Trading Terminals Explained
Welcome to episode 6 of the basics of trading with Prateek and me. In the last episode we learned different types of indicators like moving average, exponential moving average and RSI. We also learned how to use these indicators with charts to make sense of what the markets are up to. In today's episode we will learn what an actual broker terminal looks like.
We'll also learn how to place different orders using the broker terminal. But before we start this episode you know the drill. Hit the like button, and leave a comment saying, Tanmay, you are the broker to my terminal. That doesn't even make sense, but do it, leave that comment, it tells the algorithm that it should push this video out to more people. It would really help the channel a lot.
I appreciate it, and on that note, let's begin the episode. Ready to learn how to place orders. Yes, let's do it. Okay, so you all already know that you need a broker to place orders on the exchange. Correct. Most brokers function the same way.
We'll be using Kite. Got it. To understand how it is, but your broker should also be the same. The same, yeah. So, what I see over here is the dashboard, I can see the total amount of money in equity.
I can see how much money there is in commodity, in this case there's no money in the commodity. And then I can see there are any holdings I have, if I have some long term investing, that'll show up here. Got it.
Alright, and I scroll down I can see Nifty50. Now, the main thing on your broker terminal is the market watch. Market watch, correct. In left over here, I'm going to add Infosys. So I searched for INFY, and then I'm clicking, and Infosys is added. I did it.
You added. this is BSE or NSE? Yes good question. Most of the time, you can actually check NSE out. It usually has more liquidity than BSE. Got it. Okay, let's add one more, give me another stock ITC.
Let's do ITC. I'll add ITC as well. Now click and your ITC added.
So what you see over here is the name of the stock. How much percent, it is up right now, compared to yesterday’s close. It’s a 24-hour reflection, right? Basically, yesterday’s close.
So, if it closed at Rs.100 and opened today at Rs.103, then it’ll show +3%. Got it. And as the price moves during the day, this percentage and that absolute number will keep changing.
Got it. So, when I click ITC, I see buy and sell, and below that is Market Depth. Correct. Market Depth are all the offers and bids that are happening. People have placed orders. We’ll also place an order, and they're waiting it to be matched.
Got it. So these other people buying, who have placed orders who want to buy, and this is called an order book? Correct. An order book has the top five bids, and the top five offers. As here the quantity, as you can see is changing, so here you can see that the quantities are changing, the number of orders are changing.
Correct. Notice one thing, ITC’s current price is this but people are trying to bid lower than that. Right. And in the offers they're trying to offer that means sell higher than that.
So when a buyer and seller will agree, that will become the last trading price. Order completed. Order completed executed.
Got it. So these are all limit orders. Limit orders are orders where you’ve specified at which price do you want to buy or sell. Got it. And if it's in the range of top five, then it shows up here.
Got it. Generally, it’s so fast you’ll probably miss your own order. Correct. But but this is helpful to know what the total quantity is. It also shows the total, total bids, total offers is something you can also see. Okay, the next thing you see over here is the delete button.
And we know what that does, it deletes. Ohh delete button will buy. Think again. Deleted for the market match.
Correct. And then you have this more option. Here you have a bunch of other options.
For example you can pop up a chart. You can check out the fundamentals of the stock on ticker tape. Got it. Right, so if you click that, you'll see, a company’s profit loss, everything to do with fundamentals. Got it.
If you click there, it'll take you to the ticker tape and you’ll know. There are also technicals on on Streak which is a different back testing platform, or you can set an alert. What is set alert? You want to set a price alert, say when the price of ITC hits this point, alert me. There is this tool called Sentinel, and if you click that you can set price alerts, you might say this is resistance let me place an alert, this is support let me place alert.
Most brokers will have a alert system that you can specify and once that’s met you’ll get a push notification. That's pretty useful. Amazing. Cool. Now let's go through this a little dipper before we do the buy and sell. Let's see the charts.
All brokers provide chart and they will have timeframe that you can adjust. For ITC over here, we already know how to analyze this zoom in, zoom out, you can add indicators. So, there will be a way to add indicators, called Studies on this dashboard so we can add different studies. We add the one that we learned which is moving average, MA, EMA, and RSI. What should be the period? MA 200, very nice, you can choose a color too. Let’s choose Blue and it’s done.
So as you can see ITC is below. That's pretty simple. Other things include different types of candlesticks, so there's a bar, and there's line. So you can explore that, but we just stick to candle. The other thing you'd like to do is probably draw right, so most charting platforms have a way to draw on it, so you have a draw function over here. And you can mark support resistance.
So this is something I guess people can play around with the there broker terminal, there charting platform and see what all they can draw. So now, on ITC I'll click on B, which is buy. And this buy window will open. All broker terminal’s buy or sell is roughly the same.
So you don't need to worry if there's a different broker and work the same. Not to worry. So over here I can see buy ITC, the first question they’ll ask me is, is it BSE or NSE. So since we added an NSE by default in NSE is selected.
Got it. It will ask, is it an intraday trade that you want to place or a long term. Intraday is, you are gonna sell it within a day if you want to buy it. Correct. So between 9:15 and 3:30, you have to exit. Most brokers will force an exit around 3, don’t wait for the last minute, 3, 3:10.
Brokers have different times for a square off, it's called. And you know, if you specify that the broker will usually auto exit before the market closes if you don't close the position. Got it.
But, you know, this can be a little risky, don't wait for your broker to do it, you should exit the position yourself. So, this intraday is also called MIS. What does MIS stand for? MIS means margin intraday square off. Got it. Which means, so if you have one lakh in your account.
Most brokers will allow you to trade with five lakhs 10 lakhs as leverage. So that's what margin means that you put a small amount to control a large amount of money. An intraday square off means well intraday square off you can exit, within one day you have to square off and exit your position. So your broker might call it MIS position. Got it.
The other option here is long term. Pretty self explanatory, how to hold the stock for a long term, want to take a delivery. Your broker may call it delivery. Another thing that is called a CNC, Cash and Carry. Here you give the full amount, no margin. Got it.
And I want to carry it forward. CNC cash and carry. You can also, if you click on MIS your leverage that you use can also be 1:1, right. Basically cash and carry type only. Exactly, but intraday.
Correct. So ideally no one should take leverage. Right. I mean, you've, we talked about leverage, unless you're skilled, unless you're skilled.
I mean if you're watching this, you shouldn't take leverage. Yeah, ideally don’t do that. But if you if you go check out the courses on LearnApp & get upskilled, then maybe.
Don’t tell me. Okay, so the next part of the thing is quantity, this is obviously number of shares you're buying or selling. Got it. So, 10, 100.
Got it. Interestingly, showing me how much money is needed to place that order. Margin required, got it.
So I’ll just put one here. The price is, what price I want to buy it at. Correct.
Now this is interesting, because if I specify a price, the broker will not execute, unless I reach that price. Unless the stock reaches that point. So this is important right.
So this is called a limit order. Okay, this is what a limit order is. Yeah. So, basically a limit order you're telling the market, sorry you telling the broker to place an order that you don’t wanna buy above this price. Right so over here, for example, the price is high, and we're placing a lower price. Correct.
In a limit. When it reaches this price, buy then. Yes, when it falls a bit, only then will the trade be executed & I can place this order. Got it.
So what I'll do now, I'll hit the buy and to see this order, let's quickly go to orders. Here we can see that the order has been placed as you can see here. Got it, right. And it is pending, which means the price has not come down, so the order hasn’t executed.
What if you want to buy right now? Cash and Carry, C&C. Not really. So, limit order is where you’re specifying that you want to buy cheaper. What about you say, I want to buy at the current price right now? That is called the Market Order.
Got it. Why do you think it's called market? Because it's traded on the market. Whatever the current market price is, you’ll be buying. I’ll change this to market. I can't change the price anymore. Got it.
Because whatever the price is available, whatever the price is, just buy it. Just one thing here, you see this price right, if I actually place a market order. I'll most likely get a higher price than what is here right now. Because you're saying okay, no one’s in this price, who’s the next best, and so on, the price keeps increasing because there may not be a seller at that second, when you place the order. You might get a bad feel, but if you're a long term investor like a few paisa here and there, 1 rupee here and there doesn't matter, a trader would normally never use a market order. Most likely he’ll use a limit order before entering and exiting, because he wants to enter precisely exit business.
Price arbitrage. That's a big word. “Good job, son.” You see that, that means the limit order that we had placed has now been executed, and no longer pending. The other kind of order, that would be really useful to you, especially as a trader, is a stop loss.
So what happens is you have bought, actually we can draw this. So let's say you, let me right stop loss. Stop Loss, I mean it's pretty self explanatory, stop the loss. Yeah absolutely. Like if you buy a stock and it starts falling, and you are likely, I don’t want more loss, then stop it.
Correct. So let's say you bought the stock here, and if it falls below this, then you’ll exit. Please exit please, please, please, Mr.Kamath help me. So, you will basically choose stop loss in here, that is stop loss market order, and you put a trigger price. What is the difference between stop loss and stop loss market? Okay, so a stop loss limit, that's a stop loss limit order, you can specify where to place the exit and say put a limit, don't just give me a market order. So you give a range for trigger price and limit price.
If that doesn't make sense, just stick to stop loss market is where you specify this part, which is called a trigger price. If it reaches here, just turn this into a sell, sell, market order whatever is available I am out. You can also place a long term stop loss order, it's called a GTT, but you know, it basically follows the same principle.
Got it. This also means right, you don't have to stay stuck to your screen. Screen, correct. Once you place limit order, stop loss, but there’s a problem. The problem is, at first your limit order will execute, you’ll wait, okay, entry’s done, now I’ll place stop loss, what if you could place both of them together? Enter at this time, exit at this time. Then what to do? So, that is called a cover order.
Got it. Cover my, cover my, correct, order. It's called CO also. So I’ll select cover over here which will show cover order.
I'll select the price I want to enter. I want to enter at this price, let me lower this number to say, if the price comes down, exit here. Got it.
This is a cover order, you're placing an entry, and a stop loss order together. And this is a stop loss market order. Understood. Simple, right.
Correct. So these are the different order types. There are some other complex order types, but I think at this stage it's not needed. Got it. Right, this is what you mainly need. This is nice, so if people I know that we're watching they invest in stocks.
But now they can land, they can plan their exit, they can plan their entry, etc, etc also. Like if you're just generally buying stocks, your options are buy at the current market price, and later on, then you have to keep being glued to the market, it’s increasing, falling. Yeah, useless anxiety. Here, you can just place the order and stay relaxed. Yeah leave it, go to work, do whatever. Now, let’s do one thing.
Why don't you place an order. Why don't you open this up. Okay, I want to buy ITC. I’ll buy 10 shares, because why not. YOLO.
Okay. Is this an intraday order? This is, how do I check, hang on. This is, excellent. Oh I just picked market, what it’s called, MIS is what. I'll give you the first word. Margin intraday square off yeah.
So, I chose MIS. So you're already on limit, You just need to specify a price, which you already have. I'm already on limit okay got it. You already limit now just swipe. Oh, but I want to buy this when it falls a bit.
Okay fine. Now I am placing the limit order at this price and swipe. Excellent. So as you can see the order has been placed, and this is pending.
So now what, do we have to go pray? Yeah, so, is it there in Kite? A small temple to click and pray? No, but we will be using a system, so we don’t have to do that. That's true. Right.
So, here you can see in the position book that your order, that your order has been executed and we can see your profit loss. Correct. Click on this button, and you can yes okay, and just exit the stocks that exit. Oh yeah, done. So we exited it and the position that we had entered has been exited.
What we did right now was Intraday trading? Yes, intraday. Let's do another order. This time, select another company Tanmay. We will choose INFY.
Alright. Let’s buy it. T his is INFY’s price. I’ll make it slightly less, not too much. Okay. Made it slightly less and have placed a limit here.
What type of order is this now, why don't you place a long term order? Okay, long term order. I don’t wanna sell this right now, it’ll show in your Demat account and is a delivery order. Okay, got it. Right. I’ll C&C at this price, whenever it reaches this price, buy it and it’ll reflect in my Demat account. Okay, and done.
Perfect. So now let's go to the order book. And you can see it has been executed. And we'll go to this section which is the holding section. Okay. Right.
This is where, once those shares are credited to you, which is a T plus two cycle, T+2 means, transaction has been done today +2 working day, on the second day evening after the markets close, those shares are credited to your account, and they show up in holdings. Got it. Right. Got it. So this is for when you aren’t buying and selling in the same day. Correct.
You’re buying and then like, I’ll figure out when I want to sell. I'm a long term investor. That's basically it. Oh it's simple. Yeah I mean like placing orders very simple, making a profit is not. Yeah and making a profit consistently is the hardest thing.
That's super hard. Got it. It's like making content, sometimes it’s easy, sometimes it isn’t.
Oh, content is pretty easy. Ohh dude you can say that, you are king of content. So, I understood the basic order placing, limit order etc.
But I keep hearing of like, going long shorting. Yeah. How do you do that on, on your broker terminal. Okay so, first let’s understand the concept and then we'll do that right.
So let me just draw this actually. So, the first thing that normally people do, this right, so this is what most people think right, then you are buying, and you're profiting if markets go up. Correct. Right, so we buy market goes up we exit or we sell and then, the difference is profit, so this is buying going long, or the opposite of this is selling first, so I’ll just write to sell here. And this means you sell first in hopes that the market falls, and if the market falls and you square off your position. You make a profit if market falls.
Correct. And this is as you rightly said, called shorting. Shorting. Okay, now online when you read the site, people will talk about you borrow a stock from someone, your broker allows you to borrow a stock from someone you sell it first at 100, it goes down to 95 you buy that and give those borrowed shares back and Rs.5 profit, A typical money banana example. I've made a video on the whole Reddit Gamestop thing where we explain shortling, you can check out the link in description.
Super. So in India, you're not actually borrowing anything. There's no borrowing system in India.
Simply, you're, you're selling first. Right, so you're selling first at 100. Okay. Basically the broker has to net off whatever transactions you've done with the exchange at the end of the day. Correct. You should just have a buy and sell and that should netoff or the broker will do is you sell first at 100 markets fall, and let's say markets come to 95, and then you will buy it back right so you buy it over here.
So you basically reverse the transaction. This difference over here of rupees 5 is your profit. That's it. So you sell first, but you can only do this MIS. This can only be done MIS, that is margin intraday. You can't short for like two, three days in equity, unless you're using options or futures, but we won't talk about that today, in equity you’ll normally only do this, MIS, and it's intraday.
And you can sell first and then square off the transaction of buyback later, and it's done. And the market goes up, got it, you lose money. Got it.
And you can use leverage in this. You can use leverage because it's intraday. Correct. So you shouldn't but you're allowed to use leverage. Yeah.
Let’s do an actual trade with 1 share. So over here we have this we just do it on this laptop. I have this company over here, let's say, Tata Motors, and all I have to do is select intraday, quantity one and I'll basically, place the sell order and since it's an intraday and I don't have any position on Tata Motors right now, this shows as -1. -1 means minus 1 quantity.
Why so? Because I don't have any position in Tata Motors. My position right now is 0, if I sell one quantity it's minus one quantity, that is my current position. Oh, it's because you're trying to short right.
Correct. Because you've already sold it so you're, you're, you have less than one stock zero stock. Let’s make this 10. So it’s minus 10. Now I’ll just placed this order, and let's do a market order, it’ll be placed faster, so I’m placing this order. Done.
We can see this in positions. All brokers have this as we know, here you can see what’s your MTM. MTM is mark to market, when I mark my position against the current market what is my profit loss. Got it. So check this out, because the price will move and I can see the profit loss.
Before the end of the day you have to buy this back to make it, you are in minus 10 to make it 0 again. Yeah. To square it off at the end of the day. Correct.
So we better pray that Tata Motors falls, today will fall. There is one risk over here, it's out of the scope of this video to explain, but there is something called an auction. We must netoff this position but if it doesn’t happen for some reason, you have to make sure that your stop loss or exit is like planned, so whenever you’re shorting right, make sure you have cover or your exit placed. Got it. So that the exit happens. And even if the broker doesn't auto square, you square it off no matter what.
So, we’re placing a buy order for these 10 shares. Got it. Let’s do it now. Got it. Such negligible profit and loss, but example.
Now see, the quantity is 0. Yes, got it. From -10 sell order to +10 buy order, eventually netoff to 0. This is when you're shorting, yes, so let’s place a cover order on ITC. Click on cover, and I'll put say 10, we’ll selling in market order, our stop loss is this, I’m placing a sell order. Done.
And now I’ll go to positions, oh sorry, I’ll go to Order Book, and the order has been placed. Now when it triggers, my stop loss will be ready. Got it. And the same thing will happen, but make sure we exit before the end of the day, because it's possible it doesn’t go near the stop loss at all. So, exiting is important.
Got it. Sounds good. Yeah, simple. We can also profit when markets are actually falling. So when we create a system, we can say, if it breaks support, I’ll short, intraday. That’s true, can happen right? If it breaks down from support, then it’ll be amazing.
Because actually, markets fall faster than they rise. People are more fearful, optimism is harder. Greed sounds like, oh. Fear sounds like, ahhh. So people sell faster, and the price usually moves faster. So that's why there are a lot of people who just have shorting strategies, because it moves faster intraday versus like going long.
Understood. Cool. Nice.
So the other thing that you know most people should know is, after all of this, there is a back office for the broker, that you should know this. It's boring, but now that you're so deep into money, you should know this shit. It's called console on kite, but it's also called back office generally. The back office has contract notes.
What trades you took, how much brokerage you paid, you should definitely know, if the brokerage amount deducted is the same as promised, stamp duty, STD, all these other taxes, that are there can be found in something called a contract note. Got it. You probably also get a copy on your email, you'll also get profit and loss statements for tax purposes, etc, etc, back offices has all of them stored.
Got it. Everything including your grandmom and the kitchen sink is emailed to you. Yep. Okay Tanmay time for you know what. Yes oh my god. Quiz time.
Exam time. I have 4 question for you. Okay. Okay.
If you bought HDFC Bank , where will it show in your account - positions or holdings? If you bought HDFC Bank for a long term investment, then it's a holding you're holding it for long term. Excellent. If you want to track prices of stocks very regularly where would you add them, what is that area called? Watch order, watch List. Yeah, watch list. That's right, perfect. If you want to place an intraday order at say a particular price, that I must entry exit at this price, what type of order is that called? It's a limit order.
Excellent. Yeah. And if you want to enter and exit whatever's available right now? It's a market order.
Perfect. It's so simple man, why do people, it’s not complicated at all right. We'll talk tomorrow. Okay, cool. And in one line just explain to me what is shorting? Shorting is a way to make money when the market falls. Yeah.
What you essentially do is you sell shares at a certain price and then you buy them back after the price has fallen down. Yeah. So you sell share when you sell shares, then your positions you will see minus, how many number of shares that you bought.
Correct. Then ideally you should keep the price that you want to buy them back at and not wait for your broker to do that at the end of the day for you. Yeah. Yeah, and when the price falls then you buy those shares back and whatever the gap was that's your profit.
And if price rose and you bought it back then that would be a? Loss. That's correct, yeah. Excellent. As Melvin Capital will tell you. They're enjoying this right now, aren’t they? So now I think what we should do right, is there are different ways to trade the market, different styles you can trade in and out in a few seconds you can enter exit intraday.
Correct. There are all these different styles. Correct, there's also like slightly long term also. You want to trade every single day.
Correct. If you make a couple of trades a week. Yeah. And interestingly, you can select whatever style you want, you’ll probably make the same amount of money. Oh really. Yeah, it's more to do with your personality of what you're comfortable with.
So if you're working all day in office, you know probably intraday trading is not for you and for you. But if you have the time then you know maybe you should check it out. So there are different styles, why don't we discuss all the different styles and learn it. Yeah, sounds good. Yeah.
Now. I'm assuming it's in the next episode. That's right. On the next episode we will visit that also in the meanwhile.
Check out all the other features of the broker terminal available only on the advanced courses on LearnApp, taught by Guru Ji Prateek Singh himself. Check out the link in the description and get two months of extra access, absolutely free. And while you trade you can analyze your stock fundamentals and history in depth, all times to ticker tape, and before you begin trading one must have a D-mat account.
So open your own D-mat accounts, all of these links are available in the pinned comments so make sure you check it out. In the next episode, you will learn...
2021-06-25 18:14
