that we choose.

FLOATING INTEREST RATE –A floating interest rate will go up or down as interest rates in wider market change.

SIMPLE INTEREST RATE- If interest paid on a sum borrowed for certain period is uniformly then it is called simple interest.

COMPOUND INTEREST RATE- It is a rate paid on principle as well as on interest for specified period.

REAL INTEREST RATE-A real interest rate is a rate that has been adjusted to remove the effects of inflation, to reflect the real cost of funds to the borrower and the real yield to the lender or investor.

The real interest rate of an investment is calculated as the amount by which the nominal interest rate is higher than the inflation rate.



                          ANALYSE     THE   MARKET…




Image result for market analysis


Every businessman wants to make more and more profits and become successful. Some really become and some don’t , although they put their all hard-work and skills.  There is basically one difference between the two, i.e  SMART  work and HARD work. The one who gets success focuses more on SMART work than on HARD work. Today’s competitive market world permits only the smart and sparkling thinkers to move ahead .

So friends ,till now , you all must be curious to about how to do that SMART work, right ?          So take a deep breath n relax …its really very simple  and easy to understand.

Every businessman should do a proper “MARKET ANALYSIS” , no matters whether he/she is just starting a business or reviewing an existing business .One should always remember that  “ MARKET IS SUPREME  & TREND IS FRIEND “ .

Now  the very first question that arises in our mind is –


Ø What is market analysis?

Ø Why to do a market analysis ?

Ø How to do market  analysis?



“ A market analysis is the study of the dynamism of the market.”

                                                                            By:-Pestle analysis

It is the attractiveness of a special market in a specific industry. Market analysis is basically a business plan  that presents information regarding the market in which you are operating in .



A  market  analysis is done so that you can formulate a strategy on how to run your business. Market changes every moment , so a business needs to watch for changes in its market.  You need to understand and judge, what’s actually going on with your market.  What’s the marketing trends and fashion do you see having an influence in our market segments.



The most common ingredients are Strength , Weakness , Opportunities and Threats.

By assessing the company’s strengths and weaknesses, you can make a strategy on which factors to focus upon.

We also look at external factors like situations which may provide us with an opportunity or threat.

Economic factors, political instabilities or even social changes can give you opportunities which you can seize and do better.

They can also create  threats which are  going to hamper your business  dealings.




Market size

Growth rate of the market

Market trends

Make profitability

Distribution  channels

Industry cost structure

Key success  factors

Ø Technology progress

Ø Economics of scale

Ø Efficient utilization of resources



It is done mainly by the followings ways:- Technical analysis, Fundamental analysis, Sentiment analysis and Competitor analysis.


Let  us  see , how good TECHNICAL ANALYSIS  is ?

It is an analysis of financial market  data  where  price pattern ,movement in volume and other market information are analyzed  by  employing trading rules. In technical analysis, prices trend directionally (i.e. up,down,sideways or some combinations). Technicians employ many methods, tools & techniques as well as charts to analyze data .By using charts, it is easy for us to identify price patterns and market trends in financial markets and attempt to exploit those pattern. Beside charts, there are several kinds of trends and patterns ; some with unusual patterns:- rectangle ,triangle, Bollinger bands, inverted head and shoulder, candle sticks etc



It is an analysis of company’s financial statements (like balance sheet, income statement   etc). Fundamental analysis is a  holistic approach of studying  a  business. It gives us the conviction to invest for long-term wealth creation. It is also known as quantitative analysis. Generally, fundamental analysis is used most often in context of stocks, but we can perform this analysis on any security, from a bond to a derivative.

This is what fundamental analysis is all about. By focusing on a particular business, an investor can estimate the intrinsic value of the firm and thus find opportunities where he/she can buy at a discount. If all goes well, the investment will pay off over time as the market catches up to the fundamentals.



It refers to the use of natural language processing, text analysis and statistical analysis to identify and extract subjective information in source material. It is widely applied to reviews and social media for a variety of applications ranging from marketing to customer service.   Approach to sentiment analysis can be grouped into three categories:-

Ø Knowledge-based techniques

Ø Statistical methods

Ø Hybrid approaches



It is an assessment of the strengths and weaknesses of current and potential competitors. The analysis provides both an offensive and defensive strategic content to identify opportunities and threats. In addition to analyzing current competitors it is necessary to estimate the entrance of new competitors which would be likely when:-

ü there are high profit margins in the industry.

ü there is future growth potential.

ü there is no major barrier to enter.


Thus, it is very important for every business plan to include a proper      and complete market analysis so as to show positive performance and satisfactory results in stock and  other markets.




No company in the Indian corporate history has propelled itself so huge by fructifying the tool called M &A (Merger & Acquisition) like Sun Pharmaceutical Industries Limited did. Currently it is the 5th largest generic pharmaceutical company in the world and the No. 1 pharma company of India.






We all must have heard both success and horror stories of M&A, as it ‘shakes off’ the internal and external eco-system of the company involved.  But the key lies in execution –thereby having realistic mutual expectations from the merger. It ultimately leads to incremental value for shareholders.



Value creation is the goal here which Sun Pharma has achieved every time since 2004 it bought Caraco Pharma for Rs. 170Cr, right up to its latest acquisition of Ranbaxy Laboratories for $4 billion in 2014.




Every company in the world thinks about ways of growing their business, keeping in mind money constraint and pace with competition.


M&A seems to be an effective tool for bringing significant trans-formative changes.  Sun Pharma’s organic growth has been so unprecedented that it founds itself commanding market cap of nearly Rs. 2 lakh crores.


Dilip Shanghvi, Founder and Managing Director of Sun Pharma despite being conservative has always chosen distressed assets to acquire and has successfully turned around each of them. Such aggressive nature has paid dividends which no Indian pharma company could even conceive of cashing.



For Sun Pharma, M&A has served as a positive extension to the company helping it achieve greater efficiency, and stronger competitive strength so that the collective value of the products and services from 16 acquisitions/mergers has taken the company to the next level of excellence.





Reliance Joint Venture with Scotch and Soda


Reliance Ties up with international clothing brand Scotch and Soda



reliance retail
reliance retail ltd is one of a largest retailer in india and has 3383 stores in india.Reliance now want to jump up and to boost its retail business so it has tie up with the netherland based company scotch and soda .the company makes premimum quality clothing of both men and aims to increse in retail business an its revenue.The reliance retail is adding more stores in future.
Reliance Trends concept store is designed to encourage customers to discover styling ideas and what’s new in the world of fashion and help elevate the shopping experience,” the company said in a statement.
financial position
it has a turnover of 216 billion in its finanicial year 2015-2016 with a profit of 66.6 billions it has a growth rate of 21.1 % year on year


scotch and soda
scotch and soda is a dutch youth fashion based company which was founded in 2001 it has 100 offical store in the country and 7000 all across the is the fastest growing clothing comapny and  aims to setup his market in india.

Birth of an Insurance giant: HDFC Life


HDFC & MAX LIFE  said they would explore options of merging their businesses to become India’s biggest private life insurer as consolidated heats up in India’s Rs 25lac crore insurance industry.

A three decade old personal relationship between HDFC Chairman Deepak Parekh and Max Financial Services Chief Analjit Singh played a key role in the decision to consider a merger that would spawn India’s biggest listed life insurer with 50k market cap.

The two companies announced the plans at a conference in Mumbai hours after ET broke the deal in its edition dated June 17. The merger is to be completed in a two leg transaction wher Max Life will first merge with the listed holding company Max Financial Services, which owns 68% in the insurer. This will enable listing of HDFC Life, negating the need for an IPO. HDFC Life and Max Life Insurance announced a swap ratio of 3:7 for their merger , expected to take place in 12 months.  Continue reading “Birth of an Insurance giant: HDFC Life”


We all know that the cycle of economy is moving depends on its 2 wheels i.e. DEMAND & SUPPLY. So basically its relationship between how much (quantity) of product or service is desired by buyers/the amount of product people are willing to buy at a certain price & how much the market can offer.


And when we see into any business, we find its sole aim i.e. MAKING PROFIT. So in any business there are many components are present, like Market demand, Production/Manufacturing cost, Profit after sale etc. And apart from service sector in terms of production we always need Raw materials.


Hare the word “COMMODITY” appears in front of us. Today what we know about the market is what media tells us. But today what is forecast may be quite different from its actual scenario. There could be something vital which is not so much projected. The COMMODITY is one of those areas. If someday stock market fells in a big manner, there will be a distress in our media( as they are very much oppressed about the market movement). But when it comes to the Commodity, we don’t actually hear enough about it.


But what would be the reason behind it?. Does Commodity is less important than the Equity market’s ups & down?
So now let’s see some recent practical example. On 21st April 2016 we have faced a news that Indian rubber output falls to the lowest in around two decades. All India Rubber Industries Association (AIRIA) has stated that domestic natural rubber (NR) production has hit multi-year low causing a supply crunch in the domestic market.  The rubber consumption too dipped by 3 % from the peak level of a year ago. During fiscal 2016, the rubber prices had plummeted by as much as 27% from the beginning of the year before recovering. The prices plunged to the lowest in nine years at Rs 91 per kg in February. In that situation The Kerala Government has decided to continue the price support scheme for small rubber growers, which ensured a price of Rs 150 per kg to cushion them from price crash.


Kerala accounts for around 90% of the rubber cultivated in India and majority of the growers fall in the small category having two hectares or less. And also in terms of volume production we are quite behind from our Asian competitors. And our rubber industry still facing an additional threat of importing natural rubber from those country.


Top Rubber Producing Countries in the World in 2015


Rank Country Production (Metric Tonnes)
1. Thailand 3,348,897
2. Indonesia 3,088,400
3. Malaysia 996,673
4. India 891,344


Though the global scenario is not so healthy. The Association of Natural Rubber Producing Countries (ANRPC), accounting for 90 % of global supply & according to the report of ANRPC the total Natural Rubber production during the seven month ended July 2016 is estimated at 5.899 million tonnes, up 0.2%  year-on-year. The production went up in Thailand, Indonesia, and Vietnam but fell in China, Malaysia and India. Rubber industry in India is dominated by small & medium sector as out of 5500 rubber products manufacturing units, 90% are MSMEs. Rubber units spread across the country manufacture around 35000 different rubber products which find usage in Auto, Defense, Healthcare, Agriculture and in Various other critical sectors.


But at present the prices had risen to Rs 136 per kg in Cochin & Kottayam. So within these few months we have seen this price volatility of Rs- 91 to Rs- 136 in this particular commodity sector.


But in this scenario those companies will be getting the benefit whose production depends on Natural Rubber as a raw material. For example- TIRE MANUFACTURING COMPANIES like APOLLO, BKT,TVS tires etc….. but its quite obvious that these companies are not getting this benefit immediately. First they have to finish their old rubber stocks(Higher price) then they get the new rubber stocks with huge discount & automatically the margin of the company’s profit  will be increased in a large manner.


And if we consider at our present condition, from last many days we have been regularly hearing that the Good Monsoon effect is everywhere in our economy & also there is an additional positive effect of 7th Pay Commission(though it will be implemented at the end of August 2016). Recently we have also seen many Auto sector companies like Hero Honda motocorp, Bajaj Auto, Maruti Suzuki have shown their huge growth & it’s also reflected in their stock price. & recently few Tire Manufacturing company like Balkrishna industries or BKT(Highway tire manufacturer) & Apollo tire have declared that they are entering in 2 wheeler tire business. Now see the timing of their entry in 2 wheeler tire sector. When the Auto sector is booming & we all know this sector is directly associated with tire manufacturing sector.


So at present the situations for these tire companies are – The demands are growing & simultaneously the price of the raw materials (Natural Rubber) collapsed in its 19 years low. So we can easily predict that what would be the positive impact in their balance sheet in upcoming days. But it also depends on the company, how can they grab this opportunity? What they are going to do in this situation? & if the management is not good & they are unable to taking advantage of low priced raw materials then they will fail in this profit making competition.

& a smart investor will also take this advantage by shorting rubber & make a good profit out of it & eventually buying the shares of some good Tire Manufacturing companies.



So that’s why each of every Commodity having a link in Equity market or we can say most of the stocks listed in exchanges have got some based on some Commodity.














It is actally a market where shares are issued and traded, either through exchanges or over-the-counter markets. Also known as the stock market, it is one of the most vital areas of a market economy because it gives companies access to capital and investors a slice of ownership in a company with the potential to realize gains based on its future performance. 


BREAKING DOWN ‘Equity Market’

Equity markets are the meeting point for buyers and sellers of stocks. The securities traded in the equity market can be either public stocks, which are those listed on the stock exchange, or privately traded stocks. Often, private stocks are traded through dealers, which is the definition of an over-the-counter  


How to trade in the equity market?

 In the equity market, investors bid for stocks by offering a certain price, and sellers ask for a specific price. When these two prices match, a sale occurs. Often, there are many investors bidding on the same stock. When this occurs, the first investor to place the bid is the first to get the stock. When a buyer will pay any price for the stock, he or she is buying at market value; similarly, when a seller will take any price for the stock, he or she is selling at market value.
This market can be split into two main sectors: the primary and secondary market.

The primary market is where new issues are first offered, and stocks and bonds are issued directly from the company.

 Any subsequent trading takes place in the secondary market, in which proceeds from the stock go to the investors, not the company directly. Stock exchanges, such as NSE or BSE, are examples of secondary markets.


What Stock Prices Mean for the Economy?

In general, rising stock prices for companies from a particular country indicate a healthy, growing market; on the other hand, a downward trend in stocks may reflect weakening fundamentals in a country’s economy. This is because rising prices tend to indicate that many buyers are investing their money in the future health and growth of the economy as a whole.

Thank you!!!!!


ITC was incorporated on August 24, 1910 under the name Imperial Tobacco Company of India Limited. As the Company’s ownership progressively Indianised, the name of the Company was changed from Imperial Tobacco Company of India Limited to India Tobacco Company Limited in 1970 and then to I.T.C. Limited in 1974. Its diversified business include  segments:

Fast Moving Consumer Goods comprising Foods, Personal Care, Cigarettes and Cigars, Branded Apparel, Education and Stationery Products, Incense Sticks and Safety Matches, Hotels, Paperboards & Specialty Papers, Packaging, Agri-Business and Information Technology – the full stops in the Company’s name were removed effective September 18, 2001. The Company now stands rechristened ‘ITC Limited,’where ‘ITC’ is today no longer an acronym or an initialised form.


ITC’s ranking Amongst all listed private sector cos.

PBT: No. 5

PAT: No. 5

Market Capitalisation: No. 4.

                                               PORTFOLIO OF THE COMPANY.

  • MARKET CAPITAL (CR)…. 3,07,217.84
  • % CHANGE… +3.15(1.20)
  • NET SALES… 36,837.39
  • EPS… 14
  • P/E RATIO… 22
  • One of India’s most Admired and Valuable companies – Market Capitalisation: Rs. 3 lakh crores
  • 57% of Net Revenue from non-Cigarette segments
  • 10 year Value Addition is Rs. 2.5 lakh crores.
  • ITC & its Group Companies employ over 32,000 people directly; Sustainable development models and value chains have supported creation of 6 million sustainable livelihoods.

                                           WHY  RECOMMENDED

ITC share had touch a high of 254.10 with a increase of 1.26% on Monday and it was also a top gainer.Most investors who had not invested in the stock would be sulking on the missed opportunity of participating in the gain made by the tobacco to fmcg major over the last couple of years. There are 4 reasons why 1 can still invest in itc but with a clear long term horizon.

  • The company’s tobacco business was contributing 80% to its total revenues but today its contribution is down to 40%. The business still earns 90% of the company’s bottomline.
  • The FMCG business, agriculture, paperboard or thehotels business, each of these are going to create long term benefits for the company.
  • ITC has rewarded shareholders in the last 20 years. The stock has appreciated from trading at rupee one at the end of 1991 to now trading at Rs 254.1.The company has announced twobonusissues a 1:2 bonus issue in 2005 and a 1:1 bonus issue in 2010.
  • ITC had planed multiple project with an outlay of RS25,000 crore over the next 5 years.

                                                   BOTTOM LINE

ITC share is a bullish and Investing in a company with this past track record is safer than an investment in a penny stock.. It is good to buy for long term prospectus.As per the graph of 5yrs it is growing and on Monday 22nd august 2016 it was a top gainer in the market.The company aspires to be NO.1 player in the non-cigarette FMCGS business and set a revenue target of RS.1,00,000 crore by 2030 so it is highly recommended shares for the future prospectus.