Contents

*Preface*

**1.
****The Indian Equity and Derivative Markets**

n The Indian Stock Market

n The Difference between a Trader and an Investor

n Derivatives

n Aspects of Successful Trading

**2.
****ADX — The Anatomy of a Trend**

n Technical Analysis

n Types of Trading

n The Anatomy of a Bar

n Trends

n The Big Question: Is the Market Trending or Trading?

**3.
****Technical Methods**

n Indicators

n Oscillators (or Momentum Oscillators)

n Fibonacci Methods

n Candlestick Charting

**4.
****Applying Technicals to Trading**

n Swing Trading

n Successful Retest

n Bull and Bear Flags

n Support and Resistance Diagrams for the Swing Trader

**5.
****Day Trading Rules and Setups**

n Day Trading Setups

**6.
****Cash and Futures Arbitrage**

n Why the Cost of Carry Varies According to the Market Sentiment

n Advantages of Using Cash and Futures Arbitrage

n Possible Outcomes of the Cash Futures Arbitrage

**7.
****Getting to Grips with Options**

n Options: Some Important Concepts

n Factors That Determine the Price of an Option

n The Greeks

n Factors to Keep in Mind When Buying Options

**8.
****Strategies for Trading Options**

n Introduction

n Vertical Spreads

n Rolling Options Up, Down and Out

n Straddles

**9.
****The Covered Call: Who Says 4% Returns per Month
are History**

n
Why Covered Call Writing Makes Sense in

n What Kind of Returns Are We Talking About?

n How Covered Call Writing Compares with Simply Going Long

n Deciding on the Stocks to Buy and the Strikes to Write

n Follow up Strategies

n Writing Index Covered Call Options

n Advance Implementation

n Benefits of the Covered Call Strategy

n Why Don't Many Other People Do It?

**10.
****Derivative Strategies for Special Situations**

n
Writing Covered Calls Just Before Important

Announcements or News

n Budget

n Company Results

n Election Results

n Cabinet Committee Meetings

**11.
****Trading Discipline**

n What is Discipline?

n Qualities of a Disciplined Trader

n Traits of the Indisciplined Trader

n My Trading Manual

**12.
****Money Management**

n The Size of Your Trading Positions should be Based on the Size of Your Trading Capital

n What is Money Management?

n Position Sizing Strategies

n Stops

n Exits

**13.
****Selection of Stocks and Futures**

n Bottom Up Analysis

n Top Down Analysis

n Rate of Change (ROC)

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

**15.The
AG Last Hour Trading Technique**

n What's So Special about the First and Last Hours of a Trading Day?

n The Context of the Market

n How to Select the Right Stocks to Trade

n Examples

n Conclusion

Appendix-1: Permitted Contract Sizes

Appendix-II: Calculating Implied Volatility

Appendix-III: Using the Peter Hoadley Options Strategy Software