BOLT - BSE-On-Line-Trading Bull - A bull is a operator expecting a rise in price so that he can later sell at a higher

price. Bull Market - A rising market with abundance of buyers and few sellers. Bear - An individual who expects price to go down. Bear Markets - A weak or falling market characterised by absence of buyers. Bargain - Transaction between two members of the exchange. The terms "dealings" and "contracts" also have identical meanings. Bid - A bid is the demand for a security that can be entered by the syndicate/sub-syndicate members in the system. The two main components of a bid are the price and the quantity. Bidder - The person who has placed a bid in the Book Building process. Book Closure - Dates between which a company keeps its register of members closed for updating prior to payment of dividends or issue of new shares or debentures. Bonds - Long term debt instruments. Cash Settlement - Payment for transactions on the due date as distinct from carry forward (Badla) from one settlement period to the next. Crisis - Reckless heavy short-sales leading to unduly depressed prices. In such a situation, the Governing Board may prohibit short sales, fix minimum prices below which sells or purchases are not permitted and limit further dealings only to closing out of existing contracts. Debenture - A long term investment that is not usually secured by a mortgage on a specific property. Equity capital - Long term funds provided by the owners of a firm and consists of ordinary share capital and retained earnings. Floor Price - The minimum offer price below which bids cannot be entered. The Issuer Company in consultation with the Book Running Lead Manager fixes the floor price. Listed Company - A public limited company which satisfies certain listings conditions and signs a listing agreement wit the stock exchange for trading in it securities. One important listing condition is that 25% of its issued capital should be offered to the public. Rights Issues - The issues of new shares to existing shareholders in a fixed ratio to those already held at a price which is generally below the market price of the old shares. Specified Shares - For the purpose of trading, a security is categorised either as a 'specified' shares or a 'non-specified' security. This is done by stock exchange authorities. Stamp Duty - The ad valorem duty of 1/2 per cent payable by buyers for transfer of shares in their name.

Trading with a high ego. ask yourself these questions: Do I have a set of rules that tell me what to buy. Not Cutting Losses or letting Profits run One of the most common mistakes made by traders is that they let their losses grow too large. No Trading Plan If you consider yourself a trader. Once again. Three 4-letter words that will kill you! HOPE--WISH--FEAR--PRAY If you ever find yourself doing one or more of the above while in a trade then you are in big trouble! Markets has own system of moving up & down. Every trader needs to develop a method for getting out of losing trades quickly. This in turn leads to further mistakes. Be patient and wait for the next high probability opportunity. whoever or wherever has any one come from does not concern the markets. Nobody likes to take a loss. but failing to take a small loss early will often result in being forced to take a large loss later. Great traders have made many losses.General Trading Mistakes Trading for excitement & thrill Not for profits Many traders consider stock market as casino and trade for thrill and fun only. But what makes them great is their ability to recover quickly from a string of losses. All the charm. regret taking the trade and want to recover as quickly as possible. There simply cannot be any expectation of success if we can't answer these questions clearly and concisely. When you are wrong just use a simple 4-letter word to correct the situation-GET OUT! Trading with money you can't afford to lose One of the greatest obstacles to successful trading is using money that you really can't afford to lose. wishing and praying or being fearful in the world is not going to turn a losing trade into a winning one. but for the next 10 trades? Before I enter a trade. because this type of trade puts you in a highly euphoric state and leads to daydreaming about the huge profits still to come. do I know when I will take profits? Do I know when I will get out if I am wrong? These questions form the first part of a trading strategy. Ultimately what happens is that when someone knows in the back of their mind that they are risking the money they can not afford to lose. Examples of this would be money that is supposed to be used in any other business. Spending profits before you make them Nothing is more exciting then getting into a trade that blasts off and puts you into a highly profitable situation. Because they have a fairly big ego and thought they couldn't fail. they trade out of fear and emotion versus logic and no emotion. trading with borrowed money etc. Their egos become their downfall because they can not except that they would be wrong and refuse to get out of bad trades. number of degrees & diplomas of business management on the wall or business savvy will not budge the market when you are wrong. This can cause major problems however. . when to buy and how much to buy. money to be paid for college/school fee. not just for the next trade. powers of persuasion. Many individuals who have remained highly successful in other business ventures have failed miserably in trading game. As soon as one has a losing trade. he wants to quickly make back the lost money. A great trader is not someone who has never had a loss. Research and learn to apply the best methods for placing protective stoploss orders. Don't rush back in. He thinks about the other things he could have done with the money. All the hoping. This causes you to not be prepared to get out as the market reverses and wipes off all your profits because you have convinced yourself of the eventual outcome and will deny the reality of the situation. The real problem occurs as you get caught up in the daydream and expectations.

The above charges may not be the same across different service providers but a big part is likely to be the same as regulatory agencies like Securities and Exchange Board of India (SEBI) specify certain norms. with the difference being that instead of cash. be mindful of the fact that you are likely to be subject to emotional reactions of fear and greed. where you will get out. Yearly charges for maintaining the Dmat account 3. With rare exception. there are no transaction / service charges when shares are bought. A Dmat account can be opened through most banks and financial institutions. It does what it does and when you are wrong you are wrong! The easiest way to keep a bad trade from going really bad is to determine before you get in. For an individual wishing to trade in shares. Once again they hope. Account opening charges 2. Falling in love with a stock (Just Flirt) Many traders get fascinated by Dmat Account A Dmat account is like a Bank Account. The usual charges associated with a Dmat account are: 1. The charges will be levied when shares are sold. Usually. after filling up the required forms and providing identity and address proofs. So. The shares that are deposited to or reduced from the Dmat account are electronic shares.Not Sticking to your plans & Changing strategies during market hours If you find yourself changing your strategy during the day while the markets are still open. they are deposited into the buyers Dmat account and if shares are sold. Physical shares cannot be traded. It must be kept in mind that market does not care what you think. Dmat shares have many advantages in terms of ease of handling etc. Recurring periodic charges for holding shares in the Dmat account 4. It's amazing that most of the traders don't have any clear escape plan for getting out of a bad trade. Trading Account . the most prudent thing to do is to plan your trading strategy before the market opens and then strictly stick to it during trading hours. a Dmat account holds shares. pray wish and rationalize their position. if shares are bought. it is compulsory to trade only in Dmat (dematerialized) shares. Other service charges based on transactions carried out. Not knowing how to get out of a losing trade. they are reduced accordingly from the Dmat account.

There is a brokerage charge that is incurred for both buying and selling of shares. When the desired price is reached. he/she logs into the Trading account and specifies the details like the Company name. there will be additional government taxes . i. a Bank account is required for carrying out various financial transactions associated with trading of shares. Buying shares: When an individual wants to buy a share. This charge varies across different trading houses. If the Bank account had been with a different organization. When the desired price is reached. buy and sell shares in the stock exchange. The actual trading can be done by phone. Trading process Once the Dmat account. If the Bank account had been with a different organization. I have found buying and selling using the internet fairly convenient. this trade is executed and the amount (after adjusting for charges) is debited from the Bank account and the shares are credited into the Dmat account. the required amount from the Bank account is set aside for this trade.e. internet or using transaction slips that are provided at the time of opening the account. A normal Savings Account is enough and nothing additional needs to be done with the Bank account. Depending on this information. Bank account Needless to say. A Trading account can also be opened with most banks and financial institutions. While it is not necessary to have the Dmat account. then for carrying out this trade.A Trading account is required if an individual wishes to trade. Please note that apart from the charges that are levied by the Bank. Trading account and Bank account with the same organization. then after this trade. Selling shares: When an individual wants to sell a share. I feel that having it with the same organization offers additional convenience. it would have been necessary to move the amount from the Trading account into the Bank account. the Dmat account service provider and the Trading account service provider. Also. There are options to specify the price at which to buy or sell and it is easy to track the status online. The following example of buying and selling using a Trading account on the internet illustrates the convenience of having the Dmat account. Trading account and Bank account with the same organization. no. especially for individuals trading using the internet. the required no of shares from the Dmat account is set aside for this trade. this trade is executed and the shares are debited from the Dmat account and the amount (after adjusting for charges) is credited to the Bank account. of shares to sell and the price at which to sell. after filling up the required forms and providing identity and address proofs. it would have been necessary to move the amount into the Trading account. The 2 main stock exchanges in India are the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). Personally. This is where the money on sale of shares will be credited or money for buying shares will be debited from. of shares to buy and the price at which to buy. an individual is ready to start trading. no. Trading account and Bank account are in place. government levies like the Securities Transaction Tax (STT) will be incurred on such transactions. Depending on this information. he/she logs into the Trading account and specifies the details like the Company name.

Happy Trading! Ravi Kumar is one of the founders of the Chennai-based e-commerce .like STT and Service Tax. Also. please make sure to read all the terms and fee details of the service providers before opening any account and be aware of the transaction costs involved with each transaction.