Lesson 1

Question 1

Meaning of going short?

Answer 1

Sell first and buy later

Question 2

Meaning of going long?

Answer 2

Buy first and sell later

Question 3

What is RRR

Answer 3

the amount of profit you get for risking certain amount of money

Question 4

What is the basic thing a technical analyst should know. If not he is not called an technical analyst

Answer 4

Stop Loss

Question 5

What are the principles/assumptions of Technical Analysis

Answer 5

1. Price discounts everything.
2. Price moves in Trends.
3. Trends repeat.

Question 6

Technical Analysis works best only when the below conditions are met:

Answer 6

1. Mass psychology.
   
   2. Popular Asset Classes.
   3. Top 200 companies, Derivatives(Indices, Top companies).
      Cannot be manipulated

Question 7

How many types of traders are there?

Answer 7

1. Scalper.
   
   2. Intraday Trader.
   3. Positional Trader (Cash and Derivatives) - Few weeks, months.
   4. Long Term Trader (For months).
   5. Swing Trader - They trade in range bound market.
      Algo Trader - Uses software or a machine to execute the trades.

Question 8

Overnight shorting is possible in which segment?

Answer 8

Derivatives.

Question 9

Is it possible to take delivery of the shares if you trade in derivatives?

Answer 9

No

Question 10

If you short and don’t buy back the shares then how the buyer is going to get his shares?

Answer 10

Exchange conducts an auction and buys the quantity of shares that are shortfall and credit them to the buyer. You have to bare all the penalities.

Question 11

Will technical analysis work better in small and midcaps than in Large Caps?

Answer 11

NO. TA works best in large caps, indices (Derivatives)

Question 12

is it possible that trend is pumped up by the technical analysts?

Answer 12

Yes. FA creates huge movement in the price and if TAs identify any patterns, they start buying which will continue or pump up the price.

Question 13

Do TAs have the capacity to create long term trends?

Answer 13

No.