1/

Get a cup of coffee.

In this thread, I'll walk you through the P/E Ratio.

Why do some companies trade at 5x earnings and others trade at 50x earnings?

When I first started investing, this was hard for me to understand.

So, let me break it down for you.

2/

Imagine we have 2 companies, A and B.

Let's say both companies will earn $1 per share next year.

And both companies will also GROW their earnings at the SAME rate: 10% per year. Every year. Forever.

3/

Suppose A trades at a (forward) P/E Ratio of 10. So, each share of A costs $10.

And B trades at a P/E Ratio of 15. So, each share of B costs $15.

Which is the better long term investment: A or B?

4/

If you had asked me this question 10 years ago, I would have said: hands down A!

After all, both A and B earn the same ($1/share). And they grow at the same rate (10%/year).

But A is CHEAPER than B (10 vs 15 P/E).

So, of course A is the better long term investment.

Right?

5/

The answer is: NOT necessarily.

B -- the MORE "expensive" looking stock -- could *still* end up being the better investment.

Why? Because it's not just about earnings, or how fast earnings will grow.

It's about how *capital efficient* this growth will be.

Fundamentals Analysis Course FREE

A Thread🧵

Course Worth : ₹20k - ₹30k

Today, Let's learn

How to Read Financial Statements

If we get good response we will complete full fundamentals analysis in upcoming Threads

Before Starting Thread Hit Like ❤️

♻️ Retweet to help maximum public

✅Join Telegram for PDF :

Financial statement is must read before investing in any company, It helps you to understand how company is running it's operations and what is financial condition of the company

3 Sections of Financial Statements

1. Profit & Loss
2. Cash Flow
3. Balance Sheet

Now let's understand each in details

61 Top Trading mistakes of Option Buyers -
🧵

- Buying options when IV is falling.
- Buying options when the market is stagnant.
- Not waiting for confirmation of a breakout.

- Not taking care of proper position sizing.
- Thinking of only the rewards, ignoring the risks.
- Jumping to trade without waiting for proper setup formation.

- Not putting SL in the system.
- Not calculating SL beforehand.
- Not having an exit strategy beforehand.

- Not giving importance to Greeks.
- Buying OTMs near to expiry, coz they are cheap.
- Buying OTM in large quantities, coz they are cheap.

Till 2001, local jewellers ruled the Indian jewellery industry.

Until Tanishq entered the game!

With 1 masterstroke Titans startup,

- CRUSHED the local jewellers
- went from Rs 150 Cr losses => Rs 23,268 Cr revenue!

Here's how Tanishq became the JEWEL in Tata's crown 🧵

Structure:

1. How it all started?
2. Tanishq’s BIG problems
3. The masterstroke to win over India’s gold market
4. But, how much did this cost Tanishq?
5. Trust stays forever!

1/ How it all started?

By 1990, Titan had established itself as the market leader in watches.

They had changed the consumer mindset from

“watches as commodities” → “watches as a fashion accessory”.

The time was ripe for a cultural change across the organisation.

(contd.)

The next phase of Titan's growth was marked by the introduction of multiple new brands.

Tanishq, the first product brand, was launched in 1994.

The aim of Tanishq was to bring about a change in the way gold jewellery was designed, sold, and perceived.

(contd.)

You see, Titan realised that:

1. Indian jewellery sector was largely unorganized
2. the local jewellers were the absolute experts and consumers had to rely on their word
3. there was no way to compare products or price
4. there were no established quality standards.

(contd.)

I was hardly profitable for 7 long years...

until I found this low-risk strategy! 😃

This strategy is MY FAVOURITE &

• Low risk & High reward
• profitable even with 40% win rate
• can help one take big positions
• can make you 💸

REVERSALS FROM CONFLUENCE OF SUPPORTS🧵...

1⃣ Scanner to use

Use the below scanner & only focus on stocks in the list 👇
'CCI Daily crossing above

2⃣ Add these stocks to Trading watchlist to scan

You can do this in 5 mins, literally! Watch the below video how to do it👇

Scan each stock manually with your

3⃣ Stock MUST be near confluence of supports!

What's that? There are two rules

Rule 1:
• Price should be reversing from a major horizontal support zone Ex: #GOKEX

This should be visible clearly on weekly/daily charts

4⃣ Rule 2:

• Price should be reversing from major trendline support

If you also observe
• Candles with long lower wicks or
• Big green candles - refer chart

then winning probability increases😃

This reversal from HORIZONTAL & TRENDLINE Support is reversal from confluence!

Price Action Trading ( Without Indicators)

Intraday Trading strategy for all Directional traders.

Intraday Trading Strategy Thread 🧵

Support us by RETWEET to reach and benefit maximum traders

Scroll down 👇

Trading is always a balance between Profit & Loss and there is nothing called 100% or 95% sure shot. So focus on the live price rest is noise

Chart 1

Scroll down for more examples👇

Chart 2

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Chart 3

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Chart 4

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How I understand the strength of a trend:

For many day traders, the issue is not with identifying the direction but being afraid of when the move will end or reverse.

It is a challenge to identify when a move can continue and convert to a big move n when it can reverse

(1/n)

Reading orderflow data at important levels like previous day low and high (intra low and high are not that reliable levels), one can understand if a move can continue or not.

In the above chart, previous day low broke and market fell before giving a pullback.

(2/n)

Orderflow indicated that large sellers continued to sell when PDL (previous day low) was breaking.

See below chart where sellers sold huge around PDL.

We pulled back to same level and they defended their positions.

(4/n)

OF helps know the strength of a move and the probability of it continuing or not and helps me decide whether to stay in a trade for bigger profits or book out.

If you liked the content, follow me at @KillerTrader_ for more such knowledge.

Charts by @gocharting

(4/n)
#nifty

7 types of Profitability Ratios every investor should know!💸

A Detailed thread🧵⤵️

#investing #finance

A Profitability Ratio is a type of ratio which helps investors to evaluate a company’s ability for generating income profit in relation to its revenue, operating costs, balance sheet assets & equity shareholders during a particular period of time.

Higher Profitability Ratios generally show the ability of the company to generate profits & cashflows.

There are 7 ratios which we can use while analysing any company:⤵️

1⃣. Return on Equity

It measures a company's annual return or net income divided by the value of its shareholders' total Equity.

In simpler words, it measures the profit made on every 1 rupee of shareholders' Equity.

2⃣. Dividend per share

This profitability ratio shows the amount of dividend that is distributed to its shareholders by the company. The high ratio shows that the company has surplus cash.

Vwap with Pivot Points

Intraday Trading strategy for Trend followers ( Will share also for mean reversion trader as soon as possible )

Intraday Trading Strategy Thread 🧵

Support us by Retweet to reach and benefit maximum traders

Scroll down 👇

A basic framework of the system with calculation using simple standard pivot point with default settings ( On Trading view traditional pivot points )

Always focus first on risk per trade and then reward

Scroll down for examples👇

Chart example no - 1 for Trend Followers. Read the wording in the chart image along with the above framework to understand in a better way

Scroll down for more examples 👇

Chart example - 2 . Using pullback rejection maximum times make our risk smaller with high reward

Scroll down for more examples 👇 c

Chart example - 3. When the range are wider lesser the chance for Directional moves only high chance of sideways auction

Scroll down for more examples 👇

During my MBA, trading days and till now, I have read multiple books on trading and investing. Listing the best ones that I loved.

Pick based on your style - Fundamental/Technical/Momentum/options trading

Please retweet for max reach. Comment other books u love

1. Technical Analysis of the Financial Markets - John Murphy

A book which builds your basics on charts, trends, price patterns, MAs, oscillators etc. A must read for beginners!

2. Trade like a Stock Market Wizard by @markminervini

Amazing book covering critical concept of volatility contraction pattern. It is a timeless pattern rooted in human psychology & demand, supply forces. He is a multiple time US investing champion & a rags to riches story!

3. How to make money in stocks - William O'neil

Guru of a lot of investors and the one who gave the CANSLIM strategy! This along with Minervini's book is the minimum you should surely read.

4. Rare book which u might not have heard of: How to Sell by Justin Mamis

An old book published around 1980! Read this only after you are well-versed with the basics. I found it pretty good with new stuff which cements your thoughts.

Improve your volume analysis using volume profile.

A thread on volume profile 🧵

Traditional volume indicator is widely used by almost every trader.

But it has a handicap: It shows volumes transacted from a time POV but not the price POV.

(1/n)

This is what traditional volume analysis states. But in reality, how effective it is?

(2/n)

It simply shows volume from a timeframe basis. 5 mins volumes on 5 mins TF and so on.

But, is there a different way to read volumes from a price basis? Like, where did largest buying or selling by big players come in?

Read to find more.

(3/n)

This is where volume profile comes in. To put it in the simplest way, volume profile shows volume from a price perspective thus enabling a trader to identify where largest trading has occurred.

But how does this help a trader?

(4/n)

If you can spot the areas where large volumes are being traded, you can spot areas of interest and effectively find areas of support and resistance.

Of course, it is volume that drives the price.

(5/n)

3 Common chart patterns guide 🧵

With examples

Do like & retweet👍

1) Cup & handle pattern : As name suggest it looks like a cup & handle. The cup is formed as stock corrects & then starts picking up again.

Handle formation is good process as it then digests the run leading to more sustained move. The specifics of cup above (1/n)

Note - The usual depth of a good cup is max 35% but if the market is coming out of deeper correction. Then the depth of cup can be 50-55% too. But in a bull market a correction more than 35% can result in faulty pattern with lots of overhead supply ..Examples below (2/n)

Examples - Deepak Nitrite, Dixon tech

TD Power System - Recent one ( Note the handle depth here is 19% . As compared to textbook handle this is more. I see upto 20% handles working) (3/n)

2) VCP - Typically volatility contraction is not a pattern but a characteristics of any pattern. You see deep handles >15/20% - you can say that its not a cup & handle ideally but a VCP which is also fine & will work. Reduced volatility is what traders want to move ahead (4/n)

Investing can be complicated.

Let's make it simple.

10 terms every entrepreneur and investor should know:

1/ Internal Rate of Return (IRR)

IRR tells you what your average return is when time value of money is factored in.

Let's say you have an option to get 100K today or 100K in 5 years.

You would obviously prefer to get paid today so you can reinvest.

This also prevents future inflation from eating your purchasing power.

An investment that realises returns sooner than later will have a higher IRR.

2/ Multiple of Money (MoM)

Also known as cash-on-cash return or multiple of invested capital (MOIC).

Example:

Total cash inflows (proceeds from sale of a company) = $100M
Total cash outflows (initial investment) = $10M

MoM would be 10.0x.

3/ Rule of 72

A “back-of-the-envelope” method to calculate how long it would take your investment to double (2x).

Example:

How long would it take to double my money if I invest in the S&P 500?

S&P 500 average return = 8%

= 72 / 8

= 9 years

21 SKILLS That Will Pay You Forever.

- Thread -

1. Ability to sell and negotiate.

2. Ability to convey what you think and feel.

3. Ability to break a process down into smaller steps.

4. Ability to shut up, listen and learn from others.

5. Ability to adopt, improvise and overcome obstacles.

6. Ability to read, understand and memorize.

7. Ability to walk away.

8. Ability to manage time effectively.

9. Ability to stay positive and optimistic.

10. Ability to write words to persuade and influence others.

11. Ability to speak in front of large audience.

12. Ability to keep trying even after failure.

How to find a stock before it Breaks Out ??

Well, this is a time consuming and complex process, Here is a CHEATSHEET for you ⬇️👇

Follow some Twitter accounts who share their stock lists on weekend like
@Trading0secrets
@chartmojo
@Technicalchart1
@BakuSarman
and many others..
also don’t forget to follow my account @Anshi_________

2/5

Now on Weekends, go through all of the stock lists of accounts you follow and Make your watchlist of them…

Remember, Don’t remove any stock from your list and keep adding new stocks every weekend,

Do this for a month and you should have watch list of atleast 50 stocks

3/5

Now, after every market close, Go and surf your watchlist, You will find many stocks looking good to which can give a breakout -

Give priority to Stocks that

- Are green in red market
- Near their yearly high
- Trading at their all time high
- Making HH HL pattern

4/5

- Retesting breakout levels
- Breaking their important Moving Averages
- Coming out of long consolidation
-Volume building up..

Make another list of such 5-10 stocks and keep tracking them throughout the day and you will Definitely find 1-2 Breakout stocks.

That’s all!!!

Best Python libraries for Machine Learning that are open source 💯

A summary about each with their GitHub link 😉

Thread 🧵👇

1. Pandas

It aims to be the fundamental high-level building block for practical, real-world data analysis in Python.

🔗

2. OpenCV

It has more than 2500 highly optimised algorithms for machine learning and computer vision that can do just about anything with images.

🔗

3. Matplotlib

Matplotlib is a comprehensive library for creating static, animated, and interactive visualizations in Python.

🔗

4. Tensorflow

It's an end-to-end Machine Learning and Deep Learning library to solve real-world

Moving Averages Full guide 🧵

How to use them ? Which one is best ? What I use ?

Also I share free PDF on price cycle BO trading

Do retweet & like !

First let us go through 2 cases of how moving averages are used
1) For finding trend - Prices are volatile on day to day, week to week basis to smooth them MA are used . It tells clear direction of the trend without getting lost in volatility (1/n)

Look in 1 chart it's only Prices & 2nd one with only MA. Things look neat in 2nd one (2/n)

2) Support areas -

Moving averages are used as support areas for adding up stock.

As stock picks up trend it usually takes support in between towards the key moving averages. Example below - Deepak Nitrite taking support of 10 week EMA as it runs up

These 2 are the most important use of moving averages Now we will look at different MA and which one is best