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A AHAMED SULAIMAN SHAMEEM replied to the topic What is Dow Theory? in the forum Dow Theory in Practice 7 years, 6 months ago
Dow Theory is the first ever theory quoted in the history of technical analysis, proposed by Charles H Dow. It is used to derive the market direction by following the market actions continuously.
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A AHAMED SULAIMAN SHAMEEM replied to the topic What are the major critics against Dow Theory? How come it remains on top of any analysis? in the forum Dow Theory in Practice 7 years, 6 months ago
The major critics are that Dow theory doesn’t provide information on the characteristics of price movement and it is not suitable for short term trading.
But it remains on the top of any analysis because it is the basic for all the modern theories and it proves true till today.
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A AHAMED SULAIMAN SHAMEEM replied to the topic What is technical analysis? in the forum Understanding the Price Movement 7 years, 6 months ago
Technical Analysis is following the market for the variations in price and volume over a period of time.
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A AHAMED SULAIMAN SHAMEEM replied to the topic Why do we need to do an analysis? in the forum Understanding the Price Movement 7 years, 6 months ago
Analysis helps in calculating the risk and returns and make sure the returns are higher than the risk.
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A AHAMED SULAIMAN SHAMEEM replied to the topic What is the input (Data required) to do fundamental / technical analysis? in the forum Understanding the Price Movement 7 years, 6 months ago
Technical analysis – Price and Volume
Fundamental Analysis – Quantitative factors such as sales, growth rate, profit, assets etc and Qualitative factors such as management abilities, employee satisfaction, environmental policies etc.
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A AHAMED SULAIMAN SHAMEEM replied to the topic What are different types of charts? in the forum Understanding the Price Movement 7 years, 6 months ago
Line charts, Bar charts and Candlestick charts
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A AHAMED SULAIMAN SHAMEEM replied to the topic what are the Pro and cons of fundamental analysis? in the forum Understanding the Price Movement 7 years, 6 months ago
Pro – It is very powerful and it is possible to forecast the market using fundamental analysis.
Con – The inputs required to do a fundamental analysis are not easily available to everyone and it is very expensive.
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A AHAMED SULAIMAN SHAMEEM replied to the topic What drives the stock price? Why to price changes so often? in the forum Understanding the Price Movement 7 years, 6 months ago
Stock price is driven by demand and supply.
Prices change so often because of the presence of many number of buyers and sellers.
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A AHAMED SULAIMAN SHAMEEM replied to the topic Why do people avoid penny stocks? in the forum Understanding the Price Movement 7 years, 6 months ago
Because of low level of liquidity which results in a high amount of risk
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A AHAMED SULAIMAN SHAMEEM replied to the topic What is fundamental analysis? in the forum Understanding the Price Movement 7 years, 6 months ago
Fundamental Analysis is studying every aspect of a company in detail which involves quantitative as well as qualitative analysis.
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A AHAMED SULAIMAN SHAMEEM replied to the topic What are the pro / cons of technical analysis? in the forum Understanding the Price Movement 7 years, 6 months ago
Pro – Inputs required for Technical Analysis are simple and easily available to anyone
Con – It is not as powerful as fundamental analysis.
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A AHAMED SULAIMAN SHAMEEM replied to the topic price movement in the forum Stock market questions and answers 7 years, 6 months ago
Price movement is the variation of the price of shares over a period of time depending upon the demand and supply of those shares.
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A AHAMED SULAIMAN SHAMEEM replied to the topic What is the role of exchange in derivative instruments? in the forum Essentials of Trading Instruments 7 years, 6 months ago
Exchange is responsible for preventing defaulting in contracts and proper settlement.
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A AHAMED SULAIMAN SHAMEEM replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 7 years, 6 months ago
Pros are traders have the flexibility to choose the shares, price, type of trading etc.
Cons are they might end up in huge loss if they fail to make rational decisions
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A AHAMED SULAIMAN SHAMEEM replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 7 years, 6 months ago
In future contract, margin is the initial payment done buy the buyer and seller as a caution deposit.
MTM means Mark to Market. It is the process of valuing the stocks on a day to day basis and settling the difference in price to the respective person (buyer or seller).
Premium is the amount of money received by the seller in an option contract…[Read more]
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A AHAMED SULAIMAN SHAMEEM replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 7 years, 6 months ago
Futures contract is a contract where the buyer and seller sign a contract for a trade which happens on some day in the future. They pay a caution deposit initially, while signing the deal. In future contract, both the buyer and seller has some rights as well as obligations.
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A AHAMED SULAIMAN SHAMEEM replied to the topic Whether Strike price applicable for Future contract in the forum Stock market questions and answers 7 years, 6 months ago
There is no strike price in a future contract. The trade has to be done on the price for which the contract is signed.
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A AHAMED SULAIMAN SHAMEEM replied to the topic What are derivative instruments? in the forum Essentials of Trading Instruments 7 years, 6 months ago
Derivative instruments allow traders to do trades on a contract basis. Exchange doesn’t happen immediately in derivative market as in case of spot markets. The traders only pay a percentage of their deal price as a caution deposit and sign the deal. The whole settlement happens as per the contract signed by the traders.
There are two types of…[Read more]
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A AHAMED SULAIMAN SHAMEEM replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 7 years, 6 months ago
Spot market refers to buying and selling shares immediately without any contract. The shares and cash are exchanged on the same day when the deal is placed.
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A AHAMED SULAIMAN SHAMEEM replied to the topic What is Equity market? in the forum Essentials of Trading Instruments 7 years, 6 months ago
Equity market is a stock market where equity shares get traded. Equity refers to the shares offered by a company which are equal in size.
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