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Madhan replied to the topic What is Dow Theory? in the forum Dow Theory in Practice 8 years ago
Dow theory is a technical analysis concept used to study the market trend for the past two years and figure out the expectations of the market price flow
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Madhan replied to the topic What is the input (Data required) to do fundamental / technical analysis? in the forum Understanding the Price Movement 8 years ago
Inputs for FA:
RD, Sales, company shares, project involved, etc., like wise covering in and out everything about the company.
Inputs for TA:
Past market behavior, chart analysis and current market flow.
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Madhan replied to the topic Why do people avoid penny stocks? in the forum Understanding the Price Movement 8 years ago
Penny stock are highly unreliable.
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Madhan replied to the topic What are different types of charts? in the forum Understanding the Price Movement 8 years ago
Types of charts :
1. Line chart
2. Bar chart
3. Candlesticks
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Madhan replied to the topic Why do we need to do an analysis? in the forum Understanding the Price Movement 8 years ago
In order to calculate the risks and returns involved in a trade analysis is an important factor.
Trading without analysis is gambling
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Madhan replied to the topic What is fundamental analysis? in the forum Understanding the Price Movement 8 years ago
Fundamental Analysis is studying about the company in detail and completely.
It involves conducting research about the company and studying various departments, functioning, etc.,
This will help in predicting the next move of the company which will affect the stock market.
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Madhan replied to the topic What is technical analysis? in the forum Understanding the Price Movement 8 years ago
Technical Analysis is studying about the market behavior and understanding the price flow.
This will help in finding out better chances of the expectations of the share prices.
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Madhan replied to the topic what are the Pro and cons of fundamental analysis? in the forum Understanding the Price Movement 8 years ago
Fundamental Analysis : Study about the company
Pros:
1. Complete study about the company will be done.
2. Can predict the next move of the company which will affect the stock market
Cons:
1. Very costly, usually in crores.
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Madhan replied to the topic What drives the stock price? Why to price changes so often? in the forum Understanding the Price Movement 8 years ago
The stock price is always driven by the buyers and sellers based on the supply and demand at that particular time.
Price changes so often since at any point of time buyers or sellers can dominate the market.
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Madhan 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 ago
The average turn over in NSE will be in crimes.
One can never manipulate the stock price as it always depends on the buyers and sellers based on the demand and supply.
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Madhan replied to the topic What are the pro / cons of technical analysis? in the forum Understanding the Price Movement 8 years ago
Technical Analysis : Studying about the market
Pros:
1. Various techniques available to understand and find out the expectations of the price flow in market.
2. Provides the stop loss and target which will help a trader to earn minimum profit and give away minimum loss.
Cons:
1. Detailed and minute analysis is needed to find out the…[Read more]
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Madhan replied to the topic What is the role of exchange in derivative instruments? in the forum Essentials of Trading Instruments 8 years ago
The role of exchange in derivatives are:
1. Settlement of the MTM (Mark to Market) on day to day basis between the buyer and seller.
2. Ensuring the premium amount (in options) and caution deposit (in futures) are done before the trade.
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Madhan replied to the topic What are derivative instruments? in the forum Essentials of Trading Instruments 8 years ago
Derivatives instruments include
Futures contract
Options Contract
1. Call option
2. Put option
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Madhan replied to the topic What is call option and PUT option? Who decide the premium? in the forum Essentials of Trading Instruments 8 years ago
A call option is an options contract with the buyer having the rights to buy from the seller.
A put option is an options contract with the buyer having the rights to sell from the seller.
The premium will be decided upon the agreement between the buyer and seller.
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Madhan replied to the topic How option contract differ from future contract? in the forum Essentials of Trading Instruments 8 years ago
In the Futures contract,
1. The buyer/seller has both rights and obligations.
2. The buyer/seller both must pay the caution deposit.
In the Options contract,
1.The buyer has only rights but no obligations.
2. Only the buyer has to pay the premium amount.
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Madhan replied to the topic Why should a trader need the futures/call/put? in the forum Essentials of Trading Instruments 8 years ago
Nobody can predict a share price 100% correctly at present or future.
This is where the futures/call/put comes into picture, the buyers and sellers agrees for a strike price and signs a contract.
And the trader doesn’t require the lot or total amount at the time of contract signing.
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Madhan replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 8 years ago
Futures contract is a contract between the buyer and seller agreed for a strike price on a specific future date.
Based on the daily varying share prices the settlement will be done on a day-to-day basis.
The buyer/seller has the rights to transfer the contract at anytime before the mentioned date in the contract.
On the mentioned date in the…[Read more]
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Madhan replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 8 years ago
Spot or cash market is the place where the settlement of shares and amount is done immediately.
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Madhan replied to the topic What are Margin / MTM / Premium / Strike Price / Expiry Date / lot size? in the forum Essentials of Trading Instruments 8 years ago
Margin is the amount paid as caution deposit to the exchange in order to initiate/execute a trade.
Mark to Market (MTM) is the amount that is paid on a day-to-day basis for a future/options contract.
Premium is the initial amount that will be paid by the buyer of the contract in the options market.
Strike Price is the price agreed by the…[Read more]
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Madhan replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 8 years ago
Pros:
1. For Long position shares can be bought for large amount without having the actual amount.
2. For short position shares can be sold without actually having the shares.
Cons:
1. For short position the share that was sold, must be bought before the market close time.
2. For long position the account balance must have total share…[Read more]
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