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How do Mutual Funds work – The most ideal way of earning cash is by investing in trade markets. In any case, the issue is, retail financial investors generally don’t have a lot of information about the trade markets. Since they don’t comprehend how it works, they wind up losing money by putting resources into financial exchanges.

Mutual Funds – The most ideal way of putting resources into share markets

The least demanding way of putting resources into the trade market is by putting your cash in Mutual Funds. The money for Mutual Funds is dealt with by an asset supervisor who is a trade master. He/she has balanced information about the trade markets and handles your stocks as an expert.

How do Mutual Funds function?

Mutual Funds gather cash from a few economic backers and all the cash set up is then contributed. Presently, the ventures are made dependent on the subject of the Mutual Fund. For instance, enormous cap Mutual Funds will just put resources into huge cap stocks. So, on the off chance that you have placed your cash in a huge cap Mutual Fund, you know about where your cash is being contributed.

Mutual Funds are not just for securities exchange contributing: The greatest misguided judgment about putting resources into Mutual Funds is – traders generally expect that Mutual Funds just put resources into the trade markets. In case you are a moderate financial backer, and you don’t like to take an excess of hazard, then, at that point, through Debt Mutual Funds, you can likewise put resources into debt instruments, where the danger factors are substantially less. Subsequently, you can pick Mutual Funds, according to your danger craving, venture skyline, or your speculation targets.

How do Mutual Funds invest their cash and how do they produce returns?

The asset chief of Mutual Fund leads the examination and investigation around the stocks and debt instruments. Presently if you invest into Mutual Funds, the Asset Management Company or AMC allocates you the units according to the NAV of the Mutual Fund. For instance, say that you have put Rs 2,000 in a Mutual Fund, for which the NAV is Rs 20. Now, the AMC will distribute you 100 units of that Mutual Fund Scheme. Your cash is invested into trade markets in which the fund assistant has invested the money.

Presently, we should expect you have contributed Rs 2,000 on a Mutual Fund conspire, for which the AMC has distributed you 100 units for the NAV of Rs 20. In the subsequent year, the NAV for the Mutual Fund becomes Rs 22. That implies over the most recent year, you have procured a 10% profit from your Mutual Funds. In this way you can follow your ventures to know what sort of profits you are acquiring on your speculations.

Would you be able to arrange your own, how the Mutual Funds do?

Here we might want to caution you that for a retail financial backer it is an incomprehensible undertaking to make a portfolio like Mutual Funds. This is basically because, when an asset supervisor makes a portfolio, he/she gives the greatest amount of significance to chance administration, which is hard for a retail financial backer to sort out.

Sorts of Mutual Funds:

There are three kinds of Mutual Funds. Furthermore, it is fundamental to know about every one of the three to pick the right Mutual Fund for making your speculation. This characterization is made dependent on the basic resources.

Equity Mutual Funds:

These assets put resources into trade markets. On the off chance that the Mutual Funds are putting resources into enormous organizations, they can be characterized as Large Cap Mutual Funds. In the meantime, some reserves are put generally in little organizations, and they are portrayed as Small Cap Mutual Funds.

Debt Mutual Funds:

For Debt Mutual Funds, the characterizations are made dependent on loaning residency and the nature of the borrower.

On the off chance that we take the case of Short Duration Mutual Funds, these assets for the most part put resources into debt instruments whose development is inside one to three years. Likewise, for Gilt Mutual Funds, the cash is put distinctly in government protections. These are high evaluated protections and their credit hazard is low.

Hybrid Mutual Funds:

These assets are normally put both in equity and debt. They are additionally arranged based on what amount is put resources into equity and debt. Taking a gander at the extent of the venture, it tends to be ordered whether it is debt situated adjusted or crossbreed assets, or equity arranged adjusted assets.

Some advantages of investing in Mutual Funds:

Mutual Funds are charge well disposed: Presumptuous, you are in the most elevated duty section, the expense sum for your Mutual Fund ventures will be a lot of lower than conventional speculation choices like fixed stores.

Provide great long-haul returns: Assuming you put resources into Mutual Funds as long as possible, it is conceivable that the Mutual Fund plan will give better yields when contrasted with fixed stores. If you check out the drawn-out returns of Mutual Funds, however, there are no reliable returns, they typically give better yields than customary speculation choices.

Regulated by SEBI: All Mutual Fund plans are directed by the Securities and Exchange Board of India or SEBI. It guarantees that there is sufficient straightforwardness on the lookout.

Several assets to browse: More than 1000 Mutual Fund speculation plans are accessible on the lookout, and you can decide to contribute according to your venture skyline, hazard hunger, and speculation objective.

Do you still get daunted by the feeling of facing losses while trading in stock markets? Are you still confused about the technical terms during trading, like financial pages? Well, it’s not just you. Starting out as a beginner in such a complex market is a really big deal. Or however much of a pro-trader you are, in the stock market there is always a vacant room to learn!

To gain an edge over all other traders in the market, it’s essential to have knowledge about back-testing, charting, and future analysis. However, learning all this from the beginning is not just a walk in the part. Hence, to help traders with the same there are lots of programs available in the market that make trading easier. One such tool is Amibroker, popularly known as the best trading decision-making software in the market.

Read more about Amibroker software to explore whether it’s the right tool for you to invest in. Moreover, we have explained all the advanced features of the tool in detail, don’t miss that out!

Amibroker Overview

Amibroker is a professional, full-fledged, stock analysis charting software that helps traders to decide and analyze stocks before purchasing. The tool, also known as AB, performs technical analysis by its advanced features to help traders stay ahead of the pack. Some of the advanced features include back-testing, real-time charting, scanning, etc. We believe that all these features are best for traders who aspire to become pro-traders!

What Are The Best Features of Amibroker?

This best feature section is nothing but the breakdown of the main components of Amibroker!

Charting and Drawing Tools

One of the advanced features of Amibroker is its technical charts that are highly customizable. Users can set these charts according to the styles they wish to. One can even use sliders to modify all the parameters in real-time. All the charts have built-in indicators, drag and drop indicators, an object-oriented drawing tool, and different time frames. Through these charts, users can switch between different timescales during real-time trading.

Market Screening and Exploration

The analytical window of Amibroker allows users to scan and explore each aspect of the stock market. Users can easily screen stocks from these sections based on Buy, Sell, Short-term, and Cover conditions. The tool even offers generic filter conditions to explore high-return stocks.

AmiBroker Formula Editor (AFL)

AFL by Amibroker makes the software an all-independent platform. Experienced traders can make quick decisions and come up with new formulas instantly. There is even a useful in-line syntax verifier that helps users to confirm their code before analyzing it. The drop-down list helps in speeding up the coding pace. Even a person from a non-programming background can avoid unwanted expenses by learning AFL from the start.

Symbol and Quotes Database

The symbol and quotes database by Amibroker contains numerous symbols and quotes, making the tool more resourceful. Users can even find historical information regarding the trading account in this database itself. Moreover, there’s also an option of filtering the data based on different criteria.

Analysis

The analysis function is probably the best feature of Amibroker. Users can scan and back-test relatively faster as compared to all other competitor software. All the details thus obtained are listed on the excel table from where one can export the data to a spreadsheet. To get the best out of the software, one can even back-test various strategies. Hence, determining portfolio size and finding shares gets a lot easier.

The screener available on the software helps users to identify potential trades, all based on their trading strategy. This feature is best for swing and end-of-day traders because they can quickly identify the shares to buy or sell.

Yet another best feature is the parameter optimization feature whereby one can use their formula code to define as many parameters they want with different values. You just have to build up any strategy and then let the software find the best parameter combination for you!

Lastly, the walk-forward testing feature helps users to predict different possible outcomes. The outcome hence obtained from here is completely based on a wider range of strategies.

Monte Carlo Simulation

Monte Carlo simulation helps the users to analyze the probabilities of different stocks, despite the uncertainties in the market. This can help the user to understand the impact of risk as well as unpredictability in the forecasting models

The simulation defines all the worst-case scenarios to you, which is quite difficult to predict, even in the case of expert traders.

Ranking and Scoring

The ranking and scoring feature by Amibroker ranks and scores each stock on a bar basis. Hence, one can find suitable trade within minutes through this tool.

Built-in Debugger and IB Controller

The built-in debugger scans all the bugs and debugs them beforehand. This feature is best for interactive traders. Through IB controller brokers can connect to all other brokers easily and work together.

Amibroker Customer Support Services Review

Customer Support

Amibroker offers an online support system where users can mention any queries they have related to the platform. The officials usually respond to these queries in 1-3 business days. The customer support team never fails to resolve any issues raised by customers!

Members’ Area

Through the member’s area section of Amibroker, users can directly interact with other traders and share information from just being on the site.

Amibroker Pricing – Is Amibroker worth the price you pay?

Amibroker offers three pricing plans to its users and a free trial period for 30 days. The one-time fee of the standard plan is just INR 19000. Through this package, the user will get access to one-minute charting intervals, plus they can only look at ten stocks in real-time.

The one-time cost of the professional package is INR 23000, and it provides more advanced features as compared to the basic plan. With this plan, the user will get access to advanced features like intraday charging intervals, unlimited real-time data, and much more!

The cost of the Ultimate Pro Pack is just INR 35000 and includes all the features of Amibroker Professional and the basic plan. All three packages by Amibroker come with 24 months of free upgrades and unlimited customer support.

Is the Amibroker a well-suited trading platform for you?

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Many users still argue that Amibroker is best suited for experienced traders, but the truth is a lot more different. Beginners can even use Amibroker but they have to invest more time into learning, and testing trading strategies. It’s suggested to have some patience throughout the process, and a little bit of technical knowledge to use this software.

If you are a Day-trader then Amibroker is the best tool for you because of the function-based scans. Even long-term traders can find this software beneficial because of its back-testing and walk-forward testing features. Thus, Amibroker is a flexible software that anyone can use over multiple timescales.

Advantages of Amibroker

Every trading account get access to personal customer support

Fastest back-testing tools

Highly affordable

Versatile technical charts

Different strategies optimized according to different parameters

Customizable features

No-cost data available every day for free

Cons of Amibroker

It would be great for beginners to have bare minimum knowledge about programming languages like HTML, C++, and so on

Limited database available per session

Few Amibroker Alternatives – Which Platform to choose?

Amibroker Vs. MetaTrader

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MetaTrader has been a popular alternative to Amibroker used by several technical analysts and algorithmic traders over the years. Both the software have similar features but the approach is a bit different. Many traders still rely on Amibroker because it’s an old tool. Also, Amibroker is a robust, lightweight software as compared to MetaTrader with a minimum learning curve.

Amibroker Vs. Metastock

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MetaStock is yet another superior alternative to Amibroker. However, the price of this software is far more than Amibroker, and just offers limited access to features in the trial version. MetaStock formula language is relatively easier than AFL, but Amibroker’s backtest engine is faster and robust. Amibroker even has a more user-friendly interface, on the other hand, Metastock can only analyze Metastock formatted data.

Is Amibroker your best trading decision-making software?

Whether you are a beginner or a professional trader, Amibroker will help you get the safest trading experience to date. If you have a wealthy technical background, it would be an added benefit. However, if you aren’t aware of how trading works there are a lot of self-help guides provided by the tool to its users.

Closing Words

Conclusively, there are several useful features of Amibroker which most competitor software lacks. These features separate Amibroker from other software available in the market. Simply by dissecting the software in the best way, you can grab a plethora of profits.

Those investors who are looking for faster scanning using Amibroker for real-time as well as historic data can check out Truedata’s products. Our tools and plugins are designed to work with multiple technical analysis applications simultaneously.

If you have been using Amibroker for quite a while now, do let us know your experience in the comments below!

Terminology of Stock Market

What Is a Stock Market?

A stock market is a place where you can buy and sell equity shares of companies. You can participate as an investor or trader who seeks profits over a short time or in the long run. Investors mainly have a long-term horizon and want to benefit from capital appreciation over time. While Traders, on the other hand, seek quick profits and focus on the small price changes in equity shares.

Bull and bear markets are two of the basic concepts of stock market trading, where the term bull market refers to a stock market in which the price of stocks is generally rising. Most investors see bull markets as a great opportunity to excel. It is because, in a bull market, the majority of stock investors are buyers instead of short-sellers of stocks.

A bear market exists when we have stock prices declining in price. Investors can benefit from bear markets, too. They can do it via short selling, a practice of borrowing stock that the investor does not hold from a brokerage firm that owns shares of the stock. Investors can sell the borrowed stock shares in the secondary market and receive money from the sale of that stock.

The 7 Categories of Stock

Income Stocks

An income stock is a type of equity security that offers you a high yield. This yield may generate from the majority of security’s overall returns. Income stock is a very popular type of stock among investors since it is the least volatile among all and offers a higher-than-market dividend yield to its investors.

Penny Stocks

Mostly, small companies issue penny stocks, especially start-ups, to raise funds from investors. These stocks are usually illiquid that are traded at a very low price. Companies issue penny stocks with a very low market capitalization.

Speculative Stocks

Speculative stocks usually come from companies that are looking to tap unexplored territory,  developing new products, or the ones that have done major changes to their management or financial level. These stocks carry high risk since the company, product, and management are often untested. However, it gives a promise of a high return, but the risk is also high.

Growth Stocks

In this type of stock, whenever an organization earns any profit, the money gained via profit gets reinvested into the company itself to help it boost its innovation and business expansion. In this type of stock, investors do not get any dividends, but they receive capital gain whenever they sell their stocks.

Cyclical Stocks

These stocks are issued by the companies that offer luxury and discretionary goods and services. For instance, stocks of airlines, restaurants, vehicle manufactures, hotels, and clothing. The performance of cyclical stocks is interlinked with the health of the economy, i.e., if the economy does well, prices remain high, and when it performs ill, stocks lose a substantial value.

Value Stocks

A stock is considered a value stock when a company has assets worth more than its stock price. These stocks are often undervalued by the investors since their value increases gradually, i.e., it takes a lot of time. If the company does perform well, the losses will be severe.

Defensive Stocks

Every human has some basic needs, such as food, fuel, healthcare services, etc. No one stops eating food, refilling empty tanks, or avoid going to hospitals. Stocks related to such vital services are defensive stocks. Defensive stocks are immune to any economic downturn or profits.

How Do You Categorize Stocks?

We can classify stocks into multiple categories based on various parameters, such as the company size, dividend payment, industry, risk, volatility, and fundamentals.

Stocks based on ownership rules

It is the most basic parameter that we use to classify stocks. For this category, the issuing company has full power to decide whether it will issue common, preferred or hybrid stocks.

Stocks based on market capitalization

Stocks can also be classified based on the market value of the total shareholding of an organization. You can calculate the same using market capitalization, in which you need to multiply the share price with the total number of issued shares. We have three kinds of stocks under this category: small-cap, mid-cap, and large-cap stocks.

Stocks based on dividend payments

Until and unless you sell all the shares for a profit, dividends remain the primary source of income. You can divide stocks based on how much dividend your company pays. Stocks that fall under this category are income stocks and growth stocks.

Stocks based on fundamentals

Ideally, as per the followers of value investing, the share price should be equal to the intrinsic value of the company’s share. To arrive at the intrinsic value per share, you need to compare recent share prices with per-share earnings, profits, and other financials. The stock is believed to be overvalued if a share price exceeds this intrinsic value. If it is lower, the stock is undervalued.

Stocks based on risk

Some stocks have more risk than others because of their fluctuating share prices. Nevertheless, risky stocks can make you greater profits. Blue-chip stocks and beta stocks fall under this category.

Stocks based on price trends

Mostly, the prices of stocks move in tandem with the earnings of your company. Based on the same, stocks can be classified as cyclical stocks or defensive stocks.

Endnote