This is a Presentation by Mr. Omkar Godbole & Mr. Aditya Dasgupta, for the purpose of financial training. Please do not replicate without proper consent from the team of Total Package Project Associates. Total Package Project Associates is into Business Auxiliary Services, and facilitates for the main dimensions for new and existing businesses. The following are our main activities : - Project Financing / Financial Advisory (Equity / Currency Segment) - IT Infrastructure Development - Marketing Solutions - Recruitment / Training & Development - Operations Strategy (Start Up, Doc ! Project Blueprints) Disclaimer : Total Package Project Associates is a proprietary concern registered in accordance with Municipal Laws of Mumbai (Maharashtra, India). For more information please mail us on director@totalpackageprojects.com or aditya@totalpackageprojects.com.

1. 
Financial Markets & Trading
An Introduction
Omkar Godbole | Aditya Dasgupta

2. 
1. Allows
transfers of
funds from
person or
business
without
investment
opportunities
to one who
has them
2. Improves
economic
efficiency
Function of Financial
Markets

3. 
 Debt and Equity Markets
 Primary and Secondary Markets
 Investment Banks underwrite securities in primary markets
 Brokers and dealers work in secondary markets
 Exchanges and Over-the-Counter (OTC) Markets
 Money and Capital Markets
 Money markets deal in short-term debt instruments
 Capital markets deal in longer-term debt and
equity instruments
Structure of Financial
Markets

4. Trading Markets

5. 
 Macroeconomics Analysis
 Industry Analysis
 Equity Valuation Model
(Dividend Discount Model- DDM)
 Financial Statement Analysis
Fundamental Analysis

6. 
 Global Economy Analysis
– affects export, price competition and profits
– exchange rate: purchasing power and earnings
 Domestic Economy
– The ability to forecast the macroeconomy can translate
into great investment performance
– outperform other analysts to earn extra profits
Many variables can affect economy
Macroeconomics Analysis

7. 
 Select a good industry to invest. It is difficult
for a firm to do well in a troubled industry
 Standard Industry Classification (SIC) code
 Value line Investment Survey - reports 1700
firms in 90 industries
 Two factors that determine the sensitivity of a
firm’s earnings to business conditions:
business risk & financial risk
Industry Analysis

8. 
 Dividend Discount Model (DDM)
V0= (D1+P1)/(1+k)
= D1/(1+k) + D2/(1+k)2
...+ Dn/(1+k)n
 constant growth assumption
V0 = D1/(1+k) + D1(1+g)/(1+k)2
+D1(1+g)2
/(1+k)3
+ ...
= D1/(k-g)
or k = expected return
Equity Valuation Model

9. 
 Preparation of Source/Use Fund Statement
 Ratio Analysis
– Performance Analysis
– Du Pont Analysis
Financial Statement Analysis

10. 
Macro Trading - 24th
March 2014

11. 
 Dow Theory
 Trend lines
 Indicators
 Elliot Wave Analysis
Technical Analysis

12. 
 A standard Candlestick chart contains a series of
multiple individual candlestick data points, that
displays the high, low, opening and closing prices for a
security for a single day
 The wide part of the candlestick is called the "real body"
and tells investors whether the closing price was higher
or lower than the opening price
 The candlestick's shadows show the day's high and lows
and how they compare to the open and close
Japanese Candlestick

13. 
Candlestick Chart

14. Technical Indicators
 Indicators
 Technical Indicator is a result of mathematical
calculations based on indications of price and/or
volume. The values obtained are used to forecast
probable price changes

15. 
 Volumes
 Accumulation/Distribution
 Money Flow Index
 On Balance Volume
 Price and Volume Trend
 Volume Rate of Change
 Trends Indicators
 Average Directional Movement Index
 Accumulation Swing Index
 Bollinger Bands
 Commodity Channel Index
 Mass Index
 Moving Average
 Pivot Points Support and Resistance Lines
 Parabolic SAR
 Standard Deviation
 ZigZag
 Williams` Accumulation/Distribution
Cont..

16. 
Cont..

17. 
 Ralph Nelson Elliott developed the Elliott Wave
Theory in the late 1920s by discovering that stock
markets, thought to behave in a somewhat chaotic
manner, in fact traded in repetitive cycles.
Elliot Wave Theory

18. 
 The Elliott Wave Theory is interpreted as
follows:
 Every action is followed by a reaction.
 Five waves move in the direction of the main trend
followed by three corrective waves (a 5-3 move).
 A 5-3 move completes a cycle.
 This 5-3 move then becomes two subdivisions of the
next higher 5-3 wave.
 The underlying 5-3 pattern remains constant, though
the time span of each may vary.
Elliot Wave Interpretation

19. 
The Elliott Wave Theory assigns a series of categories to the
waves from largest to smallest. They are:
 Grand Super cycle
 Super cycle
 Cycle
 Primary
 Intermediate
 Minor
 Minute
 Minuette
 Sub-Minuette
Wave Categories

20. 
Elliot Wave Chart

21. 
 RISK is the possibility of loss
 Risk management is to direct and control the
possibility of loss. The activities of a risk manager are
to measure risk and to increase and decrease risk by
buying and selling stock.
Risk Management – Money and
Trade Management

22. 
 Diversify your portfolio
 Equity
 Debt
 Commodities
 Foreign Exchange
 Some examples
 Buy Gold, Yen, Pharmacy stocks as a hedge against Inflation,
stock market crash
 Buy Banking, Infrastructure and IT stocks in boom
 Only way to beat inflation – Buy Agriculture
commodities
Minimize Risk by Diversification

23. 
Legendary Trader Paul Tudor Jones trading style and beliefs
 Contrarian attempt to buy and sell turning points. Keeps trying the single trade idea
until he changes his mind, fundamentally. Otherwise, he keeps cutting his position
size down. Then he trades the smallest amount when his trading is at its worst.
 Considers himself as a premier market opportunist. When he develops an idea, he
pursues it from a very-low-risk standpoint until he has been proven wrong
repeatedly, or until he changes his viewpoint.
 Swing trader, the best money is made at the market turns. Has missed a lot of meat
in the middle, but catches a lot of tops and bottoms.
 Spends his day making himself happy and relaxed. Gets out if a losing position is
making him uncomfortable. Nothing’s better than a fresh start. Key is to play great
defense, not great offense.
 Never average losers. Decreases his trading size when he is doing poorly, increase
when he is trading well.
 He has mental stops. If it hits that number, he is out no matter what. He uses not only
price stops, but time stops.
 Monitors the whole portfolio equity (risk) in real time.
 He believes prices move first and fundamentals come second.
 He doesn’t care about mistakes made 3 seconds ago, but what he is going to do from
the next moment on.
 Don't be a hero. Don't have an ego. Always question yourself and your ability. Don't
ever feel that you are very good. The second you do, you are dead.
Trade Management and Psychology of Trader

24. 
Trading Plan from Goldenwire.com

25. 
 A trading system is simply a group of specific rules, or parameters, that
determine entry and exit points for a given equity. These points, known as
signals, are often marked on a chart in real time and prompt the immediate
execution of a trade
 Often, two or more of these forms of indicators will be combined in the
creation of a rule. For example, the MA crossover system uses two moving
average parameters, the long-term and the short-term, to create a rule
 “Buy when the short-term crosses above the long term, and sell when the
opposite is true.“
Trading System

26. 
Trading on trend lines and moving averages – 7th
Jan 2014

27. 
A sample technical trade Buy GBP/USD– 22nd
Jan 2014

28. 
Technical Trade Outcome

29. 
Merits
 It takes all emotion out of trading
 It can save a lot of time
 It's easy if you let others do it for you
De-Merits
 Trading systems are complex
 You must be able to make realistic assumptions and
effectively employ the system
 Development can be a time-consuming task
Trading Plan
Merits and Demerits

30. 
We all at
And We’re Done !!
Thank You for Your
Valuable Time !!