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 India

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