Steve Ward - How to Make Money Trading Derivatives: An Insider’s Guide

About the Book

This is a pioneering book on trading Indian futures and options written by an expert who does so for a living. It is an insider's guide which spans the three aspects of successful trading: charting and entry techniques, money and trade management, and trading psychology:

• How to figure out whether the market is trending or range-bound; the technical indicators to apply in different phases
• Day trading, swing trading, and position trading profitable approaches and appropriate precautions for these three futures trading strategies
• Cash and futures arbitrage how to get risk-free returns from idle cash
• Money-making options strategies
• How to trade with discipline
• The critical importance of money and trade management; rules for limiting your risk per trade and how to work out the size of your trading positions.

Based on an insiders expertise and experience of trading Indian futures and options, the book is packed with proven strategies and examples of real trades in the Indian derivatives market.

The author boldly asserts that derivatives have changed the Indian trading landscape forever... It is, finally, possible to make a fortune on the Indian stock market.

Gujral has cemented himself as a pioneer in this field.

James Holter, Editor, Futures Magazine, USA

Ashwani Gujral has the natural ability to show traders how it works. Jim Kharouf, Editor, Traders Source Magazine, USA

The more I read, the more I fascinated got Saikat Dasgupta

I found your book interesting, enlightening and practical

Aravind Gandhi, Mumbai

The unique thing about this book is that the author shares with us his experiences on a particular trade. It has specific pinpointed examples rather than more conceptual knowledge. In recent times, this is one of the best books on trading and managing money. www.traderji.com

About The Author

Ashwani Gujrals brilliant academic background spans engineering and finance. He is BE (Electronics and Communications) from M.I.T. Manipal, 1993, and MBA (Finance) from Georgetown University, Washington DC, USA, 1995.

Mr Gujral writes regularly for the leading US specialist magazines and journals on trading and technical analysis, including The Active Trader, USA; Stock Futures and Options, USA; Futures, USA; Traders Source, USA, and Technical Analysis of Stocks and Commodities, USA. He is also a Technical Analysis Consultant to Reuters India Ltd.

Mr Gujral also features regularly as an expert over CNBC, NDTV and Zee News Channels to offer comments on the Indian economy and the stock and derivatives markets. Since 1995, he has been trading stocks and derivatives for a living.

How to Make Money Trading Derivatives is his first book.

Ashwani Gujral has taken great strides at bringing technicalanalysis to the Indian financial markets. This book encompassesall facets.... Its a must read for anyone interested intechnically trading the Indian markets.

Jayanthi Gopalakrishnan, Editor, Technical Analysis of Stocks and Commodities Magazine, USA

India is the worlds largest and most exciting frontier of speculative markets. Ashwani Gujral has cemented himself as a pioneer in the field and will help numerous Indian market participants graduate from passive investors to traders.

James Holter, Editor, Futures Magazine, USA

As a trader and writer, Ashwani Gujral has the natural ability to break down a contract, market or product and tell traders how it works and what it means to them. His straight-forward style should help any trader trying to filter out what is needed in trading Indias derivatives markets.

Jim Kharoof, Editor, Traders Source Magazine, USA

Gujrals book is heavily under-priced for the great ideas it offers so liberally. Hindu Business Line

This book is dedicated to my biggest trade so far
my wife, Anubha
and my highest profit
my daughter Rtunjya
and I am still long on them.

They stood by me not only while I wrote this book
but also while I learnt trading and
through the inevitable initial failures
but continued to believe I could succeed.

www.vision books india.com

ALL RIGHTS RESERVED. No part of this publication may be reproduced,
stored in a retrieval system, or transmitted by any means, electronic,
mechanical, photocopying, recording, or otherwise, without the prior
written permission of the publisher and the copyright holder.

A Vision Books Original

First eBook Edition, 2016
First Published 2005, Reprinted 2005 (5 times)
Reprinted 2006 (5 times)
Revised and Expanded Edition 2007
Reprinted 2007 (4 times),
Reprinted 2008 (4 times) Reprinted 2009 (Twice), 2010 (Twice), 2011
3rd Edition 2012
Reprinted 2014, 2015 (Twice), 2016

eISBN
eISBN 10: 81-7094-931-9
eISBN 13: 978-81-7094-931-2

Ashwani Gujral, 2005, 2016

Published by
Vision Books Pvt. Ltd.
(Incorporating Orient Paperbacks and CARING imprints)
24 Feroze Gandhi Road, Lajpat Nagar 3
New Delhi 110024, India.
Phone: (+91-11) 2984 0821 / 22
e-mail: visionbooks@gmail.com

Contents

14. My Trading Diary The Bubble and the Crash:
February-June 2006

A lot of water has flown under the bridge since this book was first published in February 2005. The book has been widely read and appreciated by Indian investors and traders and I would like to thank the large number of readers who have said so many kind words about it. Indeed, it were the mails I received from readers far and wide coupled with my publishers insistence that motivated me to add two extra chapters in the books second edition on some enduring lessons to be learnt from the way the markets moved between February 2005 and June 2006.

The first of the new chapters (Chapter 13) deals with stock selection, in which we look at how to choose suitable stocks for trading. Personally, I believe that this chapter is the second most important one in the entire book, next only to the one on money management (Chapter 12). This is so because its futile to apply the right techniques to wrong stocks.

In the other new chapter (Chapter 14), I describe how I dealt both with the top forming around May 2006, and then the 40% correction from that top through June 2006. As the market went through a huge rally and then an equally sharp 40% correction, I thought it was an appropriate occasion to add some of my new learning and experience for the readers of the book.

For the books third edition, I have added a new chapter (Chapter 15) which describes the last hour trading strategy which I have honed and perfected during my television shows on ET-NOW. It provides a new dimension to the way day traders approach the last hour in the market.

I plan to continually add more chapters as my trading life unfolds, sharing my experiences and research with the readers.

While you wont become an expert technical analyst or trader merely by reading this book, I hope it will nevertheless sensitize you to the issues faced in trading.

Lets first be clear what this book is not.

This is not a book on technical analysis although it does discuss technical methods, specifically in chapters 2, 3 and 4 and uses it in almost all the others. Technical analysis is a vast field and its not possible to discuss it in its entirety in one book. Neither is it necessary to do so in a book on strategies for trading derivatives. Profitable trading does not depend on the knowledge of a large number of theories, rather it depends on successfully implementation of a few. I have tried to discuss technical analysis in a simple manner and one that can be implemented by traders having elementary knowledge of the subject. An important part of successful trading is also money management and psychology which most books do not get around to discussing at all but which are covered in some detail in separate chapters in this book.