Vol. 27 No. 05 MAY 2019 ` 5.

00

Published by: Vision Books Pvt. Ltd., 24 Feroze Gandhi Road, Lajpat Nagar 3, New Delhi 110024, Ph: 011-29836470 / 80; e-mail:visionbk@vsnl.com; www.visionbooksindia.com

Dear Investor,
Profitable Trading with Renko Charts
Imagine if a charting method could prevent
overtrading? Eliminate insignificant price action?
Make trends and tradeable patterns easier to identify?
Throw up clearly defined entry and exit signals?
Sounds too good to be true? But it is true. Among the
oldest and most popular Japanese charting system,
Renko charts offer all these unique benefits.
Vision Books is delighted to announce the
publication of a new, comprehensive book Profitable
Trading with Renko Charts (see pages 1-3). Written by
one of India's top Renko practitioners, and packed
with Indian market examples, it offers step by step
guidance from the basics to proven methods of Prashant Shah

“
T
analysis and trading. Come, profit from this If It doesn’t pay off soon,

immensely powerful system.
Mandar Jamsandekar has trained thousands to
trade safely and profitably. His course book, Trading
and Technical Analysis Course (see page 8) presents
his proven methods and strategies and also introduces
his innovative Trade Selection Ready-Reckoner tool
which enables a trader to arrive at a clear go / no-go
trading decision.
”
HE FORMATION OF BRICKS IS A UNIQUE
forget it.
feature of Renko charts which no other
chart category possesses. Equally, different — Zurich Axioms
combinations of bricks can help us in analysing both trends and setups. Over the
years, I have explored, researched and analysed numerous possible combinations and
come up with a comprehensive list of unique Renko patterns. I have also tried to keep
the patterns as objective as possible and kept their names simple so that they are easy
to remember.

And, as always, this issue also highlights dozens of SWING BREAKOUT PATTERNS: Renko charts are basically swing charts. A series of

terrific books by top market experts to help you make bullish or bearish bricks represents a swing move, minus unnecessary noise. So when
profits in all market conditions! we see a series of bricks in a Renko chart, it means that the price has moved in a
particular direction without a correction of twice the brick size (see Figure 1).
Act today . . . ordering information is given A series of bricks in one dir ection is called a swing mo
direction movve. A series of bullish
on page 4. bricks indicates a bullish tr end and a series of bearish bricks captur
trend es a bearish
captures
tr end.
trend.
As discussed in Chapter 1, a brick reversal occurs only when the reversal criteria is
Kapil Malhotra met. Hence, the price in a daily Renko chart can progress in the same brick colour for
Publisher several days until the brick reversal criteria is met.
Swing breakouts are basic Renko chart patterns. Before we discuss them any further,
Detailed descriptions and contents of all books on let us objectively define swing highs and swing lows on Renko charts (see also Figure 2):
www.visionbooksindia.com (Continued on page 2)
PAGE 1  THE PROFESSIONAL INVESTOR  MAY 2019
  P RO F I TA B L E T R A D I N G W I T H R E N KO C H A RT S
 When there is a brick reversal pattern from
a bullish brick to bearish, the high price of
the previous bullish brick is a swing high.
 Correspondingly, when there is a flip over
from a bearish brick to a bullish one, the
low price of the most recent bearish brick is
the swing low.
Figure 1: Series of bullish and bearish bricks illustrating bullish and bearish swings
Figure 2: Swing high and swing low on a Renko chart
Figure 3: A bullish swing breakout from an immediate previous swing high (left) and a bearish
swing breakout from an immediate previous swing low (right)
This basically implies that there will be a
swing high or swing low at every brick reversal
pattern.
Figure 3 explains swing breakout formations.
A swing high gets formed when a bearish
brick appears after a series of bullish bricks. If
the next series of bullish bricks goes above the
PAGE 2  THE PROFESSIONAL INVESTOR  MAY 2019

immediate previous swing high, it then triggers
a bullish swing breakout. To complete a bullish
swing breakout, the price needs to print one
brick above the prior swing high.
Correspondingly, if the next series of bearish
bricks goes below the low of an immediate
previous swing low, and prints one brick below
it, the bearish swing breakout is then said to
have been triggered at that brick.
Please note that a breakout abo
breakout abovve — or
w — the immediate pr
below
belo evious swing
previous
high or swing lo w is necessar
low necessaryy to call it a
swing br eakout. Any swing piv
breakout. pivotot prior to
the most rrecent
ecent one is not consider
considereded as
swing br eakout.
breakout.
Figure 4 is a chart of BEML illustrating and
explaining bullish and bearish swing breakouts.
Figure 5 is a chart of Bajaj Auto showing
swing breakouts.
In R enko char
Renko ts, swing br
charts, eakouts can also
breakouts
be traded as a system bbyy themselv
themselves.es. Trading
a swing breakout is a price or trend following
method that doesn’t require prediction as
regards the direction of the trend. You buy
when a bullish swing breakout occurs with a
stop loss at the bearish swing breakout level. If
the stop loss gets triggered, you exit and reverse
by trading the bearish swing breakout with a
stop placed at the bullish swing breakout price
level. The method comes with clear and pre-
defined risk (stop loss) levels, breakout and
trend riding technique.
Price going above the previous swing high
has bullish implications. As noted, this swing
breakout technique comes with a pre-defined
rule for risk management, as follows.
 A bullish swing breakout pattern fails if the
price falls one brick below the swing low.
 A bearish swing breakout pattern will get
invalidated if the price goes one brick above
the swing high of the pattern (see Figure 6).
The failure levels highlighted in Figure 6 can
be used as stop loss when initiating trades. This
approach has the advantage of objectively
identifying the initial risk in the trade. If the
risk in a particular trade is unaffordable, you
can skip that trade and wait for the next suitable
opportunity. Or, you can adjust the position
size (explained later in the book) while
initiating the trade and add to the position later
if the initial stop loss is too wide.
  P RO F I TA B L E T R A D I N G W I T H R E N KO C H A RT S 

Figure 4: Bullish and bearish swing breakouts in the daily 1% brick value Renko chart of BEML
A, B, C, E, G and L are bullish swing breakouts while D, F, I, J, K and M are bearish swing breakout
patterns. Pattern H is a resistance level and N shows a double bottom support pattern.

` 889

Profitable Trading with

Renko Charts
One of the oldest and most popular Japanese
charting methods, Renko offers some unmatched
benefits:
 Renko charts are simple to use
 Trends are easier to identify in Renko charts
 Significant tradeable patterns are much
easier to spot in Renko charts
 Entry and exit signals are clearly defined
 Renko charts help traders control
overtrading
This comprehensive book provides step-by-
step guidance, on using Renko charts methods
Figure 5: Bullish and bearish swing breakouts in the daily 1% brick value Renko chart of analysis and trading, in Indian market:
of Bajaj Auto  What a Renko chart is — and how to plot it
 Thorough description and analysis of major
A, C, D, G and J are bearish swing breakouts, while B, E, F, H, I, K, M and N are bullish swing breakout price patterns in Renko
patterns. Pattern C is also a multiple-swing breakout and L is a double bottom support pattern.
 How to profit from the unique Renko chart
indicators
 Tested and effective trading strategies
 PLUS: 250+ charts and examples from
Indian markets.
With recent advancement in technology
making Renko easily accessible on popular
charting software, this book will help both
experienced and novice traders to profit from
this very powerful system.
PRASHANT SHAH is one of India's top
practitioners of "noiseless charts." In
this comprehensive book, he reveals
all the tips and tricks of profitable
trading with Renko charts that he has
mastered over the years.

[Excerpt from: Profitable Trading with Renko Charts

by Prashant Shah. Order by email to
visionbooks@gmail.com, or online at
Figure 6: Breakout and failure levels of bullish and bearish swing breakout patterns www.visionbooksindia.com]
PAGE 3  THE PROFESSIONAL INVESTOR  MAY 2019
 “The more you learn, the more you earn” — Warren Buffett

SUPERSELLER! 3rd
Edition with a new chapter.
Shows how you can make
money trading with charts
in different market
conditions. Packed with
real-life Indian examples.
` 1,249
SUPERSELLER! 3rd SUPERSELLER! BESTSELLER! With Ichimoku is one of today's A pioneering book on BESTSELLER! Here is a BESTSELLER! How to trade
Edition With a New A master class on making examples and charts most powerful trading making money through concise, actionable guide profitably and safely by
Chapter: Pioneering book money in day trading by from Indian markets. systems. This book reveals non-directional trading, i.e. to makeing money in day combining technical stock
on trading futures and one of India’s most famous “Highly recommended . . . how you can make money without having to predict trading by a successful day picking with the power of
options by a master trader traders. discover ways of profiting using these cloud charts. the market’s future trader who has trained disciplined trade entries and
who does so for a living. ` 999 from candlestick trading.” ` 495 direction. more than 40,000 traders. trade management.
"Must read" (Also available as e-Book) ` 495 (Also available as e-Book) ` 599 ` 295 ` 799
` 599 (Also available as e-Book) (Also available as e-Book) (Also available as e-Book) (Also available as e-Book)

Real-time actionable
market analysis and
technical trading lessons
from a famous trader.
“A master class”
` 495
Path-breaking book . . . Comprehensive guide to A logical, simple-to-follow CLASSIC! This is an Proven trading secrets that "Full-time trading can BESTSELLER! A valuable
reveals rigorously tested various financial markets and disciplined method of extraordinary book. It can help “you make 50% make you very rich" says compendium of tried and
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handpicked” high profit trade stocks, bonds, forex markets. With Indian unusual success stories low risk. It’s possible and Find out how to start and strategies to help you build
Nifty trading patterns. and derivatives using charts and examples. in the history of the stock it’s true.” succeed as a professional wealth in the stock market.
“Amazing work.” technical analysis. "Truly instructive" market. ` 349 trader. ` 495
` 495 ` 495 ` 395 ` 349 (Also available as e-Book) ` 399 (Also available as e-Book)
(Also available as e-Book) (Also available as e-Book)

How to make money from
the market's short term
upswings and downswings.
"You can make far
greater profits (by
trading) swings than in
any other way" — W. D.
Gann ` 599
How to earn high returns CLASSIC. "One of the
— with low risk — most finely crafted works
through short term . . . bridges the huge gap
trading. All you need to between technical
know to get started. analysis theory and the
` 395 real business of making
money . . .” — Investor's
Chronicle ` 675
"John Piper takes you
beyond theory. He
provides an essential
lesson that most
(traders) never get"
— Dr. Alexander Elder
` 495
How to become a high
performance trader by
mastering your mind. 35
Practical strategies and
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wholly recommended"
` 495
Extraordinary true stories
of people who became
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Jack Schwager's,
Market Wizards"
` 495
New advances show
traders how to profit from
temporary market volatility
— and how to avoid its
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guide" — Traders
Magazine, USA ` 495
A comprehensive guide
to using the most
important risk
manangement method
for traders and investors.
"Must read this book"
` 325

For the invaluable know-how and skills these books offer, they are a
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 Books are also available at www.amazon.in and www.flipkart.com Explains step-by-step how How to become a more
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from systematic trading.
"Excellent" ` 675
other traders.
` 495

PAGE 4  THE PROFESSIONAL INVESTOR  MAY 2019

 ■ T E C H N I C A L ANALYSIS AND D E R I V A T I V E S ■

Derivatives Technical Analysis

How to Make Money Trading
Derivatives
An Insider's Guide (3rd Edition)
Ashwani Gujral
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 all aspects of
successful trading.
Based on an insider’s expertise and
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
assets that “derivatives have changed the
Indian trading landscape forever . . . It is,
finally, possible to make a fortune on the
Indian stock markets.”
“Ashwani Gujral has the natural ability to
show traders how it works”
— Trader's Source Magazine, USA
` 599
Technical Analysis of
Stock Trends (Ninth Edition)
Robert Edwards, John Magee &
W.H.C. Bassetti
The universally acclaimed classic
reference used by nearly one
million analysts and investors
world-wide! Long considered the
definitive foundational work on
technical analysis, this milestone,
expanded 9th edition of “the
bible of technical analysis” offers
both proven, time-tested trading
This landmark new book reveals
and investing techniques and
how behavioural finance offers
updated contemporary know-how for success in different you a more refined understand-
market conditions: ing of technical price patterns
“#1 all-time classic, the best book on chart patterns ever and trading techniques. "Highly
recommend" — Seeking Alpha
written!” Edward Dobson ` 995
` 495

How to Make a Fortune in

Futures & Options: Ashu Dutt
BESTSELLER!
“There are very few opportunities for
making very large gains in relation to the
money you put up. Futures and options is
one of them,” says Ashu Dutt. “With a
small percentage of the price as down BESTSELLER! "Charts are for BESTSELLER! This “Bible of This bestselling beginner's
payment, you get the same price trading as water is for fish. You Technical Analysis” teaches you the guide shows how you can profit
movements as the stock — but the ‘big cannot trade without knowing how to entire spectrum of technical from what the market is telling
deal’ is that the returns you make are read a technical chart." Find out how analysis techniques. "For the you. No prior knowledge
multiples of what you would make if you to hugely increases your trading savvy investor” — Business needed. Real Indian examples.
owned the stock. Even better — returns profits. (Also available as E-book) Today ` 399
` 295 ` 295
come fast when you trade in futures and
options.” In this book, he reveals time-
tested strategies that successful futures
and options traders use but won’t tell you,
proven methods that can make you a
fortune.

(Also available as E-book)

` 349

Winning with Options

The Smart Way to Manage Portfolio Risk and
Maximize Profit
"Point-and-figure is the best of all This classic text shows how "The real bible of technical
Michael C. Thomsett technical analysis methods," traders can use channel analysis." "This original work
This book offers investors easy-to-follow and important assert the expert authors and analysis to predict future share by the founder of technical
techniques related to portfolio management, and shows how demonstrate how this method prices, thus unlocking the key to analysis will teach you man
manyy
produces consistent and reliable making money in the markets. valuable things tha
thatt you don't
traders can use options with profit.
trading profits. ` 495 kno w" — J. Welles Wilde
know"
“An excellent introduction on options for traders as well ` 595 ` 675
as hedgers” — Charles S. Mizrahi, author, Getting Started in
Value Investing

` 395

Winning with Futures

The Smart Way to Recognize Opportunities, Calculate
Risk, and Maximize Profits
Michael C. Thomsett
Futures are often preceived as being high risk. Futures can,
indeed, be risky for those not familiar with them; equally, they
can be highly conservative, depending on how you use them.
Meant for investors new to futures, this book describes and
This book will arm you with one How to make big trading profits This book presents the
evaluates all their risks and opportunities to help you use them by identifying future trends and advanced stage of candlestick
simple, vital tool that will
with confidence. enhance your investment turning points with never-before analysis — Ichimoku Kinko
success — the price chart. precision using cycles, channel Hyo, also called Cloud charts.
and probability analysis. “A power packed system.”
` 395 “High quality book.”
` 295 ` 495 ` 595

PAGE 5  THE PROFESSIONAL INVESTOR  MAY 2019

  STOCK MARKET INVESTING AND STRATEGIES 

Stock Market Strategies Stock Market Investing

Fundamental Analysis for
Investors (4th Edition)
How to Make Consistent, Long-term
Profits in the Stock Market
Raghu Palat
BESTSELLER!
How to make consistent profits in the
stock market based with information-
backed decisions.
(Also available as E-book)
Shares for
Investment
and Wealth
(3rd Expanded
Edition)
BESTSELLER!
Raghu Palat
To the
knowledgeable,
the stock market
can offer
fantastic wealth
Equally, it can
ruin the ignorant
and mindless
"tip-investors."
Based on the
author's
The Beanstalk Does Grow to the Mutlibaggers: How to Profit from extensive
Sky: How to Make a Fortune through Mega Return Stocks Tejaswy Nanduary experience and investing expertise, this book takes you by
Multibaggers the hand and aquaints you with the market and its ways —
Multibaggers are stocks that can give you
Ashu Dutt and Anav Dutt and shows you how to invest in shares wisely, avoid the
ten-fold, even hundred-fold returns,
various market pitfalls, and grow wealthy.
Multibaggers are stocks that give you 5-, stocks that can literally make you a
"Simple and easy to follow with numerous illustrations.
10-fold returns in relatively quick time, fortune. Here, then, are all the tools you
Useful and well written." — The Times of India
Normal stocks don't do that. Clearly, then, need to discover and profit from
"A must for the novoice. This book highlights the pitfalls in a
multibagger investment style has to be multibaggers — stocks that can make delirious stock market and is a thumb rule for new entrants
completely different. you a fortune. to the bourses." — Business World
` 349 (Also available as E-book) ` 495 (Also available as E-book) ` 399 ` 399

Also Also
e-Book e-Book
 

` 395 ` 399 ` 295 ` 495 ` 595 ` 295

BESTSELLER! The stunning BESTSELLER! The Armchair "Value investing is not only about Comprehensive, step-by-step This book may be the most How you can apply the proven
success of some of the world's Investing system is a practical, low PE, low book value, or other framework for making money in the important investment decision you rules of gambling to win at
legendary investors has been tested, safe, automatic and rule- conventional measures of value", stock market. "Excellent" — will ever make. ". . . a must- trading and investing. "This
built on thier stock picking skills. based method. says Ashu Dutt. Business India read" — The New York Times book dazzles" — Casino Online

` 395
A comprehensive handbook on the
intricacies of P/E and how you can
improve the price-earnings ratio to
boost your stock returns.
` 295
This book shows you how to get
regular income plus capital
appreciation from shares. Packed
with real-life examples.
` 295
How to analyse, these key
financial statements to
analyse and pick companies
to invest in.
CLASSIC
` 295
This book shows readers how to
invest like the man with "the
Midas Touch", Warren Buffett
"CLASSIC"
` 595
How does one spot the bottom
of a bear market? What brings
a bear to its end? This book
provides you the answers.
` 295
CLASSIC! Often cited as the best
book ever written about market
psychology.

` 395 ` 295 ` 250 ` 295 ` 395 ` 295

"Innovative, imaginative, original and
fresh with sophisticated investment
methods – if only you'd thought of
them before."– Sunday Times, London
Step by step, this book shows how
to build and manage a share
portfolio. "An excellent guide."
— UK Analyst
Secrets of profitable investing and Explains in a simple, easy-to-read How to pick winning stocks, manage FASCINATING! Some investors
trading in volatile times. "Real style how to use financial ratios to your portfolio and make profits in the play the market using occult
world advice from real experts" pick the right shares to invest in. market. Packed with practical tools methods and win! Find out how.
and illuminating real-world examples.
PAGE 6  THE PROFESSIONAL INVESTOR  MAY 2019
 ■ INVESTING, PERSONAL FINANCE AND TAXATION ■

Indian Mutual Funds
Handbook
(5th Revised Edition)
Sunder Sankaran
BESTSELLER!
Like in the US and Japan,
mutual funds are becoming
an indispensable
investment avenue for
Indian Investors. This
comprehensive handbook
by an expert lays out the
working of Indian mutual
funds, their operational and
regulatory mechanisms, the
advantages and limitations
` 750 of Investing in them along
with sensible approaches to personal financial planning. The
author's experience of handling hundreds of training
programmes ensures an engaging and easy to understand
approach to mastering the subject. Highlights:
 Benefits of Investing in mutual funds; how they compare with
other investment avenues.
 The different types of equity, debt balanced and liquid
schemes available for investment — and the rewards and
risks each one entails.
 Investing in gold, real-estate and art through mutual funds.
“Ideal for Investors . . . (in) mutual funds."
— Business World
Mutual Funds
How to Make a
Fortune Through
Mutual Funds
Hunt with the Hounds
Ashu Dutt and Arshiya Dutt
This book reveals how you
can make extraordinary
returns from mutual funds
— far beyond the steady,
tortoise-like index parity trot
most investors are used to.
The key lies in grasping the
point that mutual funds
deliver only when the
markets are rising. You lose
money by holding on to
(Also available as e-Book) ` 495 them in down markets. So,
the conventional mutual fund mantras of all-weather regular
investing through systematic investment plans and long term
holding won't make you rich. Mutual funds are a short term
game. To make a fortune, you need to time your mutual fund
investments, and you need to trade mutual funds.
The unique benefits of mutual fund investing are widely
known. You profit from a diversified portfolio of financial assets
— stocks, bonds, commodities, etc. — managed by an expert
fund manager. Going much beyond fund mechanics and the
familiar methods of investing in mutual funds, the book shows
you how to make a fortune by applying the strategic power of
mutual funds.
The Complete Guide to
Investing in Exchange
Traded Funds
How to Earn Rates of
Return — Safely
Martha Maeda
Exchange traded funds
(ETFs) are investment funds
that hold a basket of stocks,
bonds, commodities, etc.
and trade on an exchange.
Globally, ETFs have been an
“overnight” revolution and
now represent nearly every
asset class. Indian investors
are very familiar with gold
` 399
ETFs, with an ever greater
variety of ETFs becoming increasingly available.
An ETF is much like a mutual fund but has many terrific
advantages besides being exchange traded. Their complete
transparency enables ETF investors to get a continuous fix on
their positions and easily readjust their portfolios. Also, ETFs are
cheap to buy and own and their instant liquidity ensures flexibility
of investment strategy.
“. . . not since the setting up of the public stock exchanges
have such wildly different types come together . . .
individual investors are huge buyers of ETFs, so too are
hedge funds . . . and just about every type of investors and
trader in between.” — Will McClatchy, Editor, ETFZone.com

Investing, Personal Finance and Tax Guide

10 Commandments for Wealth Engine

HOW Financial Freedom Indian Financial Planning
TO TURN How to Stop Worrying about
Money — Forever
and Wealth Management
Handbook

YOUR Mehrab Irani

This book takes you on the
Sundar Sankaran
This innovative handbook
Also
e-Book
SAVINGS liberating journey from financial
slavery to financial freedom.
highlights the risks and
returns from all the popular


INTO “The(se) 10 commandments investment classes,

including equity, debt or
. . . permanently free us ` 495
WEALTH BESTSELLER!
from money problems.” —
` 495 H. N. Sinor, CEO, Association for ` 495
income investments, gold,
real estate, etc.
How to Grow Rich in a New Age.
To Grow rich, and stay rich, you
(Also available as e-Book) Mutual Funds of India (Also available as e-Book) need to master the new power
laws of personal finance.

Also
e-Book


` 295 ` 250 ` 395 ` 295 ` 395 ` 495

How to avoid common investing Secrets of loss-proof investing How to profit from investing They wanted instant wealth — Fascinating classic reveals how This book reveals how stock market
mistakes — and grow rich. by ten top international and trading in gold, silver and they got it. Find out the big money is made. Spectacular fortunes are made and how
ILLUSTRATED investment advisers. and other precious metals. secrets of their overnight success. stories of 15 self-made super- successful stock market inveting
rich. can redically change you life.

Also
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` 199 ` 190 ` 145 ` 145 ` 599 ` 295

Explains simply and clearly
everything you need to know about
making your Will. "BRILLIANT"
Practical, inspirational roadmap.
Come, dream big — and discover
how you can fulfil your dreams . . .
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This book offers expert guidance on This book demystifies income tax
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want, whether by means of trusts or interesting style. It explains all
thorugh a valid Will — and save taxes. aspects of Income tax.

PAGE 7  THE PROFESSIONAL INVESTOR  MAY 2019

RNI No. 62633/95 Postal Regd. No. DL(S)-01/3182/2018-2020
Publication Date 29 APRIL 2019, No. of Pages 8
Posted at New Delhi NDPSO MAY 1-2, 2019 Under Lic. No. U(C)-209/2018-2020
PAGE 8  THE PROFESSIONAL INVESTOR  MAY 2019 Licensed to Post without Prepayment
 T R A D I N G A N D T E C H N I C A L A N A LY S I S C O U R S E 

Why Money Management is the How to Trade Safely and

Profitably — Step by Step
Secret of Profitable Trading Mandar
Jamsandekar
This course book shows you, step-by-step,
how to combine the stock picking and market
timing capability of technical analysis with the

M
power of disciplined trade entries and trade
ONEY MANAGEMENT IS IMPORTANT FOR amount of investment per stock with the management strategies. Result: safe and
every market participant, irrespective of current market price of the stock. This will help profitable trading:
which profile you may fit into — day in spreading and balancing risk and reward  How to use various technical analysis
trader, short term investor, positional trader or among the various stocks traded. Let’s see how. concepts and tools
investor. We all have limited amounts of money Suppose the two stocks you have decided
to put in the market. It could be `1 lakh for to trade are Suzlon and TCS. Suzlon was then
some, for others `5 lakh, `10 lakh, `1 crore or trading at `15 and TCS at `2,500.
`10 crore, but we all finally have a limit. This So, for example, when it comes to entering a
is hard earned money and we intend to grow it trade in Suzlon, I might buy 2,000 shares, but
further by investing it in the stock markets. when it comes to trading TCS I may buy only 5
Therefore, we need to respectfully take care of shares. Due to this fallacy, the value traded in
the money that we have with us. both the stocks is different. Along with the
Money management can be implemented in investment there is also a difference in the risk
two ways: and the return involved in both the trades.
Let’s look at a case where we have entered a
 Maintaining a balance between risk and reward.
trade in both the stocks as shown in Table 1.
 Giving priority to managing risk.
TCS gives a profit and Suzlon gives a loss. The
MAINTAINING A BALANCE BETWEEN RISK end result of the combined trade however
` 799
AND REWARD: Some stocks you trade or invest remains negative though your overall strike rate
 How to pick the right stocks and timely
in might be trading at two digit prices, some at in the two trades was 50%. The reason for this trades using chart and pattern analysis
three, others at even more than three digit loss was the mismatch in investment in the two  How to pre-determine tentative price and
prices. To maintain a balance between the risk trades executed. time targets for a trade
and reward involved in trades of differently To maintain a balance between the risk and  Rules of money management, risk
priced stocks, it is important to follow and management and portfolio management
reward involved in all the stocks traded in your  NEW: AIM Framework — the author's
implement money management. portfolio, you must ensure that you maintain disciplined trading approach for controlling
A simple rule for doing so is to decide your a balance in the investment amount in each. your emotions, panic and greed
investment per stock or per trade. The trade So irrespective of the stock prices, the  NEW: Trade Selection Ready-Reckoner —
quantity will then be decided by dividing the the author's powerful trading tool that helps
investment amount in each trade or investment
you identify and manage high reward trades
Table 1
must remain the same.  PLUS: Topic-wise quizzes and practice
Mismatched Trades The right way of maintaining a balance exercises to help you test your grasp of
each imprtant concept and topic and add to
Sr. Stock Price (`) Quantity Investment Risk of Reward of between the risk and rewards is by
your trading confidence
Name (` ) 2% (`) 2% (`) keeping the capital invested in all  PLUS: 175+ large size charts for clearer
1 Suzlon 15 2,000 30,000 600 600 trades the same. This can be done understanding.
2 TCS 2,500 5 12,500 250 250 as shown in the example in Table 2. means that quantity should be decided based
This is the strategy to use when
Table 2 on a pre-defined risk amount per trade.
trading normal markets.
Risk Management by Uniform Investment in Each Trade By using this strategy you will be able to
Sr. Stock Investment Price Quantity Risk of Reward of GIVING PRIORITY TO keep the risk in control during choppy
Name (` ) (` ) 2% (`) 2% (`) MANAGING RISK : The second periods.
1 Suzlon 30,000 15 2,000 600 600 way of implementing risk For example, in Table 3, you can see that
2 TCS 30,000 2,500 12 600 600 management is by focussing the risk has been balanced among the
Table 3 exclusively on risk when you decide differently priced stocks that you trade. The
Risk Management by Balancing All Trades the quantity to be traded, or the stop loss remains at the correct level and what
Sr. Stock Total Price Stop Risk Quantity Invest- amount to be invested. This is the differs is the quantity based on the risk that is
Name Acceptable (`) Loss (`) ment (`) strategy to follow when there are acceptable to you.
Risk (`) plenty of market events or external [Excerpt from: Trading and Technical Analysis
events which can cause choppiness Course by Mandar Jamsandekar. Order by email to
1 Suzlon 600 15 13.50 1.50 400 6,000.00 visionbooks@gmail.com, or online at
2 TCS 600 2,500 2,050 450 1 2,500.00 in the stock price movements. This www.visionbooksindia.com]

Printed and published by Kapil Malhotra on behalf of Vision Books Pvt Ltd and printed at Ravindra Printing Press, 1590 Madarsa Road, Kashmere Gate, Delhi-110006
and published at 24 Feroze Gandhi Road, Lajpat Nagar-III, New Delhi-110024. Editor: Kapil Malhotra