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My Three Comrades: the Chart, the Screener, and the WatchlistToday we will continue to explore the fascinating world of stock investing. And TradingView will help us with that. I sincerely recommend making friends with this platform, as I haven't found anything more convenient to implement my strategy yet. After you have registered on the site, move to the main menu "Products" > "Chart+" . This is where you'll spend most of your time with the platform. What opportunities are in front of you: - Find companies to invest in; - Make a fundamental analysis of the companies; - Make a technical analysis of stock charts; - Receive alerts on the buy or sell price of a stock that is right for you. So, let's break down each item. How to search for stocks on TradingView? Hopefully, you've already entered the "Chart+" section. In the upper left corner is a line to enter the ticker of the stock. If you don't know the ticker, just enter the first letters of the company name: the system will find the ticker that corresponds to that company on its own. However, keep in mind that stocks of the same company may be traded on different exchanges from different countries, so sometimes one company may have several tickers. As an example, let's enter the name "Tesla" in the search bar to open a chart of their stock. As we can see, the system tells us that Tesla is traded on NASDAQ and some exchanges in other countries. To the right of the search bar is a button with a choice of time frame. You can try different time frames, but for me the most important is the time frame of 1 day (i.e. one candle shows the price change for 1 day). So, the way of selecting a company via the search bar is convenient when you know at least its name. But there are thousands of companies listed on the stock exchange, and it is impossible to know the name of every company. In this case, the "Stock Screener" will help us. It is located in the lower left corner. Clicking on the Screener will open a list of stocks, filtered according to the parameters you set (you can customize the parameters by clicking on the bright blue button "Filters" on the right). Let's go to filters and configure the parameters we need. First of all, let's select the country - (for example), the USA . In the second turn, on the tab with general parameters, let's choose the instrument type - common stocks , and let's choose the exchanges - NYSE , NASDAQ , and one more American exchange - NYSE ARCA . Now we have a list of all stocks, which are traded on the exchanges that we have chosen. What we are interested in, we can add to the "Watchlist" . This is the first (top) button in the menu on the right. Just right-click on the ticker from the screener and select "Add to Watchlist". The same can be done by right-clicking on a chart. Switching between the tickers in the Watchlist you will consequently switch between the charts. So, we have figured out how to find the shares of a company. In the next post, let's see what we have in terms of fundamental analysis of companies.
NASDAQ:TSLAEducation
by Be_Capy
Infy: Chart set up and trading viewInfy - the stock is managing to hold on to gap zone levels - important support levels 1480 / 1444 / 1433 - 20 day EMA and 63 day EMA at 1562 and 1545 respectively Given the setup, one may consider to sell Infy January expiry 1460 Put option The strategy has a profit potential of 10% on Margin requirement and provides protection for a fall up to 1437.5 odd levels ( covering most of the known risk on charts) Do let me know if you find the analysis and insights helpful. Like and Follow for more ideas like these...!!! Take care & safe trading...!!! Disclaimer - The view expressed here is my personal view - Past performance is not a guarantee for future predictions - I have been wrong in the past and can be wrong again in future too - Use this for educational purpose - Any decision you take, you need to take responsibility for the same - It's your hard earned money. Treat it wisely - Trade / Invest keeping in mind your trading style, goals and objectives, time horizon & risk tolerance - if trading in F&O, understand that F&O trading involves risk - Do take proper risk management measures - Do your own analysis and consult your financial adviser if need be
NSE:INFY
by indiamarketoutlook
A little bit about volumes and the master of all averagesSo, let's refresh our knowledge from the previous posts (read part 1 and part 2 at the links): - The chart is based on the data from the tape; - The X-axis is the time scale, and the Y-axis is the price scale; - To avoid having to analyze a huge number of trades, interval charts were invented for convenience; - The most popular chart type is the Candlestick chart; - The candlestick consists of a body and shadows (upper and lower). The body is drawn at the open and close prices of the interval. The shadows are built by the maximum price (high), and the minimum price (low); - The time interval for one candle is called a time frame. The smaller the time frame, the more detailed information we get about the price changes. In addition to information about the price dynamics, from the stock chart, we can get information about the dynamics of trading volume. These are bars that we see below the candlesticks. They are also drawn on the basis of information from the tape. Let's return to our example: FB $110 20 lots 12/03/21 12-34-59 FB $115 25 lots 12/03/21 12-56-01 FB $100 10 lots 12/03/21 12-59-12 FB $105 30 lots 12/03/21 12-59-48 If you add up all the lots of trades in the interval from 12-00-00 to 12-59-59, we get 85 lots. Then the lots need to be multiplied by the number of stocks in one lot, for example, 100. It turns out that 8500 shares changed their owners in 1 hour. This information is displayed as a bar below each candlestick. My strategy does not use a trading volume analysis, but it is important to understand that increasing trading volumes are a sign of increasing attention to the stock. However, this attention does not always translate into higher prices. If there is negative news about a company, we will see both a drop in the stock price and an increase in volume. What is constantly used in my investment strategy is the moving average . What is it? This is the average of the close prices of a selected number of candles, starting with the last one. I use the average of the close values of the last 252 candlesticks. Why this number? The number 252 corresponds to the average number of trading days per year on the NYSE and the NASDAQ. That is, in fact, the average annual moving price . Why is it moving? Because every day there is a new candlestick with a new close value, and it begins a new calculation of the average value of the last 252 daily candlesticks. You can plot the moving average chart on a candlestick chart and see how far the current price has "run away" from the annual average price. I will tell you exactly how to apply this in investing in the next posts, and that's all for today. Finally, I will ask you to reflect on one thought: One who is true to the golden mean will always find something that someone else missed and give it to someone who is afraid to miss it. See you in future posts.
NSE:BANKNIFTYEducation
by Be_Capy
2
Japanese Candlesticks: Game of Body and ShadowsSo, in the last post we learned how to build a simple line chart based on the tape. Each point on the chart is defined by coordinates from the time (X scale) and price (Y scale) of a trade. But some stocks are traded at a frequency of hundreds of trades per second, at different prices. The question arises: which trade price to choose from this set? Interval charts were invented to solve this question. The most popular is the Candlestick Chart . They appeared in Japan three hundred years ago, when the Japanese exchanges were trading rice. They were invented by a trader named Homma. Apparently, being tired of drawing a lot of points on charts, he decided that it would be more convenient to show the price change over the time interval. So, what he came up with. Let's take a time frame equal to one hour and plot a 1-hour candle on the basis of the following tape: FB $110 20 lots 12/12/22 12-34-59 FB $115 25 lots 12/12/22 12-56-01 FB $100 10 lots 12/12/22 12-59-12 FB $105 30 lots 12/12/22 12-59-48 A candle consists of a body and upper and lower shadows. Like a float. The body is formed from the open and close prices of a certain time frame. In our case the hour interval is from 12-00-00 till 12-59-59. Only 4 deals were concluded in this time interval. The price of the first deal is $110, which is the opening price of the period or the so-called " open ". The price of the last deal was $105, which is the period closing price or " close ". These two prices are enough to form the body of the candle. Now let us move on to the shadows . The upper shadow is drawn at the maximum price of the interval (115$) and is called " high ". The lower shadow is drawn at the minimum price of the interval ($100) and is called " low ". The shape of our candle is ready. However, it should also have a content, namely the color. What is it for? Let's take a look at another candle. Here we can see where is the high and where is the low. But how do we know which is the open or the close? After all, the open is not always at the bottom of the candlestick body, as in the previous example, it can be at the top. To understand where is the open and where is the close, Homma has invented to paint the body of a candlestick in black, if close is lower than the open, i.e. if the price in the interval is falling (falling candle or bearish candle ). But if close is higher than open, the body of the candle remains white, it will indicate the growth of price during the interval (rising candle or bullish candle ). Sometimes a candlestick has shadows, and the close price is equal to the open price. Then it will look like a cross. This candlestick is called a doji . White and black are the classic colors for the bodies of Japanese candles. However, you can come up with your own colors. If you want the rising candles, for example, to be blue, and the falling orange - you're welcome. The main thing is to make it convenient and understandable for you. So, one candlestick allows us to understand where we had the first trade, the last trade, the price maximum and minimum in a given time frame. But it does not allow us to understand how the price changed within the interval: when the maximum or minimum was reached and what was happening within this price range. But the problem can be easily solved if we switch to a smaller time frame. If we look at the daily candlesticks (this is when the time frame of one candle is equal to one day), and we want to see what was during the day - we switch to the hourly time frame. If we want to see even more details - we switch to 15-minute candles and so on down to the seconds. But you and I will most often use daily timeframes, so as not to be distracted by the fluctuations that occur during the day. To be continued :)
Editors' picks
NSE:TATAMOTORSEducation
by Be_Capy
2
The birth of the chart. The evolution of the tapeLast time we studied how the exchange price is formed, and we found out that it is important to learn how to read charts correctly in order to analyze price changes correctly. Let's see how a chart is made and what it can tell us. Everyone who went to school probably remembers: to draw a function, we need the X and Y axes. In stock charts, the X-axis is responsible for the time scale, and the Y-axis is responsible for the price scale. As we already know, a chart is built on the basis of data from a tape. At the previous post , we have produced the following tape: FB $110 20 lots FB $115 5 lots FB $100 10 lots Actually, in addition to ticker, price and volume the tape also fixes time of trade. Let's add this parameter to our tape: FB $110 20 lots 12/08/22 12-34-59 FB $115 5 lots 12/08/22 12-56-01 FB $100 10 lots 12/08/22 12-59-02 That's it. Now this data is enough to put points on the chart. We draw three points, connect them with straight lines and get a chart. At one time, this was enough, because trades on the exchange were not frequent. But now some popular stocks, such as Apple or Google, have hundreds of trades per second with different prices. If the minimum division on the X scale is one second, what price point should we put if there were many trades at different prices in one second? Or let's place all the points at once? We will discuss that in the next post. And now, as a postscript, I want to show you some pictures describing how the tape was born and evolved. Here is a picture of a stock player, looking through a tape with quotations, which is given by a special telegraph machine. Each telegraph machine is connected by wires which, like a spider's web, entangle New York City. 1930's broker's office with several telegraph machines and a quotation board. An employee of the exchange looking through a tape of quotes. It won't be long before all this is replaced by the first computers. We'll continue today's theme soon.
NSE:HDFCBANKEducation
by Be_Capy
Market order or the hunger games of stock tradingThe previous parts of the post can be found at the links: Part 1 - How is the share price formed on the stock exchange? We do it Part 2 - Bid/Offer: The Yin and Yang of Stock Prices So, let's continue. So why don't we ever see some orders in the order book? Because such orders don't have a price, which means they can't be arranged in a book where all orders are sorted by price. This type of order is used by buyers or sellers who don't want to wait for a counter offer with a suitable price. "But how can you buy or sell something without specifying a price?" - you ask. It turns out it's possible. When you put out an order without specifying a price, the order simply "eats up" the number of lots you need at the prices currently on the books. Such an order is called a " market order ". We can say that the most "hungry" investors who want to satisfy their "hunger" right now use the market order. Remember yourself: when you really want, for example, a cake, you won't stand at the counter and wait for the seller to set the price you want, you'll just buy the cake at the price that's valid at the moment. So, let's imagine that someone sent the following order to the exchange: " to sell FB stocks in the volume of 20 lots". Such an order will not appear in the book, but it will "eat" all bids within 20 lots, starting with the most expensive ones. In our example, there were a total of 15 lots left in the book, so the following concluded trades will be printed in the tape: FB $115 5 lots FB $100 10 lots What will happen to the remaining market order of 5 lots (20-15) that couldn't be filled? The exchange will cancel the order for this remainder, as there are no counter offers in the book. So, let's review what we learned in the current series of posts: - For each company, the exchange maintains its own order book for buying and selling stocks; - A buy order is called a "bid"; - A sell order is called an "offer"; - The order must contain the ticker (abbreviated name of the stock), the direction of the transaction (buy or sell), the price per share and the volume in lots; - The lot size is set by the exchange. It may be equal to 1 share, 100 shares or some other quantity; - All orders in the book are called "limit orders"; - There is a special type of orders, which are called "market orders". They have the following parameters: ticker, trade direction, volume in lots, and have no "price" parameter. - The intersection of buy and sell orders by price creates a trade; - The volume and price of a trade depends on how much volume was "eaten" in the counter offer and at what price; - The trade is recorded in the tape. Each company has its own tape. By the way, our book became empty because all limit orders were filled and no new ones came in. As a result, we have a tape of three trades. The trades are recorded in the tape according to when they were made: FB 110$ 20 lots FB 115$ 5 lots FB $100 10 lots So, when you see a flashing stock price somewhere, like in the broker's app, know that it's the last trade in the tape as of the current second. Or if you hear that Tesla stock has reached $2,000 a share, that means that there's a $2,000-a-share deal imprinted in the Tesla tape. To show how the stock price has changed over time, a chart is made based on the prices of the trades and when they were made. At its core, a chart is a demonstration of how the stock tape has changed over time. Knowing how to read a price chart is a basic skill that you will use as you invest. I will tell you how to read charts at our next meeting.
NSE:NIFTYEducation
by Be_Capy
2
Bid/Offer: The Yin and Yang of Stock PricesRead the first part of this post at the link: How is the share price formed on the stock exchange? We do it So at what price and what volume will the deal eventually be made? To understand this, let's go back to the "price" parameter of the order. When a buyer placed an order "to buy 25 lots at $115 a share", the exchange takes it as "to buy 25 lots at a price not more than $115 a share". That is the purchase price can be less than the price stated in the order, but not more. And when the seller earlier submitted an order "to sell 20 lots at $110 a share", the exchange takes it as "to sell 20 lots at a price not less than $110 a share". That is, it is possible to sell at a price higher than that specified in the order, but not less. Once again: buyers always put orders "buy at no more than such-and-such a price", and sellers always put orders "sell at no less than such-and-such a price". So, we return to the situation with the crossing of prices. When the exchange detects a crossover, it begins to execute the order that has caused this crossover. In our case, it is an order for 25 lots at $115 per share. This order kind of "eats up" all sell orders that are on the way to the price of $115 (that is, everything cheaper than $115), until it reaches 25 lots. Which orders were "eaten up" in our case? One single order to sell is 20 lots at $110 per share. What was "eaten" is recorded as a buy and sell trade in what's called a tape. It's similar to the way a cash register punches a check with a price. The record looks like this: FB $110 20 lots However, we have a remainder after the trade is 5 lots, the remainder of those 25 at a price of $115. Since at this price (or lower) nothing can be "eaten", the order remains in the left page of the book until a suitable offer. Let's see how the FB order book looks now, after the deal is done: Let me note again that all orders in the book are sorted in descending order from top to bottom. The concept of "book" is very useful for understanding how the exchange price is formed. In the past, when there were no electronic trading systems, there were so-called floor brokers, who used to collect and record prices and volumes of orders in a real book. Nowadays you may encounter alternative terms like Depth of Market (DOM), Level II, but they are all identical to the notion of an "order book". The orders to buy that we see in the order book are called "bids", and the orders to sell are called "offers". So, in our order book there are two bids and no offers. All bids and offers are called "limit orders" because they have a price limit. But there's also a type of order that we will never see in the book. Why? I'll tell you in the next post.
NSE:RELIANCEEducation
by Be_Capy
How is the share price formed on the stock exchange? We do itYou already know that the stock exchange is a one-stop place to buy or sell stocks, whether you are a novice investor or a seasoned professional. But even if you don't trade stocks, you will still "come" to the stock exchange to find out stock prices. Let's find out how the exchange price of a stock is formed. Regardless of what country the stock exchange is in, the rules for determining the price are similar for everyone. Let us understand how it works, as always, with the help of our imagination. Imagine a large rack of books. Each book has a name on the cover: Apple, Facebook, Amazon, etc. Let's take one of the books, let's say Facebook, and open it. We will see only two pages, and they are both blank. On the left page we will record buyers' orders to buy shares, and on the right page we will record sellers' orders, respectively, to sell shares. So, every day the exchange, when it opens trading, essentially opens such a "book" and records every bid it receives. What should be written in the order? First of all, there must be an abbreviated name of the stock, or, in professional slang, the "ticker," to understand which book to get off the shelf. For example, Facebook shares have a ticker consisting of two letters FB, while Apple shares have four letters - AAPL. Second, the order must indicate the direction of the transaction, i.e. "buy" or "sell". This is how the exchange understands whether to record the incoming information on the left or on the right page of the book. Third, the order must indicate the price per share, so that the exchange can sort the orders in descending order of price from top to bottom. Fourth, the order must specify the volume in lots, that is, how many lots of shares we want to buy or sell. To clarify: Shares on the exchange are not traded by the piece, but by the lot. The lot size is set by the exchange. One lot may be equal to one share, or a hundred, a thousand, or even ten thousand shares (depending on the specific share). This is really handy because the price of one share can be equal to, for example, the price of your computer (then 1 lot may be equal to 1 share), and sometimes 1 share may be worth as much as a box of matches (then 1 lot may be equal to a thousand shares). Why "may be"? The specific rules for determining the lot size depend on the laws of the country and the exchange itself. For example, on the New York Stock Exchange (NYSE), the usual size of 1 lot is equal to 100 shares. So, let's return to our example. Suppose we want to buy shares of FB at a price of $100 per share in the amount of 10 lots. Then the exchange will record the following on the left side of the FB book: 100$ 10 Then there is a seller who wants to sell FB stock at $110 per share in an amount of 20 lots. Then this is what the exchange will record in the right side of the book: 110$ 20 Then there is a buyer who wants to buy FB stocks at $115 per share in an amount of 25 lots. The entry on the left side of the FB book will look like this: 115$ 25 And now comes the interesting part. Did you notice that the $115 price in the last buy order is higher than the single sell order of $110? That means the buyer is willing to make a deal at a price even higher than what the seller is offering. So at what price and what volume will the deal end up being made? Please wait for the next post.
NSE:TATASTEELEducation
by Be_Capy
Picking rules - the Lynch methodBack in 1977, the still famous investment company Fidelity Investments entrusted the management of a small fund of $18 million to this very man. The next 13 years were impressive for the Magellan fund and its manager - the famous Peter Lynch. The fund's assets grew to $14 billion, more than doubling the average annual growth of the S&P500 stock index. When he stopped actively managing assets, Peter shared his approach with the rest of us. Some of his thoughts inspired me to create my approach and may be useful to you as well. 1. The private investor has an objective advantage over institutional investors (e.g., funds) because he is more agile. He is not burdened by the need to coordinate his actions with the management of the company, and his purchase requests are easily satisfied by the market. Agreed, it's easier to buy for $1,000 than it is to buy for $1 billion. Thus, the private investor can catch prices that the big "players" will have a hard time getting. 2. Don't spend everything you have under your belt on stock investments. The trades will not be able to close "in the plus" just by your own volition. So first provide yourself with a financial safety cushion, a stable job and a place to live, and then start investing. 3. Admit to yourself: are you a patient person who is capable of making independent decisions, diving deep into analysis and soberly reacting to plus and minus changes? If not, practice, but on small volumes. 4. Never buy a company's stock if you can't explain what it does and can't talk about its financial performance. The stock market is no place for gambling. There are slot machines, etc., for that. 5. The company works for profit and grows because of it. So keep an eye on everything that affects profits. Evaluate the company not in monetary units, but in the number of profits. 6. Watch where the company invests its profits. If it's mostly capital investments that will probably make a profit someday, in the distant future - think about it. After all, the beautiful future as conceived may not come. If, on the other hand, the company is allocating its profits to buying its own stock, it means that management thinks the current stock price is attractive enough. 7. The success of the stock may be unrelated to the company's financial success. Beware of such investments. 8. A company's financial success may not be reflected in its stock price for a long time. However, the longer the period in question, the more direct the relationship. So if you select companies based on an analysis of financial performance, be prepared to make a long-term investment. To this day, these thoughts help me look at assets consciously and not give in to spontaneous decisions. What do you think of this approach?
SP:SPXEducation
by Be_Capy
2
I dream of entering the stock market. The question is: What for?Read the previous part of the post here . Having received only denials, the owner of the workshop decides the following: it would be great if shares were sold and bought not in the offices of banks, but in one single place - the stock exchange. Then those who want to vote would be able to buy as many shares as they need votes. Those who want a discount will wait until the price on the stock exchange falls to an acceptable level for them. And those who bought one share would be able to sell it at any time at the exchange price. The owner likes this idea and decides to list his shares on the stock exchange. Another term to remember is listing. Listing is the service of the stock exchange to allow the shares to be traded on the stock exchange. Now the shares can be bought or sold in one place, simply by connecting to the stock exchange trading through brokerage companies. The banks, which have brokerage licenses, also liked it. The main thing is that now they do not have to convince clients to buy shares for dubious rights, you can just say that the price at the exchange is constantly changing, and if you buy shares at $ 1000 now (in the bank office), then a month later at the exchange you can sell them already at a higher price. This created a real stir around the company's shares, and they were bought up from banks at the IPO price - that is, at the original price of $1,000 per share. A significant advantage for any investor is the ability to buy or sell shares quickly and easily. That is exactly the kind of opportunity stock exchanges provide. If there were no stock exchange, the owners of shares would have to look for buyers on their own. But now they have the opportunity to connect to the exchange and make a deal at any time. As soon as the stock exchange started trading, the share price of the workshop came to life. This attracted new investors who tried to buy cheaper shares and sell at a higher price. Such investors include you and me. So what we know so far: - A company needs stock to sell a share of its business and get real money. - Shares can only be issued by a public company. - Shares give its owner rights: to vote, to receive agreed dividends, and to receive a share from a bankrupt company. - The initial sale of shares to the public is called an IPO (initial public offering). - During an IPO, shares are sold not on the stock exchange, but through brokers or banks. - The first day of stock trading on the stock exchange is the completion of the IPO process. - In order for the shares to be traded on the stock exchange, the company has to go through the listing procedure. - It is only possible to buy shares on the stock exchange through a licensed broker. - The exchange price is constantly changing during trading. The workshop story may give the impression that we small investors are only being used to get money from us in exchange for unnecessary rights. However, it is important to understand that we are more interested in the opportunity to profit from the growth of the shares than in gaining formal rights. It is this desire that unites all shareholders of a company, whether you have one share or a million. A joint-stock company can be compared to a hotel with many identical rooms. One share is one room. If the hotel is doing great and making a profit, investors will want to buy more rooms, and sellers will want to sell more rooms at a higher price. If the hotel performs poorly and makes a loss, then room owners will get rid of them (i.e. sell even at an unprofitable price to get money and find another hotel that is more attractive for investment). The strategy I will share will be to find, figuratively, great hotels (in fact, joint stock companies) during a room sale (i.e., a period of declining stock). We'll figure out how stock prices are formed on the stock market soon. See you next time!
NSE:BANKNIFTYEducation
by Be_Capy
2
Part 1: Equity Derivatives - A Beginner's GuideWhat are derivatives? Basic interpretation : something which is based on another source. A derivative is a contract or product whose value derives from the value of the base asset. The base asset is called the underlying asset. i.e., Sugar prices will rise if sugarcane prices increase due to low production. It means sugarcane is the underlying asset of sugar because the value of sugar is associated with sugarcane. There is a broad range of underlying assets: Metals: lead, gold, silver, copper, zinc, nickel, tin, etc. Energy: coal, natural gas, etc. Agri commodities: corn, cotton, pulses, wheat, sugar, etc. Financial assets: Stocks, bonds, forex, etc. There are two types of derivatives: 1. Exchange-traded: A standardized derivative contract, listed and traded on an organized exchange. 2. Over-the-counter/off-exchange trading/pink sheet trading: A derivative product in which counterparties buy or sell a contract or product at a negotiated price without exchange Instruments of derivatives market: There are four instruments in the derivatives market: 1. Forward: Forward is a non-standard agreement or agreement between two parties that allows you to buy/sell the asset at the agreed price for a pre-decided date of the contract. Forwards are negotiated between two pirates, so the terms and conditions of the contract are customized. These are called over-the-counter(OTC). 2. Future: Future contracts are similar to forwarding contracts, but the deal is made through an organized and regulated exchange rather than negotiated between two counterparties. A futures contract is an exchange-traded forward contract. 3. Options: A derivative contract that gives the right but not the obligation, to buy or sell an underlying asset at a stated strike price on or before a specified date. Buyers of options- Pays the premium and buys the right Sellers of options - Receives the premium with the obligation to buy/sell underlying assets. 4. Swap: A swap is a derivative contract between two counterparties to exchange for the cash flows or liabilities from two different financial instruments. It is an introduction article. I will cover all these topics in detail. Swap helps participants manage risk associated with volatility risk interest rate, currency exchange rates, & commodity prices. Index: Index = Portfolio of securities An Index shows how investors experience the economy. Is it progressing or not? A Stock market index gathers data from a variety of companies of industries. The data forms an overall picture and helps investors compare market performance through past and current prices. Financial indices represent the price movement of bonds, shares, Treasury Bills, etc. Importance of Index: 1. An index is an indication of a specific sector or gross market. 2. It helps investors to pick the right stock 3. An index is a statistical indicator. It represents an overall change or part of a change in the economy. 4. In OTC & exchange-traded markets, It used as an underlying asset for derivatives trading 5. An index helps to measure for evaluation of portfolio performance. 6. Portfolio managers use indices as investment benchmarks. 7. Index illustrates investor sentiments. Types of index: There are four classifications for indices: Equal Weighted Index: Each company is given the same weightage in the composition of this index. Equal-weighted indexes are more diversified than market capitalization-weighted indexes. This index focuses on value investing. Free-float index: In finance, equity divides into different among various stakeholders like promoters, institutions, corporates, individuals, etc. A tradable stake for trading is called a free-float share. i.g, If XYZ company has issued 5 lakh shares with the face value of Rs 10, but of these, 2 lakh shares are owned by the promoter, then the free-float market capitalization is Rs 30 lakh. Free-float market capitalization: Free-floating shares * Price of shares Index: BSE SENSEX Market capitalization-weighted index: In this index, each stock is given weightage according to its market capitalization. High market cap = High weightage Low market cap = low weightage Market Cap= Current market price * total number of outstanding shares i. e, if XYZ company has 1,000,000 outstanding shares and a market price of 55 rs per share will have a market capitalization of 55,000,000. Index: Nifty 50 Price Weighted Index: High price = More weightage Low price = Low weightage Popular price-weighted index: Dow Jones industrial average & Nikkei 225 I will upload second part soon. Thank you :) Money_Dictators
Editors' picks
NSE:NIFTYEducation
by Money_Dictators
12
Symmetrical / Ascending TriangleSymmetrical / Ascending Triangle Two different types pattern near to shwing in the bank nifty banknifty in high range zone anything will be happen in stock market so be careful before trade wait for any breakout and sustain or predict the right situation as per market situation Most popular chart pattern Ascending Triangle is menaing to high Bulish Symmetrical Triangle is for Neutral So please look the chart as per my drawing for intraday trading please comment on my thinking wrong or right. Thanking You
NSE:BANKNIFTY
by dasarijit245
7