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Stock Market

Stephen Dsouza 22 Followers1w

Step towards financial freedom

#personalfinance #investments

Inflation (CPI) in US stood at 8.3% in August, higher than the estimated 8.1%.

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Vidula Sarda 4 Followers1m

Understanding Technical Analysis through Candlestick Pattern

There are broadly 2 types of analysis in the stock market: 
1. Technical Analysis

2. Fundamental Analysis

We are hereby going to discuss technical analysis in detail:

Technical Analysis:  It can be defined as assessing the stocks or investment opportunity on factors like the price of a stock, the volume of trading, high- low prices, and such short-term factors. Technical analysts are short-term traders and are hardly interested in knowing a company’s fundamentals. Although it is good to understand and analyze the fundamentals of companies and then make a prudent choice of the company you want to trade in. But generally speaking, such traders completely rely on market demand and supply factors to trade in various stocks.

In technical analysis generally, traders hold the following assumptions:

  •        The market tells everything: The market generally runs on a trend. If on a fine day stock price is fluctuating beyond normal, it might be an indicator that a high-profile investor is acting on some news. If it’s a good trend and depicts growth, one should buy the stock.
  • History repeats itself: The stock market can be compared to human psychology. So it will repeatedly tend to behave in the same way as in its past. For instance, if the stock market is showing an upward trend, then investors will enter into buying to be in alignment with the trend and vice versa.

Now, that we broadly know the assumptions in the stock market, let’s talk about how to analyze it through charts. The most popular and widely used chart is the candlestick chart. Let’s discuss that in detail.

Candlestick Chart


The candlestick chart is made of 3 components:

  •      Upper body: It depicts the high point the stock reached.
  •        Lower body: It depicts the low point the stock reached
  •      Central body: It depicts the open and close points of the stock.

Characteristics of Candlestick

So generally there can be bearish candles or bullish candles. Bearish candles are one when the closing price is less than the opening price. This represents that investors are bearish on stocks. And generally, investors sell their stock in such conditions.

Bullish candles are one when the opening price is more than the closing price. This represents that investors are bullish on the stock. And generally, investors tend to buy stocks in such conditions.

Bearish candles are generally represented in red and bullish candles in green. Although color coding may vary on the choice of trader. They may use some different colors also.

And also if you will analyze the charts closely you will notice that there are varied candles of short and long lengths. Short candles simply represent that stock is not getting traded much, and generally, such stocks should not be dealt with. Similarly, large candles represent that stocks are getting actively traded and such stock can be analyzed with much more dexterity.

Conclusion

There are various types of candlestick formations that enable an investor to devise a trading strategy for a particular stock. And by and large candlesticks formations are an effective tool to study stocks and to be able to trade wisely and prudently.

But remember if you are a long-term investor then you should never go long on any stock basis technical analysis.  For long-term investors, both fundamental and technical analysis is equally important. 

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1048

Stockguru 24 Followers1m

8+ years in stock market

#stockmarket #trading

Top Youtube Channels To Understand Stock Markets

CA Rachana Ranade: Pretty good at analysing fundamentals and explaining it in a understandable way.  Link: CA Rachana Phadke Ranade

Power of Stock - For Technical analysis and psychology building. Link: POWER OF STOCKS

Varun Malhotra -  Fundamentals of investing are taught in a beautiful way. Link: Varun Malhotra

Pranjal Kamra - Hardest concepts also will be dealt in easiest ways. The best value investor on YouTube. You just can't skip his videos. Link: pranjal kamra

Finnovationz - Makes videos mostly on current topics with good animation. Link: FinnovationZ

Sunil Minglani -  learn about the psychology of how stock markets work. Link: Sunil Minglani

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143

Mayuri Jain 49 Followers1m

Know what you own, and know why you own it.

#investments #savings #stockmarket

"Beware The Ides Of March" — 5 Market Secrets You Didn't Hear From Your Financial Advisors!

| 'Stop-loss order' can minimize your loss— Mental peace

A stop-loss order executes when the share price falls to a level that you set. Suppose you buy a share of $10 and set a 5% trailing stop(mean you will sell if the price drops 5% from the highest price). Stock picks up $15 means your stop-loss is $14.25, and so on...

| Your on-screen price is not right many times

Many times the price displayed on the screen is NOT correct. Either the stock is undervalued or expensive. For self-directed investors, this presents a fantastic opportunity. Do your homework and learn the ins and outs of the industry. If your study indicates that the stock will be higher this time next year, you may be able to get a good deal.

This goes for the whole market, too. Markets are driven by sentiment as well as fundamentals.

| Take a deep in 'Dark Pool.'

Generally, if you own a stock, you can sell it to someone else without going through a stock exchange. The exchange makes it easy to find buyers and sellers but isn't legally required. Someone who wants to sell a lot of stock without moving the price too much may prefer a dark pool.

Dark pools are typically attractive to large buyers and sellers to trade large volumes on thinly traded stocks. US holds 40% dark pools in daily trading, whereas SEBI is almost clueless.

| Are fund charges eating into your returns? — Stress the value

Whether you float, drown, or make a draw match, the fund manager always has their piece of cake.WHICH magazine said In the UK, the OCF or annual management charge typically ranges between:

0.75% -1.25% in most actively managed funds. 

Up to 1.8% turnover cost.

| HFT can win the game in nanoseconds, beat the fund manager

HFT is an algorithmic trading system that is automated. Computers are programmed to examine stock and futures prices and trade on the difference. This fluctuation might last for only a few microseconds. To the naked eye, they don't even exist. Blink, and you'd miss them. HFT traders rely on trading at near-lightspeed to profit from these inconsistencies. HFT holds 50% trade volume of the US and Indian market.

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