Candlesticks are the price behavior for the time allotted. If you select a 4-minute time frame, each candle will carry a time value of 4mts. If the candle closes above the previous close, then it is a green candle. If it closes lower, it will be a red candle. Each candle shows the psychology of…
Bullish means — the prices are expected to go up in the future. Bearish means — the prices will decline. Trading in a range means the prices are flat and no appreciation/depreciation is likely The simplest way to sense the direction of a stock is to use the moving average indicator on the chart. If the slope is positive — then…
It is called the moving average cross-over technique. Steps to get this indicator 1. open the chart of your favorite stock 2. Add 50 EMA indicator 3. Add 200 EMA indicator 4. check for the crossings In the above chart, the purple line is 50 EMA and the blue line is 200 EMA. When 50…
Supports are areas where the stock will take a pause — because more people will be interested in buying. Resistances are areas where the stock will pause, but this time more people are interested in selling. Supports will appear below the current traded price and resistance will appear above. see the horizontal lines drawn When the price was…
Trending markets are like T20, full of thrill and fun. Non-directional markets like Test match cricket, are mostly boring. By now you already know how to find a trending market and a non-directional market Answer: look at the slope of the moving average. if it is parallel to the x-axis it is a non-directional market….
Commercial Banks like HDFC Bank, ICICI Bank, and SBI may require funds. The easiest way to raise them would be to borrow from the Reserve Bank of India (RBI). The rate of interest at which RBI loans money to commercial banks is called Repo Rate. The current Repo rate is 6.5%. Similarly, the rate of…
Volatility is the probability that a stock swings up and down from its base price. If there are 2 stocks, stockA which swings 5% every day, and then stockB which swings 2% every day — then stockA is more volatile than stockB. Higher swings mean higher uncertainty and hence the options premium will be higher for stockA…
when we discuss about value stocks, we need to learn a bit of fundamental analysis also — so it will be quite lengthy. Hope you all remember the P/E ratio we learned last week, P/E = Price/EPS. When you divide the P/E by the growth rate of the company, we get a new ratio called PEG. For…
There are many risks in stock markets — a few of them are 1. Liquidity risk 2. Credit risk 3. Default risk 4. Interest rate or Re-investment risk 5. Inflation risk 6. Concentration risk Concentration is when most of your money is in 2 or 3 stocks. And if something happens to those stocks — you lose your savings….
Suppose you have a house worth 1 crore and you have spent your entire life savings to build it. If something happens to this house — it may put your financial goals in trouble. In such a case what will you do? The answer is to insure your house against damages, natural calamities, and accidents. Insurance will…
