European Indices at 16:00 IST on 25-02-2009

Index Level Change (pts) Change (%)
FTSE 100 Index 3874.55 58.19 1.52 1.52
CAC 40 Index 2754.41 46.36 1.63 1.63
DAX INDEX 3968.42 72.93 1.88 1.88

European Indices at 16:00 IST on 25-02-2009

Index Level Change (pts) Change (%)
FTSE 100 Index 3874.55 58.19 1.52 1.52
CAC 40 Index 2754.41 46.36 1.63 1.63
DAX INDEX 3968.42 72.93 1.88 1.88

Asian Indices at close on 25-02-2009

Index Level Change (pts) Change (%)
Nikkei 225 7461.22 192.66 2.65
Hang Seng Index 13005.08 206.56 1.61 1.61
Kospi Index 1067.08 3.20 0.30 0.30
Straits Times Index 1616.79 2.35 0.15 0.15
Jakarta Composite Index 1300.11 4.24 0.33 0.33

Post-Market Report dated February 25, 2009

Up but gives away gains Market closes higher, but 92 points off its day's high of 8995

Opening with a positive gap of 91 points at 8913 the market remained up for the better part of the day. In the first half of the session, the market remained firm above 8900 levels due to action in several counters. In the second half it gained further strength to touch the day's high of 8995. Towards the close, the market slipped, as if for a negative close, as weakness in select heavyweight, realty and capital goods stocks shaved off nearly 115 points from the day’s high to an intra-day low of 8880, only 58 points over its previous close. Sensex ended the session 81 points up at 8903, whereas Nifty added 29 points to close at 2762.

The market breadth was slightly positive. Of the 2,523 stocks traded on BSE, 1,228 stocks advanced, whereas 1,188 stocks declined. 107 stocks ended unchanged. Of the 13 sectoral indices only BSE CG and BSE Realty posted losses for the day. BSE Auto topped the list of gaining sectors posting a gain of up 3% followed by BSE IT (up 2.52%), BSE Teck (up 1.56%) and BSE Metal (up 1.28%).

Select blue chips notched significant gains. Mahindra & Mahindra rose 8.27% at Rs319.50, Tata Motors advanced 5.90% at Rs139.90, Reliance Infrastructure climbed 3.44% at Rs506, Tata Consultancy Services surged 3.11% at Rs481, Wipro scaled up 2.83% at Rs218.20, Infosys added 2.36% at Rs1212.10 and Hindalco Industries jumped 2.30% at Rs40. Among laggards, HDFC tumbled by 4.19% at Rs1235.05 and Ranbaxy Laboratories dropped 3.40% at Rs207.55 while DLF, Larsen & Toubro, Reliance Communications, Hindustan Unilever and Tata Steel ended with marginal losses.

Over 0.96 crore shares of Satyam Computer Services changed hands on the BSE followed by Cals Refineries (79 lakh shares), DLF (72 lakh shares), Unitech (67 lakh shares) and Suzlon Energy (62 lakh shares).

Satyam scam: The mega corporate fraud

Ramalinga Raju and his brother Rama Raju accused of committing an Rs40 billion fraud that threaten to shake the very foundation of Satyam Computers, are in jail. The three-member director board constituted by the Government has got down to brass tacks. The Government has further offered financial support to bail out the beleaguered Satyam. The 50,000 odd employees of Satyam find themselves at sea, with some IT majors deciding against hiring displaced Satyam staff. There are fears over the adverse fallouts of the Satyam fraud on the international reputation of the exports-driven Indian IT industry. The picture is getting curiouser and curiouser by the day.

Satyam's Rs5000cr disappears in three months!

New Delhi: Bank statements show that Satyam had funds of over Rs 5,000 crore as of September 2008, but by January 2009 when company founder Ramalinga Raju admitted to fudging accounts the IT firm could have been left with just Rs 200 crore of maturable fixed deposits.

The scam-tainted firm had short-term or long-term fixed deposits of over Rs3,300 crore, and another Rs 300 crore of accrued interest, in addition to current account deposits of over Rs 1,800 crore, as per the last auditing done by Price Water House for the quarter ending September 2008.

The company is believed not to have made any term deposit after mid-February 2007, though it did make a few short-term or margin money deposits, amounting to about Rs 10 crore till September 2008.

The auditing was done on the basis of statements sent by a host of banks detailing the fixed long-term deposits, along with maturity, ranging between October 2008 and February 2009.

With such a cash and deposits position, the IT Company should not have had any worry on the cash front and a concern to mobilize resources for the payment of salaries to staff.

In his statement on January 7, Raju had said that he was disclosing the manipulation of accounts after failing in his last-ditch effort to salvage Satyam through acquisition of the two Maytas firms on December 16.

However, the bank statements, on which PWC relied for the auditing, reveal that more than 90 per cent of the total deposits had matured by January 7.

Secret to success in trading markets

Success in trading is a worthy goal. But it will be useless if not accompanied by success in your life.

Don't try to copy the individual traders' method but understand the process they went through in order to achieve success. This is where you will find your answers. Jack Schwager, in his quest to understand traders and how the big futures traders made their fortunes, whilst many failed, interviewed and tried to find the "secret to their success."

Not surprisingly, he found there was no one secret to successfully making a lot of money from the markets. Jack Schwager found that each trader had their own, unique style of trading. Most importantly, Jack Schwager found that each trader traded a method which suited his/her own personality. This, it was established, was the "secret" to making a fortune ion the markets. Not the system, or method, or the markets traded but the real secret is finding and becoming one of the very best traders at one METHOD of trading.

Here is what Jack Schwager was left to believe about successful trading, after writing his two Market Wizards books:

The markets are not random

They are not random because they are built on human psychology.

There is no Holy Grail but there are methods that can lead to superior profits (M.S.T.S is one)

There are many ways to make money from the markets

The markets are always changing, yet they are always the same.

To secret to success lies within the individual.

To excel in trading requires talent and extremely hard work.

In the world of money

In the world of money, which is a world shaped by human behavior; nobody has the foggiest notion of what will happen in the future. Mark that word - Nobody!
We are in a spectacular bear market from January 10, 2008 to till date, before that we enjoyed a secular bull market from August 2003. Now most investors are in deep red (more than the profits made in the last 3 to 5 years, including capital - wiped out)…. Bulls and bears make money, but pigs get slaughtered.

Ones very survival as a trader depends on followings. When one ignores this, is lost and doomed:


Trade money not markets- Don't blame the market for your losses. You are the reason for your losses.

Use a trading system and don't deviate from it. Follow it with rigid DISCIPLINE.

Use money management at all times and understands risk-reward ratios

Accept small losses as part of the game if you want to win don’t liquidate a winner to keep a loser. A losing position means you were wrong. Trend Followers cut their losses and let their profits run.

Stay the course so you are around for the big moves. Sustain your patience. Big movements take time to develop. Trade markets from the short side also

Don’t be overly curious about the rationale behind a move. The key to wealth in trading is simplicity. Avoid techniques you don't understand. Don't predetermine your profits. Remind yourself there is nothing new in the markets.

Trend, what is:

Trends always go further than rational people expect, or even imagine. Most investors don't have the stomach for extended rallies or declines. The philosophy of not having a predetermined profit objective allows trade to continue with a trend for its full duration and then some. Trends endure for a specified time, longer than most imagine. In a very uncertain world, perhaps nothing makes more sense than simply following trends.

A Perfect Trader:

A trend following person with disciplined & systematic approach in trading, psychologically more powerful than others to keep control over emotions; patience waiting for opportunity to enter the trade as well as exit much before the trend reverse. They have the quality to accept failures – to cut losing potions, when stop triggered and prepared to stick with their trade-culture through good times and bad.

Why trading system:

The emotional reactions to trading, hope, fear, guilt, over-confidence, panic, etc., are avoided with trading systems based on price. The personal burden is lifted and trading can become objective when price is the only variable. The price already reflects all other variables filtering out subjective nuances of whoever is offering the information. Focusing on price, to the exclusion of fundamental data such as earnings, crop reports, consumer confidence and market news, allows for a scientific approach to trading. A systematic approach over time -only one way to profit in the market, compounding as time goes. Trust that time and the power of compounding- will take over if you stick with your system. Don't be so naive to expect you will get rich overnight. Remind yourself that patience is a virtue when it comes to trend following.

Dangers in Trading caused by Human Nature: psychology:

Fearful of profits and acts too soon And Hope for a change in the forces against one
People believe what it pleases them to believe.

An Ideal Trading System:

A trading system that works best for you - To choose a method that is consistent with your own personality & comfort level . . . The approach you use must be right for you; it must feel comfortable. Successful trading systems adapt to change. Trading system is designed to remain valid for years. Trading systems should ideally trade successfully at all times, in all markets, in all conditions, difficult to kill even in bad markets. Ride winners: One of the biggest mistakes a trader can make is not letting a good trade run. Trading systems will keep you in that winning trade and stops look at the price action & will lock in profits at most opportune time. Eliminate losers: A trading strategy must eliminate large losers with consistent risk management to be successful. No more guesswork: Completely automated trading removes any luck- Enter & exist with rules. One can't expect to enter a market at the precise moment a bottom is hit, nor will exit a market at the exact top, Capture the middle of the trend. Exits: is the hardest part of trading. One often exits too soon or too late. To use stop loss orders to protect profits, and to take out of losing positions. As the profit grows, move the stop to lock in more profit. Don't try to catch every move. There are often times, just sit and wait for safe to re-enter the market.