In deregulation power market system security is one of the challenging tasks due to competition and open access network. The security appraisal is an essential task as it gives knowledge about the system state in the event of contingency. In this paper presents contingency analysis of power system is to predict the line outage, generator outage and to keep the system secure and reliable by using full Newton‟s method. The full Newton‟s algorithm is more efficient for large power system. This result tends to be significantly more accurate and allow for gauging voltage/VAR effects. Whenever the maximum violation is occur in power system, that line and generator is outage element. So we find the maximum violation in the system network. IEEE-14 bus is the test system for contingency analysis by using power world simulator.