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Professional investors use their knowledge to identify stocks that are undervalued and have the potential to increase in price in the near future.
Technical analysis is like salt to your meal. If you do not add salt to your food, it would be tasteless and incomplete.
Trading essentially has been the most human-centric job in the world for decades. It is not only about numbers, analysis, and evaluations, but also involves a lot of human emotion, sentiments, and other factors. Wherever a human is involved, there are chances of errors and untimely decisions.
Traders can trade efficiently when they quantify risk and return for their strategy. Analyzing the history and predicting the future behaviour of a trading strategy is at the core of backtesting.
Equity Trading has been considered one of the most sought after investment avenues to earn hefty profits in the short or long term.
In stark contrast to traditional financial theories, behavioral finance states that financial decisions made by an investor are influenced by personal biases and psychological influences.
There are numerous types of investors in the financial market. Some may be comfortable with doing intraday while others may be swing traders or short sellers and others may invest systematically and be called contrarian investors.
Diamond Top Formation is one such technical analysis pattern used by traders to predict price movements.
When winter ends, the summer begins, and when summer ends, the monsoon starts. The same pattern is followed in the stock market. The price of stocks will increase after a particular decline stage and vice versa. The weather department forecasts the upcoming season, temperature and its expected intensity, etc. Likewise, there exist certain technical indicators that indicate the trends in the stock market. One such […]
Around the world, the securities market has been a constant source of curiosity and experimentation. Various traders have developed strategies and patterns after prolonged research and experience.
Businesses today strive to remain afloat amid fierce competition in their industry. One company has to level up against the other.
All businesses have one goal: Profitability. However, the term profitability is comprehensive.
The Schaff and Trend Cycle Indicator (STC) is a charting or technical indicator that allows investors to predict the market trend.
The stock market is not a lottery. But, individuals, corporations, and governments use the stock market as an auction to buy and sell securities.
Professional and experienced investors utilise every opportunity in the stock market to make profits. If the stock prices are falling, they start their research to identify a stock that is undervalued and invest in it at a time when the price is poised to rise.
The Sushi Roll technique was developed by Mark Fisher in his book ‘The Logical Trader.’ The Sushi Roll Reversal Pattern is a technical analysis tool constituting the study of candlestick charts.
Among numerous technical indicators investors use, the Williams %R indicator is one of the most effective and widely used.
Entering the stock market without a proper strategy and knowledge invites huge losses. For both trader and investor, it is important to decide a limit point at which you will sell the security. This is where the sell signal is important.
A universal fact is that financial markets and uncertainty go hand-in-hand. Price movements tend to fluctuate continuously and have an impact on trading.
Trading indicators are mathematical computations plotted as lines on a price chart that aid traders in identifying certain signs and trends of the stock market.
Pair trading involves undertaking a long and short position in stocks that have a high correlation.
The most important part of trading is to have a game plan or action plan in place. That is popularly referred to as trading strategy.
Have you ever lost your mother in the fair and panicked? You leave her hands and the next moment you are lost amongst the crowd of people without any clue. In terms of the stock market, technical analysis plays the role of your mother.
When we talk of intraday trading, we think of stop losses. But that raises a number of questions.
You must have heard the term share market trends or stock market trends quite often. What exactly are these trends and how to identify trends in stock market?
Value area is a concept that we all use in trading, either knowing or unknowingly. We look at value area as a distinct concept and understand what is value area in trading.
When you talk of value investing, what is the first name that comes to your mind? Your answer obviously would be Warren Buffett. But long before Warren Buffett entered the scene, and this has been acknowledged by Buffett himself, it was Ben Graham who came up with the idea of value investing.
Analyzing chart patterns is a competitive advantage that helps traders stand out from the crowd. Chart patterns are complete pictorial presentations showing price and volume movements during stock trading periods.
If you have been in the stock markets for some time, it is very likely that you have seen one of those glossy equity research reports either of companies or of industries. The idea of an equity research report is to give a view and a justification on why a particular stock is attractive from an investment perspective.
Most investors who started decades ago and have become successful in the stock markets are long-term investors. In the past, the stock market followed an open outcry system that did not have technology backed investing platforms and widespread financial tools for detailed analysis.
If you want to trade in stocks but can't keep up with the daily fluctuations, and don't want to engage in long-term investments, then positional trading could be ideal for you.
If you are an intraday trader, should you rely on intraday trading tips? Should you devise your own intraday trading strategies?
Worlds like equity delivery or equity market delivery are normally used interchangeably for equities. Actually, they are one and the same. To understand what is equity delivery, think of a buyer of stocks.
Continuous trading involves the immediate execution of trading orders. The trade stands executed as soon as an order is placed, and the buyer immediately becomes the stock owner.
Trading ahead is a practice where specialists or market makers put their interests ahead of the investor's financial goals.
Just as online trading is convenient and simple, it also overly relies on technology.
There exist multiple equity theories such as proprietary theory, entity theory, enterprise theory, residual equity theory, and so on. Each of these approaches presents different beneficiaries of the net receipts and different perspectives on the ways to prepare accounting records.
Candlestick is one of the most important and widely used charts by technical analysts and day traders. It informs precisely about the high, low, opening, and closing price of a security in a day represented in the shape of a candlestick.
The word Marubozu is a candlestick pattern derived from the Japanese. By the appearance of the candle, there are no wicks and shadows present at the extreme ends.
The concept of defining risk as 'R' can go a long way in allowing an investor to simplify his/her investment process. Look at the information below to further understand how you can trade successfully by defining risk as 'R'.
SEBI on Thursday notified a stricter set of insider trading norms to check illicit transactions in shares of listed firms by management personnel and 'connected persons'.
The Indian stock market has come a long way from an open outcry system where investors had to visit the stock exchanges with physical share certificates to make a trade.
Have you always wondered what trading strategies the world’s famous investors like Benjamin Graham, Warren Buffet, John Templeton, Peter Lynch and Rakesh Jhunjhunwala recommend? Find out Now!
Start your day well before the opening bell; it is a crucial time where you can get a feel for the day’s market, find potential trades, create a daily watchlist, and analyze your current position.
Any investment can typically be summed up in two words: risk and reward. The general rule of thumb is that greater the potential reward, higher is the associated risk.
In today's digital world, everything has become simpler and easier. For instance, having a demat account has made things convenient for investors and traders in the stock market
Batch trading is a style of stock or bond trading in which the trades of several similar securities are completed in a single transaction.
The Anonymous Trading definition states that it is a form of trading that occurs away from the primary or public markets.
You could be forgiven for believing that all day traders are one and the same. Actually, there are different types of day traders.
When you buy and sell stocks in the stock market using your trading account, there is a cost which is the delivery trading charges. Of course, there is brokerage for delivery, which is the fee you pay the broker for execution of the trade.
Quite simply, illiquidity is the opposite of liquidity. In the context of a business, illiquidity refers to a company or an organisation that does not have the necessary cash flows to fulfil its debt payments.
Investments without goals are like driving without a destination. Value investors always look multiple years ahead before they invest in a financial asset.
The stock market works on both data and sentiment. Many novice traders make decisions based on quick tips or have emotional biases while trading.
Every organization aims for growth. It can be in terms of revenue, market expansion, team building, and much more.
A price band is the limit beyond which the price is not allowed to move on a particular day. For example, you may have seen stocks locked in 5% upper circuit or in 10% lower circuit. We recently got to see this quite frequently in stocks such as Vakrangee, PC Jewellers, and Manpasand Beverages.
Before we understand short selling in delivery, let us spend a moment understanding the rolling settlement system in India.
How is an intraday trader different from a positional trader. As the name suggests, an intraday trader looks to close out positions on the same day and carry zero positions overnight.
An intraday trade has to opened and closed on the same day. In the rolling settlement, if it is not closed on the same day, then it goes to compulsory delivery. Hence the timing for intraday trading is from 9.15 am to 3.30 pm on a daily basis in the Indian markets.
As the name suggests, intraday trading is all about initiating and closing out the trade on the same day. Here is how intraday trading works. The trader either buys and sells on the same day or sells and then buys back the stock on the same day. Intraday trading does not result in delivery because the net position at the end of the day is zero. Hence intraday trading does not impact your demat account in any way.
We understand intraday trading as the initiation and closure of positions on the same day. You can either buy the stock and sell it by the end of day or you can even sell the stock and buy back the stock by the end of the day. In either case, there is no delivery of stocks as the net position is zero.
Intraday trading looks attractive and also looks high adrenaline. However, there is a lot of preparation required because the more you sweat in peace, the less you bleed in war.
It must have happened that you bought a stock at Rs.400 and the stock price went to Rs.395. You decided to wait and it dipped further to Rs.390.
One you have understood the concept of stop loss, the next step is to understand the stop loss procedure or how to place the stop loss. Read more about on IIFL Securities Knowledge Center.
Have you faced a situation where you bought shares and the price is falling but the system is creating problems. You orders may be going through but you are not getting confirmations.
Authorized participants are entities that can issue and redeem shares of exchange-traded funds. They provide much of the liquidity of the ETF market, by raising the underlying assets needed to create ETF shares.
No discussion on online trading is really complete without discussion of the advantages of online trading at length
Today, online trading is become more than the norm rather than the exception.
Online stock trading enables investors to buy, sell and hold shares on the go of any publicly listed company using digital platforms and online trading tools.
The universe of stocks is one of the most rewarding ones. Yes, it is true that long term investments tend to provide higher returns as good stocks always go up in price and give regular dividends to the shareholders.
One of the most vital areas of the stock market is Equities. It gives companies access to capital to grow their business, and investors a portion of ownership in a company with the potential to realize gains in their investment based on the company's future performance.
There are basic things you must understand about online trading requirements. Let us start off with how to open the online trading account.
Margin trading is a type of investing style that involves buying expensive and over your current budget stocks.You can use your regular trading and linked Demat account to activate the margin trading facility.
Is it true that there are some benefits of delivery trading over intraday trading. That would largely depend on your own trading perspective, but there is merit in that argument.
Equity trading or stock trading is the buying and selling of equities in the market through your registered trading account. To understand what is equity trading, you must first understand the concept of equities.
To understand online trading, you need to spend time and delve into the basics of online trading.
One of the common terms used in the stock markets is the term resistance. Now, resistance in share market can be technical or intuitive. For example, if you find a stock constantly touching a level of say, Rs.200 and coming down, you can call the stock price of Rs.200, its resistance in stock market. The other way to look at resistance in stock market is the technical level that you get to see in charts.
Stock splits is one of the most common corporate actions in India and across the world. Stock split or share split is about reducing the par value of a stock. For example, reducing the par value of stock from Rs.10 to Rs.5 is a 2:1 stock split and reducing the par value from Rs.10 to Rs.1 is a 10:1 stock split. Having understand the stock split meaning, let us get into detail about what is stock split.
Intraday trading has become a popular choice among new-age investors who want to make quick profits without waiting for a long time. With the right techniques, intraday trading can be a profitable endeavour.
What is delivery in stock market parlance and what is delivery trading all about. Delivery trading is when you buy a stock and take it into your demat account or when you sell a stock you hold via a debit to your demat account.
You know that when you buy stocks the delivery of stocks will be received on T+2 date. But have you ever wondered what goes on between the time you place the order and it is executed and the time you get the delivery of stocks in your demat account
Individuals have direct access to a wide range of investing possibilities in the modern world. Every investment opportunity, from stocks and bonds to real estate and commodities, has a different mix of advantages and disadvantages. Sovereign Gold Bonds (SGBs) are one such investment option that has grown in popularity in recent years. The Indian government is the issuer of these bonds, which are supported by […]
Individuals have direct access to a wide range of investing possibilities in the modern world. Every investment opportunity, from stocks and bonds to real estate and commodities, has a different mix of advantages and disadvantages. Sovereign Gold Bonds (SGBs) are one such investment option that has grown in popularity in recent years. The Indian government is the issuer of these bonds, which are supported by […]
Traders and investors are constantly searching for methods to increase earnings, reduce risks, and outperform the market’s average returns. As a result, several theories have been proposed to explain or comprehend the actions and results of the stock market as a whole. Moreover, economists, scholars, and investors have all put forth these theories over time to explain how the stock market functions and how it […]
Moving averages are a powerful and useful concept in trading. It is an integral part of technical analysis.
Scalping is the shortest-term trading method where investors use high trading volumes to make a profit rather than trying to increase profits for each trade.
Gann indicators are normally considered to be a lot more about mathematics and less about charts and technicals. However, Gann indicators have been used quite extensively in identifying opportunities in the stock markets, both at the index level and the stock level.
A stock exchange is a place where financial instruments like equities, futures and options are bought and sold. In short, these equity and other financial products are traded real time on the stock exchange.
Investors should be aware of a variety of phrases pertaining to trading in the financial markets. It is possible to trade without fully understanding the assets you are buying or selling. Still, it is not a wise decision to be uninformed about the basic terminology used in the markets. Tick size is one of the key ideas that you should learn, yet it’s one that’s […]
The Williams %R Indicator can be very useful for even entry-level investors in deciding when to enter and exit a commodity or security based on the current pricing of securities as compared to the “correct” price or “real” value of the security.
Range trading is used when there is no particular trend prevailing in the market. It is when market movements constantly occur between two price levels for a certain time. This can be used for all time frames from five-minute charts to daily and monthly charts.
Investors leverage numerous indicators during technical analysis. However, there is one method that was never made for the stock market and yet is used by investors to identify profitable stocks. The method called Fibonacci Retracement is one of the most interesting yet baffling techniques that seem to work effectively for investors without them knowing why.
For a new investor, stock markets can be an alluring place. While trading for the first time, it might feel like legalised gambling, where people make and lose their fortunes
In the stock markets, one word you get to hear often is the KYC or the Know Your Client formality. Before opening an equity trading account, you need to do the KYC and that broadly requires submitting details like your PAN card, cancelled cheque , proof of identity, proof residence to the broker for SEBI records.
The one principle that any financial market follows is Trends. A Trend is the direction of the market; it can be bearish (falling prices) or bullish (rising prices).
Leverage in stock markets actually comes in various forms. There is the basic leverage of margin trading where you can pay a small margin and trade intraday. Leverage in the stock market also arises from the ability to pay just part of a delivery trade and borrow the rest in the market. Leverage in the share market can also arise from futures trading where you […]
The process to identify the current trend and when it is going to reverse is a part of an extended process called Technical Analysis. This analysis is the study of chart patterns, graphs and diagrams on a screen. The idea is to understand price and volume trends and pick stocks accordingly.
Position Trading is a long term investing approach which follows the strategy of buy-and-hold for months or even years.
Open interest (OI) is one of the key analytical tools that help one take a price view on stocks and even on the indices. Unlike equity shares that are limited by the number of shares issued, there is no such limit on open interest.
The financial market system in India can be broadly classified into two areas; the cash segment and the derivative segment. The cash segment has always been an investor favourite of the investors. However, India has witnessed a huge surge in derivatives’ turnover and trading volume in the past few years.
If you want to trade in share markets, you should understand the fundamentals of share trading. One such aspect is knowing the difference between online and offline trading.
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