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Dipakk Mehta 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
Line charts are used with a look up period of 2 years
2-3 months is the duration of trend forecasting dow theory
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Dipakk Mehta replied to the topic What are Support and Resistance? in the forum Dow Theory in Practice 7 years, 3 months ago
Support is the area where the buyers are strong enough to buy and prevent anymore fall in price (bottom) buyers become aggressive
resistance is the area where there are more sellers to sell the stock and prevent anymore rise in price (top) sellers become aggressive
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Dipakk Mehta 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
Dow theory cannot be applied on short term or intraday trading. it needs a chart of 2 years at the least to identify major tops and bottoms.
it remains the easiest way to follow trend and identify demand and supply using volume
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Dipakk Mehta replied to the topic What is call option and PUT option? Who decide the premium? in the forum Essentials of Trading Instruments 7 years, 3 months ago
in call option the buyer has the rights to buy the stock at strike price on the maturity date but has no obligations
in put option the buyer has the rights to sell the stock at the strike price on the maturity date but has no obligations
in both cases seller has obligations but has no rights and receives a premium to sign the contract based on…[Read more]
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Dipakk Mehta replied to the topic What is Equity market? in the forum Essentials of Trading Instruments 7 years, 3 months ago
Equity market is a spot market where deal and settlement are done on the same day
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Dipakk Mehta replied to the topic What is the role of exchange in derivative instruments? in the forum Essentials of Trading Instruments 7 years, 3 months ago
They are responsible in receiving caution deposits from the buyers and sellers and deal the settlement in the right way
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Dipakk Mehta replied to the topic How option contract differ from future contract? in the forum Essentials of Trading Instruments 7 years, 3 months ago
In future contract both buyer and seller has rights and obligations
whereas option contract only buyer has rights but no obligations
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Dipakk Mehta replied to the topic What are derivative instruments? in the forum Essentials of Trading Instruments 7 years, 3 months ago
Futures and options (call and put)
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Dipakk Mehta replied to the topic Why should a trader need the futures/call/put? in the forum Essentials of Trading Instruments 7 years, 3 months ago
To minimize risk and maximize returns
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Dipakk Mehta replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 7 years, 3 months ago
One can become owner on the same day and can create our own positions.
But the full amount has to be settled and risk factors can be high if done without knowledge
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Dipakk Mehta replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 7 years, 3 months ago
Spot market is where the deal and the settlement is made on the same day
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Dipakk Mehta replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 7 years, 3 months ago
Futures contract is where the deal is made now and the settlement is made in the future. Both buyers and sellers have rights and obligations.
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Dipakk Mehta replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 7 years, 3 months ago
margin is the caution deposit that has to be paid by buyers and sellers in futures market.
MTM is market to market, i.e settling the profit and loss on day to day basis until the expiry date.
premium is the amount that has to be paid by the buyer of options contract to the seller to make him sign the contract
strike price is the mentioned price…[Read more]
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Dipakk Mehta replied to the topic What is fundamental analysis? in the forum Understanding the Price Movement 7 years, 3 months ago
Fundamental analysis is studying all the complete information of the company in order to predict the future returns more accurately.
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Dipakk Mehta 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
Buyers and sellers drive the stock price.
it fluctuates often because of demand and supply
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Dipakk Mehta replied to the topic What are different types of charts? in the forum Understanding the Price Movement 7 years, 3 months ago
Line charts
bar charts
candlestick charts
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Dipakk Mehta replied to the topic What are the pro / cons of technical analysis? in the forum Understanding the Price Movement 7 years, 3 months ago
It is possible to do technical analysis by everyone unlike fundamental which can only be done by stong hands.
Technical analysis helps us follow market trend and derive risk reward ratio quite easily.
It is not as effective as fundamental as sometimes it may go wrong.
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Dipakk Mehta replied to the topic What is technical analysis? in the forum Understanding the Price Movement 7 years, 3 months ago
Technical analysis is nothing but following the market. Studying price and volume helps understand demand and supply of the company.
It is done through various effective theories.
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Dipakk Mehta replied to the topic what are the Pro and cons of fundamental analysis? in the forum Understanding the Price Movement 7 years, 3 months ago
Fundamental analysis gives more accuracy to derive risk reward ratio. It gives the complete information on a company thus helping a trader to study the market accurately and expect profits.
It is expensive mode and can only be achieved by stong hands.
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Dipakk Mehta replied to the topic Why do we need to do an analysis? in the forum Understanding the Price Movement 7 years, 3 months ago
Analysis is required to derive a proper risk reward ratio so as to increase the profit. It is required to study the market and make rational decisions.
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