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  • CANDLESTICK SIGNALS

    CANDLESTICK SIGNALS

    1.The Doji

    Criteria:

    •  The open and the close are the same or nearly the same.
    •  The length of the shadow should not be excessively long, especially when viewed at the end of a bullish trend.

    Signal Enhancements:

    1. A gap away from the previous day’s close sets up for a stronger reversal move.
    2. Large volume on the signal day increases the chances that a blowoff day has occurred, although it is not a necessity.
    3. It is more effective after a long candle body, usually an exaggerated daily move compared to the normal daily trading range seen in the majority of the trend.
    https://www.youtube.com/watch?v=YWMcGyD2a4I&t=1s

    2. Bullish Engulfing

                         

    Criteria:

    • The body of the second day completely engulfs the body of the first day. Shadows are not a consideration.
    •  Prices have been in a definable uptrend, even if it has been short term.
    • The body of the second candle is the opposite color of the first candle,the first candle being the color of the previous trend. The exception to this rule is when the engulfed body is a Doji or an extremely small body.

    Signal Enhancements:

    1. A large body engulfing a small body. The previous day was showing that the trend was running out of steam. The large body shows that the new direction has started with good force.
    2. When the Engulfing Pattern occurs after a fast move down, there will be less supply of stock to slow down the reversal move. A fast move makes a stock price over-extended and increases the potential for profit taking.
    3. Large volume on the engulfing day increases the chances that a blowoff day has occurred.
    4. The engulfing body engulfing more than one previous body demonstrates power in the reversal.
    5. If the engulfing body engulfs the body and the shadows of the previous day, the reversal has a greater probability of working.
    6. The greater the open gaps down from the previous close, the greater the probability of a strong reversal.

    3. Bearish Engulfing

    Criteria:

    • The body of the second day completely engulfs the body of the first day.Shadows are not a consideration.
    • Prices have been in a definable uptrend, even if it has been short term.
    • The body of the second candle is the opposite color of the first candle,the first candle being the color of the previous trend. The exception to this rule is when the engulfed body is a Doji or an extremely small body.

    Signal Enhancements:

    1. A large body engulfing a small body. The previous day was showing that the trend was running out of steam. The large body shows that the new trend was running out of steam. The large body shows that the new.
    2. When the Engulfing Pattern occurs after a fast spike up, there will be less supply of stock to slow down the reversal move. A fast move makes a stock price over-extended and increases the potential for profit taking and a meaningful pullback.
    3. Large volume on the engulfing day increases the chances that a blowoff day has occurred.
    4. The engulfing body engulfing more than one previous body demonstrates power in the reversal.
    5. If the engulfing body engulfs the body and the shadows of the previous day, the reversal has a greater probability of working.
    6. The greater the open gaps up from the previous close, the greater the probability of a strong reversal.
    https://www.youtube.com/watch?v=KkKanyv_VOQ&t=192s

    4. Hammer

                            

    Criteria:

    •  The lower shadow should be at least two times the length of the body.
    •  The real body is at the upper end of the trading range. The color of the body is not important although a white body should have slightly more bullish implications.
    • There should be no upper shadow or a very small upper shadow.
    •  The following day needs to confirm the Hammer signal with a strong bullish day.

    Signal Enhancements:

    1. The longer the lower shadow, the higher the potential of a reversal occurring.
    2. A gap down from the previous day’s close sets up for a stronger reversal move provided the day after the Hammer signal opens higher.
    3. Large volume on the Hammer day increases the chances that a blowoff day has occurred.

    5. Hanging Man

             

    Criteria:

    • The upper shadow should be at least two times the length of the body.
    •  The real body is at the upper end of the trading range. The color of the body is not important although a black body should have slightly more bearish implications.
    • There should be no upper shadow or a very small upper shadow.
    • The following day needs to confirm the Hanging Man signal with a blackcandle or, better yet, a gap down with a lower close.

    Signal Enhancements:

    1. The longer the lower shadow, the higher the potential of a reversal occurring.
    2. A gap up from the previous day’s close sets up for a stronger reversal move provided the day after the Hanging Man signal trades lower.
    3. Large volume on the signal day increases the chances that a blowoff day has occurred, although it is not a necessity.

    6. Piercing Candle

                          

    Criteria:

    • The body of the first candle is black; the body of the second candle is white.
    • The downtrend has been evident for a good period. A long black candle occurs at the end of the trend.
    • The second day opens lower than the trading of the prior day.
    • The white candle closes more than halfway up the black candle.

    Signal Enhancements:

    1. The longer the black candle and the white candle, the more forceful the reversal.
    2. The greater the gap down from the previous day’s close, the more pronounced the reversal.
    3. The higher the white candle closes into the black candle, the stronger the reversal.
    4. Large volume during these two trading days is a significant confirmation.

    7.Dark Cloud Cover

                             

    Criteria:

    •  The body of the first candle is white; the body of the second candle is black.
    • The uptrend has been evident for a good period. A long white candle occurs at the top of the trend.
    • The second day opens higher than the trading of the prior day.
    • The black candle closes more than halfway down the white candle.

    Signal Enhancements:

    1. The longer the white candle and the black candle, the more forceful the reversal.
    2. The higher the gap up from the previous day’s close, the more pronounced the reversal.
    3. The lower the black candle closes into the white candle, the stronger the reversal.
    4. Large volume during these two trading days is a significant confirmation.

    8. Bullish Harami

                        

    Criteria:

    • The body of the first candle is black; the body of the second candle is white.
    • The downtrend has been evident for a good period. A long black candle occurs at the end of the trend.
    • The second day opens higher than the close of the previous day and closes lower than the open of the prior day.
    • Unlike the Western Inside Day, just the body needs to remain in the previous day’s body, whereas the Inside Day requires both the body and the shadows to remain inside the previous day’s body.
    • For a reversal signal, further confirmation is required to indicate that the trend is now moving up.

    Signal Enhancements:

    1. The longer the black candle and the white candle, the more forceful the reversal.
    2. The higher the white candle closes up on the black candle, the more convincing the signal that a reversal has occurred despite the size of the white candle.

    9. Bearish Harami

                         

    Criteria:

    • The body of the first candle is white; the body of the second candle is black.
    • The uptrend has been apparent. A long white candle occurs at the end of the trend.
    • The second day opens lower than the close of the previous day and closes higher than the open of the prior day.
    • For a reversal signal, confirmation is needed. The next day should show weakness.

    Signal Enhancements:

    1. The longer the white candle and the black candle, the more forceful the reversal.
    2. The lower the black candle closes down on the white candle, the more convincing that a reversal has occurred, despite the size of the black candle.

    10.Morning Star

     

    Criteria:

    • The downtrend has been apparent.
    • The body of the first candle is black, continuing the current trend. The second candle is an indecision formation.
    • The third day shows evidence that the bulls have stepped in. That candle should close at least halfway up the black candle.

    Signal Enhancements:

    1. The longer the black candle and the white candle, the more forceful the reversal.
    2. The more indecision that the star day illustrates, the better probabilities that a reversal will occur.
    3. A gap between the first day and the second day adds to the probability that a reversal is occurring.
    4. A gap before and after the star day is even more desirable.
    5. The magnitude, that the third day comes up into the black candle of the first day, indicates the strength of the reversal.

    11.Evening Star

                        

    Criteria:

    • The uptrend has been apparent.
    • The body of the first candle is white, continuing the current trend. The second candle is an indecision formation.
    • The third day shows evidence that the bears have stepped in. That candle should close at least halfway down the white candle.

    Signal Enhancements:

    1. The longer the white candle and the black candle, the more forceful the reversal.
    2. The more indecision that the star day illustrates, the better probabilities that a reversal will occur.
    3. A gap between the first day and the second day adds to the probability that a reversal is occurring.
    4. A gap before and after the star day is even more desirable. The magnitude, that the third day comes down into the white candle of the first day, indicates the strength of the reversal.

    12. Kicker

          

    Criteria:

    • The first day’s open and the second day’s open are the same. The price movement is in opposite directions from the opening price.
    • The trend has no relevance in a kicker situation.
    • The signal is usually formed by surprise news before or after market hours.
    • The price never retraces into the previous day’s trading range.

    Signal Enhancements:

    1. The longer the candles, the more dramatic the price reversal.
    2. Opening from yesterday’s close to yesterday’s open already is a gap. However, gapping away from the previous day’s open further enhances the reversal.

    13. Shooting Star

                       

    Criteria:

    • The upper shadow should be at least two times the length of the body.
    • The real body is at the lower end of the trading range. The color of the body is not important although a black body should have slightly more bearish implications.
    • There should be no lower shadow or a small lower shadow.
    • The following day needs to confirm the Shooting Star signal with a black candle or, better yet, a gap down with a lower close.

    Signal Enhancements:

    1. The longer the upper shadow, the higher the potential of a reversal occurring.
    2. A gap up from the previous day’s close sets up for a stronger reversal move.
    3. The day after the Shooting Star signal opens lower.
    4. Large volume on the Shooting Star day increases the chances that a blowoff day has occurred, although it is not a necessity.

    14. Inverted Hammers

                  

    Criteria:

    • The upper shadow should be at least two times the length of the body.
    • 2. The real body is at the lower end of the trading range. The color of the body is not important, although a white body should have slightly more bullish implications.
    • There should be no lower shadow or a very small lower shadow.
    • The following day needs to confirm the Inverted Hammer signal with a strong bullish day.

    Signal Enhancements:

    1. The longer the upper shadow, the higher the potential of a reversal occurring.
    2. A gap down from the previous day’s close sets up for a stronger reversal move provided.
    3. The day after the hammer signal opens higher.
    4. Large volume on the Reverse Hammer day increases the chances that a blowoff day has occurred.
    https://www.youtube.com/watch?v=q2BvvyL0z8c

    15. Tri Star

    Criteria:

    • All three days are Dojis.
    • The middle day gaps above or below the first and third day. The length of the shadow should not be excessively long, especially when viewed at the end of a bullish trend.

    Signal Enhancements:

    1. The greater the gap, away from the previous day’s close, the more it sets  up for a stronger reversal move.
    2. Large volume on one of the signal days increases the chances that a significant reversal is taking place.

    16. Three Black Crows

                      

    Criteria:

    • Three long black bodies occur, all of nearly equal length.
    • The prior trend should have been up.
    • Each day opens within the body of the previous day.
    •  Each day closes near its low.

    17. Two Crow

                         

    Criteria:

    • A long white candle continues the uptrend.
    • The real body of the next day is black while gapping up and not filling the gap.
    • The third day opens within the second day’s body and closes within the white candle’s body. This produces a black candle that fills in the gap.

    Signal Enhancements:

    1. If the third day was to close more than halfway down the white candle, it would form an Evening Star pattern.

    18. UpSide Gap Two Crows

    Criteria:

    • A long white candle continues the uptrend.
    • The real body of the next day is black while gapping up and not filling the gap.
    • The third day opens higher than the second day’s open and closes below the second day’s close. This produces a black candle that completely engulfs the small black candle.
    • The close of the third day is still above the close of the last white candle.

    Signal Enhancements:

    1. If the third day were to close within the white candle, it would become Two Crows.

    19. Counterattack Lines

                 

    Criteria:

    1. The first Candlestick body should continue the prevailing trend.
    2. The second Candlestick gaps open continuing the trend.
    3. The real body of the second day closes at the close of the first day.
    4. The body of the second day is the opposite color of the first day’s.
    5. Both days should be long candle days.

    Signal Enhancements:

    1. The longer the bodies, the more significant the reversal pattern.

    20. Belt Hold

              

    Criteria:

    • The Candlestick body should be the opposite color of the prevailing trend.
    • It significantly gaps open, continuing the trend.
    • The real body of the Candlestick has no shadow at the open end. The open is the high or low of that trend.
    • The length of the body should be a long body. The greater the length,the more significant the reversal signal.

    Signal Enhancements:

    1. The longer the body, the more significant the reversal pattern.

    21. Unique Three River Bottom

                     Criteria:

    • The Candlestick body of the first day is a long black candle, consistent with the prevailing trend.
    • The second day does a Harami/Hammer. It also has a black body.
    • The second day’s shadow has set a new low.
    • The third day opens lower, but not below the lowest point of the previous day. It closes higher but below yesterday’s close.

    Signal Enhancements:

    1. The longer the shadow of the second day, the probability of a successful reversal becomes greater.

     

    22. Breakaways

     Criteria:

    • The first day is a long-body day and has the color of the existing trend.
    • The second day gaps away from the previous close. It has the same color as the first day candle.
    • Days three and four have closes that continue the trend.
    • The last day is an opposite-color day that closes in the gap area between day one and day two.

    23. Three Inside Up & Three Inside Down                            

    Criteria:

    • The Harami pattern is the overriding signal component of this pattern.
    • The harami body should be the opposite color of the long candle day.
    • Day three has a close that is higher than the open of day one. Or lower than day one in the bearish indicator.

    24. Three Stars In The South

                   

    Criteria:

    • The first black candle day has a lower shadow that indicates buying stepping in—almost a Hammer but not quite.
    • The second day is like the first but on a smaller scale.
    • Day three should be a Marubozu with no shadows. It is within the previous day’s trading range.

    25. Three White Soldiers

    Criteria:

    • Each consecutive long candle closes with a higher close.
    • The second and third Candlesticks open in the previous day’s body.
    • The opens should be within the top half of the previous day’s body.

    26. Advance Block

                

    Criteria:

    • Each white candle occurs with higher closes.
    • The opens occur in the previous day’s body.
    • The bodies are getting smaller, and/or the upper shadows are getting longer.

    27. Deliberation

    Criteria:

    • The first two white candles are relatively equal long candles.
    • The third day is a small body.
    • The small body opened at or very near the previous day’s close. Or it may have gapped up slightly.

    28. Concealing Baby Swallow

     Criteria:

    • Two large Black Marubozus make up the beginning of this pattern.
    • The third day is a Reverse Hammer formation. It gaps down from the previous day’s close.
    • The final day completely engulfs the third day, including the shadow.

    29. Stick Sandwich

             

    Criteria:

    • A downtrend is concluded with a large black candle followed by a white candle. The white candle opens above the black candle close and closes above the black candle’s open.
    • The final day completely engulfs the white candle and closes at the same level as the previous black candle.

    30. Homing Pigeon

       Criteria:

    • The body of the first candle is black; the body of the second candle is black.
    • The downtrend has been evident for a good period. A long black candle occurs at the end of the trend.
    • The second day opens higher than the close of the previous day and closes lower than the open but above the closing price of the prior day.
    • Unlike the Western Inside Day, just the body needs to remain in the previous day’s body, whereas the Inside Day requires both the body and the shadows to remain inside the previous day’s body.
    • For a reversal signal, further confirmation is required to indicate that the trend is moving up.

    Signal Enhancements:

    1. The higher the second candle closes up on the first black candle, the more convincing it is that a reversal has occurred.

    31. Ladder Bottom

                 

    Criteria:

    • Like the Three Black Crows pattern, the beginning of the signal has three black candle days, each with lower opens and closes of the previous day.
    • The fourth day resembles a reverse hammer, opening, then trading up during the day before closing on its low.
    • The final day opens above the open of the previous day open, a gap up and upward continuation for the rest the day, a Kicker-type pattern. It finally closes above the trading range of the previous three days.

    32. Matching Low

    Criteria:

    • The body of the first candle is black; the body of the second candle is black.
    • The downtrend has been evident for a good period. A long black candle occurs at the end of the trend.
    • The second day opens higher than the close of the previous day and closes at the same close as the prior day.
    • For a reversal signal, further confirmation is required to indicate that the trend is moving up.

    33. Upside Tasuki Gap

    Criteria:

    • An uptrend is in progress. A gap occurs between two candles of the same color.
    • The color of the first two candles is the same as the prevailing trend.
    • The third day, an opposite color candlestick opens within the previous candle and closes below the previous open.
    • The third day close does not fill the gap between the two white candles.
    • The last two candles, opposite colors, are usually about the same size.

    34. Downside Tasuki Gap

    Criteria:

    • A downtrend is in progress. A gap occurs between two candles of the same color.
    • The color of the first two candles is the same as the prevailing trend.
    • The third day, an opposite color Candlestick opens within the previous candle and closes below the previous open.
    • The third day close does not fill the gap between the two black candles.
    • The last two candles, opposite colors, are usually about the same size.

    35. On Neck Line 

                 

    Criteria:

    •  A long black candle forms in a downtrend.
    • The next day gaps down from the previous day’s close; however, the body is usually smaller than one seen in the Meeting Line pattern.
    • The second day closes at the low of the previous day.

    36. In Neck Line 

    Criteria:

    • A long black candle forms in a downtrend.
    • The next day gaps down from the previous day’s close; however, the body is usually smaller than one seen in the Meeting Line pattern.
    • The second day closes at the close or just slightly above the close of the previous day.

    37. Thrusting

    Criteria:

    • A long black candle forms in a downtrend.
    • The next day gaps down from the previous day’s close; however, the body is usually bigger than the ones found in the On Neck and In Neck patterns.
    • The second day closes just slightly below the midpoint of the previous day’s candle.

    38. Rising Three Method

    Criteria:

    • An uptrend is in progress. A long white candle forms.
    • A group of small-bodied candles follow, preferably black bodies.
    • The close of any of the pullback days does not close lower than the open of the big white candle.
    • The final day opens up into the body of the last pullback day and proceeds to close above the close of the first big white candle day.

    39. Falling Three Method

                       

    Criteria:

    • A downtrend is in progress. A long black candle forms.
    • A group of small-bodied candles follows, preferably white bodied.
    • The close of any of the uptrend days does not close higher than the open of the big white candle.
    • The final day opens up into the body of the last uptrend day and proceeds to close below the close of the first big black candle day.

    40. Side By Side white Lines

                                              

    Criteria:

    • An uptrend is in progress. A gap occurs between two candles of the same color.
    • The color of the first two candles is the same as the prevailing trend.
    • The third day, a candle opens at the same or near the open price of the previous day.
    • The third day closes near the close of the previous day.

    41. Separating Lines

    Criteria:

    • An uptrend is in progress. Then a day occurs that is the opposite color of the current trend.
    • The second day opens at the open of the previous day.
    • The second day should open on its low for the day and proceed higher.

                 

    42. Mat Hold

    Criteria:

    • An uptrend is in progress. A long white candle forms.
    • A gap up day that closes lower than its open creates a small black candle.
    • The next two days form small candles somewhat like the Rising Three Method.
    • The final day gaps up and closes above the trading ranges of the previous four days.

    43. Three Line Strike

             

    Criteria:

    • Three White Soldiers, three white candles, are continuing an uptrend.
    •  The fourth day opens higher, but then pulls back to close below the open of the first white candle.

    Refered from book  Candlestick Trading

  • WHAT IS PUT CALL RATIO

    WHAT IS PUT CALL RATIO

    DEFINITION:

    “The ratio of the volume of put options traded to the volume of call options traded, which is used as an indicator sentiment (bullish or bearish).”
    Put-call ratio (PCR) is an indicator that forecast the trend of the INDEX/STOCKS.

    A “Put” or put option is a right to sell an asset at a predetermined price. A “Call” or call option is right to buy an asset at a predetermined price. Many traders use options for directional beta; buying call when market bullish & buying put when market bearish.

    PCR is a popular derivative indicator, specifically designed to help traders gauges the overall sentiment of the market. The ratio is calculated either on the basis of options trading volumes or on the basis of the open interest for a particular period.

    This indicator will show you which gang is dominating the market; the bearish gang (short masters), or the bullish gang (long masters).

    The put call ratio can be calculated for any individual stock, as well as for any INDEX, or can be aggregated.

    HOW TO ANALYSES PCR:   

    The put call ratio is calculated by the dividing the number of OPEN INEREST of put option by the number of OPEN INEREST of call option.

    PCR (OI) = PUT OPEN INTEREST ON GIVEN DAY/ CALL OPEN INTEREST ON SAME DAY:

    PCR for marker wide position can be also be calculated by taking total number of OI for all OI call options & for all OI options in a given series.The PCR can be calculated for indices, indivu

    Eg.

    PUT (OI)                                                        CALL (OI)

    CURRENT MONTH                                  CURRENT MONTH
    NEXT MONTH                                           NEXT MONTH
    FAR MONTH                                               FAR MONTH

    PCR = PUT (OI)/ CALL (OI)
    PCR = ?

    • A rising put-call ratio, or a ratio greater than .7 or exceeding 1, means that equity traders are buying more puts than calls. It suggests that bearish sentiment is building in the market. Investors are either speculating that the market will move lower or are hedging their portfolios in case there is a sell-off.
    • A falling put-call ratio, or below .7 and approaching .5, is considered a bullish indicator. It means more calls are being bought versus puts.

     

    Also Read | What is Index?

  • What is SWING TRADING

    What is SWING TRADING

    Swing trading is a short-term trading method that can be used when trading stocks & options. Whereas day trading positions last less than one day, swing trading position typically last two to six days, but may last as long as two week or month.

    Swing trading is a short-term strategy used by traders to buy & sell stocks whose technical indicator suggest an upward or downward trend in the near future generally one day or two weeks.

    Swing trading uses technical analysis to determine whether or not particular stocks will go up or down in the very hear term. By examining technical indicators, day traders look for stocks whose price movement have momentum signaling the best times to buy or sell. Swing traders are not concerned with the long-term value of a given stock.

     

    TWO KEYS OF SWING TRADING STRATEGIES

    1. OOPS

    2. MEAN REVERSION

     

    1. OOPS

    • Object Oriented Programming Strategy.
    • Simple OOPS trades developed by Larry Williams at least 30 years ago.

    RULES

    • SE TUP – Any opening gap, whether up or down offers a potential signal.
    1. LONG – On a gap down, place a buy – stop at yesterday’s low.
    2. SHORT – On a gap up, place a sell – stop at yesterday’s high.

    EXIT ON THE ‘FIRST PROFITABLE OPENING’ (FPO)

    1. FPO stop exit the trade the first time a position opens with a profit.
    2. Testing shows this consistently makes money by holding a position overnight.
    3. Exit on 20% stop loss.
    • The stop loss is below the low of the same day.

    ITS VERY EASY TO IDENTIFY OOPS PATTERN IN THE CHART:

    • OOPS BUY
    1. If you are watching daily charts, the first condition is that there has to be a SUSTAINED downtrend for a few trading sessions. I mean few RED CANDLES on daily charts.
    2. On the last day of downtrend, the OOPS buy occurs, there is a gap down, which open well below the previous day’s low.
    3. During the course of trading the stock rises & goes above the previous day’s low & also the previous day’s close.

    • OOPS SELL
    1. If you are watching daily charts, the first condition is that there has to be a SUSTAINED uptrend for a few trading sessions. I mean WHITE CANDLE on daily charts.
    2. On the last day of uptrend when the OOPS sell occurs, there is a gap up opening, which opens well above the previous day’s high.
    3. During the course of trading the stock corrects & goes below the previous day’s high, & also the pervious day,s close.

    2. MEAN REVERSION

    Mean reversion is a theory used in finance that suggests that assets price & historical returns eventually return back to the long run mean or average level of the entire data set. This mean or average can be the historical average of the price or return,or another relevant average such as the growth in the economy or the average return of an industry.
    The idea of mean reversion is rooted in a well known concept called regression to the mean.
    This is a theory first observed by statistician francis gallon.

    The two most popular types of trading strategies are momentum & mean reversion. A mean reversion trading strategy involves betting that prices will revert back toward the mean or average.

    When the market is moving sideways or consolidating, a particular asset might exhibit mean reversion in the short run & trend following strategies will not work.. prices & returns eventually move back to their mean or average stance this concept forms the basis of many successful strategies.

    How do we identify the underlying trend? That’s the essence of this strategy! Consider the dummy example below:

     

    We calculate the 90-day Moving Average(90d MA) of the stock price and treat that as the underlying stable trend. We also calculate the 30-day Moving Average(30d MA) and can see that it zig-zags around the 90d trend. Now we can build the following strategy:

    • When the value of 30d MA falls below 90d MA we expect it to revert back to the 90d line. That is, the current price is too low and likely to increase. Hence this is a signal to buy
    • Similarly, if the value of 30d MA rises above 90d MA we expect it to fall back to the 90d line. Hence the current price is too high and is a signal to sell

     

     

     

     

     

     

     

  • 10 things you should know about stock Market

    10 things you should know about stock Market

    1. Do Not Borrow Money to Invest in Stocks.

    One other mistake new investors make is utilizing borrowed funds to pay for shares. That is nearly at all times a horrible concept that may result in disaster. Once you borrow cash to spend money on shares, you might be inviting one other particular person or establishment which can not have your greatest curiosity at coronary heart into the decision-making course of. Cease the entire nonsense about “good debt” and “dangerous debt” and notice that threat discount is usually extra vital than your compound annual progress fee.

    2. Know What You Need, And What You’re Paying For.

    The evolving brokerage business is a beehive of competitors to supply the most recent and biggest buying and selling choices, however for many buyers the essential necessities could be discovered wherever.

    Ensure you know the kind of purchase or promote order you are coming into. A market order, as an illustration, will likely be executed as quickly as doable, regardless of the prevailing market value; a restrict order against this will solely full the transaction inside value parameters you have established.

    3. Different brokerages have different strengths and weaknesses.

    Naturally, totally different brokerages have very totally different strengths and weaknesses. Some have very excessive charges on transactions however will provide a ton of assist to particular person buyers. Others may provide decrease charges however be very hands-off. Some may cost nothing for sure sorts of transactions (often if you’re shopping for the corporate’s personal investments, which I’ll clarify beneath).

    What brokerage do I take advantage of? I take advantage of Motilal Oswal. That is largely as a result of I make investments my very own cash in it for which they don’t cost any excessive transaction charges. You’ll be able to examine Motilal Oswal brokerage companies in my subsequent weblog.

    4. The Chart

    Studying to learn a chart is a talent that takes time, however primary chart studying takes little or no talent. As famed investor Dennis Gartman says on a regular basis on CNBC, if an funding’s chart begins on the decrease left and ends on the higher proper, that is a very good factor. If the chart is heading down, keep away and do not attempt to determine why. There are literally thousands of shares to select from with out choosing one that’s shedding cash. If you happen to actually imagine on this inventory, put it in your watch checklist and are available again to it at a later time.

    There are lots of individuals who imagine in investing in shares which have scary wanting charts, however they’ve analysis time and sources that you simply most likely do not.

    5. Buy Low, Sell High.

    Sounds so easy proper? And but investing is a uncommon a part of our monetary lives the place issues getting cheaper seems like a nasty factor. Few shoppers are lamenting cheaper costs on the pump amid the collapse in oil costs over the past yr and a half, but a reasonable market fall is handled because the dying knell for the bull market.

    These are information that aren’t mutually unique: the present bull market will finish, and over nearly any long-term horizon shares have confirmed to be useful investments that usually grind increased.

    6. Trade what you see, not what you Think.

    As a dealer, you could have most likely learn that you should management your feelings and give attention to logic and objectivity as an alternative of giving into the impulses of greed, hope, and concern. Nevertheless, it’s one factor to know you shouldn’t commerce emotionally and one other to truly know HOW to NOT commerce emotionally and how you can implement this information.

    Whereas “buying and selling what you see” describes the optimum state of affairs during which merchants make goal choices primarily based on sound value evaluation, “commerce what you assume” is the precise reverse and it’s how nearly all of merchants make their buying and selling choices – pushed by feelings, impulses and wishful considering.

    As a way to turn out to be a persistently worthwhile dealer it’s needed to plot a plan utilizing our extra logical and goal frontal lobe part of the mind, which is the latest space of the human mind and permits us to plan, motive, and comprehend sophisticated concepts.

    By studying to commerce what we see, and never what we expect, we will ensure that we’re working on logic and objectivity as an alternative of emotion.

    7. Watch out for red flags.

    There are a number of pink flags to look at for when selecting shares. Simply to call a number of, rookies ought to keep away from the next sorts of shares

    Corporations that do not earn any earnings

    Shares whose share costs appear to at all times drop (have a look at the three- or five-year chart)

    Corporations which are beneath investigation

    Corporations with a lot of debt

    Shares with current dividend cuts, or an unstable dividend historical past

    8.  Don’t put all Eggs in one basket.

    It is a piece of recommendation which signifies that one shouldn’t focus all efforts and sources in a single space as one may lose every part.

    Don’t pull all of your eggs in a single basket; means don’t threat every part . If you happen to maintain all of your egg in a single basket, if the basket will get stolen or somebody drop the basket then you find yourself shedding all of your eggs. However however in case you had stored your eggs on a number of baskets and if one had been dropped by somebody or received stolen. Then you definately would have free solely a few of your eggs not all.

    This proverb can be relevant in stock Market.

    If you happen to make investments your total cash on one shares, and if the share goes down, it can take you down. That’s the reason it’s suggested by no means totally depending on one share. As a substitute make investments on a number of shares. Thus if one goes down you lose few cash not all.

    9.  If you cannot control your emotions, you cannot be in share market.

    Unless you can watch your stock, holding decline by 50% without becoming panic, you should not be in stock market.

    Don’t let feelings cloud your judgement. Many buyers have been shedding cash in stock markets because of their lack of ability to manage feelings, significantly concern and greed.In a bear market, however, buyers panic and promote their shares at rock-bottom costs.

    Greed augments when buyers hear tales of fabulous returns being made within the stock market in a brief time frame. “This leads them to take a position, purchase shares of unknown corporations or create heavy positions within the futures phase with out actually understanding the dangers concerned.”

    As a substitute of making wealth, these buyers thus burn their fingers very badly the second the sentiment available in the market reverses. In a bear market, however, buyers panic and promote their shares at rock-bottom costs. Thus, concern and greed are the worst feelings to really feel when investing, and it’s higher to not be guided by them.

    10.  Buy right and hold tight.

    In share market before buying anything one should have a total knowledge about it, because right buying is one of the most important factor in share market. Before buying any share there are certain parameters one should look. Buying right in shares means you have to see the Fundamental Analysis should be strong.

    It should be technically strong and its should up trending. One should also see that the company must be listed at least from last 5-7 years. Also should check the dividend ratio of last few years.

    And once this all parameters are in favor, the shares are purchased the the role come of hold tight. Try to hold the shares for longer time to take the benefits of it. Just because the rates are falling or rising that dosen’t means it’s a right time to sell it. We should have a control on it and try to hold the shares. Selling of shares should be depend on it’s graphs, charts & company condition and not the price. Yes, price may also be one of the reason for selling the shares, but should not be the only factor.

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