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Fundamental-analysis

Top Trader SetupThe 3 5 7 rule is a risk management strategy in trading that emphasizes limiting risk on each individual trade to 3% of the trading capital, keeping overall exposure to 5% across all trades, and ensuring that winning trades yield at least 7% more profit than losing trades. What is a good setup for day trading? A good day trading setup includes a powerful computer or laptop, high-resolution monitor or monitors, ergonomic desk and chair, reliable charting software, high-speed internet connection, and access to real-time news feeds and stock scanners.
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Data Trading in optionsOptions data captures information on options contracts, including pricing and trading volumes, useful for investment strategies. Discover our guide and top options data providers. By analysing the information provided in the option chain, traders can identify potential trading opportunities and make informed decisions about buying or selling options contracts. Option chains are used by traders to analyse and evaluate the market's expectations of an asset's future price movements.
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Option chainAn options chain displays all available option contracts for a security, organized by expiration date and strike price. Options chains typically show each contract's bid price, ask price, volume, open interest, and implied volatility (IV). Option chains also allows traders with the option to select the best expiration date for their options trading. The option's expiration date is the day it will stop being tradeable. Traders may use the option chain to identify the expiry date that provides the optimal balance of risk and return for their transaction.
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Professional TradingWhat Is Technical Analysis? Technical analysis is a method of evaluating statistical trends in trading activity, typically involving price movement and volume. It is used to identify trading and investment opportunities. Unlike fundamental analysis, which attempts to evaluate a security's value based on financial information such as sales and earnings, technical analysis focuses on price and volume to draw conclusions about future price movements. Key Takeaways Technical analysis is used to evaluate price trends and patterns and thereby identify potential investments and trading opportunities. Technical analysts believe past trading activity and a security's price changes can be valuable indicators of the security's future price movements. Technical analysis may be contrasted with fundamental analysis, which focuses on a company's financials rather than historical price patterns or stock trends. Technical analysis was introduced by Charles Dow.
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Advanced Technical TradingWhat Is Price Action? Price action is the movement of a security's price plotted over time. Price action forms the basis for all technical analyses of a stock, commodity, or other asset charts. Many short-term traders rely exclusively on price action and the formations and trends extrapolated from it to make trading decisions. Technical analysis as a practice is a derivative of price action since it uses past prices in calculations that can then be used to inform trading decisions. Key Takeaways Price action generally refers to the changes of a security's price over time. Different looks can be applied to a chart to make trends in price action more obvious for traders. This is especially true when analyzing data covering different time periods. Technical analysis formations and chart patterns are derived from price action. Technical analysis tools like moving averages are also calculated from price action and projected into the future to inform trades. Though many use price action to forecast future prices, prior price action does not guarantee future results.
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Technical Analysis Part - 3Volume can confirm divergence signals by indicating the strength and conviction behind price movements. High volume during divergence signals strengthens the reliability of the signal, while low volume may indicate weaker market sentiment. The basic rule of thumb is that an RSI value over 70 indicates a stock is “overbought” and may see its price fall in the future. Meanwhile, an RSI value of 30 or lower can mean that the price could go up. An RSI of 50 is often seen as neutral, meaning the stock has not been either overbought or oversold.
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Technical Analysis Part - 4The MACD is a momentum indicator that can be used to anticipate changes in market sentiment. However, it is not foolproof: experienced traders look to other metrics, such as trading volume, for a more complete perspective on market sentiment. Key Takeaways The moving average convergence divergence (MACD) is a popular momentum indicator that is used in technical analysis. The MACD is calculated by comparing exponential moving averages in a security's price. The MACD line is charted alongside a nine-day moving average of the MACD line, called the signal line, and a histogram representing the difference between these two curves. Traders use the MACD histogram to anticipate changes in market momentum. MACD analysis can still generate false price predictions. Experienced traders use additional metrics and fundamental analysis to support their forecasts.
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Advanced Rsi Divergence TradingRSI Divergence occurs when the Relative Strength Index indicator starts reversing before price does. A bearish divergence consists of an overbought RSI reading, followed by lower high on RSI. At the same time, price must make a higher high on the second peak, where the RSI is lower. If used correctly, RSI divergence can be profitable, providing early signals of trend reversals. However, it also carries risks, and traders should use it alongside other indicators and proper risk management strategies.
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Technical Analysis MACD HIstogram Key Takeaways The moving average convergence divergence (MACD) is a popular momentum indicator that is used in technical analysis. The MACD is calculated by comparing exponential moving averages in a security's price. The MACD line is charted alongside a nine-day moving average of the MACD line, called the signal line, and a histogram representing the difference between these two curves. Traders use the MACD histogram to anticipate changes in market momentum. MACD analysis can still generate false price predictions. Experienced traders use additional metrics and fundamental analysis to support their forecasts. This example should demonstrate how observing the MACD histogram can help anticipate changes in trends in both short-term and long-term price momentum. It is important for traders to learn to recognize these trends and not bet against them. Fighting a trend is a sure way to get pummeled.
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Data Trading Part -1 It proves useful for assessing the depth and liquidity of specific strikes. It aids traders to find option premium against its corresponding maturity date and strike price. Option chain serves as a warning against breakouts or sharp moves in the index. How It Works: A long straddle options strategy involves simultaneously buying a call option and a put option on the same underlying asset with the same strike price and expiration date. This strategy becomes profitable when the stock significantly shifts in one direction or another.
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DATABASE TRADING WITH OPTION CHAINOption chain data is the complete picture pertaining to option strikes of a particular stock or index in a single frame. In the Option chain frame, the strike price is at the center and all data pertaining to calls and puts on the same strike are presented next to each other. Traders use an options chain to choose the specific option contracts that best align with their trading strategy. They can select options with the desired strike prices and expiration dates based on their market outlook. Options chains are crucial for assessing and managing risk.
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Beginner to Advanced Trading Every successful investor has one thing in common, they read as many investment books as they can. Trading in the share market requires a basic knowledge of all the aspects that can influence the prices of shares, and it can be gathered by reading books regularly. Skills #1 and #2 – Research and Analysis. ... Skill #3 – Adapting Your Market Analysis to Changing Market Conditions. ... Skill #4 – Staying in the Game. ... Skills #5 and #6 – Discipline and Patience. ... Bonus Skill #7 – Record Keeping. ... In the End.
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How To Draw Support and ResistanceHorizontal Support and Resistance Levels: These are drawn using horizontal lines based on price points. Support Levels: Identify areas where the market had difficulty breaking below. These levels often have a cluster of buy orders. Resistance Levels: Represent price points where the market struggled to break above. Sellers tend to enter around these levels. Round-Number Levels (Psychological Levels): These occur around round exchange rates (e.g., 1.00, 1.10, 1.50). Traders pay attention to these levels due to their psychological significance. Trendline Support and Resistance: Draw upward or downward sloping trendlines using at least two price points. Trendlines help identify dynamic support and resistance.
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ADVANCED PCR TRADING #NSE #BSE #Option'sWhat is the PCR Ratio? The PCR measures the relative trading volume of put options (bearish bets) to call options (bullish bets) in the market. It’s calculated as:PCR=Open Interest of Call Options / Open Interest of Put Options​ Interpretation: PCR > 1: Indicates bearish sentiment. More put options are being traded, suggesting traders are hedging against potential declines or speculating on downward moves. PCR < 1: Signals bullish sentiment. More call options are traded, indicating traders expect price increases or are hedging short positions. PCR = 1: Suggests a neutral sentiment where buying and selling pressures are balanced. Why PCR Matters: Sentiment Gauge: The PCR reflects market sentiment. Tracking changes helps you gauge optimism or pessimism. Contrarian Indicator: Extremely high PCR may signal excessive pessimism, potentially leading to reversals.
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Advanced Trading With DataBase #Nse #BseOptions Data APIs and Tools: Investopedia: Provides insights on using options data for market direction. IVolatility: Offers a deep database of options and futures prices, volatility, and analytical tools for traders and investors. Polygon: Real-time options prices, historical data, and news for major options markets. Optionistics: Offers free analysis tools, including price and volatility history, option calculators, and more. Barchart: Provides an overview of today’s options market activity and unusual options activity5.
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1
Trading Management and Psychology #NSE #SMCTrading psychology is different for each trader, and it is influenced by the trader's emotions and biases. The two main emotions that are likely to impact the success or failure of a trade are greed or fear. Greed is defined as the excessive desire for profits that could affect the rationality and judgment of a trader. Trading psychology is the emotional component of an investor's decision-making process, which may help explain why some decisions appear more rational than others. Trading psychology is characterized primarily by the influence of both greed and fear. Greed drives decisions that might be too risky. Here are five ways to feel more in control of your emotions while trading. Create Personal Rules. Setting your own rules to follow when you trade can help you control your emotions. ... Trade the Right Market Conditions. ... Lower Your Trade Size. ... Establish a Trading Plan and Trading Journal. ... Relax!
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Advanced Data Base Option's Trading #NSE #BSEInstitutional options trading refers to the buying and selling of options contracts by large entities such as banks, pension funds, hedge funds, mutual funds, and other institutional investors. These institutions accumulate funds from various investors to trade on their behalf. Options are financial derivatives that give the holder the right (but not the obligation) to buy (call option) or sell (put option) an underlying asset (such as stocks, commodities, or currencies) at a predetermined price (strike price) within a specified time frame (expiration date). Here are some key points about institutional options trading: 1.Institutional Traders vs. Retail Traders: *Institutional Traders: These traders manage accounts for institutions or groups. They trade larger volumes and have access to more exotic products, including complex options. *Retail Traders: These traders operate personal accounts and typically trade smaller sizes of assets. 2.Advantages of Institutional Trading: *Access to a wide range of financial instruments, including exotic options. *Ability to execute large trades efficiently due to their substantial funds. *Influence on market prices due to their significant trading volumes. 3.Service Providers Used by Institutional Trading Firms: * Bloomberg * Thomson Reuters * Factset * Marketwatch 4.Educational Requirements and Job Opportunities: *Becoming an institutional trader often requires a strong educational background in finance, economics, or related fields. *Job opportunities include roles in trading, risk management, and portfolio management. 5.Earnings: *Institutional traders can earn substantial salaries, but compensation varies based on experience, performance, and the institution. Remember that institutional trading strategies involve careful analysis, calculated moves, and a long-term perspective, as these traders significantly impact market dynamics.
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5
Advanced RSI Trading #Options The relative strength index (RSI) is a momentum indicator used in technical analysis. RSI measures the speed and magnitude of a security's recent price changes to evaluate overvalued or undervalued conditions in the price of that security. The RSI is displayed as an oscillator (a line graph) on a scale of zero to 100. The indicator was developed by J. Welles Wilder Jr. and introduced in his seminal 1978 book, New Concepts in Technical Trading Systems. The RSI can do more than point to overbought and oversold securities. It can also indicate securities that may be primed for a trend reversal or corrective pullback in price. It can signal when to buy and sell. Traditionally, an RSI reading of 70 or above indicates an overbought situation. A reading of 30 or below indicates an oversold condition.
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Data Base Trading Part - 5 #StocksAn option chain lists data on calls and puts, underlying prices, strike prices, expiration, and moneyness. Call option data is listed to the right of the table. Put option data is listed to the left of the table. Strike prices are listed on rows in the centre of the table. Avoid options with low liquidity; verify volume at specific strike prices. calls grant the right to buy, while puts grant the right to sell an asset before expiration. Utilise different strategies based on market conditions; explore various options trading approaches. A call option buyer stands to profit if the underlying asset, say a stock, rises above the strike price before expiry. A put option buyer makes a profit if the price falls below the strike price before the expiration.
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Data Base Trading Part = 4 #Institutions Options chain can be defined as the listing of all option contracts. It comes with two different sections: call and put. A call option means a contract that gives you the right but does not give you the obligation to buy an underlying asset at a particular price and within the option's expiration date. An option chain trading strategy can be formulated by seeing accumulations in OI (open interest) and volumes in various option strikes. You should note, here, that open interest implies the number that tells you how many options or futures contracts are presently outstanding/open, within the market.
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Data Base Trading Part - 3 #NSE #BSE What exactly is an Option Chain? It is the complete picture pertaining to all the option strikes of the Nifty in a single frame. Remember, just as there is an option chain for the Nifty, you have option chains for all the key indices traded in F&O and also for individual stocks where options trading is permitted. Tips for Trading in Bank Nifty Option Stay Informed About Economic Events and Market Trends. ... Use Technical Analysis to Identify Patterns and Trends. ... Develop a Trading Plan and Stick to It. ... Set Realistic Targets and Stop Losses. ... Use Options Greeks to Assess Risk and Return. Bank Nifty is considered one of the best indices for options trading due to its high liquidity, volatility, and significant price movements. These characteristics offer ample trading opportunities and the potential for substantial profits in a short time frame.
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Data Base Trading Part -2 #NSE #BSE #OptionchainTo study an option chain, focus on the current market price, displayed in the centre. Analyse the built-up data to understand market direction based on recent changes in open interest and price. ITM call options are typically highlighted in yellow, making it easier to distinguish them from other options. Nifty option chain is considered to be the best advance warning system of sharp moves or break outs in the index. So, if you see an aggressive increase in open interest in puts, it is most likely being led by the institutions who are selling puts and it hints at a support level below which the market is unlikely to fall. The reverse interpretation holds in case of call options OI movement. You can position your trades accordingly.
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