Nifty Trading Academy Review for Basic of Technical Analysis
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Transcript of Nifty Trading Academy Review for Basic of Technical Analysis
Nifty Trading Academy Review- 99253 91111
TECHNICAL ANALYSIS-KNOW HOW
Basics of Technical Analysis
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Technical analysis is used to forecast stock prices on the basis of market-derived
data.
Technicians (also known as quantitative analysts or chartists) usually stare at price,
volume and psychological indicators over time.
They look for trends and patterns in the data that indicate future price movements.
TA is useful with various Aspects and in Various ways
Trends for Coming Days.
Trends mean whether it is Up trend or Down Trend
TA is mostly used in West and Some Asian Countries like Japan for More
than 125 to 150 Years Back.
In India, it is popular from last 20 to 25 years.
Why Technical Analysis
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Fundamental vs. Technical
The Difference between TA and FA is that, FA finds the reasons for stock to move up/Down due to result. Whether TA is not concern with the reason.
In TA, sometimes reason may come afterward for stocks to move up or down.
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The Logic of Technical Analysis
Supply and demand determine prices
Changes in supply and demand cause changes in prices
Prices can be projected with charts and other technical tools
The logic behind Technical Analysis
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• Human behavior is often erratic and driven by emotion.
• Market trends and patterns reflect irrational human behavior.
• Trends and patterns repeat themselves and are thus predictable.
Assumptions of Technical Analysis
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Position
Charts
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Candle Stic
k Char
tBar Char
t
Line Char
t
Line charts are familiar to all types of analysts and are a simple graphic display of price trends over time. Usually, the chart is a plot of data points, such as share price, with a line connecting these points.
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99253 91111
Line Chart
A bar chart, in contrast, has four bits of data in each entry—the high and low price encountered during the time interval plus the opening and closing prices
Bar Chart
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Green Candle and Red candle. There are four price in candle. Open High Low Close.If Open to close is high it is a green candle.If open to close Below it is a Red candle.
(*) Candel Stick
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Candle Stick ChartsCandel Stick
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Price and Volume
Price Is Trending Higher or Lower
Volume Is Increasing
Confirmation: Trend Will Continue
Volume Is Decreasing
Divergence: Trend Will End
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• A low price range in which buying activity is sufficient to stop a decline in priceSupport
• A high price range in which selling activity is sufficient to stop a rise in priceResistance
• Once a resistance level is breached, it becomes a support levelChange in Polarity
Support and Resistance
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Chart Patterns
Chart Patterns
Reversal PatternsHead and
Shoulders
or Inverse Head and
Shoulders
Double Tops
or Double
Bottoms
Triple Tops
or Triple
Bottoms
Continuation Patterns
Triangles Rectangles
Flags and Pennants
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Construction of Charts:- There are two Axis 1. X-Axis and 2. Y-Axis. X-Axis - Shows Time period of the Stocks. Y-Axis – Shows Value of the Stocks. Time Period Means:- Price can be plotted on the charts from Minute
to year
Types of Charts
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Types of Charts
Minute-to-Minute Charts. Daily Charts. Weekly Charts. Monthly Charts. Yearly Charts.
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Types of Charts
Up Trend
Down Trend
Flat or Sideways Trend
Types of Trends
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In Up Trend , stocks prices move in upward direction. Formation is higher top and higher bottom. One should buy at
every decline.
Up trend
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2) Down Trend:-
In down trend, stocks prices move in downward direction. Formation lower bottom and lower top. One should sell at every rise
Down Trend
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3) Flat or Sideways Trends:- In sideways trends, stocks prices move in narrow range neither going
up wards nor down wards. Here, one should have to wait for the clear trend whether up or
down.
Sideways Trend
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Technical Indicators
Price-Based
Indicators
Momentum
Oscillators
Sentiment
Indicators
Flow-of-Funds
Indicators
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Price-Based Indicator: Moving Average
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Price-Based Indicator: Bollinger Band
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THANK YOU ALL
1st Indian Institute for LiveMarket Training
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