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Arif Jani replied to the topic What is inverted Head and Shoulder? What are their conditions to determine the bullish trend? in the forum Price Patterns and its characteristics 7 years, 10 months ago
A inverted head and shoulder consists of one head and two shoulder. It is an accumulation phase which takes 3 months to form.
the volume near the left shoulder is higher. the volume near the right shoulder is low. when the stock crosses the neck line, a long position can be created.
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Arif Jani replied to the topic What is Double BOTTOM? What are their conditions to determine the bullish trend? in the forum Price Patterns and its characteristics 7 years, 10 months ago
Double bottom is a price pattern derived from DOW theory. It takes about 1 month to form the double bottom.
Firstly we have to identify two identical consequent bottoms. The volume near second bottom should be good. When the stock rises above the previous top, a bullish pattern is established and a long position can be created.
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Arif Jani replied to the topic What is Double TOP? What are their conditions to determine the bearish trend? in the forum Price Patterns and its characteristics 7 years, 10 months ago
Double top is a price pattern derived from DOW theory.
Double top usually takes about 1 month to form. Firstly we have to identify two identical tops , where in the volume near the second top will be good. when the sellers zone dominates and down further the previous bottom. Short position can be created at this point.
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Arif Jani replied to the topic What is FLAG pattern? What are the conditions to qualify as perfect FLAG? in the forum Price Patterns and its characteristics 7 years, 10 months ago
flag pattern is a price pattern which is formed with in 10 days time.
A flag pattern has 3 parts:
1. A steep slope usually 75-80 degrees, which takes 2- 3 days to form with a good volume.
2. a horizontal flag pattern which maintains a same level without moving down or up, which usually takes 3-7 days to form with any significant volume.
3. a…[Read more]
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Arif Jani replied to the topic What are different types of charts? in the forum Understanding the Price Movement 7 years, 10 months ago
There are line charts, bar charts, candle sticks charts
each chart has its own use like line charts are used for positional trading for monthly traders, candle sticks charts are used for positional trading for weekly traders
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Arif Jani replied to the topic What is the average turnover in NSE only daily basis? Can any one manipulate the stock price? in the forum Understanding the Price Movement 7 years, 10 months ago
Average turnover in NSE 17400 crores. The traders with large investment potential can manipulate the stock price falsely creating a surge or decline in demand and supply
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Arif Jani replied to the topic Why do people avoid penny stocks? in the forum Understanding the Price Movement 7 years, 10 months ago
Penny stocks give very high returns with high risk. There is a chance that few traders can manipulate the stock price to their favour. Moreover a technical analysis will not be true most of the times. When the penny stocks rise in price there might be fewer buyers, which means that the liquidity of capital is lesser in penny stock
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Arif Jani replied to the topic Why do we need to do an analysis? in the forum Understanding the Price Movement 7 years, 10 months ago
Only by doing an analysis we can derive the market trend, by which we can either go long or short or hold or sell the stocks. Trading without analysis is like gambling. With analysis we can minimise the risks and maximise the reward.
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Arif Jani replied to the topic What drives the stock price? Why to price changes so often? in the forum Understanding the Price Movement 7 years, 10 months ago
<p style=”text-align: left;”>Stock prices are generally driven by the trends of buyers and sellers, depending on their trading movement. Apart from this , any positive news abt the company or the stock market as a whole can drive up the stock price, where as a negative news can bring down the price</p>
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Arif Jani replied to the topic What is the input (Data required) to do fundamental / technical analysis? in the forum Understanding the Price Movement 7 years, 10 months ago
data required to do fundamental analysis includes details of the company, it’s directors, CEO, marketing strategy, sales strategy, progress in the past financial years, etc. This may include data which is confidential and difficult to acquire by the public.
data required for technical analysis is price movement with its corresponding volume. The…[Read more]
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Arif Jani replied to the topic What are the pro / cons of technical analysis? in the forum Understanding the Price Movement 7 years, 10 months ago
Pro’s- data available for analysis is readily for everyone. Comparatively lesser time taken for technical analysis as compared with fundamental analysis
Con’s- it is unpredictable, cannot always be correct. It heavily relies on buyers and sellers trade patterns
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Arif Jani replied to the topic what are the Pro and cons of fundamental analysis? in the forum Understanding the Price Movement 7 years, 10 months ago
Pro’s- if done properly, it will give a clear direction of the trend of the stock
Con’s- it will be expensive and time consuming. It will require access to information which is not usually available to the public
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Arif Jani replied to the topic What is technical analysis? in the forum Understanding the Price Movement 7 years, 10 months ago
Technical analysis is the study of the price movement and the corresponding volume to derive the market trend. Technical analysis has many tools in charts like candlebars for weekly trading, line charts for monthly trading and gap indicators for strength of the stock
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Arif Jani replied to the topic What is fundamental analysis? in the forum Understanding the Price Movement 7 years, 10 months ago
Fundamental analysis is the study about company in all aspects like financial data, sales, growth, performance and contribution of the company towards the sector growth
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Arif Jani replied to the topic Why should a trader need the futures/call/put? in the forum Essentials of Trading Instruments 7 years, 10 months ago
the capital required for futures and options is lesser as compared to equity. The returns are higher than equity but the risk is also a high. The premium paid in options can go down to almost zero in some cases.
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Arif Jani replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 7 years, 10 months ago
Pro’s- Equity market gives a wide range of choice to select and trade with the shares of the listed companies. When invested in companies which lead the sectors in the market, we can expect liquidity at any point of time. Moreover when traded are done with good analysis and rational decision, then it can give substantial returns.
Con’s- When…[Read more]
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Arif Jani replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 7 years, 10 months ago
Spot/cash market where the shares are traded and settled at the end of each day
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Arif Jani replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 7 years, 10 months ago
Futures contract is derivative instrument where in the buyer and seller enter into a contract agreeing on a strike price for a future date. Both of them have to pay a caution deposit to the exchange. If the market price goes more than the strike price the exchange will pay the difference to the buyer on MTM basis and if the price goes below the…[Read more]
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Arif Jani replied to the topic What are derivative instruments? in the forum Essentials of Trading Instruments 7 years, 10 months ago
Derivative instruments are futures and call options
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Arif Jani replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 7 years, 10 months ago
Margin is the amount of money an investor needs to put up in the trading account in order to fulfill the requirements of the derivative from the perspective of both the parties
MTM is market to market concept is the daily settlement of the derivatives based upon the last traded price of the share in equity market
Premium is what the buyer pays…[Read more]
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