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Vineet Kumar Nair 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, 1 month ago
Major critics is that it only tells about market trend whether it is bullish or bearish based on the demand and supply. It doesn’t offer insight on price behavior. Also, it can’t be used for short term trading.
It remains on top of any analysis because it is the base (concept of demand and supply) for all the technical analysis tools.
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Vineet Kumar Nair 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, 1 month ago
Charts used – Line chart (Daily)
Minimum look-up period – 2 years
Duration of trend forecasting – 3 months to +1 year
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Vineet Kumar Nair replied to the topic What are Support and Resistance? in the forum Dow Theory in Practice 7 years, 1 month ago
Support – It is a demand zone where the buyers are aggressive.
Resistance – It is a supply zone where the sellers are aggressive.
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Vineet Kumar Nair replied to the topic When to buy and Sell using Dow Theory? in the forum Dow Theory in Practice 7 years, 1 month ago
During the bullish trend, identify the price crossing the previous top with high volume to create a long position.
During the bearish trend, identify the price crossing the previous bottom with high volume to create a short position.
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Vineet Kumar Nair replied to the topic When to buy and Sell using Dow Theory? in the forum Dow Theory in Practice 7 years, 1 month ago
During the bullish trend, identify the price crossing the previous top with high volume to create a long position.
During the bearish trend, identify the price crossing the lower bottom with high volume to create a short position.
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Vineet Kumar Nair replied to the topic How to determine the market trend using Dow Theory? in the forum Dow Theory in Practice 7 years, 1 month ago
Market trend can be determined by identifying the particular sequences in the line chart:
1. Higher bottom – higher top (with significant volume) = Bullish trend
2. Lower top – lower bottom (with significant volume) = Bearish trend
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Vineet Kumar Nair replied to the topic What is Dow Theory? in the forum Dow Theory in Practice 7 years, 1 month ago
Dow theory is one of the earliest approaches to technical analysis. It enables us to understand the concept of demand and supply which in-turn tell us the direction of the market, i.e., whether it is trending +vely (bullish) or -vely (bearish).
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Vineet Kumar Nair replied to the topic Why do we need to do an analysis? in the forum Understanding the Price Movement 7 years, 1 month ago
Analysis is done to examine the market and its characteristics which enable the trader to understand the risk and returns before making a trade.
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Vineet Kumar Nair replied to the topic Why do people avoid penny stocks? in the forum Understanding the Price Movement 7 years, 1 month ago
People avoid penny stocks because:
1. It fluctuates tremendously in price
2. Easy to manipulate
3. They can be illiquid in nature
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Vineet Kumar Nair replied to the topic What is the input (Data required) to do fundamental / technical analysis? in the forum Understanding the Price Movement 7 years, 1 month ago
Fundamental analysis – Economic data, industry data and company data.
Technical analysis – Traded price and traded volume.
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Vineet Kumar Nair replied to the topic What are the pro / cons of technical analysis? in the forum Understanding the Price Movement 7 years, 1 month ago
Pro –
1. Less time consuming and ideal for determining the entry and exits points for short term.
2. The inputs to analyze are easily available which makes it easier to determine which stock to buy.
Cons –
1. Not ideal for long term investment.
2. High risk as compared to fundamental analysis as we will not know whether the company is…[Read more]
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Vineet Kumar Nair replied to the topic What is technical analysis? in the forum Understanding the Price Movement 7 years, 1 month ago
Technical analysis studies the past price movements by focusing on the traded price, traded volume, market trends and its characteristics to predict the future price movement with the help of charts.
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Vineet Kumar Nair replied to the topic what are the Pro and cons of fundamental analysis? in the forum Understanding the Price Movement 7 years, 1 month ago
Pro – Valuable information for long term investing
Cons – Costly and time consuming. Not ideal for determining the entry and exit points for short term.
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Vineet Kumar Nair replied to the topic What is fundamental analysis? in the forum Understanding the Price Movement 7 years, 1 month ago
Fundamental analysis combines economic, industry and company analysis to derive a stock’s current value and forecast future value.
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Vineet Kumar Nair replied to the topic What are different types of charts? in the forum Understanding the Price Movement 7 years, 1 month ago
1. Line chart – Used when there are lot of data points – for investors – while using Dow theory.
2. Bar chart – Gives detailed information regarding the open, close, high and low prices – for traders.
3. Candlestick chart – Easy to understand detailed graphical representation – better alternative to bar chart – ultimate chart for technical analysis.
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Vineet Kumar Nair replied to the topic What drives the stock price? Why to price changes so often? in the forum Understanding the Price Movement 7 years, 1 month ago
Demand and supply drives the stock price.
If demand > supply, then prices are expected to increase.
If supply > demand. then prices are expected to decrease.
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Vineet Kumar Nair 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, 1 month ago
Average daily turnover in NSE is approx. 20,000 crores.
Stock price can be manipulated by stock operators in the small-cap stocks or penny stocks. Also, stronger hands and insider trading affect the stock prices.
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Vineet Kumar Nair replied to the topic What is call option and PUT option? Who decide the premium? in the forum Essentials of Trading Instruments 7 years, 1 month ago
Call option – The buyer has the rights to buy which are given to him by the seller but has no obligation. On the other hand, the seller has no rights but only obligations. The buyer makes profit if the price goes above the strike price.
Put options – The buyer has the right to sell which are given to him by the seller but has no obligation. On…[Read more]
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Vineet Kumar Nair replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 7 years, 1 month ago
A future contract is an agreement between the buyer and seller where the deal is made on a agreed price and the settlement happens in the future on the maturity date. Here, the buyer and seller have the rights to buy and sell respectively and both have the obligations to settle.
Example – The seller gives the right to the buyer to buy at 100; if…[Read more]
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Vineet Kumar Nair replied to the topic What is Futures contract? in the forum Essentials of Trading Instruments 7 years, 1 month ago
A future contract is an agreement between the buyer and seller where the deal is made on a strike price and the settlement happens in the future on the maturity date. Here, the buyer and seller have the rights to buy and sell respectively and both have the obligations to settle.
Example – The seller gives the right to the buyer to buy at 100; if…[Read more]
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