About Anurag Vishnoi

Anurag Vishnoi  is a committed Professional Analyst ( Derivative & Technical ) and a Trader. He has vast experience in trading and analyzing capital markets. He has been advising brokerage firms, investment firms, and clients with the market trends, investments for long, medium and short term, option trading strategies as per market scenarios, provide them with derivative analysis reports and train their employees with analyzing, trading and arbitrage skills. He has excellent command of trading derivative/option strategies, trading with delta neutral technique, trading volatility and hedging. He has powerful analyzing skills reading charts using technical and have analyzed and successfully ridden market rallies in the past.

Why only Technical Analysis ?  

Technical analysis is frequently contrasted with fundamental analysis, the study of economic factors that influence prices in financial markets. Technical analysis holds that prices discounts everything and already reflect all such influences before investors are aware of them, hence the study of price action alone.

ARBITRAGE

In economics and finance, arbitrage is the practice of taking advantage of a price differential between two or more markets: striking a combination of matching deals that capitalize upon the imbalance, the profit being the difference between the market prices. When used by academics, an arbitrage is a transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state; in simple terms, a risk-free profit.

A person who engages in arbitrage is called an arbitrageur such as a bank or brokerage firm. The term is mainly applied to trading in financial instruments, such as bonds, stocks, derivatives, commodities and currencies.

If the market prices do not allow for profitable arbitrage, the prices are said to constitute an arbitrage equilibrium or arbitrage-free market.

Arbitrage is possible when one of three conditions is met:
1. The same asset does not trade at the same price on all markets ("the law of one price").
2. Two assets with identical cash flows do not trade at the same price.
3. An asset with a known price in the future does not today trade at its future price discounted at the risk-free interest rate (or, the asset does not have negligible costs of storage; as such, for example, this condition holds for grain but not for securities).

Arbitrage is not simply the act of buying a product in one market and selling it in another for a higher price at some later time. The transactions must occur simultaneously to avoid exposure to market risk, or the risk that prices may change on one market before both transactions are complete. In practical terms, this is generally only possible with securities and financial products which can be traded electronically, and even then, when each leg of the trade is executed the prices in the market may have moved. Missing one of the legs of the trade (and subsequently having to trade it soon after at a worse price) is called 'execution risk' or more specifically 'leg risk'.

In the most simple example, any good sold in one market should sell for the same price in another. Traders may, for example, find that the price of wheat is lower in agricultural regions than in cities, purchase the good, and transport it to another region to sell at a higher price. This type of price arbitrage is the most common, but this simple example ignores the cost of transport, storage, risk, and other factors. "True" arbitrage requires that there be no market risk involved. Where securities are traded on more than one exchange, arbitrage occurs by simultaneously buying in one and selling on the other.

In finance theory, an arbitrage is a "free lunch" a transaction or portfolio that makes a profit without risk. The simultaneous purchase and sale of an asset in order to profit from a difference in the price. It is a trade that profits by exploiting price differences of identical or similar financial instruments, on different markets or in different forms. Arbitrage exists as a result of market inefficiencies; it provides a mechanism to ensure prices do not deviate substantially from fair value for long periods of time. Most arbitrage is performed by institutions that have very low transaction costs and can make up for small profit margins by doing a large volume of transactions.

Formally, theoreticians define an arbitrage as a trading strategy that requires the investment of no capital, cannot lose money, and has a positive probability of making money.
A market is said to have no arbitrage or be arbitrage free if prices in that market offer no arbitrage opportunities. This is a theoretical condition that is usually assumed for markets in economic and financial models. The assumption underlies the financial engineering theory of arbitrage-free pricing.

TECHNICAL ANALYSIS

Technical analysis is a security analysis discipline for forecasting the future direction of prices through the study of past market data, primarily price and volume.

Technical analysts seek to identify price patterns and trends in financial markets and attempt to exploit those patterns. While technicians use various methods and tools, the study of price charts is primary.

Technical analysis is frequently contrasted with fundamental analysis, the study of economic factors that influence prices in financial markets. Technical analysis holds that prices already reflect all such influences before investors are aware of them, hence the study of price action alone. Some traders use technical or fundamental analysis exclusively, while others use both types to make trading decisions.

Users of technical analysis are most often called technicians or market technicians. Some prefer the term technical market analyst or simply market analyst. An older term, chartist, is sometimes used, but as the discipline has expanded and modernized the use of the term chartist has become rare.

Technical analysts use technical indicators. A technical indicator is a series of data points that are derived by applying a formula to the price data of a security. Price data includes any combination of the open, high, low or close over a period of time. Some indicators may use only the closing prices, while others incorporate volume and open interest into their formulas. The price data is entered into the formula and a data point is produced. A technical indicator offers a different perspective from which to analyze the price action.

FUNDAMENTAL ANALYSIS

Fundamental analysis of a business involves analyzing its financial statements and health, its management and competitive advantages, and its competitors and markets. When applied to futures and forex, it focuses on the overall state of the economy, interest rates, production, earnings, and management. When analyzing a stock, futures contract, or currency using fundamental analysis there are two basic approaches one can use; bottom up analysis and top down analysis. The term is used to distinguish such analysis from other types of investment analysis, such as quantitative analysis and technical analysis.

Fundamental analysis is performed on historical and present data, but with the goal of making financial forecasts. There are several possible objectives:
   to conduct a company stock valuation and predict its probable price evolution,
   to make a projection on its business performance,
   to evaluate its management and make internal business decisions,
   to calculate its credit risk.

When the objective of the analysis is to determine what stock to buy and at what price, there are two basic methodologies
1. Fundamental analysis maintains that markets may misprice a security in the short run but that the "correct" price will eventually be reached. Profits can be made by trading the mispriced security and then waiting for the market to recognize its "mistake" and reprice the security.
2. Technical analysis maintains that all information is reflected already in the stock price. Trends 'are your friend' and sentiment changes predate and predict trend changes. Investors' emotional responses to price movements lead to recognizable price chart patterns. Technical analysis does not care what the 'value' of a stock is. Their price predictions are only extrapolations from historical price patterns.

Investors can use one or all of these different but somewhat complementary methods for stock picking. For example many fundamental investors use technicals for deciding entry and exit points. Many technical investors use fundamentals to limit their universe of possible stock to 'good' companies.

Fundamental analysis includes:
1.Economic analysis
2.Industry analysis
3.Company analysis
On the basis of this three analysis the intrinsic value of the shares are determined. This is considered as the true value of the share. If the intrinsic value is higher than the market price it is recommended to buy the share . If it is equal to market price hold the share and if it is less than the market price sell the shares.

 

AUTOMATED TRADING SYSTEM

An automated trading system (ATS) is a computer trading program that automatically submits trades to an exchange. This allows traders to input trades in real fast speed almost invisibly to the market. This enables anonymous conversations and negotiations to take place between bidders, and so reduces informational costs to the participants.

Given the advancement in technology it has become extremely difficult to profit from mispricing in the market. Many traders have computerized trading systems set to monitor fluctuations in similar financial instruments. Any inefficient pricing setups are usually acted upon quickly and the opportunity is often eliminated in a matter of seconds.

WEALTH CREATION USING OPTIONS TRADING

Trading in nifty options using technical analysis is the best way to make wealth in stock market. If you buy options then you have limited risk and unlimited profit potential. It is easy to get 100 to 400% per month profit in options trading.

If you earn 100% profit per month then a initial investment of INR 10,000 will grow as follows

and so on ..............

If you earn 200% profit per month then a initial investment of INR 10,000 will grow as follows

and so on ..........

If you earn 300% profit per month then a initial investment of INR 10,000 will grow as follows

and so on ............