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S SUNDAR RAJAN replied to the topic What are Price Patterns? in the forum Price Patterns and its characteristics 7 years, 4 months ago
Price patterns are formed based on Dow theory and identifies meaningful trend in a short term.
Double Bottom, Double Top, Cup, Head&Shoulder are some of the powerful price patterns used in technical analysis.
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S SUNDAR RAJAN replied to the topic What Should be Entry price, Exit Price and Stop loss for Cup Pattern in the forum Stock market questions and answers 7 years, 4 months ago
Cup pattern: Sign of a Bullish trend. Long position.
Entry price: Wait for the price to cross the previous Top.
Stop Loss: Previous Bottom price level.
Exit price: Entry price + 2(Entry price – Stop Loss).
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S SUNDAR RAJAN replied to the topic What Should be Entry price, Exit Price and Stop loss for Head & Shoulders in the forum Price Patterns and its characteristics 7 years, 4 months ago
Head & Shoulders: Sign of bearish trend. Short selling can be considered.
Entry price: Wait for the price to cross the previous bottom price levels.
Stop Loss: Previous Top price levels.
Exit price: Entry price – (Previous Top price – Entry price)
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S SUNDAR RAJAN replied to the topic What Should be Entry price, Exit Price and Stop loss for Double top in the forum Stock market questions and answers 7 years, 4 months ago
Double Top: Sign of bearish trend. Traders can consider to take Short position.
Entry price: Wait for the price to cross the previous bottom price levels.
Stop Loss: Previous Top price level.
Exit price: Entry price – (Previous Top price – Entry price)
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S SUNDAR RAJAN replied to the topic What Should be Entry price, Exit Price and Stop loss for Double Bottom in the forum Stock market questions and answers 7 years, 4 months ago
Double Bottom: Sign of bullish trend.
Entry price: When the price crosses the previous Top price level, we can consider taking long position.
Stop Loss : Previous bottom price level
Exit price: Entry price + (Entry price – previous bottom price)
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S SUNDAR RAJAN replied to the topic What are the pro / cons of technical analysis? in the forum Understanding the Price Movement 7 years, 4 months ago
Pros: 1) Easy to analyze the price and volume.
2) Data availability.
3) Requires less time and effort.
Cons: 1) Result does not influence the future price movement in the market. Hence, chance of making loss in trade.
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S SUNDAR RAJAN replied to the topic what are the Pro and cons of fundamental analysis? in the forum Understanding the Price Movement 7 years, 4 months ago
Pros: 1) Highly reliable.
2) Drives the company’s sentiment in the market.
3) Contradicting the market is also possible.
Cons: 1) Getting the required information is very difficult
2) Involves more time and effort.
3) Only experts can perform the analysis.
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S SUNDAR RAJAN replied to the topic Why do people avoid penny stocks? in the forum Understanding the Price Movement 7 years, 4 months ago
High risk.
Occasional demand and supply. Highly unpredictable.
Risk of company closure and thus, total capital erosion.
Low liquidity.
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S SUNDAR RAJAN 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, 4 months ago
Average turnover in NSE is about INR 22,500 crores.
Nobody can manipulate the stock price. Big players in the stock market can alter demand and supply position in the market and thereby, the share price will go up or come down. But, they cannot influence the share price directly.
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S SUNDAR RAJAN replied to the topic What drives the stock price? Why to price changes so often? in the forum Understanding the Price Movement 7 years, 4 months ago
Demand and supply factors drive the stock price.
Market situation is very dynamic. Many people participate in stock market and hence, we see the price changing often.
If demand is more, price goes up.
If supply is more, price comes down.
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S SUNDAR RAJAN replied to the topic What are different types of charts? in the forum Understanding the Price Movement 7 years, 4 months ago
Line chart, Bar chart, Candlestick charts.
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S SUNDAR RAJAN replied to the topic What is fundamental analysis? in the forum Understanding the Price Movement 7 years, 4 months ago
Fundamental Analysis: Detailed study about company’s business, management, past performance, financials, estimated future earnings etc., Information gathering is a challenge in this analysis. But, if we get it right, we can even contradict the market and trade successfully.
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S SUNDAR RAJAN replied to the topic What is technical analysis? in the forum Understanding the Price Movement 7 years, 4 months ago
Technical Analysis: Analysis that follows the market and uses traded price and traded volume as an input.
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S SUNDAR RAJAN replied to the topic Why do we need to do an analysis? in the forum Understanding the Price Movement 7 years, 4 months ago
Analysis is required to make it a profitable trade. Analysis improves the knowledge and inculcates discipline.
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S SUNDAR RAJAN replied to the topic What is the input (Data required) to do fundamental / technical analysis? in the forum Understanding the Price Movement 7 years, 4 months ago
Fundamental analysis: Information about the company’s business, management, past performance, annual turnover, estimated future earnings etc.,
Technical Analysis: Traded price and traded volume information. As a long time investor, we need the price/volume movement of the share for the last 2 or 3 years. Otherwise, price/volume movements fo…[Read more]
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S SUNDAR RAJAN replied to the topic What is Spot / Cash market? in the forum Essentials of Trading Instruments 7 years, 4 months ago
SPOT or CASH market: Market place where the shares are traded for immediate delivery. Cash settlement generally happens T+2 days.
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S SUNDAR RAJAN replied to the topic What is Equity market? in the forum Essentials of Trading Instruments 7 years, 4 months ago
Equity market refers to a market place where the equity shares are traded. Equity market can be further categorized as Spot market and derivative market.
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S SUNDAR RAJAN replied to the topic What is the Pro / Cons of Equity market from traders’ perspective? in the forum Essentials of Trading Instruments 7 years, 4 months ago
Pros: 1) Best asset class if traded with knowledge and discipline,
2) Capital market is a independent body,
3) Transparency in price, nobody can influence the share price
4) High returns. Upward market price movement, eligible to receive Dividend and Bonus shares
5) High liquidity
Cons: 1) High risk investment and may result in huge…[Read more]
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S SUNDAR RAJAN replied to the topic What is the role of exchange in derivative instruments? in the forum Essentials of Trading Instruments 7 years, 4 months ago
Trade settlement and smooth completion of contract.
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S SUNDAR RAJAN replied to the topic Whether Margin money is mandatory for both buyers & sellers of Option Contract in the forum Stock market questions and answers 7 years, 4 months ago
Margin money refers to the amount of money that should be available in Bank account of the parties to the contract at the time of entering into the contract to cover any potential liability. Caution deposit.
Margin money is not mandatory in Options contract as the Buyer has no obligation to execute. But, Brokers may still insist to have margin m…[Read more]
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