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Ramanathan Chidambaram replied to the topic What is Dow Theory? in the forum Dow Theory in Practice 8 years, 7 months ago
It is the oldest theory invented by Chrales H Dow. Who actually throwed light on the fact that, by studying the trend, we will be able to predict the trend of the stock. Hence it is the foundation for the technical analysis.
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Ramanathan Chidambaram replied to the topic How to determine the market trend using Dow Theory? in the forum Dow Theory in Practice 8 years, 7 months ago
Consider daily charts for minimum 2 years, to have a clear view.
Identify the spots, very clear Tops and bottoms. Then qualify them as Higher bottom/top and lower bottom/top (just refer the previous top/bottom to qualify it as higher or lower)
Then identify the following the sequence:
HB-HT with volume – Bullish trend
LB-LT with volume – bearish trend
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Ramanathan Chidambaram replied to the topic When to buy and Sell using Dow Theory? in the forum Dow Theory in Practice 8 years, 7 months ago
Higher bottom – Higher Top with high volume, indicates the bullish trend. When the stock moving upwards beyond the previous Higher top, then we can buy the stock
Lower top – Lower volume with high volume, indicates the bearish trend. When the stock moving down beyond previous Higher bottom”, then we can sell the stock.
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Ramanathan Chidambaram 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 8 years, 7 months ago
Major critics – It’s limitation from not being very clear in identifying the spots. It includes few judgements to perform the same, which doesn’t have much justification. More over this theory is used to predict the trend alone, we will not be able to decide the direction of stock, to do so, we may need to make use of price patterns.
But still…[Read more]
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Ramanathan Chidambaram replied to the topic What are Support and Resistance? in the forum Dow Theory in Practice 8 years, 7 months ago
Support – Strong buyer zone. In the bearish trend, if the stock is found to be bounces back due to strong buyer zone, then it will be termed as support level.
Resistance – Strong seller zone. In the bullish trend, if the stock is found to be bounces back due to strong seller zone, then it will be termed as resistance level.
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Ramanathan Chidambaram 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 8 years, 7 months ago
Types of chart – Daily chart
Minimum look up period – 2 years
Duration of trend forecasting for Dow theory – approx 2 to 3 months
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ramesh and Ramanathan Chidambaram are now friends 8 years, 7 months ago
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Ramanathan Chidambaram replied to the topic What is fundamental analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Fundamental analysis – Studying company in detail.
It is not a transparent process.
It is time taking process, but it is able to give insight about the stock for a longer term.
It needs lot of information such as <span style=”color: #777777; font-family: ‘Open Sans’; font-size: 13px; line-height: 20px;”>current performance, financial status,…[Read more]
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Ramanathan Chidambaram replied to the topic price movement in the forum Stock market questions and answers 8 years, 7 months ago
Price movement analysis is performed to identify the short term behaviour/trend of the stock.
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Ramanathan Chidambaram replied to the topic What are the pro / cons of technical analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Advantages – It gives the clear information about the direction, trend and behaviour of the stock as well. The process is very transparent, hence it can be adopted by the retail traders as well.
Disadvantages – As we take decisions, based on the market action, at times, it may not react the way we expected. Hence the trader is in need of…[Read more]
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Ramanathan Chidambaram replied to the topic what are the Pro and cons of fundamental analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Advantages – It is a very clear and a detailed study of the company. Hence the chances of determining the stock price and identifying the trend, direction of the stock is very high.
Disadvantages – It is not transparent, hence we may need to get to know high secret news about the company to perform such analysis. Hence it cannot be performed by a…[Read more]
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Ramanathan Chidambaram replied to the topic What is the input (Data required) to do fundamental / technical analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Fundamental – Complete information about the company, such as current performance, financial status, debt ratios, upcoming deals, strike rates, employee strength, average expenses on infrastructure/employees etc, government policies and its impact, current orders in hand and many more.
Technical – Traded price of the stock and traded volume of…[Read more]
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Ramanathan Chidambaram replied to the topic What is technical analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Technical analysis is the analysis performed by watching the market action. Traded price and Traded volume is considered as input, after the analysis, we will be able to identify the demand and supply ratio. This will give information about the direction of the stock. To do the analysis, we will use charts for our convenience to understand the…[Read more]
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Ramanathan Chidambaram replied to the topic Why do we need to do an analysis? in the forum Understanding the Price Movement 8 years, 7 months ago
Analysis is performed to determine the Demand and supply. This will gives us information about the direction of the stock.
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Ramanathan Chidambaram replied to the topic What drives the stock price? Why to price changes so often? in the forum Understanding the Price Movement 8 years, 7 months ago
Stock price driven by none other than Demand and Supply. Price often changes, reason being, it depends on the individual traders mindset, global scenarios, news being shared by the media, respective sector/industry performance, natural/external factors etc.
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Ramanathan Chidambaram replied to the topic What are different types of charts? in the forum Understanding the Price Movement 8 years, 7 months ago
LINE chart, BAR chart and CANDLE STICK charts.
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Ramanathan Chidambaram 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 8 years, 7 months ago
Approx 17ooo crores is the average turnover in NSE on daily basis.
In general, it is difficult to manipulate the stock price. But, yes it is possible to manipulate the stock price, but not for a longer period.
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Ramanathan Chidambaram replied to the topic Why do people avoid penny stocks? in the forum Understanding the Price Movement 8 years, 7 months ago
As a technical analyst, we highly depended on two major inputs, i.e, traded price and traded volume. But in case of penny stocks, we rarely see any fluctuation in these two inputs. Hence it is difficult to analyse and identify the behaviour of the stock. This is the reason why, we generally avoid penny stocks
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Raja Prabha kumaresan and Ramanathan Chidambaram are now friends 8 years, 7 months ago
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Ramanathan Chidambaram replied to the topic How Stock exchanges ensure the traders counter party risk? in the forum Basics of Stock Trading 8 years, 7 months ago
Stock exchanges basically deal with KYC norms (Know your customer)
Moreoever the exchange will expect that the broker to take care of the KYC and then only admit him to perform trading. Hence it will deal the risk with the broker itself.
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