To understand the stock market and its trends better we should know Fundamental Analysis and Technical Analysis and we should know how to apply it while selecting a stock for trading

  • : Key factors that can affect stock prices Company news & performance Industry performance Investor sentiment Economic factors But the major factor for stock price change is supply and demand cycle.
  • : Fundamental analysis is a method of evaluating the intrinsic value of an asset and analysing the factors that could influence its price in the future. Understand the company. Study the financial reports of the company. Check the debt. Find the company's competitors. Analyzing the future prospects. Review all the aspects time to time.
  • : Technical analysis is a means of examining & predicting price movements in the financial markets, by using historical price charts and market statistics. It is based on the idea that if a trader can identify previous market patterns, they can form a fairly accurate prediction of future price trajectories.
  • : Pros Helps in identification of good stocks Create solid base for long term investment Helpful in avoiding panic in stock market Cons No guarantee of profit It's very long and time consuming process Have to wait for longer time to see the results in our favour.
  • : Fundamental analysis required various company parameters like companies annual report(Revenue, Profit/ Loss), Assets, Growth plan, competition, R&D plan, Employee’s Satisfaction, Management, Various policies, Quality, etc. Technical analysis is based on demand and supply, which can be derived from traded Price and Volume.
  • : Positive news , good earning will normally cause buying where as negative news and low earning report will cause selling of stocks. Analyst reports are generally written to offer guidance to investors as to whether to invest in specific companies or industry sectors
  • : Average daily turnover of NSE is approximately 17500 crores. The stock price can not be manipulated for major stocks since it is monitored and traded with large set of people. However the penny stocks can be manipulated and generally not recommended to trade with penny stocks.
  • : Pros technical analysis helps you to stay objective. Regardless of the stock or price, it provides an apples-to-apples comparison of the period’s price action. It helps you to build a rule based system to buy and sell stocks Cons The odds of creating false signals increase during less-than-ideal trading conditions. With inaccurate backtesting, an indicator may be applied improperly in the live market. Although the technical analysis of stocks accounts for enhanced price action, it doesn’t factor in the increased risks posed by evolving market conditions.
  • : Penny stocks are high-risk securities with small market capitalizations that trade for a low price outside major market exchanges. A lack of history and information, as well as low liquidity, make penny stocks more risky.
  • : There are many types of charts that are used for technical analysis. However, the 3 types that are most commonly used Line chart Bar chart candlestick chart.
  • : Using candles on charts is that single or multiple candle patterns give earlier and more reliable reversal signals. Every candle shows the activity for the referenced period in hourly, daily, or weekly charts, for example. Candlestick charts are traders’ preferred chart type because they can use candle chart patterns as part of the buying and selling process to find short term price turning points and additionally these patterns are used for support and resistance. A candlestick can consists of one or many trading days. The module calculates result composed from different historical periods that allows making the forecast more accurate. Also it can perform comparative forecast analysis for many symbols.
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