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Dinesh replied to the topic What is triangle pattern? What are the conditions to qualify as perfect triangle? in the forum Price Patterns and its characteristics 7 years, 3 months ago
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5 wave corrective pattern should form a triangle.This shows both the buyers and sellers are aggressive.
Conditions:
- triangle area should be mini. 45 days
- volume should be high at the breakout
- breakout is expected around the 70% of the triangle zone.
If it breaksout upward,then it is bullish trend. create…[Read more]
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Dinesh replied to the topic What is rounding bottom / Cup pattern? What are their conditions to determine the bullish trend? in the forum Price Patterns and its characteristics 7 years, 3 months ago
1. Cup patterns are generally powerful if it takes long time to construct.
2. Druing the rounding bottom, the volume is expected to be low as possible.
3. The correlation between the market to the stock should be low during the mid of the pattern.
4. Do not buy when it is at the rounding bottom, called dead snake state.
5. Long position can be…[Read more]
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Dinesh 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, 3 months ago
1. A Steeper pole.
2. Rectangular shaped sideways movement can be considered as flag.
3. Generally takes less time to form ( 4 to 7 days).
4. Positive pole flag should give positive break out.
5. Volume is expected to increase while giving break out.
6. Long position can be considered when the price goes above the break out point.
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Dinesh 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, 3 months ago
The inverted Head and Shoulder indicates an Accumulation scenario where as a Stronger Hand trying to accumulate the bulk of stocks in the market by creating numerous long position.
Here The long position can be considered when the price goes above the the Neck line of the R Shoulder when it is upside down.
And the remaining conditions applies…[Read more]
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Dinesh replied to the topic What is Head and Shoulder? What are their conditions to determine the bearish trend? in the forum Price Patterns and its characteristics 7 years, 3 months ago
The pattern Head and Shoulder implies there’s an intervention of the stronger hand in the market who is looking for a short position to their bulk upholding stock.
1. Significant rally prior to the Head and Shoulder Structure indicated the trend reversal.
2. The Head should be the highest among the recent price action.
3. The Duration to form…[Read more]
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Dinesh 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, 3 months ago
1. Two equivalent bottom.
2. Volume at the 2nd bottom and it’s high should be higher.
3. Duration between the first bottom and 2nd bottom should be min 20 days.
4. Long position can be considered when the 2nd bottom high goes than the previous high.
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Dinesh 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, 3 months ago
1. Two equivalent Tops.
2. Volume at the 2nd top and it’s low should be high.
3. Duration between the first top and the 2nd top should be min 20 days.
4. Short position can be considered after the 2nd top low is higher than it’s previous low.
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Dinesh replied to the topic When to buy and Sell using Price Patterns? in the forum Price Patterns and its characteristics 7 years, 3 months ago
The time to buy and sell in the consideration of price patterns varies pattern to pattern, and the volume applies as derrived.
Double Top: Short position can be considered when the price goes below the previous low.
Double Bottom: Long position can be considered when the price goes above the previous high.
Head and Shoulder: Short position…[Read more]
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Dinesh replied to the topic How price pattern are different from Dow Theory? in the forum Price Patterns and its characteristics 7 years, 3 months ago
Dow theory focuses on Trend whereas Price patterns focuses on behavior and characteristics of the Trend. Price pattern is ideal for it’s derived time period. It consumes a periodic time interval to plot the characteristics and gives us an early signal. It is a good tool of analysis for the near term investment decisions.
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Dinesh replied to the topic What are Price Patterns? in the forum Price Patterns and its characteristics 7 years, 3 months ago
Prize pattern helps to study the market and it is a good technical analysis tool for near future trends. It uses a line charts to plot the trend characteristics and behaviour and studies the various pattern created by the stock. It considers market stock price and volume movement and illustrates it’s direction of trend.
Some of the vital price…[Read more]
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Dinesh 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, 3 months ago
The major draw back of Dow theory is, it does not explain the price behavior of the stocks . But still the Dow theory remains on the top as the core of the Dow theory analysis considers supply – Demand which plays the key role in the technical analysis. All theories that have evolved today has taken Dow theory as their base and no one could con…[Read more]
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Dinesh replied to the topic When to buy and Sell using Dow Theory? in the forum Dow Theory in Practice 7 years, 3 months ago
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Buy (Bullish): Higher bottom – higher top sequence when it crosses the breakout point. When demand is greater than supply with high volume.
Sell (Bearish): Lower top -Lower bottom sequence when it crosses the breakout point. When supply is greater than Demand with high volume.
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Dinesh replied to the topic What type of Charts Used, Minimum look up period, Duration of Trend forecasting for Dow Theory? in the forum Dow Theory in Practice 7 years, 3 months ago
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Line chart is used with look up period of 2years.
1 to 3 months is a trend forecasting for dow theory
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Dinesh replied to the topic What is Dow Theory? in the forum Dow Theory in Practice 7 years, 3 months ago
Dow theory is a theory of technical analysis introduced by Charles H Dow which is used to derive the market trend by following the market based on demand and supply levels with volume .It helps the traders to decide when to enter and exit the market by view the chart (bullish/bearish).
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Dinesh replied to the topic What are Support and Resistance? in the forum Dow Theory in Practice 7 years, 3 months ago
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Support is the area where buyers are strong enough to prevent the further fall. (Bottom region). Support is an area where the demand is strong enough to prevent price from further falling down.(Buyers aggressive)
Resistance is the area where sellers are strong enough to prevent the further rise. (top region).…[Read more]
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Dinesh replied to the topic How to determine the market trend using Dow Theory? in the forum Dow Theory in Practice 7 years, 3 months ago
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Higher Bottom- Higher Top sequence  with high volume is Bullish. Buy–> When Demand is greater than supply.
Lower Top -Lower Bottom sequence with high volume is Bearish. Sell–> When supply is greater than Demand.
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Dinesh replied to the topic What drives the stock price? Why to price changes so often? in the forum Understanding the Price Movement 7 years, 3 months ago
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Buyers and sellers drives the stock price. price changes depends on the market flow on the basis of demand and supply.
When demand increases compared to supply the price rises and if the demand is less than supply price drops.
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Dinesh replied to the topic What are different types of charts? in the forum Understanding the Price Movement 7 years, 3 months ago
There are three kind of charts:
1. line chart – this chart has x and y axis where in the closing rate are being joined together to make a line.
2. bar chart – this chart is a chart with information on opening/ closing prices with the days high and low.
3. candlesticks – this show the market trend(bullish or bearish) apart from the informa…[Read more] -
Dinesh replied to the topic What are the pro / cons of technical analysis? in the forum Understanding the Price Movement 7 years, 3 months ago
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Pros-
Helps follow the market which is largely controlled by strong hands. When done well, reduces risk of trading. It is a short term and easy doing any individual who understand the market.
Cons-
Not the best approach when compared to fundamental analysis whereas fundamental analysis gives you a accurate price…[Read more]
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Dinesh replied to the topic Why do people avoid penny stocks? in the forum Understanding the Price Movement 7 years, 3 months ago
Even though penny stocks are traded at low price , they are volatile in nature and percentage of risk and more probability of price manipulation is high. They use to trade at a cost less than Rs.10
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