Project Description

The intent ship of this project is to provide a plan to establish an

investment firm. In order to accomplish this goal several active
investment companies in Stock Markets advisory services, Treasury
Elite, commodities market were researched to study their business
plans, trading strategies, risk management and other aspects that
constitute an investment firm. Based on this information, some of the
useful ideas, to build a more versatile portfolio for clients. However, it
was concluded that no matter what the trading plan was the technical
and fundamental analysis were key for a good trade. The second step
consisted in focusing on applying the trading experience in teams to try
to simulate as much as possible the feeling of trading with real money
in a company.
 INTRODUCTION
B B Advisory Private Limited is a Private incorporated on 14 July 2005. It is
classified as non-govt company and is registered at Registrar of Companies,
Kolkata. Its authorized share capital is Rs. 200,000 and its paid-up capital is Rs.
100,000. It is involved in Legal, accounting, book-keeping and auditing activities;
tax consultancy; market research and public opinion polling; business and
management consultancy
Directors of B B Advisory Private Limited are Manish Kumar Agarwal, Ritu
Agarwal.

 B B Advisory, is one of the most prominent financial services providers headquarter

in Bangalore, India. We mainly focus in Stock Markets, FX advisory services,
Treasury Elite, commodities market and also in training & consulting mainly in the
fields of BSE, NSE, MCX, NCDEX, COMEX, and CFD. The study is done for the
purpose of conducting fundamental analysis and technical analysis of
leading securities in the stock market. In the stock market share price of
companies are determined by the demand and supply forces operating
in the market. These demand and supply forces in turn are influenced by
a number of fundamental factors as well as certain psychological or
emotional factors. The main reason is that Indian economy is one of the
strongest in the world. As a result of that both foreign and domestic
investors are interested in investing in Indian stock market. 

It helps us to understand briefly about financial markets by taking one

currency pair that I have taken (EURO/USD) by analyzing daily currency
pair news i.e., investing.com, forex factory.com and in google finance.
We get daily news about the currency market and analyses it to identify
the news that affects the respective currency pair that I have taken and
then accordingly I take the decision in placing the order buying/selling.
 Financial Markets

Financial markets refer broadly to any marketplace where the trading of

securities occurs, including the stock market, bond market, forex market, and
derivatives market, among others. Financial markets are vital to the smooth
operation of capitalist economies. Financial markets play a vital role in
facilitating the smooth operation of capitalist economies by allocating
resources and creating liquidity for businesses and entrepreneurs. The
markets make it easy for buyers and sellers to trade their financial holdings.
Financial markets create securities products that provide a return for those
who have excess funds (Investors/lenders) and make these funds available
to those who need additional money (borrowers). 

Types of Financial Markets

Stock Market

The original financial market, the stock market is one of the best ways for
companies to raise money. When a private owned company needs more capital to
expand its operations there are two ways they can get the money, borrowing money
or going public. Publicly traded companies raise additional capital by selling shares
of ownership in the public market. The liquidity that this market offers the ability to
investors to easily buy or sell securities or stocks. Something attractive for investing
in stocks, which offers a lot more liquidity than other less liquid markets such as real
estate.

Bond Market
The best way to describe this market is that it is a market “where individuals can
issue new debt (primary market), buy or sell debt securities (secondary market).
This is generally done in the form of bonds. Bonds are debt securities, in which the
issuer owes the owners a debt and pays interest to use and/or to repay the principal
of the debt at a later date. The primary purpose of the bond market is to provide a
mechanism for long term funding of public and private expenditures. This market
has been known for being one of the less risky investments. It is highly sensitive to
interest rates, and thus it is often used for changes in the interest rates.

Derivatives Market
The derivatives market is basically divided in three different sub-markets,
which are: Future Contracts, Forward Contracts, Option Contracts. Future
Contracts Future Contracts are contractual agreements, done on a trading floor
or virtually through the Internet where you can buy or sell a particular
commodity at a predetermined price in the 6 futures. Thus, if you believe a
commodity is going to appreciate in value you will buy it, the same is true if you
believe depreciation will occur. While some future contracts are settled in cash,
others require the physical delivery of the asset (thus, if you bought contract for
cattle, you better have a big house/farm, if not you could come to agreement to sell it
before the contract matures.) Forward Contracts Forward Contracts are cash market
transactions in “which delivery of the commodity is deferred until after the contract
has been made. Although the delivery is made in the future, the price is determined
on the initial trade date”-1. Most forward contracts do not have standards nor traded
on exchanges. For example, if a farmer wants to lock-in a price for his grain for the
upcoming harvest season, he would use a forward contract. Option Contracts in
Option Contracts the buyer pays a premium to get in a transaction and thus, gains
the option, but not the obligation to engage in a transaction, while the seller has the
obligation to honour the transaction. The price of an option derives from the
difference between the reference price and the value of the asset. If an individual
wants to obtain the right to buy an asset at a specific price, he uses a call. On the
other hand, an option that gives the right to sell something as a put. The reference
price at which the asset is to be traded is the strike price. Most options have an
expiration date and if this option is not exercised by the expiration date, it becomes
void and worthless

Current market
Current market value is generally closely related to market or financial
instrument liquidity. An asset's liquidity refers to the ease with which that asset's
owner can convert it from an investment to cash. An owner of a liquid asset will be
able to convert it easily to cash and will receive a value for the asset equal to or very
close to the current market value. Traded pairs in Currency Market,

The US dollar (USD)

The Euro (EUR)

The British Pound (GBP)

The Swiss Franc (CHF)

The Canadian dollar (CAD)
TheAustralian dollar (AUD)

Currency market opening hours: -

SYDNEY-Opens/Close-3.30am/11.30am
GERMANY-Opens/Close-11.30am/7.30pm
USA -Opens/Close-5.30pm/1.30am
JAPAN-Opens/Close-4.30pm/12.30am
GREAT BRITAIN- Opens/Close-12.30pm/8.30pm
Two analytical models
 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 re-price the security.

Technical analysis maintains that all information is reflected already in the stock
price, so fundamental analysis is a waste of time. 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 both these different
but somewhat complementary methods for stock picking. Many fundamental
investors use techniques for deciding entry and exit points.

Fundamental analysis

Fundamental analysis of a business involves analysing 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 analysing 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. A method of security valuation which
involves examining the company's financials and operations, especially sales,
earnings, growth potential, assets, debt, management, products, and competition.
Fundamental analysis takes into consideration only those variables that are directly
related to the company itself, rather than the overall state of the market or technical
analysis data. The end goal of performing fundamental analysis is to produce a value
that an investor can compare with the security's current price in hopes of figuring out
what sort of position to take with that security 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.

Tools for fundamental analysis

the following ratios are used:

EPS = PAT / No of equity shares

DPS = Amount declared as dividend / No. of equity shares
Pay-out ratio = DPS / EPS
ROE = PAT / Net worth P/E ratio = MPS / EPS
P/E Average = Average of the P/E range
Current ratio = Current assets / Current liabilities
Debt- Equity ratio = Debt capital / Owner’s capital
Interest coverage ratio = EBIT / Interest
N/P Margin = PAT / Net sales

TECHNICAL ANALYSIS
Technical analysis is a study of the market data in terms of factors affecting supply
and demand schedules, namely, prices, volume of trading, etc. The technical
analysis believes that share prices are determined by the demand and supply forces
operating the market. These demand and supply forces are in turn influenced by a
number of fundamental factors as well as certain psychological and emotional
factors. The combined impact of all these factors is reflected in the share price
movement. The technical analysis therefore concentrates on the movement of share
price. Technical analysis is the name given to forecasting techniques that utilize
historical share price data. Technical analysis is a method of evaluating securities by
analysing statistics generated by market activity, such as past prices and volume.
Technical analysts do not attempt to measure a security's intrinsic value, but instead
use charts and other tools to identify patterns that can suggest future activity.
Technical analysts believe that the historical performance of stocks and markets are
indications of future performance.

TOOLS OF TECHNICAL ANALYSIS

o Relative Strength Index
o Simple Moving Average
o Line Chart
o Bar Chart 

BEARISH MARKET

A bearish trend is a downward trend in a particular asset. Bears think the market will
go down. A market in a long-term downtrend, with continuously falling prices, is
called a bear market. For example, a trader or investor might say, “I’m bearish about
crude oil going into the summer,” which means that he thinks the price of crude oil is
likely to go down in the early weeks of summer.

BULLISH MARKET
A bullish trend is an upward trend in a particular asset. Bulls think the markets will go
up. A market in a long-term uptrend is called a bull market. If a trader says, “I’m
bullish on gold,” she thinks the price of gold will go up.
CHARTS AND PATTERNS

Types of charts

LINE CHART
A line chart is a graphical representation of an asset's historical price action that
connects a series of data points with a continuous line. This is the most basic type of
chart used in finance, and it typically only depicts a security's closing prices over
time. 
BAR CHARTS
Bar charts consist of multiple price bars, with each bar illustrating how the price of
an asset or security moved over a specified time period. Technical analysts use bar
charts—or other chart types such as candlestick or line charts—to monitor price
action, which aids in trading decisions. Bar charts allow traders to analyse trends,
spot potential trend reversals, and monitor volatility and price movements.

A bar chart is a collection of price bars, with each bar showing price movements for a
given period. Each bar has a vertical line that shows the highest and lowest price
reached during the period. The opening price is marked by a small horizontal line on
the left of the vertical line, and the closing price is marked by a small horizontal line
on the right of the vertical line.

If the closing price is above the open price, the bar may be coloured black or green.
Conversely, if the close is below the open, the price dropped during that period, so it
could be coloured red. Colour coding the bars helps traders see trends and price
movements more clearly. Colour coding is available as an option in most charting
platforms.
Candlestick Chart
Candlestick charts originated in Japan over 100 years before the West developed
the bar and point-and-figure charts. In the 1700s, a Japanese man named Homma
discovered that, while there was a link between price and the supply and demand of
rice, the markets were strongly influenced by the emotions of traders.

 Candlestick charts are used by traders to determine possible price movement

based on past patterns.
 Candlesticks are useful when trading as they show four price points (open,
close, high, and low) throughout the period of time the trader specifies.
 Many algorithms are based on the same price information shown in
candlestick charts.
 Trading is often dictated by emotion, which can be read in candlestick charts.
Just like a bar chart, a daily candlestick shows the market's open, high,
low, and close price for the day. The candlestick has a wide part, which is called the
"real body." 

This real body represents the price range between the open and close of that day's
trading. When the real body is filled in or black, it means the close was lower than
the open. If the real body is empty, it means the close was higher than the open.
 Forex Trading
The market determines the value, also known as an exchange rate, of the majority of
currencies. Foreign exchange can be as simple as changing one currency for
another at a local bank. It can also involve trading currency on the foreign exchange
market. For example, a trader is betting a central bank will ease or tighten monetary
policy and that one currency will strengthen versus the other.

When trading currencies, they are listed in pairs, such as USD/CAD, EUR/USD, or

USD/JPY. These represent the U.S. dollar (USD) versus the Canadian dollar (CAD),
the euro (EUR) versus the USD, and the USD versus the Japanese yen (JPY).

There will also be a price associated with each pair, such as 1.2569. If this price was
associated with the USD/CAD pair, it means that it costs 1.2569 CAD to buy one
USD. If the price increases to 1.3336, then it now costs 1.3336 CAD to buy one
USD. The USD has increased in value (CAD decrease) because it now costs more
CAD to buy one USD.

In the forex market currencies trade in lots, called micro, mini, and standard lots. A
micro lot is 1,000 worth of a given currency, a mini lot is 10,000, and a standard lot is
100,000. This is different than when you go to a bank and want $450 exchanged for
your trip. When trading in the electronic forex market, trades take place in set blocks
of currency, but you can trade as many blocks as you like. For example, you can
trade seven micro lots (7,000) or three mini lots (30,000) or 75 standard lots
(7,500,000), for example.

The foreign exchange market is unique for several reasons, mainly because of its
size. Trading volume in the forex market is generally very large. As an example,
trading in foreign exchange markets averaged $6.6 trillion per day in April 2019,
according to the Bank for International Settlements, which is owned by 62 central
banks and is used to work in monetary and financial responsibility.

Trading in the Foreign Exchange Market

The market is open 24 hours a day, five days a week across major financial centres
across the globe. This means that you can buy or sell currencies at any time during
the day.

The foreign exchange market isn't exactly a one-stop shop. There are a whole
variety of different avenues that an investor can go through in order to execute
forex trades. You can go through different dealers or through different financial
centres which use a host of electronic networks.
From a historical standpoint, foreign exchange was once a concept for
governments, large companies, and hedge funds. But in today's world, trading
currencies is as easy as a click of a mouse—accessibility is not an issue, which
means anyone can do it. In fact, many investment companies offer the chance for
individuals to open accounts and to trade currencies however and whenever they
choose.

When you're making trades in the forex market, you're basically buying or selling the
currency of a particular country. But there's no physical exchange of money from one
hand to another. That's contrary to what happens at a foreign exchange kiosk—think
of a tourist visiting Times Square in New York City from Japan. He may be
converting his (physical) yen to actual U.S. dollar cash (and may be charged a
commission fee to do so) so he can spend his money while he's traveling.

But in the world of electronic markets, traders are usually taking a position in a

specific currency, with the hope that there will be some upward movement and
strength in the currency that they're buying (or weakness if they're selling) so they
can make a profit. 

Trading Terms
For a better understanding of the Forex market a brief explanation on the most
commonly used terms in this market will be given.

Base/Quote Currency
This is the first currency written in a pair. For example, if the currency pair is
EUR/USD, the Euro would be the base currency and the US dollar would be the
quote currency. You would

Pip
A pip or basis point is the smallest measure of change in a currency. For example, in
the US based pairs it represents one hundredth (1/100) of a cent.

Spread
The spread is the difference between the bid and ask. When you bid, you are buying
and when you ask you are selling. The bid price is always greater than the ask price.

Hedging
Ability to hold both long and short positions at the same time.

Lot
Standard unit of a transaction. Usually, this is equal to 100,000 units of the base
currency. There is also a mini-lot = 10,000 units and a micro-lot = 1,000 units.

Rollover/Swap
If you keep a position open for more than one trading day, you would have to
pay/receive interest, depending on the currency pair you are trading. The rollover
price represents the interest rate difference for the two currencies involved.

Leverage
The used of various financial instruments or borrowed capital, such as margin, to
increase the potential return of an investment.

Long
The buying of a security such as stock, commodity or currency, with the expectation
that the asset will rise in value.

Short
The sale of a borrowed security, commodity or currency with the expectation that
the asset will fall in value.

SHORT SELLING
It is a type of selling that opening in a position to sell, that means when a trader think
that the value of a currency pair will fall, at that time there is a position to sell the
currency pair.

There are two terms which mostly used in this currency trading pair are:

STOP LOSS
It means when a trader indicates when they are ready to close their position and not
sure that will move up or down in market.

PIPETTES
The accuracy of produced fractions of one pip which called as pipette.

EX-IN EUR/USD is at 1.2457 then 1 pip will make 1.2458 and that of 100 pips make
decline 1.23547

Types of order:
MARKET EXECUTION ORDER
It means an order to buy or sell immediately i.e., the order will guaranteee that will be
executed and reach the desired price.

PENDING ORDER

are used to execute a trade at a position that will be a chieved by the market in
the future.

There are two types- a. Limit order

b. stop order.

a. Limit order- this order is placed when trader expects the price will drop
down to certain level.
b. Stop order- this are order that are placed when a trader anticipates that
the price will increase to certain level.

STEPS TO IDENTIFY CURRENT MARKET PRICE:

a. In current market price, when the price will move up (sell) that up point is
stop loss and when price will down(buy) and that down point is take profit.

b. In CMP, when the price will first move down (buy) that down point is stop
loss and when price will move up(sell) and that up point is take profit.

THE 3 MOST COMMON TYPES OF MARKET ANALYSIS:

 Fundamental
 technical
 sentiment analysis

1) Fundamental

Forex fundamentals centre mostly around the currency’s interest rate. This is due to
the fact that interest rates have a sizeable effect on the forex market. Other
fundamental factors are included such as gross domestic product, inflation,
manufacturing, economic growth activity. However, whether those other
fundamental releases are good or bad is of less importance than how those releases
affect that country’s interest rate.
Traders reviewing the fundamental releases should keep in mind how they might
affect the future movement of interest rates. When investors are in a risk-seeking
mode, money follows yield (currencies that offer a higher interest rate), and higher
rates could mean more investment. When investors are in a risk adverse mentality,
then money leaves yield for safe-haven currencies.

Some are the main indicators that we need to know and use for currency pair: -

a. Industrial production
b. Gross domestic product (PMI)
c. Taken large manufacturing Index
d. Taken interest rate announcement
e. Manufacturing and Non-manufacturing Index
f. Retail Price
g. Consumer price Index
h. Employment and unemployment change
i. Durable goods

STEPS TO BETTER FUNDAMENTAL DAILY NEWS:

 First of all, we have to select a better currency pair, I have taken USD/JPY.
 Then, if we go for weekly analysis or start trading from Monday for that
particular currency pair, we have to analyse the whole weekly basis.
 If we start trading on random date, then we only analyse on that particular
day news or sometimes it needed for whole weekly analysis for better
trading.
 Then, we have three types of news i.e., strong, medium, and low impact
news.
 Strong is always better news for trading and it always profitable and that of
middle is lower impact than strong and so on.
 But in low impact news, we have to wait for the better news or for the
upcoming strong impact news.
 After that, we have to see all economic indicators that everyday news will
come for that particular currency and also for strong impact.
 Some of them are sources, measures, usual effect frequency, etc have to
see for the news.
2) Technical

Forex technical analysis involves looking at patterns in price history to determine the
higher probability time and place to enter a trade and exit a trade. As a result,
technical analysis in forex is one of the most widely used types of analysis.

Since FX is one of the largest and most liquid markets, the movements on a chart
from the price action generally gives clues about hidden levels of supply and
demand. Other patterned behaviour such as which currencies are trending the
strongest can be obtained by reviewing the price chart. An example of this can be
seen below in the GBP/USD chart where the US dollar is strengthening against
the Pound Sterling.

Other technical studies can be conducted through the use of indicators. Many traders
prefer using indicators because the signals are easy to read, and it makes forex
trading simpler.

Technical versus fundamental analysis in forex is a widely debated topic. There is no

right answer to the question of which type of analysis is better and traders tend to
adopt one, or a combination of the two, in their analysis.
THE MAIN PART IN TECHNICAL INDICATORS ARE: -
MOVING AVERAGE
The moving average (MA) is a simple technical analysis tool that smooths out price
data by creating a constantly updated average price. The average is taken over a
specific period of time, like 10 days, 20 minutes, 30 weeks or any time period the
trader chooses. There are advantages to using a moving average in your trading, as
well as options on what type of moving average to use. Moving average strategies
are also popular and can be tailored to any time frame, suiting both long-term
investors and short-term traders.

 A moving average (MA) is a widely used technical indicator that smooths out
price trends by filtering out the “noise” from random short-term price
fluctuations.
 Moving averages can be constructed in several different ways, and employ
different numbers of days for the averaging interval.
 The most common applications of moving averages are to identify trend
direction and to determine support and resistance levels.
 When asset prices cross over their moving averages, it may generate a
trading signal for technical traders.
 While moving averages are useful enough on their own, they also form the
basis for other technical indicators such as the moving average convergence
divergence (MACD).
Types of Moving Averages

1. Simple Moving Average (SMA)

The simple moving average (SMA) is a straightforward technical indicator that is

obtained by summing the recent data points in a given set and dividing the total by
the number of time periods. Traders use the SMA indicator to generate signals on
when to enter or exit a market. An SMA is backward-looking, as it relies on the past
price data for a given period. It can be computed for different types of prices, i.e.,
high, low, open, and close.

In financial markets, analysts and investors use the SMA indicator to determine buy
and sell signals for securities. The SMA helps to identify support and resistance
prices to obtain signals on where to enter or exit a trade.

When generating the SMA, traders must first calculate this average by adding prices
over a given period and dividing the total by the total number of periods. The
information is then plotted on a graph.

The formula for Simple Moving Average is written as follows:

SMA = (A1 + A2 + ………. An) / n

Where:

 A is the average in period n

 n is the number of periods

Example of a Simple Moving Average

John, a stock trader, wants to calculate the simple moving average for Stock ABC by
looking at the closing prices of the stock for the last five days. The closing prices for
Stock ABC for the last five days are as follows: $23, $23.40, $23.20, $24, and
$25.50. The SMA is then calculated as follows:

SMA = ($23 + $23.40 + $23.20 + $24 + $25.50) / 5

SMA = $23.82

 
2. Exponential Moving Average (EMA)

The other type of moving average is the exponential moving average (EMA), which
gives more weight to the most recent price points to make it more responsive to
recent data points. An exponential moving average tends to be more responsive to
recent changes, as compared to the simple moving average which applies equal
weight to all price changes in the given period.

When calculating the exponential moving average, the following three steps are
used:

1. Calculate the simple moving average for the period

The EMA needs to start somewhere, and the simple moving average is used as the
previous period’s EMA. It is obtained by taking the sum of the security’s closing
prices for the period in question and dividing the total by the number of periods.

2. Calculate the multiplier for weighting the exponential moving

average

The formula for calculating the multiplier is as follows:

Multiplier = [2 / (Selected Time Period + 1)]

For example, if the time period in question is 10, the multiplier will be calculated as
follows:

Multiplier = [2 / (10+1)] = 0.1818

3. The last step is to calculate the current exponential moving

average

The last step calculates the current EMA by taking the period from the initial EMA
until the most recent time period, using the price, multiplier, and the previous period’s
EMA value. It is computed using the following formula:
Current EMA = [Closing Price – EMA (Previous Time Period)] x Multiplier + EMA
(Previous Time Period)

The weighting given to recent price data is higher for a longer-period EMA than a
shorter-period EMA. A multiplier of 18.18% is applied to the recent price points of
a 10-period EMA, whereas a 9.52% multiplier is applied for the recent price points
of a 20-period EMA.

3) Sentiment

Forex sentiment is another widely popular form of analysis. When you see sentiment
overwhelmingly positioned to one direction, this means the vast majority of traders
are already committed to that position.

Perhaps this can be better explained with an example. Let’s assume that an
overwhelming number of traders and investors are bullish the Euro. They think
the Euro is going higher. Since people vote with their trades, we can assess through
DailyFX (which uses IG Client Sentiment) that the EUR/USD sentiment shows a
majority of traders are buyers in the currency pair.
Since we know there is a large pool of traders who have already BOUGHT, then
these buyers become a future supply of sellers. We know that because eventually,
they are going to want to close out the trade. That makes
the EUR to USD vulnerable to a sharp pull back if these buyers turn around and sell
to close out their trades.

Trading Plan:
Having a trading plan is essential, is as they say “If you fail to plan, you plan to fail”.
In this case, if you do not have a trading plan, you might as well go to a casino. The
difference between trading and gambling is having some guidelines to stick to and
make you accountable for the type of entries you make. Having this in mind, we have
come up with some “guidelines” of our own. Remember that a trading plan is created
based on the risk factor that each person possesses, thus, trading plans should be
customized to each person’s needs.

- Look at any important news during the day to account for volatility, preferably stay
away from trading during news. (Trade news few times).
- Trade only in high volume hours, from 8am-10:30am. Once or twice a week get up
at 3am to trade during the London session.

- Work using the 5-, 15- and 30-minute chart, to enter a trade these time frames
have to agree more or less on the same direction.

- Use the bigger time frames to look for market direction, especially the 1-hour
chart.

- CONSISTENCY

– Trade primarily using moving averages, elephant bars, TT, BT, highs and lows,
double tops, support and resistance levels and especially do NOT trade against the
moving averages.

- Learn how to use other indicators, such as the MACD

- Do not trade when level already passed or when max loss is reached. In this case,
look at the charts and keep an eye on prices to possibly look for set ups when I can
return to trade.

- If weekly max loss reached, use the time off to consider making adjustments to
trading plan.

- Make 4 to 6 trades a day! (PATIENCE) Don’t have to trade everything. - Put a

“take profit” on trades that I cannot monitor and use a trailing stop.

HOW TO APPLY TECHNIQUES IN TRADING

Traders can utilize a mix of all three types of forex market analysis. This can be done
by:

1) Use fundamentals to assist in identifying a long-term trend:

 Analysing a country’s GDP, interest rate and inflation rate provides insight on
the strength of that country’s economy and by extension, their currency. For
example, if the US begins an interest rate hiking cycle, the US dollar will look
attractive. If enough investors/traders buy US dollars this will prop up the
value of the USD.

2) Apply sound technical analysis to spot entries into the market:

 Using multiple time frame analysis and an indicator like the MACD or Relative

Strength Index, traders can spot ideal entries into the market.

3) Consider client sentiment:

 Traders can analyse client sentiment either by observing the net number of
traders long or short, or by trading the difference in net short/long
movements. The main takeaway however, is that retail clients tend to trade
against prevailing trends therefore, making client sentiment a contrarian
indicator.

ON BALANCE VOLUME
 The on- balance volume (OBV) indicator is a well – known technical
indicator that reflects movements in volume, It is also one of the simplest
volume indicators to compute and understand.
 The OBV is calculated by taking the total volume for the trading period
and assigning it a positive or negative value depending on whether the
price is up or down during the trading period.
 When price is up during the trading period, the volume is assigned a
positive value, while a negative value is assigned when the price is down
for the period. The positive or negative volume total for the period is then
added to a total that is accumulated from the start of the measure.
BOLLINGER BAND
Bollinger Bands are envelopes plotted at a standard deviation level above and below
a simple moving average of the price. Because the distance of the bands is based
on standard deviation, they adjust to volatility swings in the underlying price.
Bollinger Bands use 2 parameters, Period and Standard Deviations, StdDev.
standard deviation is a measure of volatility, Bollinger Bands adjust themselves to
the market conditions. When the markets become more volatile, the bands widen
(move further away from the average), and during less volatile periods, the bands
contract (move closer to the average). The tightening of the bands is often used by
technical traders as an early indication that the volatility is about to increase sharply.

How this indicator works

  When the bands tighten during a period of low volatility, it raises the
likelihood of a sharp price move in either direction. This may begin a
trending move. Watch out for a false move in opposite direction which
reverses before the proper trend begins.
 When the bands separate by an unusual large amount, volatility
increases and any existing trend may be ending. 
 Prices have a tendency to bounce within the bands' envelope, touching
one band then moving to the other band. You can use these swings to
help identify potential profit targets. For example, if a price bounces off
the lower band and then crosses above the moving average, the upper
band then becomes the profit target. 
 Price can exceed or hug a band envelope for prolonged periods during
strong trends. On divergence with a momentum oscillator, you may want
to do additional research to determine if taking additional profits is
appropriate for you. 
 A strong trend continuation can be expected when the price moves out of
the bands. However, if prices move immediately back inside the band,
then the suggested strength is negated.

STOCHASTIC OSCILLATOR
A stochastic oscillator is a momentum indicator comparing a particular closing
price of a security to a range of its prices over a certain period of time. The
sensitivity of the oscillator to market movements is reducible by adjusting that
time period or by taking a moving average of the result. It is used to
generate overbought and oversold trading signals, utilizing a 0–100 bounded
range of values.

PIVOT POINT
Pivot points refer to technical indicators used by day traders to identify potential
support and resistance price levels in a securities market. They are based on the
previous day’s high, low, and closing prices. Traders use pivot points and the
support and resistance levels they provide to determine potential entry, exit, and
stop-loss prices for trades.
Pivot point (P) = (Previous High + Previous Low + Previous Close)/3

S1= (P x 2) – Previous high

S2 = P – (Previous High – Previous Low)

R1 = (P x 2) – Previous Low

R2 = P + (Previous High – Previous Low)

where:

P=Pivot point

R1=Resistance 1

R2=Resistance 2

S1=Support 1
S2=Support 2

 High indicates the highest price from the prior trading day,

 Low indicates the lowest price from the prior trading day, and
 Close indicates the closing price from the prior trading day.
FUNCTION
Pivot points are especially useful to short-term traders who are looking to
take advantage of small price movements, like normal support and
resistance levels, traders can choose to trade the bounce or the break of
these levels.
THERE ARE TWO CONDITIONS: -
A. Range-bound traders use pivot points to identify reversal points.
They see pivot points as areas where they can place their buy or
sell orders.
B. Breakout traders use pivot points to recognize key levels that need
to be broken for a move to be classified as a real deal breakout.

RELATIVE STRENGTH INDEX (RSI):

The relative strength index (RSI) is a momentum indicator used in technical analysis

that measures the magnitude of recent price changes to evaluate overbought or
oversold conditions in the price of a stock or other asset. The RSI is displayed as an
oscillator (a line graph that moves between two extremes) and can have a reading
from 0 to 100. Traditional interpretation and usage of the RSI are that values of 70 or
above indicate that a security is becoming overbought or overvalued and may be
primed for a trend reversal or corrective pullback in price. An RSI reading of 30 or
below indicates an oversold or undervalued condition.
 HOW TO OPEN A LIVE ACCOUNT?

Go to the website starnetfx.com.

Then, click to open demo/live account.
Then choose live account.
Then enter basic details.
After that we will receive an SMS for temporary password and id.
That have to enter in that login page.
Then get the details of Live Account Id password in our Mail Id.
Then to complete Basic KYC process by ADHHAR AND PAN CARD.

After analyzing the fundamental and technical signals. We go for best decision to
take whether to place a sell or buy order at that time. There we decide which time
frame will be better for trading in 1 day/ 4hrs/ 1hr. Then we set the take profit and
stop loss respectively then wait for our decisions to confirm and close the position.

I have traded in the demo account with all the respective analysis & instructions were
provided by Rajan Sir.

CURRENCY PAIR: - EURO/USD

ABOUT BROKERAGE PLAN:

They offer to all our students from STARNETFX TRADERS without any brokerage
charges by opening $1000 and more in live account.
All trades are free from brokerage charges
CONDITIONS:

a) Must have live account in the past or opening during period and deposited
money during 1-06-2021---10-06-2021.
b) Deposited money should be $1000 or more
c) No trade is to be placed before accumulated to $1000 or more.
d) It is a lifetime brokerage free.
e) Then only after we deposit money in live account for minimum $200.

TASK:
i. To analyze the market every single day and do daily predictions of the market
trend followed by fundamental analysis and technical analysis.
ii. Daily presentations on market analysis to be done in every session.
iii. Had to make profit daily and post the screen shots on social media platforms
to acquire prospective clients. So that we can make them understand the
advantages of trading in forex market and about the risks and rewards.
iv. To open a demo account for them for live experience of trading, then to create
an account to trade with a minimum amount of $200.
v. Day to day activities in the economy of different countries and their major
events affecting the money market to be observed.
Conclusion
On the whole, this internship was a useful experience. I have gained new
knowledge, skills and many more. I can conclude that there have been a lot I’ve
learnt from my work at B B ADVISORY PRIVATE LIMITED. It was quite very good
experience for me as a beginner. Experience all the common terms like forex, Stock
Markets, FX advisory services, Treasury Elite, BSE, NSE, MCX, NCDEX, COMEX, and
CFD. In order to become a profitable trader, there has to be awareness on the
economic, social and political changes that could affect the currency market. Also,
the use of technical indicators is also encouraged to support the global
macroeconomic issues and facilitate the trader’s decisions. Experimentation has led
the group to conclude that the more analysis utilized the better the outcome
produced. This does not mean to use all indicators available, just to get a little
information of every aspect of the factors that affect a currency. Two main things
that I’ve learned the importance of risk-management and self-motivation.

Name- Loknath Patra

Roll No- 2006258003
Internship Period– 2 months
Academic Year– MBA (2020-2022)