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  1. <?xml version='1.0' encoding='UTF-8'?><?xml-stylesheet href="http://www.blogger.com/styles/atom.css" type="text/css"?><feed xmlns='http://www.w3.org/2005/Atom' xmlns:openSearch='http://a9.com/-/spec/opensearchrss/1.0/' xmlns:blogger='http://schemas.google.com/blogger/2008' xmlns:georss='http://www.georss.org/georss' xmlns:gd="http://schemas.google.com/g/2005" xmlns:thr='http://purl.org/syndication/thread/1.0'><id>tag:blogger.com,1999:blog-5098111511822610032</id><updated>2024-11-08T21:08:02.949+05:30</updated><category term="Technical Analysis Trading Indicator"/><category term="Chart Indicator"/><category term="Indicator"/><category term="Candlestick Patterns"/><category term="Candlestick Tutorial"/><category term="Financial Learning"/><category term="14 Key Candlestick Formation"/><category term="Support-Resistance"/><category term="Commodity"/><category term="Intraday Trading Knowledge"/><category term="Trading Setup"/><category term="Mutual Fund Investment Learning"/><category term="Channel"/><category term="Stock Market Theory"/><category term="Trend Line"/><category term="Chart Analysis-Chart Patterns"/><category term="Option Strategies"/><category term="Risk Management"/><category term="Stock Market Calculator"/><category term="Investment Learning"/><category term="Option Trading Tutorial"/><category term="Candlestick Chart"/><category term="Fundamental analysis"/><category term="Intraday Trading Guide for Beginners"/><category term="Miscellaneous"/><category term="Share Market Basic"/><category term="Stock Market Basic"/><category term="Trading Strategy"/><category term="Volume"/><category term="Volume Analysis"/><category term="Asset Allocation"/><category term="Balance sheet"/><category term="Balance sheet analysis"/><category term="Basics"/><category term="Butterfly and Bat Chart Patterns"/><category term="Chart Patterns"/><category term="Dividends"/><category term="Do &amp; Don&#39;t for Intraday Traders"/><category term="Dow Theory"/><category term="F&amp;O Trading Strategy"/><category term="Glossary"/><category term="Helping Web Address and Books  ETC"/><category term="How to Choose Stocks for Intraday Trading"/><category term="How to Make Profit in Intraday Trading"/><category term="Identity Bullish Bearish Price Movements"/><category term="Intraday Trading Indicators"/><category term="Intraday Trading Time Analysis"/><category term="Introduction"/><category term="Largest World Stock Exchanges Comparing"/><category term="Lesson 48. Trading Dictionary"/><category term="Mistakes"/><category term="Patterns"/><category term="Price Action"/><category term="Relationship of Risk &amp; Return"/><category term="Stocks Catagory"/><category term="Strategies"/><category term="Summary of Intraday Trading"/><category term="Tips"/><category term="Tips on How to Pick Stocks for Intraday Trading"/><category term="Trade Setup"/><category term="Trend Bars"/><category term="Types Of Stocks"/><category term="Volume Analysis Patterns"/><category term="What is Intraday Trading"/><category term="World Stock Exchanges Comparing"/><category term="tech"/><title type='text'>Beyond The Technical Analysis Expended</title><subtitle type='html'>An Exclusive Indian Stock, Commodity Market Technical Analysis Tutorial Blog. Start Your Journey With Our TA Course.</subtitle><link rel='http://schemas.google.com/g/2005#feed' type='application/atom+xml' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/feeds/posts/default'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default?redirect=false'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/'/><link rel='hub' href='http://pubsubhubbub.appspot.com/'/><link rel='next' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default?start-index=26&amp;max-results=25&amp;redirect=false'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><generator version='7.00' uri='http://www.blogger.com'>Blogger</generator><openSearch:totalResults>144</openSearch:totalResults><openSearch:startIndex>1</openSearch:startIndex><openSearch:itemsPerPage>25</openSearch:itemsPerPage><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-2311628975775017658</id><published>2019-03-06T11:49:00.000+05:30</published><updated>2019-03-06T11:52:33.797+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Identity Bullish Bearish Price Movements"/><category scheme="http://www.blogger.com/atom/ns#" term="Price Action"/><category scheme="http://www.blogger.com/atom/ns#" term="Trend Bars"/><title type='text'>Trend Bars - A Simple Way to Look at Price Action</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  2. &lt;div style=&quot;text-align: justify;&quot;&gt;
  3. Understanding price action is simple.&lt;br /&gt;
  4. I am not talking about trading price action, but just reading it. I am referring to grasping what the market is doing right now.&lt;br /&gt;
  5. Price action results from the struggle between buyers and sellers. It
  6. is the footprint of the&amp;nbsp;fight between the bulls and the bears. When you
  7. look at a chart, it makes sense to focus on finding the bulls and the
  8. bears.&lt;/div&gt;
  9. &lt;div style=&quot;text-align: justify;&quot;&gt;
  10. The only concept you need is the Trend Bar.
  11. &lt;br /&gt;
  12. &lt;h2&gt;
  13. What is a Trend Bar?&lt;/h2&gt;
  14. &lt;/div&gt;
  15. &lt;div style=&quot;text-align: justify;&quot;&gt;
  16. &amp;nbsp;A Trend Bar has a body that is greater than 50% of the entire bar range.&lt;br /&gt;
  17. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  18. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4YmrGGAXHLp1tV6CsYiHCL7VaiCzkQ7CPgusTbYsdwe7f9hsx-ZU_UO0TNBYW7jSvtag78oVsWIcBIz2ENLaBS5kSMfQ79QdFWZj5MBy6n-5-zBJjoOkDntCZDKNnQ8smDDxWTBU-vHf_/s1600/TrendBar-657x396.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;396&quot; data-original-width=&quot;657&quot; height=&quot;241&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4YmrGGAXHLp1tV6CsYiHCL7VaiCzkQ7CPgusTbYsdwe7f9hsx-ZU_UO0TNBYW7jSvtag78oVsWIcBIz2ENLaBS5kSMfQ79QdFWZj5MBy6n-5-zBJjoOkDntCZDKNnQ8smDDxWTBU-vHf_/s400/TrendBar-657x396.jpg&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  19. &lt;/div&gt;
  20. &lt;div style=&quot;text-align: justify;&quot;&gt;
  21. &lt;br /&gt;
  22. If a Trend Bar closes above its opening price, it is a&amp;nbsp;Bullish Trend Bar.&lt;br /&gt;
  23. If a Trend bar closes below its opening price, it is a Bearish Trend Bar.&lt;br /&gt;
  24. &lt;h2&gt;
  25. Guidelines for Reading Price Action with Trend Bars&lt;/h2&gt;
  26. &lt;ul&gt;
  27. &lt;li&gt;Consecutive Trend Bars in the same direction display&amp;nbsp;strength. Recognize it.&lt;/li&gt;
  28. &lt;li&gt;Opposing Trend Bars imply a fight between the bulls and the bears. Find out who wins.&lt;/li&gt;
  29. &lt;li&gt;Isolated Trend Bars are potential traps. Traps, by definition, are tricky. &lt;i&gt;Is it really a trap?&lt;/i&gt;&lt;/li&gt;
  30. &lt;/ul&gt;
  31. &lt;h2&gt;
  32. Price Action Chart Examples&lt;/h2&gt;
  33. Let’s take a look at two detailed&amp;nbsp;examples of&amp;nbsp;this useful concept in action.&lt;br /&gt;
  34. &lt;h3&gt;
  35. Chart Markup Legend&lt;/h3&gt;
  36. &lt;ul&gt;
  37. &lt;li&gt;Cyan Background – Trend Bar&lt;/li&gt;
  38. &lt;li&gt;Blue Circle – Consecutive Trend Bars in the same direction&lt;/li&gt;
  39. &lt;li&gt;Pink Dash Circle – Opposing Trend Bars&lt;/li&gt;
  40. &lt;li&gt;Green Arrow – Isolated Bearish Trend Bar (possible bull trap)&lt;/li&gt;
  41. &lt;li&gt;Red Arrow – Isolated Bullish Trend Bar (possible bear trap)&lt;/li&gt;
  42. &lt;/ul&gt;
  43. &lt;h3&gt;
  44. Example 1: SPY Daily Chart&lt;/h3&gt;
  45. &lt;/div&gt;
  46. &lt;div style=&quot;text-align: justify;&quot;&gt;
  47. &lt;br /&gt;
  48. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  49. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhapjv_8t5vj7UTVPPmef7oGgDXfwWKh2gp1Oq5RaDF7VEX1lsTBHXE8MoS0m-aCXCUZbuyJjWtox1c6xdfySt7UNRznT5SNhVrQboy-9hkXkbznojt0V-ldgkBTyNIK7yckYUqRK0Q5Lwg/s1600/Reading-Price-Action-Trend-Bar-SPY-747x396.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;396&quot; data-original-width=&quot;747&quot; height=&quot;339&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhapjv_8t5vj7UTVPPmef7oGgDXfwWKh2gp1Oq5RaDF7VEX1lsTBHXE8MoS0m-aCXCUZbuyJjWtox1c6xdfySt7UNRznT5SNhVrQboy-9hkXkbznojt0V-ldgkBTyNIK7yckYUqRK0Q5Lwg/s640/Reading-Price-Action-Trend-Bar-SPY-747x396.jpg&quot; width=&quot;640&quot; /&gt;&amp;nbsp;&lt;/a&gt;&lt;/div&gt;
  50. &lt;ol&gt;
  51. &lt;li&gt;Clear war zone with four consecutive alternating Trend Bars.&lt;/li&gt;
  52. &lt;li&gt;Bulls tried to push back without much impact.&lt;/li&gt;
  53. &lt;li&gt;Bears came back stronger.&lt;/li&gt;
  54. &lt;li&gt;Both fights resolved in a bullish way. Likely that bulls have regained control.&lt;/li&gt;
  55. &lt;li&gt;Bullish strength as expected.&lt;/li&gt;
  56. &lt;li&gt;A fight that looked bullish. But we knew that the bulls did not have a clear win as the last extreme high was not exceeded.&lt;/li&gt;
  57. &lt;li&gt;This thrust confirmed that the bears have taken over.&lt;/li&gt;
  58. &lt;/ol&gt;
  59. You can take a closer look at the red and green arrows. In the right context, they present solid&amp;nbsp;bear and bull traps.&lt;br /&gt;
  60. &lt;h3&gt;
  61. Example 2: ES Intraday 5-Minute Chart&lt;/h3&gt;
  62. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  63. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwzqIErd9AVFW9Aao4l88kAXPVTzzVClY9QK3GWnM62P-FEZ6vmiP_OnznqIWk4Zk-tRi8HrWQeAanjiVS_h3-hk72Od8hTbJ_5Vhy8DrH0NsmrbGE067IaPbUQA2h-_J8bIAZRO32w05U/s1600/Reading-Price-Action-Trend-Bar-ES-747x396_2.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;396&quot; data-original-width=&quot;747&quot; height=&quot;338&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgwzqIErd9AVFW9Aao4l88kAXPVTzzVClY9QK3GWnM62P-FEZ6vmiP_OnznqIWk4Zk-tRi8HrWQeAanjiVS_h3-hk72Od8hTbJ_5Vhy8DrH0NsmrbGE067IaPbUQA2h-_J8bIAZRO32w05U/s640/Reading-Price-Action-Trend-Bar-ES-747x396_2.jpg&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  64. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: left;&quot;&gt;
  65. &lt;br /&gt;&lt;/div&gt;
  66. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: left;&quot;&gt;
  67. &lt;br /&gt;&lt;/div&gt;
  68. &lt;ol&gt;
  69. &lt;li&gt;The session started with the bulls in charge.&lt;/li&gt;
  70. &lt;li&gt;However, price soon stalled as both the bulls and the bears got involved.&lt;/li&gt;
  71. &lt;li&gt;Bears were in, but lacked strength when viewed in context.&lt;/li&gt;
  72. &lt;li&gt;Accordingly, this was an excellent bear trap. (Chance to buy.)&lt;/li&gt;
  73. &lt;li&gt;The bulls won this fight as price broke out above.&lt;/li&gt;
  74. &lt;li&gt;More bullishness after some struggle.&lt;/li&gt;
  75. &lt;li&gt;Sideways drift with two more instances of opposing Trend Bars. Bears win.&lt;/li&gt;
  76. &lt;/ol&gt;
  77. &lt;h2&gt;
  78. Open a Price Chart and Start Reading&lt;/h2&gt;
  79. This approach to reading price action is simple. This is why
  80. it&amp;nbsp;works&amp;nbsp;on all time-frames and instruments. (I selected the charts
  81. above at random.)&lt;br /&gt;
  82. It takes some practice, but anyone can do it too. Open a historical
  83. chart, mark the Trend Bars, and practice how to interpret the constant
  84. price war.&lt;br /&gt;
  85. After getting the hang of it, use the same method to understand the live market.&lt;br /&gt;
  86. This is a price action method for understanding market movements.
  87. It’s not perfect, but it is a solid first step to understanding price
  88. action.&lt;/div&gt;
  89. &lt;div style=&quot;text-align: justify;&quot;&gt;
  90. &lt;br /&gt;
  91. &lt;a href=&quot;https://nse-bse-mcx-technicalanalysis.blogspot.com/p/technical-analysis-course.html&quot; title=&quot;This course is a complete course for whom wants to became an Expert in the industry of share market.&quot;&gt;&lt;img alt=&quot;&quot; height=&quot;315&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhosHMK_b2dBvCMOSSyw5HucwUR6gLfM305cqoHAHpSC0w-UqLvNcut46fg5tPXPtW9kHU_gNX4nNjeizlaLlZZ6ZMobIGJ-XsgHQuF_7ORFidGCk34lzCz29oAM7y7qUvy_8wmVSOvn4yI/s1600/Screenshot_2.jpg&quot; width=&quot;680&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  92. &lt;div style=&quot;text-align: justify;&quot;&gt;
  93. &lt;/div&gt;
  94. &lt;div style=&quot;text-align: justify;&quot;&gt;
  95. &lt;/div&gt;
  96. &lt;div style=&quot;text-align: justify;&quot;&gt;
  97. &lt;/div&gt;
  98. &lt;div style=&quot;text-align: justify;&quot;&gt;
  99. &lt;/div&gt;
  100. &lt;div style=&quot;text-align: justify;&quot;&gt;
  101. &lt;/div&gt;
  102. &lt;div style=&quot;text-align: justify;&quot;&gt;
  103. &lt;/div&gt;
  104. &lt;div style=&quot;text-align: justify;&quot;&gt;
  105. &lt;/div&gt;
  106. &lt;div style=&quot;text-align: justify;&quot;&gt;
  107. &lt;/div&gt;
  108. &lt;div style=&quot;text-align: justify;&quot;&gt;
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  111. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/2311628975775017658'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/2311628975775017658'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2019/03/trend-bars-simple-way-to-look-at-price.html' title='Trend Bars - A Simple Way to Look at Price Action'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg4YmrGGAXHLp1tV6CsYiHCL7VaiCzkQ7CPgusTbYsdwe7f9hsx-ZU_UO0TNBYW7jSvtag78oVsWIcBIz2ENLaBS5kSMfQ79QdFWZj5MBy6n-5-zBJjoOkDntCZDKNnQ8smDDxWTBU-vHf_/s72-c/TrendBar-657x396.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-131162461429282111</id><published>2018-11-12T18:44:00.003+05:30</published><updated>2018-11-12T18:54:26.364+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="F&amp;O Trading Strategy"/><category scheme="http://www.blogger.com/atom/ns#" term="Mistakes"/><category scheme="http://www.blogger.com/atom/ns#" term="Trade Setup"/><title type='text'>Be Careful ! These 4 things that can make you fail in Stock Trading</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
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  113. &lt;/div&gt;
  114. &lt;div style=&quot;text-align: justify;&quot;&gt;
  115. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfmy_g6PPY7SsH_PHaxQkFBJQ5KnVOA6jjWHs95q9z7YC05Y9GAfvKIGOxAG2RU5sB5bdBbaCcomJL1n_Nkpek9GtYh8YkoYCo_tzfOjHYIhBB4avCTxaACk6OA_0XpwJbEx4AwTCDI-28/s1600/Construction-Fail-12.jpg&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;297&quot; data-original-width=&quot;400&quot; height=&quot;148&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfmy_g6PPY7SsH_PHaxQkFBJQ5KnVOA6jjWHs95q9z7YC05Y9GAfvKIGOxAG2RU5sB5bdBbaCcomJL1n_Nkpek9GtYh8YkoYCo_tzfOjHYIhBB4avCTxaACk6OA_0XpwJbEx4AwTCDI-28/s200/Construction-Fail-12.jpg&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;These few points will help you to not make mistakes I did and help you overcome some myths and notions associated with stock market trading . Just a request – Note that these learning have come from my trading in Options (which is derivatives) and not regular stocks, but that does not change the learning you are going to read below.&lt;/span&gt;&lt;/div&gt;
  116. &lt;div style=&quot;text-align: justify;&quot;&gt;
  117. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;br /&gt;&lt;/span&gt;&lt;/div&gt;
  118. &lt;div style=&quot;text-align: justify;&quot;&gt;
  119. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;br /&gt;&lt;/span&gt;&lt;/div&gt;
  120. &lt;h3 style=&quot;text-align: justify;&quot;&gt;
  121. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-size: large;&quot;&gt;Mistake #1 – I focused too much on Knowledge&lt;/span&gt;&lt;/span&gt;&lt;/h3&gt;
  122. &lt;div style=&quot;text-align: justify;&quot;&gt;
  123. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;When I entered into stock markets, I was of the impression that I need to acquire a lot of knowledge on how things work, how various strategies work ? How technical analysis can help in trading ? I learnt all the technical indicators, back tested them on the past data, wrote lot of programming scripts to test my hypothesis.&lt;br /&gt;&lt;br /&gt;I even went on to download lots of videos online and watched it over and over for many months and I realized that my knowledge had gone up significantly. I now understood lots of concepts, strategies, complex terms .&lt;br /&gt;&lt;br /&gt;I could see a chart and instantly see lots of hidden patterns and could tell more than a normal person who does not know how to read a chart.&lt;br /&gt;&lt;br /&gt;But then, over the months, I realized that “knowledge” is just a secondary element to trade successfully in stock markets. Almost all the good traders around the world agree that “knowledge” does not contribute more than 10-15% in being a successful trader. It’s an important thing , but certainty not the holy grail&lt;br /&gt;&lt;br /&gt;I am not saying that one should not focus on “knowledge” part, all I am saying is that it’s not that KEY thing to succeed. Over knowledge will only create problems for you.&lt;br /&gt;&lt;br /&gt;One of the famous stock trader Ashwani Gujral says in his book – “How to make money trading derivates” – that as per his experience over many decades, he feels that knowledge of charts etc contributes to just 10% of success for any trader. Here is the chart which explains what he mentioned in the book&lt;/span&gt;&lt;/div&gt;
  124. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: justify;&quot;&gt;
  125. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLI2vYjuENvlIFH0usrXX8Q3lsMT5S0NxNodu-h7OF0rSCCkgC53F7GTS4ou_JX3ArIKay0VRT4jjbw6Pwi-OD-JWIHziFmGHie8SrsbHxNG4Oq5y8QNuzR_40GF43oTzOloDfC6mORivK/s1600/elements-of-successful-trading.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;420&quot; data-original-width=&quot;398&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiLI2vYjuENvlIFH0usrXX8Q3lsMT5S0NxNodu-h7OF0rSCCkgC53F7GTS4ou_JX3ArIKay0VRT4jjbw6Pwi-OD-JWIHziFmGHie8SrsbHxNG4Oq5y8QNuzR_40GF43oTzOloDfC6mORivK/s1600/elements-of-successful-trading.png&quot; /&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  126. &lt;div style=&quot;background-color: white; box-sizing: border-box; color: black; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;&quot;&gt;
  127. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;So, learn things in stock market and then concentrate on the other important elements which you will learn in some time. Don&#39;t overthink about knowledge part.&lt;/span&gt;&lt;/div&gt;
  128. &lt;h4 style=&quot;background-color: white; box-sizing: border-box; color: black; font-style: normal; font-variant: normal; font-weight: bold; letter-spacing: normal; line-height: 1.1; margin-bottom: 30px; margin-top: 0px; padding-top: 0px; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;&quot;&gt;
  129. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-size: large;&quot;&gt;Mistake #2 – I went against the Trend&lt;/span&gt;&lt;/span&gt;&lt;/h4&gt;
  130. &lt;div style=&quot;background-color: white; box-sizing: border-box; color: black; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;&quot;&gt;
  131. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;What I have seen is that all the new traders somewhere want to challenge the markets and want to predict when markets will fall and when it will rise. They want to predict when the trend will reverse. They want to catch that top or bottom.&lt;/span&gt;&lt;/div&gt;
  132. &lt;div style=&quot;background-color: white; box-sizing: border-box; color: black; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;&quot;&gt;
  133. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;This is the essence of where most of the failed traders are stuck . If markets are rising , somewhere inside me, I wanted to catch the top and wanted to prove as if I “almost” know that now markets will fall OR if markets were going down.&lt;/span&gt;&lt;/div&gt;
  134. &lt;div style=&quot;background-color: white; box-sizing: border-box; color: black; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;&quot;&gt;
  135. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;However in this process, I realized that all the time I was just trying to swim against the trend, If markets were going up, I tried to predict when it will fall and how much and vice versa, and in that process I never stayed with the trend. There was some kind of fun in going against the trend. It was very tough to accept that markets can be simple (not easy)&lt;/span&gt;&lt;/div&gt;
  136. &lt;div style=&quot;background-color: white; box-sizing: border-box; color: black; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;&quot;&gt;
  137. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Below you can see last 1 yr graph of NIFTY Index and see that there has been an uptrend in market and it has risen from 6000 in 2013 to around 8000 now . That’s 33% increase , but imagine someone who didn’t stay with the trend and always tried to predict when will market fall and looked at markets with suspecting manner and never got in the trend itself.&lt;/span&gt;&lt;/div&gt;
  138. &lt;div style=&quot;background-color: white; box-sizing: border-box; color: black; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; text-align: justify; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;&quot;&gt;
  139. &lt;span style=&quot;font-family: &amp;quot;helvetica neue&amp;quot; , &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  140. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  141. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjz97ONATq9aDBbbbpaTF9PqoUgjCCMe-_YaWN7EgKdRTpvy2tx4Zambo03VC-pvX-M46ELqo7yS7mStaJwjmK1HoskXB7idRl9DWA8gdlXM2CT-0YrEadbIaHu4LSr0fI8T4VlNNG9dU34/s1600/dont-go-against-the-trend-in-stock-market.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;304&quot; data-original-width=&quot;597&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjz97ONATq9aDBbbbpaTF9PqoUgjCCMe-_YaWN7EgKdRTpvy2tx4Zambo03VC-pvX-M46ELqo7yS7mStaJwjmK1HoskXB7idRl9DWA8gdlXM2CT-0YrEadbIaHu4LSr0fI8T4VlNNG9dU34/s1600/dont-go-against-the-trend-in-stock-market.png&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  142. &lt;br /&gt;
  143. &lt;br class=&quot;Apple-interchange-newline&quot; /&gt;
  144. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  145. So just make sure that you never go against the flow in general. If I have to compare this trend following with some adventure sports, then I will compare it with&lt;span class=&quot;Apple-converted-space&quot;&gt;&amp;nbsp;&lt;/span&gt;Surfing, where you ride on the flow of the water. The flow of the water itself will take you with it, you just need to stay with it. Imagine what happens if you try to go against the water flow, the chances of you getting crushed is high.&lt;/div&gt;
  146. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  147. So, try to identify the overall trend (upside , downside) and then make sure whatever is your trading style , be with the flow itself.&lt;/div&gt;
  148. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  149. There is nothing wrong in having a contrarian view and predict when the markets will turn its direction, but be sure you know how you will take that decision. You can surely take a call against the trend , but make sure you accept that you were wrong in case you fail. Don’t try to prove yourself right if you are wrong, because it’s only going to harm you.&lt;/div&gt;
  150. &lt;h3 style=&quot;background-color: white; box-sizing: border-box; color: black; font-family: &amp;quot;Source Sans Pro&amp;quot;,&amp;quot;Helvetica Neue&amp;quot;; font-style: normal; font-variant: normal; font-weight: bold; letter-spacing: normal; line-height: 1.1; margin-bottom: 30px; margin-top: 0px; padding-top: 0px; text-align: left; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;&quot;&gt;
  151. &lt;span style=&quot;font-size: large;&quot;&gt;Mistake #3 – I didn’t realize that Money management is supreme&lt;/span&gt;&lt;/h3&gt;
  152. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  153. I personally think this is the most important part of being a successful trader . The biggest reason for my failure was that – I was very casual about money management and made the biggest mistakes in this area. Money Management in context of trading is all about managing your overall money and how much part of your overall trading capital you put at risk in each trade.&lt;/div&gt;
  154. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  155. I will give you an example – Let’s say you have set aside Rs 10 lacs for stock market trading . Now let’s say you make 2 rules&lt;/div&gt;
  156. &lt;blockquote style=&quot;-webkit-text-stroke-width: 0px; background: rgb(242, 242, 242); border-left-color: rgb(204, 204, 204); border-left-style: solid; border-left-width: 5px; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 15px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; margin: 0px 0px 20px; orphans: auto; padding: 30px; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  157. &lt;div style=&quot;box-sizing: border-box; line-height: 25px; margin: 0px 0px 30px; padding-left: 30px;&quot;&gt;
  158. &lt;b style=&quot;box-sizing: border-box; font-weight: 700;&quot;&gt;Rule 1&lt;/b&gt;&lt;span class=&quot;Apple-converted-space&quot;&gt;&amp;nbsp;&lt;/span&gt;: You will never use more than 20% of your capital in any given trade, no matter how promising it looks to you. Which means out of Rs 10 lacs you have , you will not put more than Rs 2 lacs on any single trade (so even in worst case, you will lose only 20% of your capital)&lt;/div&gt;
  159. &lt;div style=&quot;box-sizing: border-box; line-height: 25px; margin: 0px 0px 30px; padding-left: 30px;&quot;&gt;
  160. &lt;b style=&quot;box-sizing: border-box; font-weight: 700;&quot;&gt;Rule 2&lt;/b&gt;&lt;span class=&quot;Apple-converted-space&quot;&gt;&amp;nbsp;&lt;/span&gt;: The maximum loss you will allow on any give trade is 10% , which means that if you put Rs 2 lacs on a trade, you will not let the loss cross 10% , which is just Rs 20,000&lt;/div&gt;
  161. &lt;div style=&quot;box-sizing: border-box; line-height: 25px; margin: 0px; padding-left: 30px;&quot;&gt;
  162. If you see these 2 rules, you can see that the maximum loss in any single trade will not be more than Rs.20,000 which is 2% of your overall capital. So assuming you make 1 trade each month, you have 50 months of quota with you to go wrong fully&lt;/div&gt;
  163. &lt;/blockquote&gt;
  164. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  165. No one is so bad that they will make bad decisions every time, you make good and bad both decisions , but important point is that you should survive in markets till that time when you start taking right decisions .. Hence it’s important to be in the game and unless you take money management very seriously , you are bound to get out of the game some or the other day.&lt;/div&gt;
  166. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  167. This is exactly what happened with me. By the time I started realizing that I am moving from “bad trader” to an “average trader” zone , my capital was over and I was already in loss and I never went back to the game itself.&lt;/div&gt;
  168. &lt;h4 style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 18px; font-style: normal; font-variant: normal; font-weight: 500; letter-spacing: normal; line-height: 1.1; margin-bottom: 10px; margin-top: 10px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  169. &lt;i style=&quot;box-sizing: border-box;&quot;&gt;&lt;b style=&quot;box-sizing: border-box; font-weight: 700;&quot;&gt;Why one should use Money management ?&lt;/b&gt;&lt;/i&gt;&lt;/h4&gt;
  170. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  171. The biggest reason why money management should be used is that it does not expose you heavily to the risk on a broader level, even if there is very high risk on individual trades.&lt;/div&gt;
  172. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  173. And the next big reason why money management is crucial is that it brings some kind of consistency in your growth overtime.&lt;/div&gt;
  174. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  175. Below you can see 3 versions of money management, which is BAD , Average and GOOD money management, where the overall risk taken on a single trade is moving from high to low.&lt;/div&gt;
  176. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  177. I did some simulation on excel where we are measuring how capital will grow over 36 months (assuming 1 trade is done in a month) . I ran 25 tests and plotted them on a graph together. You can see how in case of bad money management the growth of capital is very random, unpredictable and varies from very high (lucky) to very low (unlucky)&lt;/div&gt;
  178. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  179. But in case of good money management , the growth of capital a trader has moves up over time and with high consistency .&lt;/div&gt;
  180. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  181. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhu6EY3BJazAZNF6cNIh0ZxjpqdgQGR5Eh0nqvgYZBw2JC3H3nAMz3OPEF4gfsWyMZRtwk6mrYbA4mc6k6vFd2ZmNsG-vgA-PP8kUQ1DH6UTsQ3j9qk5IacQ23vf5JNGAE2hRglJDkyYdyn/s1600/money-management-system-case-study.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;1554&quot; data-original-width=&quot;600&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhu6EY3BJazAZNF6cNIh0ZxjpqdgQGR5Eh0nqvgYZBw2JC3H3nAMz3OPEF4gfsWyMZRtwk6mrYbA4mc6k6vFd2ZmNsG-vgA-PP8kUQ1DH6UTsQ3j9qk5IacQ23vf5JNGAE2hRglJDkyYdyn/s1600/money-management-system-case-study.png&quot; /&gt;&amp;nbsp;&lt;/a&gt;&lt;/div&gt;
  182. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  183. So to sum up , I would say money management system is like having a great stamina . If you are there for longer time in markets, in a way you win the battle to some extent.&lt;/div&gt;
  184. &lt;h3 style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Source Sans Pro&#39;, &#39;Helvetica Neue&#39;; font-size: 28px !important; font-style: normal; font-variant: normal; font-weight: bold; letter-spacing: normal; line-height: 1.1; margin-bottom: 30px; margin-top: 0px; orphans: auto; padding-top: 0px; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  185. Mistake 4# – I thought trading is all about WINNING&lt;/h3&gt;
  186. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  187. Psychology plays a big role in being a good trader. From the childhood we are programmed to WIN and that same mindset takes over rational thinking in stock markets trading too. We want to WIN on all the trades , It’s hard to accept that you were wrong , being wrong means taking a LOSS . LOSS equals FAILURE and we are never taught properly how to take failures. And that’s exactly what happens in trading, novice traders don’t cut their losses fast, they let them grow (ego) and keep hoping that they will WIN&lt;/div&gt;
  188. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  189. This is what also happened with me. When I bought an option for a stock, every time I wanted to WIN, every time I wanted to make profit on that option. I thought I will become a great trader , if I WON more and more ..&lt;/div&gt;
  190. &lt;h4 style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 18px; font-style: normal; font-variant: normal; font-weight: 500; letter-spacing: normal; line-height: 1.1; margin-bottom: 10px; margin-top: 10px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  191. &lt;b style=&quot;box-sizing: border-box; font-weight: 700;&quot;&gt;&lt;i style=&quot;box-sizing: border-box;&quot;&gt;I was so WRONG&lt;/i&gt;&lt;/b&gt;&lt;/h4&gt;
  192. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  193. Winning MORE times is not same as making MORE money in stock markets trading. I know some of you who are reading this are confused with this statement , but let me explain this important point&lt;/div&gt;
  194. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  195. So when it comes to stock market trading, you can’t choose how many times you WIN or LOOSE, but can control HOW MUCH you will win or lose !&lt;/div&gt;
  196. &lt;h4 style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 18px; font-style: normal; font-variant: normal; font-weight: 500; letter-spacing: normal; line-height: 1.1; margin-bottom: 10px; margin-top: 10px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  197. &lt;b style=&quot;box-sizing: border-box; font-weight: 700;&quot;&gt;All you can do is 3 things&lt;/b&gt;&lt;/h4&gt;
  198. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; padding-left: 30px; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  199. 1. You can control how fast you can get out of loosing trade (getting out of a bad decision)&lt;/div&gt;
  200. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; padding-left: 30px; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  201. 2. You can control how long you will stay with a winning trade&lt;/div&gt;
  202. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; padding-left: 30px; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  203. 3. And You can control when you will take the decision using your knowledge.&lt;/div&gt;
  204. &lt;h4 style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 18px; font-style: normal; font-variant: normal; font-weight: 500; letter-spacing: normal; line-height: 1.1; margin-bottom: 10px; margin-top: 10px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  205. &lt;b style=&quot;box-sizing: border-box; font-weight: 700;&quot;&gt;&lt;i style=&quot;box-sizing: border-box;&quot;&gt;WINNING MORE , but still LOOSING&lt;/i&gt;&lt;/b&gt;&lt;/h4&gt;
  206. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  207. Every trade you make in stock market, you should make sure that your profits potential is generally much higher than the risk potential. Here is how it should look like&lt;/div&gt;
  208. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  209. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhe4JS-yZPxCsDhn7SNczGEYaJX_qOxrEq65FwC_4FWbCtJBkl3YqL6AXcf82thXbS6V-FV__h95fw0s0qIK8kx9tV1EZ3pCip8gTiV5LZJmVeAZSBFiWD6hrXupMM3vp6MjSYKhxDR3hvt/s1600/risk-reward-of-money-management-system.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;305&quot; data-original-width=&quot;520&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhe4JS-yZPxCsDhn7SNczGEYaJX_qOxrEq65FwC_4FWbCtJBkl3YqL6AXcf82thXbS6V-FV__h95fw0s0qIK8kx9tV1EZ3pCip8gTiV5LZJmVeAZSBFiWD6hrXupMM3vp6MjSYKhxDR3hvt/s1600/risk-reward-of-money-management-system.png&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  210. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  211. &lt;br /&gt;&lt;/div&gt;
  212. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  213. It’s very much possible that a trader wins 6 out of 10 times and still looses the money and in the same manner, it can happen that a trader wins just 4/10 times and still makes a lot of money.&lt;/div&gt;
  214. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  215. Let me explain this with an example. Let’s say a person has Rs 10 lacs to start his trading .&lt;/div&gt;
  216. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  217. A good trader wins just 4 times, but he makes sure that he will make big win and every time he makes a bad decision, he cuts the loss fast.&lt;/div&gt;
  218. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  219. And in same way, a bad trader might win 6 times , but every time they are in hurry to book their profits (so they earn small every time) and when they are in loss, they do not book their losses fast (no money management rules in place) and hence let their losses grow because they can’t accept they made mistake (Ego) . The chart below will explain you this .&lt;/div&gt;
  220. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpil6FIEJevcSlpDZF9-xpe3z2qeDnjpLP9tXzPhA_Q0JKA32bfT3NopVs9v7oLlYhSA0eRVE7OUWWx61oBshAoL_qywcfx_2aCwoiG1YBr8MYILzbGYgwVIn2hfFkYyC8bSM9_DZeg5Ir/s1600/why-winning-in-stock-markets-is-not-important.png&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;748&quot; data-original-width=&quot;600&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgpil6FIEJevcSlpDZF9-xpe3z2qeDnjpLP9tXzPhA_Q0JKA32bfT3NopVs9v7oLlYhSA0eRVE7OUWWx61oBshAoL_qywcfx_2aCwoiG1YBr8MYILzbGYgwVIn2hfFkYyC8bSM9_DZeg5Ir/s1600/why-winning-in-stock-markets-is-not-important.png&quot; /&gt;&lt;/a&gt;&lt;br /&gt;
  221. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  222. This is the only big difference between a good trader and bad trader .&lt;/div&gt;
  223. &lt;h3 style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Source Sans Pro&#39;, &#39;Helvetica Neue&#39;; font-size: 28px !important; font-style: normal; font-variant: normal; font-weight: bold; letter-spacing: normal; line-height: 1.1; margin-bottom: 30px; margin-top: 0px; orphans: auto; padding-top: 0px; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  224. &lt;b style=&quot;box-sizing: border-box; font-weight: 700;&quot;&gt;Conclusion&lt;/b&gt;&lt;/h3&gt;
  225. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  226. Today I have shared my mistakes I did when I traded OPTIONS and I hope you will learn from my mistakes . But this can just be starting point only, you will only learn when you get on the ground and do the real trading. Till then it’s just a practice no matter what you do.&lt;/div&gt;
  227. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  228. It’s extremely addictive to trade and if you are like me, you will feel a great thrill trading either stocks, futures or options (or any other instruments) , while I didn’t succeed in trading, I at-least know why I failed, I at least came to know my weakness and now I can improve upon it. I can at least help others to not make the same mistakes I did.&lt;/div&gt;
  229. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  230. Also in future, if I get into trading again, I am sure I will be 10X better compared to earlier version of mine. I know it will still be very though, but I can try at least and when I stopped my trading, somewhere I felt bad about leaving it. I felt as if I am turning my back and got a feel of leaving the battle ground, but it was a right decision because I could have damaged my own net-worth to a big extent had I not stopped.&lt;/div&gt;
  231. &lt;div style=&quot;-webkit-text-stroke-width: 0px; background-color: white; box-sizing: border-box; color: black; font-family: &#39;Libre Baskerville&#39;, Georgia, serif; font-size: 16px; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: 25px; margin: 0px 0px 30px; orphans: auto; text-align: start; text-indent: 0px; text-transform: none; white-space: normal; widows: 1; word-spacing: 0px;&quot;&gt;
  232. I would love to hear what you feel about the points I shared and if you would like to share your own experiences&lt;/div&gt;
  233. &lt;span style=&quot;font-size: xx-small;&quot;&gt;Source: Collected from Internet.&lt;/span&gt;&lt;br /&gt;
  234. &lt;br /&gt;
  235. &lt;span style=&quot;font-size: x-small;&quot;&gt;Disclaimer:&lt;br /&gt;Before using this post, please make sure that you note the following important notice. Information provided in this post for the educational &amp;amp; informational purpose only. Visitors/Viewer/ followers are advised, before making any investment decision from this post, you should do independent research. The use of this post or information for your own benefit is at your own risk.&lt;/span&gt;&lt;b&gt;&lt;br /&gt;&lt;br /&gt;&amp;nbsp;&lt;/b&gt;&lt;br /&gt;
  236. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: left;&quot;&gt;
  237. &amp;nbsp; &lt;/div&gt;
  238. &lt;/div&gt;
  239. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/131162461429282111'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/131162461429282111'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2018/11/be-careful-these-4-things-that-can-make.html' title='Be Careful ! These 4 things that can make you fail in Stock Trading'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhfmy_g6PPY7SsH_PHaxQkFBJQ5KnVOA6jjWHs95q9z7YC05Y9GAfvKIGOxAG2RU5sB5bdBbaCcomJL1n_Nkpek9GtYh8YkoYCo_tzfOjHYIhBB4avCTxaACk6OA_0XpwJbEx4AwTCDI-28/s72-c/Construction-Fail-12.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-2397695789658284402</id><published>2018-10-27T17:00:00.000+05:30</published><updated>2018-10-27T17:00:04.383+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Asset Allocation"/><category scheme="http://www.blogger.com/atom/ns#" term="Relationship of Risk &amp; Return"/><title type='text'>Relationship of Risk &amp; Return</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  240. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  241. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6ZbLL7NZc_HK8rZSmze2gqplIS4yvKDBppgV8I0z1LJiEFAM7hu7s-f0ZjO9zO5XYpmoOrI_qqOAZhbJQJjhAtKHH2JrV0p_4d2GdBQeufoCVGmZm06gEB__m3GrKrWkRbLr55Idcw7gh/s1600/Risks-Returns.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: left; float: left; margin-bottom: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;409&quot; data-original-width=&quot;827&quot; height=&quot;158&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6ZbLL7NZc_HK8rZSmze2gqplIS4yvKDBppgV8I0z1LJiEFAM7hu7s-f0ZjO9zO5XYpmoOrI_qqOAZhbJQJjhAtKHH2JrV0p_4d2GdBQeufoCVGmZm06gEB__m3GrKrWkRbLr55Idcw7gh/s320/Risks-Returns.png&quot; width=&quot;320&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  242. &lt;br /&gt;
  243. &lt;br /&gt;
  244. &quot;Stocks are risky. Bank deposits are safe. Don&#39;t buy stocks! Keep
  245. your money safe.&quot; Haven&#39;t you heard such statements before? We are sure
  246. you have.&lt;br /&gt;
  247. &lt;br /&gt;
  248. &lt;br /&gt;
  249. &lt;br /&gt;
  250. &lt;br /&gt;
  251. But before you decide to accept these statements on their face value, we
  252. suggest you understand the real relationship between risk and returns.
  253. To start with have a look at the average historical returns given by
  254. these 2 assets, i.e. stocks and bank deposits:&lt;br /&gt;
  255. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  256. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPCZxnuShW90eAkrdSbBUMsVC2SJrQGotvmkl5yUJ7CTar30_0aHKdAYkcJV5B3UDmKzOI_vO2-Jzv-2CUrP9yBvRxB3GbZIKp65v3f3nE7DaN4dCeB39StaDGfLegLp3JFSKu1_TmaEBj/s1600/ETF_Portfolio_Zoom.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;735&quot; data-original-width=&quot;1041&quot; height=&quot;281&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiPCZxnuShW90eAkrdSbBUMsVC2SJrQGotvmkl5yUJ7CTar30_0aHKdAYkcJV5B3UDmKzOI_vO2-Jzv-2CUrP9yBvRxB3GbZIKp65v3f3nE7DaN4dCeB39StaDGfLegLp3JFSKu1_TmaEBj/s400/ETF_Portfolio_Zoom.jpg&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  257. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  258. &lt;/div&gt;
  259. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  260. &lt;/div&gt;
  261. &lt;div class=&quot;t-center&quot;&gt;
  262. &lt;br /&gt;
  263. &lt;/div&gt;
  264. One glance at the table above and it becomes clear - which is the
  265. better asset to invest in,given the historical average returns. Another
  266. thing to note here is that returns given by bank deposits will be
  267. further reduced when we consider taxes.This makes stocks all the more
  268. better option for long-term investing.&lt;br /&gt;
  269. But unfortunately, stocks don’t go up in straight lines. Stocks are
  270. volatile and can move up or down sharply. This is unlike bank deposits,
  271. which are almost guaranteed to give fixed returns promised at the time
  272. of booking the deposits. But before you draw a negative conclusion about
  273. stocks, it is important to understand that its the very nature of
  274. stocks (as an asset class), which makes it a volatile asset class for
  275. the short term. But when you increase the period under review, its found
  276. that stocks (and equity mutual funds) give much higher average returns
  277. than what is given by bank deposits, or for that matter, any other asset
  278. class.&lt;br /&gt;
  279. Just have a look at the table below (which builds on the previous table):&lt;br /&gt;
  280. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  281. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSbS_QfjQjSbkUp4zcP5phEDAEo2I8GT5xxUjbPhi3i0e9rCUN_5LJCNe8aBkWjB_3tAh3gs52_n70xEyuMXgqwkUBlOQUSwoHbCR61w_l_tOTA7YsMIIgsa6ixoW00WYWrqmQ_0dxUELg/s1600/understanding-risk-return-img1.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;284&quot; data-original-width=&quot;450&quot; height=&quot;252&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiSbS_QfjQjSbkUp4zcP5phEDAEo2I8GT5xxUjbPhi3i0e9rCUN_5LJCNe8aBkWjB_3tAh3gs52_n70xEyuMXgqwkUBlOQUSwoHbCR61w_l_tOTA7YsMIIgsa6ixoW00WYWrqmQ_0dxUELg/s400/understanding-risk-return-img1.jpg&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  282. &lt;div class=&quot;t-center&quot;&gt;
  283. &lt;/div&gt;
  284. Stocks are clear winner.&lt;br /&gt;
  285. But nothing comes for free in this world. Same is the case with high
  286. returns of stocks. These come at a cost -higher volatility in the
  287. short-term.&lt;br /&gt;
  288. Or looked at from another perspective, an investor in stocks needs to
  289. be compensated for taking higher risks. This is achieved by means of
  290. higher returns that stocks provide.&lt;br /&gt;
  291. Understanding this relationship between risk and return is very
  292. important and can help an investor make correct financial decisions,
  293. based on their risk appetite and return requirements.&lt;br /&gt;
  294. &lt;b&gt;What is Risk?&lt;/b&gt;&lt;br /&gt;
  295. A very formal definition of risk is the likelihood that actual returns will be less than historical and expected returns.&lt;br /&gt;
  296. But to put it very simply, risk is the possibility of losing your
  297. money that is invested as principal. For example – You invest Rs 20,000
  298. in stocks today. Next day, the markets go down and reduce the value of
  299. your investments to Rs 18,000. That is the primary risk when you invest
  300. in stocks.&lt;br /&gt;
  301. But stocks are not the only assets that have risk. All investments
  302. have their own share of risks. The risks however vary in type and
  303. degree.&lt;br /&gt;
  304. So even when you keep you money in bank deposits offering 5.5%
  305. returns (after-tax), there is another kind of risk that you are taking –
  306. inflation risk. Your investment might not keep pace with inflation,
  307. which will reduce your purchasing power in future.&lt;br /&gt;
  308. Risk can come from many other factors too. Like volatility in stock
  309. markets, inflation, changes in currency exchange rates, changes in
  310. business dynamics, changes in economy, geo-political developments, etc.&lt;br /&gt;
  311. But generally, the investments that are considered to carry higher
  312. risks have the potential to deliver higher returns. On the other hand,
  313. investments with lower expected returns (like bank deposits),carry lower
  314. risks.&lt;br /&gt;
  315. &lt;b&gt;What is Return?&lt;/b&gt;&lt;br /&gt;
  316. This is quite simple. Returns are simply the amount you get (or lose)
  317. on the invested amount. It is generally calculated on an annual basis.&lt;br /&gt;
  318. As mentioned earlier too, the asset, which gives higher returns, is generally expected to have higher levels of risk.&lt;br /&gt;
  319. &lt;b&gt;Risk – Return Relationship&lt;/b&gt;&lt;br /&gt;
  320. There is a clear (if not linear) relationship between risk and returns.&lt;br /&gt;
  321. Try finding an asset, where there is no risk. Chances are that you
  322. will end up with an asset giving very low returns. Again try finding an
  323. asset that offers very high returns. We are sure you would have chosen a
  324. very risky asset.&lt;br /&gt;
  325. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  326. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKAyE4oD68HaX8jrXXqYMRz-gBUf3S30FkBC-d6JfHpHiiMZq6iKWz0xnt1mKIeOeE3_tC0l_cb0WOCTCSTyM3UoSaBmRkjJHCxtn5_wYfoVrBGnH8Mrha91DcqYMfdd_6qbIp-B3mM_56/s1600/UnderstandR3.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;282&quot; data-original-width=&quot;532&quot; height=&quot;211&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhKAyE4oD68HaX8jrXXqYMRz-gBUf3S30FkBC-d6JfHpHiiMZq6iKWz0xnt1mKIeOeE3_tC0l_cb0WOCTCSTyM3UoSaBmRkjJHCxtn5_wYfoVrBGnH8Mrha91DcqYMfdd_6qbIp-B3mM_56/s400/UnderstandR3.png&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  327. Now risk cannot be eliminated completely. At best, investors can manage the risk in their investments.&lt;br /&gt;
  328.  
  329. So when investing in shares, you can either have a concentrated
  330. portfolio of few stocks or a diversified portfolio of many stocks. The
  331. risk with holding a concentrated portfolio is that if value of even one
  332. company goes down, it will have a big impact on the overall portfolio
  333. returns.&lt;br /&gt;
  334.  
  335. Instead to reduce the risk, one can chose to invest in a diversified
  336. portfolio of stocks. This way, a fall in share price of even few stocks
  337. will not have a large negative impact on the overall portfolio returns.
  338. This is the exact principle on which fund managers build mutual fund
  339. portfolios.&lt;br /&gt;
  340.  
  341. Another way to reduce risk is to diversify across assets and hold a
  342. portfolio of stocks, bonds, bank deposits, gold and other assets. What
  343. happens then is that bank deposits, bonds, gold, etc. will provide
  344. stability to the portfolio, albeit at the cost of lower returns. Stocks
  345. on other hand will provide higher long-term returns and improve overall
  346. portfolio returns.&lt;br /&gt;
  347.  
  348. Time also plays a big role in deciding the returns obtained by
  349. investors. It has been empirically found that when investing in good
  350. stocks, the longer your investment horizon is, lower are the associated
  351. risks and returns are comparatively better than other asset classes.
  352. Having a long investment period averages out the short-term volatility
  353. of returns.&lt;br /&gt;
  354.  
  355. Humans have a tendency to reduce risk that they take. You too can
  356. choose to invest only in safe assets like bank deposits or hold cash.
  357. But then, your investments will lose value over time (due to inflation).
  358. And you don’t want that.&lt;br /&gt;
  359.  
  360. Its better to assess your risk tolerance and choose investments
  361. intelligently. Taking on some risk is necessary to achieve adequate
  362. returns. So try and find the ideal balance for your investments, which
  363. gives you the best risk-adjusted returns for your investments.&lt;br /&gt;
  364. &lt;br /&gt;
  365. &lt;br /&gt;
  366. &lt;b&gt;↪&lt;/b&gt; Disclaimer:&lt;br /&gt;Before using this post, please make sure that you note the following important notice. Information provided in this post for the educational &amp;amp; informational purpose only. Visitors/Viewer/ followers are advised, before making any investment decision from this post, you should do independent research. The use of this post or information for your own benefit is at your own risk.&lt;br /&gt;&lt;br /&gt;
  367. &lt;/div&gt;
  368. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/2397695789658284402'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/2397695789658284402'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2018/10/relationship-of-risk-return.html' title='Relationship of Risk &amp; Return'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh6ZbLL7NZc_HK8rZSmze2gqplIS4yvKDBppgV8I0z1LJiEFAM7hu7s-f0ZjO9zO5XYpmoOrI_qqOAZhbJQJjhAtKHH2JrV0p_4d2GdBQeufoCVGmZm06gEB__m3GrKrWkRbLr55Idcw7gh/s72-c/Risks-Returns.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-5799695394916302414</id><published>2018-10-27T16:31:00.001+05:30</published><updated>2018-10-27T16:31:18.552+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Stocks Catagory"/><category scheme="http://www.blogger.com/atom/ns#" term="Types Of Stocks"/><title type='text'>Different Types Of Stocks</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  369. &lt;div class=&quot;entry-content&quot;&gt;
  370.     &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  371. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgr2rJ6qjJ0t_QqlMnm9J_Q6c7kCuZT07pwcU3ZUPrpZ762KB9DNmWCRkU14W7shrD_rhBBs_ibByIl6FLYiN92L6idCi7o4NQfj5m8pkYNi_l4bQmI9Fcvm5tPigs8dJxoJjJs-hTuxcNq/s1600/Untitled-1.jpg&quot; imageanchor=&quot;1&quot; style=&quot;clear: left; float: left; margin-bottom: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;393&quot; data-original-width=&quot;499&quot; height=&quot;252&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgr2rJ6qjJ0t_QqlMnm9J_Q6c7kCuZT07pwcU3ZUPrpZ762KB9DNmWCRkU14W7shrD_rhBBs_ibByIl6FLYiN92L6idCi7o4NQfj5m8pkYNi_l4bQmI9Fcvm5tPigs8dJxoJjJs-hTuxcNq/s320/Untitled-1.jpg&quot; width=&quot;320&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  372. People invest in stocks to earn higher returns than what fixed
  373. income products offer. But all stocks are not same. Like the companies
  374. and businesses, the stocks of different companies also have different
  375. characteristics.&lt;br /&gt;
  376.  
  377. In general, companies issue stocks of two types – Preferred (have
  378. priority over other shareholders) &amp;amp; Common stocks. In line with its
  379. name, the common stocks are the first choice of retail investors. We
  380. will be focusing on common stocks in this article.&lt;br /&gt;
  381.  
  382. Let’s evaluate different stock classifications that are commonly used:&lt;br /&gt;
  383.  
  384. &lt;br /&gt;
  385.  
  386. &lt;strong&gt;&lt;u&gt;On basis of Market Capitalization&lt;/u&gt;&lt;/strong&gt;&lt;br /&gt;
  387.  
  388. Stocks are often classified as large caps, mid caps, small caps and
  389. micro caps on basis of their total market capitalization (Current Share
  390. Price x Total Number of Shares). Though there are no exact cutoffs about
  391. what exactly is defined as a large cap and what isn’t, investors
  392. usually categorize companies under as follows:&lt;br /&gt;
  393.  
  394. &lt;ul&gt;
  395. &lt;li&gt;&lt;strong&gt;Large-cap:&lt;/strong&gt; Market Cap &amp;gt; Rs 10,000 Crore (Cr)&lt;/li&gt;
  396. &lt;li&gt;&lt;strong&gt;Mid-cap:&lt;/strong&gt; Rs 2,000 Cr &amp;lt; Market Cap &amp;lt; Rs 10,000 Cr&lt;/li&gt;
  397. &lt;li&gt;&lt;strong&gt;Small-cap:&lt;/strong&gt; Rs 200 Cr &amp;lt; Market Cap &amp;lt; Rs 2,000 Cr&lt;/li&gt;
  398. &lt;li&gt;&lt;strong&gt;Micro-cap:&lt;/strong&gt; Below Rs 200 Cr&lt;/li&gt;
  399. &lt;/ul&gt;
  400. Also the concept of&amp;nbsp; Risk and Return &amp;nbsp;is
  401. applicable here too. Small companies are riskier than large ones. So
  402. due to the increased risk, many of the smaller companies tend to give
  403. higher returns than large or mid-cap companies. Of course, the
  404. proportion of small companies not doing well is also higher than those
  405. among their larger counterparts.&lt;br /&gt;
  406.  
  407. Many of the large cap stocks are of high quality, well-established
  408. companies with stable or growing earnings. The stocks of these companies
  409. are known as &lt;strong&gt;&lt;em&gt;blue-chip&lt;/em&gt;&lt;/strong&gt; stocks. The perceived
  410. risk associated with these companies is also very low. Examples - Many
  411. stocks that are part of Sensex or Nifty 50 index.&lt;br /&gt;
  412.  
  413. &lt;br /&gt;
  414.  
  415. &lt;strong&gt;&lt;u&gt;On basis of Growth / Value / Income&lt;/u&gt;&lt;/strong&gt;&lt;br /&gt;
  416.  
  417. This classification of stocks depends on the nature of business, its
  418. profit distribution policy and general assessment of price vs. actual
  419. intrinsic value.&lt;br /&gt;
  420.  
  421. &lt;br /&gt;
  422.  
  423. &lt;strong&gt;Growth Stocks&lt;/strong&gt;&lt;br /&gt;
  424.  
  425. These are stocks of businesses, which are growing higher than average
  426. rate. This high growth is translated into higher profits, and is
  427. reflected in rise of company’s stock price. Because of this, these
  428. companies prefer to reinvest their earnings back into company operations
  429. in hope of generating more profits. This theoretically helps these
  430. companies grow at a faster rate. Consequently, these companies have low
  431. dividend payouts. Generally, the growth stocks are bought more for
  432. capital appreciation in stock prices and are riskier than other two
  433. varieties.&lt;br /&gt;
  434.  
  435. &lt;br /&gt;
  436.  
  437. &lt;strong&gt;Value Stocks&lt;/strong&gt;&lt;br /&gt;
  438.  
  439. These are stocks that according to some financial analysis ratios,
  440. are trading at prices that are less than their actual (intrinsic)
  441. values. Some of the popularly used ratios to assess reasonability of
  442. price against embedded value are:&lt;br /&gt;
  443.  
  444. &lt;ul&gt;
  445. &lt;li&gt;Low P/E ratio&lt;/li&gt;
  446. &lt;li&gt;Low P/BV ratio&lt;/li&gt;
  447. &lt;li&gt;Low Price-to-Sales ratio, etc.&lt;/li&gt;
  448. &lt;/ul&gt;
  449. Value stocks don’t remain good value picks forever. When other
  450. investors realize that stocks are under-priced, the prices tend to rise
  451. up and reward those early investors who bought at lower levels.&lt;br /&gt;
  452.  
  453. &lt;br /&gt;
  454.  
  455. &lt;strong&gt;Income Stocks&lt;/strong&gt;&lt;br /&gt;
  456.  
  457. These stocks distribute a comparatively higher percentage of their
  458. earnings as dividends to shareholders. This often gives them high
  459. dividend yields &lt;em&gt;(dividend &amp;nbsp;in relation to their share price)&lt;/em&gt;.
  460. At times, these are also referred to as high dividend-yield stocks. A
  461. higher dividend means higher income and hence, the name income stocks.
  462. Generally, these belong to companies that have stable businesses
  463. churning out reasonable assured amounts of profits.&lt;br /&gt;
  464.  
  465. These are some of the more commonly used approaches to classify
  466. stocks. But stocks can also be classified in many other ways like
  467. defensive stocks, high beta stocks, etc.&lt;br /&gt;
  468. &lt;br /&gt;
  469. &lt;br /&gt;
  470. ↪Disclaimer:&lt;br /&gt;Before using this post, please make sure that you note the following important notice. Information provided in this post for the educational &amp;amp; informational purpose only. Visitors/Viewer/ followers are advised, before making any investment decision from this post, you should do independent research. The use of this post or information for your own benefit is at your own risk.&lt;br /&gt;&lt;br /&gt;
  471.  
  472.     &lt;/div&gt;
  473. &lt;/div&gt;
  474. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/5799695394916302414'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/5799695394916302414'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2018/10/different-types-of-stocks.html' title='Different Types Of Stocks'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgr2rJ6qjJ0t_QqlMnm9J_Q6c7kCuZT07pwcU3ZUPrpZ762KB9DNmWCRkU14W7shrD_rhBBs_ibByIl6FLYiN92L6idCi7o4NQfj5m8pkYNi_l4bQmI9Fcvm5tPigs8dJxoJjJs-hTuxcNq/s72-c/Untitled-1.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-4073625470985811441</id><published>2018-09-26T11:45:00.001+05:30</published><updated>2018-09-26T12:13:17.013+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Option Trading Tutorial"/><category scheme="http://www.blogger.com/atom/ns#" term="tech"/><category scheme="http://www.blogger.com/atom/ns#" term="Trading Setup"/><category scheme="http://www.blogger.com/atom/ns#" term="Trading Strategy"/><title type='text'>Option Put-Call Ratio </title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  475. &lt;h1 class=&quot;mT15&quot;&gt;
  476. Guide to Put-Call Ratio &lt;/h1&gt;
  477. &lt;div class=&quot;sfitemDetails sfdetails detailWrapper bolgIndividual&quot; data-sf-id=&quot;1a436f7b-f27f-6df3-8c06-ff00000a8217&quot; data-sf-provider=&quot;OpenAccessProvider&quot; data-sf-type=&quot;Telerik.Sitefinity.DynamicModules.Model.DynamicContent&quot;&gt;
  478. &lt;/div&gt;
  479. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  480. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlF6DaqViw3zuPw5Cj0RmSu7E5lzgw604nj9JaPSDTReigaZ_oG0Cj1gM6q-uZraGhujrAOicD5O1cpA8fBjpVQY5SVYbHIhAT-rpwkua6yQLnwZFM2_QUJpRS3yAXaTUMof6CHVd2Fd9J/s1600/ratios.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;283&quot; data-original-width=&quot;789&quot; height=&quot;143&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlF6DaqViw3zuPw5Cj0RmSu7E5lzgw604nj9JaPSDTReigaZ_oG0Cj1gM6q-uZraGhujrAOicD5O1cpA8fBjpVQY5SVYbHIhAT-rpwkua6yQLnwZFM2_QUJpRS3yAXaTUMof6CHVd2Fd9J/s400/ratios.jpg&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  481. &lt;div style=&quot;text-align: justify;&quot;&gt;
  482. &lt;br /&gt;&lt;/div&gt;
  483. &lt;div style=&quot;text-align: justify;&quot;&gt;
  484. &lt;span style=&quot;font-size: 18px;&quot;&gt;What  is Put/Call Ratio?&lt;/span&gt;&lt;/div&gt;
  485. &lt;div style=&quot;text-align: justify;&quot;&gt;
  486. Put/Call  ratio (PCR) is  a popular derivative indicator, specifically  
  487. designed to help traders gauge the overall&amp;nbsp;sentiment(mood) of the
  488. market. The ratio is calculated either  on the basis of options trading
  489. volumes or on the basis of the open interest  for a particular period.&amp;nbsp;
  490. If the ratio is more than 1, it means that more  puts have been  traded
  491. during the day and if it is less than 1 it means more calls  have been
  492. traded. The PCR can be  calculated for the option segment as a whole
  493. which includes individual stocks  as well as indices.&lt;br /&gt;
  494. &lt;img alt=&quot;&quot; class=&quot;img-responsive&quot; src=&quot;https://www.5paisa.com/cms/images/default-source/Blog-Articles/complete-guide-to-put.jpg?sfvrsn=2&quot; /&gt;
  495. &lt;/div&gt;
  496. &lt;h3 class=&quot;h2_blog&quot; style=&quot;text-align: justify;&quot;&gt;
  497. How  to Interpret Put/Call ratio &lt;/h3&gt;
  498. &lt;div style=&quot;text-align: justify;&quot;&gt;
  499. The  Put/Call ratio is mainly used as a contrarian indicator. Markets in
  500. the short-term are driven more by the emotions than  fundamentals.
  501. Times of greed and fear in the market are reflected by  significantly
  502. high or low PCR. Contrarians say, PCR is  usually headed in the wrong
  503. direction. In an oversold market, puts will be  high; as everyone
  504. expects the market to fall more. But for contrarian trader,  it suggests
  505. that the market may soon bottom out. Conversely, in an overbought  
  506. market, the number of calls traded will be high expecting the market to
  507. trend  higher but for contrarians, it would suggest that market top is
  508. in the making.&lt;br /&gt;
  509. &lt;br /&gt;
  510. There  is no fixed range that indicates that the market has created a
  511. bottom or a top,  but generally traders will anticipate this by looking
  512. for spikes in the ratio  or for when the ratio reaches levels that are
  513. outside of the normal trading range.&lt;br /&gt;
  514. &lt;br /&gt;
  515. If  options were held only to make directional bets, this analysis would
  516. have held true,  however traders trade options for reasons other than
  517. making directional bet.  Traders could buy options to hedge their
  518. existing position as well as to create income generation strategies.  So
  519. with a combination of speculation and hedging activities, relying
  520. solely in terms  of higher or lower number of Put Call ratio may not be
  521. fruitful. &lt;br /&gt;
  522. &lt;b&gt;&lt;/b&gt;&lt;br /&gt;
  523. &lt;b&gt;Let’s see how vague PCR  can be, if used in isolation.&lt;/b&gt;&lt;/div&gt;
  524. &lt;h4 class=&quot;h2_blog&quot; style=&quot;text-align: justify;&quot;&gt;
  525. Bank Nifty futures vis-à-vis Bank Nifty PCR&amp;nbsp;&lt;/h4&gt;
  526. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  527. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeT-x2m5zH-M0vbBFs0EZUvfGDsYgDLPIYa8HkmSrbYb6PtwlP7veSZ-yx2ehOyGjTolqOlaa-RbK_pAUqNAtURHV6eBF2qEbizeihLGhSpzlnRrxBGVVJAodTAzA1JqKZCsoJgg3yrfc7/s1600/bank-nifty-pcr.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;414&quot; data-original-width=&quot;728&quot; height=&quot;362&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjeT-x2m5zH-M0vbBFs0EZUvfGDsYgDLPIYa8HkmSrbYb6PtwlP7veSZ-yx2ehOyGjTolqOlaa-RbK_pAUqNAtURHV6eBF2qEbizeihLGhSpzlnRrxBGVVJAodTAzA1JqKZCsoJgg3yrfc7/s640/bank-nifty-pcr.jpg&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  528. &lt;div style=&quot;text-align: justify;&quot;&gt;
  529. In  the above example of Bank Nifty, we had witnessed a  steady increase
  530. in PCR from May 2016 to 15th July 2016. Con-currently we saw a  rise in
  531. price of Bank Nifty as well. In Dec 2016 Bank Nifty resumed its fresh  
  532. uptrend but PCR fell sharply. This contradicts with the  relations
  533. experienced earlier. From May 2017 till July 2017, PCR has once again  
  534. moved in tandem with Bank Nifty. PCR as an indicator on its own has
  535. flaws. PCR levels in a highly volatile  market can be misleading as
  536. typically, during such times; traders tend to sell  puts instead of
  537. buying calls. So, analyzing put call ratio based only on high  or low
  538. PCR numbers could prove costly. Thus it is important to use Put Call  
  539. ratio in sync with other trading activities. &lt;/div&gt;
  540. &lt;h3 class=&quot;h2_blog&quot; style=&quot;text-align: justify;&quot;&gt;
  541. PCR Analysis &lt;/h3&gt;
  542. &lt;div style=&quot;text-align: justify;&quot;&gt;
  543. Let’s  see how PCR analysis can be interpreted taking option sellers
  544. into  consideration who are the major players in the market as compared
  545. to the retail  public who are usually on the buying side of the trade.&amp;nbsp;&lt;br /&gt;
  546. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  547. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGS4ID_ZEwYiA5oi8yFwlwmavBhv1lUtio2H5EMrzWO1LRg56BhmR48k-v1UOvoqqRCF4j3iQ6QzbNi0kumKot_BW0Q7Uoe_OiQ298cuWHrhq7RlX1L_fiWcAcm8ZQeQMgRWJ8WyWI8FGH/s1600/Screenshot_1.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;450&quot; data-original-width=&quot;705&quot; height=&quot;408&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiGS4ID_ZEwYiA5oi8yFwlwmavBhv1lUtio2H5EMrzWO1LRg56BhmR48k-v1UOvoqqRCF4j3iQ6QzbNi0kumKot_BW0Q7Uoe_OiQ298cuWHrhq7RlX1L_fiWcAcm8ZQeQMgRWJ8WyWI8FGH/s640/Screenshot_1.jpg&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  548. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  549. &lt;/div&gt;
  550. &amp;nbsp;Traders can combine  options data including the Put Call ratio with
  551. implied volatility to gauge if  long or short positions have been
  552. created in the market. &lt;/div&gt;
  553. &lt;div style=&quot;text-align: justify;&quot;&gt;
  554. &lt;br /&gt;
  555. 1) Build-up in options along with increase in  IV’s (Implied Volatility) suggests long formation &lt;br /&gt;
  556. &lt;br /&gt;
  557. 2)  Build-up in options along with fall in IV’s (Implied Volatility) suggests short  formation &lt;br /&gt;
  558. Types  of View based on Open Interest, Implied Volatility and Put Call Ratio:&lt;br /&gt;
  559. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  560. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTwR_O4x5VylaSzDjL1pBMPw0IJRD5pJUp6WLRnqXjFTu4m6ybOZjLDbGLaPFIzo-NU_ys-R9bGSJL8YIQQ0xmHPI2G6fcN1AD3hc1SXQX6A0JoqLKkBhyCNqg3uBPnQ7r9rIWlP4jberK/s1600/Screenshot_2.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;503&quot; data-original-width=&quot;472&quot; height=&quot;640&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhTwR_O4x5VylaSzDjL1pBMPw0IJRD5pJUp6WLRnqXjFTu4m6ybOZjLDbGLaPFIzo-NU_ys-R9bGSJL8YIQQ0xmHPI2G6fcN1AD3hc1SXQX6A0JoqLKkBhyCNqg3uBPnQ7r9rIWlP4jberK/s640/Screenshot_2.jpg&quot; width=&quot;600&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  561. Let’s see how the combination of the Scenario 4 &amp;amp; 8 from  the above
  562. table provided a Buying signal before the big up spurt in Nifty. &lt;/div&gt;
  563. &lt;h4 class=&quot;h2_blog&quot; style=&quot;text-align: left;&quot;&gt;
  564. Chart A –Nifty Futures July Series&amp;nbsp;&lt;/h4&gt;
  565. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  566. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRb02BU6epg9FqafS8hhNKLhAhYDVCFZfBlwwgC-pMWs9sxH_5Jh45OTvP9kSdE_UbQr2Eq2GO4LRpM6L7W2o_PS9ORa3x9uVOLqET4UA99aqJgV4y9yqpap-FJbtU1EQ2SDGztlKW_PwR/s1600/nifty-futures-july-series.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;304&quot; data-original-width=&quot;800&quot; height=&quot;242&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgRb02BU6epg9FqafS8hhNKLhAhYDVCFZfBlwwgC-pMWs9sxH_5Jh45OTvP9kSdE_UbQr2Eq2GO4LRpM6L7W2o_PS9ORa3x9uVOLqET4UA99aqJgV4y9yqpap-FJbtU1EQ2SDGztlKW_PwR/s640/nifty-futures-july-series.jpg&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  567. &lt;h2 class=&quot;h2_blog&quot;&gt;
  568. &lt;/h2&gt;
  569. &lt;div style=&quot;text-align: justify;&quot;&gt;
  570. &lt;/div&gt;
  571. &lt;div style=&quot;text-align: justify;&quot;&gt;
  572. (Upper Sub Graph –Nifty Futures Price, Green Line –Nifty  Futures Open Interest)&lt;/div&gt;
  573. &lt;h4 class=&quot;h2_blog&quot; style=&quot;text-align: justify;&quot;&gt;
  574. Chart B- Nifty 10,000 July CE &lt;/h4&gt;
  575. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  576. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8AA5KNKZztxLHERzVyuvrXXnfZmKatgkzX3xEno4JUMsCo79Tj6T0bP1J3cojkdv3dua0e81ZHkRJ6TrbaIwyg8LYPvc7WhjUglcmHdYCKw8f-hxiPbkbfoaaMcPO68TBXA-ZWU3ZMQOC/s1600/nifty-10-000-july-ce.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;365&quot; data-original-width=&quot;800&quot; height=&quot;291&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg8AA5KNKZztxLHERzVyuvrXXnfZmKatgkzX3xEno4JUMsCo79Tj6T0bP1J3cojkdv3dua0e81ZHkRJ6TrbaIwyg8LYPvc7WhjUglcmHdYCKw8f-hxiPbkbfoaaMcPO68TBXA-ZWU3ZMQOC/s640/nifty-10-000-july-ce.jpg&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  577. &lt;div style=&quot;text-align: justify;&quot;&gt;
  578. (Upper Sub Graph-Nifty 10,000CE, Blue Line –PCR, Red  Line-Implied Volatility 10,000CE, Green Line –Open Interest 10,000CE)&lt;br /&gt;
  579. &lt;br /&gt;
  580. &lt;b&gt;Chart A&lt;/b&gt;: Nifty futures witnessed a swift increase in
  581. prices from 9650  levels to 9950 levels where the markets started to
  582. consolidate, coinciding with  a gradual increase in Nifty futures O.I.
  583. Traders at this levels started to  create fresh short position in the
  584. futures market, expecting the market to  correct as the open interest
  585. surged higher along with a small drop in  prices.&amp;nbsp; &lt;br /&gt;
  586. &lt;br /&gt;
  587. Simultaneously in &lt;b&gt;Chart B &lt;/b&gt;from  10th July to 20th July
  588. we witnessed call writing in OTM  call option strikes including
  589. 10,000CE(as shown in the above graph) as the traders  expected market to
  590. correct or remain range bound and not cross 10,000 levels in  the
  591. current series. This is indicated by a decrease in PCR and increase in
  592. Open  interest of Nifty OTM call options including 10,000CE strike
  593. during the same  timeframe. &lt;br /&gt;
  594. &lt;br /&gt;
  595. As price of Nifty futures started to increase from 23rd July,  traders
  596. who were short in the futures market along with the call option writers
  597. had to run for a  cover and close their short positions. This panic was
  598. observed by a sharp  decline in the open interest positions of Nifty
  599. future contracts. In addition,  implied volatility also tumbled along
  600. with an increase in Put Call ratio due to  unwinding of open positions
  601. in short call option strikes. &lt;br /&gt;
  602. &lt;br /&gt;
  603. Any smart trader, by analyzing the above mentioned positions in Nifty
  604. futures and  call options could have taken a bullish stance by
  605. anticipating a huge short covering  in the markets.&amp;nbsp;&lt;/div&gt;
  606. &lt;div style=&quot;text-align: justify;&quot;&gt;
  607. &lt;br /&gt;&lt;/div&gt;
  608. &lt;div style=&quot;text-align: justify;&quot;&gt;
  609. ----------------------------------------------------------------------------------------------------------- &lt;/div&gt;
  610. &lt;blockquote class=&quot;tr_bq&quot;&gt;
  611. ↪Disclaimer:&lt;br /&gt;
  612. Before using this post, please make sure that you note the following important notice. Information provided in this post for the educational &amp;amp; informational purpose only. Visitors/Viewer/ followers are advised, before making any investment decision from this post, you should do independent research. The use of this post or information for your own benefit is at your own risk.&lt;/blockquote&gt;
  613. &lt;div style=&quot;text-align: justify;&quot;&gt;
  614. &lt;br /&gt;&lt;/div&gt;
  615. &lt;div style=&quot;text-align: justify;&quot;&gt;
  616. &lt;br /&gt;&lt;/div&gt;
  617. &lt;/div&gt;
  618. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4073625470985811441'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4073625470985811441'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2018/09/option-put-call-ratio.html' title='Option Put-Call Ratio '/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhlF6DaqViw3zuPw5Cj0RmSu7E5lzgw604nj9JaPSDTReigaZ_oG0Cj1gM6q-uZraGhujrAOicD5O1cpA8fBjpVQY5SVYbHIhAT-rpwkua6yQLnwZFM2_QUJpRS3yAXaTUMof6CHVd2Fd9J/s72-c/ratios.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-4164046463995281306</id><published>2018-04-05T18:07:00.000+05:30</published><updated>2018-08-23T10:49:10.019+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Balance sheet"/><category scheme="http://www.blogger.com/atom/ns#" term="Balance sheet analysis"/><category scheme="http://www.blogger.com/atom/ns#" term="Fundamental analysis"/><title type='text'>How to read Balance Sheet for Fundamental Analysis </title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  619. &lt;!--[if !mso]&gt;
  620. &lt;style&gt;
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  624. .shape {behavior:url(#default#VML);}
  625. &lt;/style&gt;
  626. &lt;![endif]--&gt;
  627.  
  628. &lt;br /&gt;
  629. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  630. &lt;br /&gt;
  631. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;By looking at the balance sheet of
  632. the company one can understand how the company has build wealth for itself and
  633. its owners over the past years.&lt;/span&gt;&lt;/div&gt;
  634. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  635. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Balance sheet of a company makes one
  636. thing clear about the business, it talks about from where the company is
  637. generating funds to run its business, and where the company is using those
  638. funds.&lt;/span&gt;&lt;/div&gt;
  639. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  640. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Any company generate funds in three
  641. possible ways. It can borrow money from stock market. This is called &lt;b&gt;share
  642. capital&lt;/b&gt; in balance sheet.&lt;/span&gt;&lt;/div&gt;
  643. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  644. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;The company can also retain its net
  645. profits to run the business. This is called &lt;b&gt;reserves and surplus&lt;/b&gt; in the
  646. balance sheet.&lt;/span&gt;&lt;/div&gt;
  647. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  648. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Company can also borrow funds from
  649. Bank etc. This is recorded as long term borrowing and short term borrowing in
  650. balance sheet.&lt;/span&gt;&lt;/div&gt;
  651. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  652. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Hence, the total funds available
  653. with a company to run its business can be summed up like this:&lt;/span&gt;&lt;/div&gt;
  654. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  655. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Total Funds = Share Capital +
  656. Reserves + Debt.&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  657. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  658. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;{Note: Share Capital + Reserves =
  659. Book Value.}&lt;/span&gt;&lt;/div&gt;
  660. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  661. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;This (total funds) is also called
  662. the &lt;b&gt;total liability&lt;/b&gt; of the company.&lt;/span&gt;&lt;/div&gt;
  663. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  664. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;How the company uses their generated
  665. funds is also indicated in the balance sheet.&lt;/span&gt;&lt;/div&gt;
  666. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  667. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Company use its generated funds to
  668. build &lt;b&gt;assets&lt;/b&gt;. These assets intern generate income for the company.&lt;/span&gt;&lt;/div&gt;
  669. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  670. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Let’s see the important constituents
  671. of a balance sheet in more detail.&lt;/span&gt;&lt;/div&gt;
  672. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  673. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Balance sheet basically defines this
  674. equation:&lt;/span&gt;&lt;/div&gt;
  675. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  676. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhX-Hb_tjORngtUk9vMwzJ4qLhP0TRQwBluqqQU3mgst4n1Ec-zIyV0IegcNfrMsjpdXOz3U3oR8uAmOAp2ukSnrOzheIN4TU1iyh-K6zGzKXIYbD3VnzNcCN3nmiDwQ7cEVl9JeF2E4rt3/s1600/Understanding-Balance-Sheet_FORMULA.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;294&quot; data-original-width=&quot;645&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhX-Hb_tjORngtUk9vMwzJ4qLhP0TRQwBluqqQU3mgst4n1Ec-zIyV0IegcNfrMsjpdXOz3U3oR8uAmOAp2ukSnrOzheIN4TU1iyh-K6zGzKXIYbD3VnzNcCN3nmiDwQ7cEVl9JeF2E4rt3/s1600/Understanding-Balance-Sheet_FORMULA.png&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  677. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  678. &lt;br /&gt;&lt;/div&gt;
  679. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  680. &lt;b style=&quot;mso-bidi-font-weight: normal;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  681. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  682. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;If one read a balance sheet statement
  683. of a company, it will show how much accumulated wealth the company has amassed
  684. till that day.&lt;/span&gt;&lt;/div&gt;
  685. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;&quot;&gt;
  686. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 18.0pt;&quot;&gt;Shareholders
  687. fund (Book Value / Net Worth)&lt;/span&gt;&lt;/b&gt;&lt;/div&gt;
  688. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  689. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Why it is called as shareholders
  690. fund?&lt;/span&gt;&lt;/div&gt;
  691. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  692. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Shareholders fund is that money that
  693. companies owe to their shareholders.&lt;/span&gt;&lt;/div&gt;
  694. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  695. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Shareholders have a legal claim on
  696. the company’s net profits. Hence any funds that is retained by the company
  697. (Reserves) goes into the account of shareholders funds.&lt;/span&gt;&lt;/div&gt;
  698. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  699. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Company consider these funds as that
  700. money which they need to pay-back to the shareholders one day.&lt;/span&gt;&lt;/div&gt;
  701. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  702. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Book Value = Share Capital +
  703. Reserves&lt;/span&gt;&lt;/div&gt;
  704. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  705. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Share capital:&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt; is that money that the company has generated from its IPO.&lt;/span&gt;&lt;/div&gt;
  706. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  707. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Share capital is actually the
  708. borrowed money that the company has taken from the shareholders.&lt;/span&gt;&lt;/div&gt;
  709. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  710. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;It is also treated as companies
  711. liability.&lt;/span&gt;&lt;/div&gt;
  712. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  713. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Reserves &lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;:are also referred as retained net profits of the company.&lt;/span&gt;&lt;/div&gt;
  714. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  715. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Why companies retain their profits?
  716. This is done to strengthen their balance sheet (financial position).&lt;/span&gt;&lt;/div&gt;
  717. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  718. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Companies used a reserves to buy new
  719. fixed assets. This day 2 by means of capital expenditure plans (CAPEX).&lt;/span&gt;&lt;/div&gt;
  720. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  721. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Companies also use their reserves to
  722. reduce there debt burden.&lt;/span&gt;&lt;/div&gt;
  723. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  724. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;A portion of reserves is also used
  725. to pay dividends to its existing shareholders.&lt;/span&gt;&lt;/div&gt;
  726. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  727. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;General there are two types of
  728. reserves. First, revenue reserve and second, is called capital Reserves.&lt;/span&gt;&lt;/div&gt;
  729. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  730. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Revenue reserves is again
  731. categorized into two types, first he is general reserves and second is specific
  732. reserves.&lt;/span&gt;&lt;/div&gt;
  733. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  734. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;As the name suggests, &lt;b&gt;general
  735. reserves&lt;/b&gt; is not apportioned for any specific purpose. They are just kept in
  736. the balance sheet to strengthen the financial position of the company.&lt;/span&gt;&lt;/div&gt;
  737. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  738. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Specific reserves&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt; are those portion of money which is kept for specific
  739. purpose. The the funds kept in the specific reserve shall be used only for the
  740. designated purpose.&lt;/span&gt;&lt;/div&gt;
  741. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  742. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;How the reserves in the balance
  743. sheet is funded every year?&lt;/span&gt;&lt;/div&gt;
  744. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  745. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;The annual profits of the company
  746. that is shown as net profit, in profit and loss account, is transferred to the
  747. company’s balance sheet as retained earnings.&lt;/span&gt;&lt;/div&gt;
  748. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  749. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;This retained earning in turn is
  750. used as the reserves of the company.&lt;/span&gt;&lt;/div&gt;
  751. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  752. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;If the company has made a loss in a
  753. particular financial year, no transaction is recorded in the reserves column of
  754. the balance sheet.&lt;/span&gt;&lt;/div&gt;
  755. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  756. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Sometimes, in case of loss, the
  757. company may even debit there reserves account in balance sheet to meet their
  758. requirements.&lt;/span&gt;&lt;/div&gt;
  759. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  760. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;In such case one will find a dip in
  761. the reserves and surplus account as compared to the previous year.&lt;/span&gt;&lt;/div&gt;
  762. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  763. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;One of the most important financial
  764. indicator detailed in the Balance Sheet is shareholders equity. In doing a
  765. balance sheet analysis it plays an important role.&lt;/span&gt;&lt;/div&gt;
  766. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  767. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Net worth of a company is equal to
  768. total capital generated by the company by issuing stocks and accumulated
  769. retained earnings.&lt;/span&gt;&lt;/div&gt;
  770. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  771. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;A continuously improving net worth
  772. is what investors likes to see in companies balance sheet.&lt;/span&gt;&lt;/div&gt;
  773. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  774. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Investors must compare last five
  775. years net worth of the company, and must also check growth rate.&lt;/span&gt;&lt;/div&gt;
  776. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  777. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;It is important to check how the net
  778. worth of company has grown.&lt;/span&gt;&lt;/div&gt;
  779. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  780. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;If increase in net worth is
  781. attributable only to the issuance of more stocks to public, then it is not
  782. good.&lt;/span&gt;&lt;/div&gt;
  783. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  784. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Ideally, the companies net worth
  785. must increase due to growth in retained earnings.&lt;/span&gt;&lt;/div&gt;
  786. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;&quot;&gt;
  787. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 18.0pt;&quot;&gt;Liability&lt;/span&gt;&lt;/b&gt;&lt;/div&gt;
  788. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  789. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Non current liabilities&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  790. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  791. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Non current liabilities are those
  792. liabilities of a company which is settled only after 12 months from the date of
  793. reporting.&lt;/span&gt;&lt;/div&gt;
  794. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  795. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;These are such liabilities that
  796. company need not settle immediately.&lt;/span&gt;&lt;/div&gt;
  797. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  798. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;If you will see in moneycontrol.com,
  799. you will find that non current liabilities are mainly recorded in two three
  800. some heads. First he’s long term borrowing. Second, is deferred tax liability
  801. and third is long term provisions.&lt;/span&gt;&lt;/div&gt;
  802. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  803. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Companies which show the line item
  804. has long term borrowing, means that the company has taken that from the market
  805. (mainly banks).&lt;/span&gt;&lt;/div&gt;
  806. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  807. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;It is very important for the
  808. shareholders to keep a note of how high is the long term borrowings of the
  809. company as compared to its equity.&lt;/span&gt;&lt;/div&gt;
  810. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  811. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Deferred tax liability is a
  812. provisional fund maintained by the company using which they will pay the
  813. forthcoming additional tax dues.&lt;/span&gt;&lt;/div&gt;
  814. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  815. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Has a part of non current liability
  816. the company also hello kids some funds in the name of long term provisions.
  817. Here the company keeps some cash reserves for paying their employees. These
  818. payments can be like gratuity, provident funds, leave encashment. The
  819. provisions can also be made for income tax payment, payment of dividend to
  820. shareholders, dividend distribution tax etc.&lt;/span&gt;&lt;/div&gt;
  821. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  822. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Current liabilities&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  823. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  824. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Current liabilities are those
  825. obligation of the company that they must meet before 12 months.&lt;/span&gt;&lt;/div&gt;
  826. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  827. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;If you will look into balance sheet
  828. of any company in moneycontrol.com you will find four line items under the
  829. heading current liabilities. They are, short term borrowing, trade payables,
  830. other current liability and short term provisions.&lt;/span&gt;&lt;/div&gt;
  831. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  832. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Short term borrowing is essentially
  833. that loan that company has taken from Bank CTC to fund there day-to-day cash
  834. flow requirement. In financial term this is also called as working capital of
  835. the company.&lt;/span&gt;&lt;/div&gt;
  836. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  837. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Trade payable is that money that a
  838. company must pay to its suppliers within next 12 months.&lt;/span&gt;&lt;/div&gt;
  839. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  840. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Short term provisions are again
  841. similar to long term provisions. The only difference here he is, this
  842. provisions me get used within next 12 months.&lt;/span&gt;&lt;/div&gt;
  843. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;&quot;&gt;
  844. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 18.0pt;&quot;&gt;Assets&lt;/span&gt;&lt;/b&gt;&lt;/div&gt;
  845. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  846. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Generally in the balance sheet,
  847. assets are categorised into two main types: non-current assets and current
  848. assets.&lt;/span&gt;&lt;/div&gt;
  849. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  850. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd3wvxcLn0ZTS5GQzyYv4I_YEJOycayYPt785JEBhtfbYj_8dtuEaQp1nkT1mwF27nt8YvrIeD-eCXOHKwIfk3RSbCDNMyWTnYYQ7uk8sdf26cRmMz646xyi-OlVoUR-Ddz6GN6rp4hKDB/s1600/Understanding-Balance-Sheet_Asset.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;444&quot; data-original-width=&quot;757&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhd3wvxcLn0ZTS5GQzyYv4I_YEJOycayYPt785JEBhtfbYj_8dtuEaQp1nkT1mwF27nt8YvrIeD-eCXOHKwIfk3RSbCDNMyWTnYYQ7uk8sdf26cRmMz646xyi-OlVoUR-Ddz6GN6rp4hKDB/s1600/Understanding-Balance-Sheet_Asset.png&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  851. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  852. &lt;br /&gt;&lt;/div&gt;
  853. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  854. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  855. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  856. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Non-current assets are basically
  857. property, plant, and equipment’s of the company. Normal terms we call it as
  858. fixed assets of the company (Tangible assets).&lt;/span&gt;&lt;/div&gt;
  859. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  860. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Fixed Assets (Tangible Assets)&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  861. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  862. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Fixed assets adults assets of the
  863. company which they use directly for the production of goods and services for
  864. their customers.&lt;/span&gt;&lt;/div&gt;
  865. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  866. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Common examples of fixed assets are
  867. land, factory buildings, machines, furniture’s, Motor vehicles etc.&lt;/span&gt;&lt;/div&gt;
  868. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  869. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Fixed assets are those assets of the
  870. company which company gathers to hold them for long-term.&lt;/span&gt;&lt;/div&gt;
  871. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  872. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Contrast to the fixed assets, an
  873. inventory is also an asset of the company. But company maintains the inventory
  874. with the objective of selling them in near future.&lt;/span&gt;&lt;/div&gt;
  875. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  876. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Intangible assets&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  877. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  878. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Assets of the company do not have a
  879. physical substance. You cannot physically see it and touch it. Example off in
  880. tangible assets can be like copyrights, trademarks,&amp;nbsp;patents etc gathered
  881. by the company over a period of time.&lt;/span&gt;&lt;/div&gt;
  882. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  883. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Capital work in progress&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  884. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  885. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;These are those assets which were
  886. not ready at the time of preparation of the balance sheet. These are those
  887. assets which are still not ready to produce goods and services for the company.&lt;/span&gt;&lt;/div&gt;
  888. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  889. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Hence, call costs that has gone into
  890. the preparation of that as it is shown as capital work in progress off the
  891. companies balance sheet.&lt;/span&gt;&lt;/div&gt;
  892. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  893. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Just to understand, let’s take a
  894. small example. Pause cement manufacturing plant is putting up a new facility to
  895. manufacture a new brand of cement. Average it may take 3 years for the company
  896. to start production from this new facility. But the company will start spending
  897. money on this asset from the first months itself. So, the cost that was into
  898. the preparation of the new cement plant will be booked as capital work in
  899. progress for the next three years.&lt;/span&gt;&lt;/div&gt;
  900. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  901. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;As soon as the new plant will begin
  902. production, all capital work in progress associated with this new plant will be
  903. transferred as tangible asset.&lt;/span&gt;&lt;/div&gt;
  904. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  905. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Non-current investments&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  906. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  907. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Current investments are those
  908. investments made by the company which day would like to hold for more then next
  909. 12 months. Example of such an investment can be stockholding of another
  910. company.&lt;/span&gt;&lt;/div&gt;
  911. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  912. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Generally current investments are
  913. reported in the balance sheet equivalent to the market valuation of the
  914. investment.&lt;/span&gt;&lt;/div&gt;
  915. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  916. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Current assets&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  917. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  918. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Current assets are those assets of
  919. the company which is expected to be converted into cash within next one year.&lt;/span&gt;&lt;/div&gt;
  920. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  921. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;It is the current assets of the
  922. company that helps them to maintain enough liquidity.&lt;/span&gt;&lt;/div&gt;
  923. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  924. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Current assets of the company helps
  925. in management of the current liabilities.&lt;/span&gt;&lt;/div&gt;
  926. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  927. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;One of the most reliable firms of
  928. current assets cash and cash equivalent, inventory, it’s investments, account
  929. receivables from its customers, and loans and advances given to associates/
  930. suppliers. Advances are also referred to as pre-paid expenses in some balance
  931. sheets.&lt;/span&gt;&lt;/div&gt;
  932. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 3;&quot;&gt;
  933. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 13.5pt;&quot;&gt;To
  934. Conclude&lt;/span&gt;&lt;/b&gt;&lt;/div&gt;
  935. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  936. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAMqxlfd4Sj9BFyZQzn-GnVmQkbcm0ecvrkb9yh0gSUkMP2oULAKXsC42hImhxIHyTmrWOrTrCrjm4WIXDfjmKKas1j_KLaoqxrvFfJqGC7tTnyDYK1EZrxR4-eVb14QrIT9Ofkctwzlz5/s1600/Understanding-Balance-Sheet_Conclusion.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;644&quot; data-original-width=&quot;800&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiAMqxlfd4Sj9BFyZQzn-GnVmQkbcm0ecvrkb9yh0gSUkMP2oULAKXsC42hImhxIHyTmrWOrTrCrjm4WIXDfjmKKas1j_KLaoqxrvFfJqGC7tTnyDYK1EZrxR4-eVb14QrIT9Ofkctwzlz5/s1600/Understanding-Balance-Sheet_Conclusion.png&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  937. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 3;&quot;&gt;
  938. &lt;br /&gt;&lt;/div&gt;
  939. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  940. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  941. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  942. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;You can see the above snapshot of a
  943. typical balance sheet of a company and understand what is actually balanced in
  944. a balance sheet.&lt;/span&gt;&lt;/div&gt;
  945. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  946. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Total asset of a business is always
  947. equal to the sum of its total liability and shareholders funds.&lt;/span&gt;&lt;/div&gt;
  948. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; mso-outline-level: 2;&quot;&gt;
  949. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 18.0pt;&quot;&gt;How
  950. balance sheet is related with its profit and loss accounts?&lt;/span&gt;&lt;/b&gt;&lt;/div&gt;
  951. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  952. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Reserves &amp;amp; Surplus&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt; in balance sheet gets updates every time the company makes
  953. net profit (PAT). &lt;b&gt;Net profit&lt;/b&gt; appears in companies profit and loss
  954. accounts.&lt;/span&gt;&lt;/div&gt;
  955. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  956. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Debt&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt; (long term and short term borrowings) in balance sheet
  957. increases the companies &lt;b&gt;Finance cost&lt;/b&gt; which appears in companies profit
  958. and loss accounts. &lt;/span&gt;&lt;/div&gt;
  959. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  960. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Trade payables&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt; of the balance sheet is a portion of &lt;b&gt;expense&lt;/b&gt; to be
  961. incurred by the company in the next financial year (FY). Companies often buy goods
  962. and services from the suppliers on credit. All expenses which are booked by the
  963. company appears in the profit and loss accounts.&lt;/span&gt;&lt;/div&gt;
  964. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  965. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Tangible assets valuation appearing
  966. in balance sheet are recorded as net of accumulated depreciation (over last
  967. several years of operation). Depreciation applicable only for a particular FY,
  968. appears in the companies profit and loss accounts. &lt;/span&gt;&lt;/div&gt;
  969. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  970. &lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Non-current and current investments&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt; made by the company is recorded in companies balance sheet.
  971. The income generated by these investments are recorded as &lt;b&gt;other income&lt;/b&gt;
  972. in profit and loss accounts. &lt;/span&gt;&lt;/div&gt;
  973. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  974. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;Trade receivables appearing in
  975. balance sheet of the company is the out of sales revenue. Companies often sell
  976. their products and services to their customers on credit. This credit payment
  977. due, to be paid by next months are recorded as trade receivable.&lt;/span&gt;&lt;/div&gt;
  978. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  979. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOmFZl1onJ1WLssME17huPMWXSio0oWF51gGK-nlnhupBXCb47aO5CAKLYslGAVYc-KyAvPXGgKpHT4NmGsAA9DFC4cxzFjlIi8yJKBNZtFuzuY-AMeD5nX4Q_leYISGWMG_QKRr9Hfmdw/s1600/Understanding-Balance-Sheet_Relationship..png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;555&quot; data-original-width=&quot;898&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOmFZl1onJ1WLssME17huPMWXSio0oWF51gGK-nlnhupBXCb47aO5CAKLYslGAVYc-KyAvPXGgKpHT4NmGsAA9DFC4cxzFjlIi8yJKBNZtFuzuY-AMeD5nX4Q_leYISGWMG_QKRr9Hfmdw/s1600/Understanding-Balance-Sheet_Relationship..png&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  980. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  981. &lt;br /&gt;&lt;/div&gt;
  982. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  983. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  984. &lt;div class=&quot;MsoNormal&quot; style=&quot;line-height: normal; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;&quot;&gt;
  985. &lt;span style=&quot;font-family: &amp;quot;times new roman&amp;quot; , &amp;quot;serif&amp;quot;; font-size: 12.0pt;&quot;&gt;So now you can understand well, how
  986. balance sheet and profit and loss accounts communicate with each other. &lt;/span&gt;&lt;/div&gt;
  987. &lt;div class=&quot;MsoNormal&quot;&gt;
  988. &lt;br /&gt;&lt;/div&gt;
  989. &lt;div class=&quot;MsoNormal&quot;&gt;
  990. &lt;br /&gt;&lt;/div&gt;
  991. &lt;div class=&quot;MsoNormal&quot;&gt;
  992. &lt;b&gt;Disclaimer&lt;/b&gt;: All blog posts of &lt;a href=&quot;https://nse-bse-mcx-technicalanalysis.blogspot.com/&quot;&gt;https://nse-bse-mcx-technicalanalysis.blogspot.com/&lt;/a&gt; are for
  993. information only. No blog posts should be considered as an investment
  994. advice or as a recommendation. The user must self-analyze all securities
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  1326. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4164046463995281306'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4164046463995281306'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2018/04/how-to-read-balance-sheet-for.html' title='How to read Balance Sheet for Fundamental Analysis '/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhX-Hb_tjORngtUk9vMwzJ4qLhP0TRQwBluqqQU3mgst4n1Ec-zIyV0IegcNfrMsjpdXOz3U3oR8uAmOAp2ukSnrOzheIN4TU1iyh-K6zGzKXIYbD3VnzNcCN3nmiDwQ7cEVl9JeF2E4rt3/s72-c/Understanding-Balance-Sheet_FORMULA.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-6988927588512735913</id><published>2017-06-04T22:16:00.002+05:30</published><updated>2017-06-04T22:30:23.132+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Patterns"/><category scheme="http://www.blogger.com/atom/ns#" term="Volume"/><category scheme="http://www.blogger.com/atom/ns#" term="Volume Analysis"/><category scheme="http://www.blogger.com/atom/ns#" term="Volume Analysis Patterns"/><title type='text'>Volume Analysis Patterns</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1327. &lt;h1 class=&quot;entry-title&quot;&gt;
  1328. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Volume Analysis Patterns&lt;/span&gt;&lt;/h1&gt;
  1329. &lt;h1 class=&quot;entry-title&quot; style=&quot;text-align: justify;&quot;&gt;
  1330. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;Volume is one of the tools professional traders use to find clues
  1331. about possible market movement as well as confirmations to trends.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Volume data is most accurate in stock, future, and commodity
  1332. exchanges. This is due to the fact that all of these are regulated
  1333. exchanges. While most of the trading that happens on these exchanges is
  1334. electronic nowadays, every order still has to be cleared with the
  1335. exchange in the end, so no matter how large or small the quantity traded
  1336. is, it is registered in the database.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/h1&gt;
  1337. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1338. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1339. &lt;/span&gt;&lt;/div&gt;
  1340. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1341. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;In Forex trading things are different. Volume data is measured by how
  1342. many ticks are registered in time frame chosen in the chart. For those
  1343. who don’t know what a tick is, it is a transaction (filled order) made
  1344. in the underlying instrument &lt;i&gt;regardless of the quantity traded. &lt;/i&gt;A
  1345. tick charts draws bars based on the predefined number of trades
  1346. conducted (if you have a 50-tick chart then each bar is closed at the
  1347. end of the 50th trade, regardless of how much time it takes to conduct
  1348. these trades.&lt;i&gt; &lt;/i&gt;This means a transaction of 1 mini lot is a tick and a transaction of 10 standard lots (buying or selling 10 lots &lt;i&gt;together&lt;/i&gt; as 1 single order) is also a tick.&lt;/span&gt;&lt;/div&gt;
  1349. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1350. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1351. &lt;/span&gt;&lt;/div&gt;
  1352. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1353. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;With the absence of a single exchange that processes all orders in
  1354. Forex, each broker calculates volume based on their own ticks taken from
  1355. there trades database.&lt;/span&gt;&lt;/div&gt;
  1356. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1357. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1358. &lt;/span&gt;&lt;/div&gt;
  1359. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1360. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;The bottom line is, the following patterns are best applied to stock
  1361. and future contracts and not of much value in the Foreign Exchange
  1362. trading.&lt;/span&gt;&lt;/div&gt;
  1363. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1364. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1365. &lt;/span&gt;&lt;/div&gt;
  1366. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1367. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;To produce meaningful signals, volume is coupled with price data in these patterns.&lt;/span&gt;&lt;/div&gt;
  1368. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1369. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1370. &lt;/span&gt;&lt;/div&gt;
  1371. &lt;h4 style=&quot;text-align: justify;&quot;&gt;
  1372. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Accumulation&lt;/span&gt;&lt;/h4&gt;
  1373. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1374. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1375. &lt;/span&gt;&lt;/div&gt;
  1376. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1377. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Accumulation, which indicates that buyers are loading up on a certain
  1378. stock or a futures contract, is signaled by a slowing in the downtrend
  1379. (or price going nowhere) while the volume stays high.&lt;/span&gt;&lt;/div&gt;
  1380. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1381. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1382. &lt;/span&gt;&lt;/div&gt;
  1383. &lt;h4 style=&quot;text-align: justify;&quot;&gt;
  1384. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Distribution&lt;/span&gt;&lt;/h4&gt;
  1385. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1386. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1387. &lt;/span&gt;&lt;/div&gt;
  1388. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1389. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;The opposite of accumulation is indicated by a slowing in the uptrend
  1390. (or price going nowhere), while volume stays high. Which means that
  1391. sellers are starting to takeover in the underlying market.&lt;/span&gt;&lt;/div&gt;
  1392. &lt;div class=&quot;entry-title&quot; style=&quot;text-align: justify;&quot;&gt;
  1393. &lt;br /&gt;&lt;/div&gt;
  1394. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
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  1396. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1397. &lt;br /&gt;&lt;/div&gt;
  1398. &lt;h4 style=&quot;text-align: justify;&quot;&gt;
  1399. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Confirmation of Trend&lt;/span&gt;&lt;/h4&gt;
  1400. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1401. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1402. &lt;/span&gt;&lt;/div&gt;
  1403. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1404. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;For a trend to be healthy whether it is an uptrend or a downtrend,
  1405. volume has to be increasing in each up or down swing. The volume data
  1406. acts as a confirmation of the trend in this case. A decreasing volume
  1407. means that the trend is nearing its end or at least about to stall.&lt;/span&gt;&lt;/div&gt;
  1408. &lt;div class=&quot;entry-title&quot; style=&quot;text-align: justify;&quot;&gt;
  1409. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;br /&gt;&lt;/span&gt;&lt;/div&gt;
  1410. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1411. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgz4iCc1fZ6QhJ4YoWJ1fWBeZkcHlc0BtV4IOS_p9IDpkdNo9C7JpqcKVIlOTXyVNtKUZpN6J6H1ijuPcplctuvl8hn5u2HQ1hGnEwcTtJeKhiEApo-0qlbjV1QW7T0yDwf2jHFXpIrlIqp/s1600/volumepatterns.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;516&quot; data-original-width=&quot;682&quot; height=&quot;484&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgz4iCc1fZ6QhJ4YoWJ1fWBeZkcHlc0BtV4IOS_p9IDpkdNo9C7JpqcKVIlOTXyVNtKUZpN6J6H1ijuPcplctuvl8hn5u2HQ1hGnEwcTtJeKhiEApo-0qlbjV1QW7T0yDwf2jHFXpIrlIqp/s640/volumepatterns.jpg&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1412. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1413. &lt;br /&gt;&lt;/div&gt;
  1414. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1415. &lt;br /&gt;&lt;/div&gt;
  1416. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1417. &lt;/div&gt;
  1418. &lt;h4 style=&quot;text-align: justify;&quot;&gt;
  1419. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Volume Spikes&lt;/span&gt;&lt;/h4&gt;
  1420. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1421. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1422. &lt;/span&gt;&lt;/div&gt;
  1423. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1424. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Sometimes volume spikes, accompanied with other reversal signals with
  1425. gaps or candlestick patterns, signal the end of a decent run in price.
  1426. This can be very aggressive and needs extra precaution.&lt;/span&gt;&lt;/div&gt;
  1427. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1428. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1429. &lt;/span&gt;&lt;/div&gt;
  1430. &lt;h4 style=&quot;text-align: justify;&quot;&gt;
  1431. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Breakout Signals&lt;/span&gt;&lt;/h4&gt;
  1432. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1433. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1434. To gauge the interest and therefore determine the probable direction
  1435. of the breakout of a trading range, determine the trading range that you
  1436. want to monitor, then watch the overall volume in the duration of the
  1437. trading range.&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1438. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1439. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Generally speaking, higher volume leading to the breakout (whether up or
  1440. down), gives more value to the breakout. There is also the
  1441. follow-through volume, which is high volume after the breakout has
  1442. occurred. This also adds to the strength of the breakout.&lt;/span&gt;&lt;/div&gt;
  1443. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1444. &lt;/div&gt;
  1445. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1446. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8aAU-B6fh5l6DvK60dQajjsa3z-QXturt8X41vN7qvZPxnzOxmSlE7HGK9O8lZkoED5v9iGCP_tfL0O9tno4Pxmzdlx2ry3NSBbONNeZiM6B3FYtkLyzB3zvKy_7uwNXDBtLC0msGmq-E/s1600/volumepatterns2.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;516&quot; data-original-width=&quot;682&quot; height=&quot;484&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh8aAU-B6fh5l6DvK60dQajjsa3z-QXturt8X41vN7qvZPxnzOxmSlE7HGK9O8lZkoED5v9iGCP_tfL0O9tno4Pxmzdlx2ry3NSBbONNeZiM6B3FYtkLyzB3zvKy_7uwNXDBtLC0msGmq-E/s640/volumepatterns2.jpg&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1447. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1448. &lt;br /&gt;&lt;/div&gt;
  1449. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1450. &lt;h4 style=&quot;text-align: left;&quot;&gt;
  1451. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Notes of Precaution&lt;/span&gt;&lt;/h4&gt;
  1452. &lt;ul&gt;
  1453. &lt;li&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Volume is relative so when dealing with volume bars I found the best
  1454. way to put things in context is drawing trend lines across volume bars.
  1455. This helps understanding the story that volume tells.&lt;/span&gt;&lt;/li&gt;
  1456. &lt;li&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Volume signals aren’t enough by themselves, instead they act to
  1457. confirm your other signals or refute them. Don’t rely on volume alone to
  1458. produce signals.&lt;/span&gt;&lt;/li&gt;
  1459. &lt;/ul&gt;
  1460. &lt;/div&gt;
  1461. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1462. &lt;/div&gt;
  1463. &lt;/div&gt;
  1464. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/6988927588512735913'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/6988927588512735913'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/06/volume-analysis-patterns.html' title='Volume Analysis Patterns'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh2DPjz1Dwg1rNcPSPh5J5y9FEeLYEQw_ag6TFmtA2GNz6sTn_KmAfmF0P3fF7IFzatqU_cWARUNXlOU53EFfE3CepRSWEzS-OL8CZDOAInjPhLE3Halc3WuB3EaSZK9xiNduUCx5q7RB1H/s72-c/distributionvolume.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-4555695581831636924</id><published>2017-06-04T22:15:00.000+05:30</published><updated>2017-06-04T22:15:58.630+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Butterfly and Bat Chart Patterns"/><category scheme="http://www.blogger.com/atom/ns#" term="Chart Patterns"/><title type='text'>Butterfly and Bat Chart Patterns</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1465. &lt;b&gt;&lt;span style=&quot;font-size: large;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Butterfly and Bat Chart Patterns&lt;/span&gt;&lt;/span&gt;&lt;/b&gt;&lt;br /&gt;
  1466. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1467. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Chart patterns are among the most important tools we can use to
  1468. predict the market direction, take a position and make some money. So
  1469. far, I have talked about triangles, wedges, flags,&amp;nbsp;pennants, rectangles, head and shoulders, and cup and handle patterns.
  1470. In this article, I am talking about some other kinds of patterns that
  1471. are very important in predicting the market direction, specially when
  1472. there is a possibility that the market changes its direction.&lt;/span&gt;&lt;/div&gt;
  1473. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1474. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1475. &lt;/span&gt;&lt;/div&gt;
  1476. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1477. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Butterfly which is also known as W, is an important reversal pattern
  1478. that usually forms at the top of an uptrend. Of course, you have to
  1479. notice that this pattern doesn’t always cause the market to reverse, and
  1480. sometimes the trend will be continued after that. I will tell you what
  1481. to do to stay away from taking wrong positions.&lt;/span&gt;&lt;/div&gt;
  1482. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1483. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1484. &lt;/span&gt;&lt;/div&gt;
  1485. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1486. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Bat pattern is so similar to butterfly pattern. It is a reversal
  1487. pattern too. In fact butterfly&amp;nbsp;and&amp;nbsp;bat patterns are almost the same, but
  1488. just their shape is a little different. Sometimes it becomes hard to
  1489. say if the pattern is a bat or butterfly pattern, but this doesn’t
  1490. matter at all. The only thing we have to learn very well is that we
  1491. understand that the market is going to an indecision status for a while
  1492. and it is possible that it reverses, so that we take a position and make
  1493. some money.&lt;/span&gt;&lt;/div&gt;
  1494. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1495. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1496. &lt;/span&gt;&lt;/div&gt;
  1497. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1498. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Experience shows that bat pattern usually forms at the bottom of
  1499. downtrends, but butterfly patterns form at the top of &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;uptrend&lt;/span&gt;. Bat
  1500. patterns look like capital &lt;b&gt;M&lt;/b&gt;, whereas butterfly patterns look like capital &lt;b&gt;W&lt;/b&gt;.&lt;/span&gt;&lt;/div&gt;
  1501. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1502. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1503. &lt;/span&gt;&lt;/div&gt;
  1504. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1505. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Please let me show you some examples and then I will tell you how you can trade using these patterns.&lt;/span&gt;&lt;/div&gt;
  1506. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1507. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;
  1508. &lt;/span&gt;&lt;/div&gt;
  1509. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1510. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;This is a beautiful butterfly pattern formed at the top of a strong uptrend on GBP/USD daily chart:&lt;/span&gt;&lt;br /&gt;
  1511. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1512. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOJYQZ_feXEX2UqcXK_qTGGQhJ9N9A3Bj_7OWIBEQ9L3qc5ox4cqXVUxLdZRcdZ7rD1zw75P-clRzJjKMAVBifiaeJ4ldgqRfREXkVFnCdUsLGv4pJcWmuNCuwt4OIpS2TZXBIobqHlGdC/s1600/butterfly-pattern-1.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;291&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOJYQZ_feXEX2UqcXK_qTGGQhJ9N9A3Bj_7OWIBEQ9L3qc5ox4cqXVUxLdZRcdZ7rD1zw75P-clRzJjKMAVBifiaeJ4ldgqRfREXkVFnCdUsLGv4pJcWmuNCuwt4OIpS2TZXBIobqHlGdC/s400/butterfly-pattern-1.png&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1513. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&amp;nbsp;&lt;/span&gt;And this is another butterfly pattern on the same chart:&lt;br /&gt;
  1514. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1515. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJc5l8BPM0nLFLILFMiFPu0AzIuD-oo579D2kg7ZL2NjNNCQbP-FJa-Oo7TghyphenhyphencLZRIQ0Mv1aeJTvaqJ-3I0Ut8sYcy8ZiOAFgKS7t29nN5py2JrTihcHKqZ_-1wlvoT4p-HPfVLMIhvY0/s1600/butterfly-pattern-2.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;291&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhJc5l8BPM0nLFLILFMiFPu0AzIuD-oo579D2kg7ZL2NjNNCQbP-FJa-Oo7TghyphenhyphencLZRIQ0Mv1aeJTvaqJ-3I0Ut8sYcy8ZiOAFgKS7t29nN5py2JrTihcHKqZ_-1wlvoT4p-HPfVLMIhvY0/s400/butterfly-pattern-2.png&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1516. &amp;nbsp;And this is another butterfly pattern formed on EUR/USD four hours chart:&lt;br /&gt;
  1517. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1518. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtkuQGYOreSvePdPBX8VvTpHJduvSTQ5YsFRwmdQMzlWlfvouDeLDBq4C5R4k5cegwGpxBti7vNFC1AyVSPXRkz2l3UsYPCW5mLmsDledHNBuZBCNpVimydnSmfN17iH8tzJC8bSr1-cZy/s1600/butterfly-pattern-3.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;282&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgtkuQGYOreSvePdPBX8VvTpHJduvSTQ5YsFRwmdQMzlWlfvouDeLDBq4C5R4k5cegwGpxBti7vNFC1AyVSPXRkz2l3UsYPCW5mLmsDledHNBuZBCNpVimydnSmfN17iH8tzJC8bSr1-cZy/s400/butterfly-pattern-3.png&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1519. &amp;nbsp;This is a bat pattern formed at the bottom of a downtrend on EUR/USD
  1520. four hours chart. As you see it really looks like a bat and also capital
  1521. M. Also you can see that the downtrend reverses and goes up very
  1522. strongly after this bat pattern:&lt;br /&gt;
  1523. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1524. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWnH78dJqV3eGiZqHPPg6h0vxo3Z3X1C5if4s9eUsAhv4LizuLFKzCIIDvliXF7FHWm7BjHAi034z8fkfm0_rlUq6cfGQoBdzd0uSwjm_MnGWQhXMj8VEXkKmhpU38EU0TPrnEVh0oEfMV/s1600/bat-pattern-1.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;291&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgWnH78dJqV3eGiZqHPPg6h0vxo3Z3X1C5if4s9eUsAhv4LizuLFKzCIIDvliXF7FHWm7BjHAi034z8fkfm0_rlUq6cfGQoBdzd0uSwjm_MnGWQhXMj8VEXkKmhpU38EU0TPrnEVh0oEfMV/s400/bat-pattern-1.png&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1525. &amp;nbsp;How to Trade Using the Butterfly or Bat Patterns?&lt;br /&gt;
  1526. &lt;br /&gt;
  1527. Like all the other patterns, this pattern also has a support and resistance line. My strategy for trading this pattern is the same as my trading strategy with the other patterns. I consider the rules, but I always wait for breakouts. This is what I have always emphasized on.&lt;br /&gt;
  1528. &lt;br /&gt;
  1529. For example, although it is said that butterfly and bat patterns are reversal patterns, I do not go against the trend when I see that these patterns are formed at the top of an uptrend. I wait for the market to break below the support line and then I go short.&lt;br /&gt;
  1530. &lt;br /&gt;
  1531. Here below I am showing you an example. As you see a strong butterfly pattern is formed on EUR/USD four hours chart, and finally it worked strongly as a reversal pattern and the price went down. However, in order to go short, we had to wait for the market to go down and break below the butterfly support. The breakout occurs when a candlestick closes below the support line or above the resistance. The stop loss has to be placed above the candle which has broken below the support:&lt;/div&gt;
  1532. &lt;/div&gt;
  1533. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4555695581831636924'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4555695581831636924'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/06/butterfly-and-bat-chart-patterns.html' title='Butterfly and Bat Chart Patterns'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiOJYQZ_feXEX2UqcXK_qTGGQhJ9N9A3Bj_7OWIBEQ9L3qc5ox4cqXVUxLdZRcdZ7rD1zw75P-clRzJjKMAVBifiaeJ4ldgqRfREXkVFnCdUsLGv4pJcWmuNCuwt4OIpS2TZXBIobqHlGdC/s72-c/butterfly-pattern-1.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-7469769464444058802</id><published>2017-06-04T21:31:00.000+05:30</published><updated>2017-06-04T21:31:37.695+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Largest World Stock Exchanges Comparing"/><category scheme="http://www.blogger.com/atom/ns#" term="World Stock Exchanges Comparing"/><title type='text'>World Stock Exchanges Comparing</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1534. &lt;h3 style=&quot;text-align: center;&quot;&gt;
  1535. Largest World Stock Exchanges Comparing&lt;/h3&gt;
  1536. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1537. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHg5Ve11SAgdugE-yK4PcwkDoYRr6bmLme-rH2YIYj0Ty_fFtOFcYLBOqgLufETXjt1JKcjiTlWBHtv4CLdyWP1_oSBukg8Vr30I6kOy-tNBHbdv6rtipysMXEowDWdaWs-4KxTS_Be1Ac/s1600/Largest+World+Stock+Exchanges+Comparing.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; data-original-height=&quot;1600&quot; data-original-width=&quot;634&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHg5Ve11SAgdugE-yK4PcwkDoYRr6bmLme-rH2YIYj0Ty_fFtOFcYLBOqgLufETXjt1JKcjiTlWBHtv4CLdyWP1_oSBukg8Vr30I6kOy-tNBHbdv6rtipysMXEowDWdaWs-4KxTS_Be1Ac/s1600/Largest+World+Stock+Exchanges+Comparing.jpg&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1538. &lt;h3 style=&quot;text-align: justify;&quot;&gt;
  1539. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;&lt;b&gt;&amp;nbsp;The Oldest Exchange:&lt;/b&gt; Of the top 20 stock exchanges on the above list, the oldest can be found in Frankfurt. Originally the location of medieval trade fairs in the 11th century, Frankfurt quickly became an important center for commercial and monetary transactions. The “birth” of the stock exchange is said to have happened in 1585 when fair merchants decided to establish fixed currency exchange rates.&lt;br /&gt;&lt;br /&gt;&lt;b&gt;The Most Listed Companies:&lt;/b&gt; Established in 1875, the Bombay Stock Exchange was actually Asia’s first stock exchange. It has 5,749 listed public companies, which is the most of any of the top 20 exchanges. The majority of companies listed on the BSE are small caps, with an average market capitalization of just US$292 million per company.&lt;br /&gt;&lt;br /&gt;&lt;b&gt;The Largest Market Cap:&lt;/b&gt; As mentioned before, the NYSE takes the cake here with close to $20 trillion in market capitalization. There is a steep drop-off after the NYSE, which is followed by NASDAQ ($7 trillion), London Stock Exchange ($6 trillion), Tokyo Stock Exchange ($4 trillion), Shanghai Stock Exchange ($4 trillion), and Hong Kong Stock Exchange ($3 trillion).&lt;br /&gt;&lt;br /&gt;In fact, only 16 exchanges have market capitalizations over $1 trillion. Here are those visualized by market cap on a map from our previous infographic that showed all of the stock exchanges in the world.&lt;/span&gt;&lt;/span&gt;&lt;/h3&gt;
  1540. &lt;h3 style=&quot;text-align: justify;&quot;&gt;
  1541. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/h3&gt;
  1542. &lt;/div&gt;
  1543. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/7469769464444058802'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/7469769464444058802'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/06/world-stock-exchanges-comparing.html' title='World Stock Exchanges Comparing'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjHg5Ve11SAgdugE-yK4PcwkDoYRr6bmLme-rH2YIYj0Ty_fFtOFcYLBOqgLufETXjt1JKcjiTlWBHtv4CLdyWP1_oSBukg8Vr30I6kOy-tNBHbdv6rtipysMXEowDWdaWs-4KxTS_Be1Ac/s72-c/Largest+World+Stock+Exchanges+Comparing.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-2811735165552436009</id><published>2017-02-01T21:43:00.000+05:30</published><updated>2017-02-01T21:48:55.502+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Guide for Beginners"/><category scheme="http://www.blogger.com/atom/ns#" term="Summary of Intraday Trading"/><title type='text'>Intraday Trading Knowledge 9, Importent Summary </title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1544. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1545. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkWR7w3nw6ospt-l2IeyA8lGlEQ7rkjQi65tQTtSEFvASCTsvMAdvrDcKwWX_FXu55yWBykd-U1I_VdFgIqjBnkVpInFvUHqajOjWaCpD362nhhEc4CLtjTCjgQnpniUlkr-QqzB8lGNX1/s1600/Intraday+Trading+Knowledge+9%252C+Summary.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkWR7w3nw6ospt-l2IeyA8lGlEQ7rkjQi65tQTtSEFvASCTsvMAdvrDcKwWX_FXu55yWBykd-U1I_VdFgIqjBnkVpInFvUHqajOjWaCpD362nhhEc4CLtjTCjgQnpniUlkr-QqzB8lGNX1/s1600/Intraday+Trading+Knowledge+9%252C+Summary.png&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1546. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1547. &lt;/div&gt;
  1548. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1549. &lt;/div&gt;
  1550. &lt;br /&gt;&lt;/div&gt;
  1551. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/2811735165552436009'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/2811735165552436009'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/intraday-trading-knowledge-9-summary_1.html' title='Intraday Trading Knowledge 9, Importent Summary '/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgkWR7w3nw6ospt-l2IeyA8lGlEQ7rkjQi65tQTtSEFvASCTsvMAdvrDcKwWX_FXu55yWBykd-U1I_VdFgIqjBnkVpInFvUHqajOjWaCpD362nhhEc4CLtjTCjgQnpniUlkr-QqzB8lGNX1/s72-c/Intraday+Trading+Knowledge+9%252C+Summary.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-8745354083860931359</id><published>2017-02-01T21:33:00.002+05:30</published><updated>2017-02-01T21:33:19.867+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Glossary"/><category scheme="http://www.blogger.com/atom/ns#" term="Share Market Basic"/><category scheme="http://www.blogger.com/atom/ns#" term="Stock Market Basic"/><title type='text'>Glossary, Stock Market Basic, Share Market Basic</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1552. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1553. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikrELoMTcR09XOrhUkH4tPgxRotQdLyoLVe6X5RR-SBvmHDZ0DpG_ItMVsIBDCMgdIHMDS4tuCQsedoklS9kyC31YhEy9bAIthRHs4b-XNooCs4MaS-SwZIojRocuiIlMHqSV5A__f-Wla/s1600/glossary_1.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;200&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikrELoMTcR09XOrhUkH4tPgxRotQdLyoLVe6X5RR-SBvmHDZ0DpG_ItMVsIBDCMgdIHMDS4tuCQsedoklS9kyC31YhEy9bAIthRHs4b-XNooCs4MaS-SwZIojRocuiIlMHqSV5A__f-Wla/s200/glossary_1.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1554. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1555. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Whether you are a beginner at investing or seasoned investor being familiar the basic term of the stock market is essential. Expanding your stock market vocabulary will enable you to be a better investor, so that you can trade successfully. Given below is a basic glossary of terms that&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1556. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1557. &lt;br /&gt;&lt;/div&gt;
  1558. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1559. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;you must know as an investor:-&lt;br /&gt;&lt;/span&gt;&lt;/div&gt;
  1560. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1561. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&lt;u&gt;&lt;b&gt; Agent: &lt;/b&gt;&lt;/u&gt;In the stock market, an agent refers to a brokerage firm which buys or sells shares on behalf of the investor.&lt;/span&gt;&lt;/li&gt;
  1562. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Ask/Offer:&lt;/b&gt;&lt;/u&gt;Lowest price at which an owner agrees to sell the shares.&lt;/span&gt;&lt;/li&gt;
  1563. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&lt;u&gt;&lt;b&gt; Assets:&lt;/b&gt;&lt;/u&gt;Assets refers to the property owned by the company such as cash, equipment, land, technology etc.&lt;/span&gt;&lt;/li&gt;
  1564. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Bea&lt;/b&gt;&lt;/u&gt;r Market: It is a market situation where the stock prices fall consistently.&lt;/span&gt;&lt;/li&gt;
  1565. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;At the money:&lt;/b&gt;&lt;/u&gt;A situation at where the options strike price is same as the price of the underlying securities.&lt;/span&gt;&lt;/li&gt;
  1566. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&lt;u&gt;&lt;b&gt; Beta:&lt;/b&gt;&lt;/u&gt; It is a measurement of relationship between stock price of any particular stock and the movement of whole market.&lt;/span&gt;&lt;/li&gt;
  1567. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Bid:&lt;/b&gt;&lt;/u&gt; The highest price that a buyer is willing to pay for a particular stock.&lt;/span&gt;&lt;/li&gt;
  1568. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Blue Chip Stock:&lt;/b&gt;&lt;/u&gt; Stock of well-established and financially sound companies that have a market capitalization in thousands of crores.&lt;/span&gt;&lt;/li&gt;
  1569. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Board Lot:&lt;/b&gt;&lt;/u&gt;A standard trading unit which is defined by a particular exchange board. The Board lot size depends on the per share price. Some common board lot sizes are 50, 100, 500, 1000 units.&lt;/span&gt;&lt;/li&gt;
  1570. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Bonds:&lt;/b&gt;&lt;/u&gt; It is promissory note issued by the government or a company to its buyers. It illustrates the specified amount held for a specified time period by the buyer.&lt;/span&gt;&lt;/li&gt;
  1571. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Book:&lt;/b&gt;&lt;/u&gt; It is an electronic record that is used to manage all the pending buy and sell orders of particular stocks.&lt;/span&gt;&lt;/li&gt;
  1572. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Bull Market:&lt;/b&gt;&lt;/u&gt; A market situation where the price of the stocks increases rapidly.&lt;/span&gt;&lt;/li&gt;
  1573. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Call Option:&lt;/b&gt;&lt;/u&gt; It is an option given to investor the right to buy a particular stock at a specified price and time which is not an obligation.&lt;/span&gt;&lt;/li&gt;
  1574. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Close Price:&lt;/b&gt;&lt;/u&gt;The final price at which the stock is sold or traded on a particular trading day.&lt;/span&gt;&lt;/li&gt;
  1575. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Convertible Securities:&lt;/b&gt;&lt;/u&gt; A security (bonds, debentures, preferred stocks) by an issuer that can be converted into other securities of that issuer are known as convertible securities.&lt;/span&gt;&lt;/li&gt;
  1576. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Debentures:&lt;/b&gt;&lt;/u&gt; A form of debt instrument which is not secured by physical assets or collateral.&lt;/span&gt;&lt;/li&gt;
  1577. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Defensive Stock:&lt;/b&gt;&lt;/u&gt;A type of stock that provides a constant rate of dividends even in the periods of economic downturn.&lt;/span&gt;&lt;/li&gt;
  1578. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Delta&lt;/b&gt;&lt;/u&gt;: The ratio that compares the change in the price of the underlying asset to the corresponding change in the price of a derivative.&lt;/span&gt;&lt;/li&gt;
  1579. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Face value:&lt;/b&gt;&lt;/u&gt; It is the cash value or the amount of money the holder of a security is going to earn from the issuer of the security at the time of maturity.&lt;/span&gt;&lt;/li&gt;
  1580. &lt;/ul&gt;
  1581. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1582. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; One-side&lt;/span&gt;&lt;/div&gt;
  1583. &lt;/div&gt;
  1584. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/8745354083860931359'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/8745354083860931359'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/glossary-stock-market-basic-share.html' title='Glossary, Stock Market Basic, Share Market Basic'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEikrELoMTcR09XOrhUkH4tPgxRotQdLyoLVe6X5RR-SBvmHDZ0DpG_ItMVsIBDCMgdIHMDS4tuCQsedoklS9kyC31YhEy9bAIthRHs4b-XNooCs4MaS-SwZIojRocuiIlMHqSV5A__f-Wla/s72-c/glossary_1.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-1857866301333008029</id><published>2017-02-01T21:05:00.001+05:30</published><updated>2017-02-01T21:05:47.891+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Dividends"/><category scheme="http://www.blogger.com/atom/ns#" term="Share Market Basic"/><category scheme="http://www.blogger.com/atom/ns#" term="Stock Market Basic"/><title type='text'>Share Market Basic, Dividends</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1585. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtecfYUoslYITOfnOhnUK4cO8WHoB3jVOyPuAyHubAa31Vjm4wchyqD0iBQ6x5LeGgvHg2uE1Zi7qyKiZKCmOyZgQTiiHV-R-Lng7kFhpTBIn364NA24_mHu02eaMyCcpCtrheo4Ojl8oR/s1600/Dividents.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;168&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtecfYUoslYITOfnOhnUK4cO8WHoB3jVOyPuAyHubAa31Vjm4wchyqD0iBQ6x5LeGgvHg2uE1Zi7qyKiZKCmOyZgQTiiHV-R-Lng7kFhpTBIn364NA24_mHu02eaMyCcpCtrheo4Ojl8oR/s200/Dividents.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;b&gt;Important Facts to Know about Dividends&lt;/b&gt;&lt;br /&gt;
  1586. &lt;br /&gt;
  1587. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1588. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;As discussed, shares comprise a certain portion of an organization. Several profit-making companies listed on the share market share their profits among shareholders, which is the primary objective of paying dividends. Companies distribute a small component of their profits as dividends to the investors. This becomes an important source of earnings for investors who stay involved in the share market for a longer period of time.&lt;br /&gt;&lt;br /&gt;Because dividends are a minor portion of company profits that are returned to the investors, they provide additional incentive for individuals to hold on to their stocks even if the company is not growing at high rates. This is an important share market basic, which all investors must remember.&lt;br /&gt;&lt;br /&gt;Companies utilize dividends to share the annual profits directly with the shareholders. Generally, it is paid as cash; the organization pays a small percentage of the earned profits to every shareholder. Sometimes, this profit share could be in the form of offering additional stocks to the investors.&lt;/span&gt;&lt;/div&gt;
  1589. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1590. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Important Facts to Know about Dividends&lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1591. &lt;/ul&gt;
  1592. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1593. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; Periodic Payments: Most companies pay an annual dividend based on the total profits made during the year. In certain instances, organizations may pay quarterly dividends or special one-time dividends if exceptional profits have been earned through unique events.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; Taxable: Investors need to bear in mind that income earned from dividends is taxable as per the Income Tax Act, 1961. An accountant should ideally be consultant for clarifications and more details on this.&lt;br /&gt;&lt;/span&gt;&lt;/div&gt;
  1594. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1595. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Types of Dividends&lt;/b&gt;&lt;/span&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;/span&gt;&lt;br /&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;/span&gt;&lt;/li&gt;
  1596. &lt;/ul&gt;
  1597. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1598. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Companies can either pay fixed rate, referred to as preferred dividends, or they can pay variable dividends based on the earnings, known as common dividends.&lt;br /&gt;&lt;br /&gt;Investors should remember one thing about share market investment — companies are not obliged to make these payments by any regulatory guidelines. However, preferred shareholders are more likely to receive these pay-outs, unless the companies are going through exceptional financial difficulties.&lt;/span&gt;&lt;/div&gt;
  1599. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1600. &lt;li&gt;&lt;b&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Dates to Remember&lt;/span&gt;&lt;/b&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;/span&gt;&lt;br /&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;/span&gt;&lt;/li&gt;
  1601. &lt;/ul&gt;
  1602. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1603. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;i&gt;&lt;u&gt;&lt;b&gt;Declaration Date&lt;/b&gt;:&lt;/u&gt;&lt;/i&gt; This is the date when the company determines the payment date for the dividend, the ex-dividend rate, and the dividend amount.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;b&gt;&lt;u&gt;&lt;i&gt;Record Date:&lt;/i&gt;&lt;/u&gt; &lt;/b&gt;The companies compile the list of all the shareholders as on the record date. All these investors are eligible to receive the declared dividends.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;b&gt;&lt;u&gt;&lt;i&gt;Ex-Dividend Date:&lt;/i&gt;&lt;/u&gt;&lt;/b&gt; This is often a few days before the record date. The primary objective of this date is to ensure pending transactions, if any, are completed prior to the record date. Any investor who does not own company shares before the ex-dividend date will be ineligible to receive the dividends for the said period.&lt;br /&gt;&lt;/span&gt;&lt;/div&gt;
  1604. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1605. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Benefits of Dividends&lt;/b&gt;&lt;/span&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;/span&gt;&lt;br /&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;/span&gt;&lt;/li&gt;
  1606. &lt;/ul&gt;
  1607. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1608. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;b&gt;&lt;i&gt;&lt;u&gt;For Companies:&lt;/u&gt;&lt;/i&gt;&lt;/b&gt; Organizations on the share market pay dividends to retain investors by keeping them happy. It is often perceived that dividend-paying organizations have progressed from the growth stage, which means they cannot keep pace with the rate of growth expected by the markets. Organizations that do not reinvest their profits to grow their companies pay dividends to shareholders. Regular dividends make the stock appealing to investors, which, in turn, helps in increasing the price of the share.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;i&gt;&lt;b&gt;For Investors: &lt;/b&gt;&lt;/i&gt;&lt;/u&gt;Dividends provide investors a stable return on their investments, which is low risk. Individuals who are risk-averse can be assured of investing their money in stable companies with low growth but with almost no risk of a fall in share prices, which can then risk their capital investments. In addition, as the organizations continue to grow, the dividends increase, which raises the value of the stock for the investors.&lt;br /&gt;&lt;br /&gt;Investors need to bear in mind that bigger dividends do not always mean better. It is generally seen that companies paying high dividends are unable to sustain these rates in the longer period. Thorough research and exercising caution while choosing dividend-paying companies will help sustain periodic returns on investments in the share market.&lt;/span&gt;&lt;b&gt; &lt;/b&gt;&lt;/div&gt;
  1609. &lt;/div&gt;
  1610. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/1857866301333008029'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/1857866301333008029'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/share-market-basic-dividends.html' title='Share Market Basic, Dividends'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhtecfYUoslYITOfnOhnUK4cO8WHoB3jVOyPuAyHubAa31Vjm4wchyqD0iBQ6x5LeGgvHg2uE1Zi7qyKiZKCmOyZgQTiiHV-R-Lng7kFhpTBIn364NA24_mHu02eaMyCcpCtrheo4Ojl8oR/s72-c/Dividents.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-5772045602166251624</id><published>2017-02-01T20:38:00.006+05:30</published><updated>2017-02-01T20:38:51.664+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Do &amp; Don&#39;t for Intraday Traders"/><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Knowledge"/><title type='text'>Intraday Trading Knowledge 8, Do &amp; Don&#39;t for Intraday Traders</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1611. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1612. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Dos &amp;amp; Don&#39;ts for Intraday Traders &lt;/b&gt;&lt;/span&gt;&lt;/div&gt;
  1613. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1614. &lt;b&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj11Aw6zEGn4DhLY5fFULXDx6ZauCAx9MMtCTwR9CY3_KcMue4_o-NTcn5SwwnaGzyGPZEP1Co1KNae7_EAgIgV7OxQhSw4IZv4HckK2qLKgkKL1UCkx9tJ6v9m_upIs2fgiteMJmw0Zfoj/s1600/nsebsegrowth.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;56&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj11Aw6zEGn4DhLY5fFULXDx6ZauCAx9MMtCTwR9CY3_KcMue4_o-NTcn5SwwnaGzyGPZEP1Co1KNae7_EAgIgV7OxQhSw4IZv4HckK2qLKgkKL1UCkx9tJ6v9m_upIs2fgiteMJmw0Zfoj/s200/nsebsegrowth.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/b&gt;&lt;/div&gt;
  1615. &lt;br /&gt;
  1616. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1617. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;br /&gt;&lt;/span&gt;&lt;/div&gt;
  1618. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1619. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Day traders Buy or Sell Stocks several times every day and close out all positions before the market closes. &lt;br /&gt;The expectation of Traders is making small profits with as little risk as possible and they simply look for potential price movement Based on Technical Analysis.&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1620. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1621. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;br /&gt;&lt;/span&gt;&lt;/div&gt;
  1622. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1623. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Plan your trade. Trade as per your plan. &lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1624. &lt;/ul&gt;
  1625. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1626. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Select your Stock, Decide the Quantity, Decide the entry and exit price and Decide the amount of money you can loose if the trade goes against you. &lt;br /&gt;Trading in Opening and Closing hours of the market is Risky but Rewarding. &lt;/span&gt;&lt;/div&gt;
  1627. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1628. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Use a Stop Loss &lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1629. &lt;/ul&gt;
  1630. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1631. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Always trade with Stop Loss. Set Stop Loss Sell Order just below the low of the day or Support level and Stop Loss Buy Order just above the high of the day or Resistance level.&lt;/span&gt;&lt;/div&gt;
  1632. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1633. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Never Trade too many stocks at once &lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1634. &lt;/ul&gt;
  1635. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1636. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Always trade in High Volume Index based Shares. &lt;br /&gt;Select Three or five stocks for Trading. &lt;/span&gt;&lt;/div&gt;
  1637. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1638. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Get the price movement between the bottom and top&lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1639. &lt;/ul&gt;
  1640. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1641. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;It is not possible to Buy at the Bottom and Sell at the Top. &lt;br /&gt;Try to trade between the Bottom and Top. &lt;/span&gt;&lt;/div&gt;
  1642. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1643. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Buy a stock &lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1644. &lt;/ul&gt;
  1645. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1646. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Always buy a stock that is going Up. Buying level is just above the previous closing price. &lt;/span&gt;&lt;/div&gt;
  1647. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1648. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Short the stock &lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1649. &lt;/ul&gt;
  1650. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1651. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Always sell the stock that is going down. Selling level is just below the previous closing price. &lt;/span&gt;&lt;/div&gt;
  1652. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1653. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Don&#39;t average Your Position &lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1654. &lt;/ul&gt;
  1655. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1656. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;One common mistake by Traders is averaging Loss making position. You must exit if the trade goes against you.&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;/span&gt;&lt;/div&gt;
  1657. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1658. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Take control of your greed &lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1659. &lt;/ul&gt;
  1660. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1661. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Book Profit and leave the trading hall and enjoy the day. &lt;/span&gt;&lt;/div&gt;
  1662. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1663. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Take control of your fear &lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1664. &lt;/ul&gt;
  1665. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1666. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Cut your loss - Relax – Forget your loss quickly. Wait for next Opportunity. You can Win. &lt;/span&gt;&lt;/div&gt;
  1667. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1668. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Keep records of your trading results. &lt;/b&gt;&lt;/span&gt;&lt;/li&gt;
  1669. &lt;/ul&gt;
  1670. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Always record details of your trades and mistakes. Accept failure as a step towards victory.&lt;/span&gt;&lt;br /&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  1671. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/5772045602166251624'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/5772045602166251624'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/intraday-trading-knowledge-8-do-dont.html' title='Intraday Trading Knowledge 8, Do &amp; Don&#39;t for Intraday Traders'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj11Aw6zEGn4DhLY5fFULXDx6ZauCAx9MMtCTwR9CY3_KcMue4_o-NTcn5SwwnaGzyGPZEP1Co1KNae7_EAgIgV7OxQhSw4IZv4HckK2qLKgkKL1UCkx9tJ6v9m_upIs2fgiteMJmw0Zfoj/s72-c/nsebsegrowth.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-1470113127147856117</id><published>2017-02-01T20:16:00.000+05:30</published><updated>2017-02-01T20:16:34.162+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Knowledge"/><category scheme="http://www.blogger.com/atom/ns#" term="Tips on How to Pick Stocks for Intraday Trading"/><title type='text'>Intraday Trading Knowledge 8, Stock Selection Idea For Intraday Trading</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1672. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1673. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s1600/nsebsegrowth.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;56&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s200/nsebsegrowth.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1674. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1675. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;b&gt;Tips on How to Pick Stocks for Intraday Trading&lt;/b&gt;&lt;br /&gt;&lt;br /&gt;One of the big questions that come to every intraday trader’s mind every single day is to find the right stock for intraday trading. After all, the key to successful trading is the right selection of stocks. There are a number of factors that should be taken into consideration at the time of stock selection. There are so many listed shares but it isn’t necessary that they can be chosen for intraday trading. Take a look at a few tips mentioned below which highlight on&lt;br /&gt;&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1676. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1677. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;u&gt;&lt;b&gt;how to pick stocks for intraday trading? :&lt;/b&gt;&lt;/u&gt;&lt;br /&gt;&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1678. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1679. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;u&gt;&lt;i&gt;Shares Volume&lt;/i&gt;&lt;/u&gt;&lt;/span&gt;&lt;/div&gt;
  1680. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1681. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;One of the main criteria while intraday trading is the volume of the stocks. The total number of shares that are traded in a particular market at a given time reflect volume. It is mostly recommended to purchase stocks that are high in volume.&lt;br /&gt;&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1682. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1683. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;u&gt;&lt;i&gt;Stocks of the day&lt;/i&gt;&lt;/u&gt;&lt;/span&gt;&lt;/div&gt;
  1684. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1685. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Depending on good news, a few stocks are expected to perform well. Such stocks are anticipated to move in either direction with good volume. These shares can be used for intraday trading.&lt;br /&gt;&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1686. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1687. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;u&gt;&lt;i&gt;Week’s movement&lt;/i&gt;&lt;/u&gt;&lt;/span&gt;&lt;/div&gt;
  1688. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1689. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Study the movement of stocks that are constantly closing in negative or positive for the previous one week. An analysis of this movement will help you in selecting the stocks for intraday trading.&amp;nbsp; &lt;br /&gt;&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1690. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1691. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;i&gt;&lt;u&gt;Resistance level&lt;/u&gt;&lt;/i&gt;&lt;/span&gt;&lt;/div&gt;
  1692. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1693. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Some of the stocks to watch out for are those that have broken resistance levels and which move in an upward direction. Such stocks are one of the favorite choices.&lt;br /&gt;&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1694. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1695. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;u&gt;&lt;i&gt;Trading in few stock lists&lt;/i&gt;&lt;/u&gt;&lt;/span&gt;&lt;/div&gt;
  1696. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1697. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;A few intraday traders involve in trading only in particular shares. This is because these traders engage in detailed study of share movement. This is one of the main intraday strategies that are followed by traders.&lt;br /&gt;&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  1698. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1699. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;i&gt;&lt;u&gt;Top gainers and losers&lt;/u&gt;&lt;/i&gt;&lt;br /&gt;While some shares come under top gainers, others come under top losers.&amp;nbsp; Such shares may provide fairly good movements. However, keep a close watch on these them in order to begin trading.&lt;/span&gt;&lt;/div&gt;
  1700. &lt;/div&gt;
  1701. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/1470113127147856117'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/1470113127147856117'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/intraday-trading-knowledge-8-stock.html' title='Intraday Trading Knowledge 8, Stock Selection Idea For Intraday Trading'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s72-c/nsebsegrowth.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-7035737046658978722</id><published>2017-02-01T20:10:00.000+05:30</published><updated>2017-02-01T20:10:24.658+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Knowledge"/><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Time Analysis"/><title type='text'>Intraday Trading Knowledge 7, Intraday Trading Time Analysis</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1702. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1703. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s1600/nsebsegrowth.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;56&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s200/nsebsegrowth.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1704. &lt;b&gt;Intraday Trading Time Analysis&lt;/b&gt;&lt;br /&gt;&lt;br /&gt;When it comes to intraday trading, daily charts are the most commonly used charts that represent the price movements on a one-day interval. These are beneficial for analyzing short and medium-term time periods; however, some traders may use these for long-term analysis. The thumb rule states that usage of daily charts is used for analysing periods exceeding six weeks. They help in assessing stock movements in a better way, thus giving clear picture about stock performance. This helps in planning the trading strategy effectively.six weeks.&lt;br /&gt;
  1705. &lt;br /&gt;&lt;u&gt;&lt;b&gt;Intraday Trading Charts&lt;/b&gt;&lt;/u&gt;&lt;br /&gt;
  1706. &lt;br /&gt;These charts are quite popular in the trading world, they help to illustrate the movement of the prices between the opening bell and closing of the daily trading session. There are several methods in which intraday charts can be used. Below are some of the most commonly used charts while intraday trading on the Indian stock market:&lt;br /&gt;&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;i&gt;Hourly Charts:&lt;/i&gt;&lt;/u&gt; These charts depict the price movements of a particular stock for a specific period of time. These include detailed information within the confines of a single trading day. Each candlestick or bar is representative of the opening, closing, high, and low of every hourly interval for the time period being analysed. These are generally used for short-term trades, which last from a few hours to a few days.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;i&gt;15 - Minute Charts:&lt;/i&gt;&lt;/u&gt; These show the opening, closing, high, and low price movements at 15-minute intervals for a particular stock. The 15-minute charts are often used for day trades lasting from an hour to a few trading sessions.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;i&gt;Intraday Five-Minute Charts:&lt;/i&gt;&lt;/u&gt; This is one of the most widely used charts by traders. It represents the price movements of the index or stocks over a particular period of time. Every bar on the chart represents the opening, closing, high, and low of five-minute intervals during the chosen time frame. These charts are frequently useful for quick scalps lasting from several minutes to several hours during a trading session. This kind of chart is also used by long-term traders to identify and select the most efficient entry and exit points while initiating trades over a longer period of time. Using the intraday five-minute chart for long-term share market investment can be a beneficial intraday tip for longer period investors.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;i&gt;Two-Minute Chart: &lt;/i&gt;&lt;/u&gt;This is another intraday chart that is popular among stock market traders. This type of chart often depicts the price movement over some hours on the same trading day. Each candlestick shows the opening, closing, high, and low at two-minute intervals during the selected period of time. These charts are most beneficial for day trades or scalping, which can range from some minutes to several hours during one trading session.&lt;br /&gt;&amp;nbsp;&lt;i&gt;&amp;nbsp;&amp;nbsp; &lt;u&gt;Tick-Trade Charts:&lt;/u&gt;&lt;/i&gt;&lt;u&gt;&lt;i&gt; &lt;/i&gt;&lt;/u&gt;These are line charts representing every trade that is executed on the stock market. While using these kinds of charts, traders need to bear in mind that time is of no essence and every point on the chart represents an actual completed trade. In case the markets are illiquid, the chart is depicted as a flat line. Highly liquid market charts show constantly moving ticks. The chart is beneficial while intraday trading in tracking every executed transaction with a line across time, which moves up or down to immediately show the upward or downward movement in the stock price. The tick charts are used by traders for scalping and to keep track of ‘out of money’ trades that need correction.&lt;br /&gt;&lt;br /&gt;Based on the traders’ perspectives, market conditions can change, also depending on the period of time being analysed. To be successful, analysis of the accurate time period is important and is a vital intraday trading tip that must always be borne in mind.&lt;br /&gt;&lt;/div&gt;
  1707. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/7035737046658978722'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/7035737046658978722'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/intraday-trading-knowledge-7-intraday.html' title='Intraday Trading Knowledge 7, Intraday Trading Time Analysis'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s72-c/nsebsegrowth.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-4054055668591361030</id><published>2017-02-01T18:05:00.001+05:30</published><updated>2017-02-01T18:05:51.695+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Indicators"/><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Knowledge"/><title type='text'>Intraday Trading Knowledge 6, Intraday Trading Indicators</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1708. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1709. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s1600/nsebsegrowth.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;56&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s200/nsebsegrowth.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1710. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1711. Intraday Trading Indicators&lt;br /&gt;&lt;br /&gt;Be it a beginner or an established trader, following the basic intraday tips is a common practice before starting the trading day. However, your trading strategy changes with time, and the concurrent events play a huge role in its working. In order to maximize returns, it is essential to understand the market. For this purpose, there are trading indicators. Trading indicators are beneficial tools that are used with a comprehensive strategy to maximize returns..&lt;br /&gt;Information Offered by Intraday Trading Indicators&lt;/div&gt;
  1712. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  1713. &lt;li&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; The direction of the trend to determine the movement&lt;/li&gt;
  1714. &lt;li&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; The lack of or existing momentum within the investment market&lt;/li&gt;
  1715. &lt;li&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; Profit potential due to the volatility&lt;/li&gt;
  1716. &lt;li&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; Determine the popularity through volume measurements.&lt;/li&gt;
  1717. &lt;/ul&gt;
  1718. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1719. These are the vital pointers shared by trading indicators. These basic, but beneficial pointers help in assessing the market conditions and allow traders to take better decisions with respect to trade positions.&lt;/div&gt;
  1720. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1721. &lt;br /&gt;&lt;u&gt;&lt;b&gt;Useful Intraday Trading Indicators&lt;/b&gt;&lt;/u&gt;&lt;br /&gt;&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Moving Averages:&lt;/b&gt;&lt;/u&gt; Traders often hear about daily moving averages (DMA), which is the most common and widely used indicator. The moving average is a line on the stock chart that connects the average closing rates over a specific period. The longer the period, the more reliable the moving average. This indicator will help you comprehend the underlying movement of the price, as prices do not move only in one direction. Stock prices are volatile and the moving average indicator smoothens the volatility to provide an understanding of the underlying trend of the price movement.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Bollinger Bands:&lt;/b&gt;&lt;/u&gt; This intraday trading indicator is one step ahead of the moving average. This band comprises three lines—the moving average, an upper limit and a lower one. All these are representative of the stock’s standard deviation, which is nothing but the amount by which the price increases or decreases from its average. This provides traders an understanding about the stock’s trading range.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Momentum Oscillators: &lt;/b&gt;&lt;/u&gt;Stock prices move up and down. There are short-period cycles that are unrelated to the bullish or bearish market trends. In such cases, it is easy for day traders to miss out on such changes, which is when the momentum oscillator is beneficial. This indicator is depicted within a range of 0 to 100, and is advantageous when the price has achieved a new high or low, and one wants to determine whether it will further rise or fall. In other words, the momentum oscillator helps to understand when the market sentiments are undergoing modifications.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Relative Strength Index (RSI):&lt;/b&gt;&lt;/u&gt; The RSI is one of the useful intraday trading tips to compare the share price’s gains and losses. This information is then formulated in an index form, which further helps in narrowing down the RSI score ranging between 0 and 100. This index increases with price rises and vice versa. Once the RSI increases or decreases to a specified limit, you can modify your trading strategy.&lt;br /&gt;&lt;br /&gt;&lt;b&gt;Decoding the Intraday Trading Indicators&lt;/b&gt;&lt;br /&gt;&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Moving Averages:&lt;/b&gt;&lt;/u&gt; If short-term averages are exceeding the long-term averages, it indicates a bullish market trend. Traders may take a buy call with specific strategies like stop loss either at the long-term moving average or retracement support, and vice versa. This intraday tip can help traders earn decent profits through intraday trading.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;Bollinger Bands:&lt;/b&gt;&lt;/u&gt; If the stock is trading at a price below the Bollinger Band lower line, there is potential for the price to increase in the future. Traders can choose to take a buy position. On the other hand, if the current stock price is over the upper line, traders can sell the share.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;b&gt;&lt;u&gt;Momentum Oscillators:&lt;/u&gt;&lt;/b&gt; If the share price has reached a historical high, and the level of the oscillator is not the same as the price, it is indicative of slowly decreasing demand. This also indicates the possibility of a stock price fall. And the opposite is true for stock price rise.&lt;br /&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;u&gt;&lt;b&gt;RSI:&lt;/b&gt;&lt;/u&gt; Most analysts will recommend traders to sell the stock when the RSI touches 70 and a buy recommendation when it falls to 30. However, all stocks may not adhere to this pattern, so it is important to analyse the volatility and RSI history before making a decision.&lt;br /&gt;&lt;br /&gt;Using intraday trading indicators help in averting risk and placing appropriate trades based on technical analysis and market sentiments.&lt;/div&gt;
  1722. &lt;/div&gt;
  1723. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4054055668591361030'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4054055668591361030'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/intraday-trading-knowledge-6-intraday.html' title='Intraday Trading Knowledge 6, Intraday Trading Indicators'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s72-c/nsebsegrowth.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-5931696118885285565</id><published>2017-02-01T17:23:00.000+05:30</published><updated>2017-02-01T17:23:37.224+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="How to Make Profit in Intraday Trading"/><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Knowledge"/><title type='text'>Intraday Trading Knowledge 5, How to Make Profit in Intraday Trading</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1724. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1725. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s1600/nsebsegrowth.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;56&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s200/nsebsegrowth.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1726. &lt;b&gt;How to Make Profit in Intraday Trading&lt;/b&gt;&lt;br /&gt;&lt;br /&gt;Intraday traders always face inherent risks that exist in the stock markets. Price volatility and fluctuating daily volume are a couple of factors that affect the stocks picked for daily trading. Ideally, Traders should not risk over two per cent of their total trading capital on a single trade to ensure the right risk management. However, the desire to earn higher profits often compels traders to risk more. In order to balance the risk taken, while achieving higher returns, here are some tips to follow:&lt;br /&gt;
  1727. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1728. &lt;li&gt;&lt;i&gt;Opening Range Breakout (ORB):&lt;/i&gt;&lt;/li&gt;
  1729. &lt;/ul&gt;
  1730. &amp;nbsp;This intraday trading strategy is widely used by professional traders as well as amateurs. To maximize the potential of this strategy, combining it with the optimum use of indicators, accurate assessment of market sentiment and stringent rules are recommended. ORB has numerous variations; some traders may opt for trade on large breakouts from the opening range and others choose to place their trades on the opening range breakout. The time window for the trades ranges between 30 minutes and three hours.&lt;br /&gt;
  1731. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1732. &lt;li&gt;&lt;i&gt;Mapping Resistance and Support:&lt;/i&gt;&lt;/li&gt;
  1733. &lt;/ul&gt;
  1734. Every stock price fluctuates within a range from the initial 30 minutes of the start of the trading session, which is known as the opening range. The highest and lowest prices during this period are assumed as the resistance and support levels. It is advisable to buy when the share price moves beyond the opening range high and sell if the price falls below the opening range low.&lt;br /&gt;
  1735. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1736. &lt;li&gt;&lt;i&gt;Demand-Supply Imbalances:&lt;/i&gt;&lt;/li&gt;
  1737. &lt;/ul&gt;
  1738. An important intraday trading tip for beginners is to look for stocks where drastic demand-supply imbalances exist and opt for these as entry points. The financial markets follow the normal demand and supply rules—price reduces when there is no demand for higher supplies and vice versa. Users must learn to identify such points on the price chart through research and studying the historical movements.&lt;br /&gt;
  1739. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1740. &lt;li&gt;Opt for 3:1 Risk-Reward Ratio:&lt;/li&gt;
  1741. &lt;/ul&gt;
  1742. Traders, especially beginners, must understand the appropriate risk-reward ratio. Initially, finding stocks that provide a potential risk-reward ratio of at least 3:1 will be beneficial in earning profits in share market investment. This strategy will allow them to lose small while giving them the opportunity to earn big even if they have losses on most of their trades.&lt;br /&gt;
  1743. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1744. &lt;li&gt;Relative Strength Index (RSI) and Average Directional Index (ADX):&lt;/li&gt;
  1745. &lt;/ul&gt;
  1746. Combining these two intraday trading strategies to find buy and sell opportunities can help traders earn profits. The RSI is a technical momentum indicator comparing recent losses and gains to determine over purchased and oversold stocks. The ADX is beneficial and used to determine when the prices are showing strong trends. In most scenarios, if the RSI crosses the upper limit, it is indicative of a sell trade and vice versa. However, when you combine the RSI and ADX, intraday traders buy when the RSI crosses the upper limit and vice versa. The ADX is used as the trend identifier to help users take their buy or sell decisions.&lt;br /&gt;&lt;br /&gt;Intraday trading involves same-day trade settlements. Most traders try to achieve smaller profits through their trades. The golden intraday tip is to ride with the market trend to help make profits.&lt;/div&gt;
  1747. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/5931696118885285565'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/5931696118885285565'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/intraday-trading-knowledge-5-how-to.html' title='Intraday Trading Knowledge 5, How to Make Profit in Intraday Trading'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s72-c/nsebsegrowth.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-9114870755239814562</id><published>2017-02-01T17:14:00.001+05:30</published><updated>2017-02-01T18:10:17.689+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="How to Choose Stocks for Intraday Trading"/><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Knowledge"/><title type='text'>Intraday Trading Knowledge 4, How to Choose Stocks for Intraday Trading</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1748. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1749. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s1600/nsebsegrowth.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;56&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s200/nsebsegrowth.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1750. &lt;b&gt;How to Choose Stocks for Intraday Trading&lt;/b&gt;&lt;br /&gt;
  1751. &lt;br /&gt;
  1752. To succeed as a day trader, it is important to know how to pick stocks for intraday trading. Often people are unable to make profits because they fail to select appropriate stocks to trade during the day.&lt;br /&gt;
  1753. &lt;br /&gt;
  1754. &lt;b&gt;&lt;u&gt;Tips to Choose the Right Intraday Trading Stocks:&lt;/u&gt;&lt;/b&gt;&lt;br /&gt;
  1755. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1756. &lt;li&gt;&lt;i&gt;Trade Only in Liquid Stocks:&lt;/i&gt;&lt;/li&gt;
  1757. &lt;/ul&gt;
  1758. Liquidity is the most important intraday trading tip while choosing the right stocks to trade during the day. Liquid stocks have huge trading volumes whereby larger quantities can be purchased and sold without significantly affecting the price. Generally, lesser liquid stocks do not provide traders the opportunity to purchase and sell larger quantities due to lack of too many buyers. Some traders may argue that illiquid stocks offer bigger opportunities with rapid price modifications. However, statistics show that volatile stocks show greater movements in a short period of time. Thus, most of the possible gains dissipate while the downside risk still looms. Nonetheless, the liquidity of the stocks depends on the quality of the trades placed by the traders. For example, a volume of 50,000 to 75,000 shares is sufficient if the trade is for 50 or 100 Rs; however, if the volume is few hundreds or thousands, volume requirements significantly become larger.&lt;br /&gt;
  1759. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1760. &lt;li&gt;&lt;i&gt;Stay Away from Volatile Stocks:&lt;/i&gt;&lt;/li&gt;
  1761. &lt;/ul&gt;
  1762. It is commonly noticed that a low daily volume of traded stocks or those where some huge news is expected move in an unpredictable way. Sometimes, the stock may show volatility even after the announcement of the big news. Traders are recommended to avoid intraday trading in such stocks. A few volatile stocks are in the mid-size segment while most stocks traded in the low-cap categories like S, T, and Z are highly chaotic. In addition to being volatile, these stocks have low daily volumes, making them illiquid.&lt;br /&gt;
  1763. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1764. &lt;li&gt;&lt;i&gt;Trade in Good Correlation Stocks:&lt;/i&gt;&lt;/li&gt;
  1765. &lt;/ul&gt;
  1766. An intraday tip for choosing the right stock is to opt for those that have a higher correlation with major sectors and indices. This means when the index or the sector sees an upward movement, the stock price also increases. Stocks that move according to the sentiment of the group are reliable and often follow the expected movement of the sector. For example, strengthening of the Indian Rupee against the Dollar will generally affect all information technology companies dependent on the US markets. A stronger rupee implies lower earnings for the IT companies and weakening rupee will result in higher export incomes for these companies.&lt;br /&gt;
  1767. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1768. &lt;li&gt;&lt;i&gt;Follow the Market Trend before deciding the Right Stock:&lt;/i&gt;&lt;/li&gt;
  1769. &lt;/ul&gt;
  1770. One of the most important intraday trading tips is to remember that moving with the trend is always beneficial. During a bull run in the stock market, traders must try to identify stocks that can potentially rise. On the other hand, during the bear run, finding stocks that are likely to decline is advisable.&lt;br /&gt;
  1771. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1772. &lt;li&gt;&lt;i&gt;Pick the Stock you are most confident in after Research:&lt;/i&gt;&lt;/li&gt;
  1773. &lt;/ul&gt;
  1774. Undertaking quality research is one of the most vital intraday tips that traders must always remember. Unfortunately, most day traders avoid doing their research. Identifying the index and then finding sectors that are of interest is recommended. The next step is to create a list of several stocks with these sectors. Traders need not necessarily include sector leaders, but rather identify stocks that are liquid. Technical analysis and determining the support and resistance levels along with studying the fundamentals of these stocks will help traders find the right stocks to profit through intraday / day trading.&lt;br /&gt;
  1775. &lt;br /&gt;
  1776. &lt;/div&gt;
  1777. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/9114870755239814562'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/9114870755239814562'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/intraday-trading-knowledge-4-how-to.html' title='Intraday Trading Knowledge 4, How to Choose Stocks for Intraday Trading'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGq-e1_dIV4QWBP7fnZk28dW_-VQoIx-xHNSVPvyvMggJLasgB81lcXMy4dQ-sS5JXxs6nFjj-9NDcsQ2yOMJFTgobf6A3SAH-OQD1ikRi-kZxVdPqiuFltMmGOE-u-fE52Yu0NdAuo_jS/s72-c/nsebsegrowth.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-4851989112091109771</id><published>2017-02-01T16:56:00.002+05:30</published><updated>2017-02-01T16:56:52.898+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Guide for Beginners"/><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Knowledge"/><title type='text'>Intraday Trading Knowledge 3,  Intraday Trading Guide for Beginners</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1778. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1779. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDhAuLXCRlzUyWtY0bcQYe5INRUMpHiCj7OVpALdm_Q2sj_LZ-kQ5ZdvObztM4l9Ik_YxcbMvUiFYjboe5juFd4rBl_a8gBq1UzSCzZk07sHBf9Y4v-VUJAcUpN6YW5wy-N0lHxjSBmsAW/s1600/nsebsegrowth.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;56&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDhAuLXCRlzUyWtY0bcQYe5INRUMpHiCj7OVpALdm_Q2sj_LZ-kQ5ZdvObztM4l9Ik_YxcbMvUiFYjboe5juFd4rBl_a8gBq1UzSCzZk07sHBf9Y4v-VUJAcUpN6YW5wy-N0lHxjSBmsAW/s200/nsebsegrowth.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1780. When&#39;s the Right Time to Invest in stocks?&lt;br /&gt;&lt;br /&gt;
  1781. Intraday means ‘within the day’. Hence, intraday trading refers to trading stocks and ETFs during regular trading hours within single day. You can buy or sell shares within a short span of time, without having to undergo the tedious process of availing physical share certificates. Intraday trading works on the concept of price movement. You buy shares when the price is low and sell them when the price rises, The difference in both the prices amounts to the profit earned.&lt;br /&gt;&lt;br /&gt;To begin with, Traders use real-time charts to identify the intraday price movement. Along with price monitoring, there are several other tools that help in making your initial trades successful. Here is a guide of moves and strategies that will help you profit:&lt;br /&gt;&lt;br /&gt;
  1782. &lt;b&gt;Enter and Exit intraday trading at an Ideal Time&lt;/b&gt;&lt;br /&gt;&lt;br /&gt;A great tip for intraday trading is to trade with the prevalent intraday trend. It allows low-risk entries and potential for greater profit if the trend continues. Such trends provide useful entry and stop-loss strategies. An intraday trading strategy must have entry and exit signals, i.e. when to get into a particular position and when to withdraw. Once the system generates an entry signal and the position is taken, the exit position has to be decided. You can exit if either of the two conditions is met—you have achieved your desired profit or maximum loss is reached. Once the desired profit is achieved, it is advisable to exit the trade. You must set profit and stop-loss targets before the trade and must not let impulsive behaviour get the better of you.&lt;br /&gt;
  1783. &lt;br /&gt;&lt;b&gt;Choose stocks after historical research&lt;/b&gt;&lt;br /&gt;&lt;br /&gt;The main aim of intraday trading should be to create the best stock picking strategy which preserves capital and, at the same time, controls risk. Start by trading a single stock and learn the characteristics, trends and risks associated with the stock. Once you’ve understood the behaviour of stocks, you will have a better understanding of the best-performing stocks.&lt;br /&gt;&lt;br /&gt;Choose highly liquid stocks, i.e. stocks with a high average daily volume. These stocks can be bought and sold in sufficient volumes without causing much impact on prices. Also, trade in stocks that have good correlation with major indices and sectors. Avoid unpredictable stocks, which tend to trade in a volatile manner.&lt;br /&gt;&lt;br /&gt;
  1784. &lt;b&gt;Have a per-defined target&lt;/b&gt;&lt;br /&gt;&lt;br /&gt;New traders may feel discouraged with their ability to reap profits and may fail to do important things necessary to succeed in day trading. It is important to have a day trading plan to avail of the numerous opportunities in the Stock Market. Beginners need to use trading strategies to take advantage of these opportunities. Set profit and stop-loss price targets before you trade so as to limit your potential loss and to prevent yourself from being too greedy. Also, conduct trade in a disciplined manner. Don’t let impulsive behavior get the better of you. Instead, stick to your day trading plan and don’t expect to get rich in a single trade.&lt;br /&gt;&lt;br /&gt;
  1785. &lt;b&gt;Pick the intraday market direction&lt;/b&gt;&lt;br /&gt;&lt;br /&gt;You can pick an intraday market direction using the ‘value area’. The value area is the range where almost 70% of the previous day’s trade took place. If the market opens below or above this value area, and remains in this area for two consecutive half-hour periods, then the market has an 80% chance of filling the value area. This parameter helps in gauging the market direction. Once you get used to the concept of value area and the 80% rule, trading can be profitable.&lt;br /&gt;&lt;br /&gt;If the market opens higher than the value area, enter a short position closer to the top of the value area. Similarly, if the market opens at a value lower than the value area, enter in a long-term position towards the bottom of the value area.&lt;/div&gt;
  1786. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4851989112091109771'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4851989112091109771'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/intraday-trading-knowledge-3-intraday.html' title='Intraday Trading Knowledge 3,  Intraday Trading Guide for Beginners'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDhAuLXCRlzUyWtY0bcQYe5INRUMpHiCj7OVpALdm_Q2sj_LZ-kQ5ZdvObztM4l9Ik_YxcbMvUiFYjboe5juFd4rBl_a8gBq1UzSCzZk07sHBf9Y4v-VUJAcUpN6YW5wy-N0lHxjSBmsAW/s72-c/nsebsegrowth.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-3515350221637471280</id><published>2017-02-01T16:46:00.004+05:30</published><updated>2017-02-01T16:58:27.022+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Basics"/><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Knowledge"/><category scheme="http://www.blogger.com/atom/ns#" term="Strategies"/><category scheme="http://www.blogger.com/atom/ns#" term="Tips"/><title type='text'>Intraday Trading Knowledge 2, Tips, Strategies, Basics</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1787. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1788. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDhAuLXCRlzUyWtY0bcQYe5INRUMpHiCj7OVpALdm_Q2sj_LZ-kQ5ZdvObztM4l9Ik_YxcbMvUiFYjboe5juFd4rBl_a8gBq1UzSCzZk07sHBf9Y4v-VUJAcUpN6YW5wy-N0lHxjSBmsAW/s1600/nsebsegrowth.png&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;56&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDhAuLXCRlzUyWtY0bcQYe5INRUMpHiCj7OVpALdm_Q2sj_LZ-kQ5ZdvObztM4l9Ik_YxcbMvUiFYjboe5juFd4rBl_a8gBq1UzSCzZk07sHBf9Y4v-VUJAcUpN6YW5wy-N0lHxjSBmsAW/s200/nsebsegrowth.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1789. &lt;div style=&quot;text-align: left;&quot;&gt;
  1790. &lt;u&gt;&lt;b&gt;Intraday Trading: Tips, Strategies &amp;amp; Basics&lt;/b&gt;&lt;/u&gt;&lt;br /&gt;
  1791. Intraday trading is riskier than investing in the regular stock market. It is important, especially for beginners, to understand the basics of such trading to avoid losses. Individuals are advised to invest only the amount they can afford to lose without facing financial difficulties.&lt;/div&gt;
  1792. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1793. &lt;li&gt;&lt;b&gt;A few intraday trading tips discussed below should help investors in making the right decision.&lt;/b&gt;&lt;/li&gt;
  1794. &lt;/ul&gt;
  1795. &lt;b&gt;Choose Two or Three Liquid Shares&lt;/b&gt;&lt;br /&gt;
  1796. Intraday trading involves squaring open positions before the end of the trading session. This is why it is recommended to choose two or three large-cap shares that are highly liquid. Investing in mid-size or small-caps can result in the investor having to hold these shares because of low trading volumes.&lt;br /&gt;
  1797. &lt;br /&gt;
  1798. &lt;b&gt;Determine Entry and Target Prices&lt;/b&gt;&lt;br /&gt;
  1799. Before placing the buy order, you must determine your entry level and target price. It is common for a person’s psychology to change after purchasing the shares. As a result, you may sell even if the price sees a nominal increase. Due to this, you may lose the opportunity to take advantage of higher gains because of the price increase.&lt;br /&gt;
  1800. &lt;br /&gt;
  1801. &lt;b&gt;Utilizing Stop Loss for Lower Impact&lt;/b&gt;&lt;br /&gt;
  1802. Stop loss is a trigger that is used to automatically sell the shares if the price falls below a specified limit. This is beneficial in limiting the potential loss for investors due to the fall in the stock prices. For investors who have used short-selling, stop loss reduces loss in case the price rises beyond their expectations. This strategy ensures emotions are eliminated from your decision.&lt;br /&gt;
  1803. &lt;br /&gt;
  1804. &lt;b&gt;Book Your Profits when Target is reached&lt;/b&gt;&lt;br /&gt;
  1805. Most day traders suffer from fear or greed. It is important for investors to not only cut their losses, but also to book their profits once the target price is reached. In case the individual thinks the stock has a further possibility of rising in price, the stop loss trigger must be readjusted to match this expectation.&lt;br /&gt;
  1806. &lt;br /&gt;
  1807. &lt;b&gt;Avoid being an Investor&lt;/b&gt;&lt;br /&gt;
  1808. Intraday trading, as well as investing, requires individuals to purchase shares. However, factors for both these strategies are distinct. One kind adopts fundamentals while the other considers the technical details. It is common for day traders to take delivery of shares in case the target price is not met. He or she then waits for the price to recover to earn back his or her money. This is not recommended because the stock may not be worthy of investing, as it was purchased only for a shorter duration.&lt;br /&gt;
  1809. Research your Wish list thoroughly&lt;br /&gt;
  1810. Investors are advised to include eight to 10 shares in their wish lists and research these in depth. Knowing about corporate events, such as mergers, bonus dates, stock splits, dividend payments, etc., along with their technical levels is important. Using the Internet for finding resistance and support levels will also be beneficial.&lt;br /&gt;
  1811. Don’t Move against the Market&lt;br /&gt;
  1812. Even experienced professionals with advanced tools are not able to predict market movements. There are times when all technical factors depict a bull market; however, there may still be a decline. These factors are only indicative and do not provide any guarantees. If the market moves against your expectations, it is important to exit your position to avoid huge losses.&lt;br /&gt;
  1813. Stock returns can be huge; however earning smaller gains by adhering to these intraday trading tips should be satisfactory. Intraday trading provides higher leverage, which effectively provides decent returns in one day. Being content is crucial to succeeding as a day trader.&lt;br /&gt;
  1814. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1815. &lt;li&gt;&lt;b&gt;Rules for Intraday Trading&lt;/b&gt;&lt;/li&gt;
  1816. &lt;/ul&gt;
  1817. Most traders, especially beginners, lose money in intraday trading because of the high volatility of the stock markets. Generally, losses occur due to fear or greed because, while investment is not risky, the lack of knowledge is.&lt;br /&gt;
  1818. Basic Rules for Intraday Trading&lt;br /&gt;
  1819. &lt;br /&gt;
  1820. &amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;i&gt;&lt;u&gt;Timing the Market:&lt;/u&gt;&lt;/i&gt;&lt;br /&gt;
  1821. Experts often recommend individuals avoid trading during the first hour, once the markets open. Taking positions between noon and 1pm can increase the possibility of earning profits.&lt;br /&gt;
  1822. &amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;i&gt;&lt;u&gt;Plan Investment Strategy and Stick to it:&lt;/u&gt;&lt;/i&gt;&lt;br /&gt;
  1823. Every time users initiate a trade, it is important for them to have a clear plan of how to do intraday trading. Determining the entry and exit prices before initiating the trade is crucial. One of the most important intraday trading tips is to use the stop loss trigger to reduce the potential loss on your position. Moreover, once the stock achieves the target price, users are advised to close their position, and not be greedy and expect higher profits.&lt;br /&gt;
  1824. &amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;i&gt;&lt;u&gt;Exiting the Position under Unfavourable Conditions:&lt;/u&gt;&lt;/i&gt;&lt;br /&gt;
  1825. For trades that provide profits and price-give reversal (price expected to show reverse trends), it is prudent to book the profits and exit open position. In addition, if the conditions are not favourable to the position, it is advisable to immediately exit and not await the stop-loss trigger to be activated. This will help traders reduce their losses.&lt;br /&gt;
  1826. &amp;nbsp;&amp;nbsp;&amp;nbsp;&lt;i&gt; &lt;u&gt;Invest Small Amounts that Won’t Pinch:&lt;/u&gt;&lt;/i&gt;&lt;br /&gt;
  1827. It is not uncommon for beginners to get carried away once they make some profits during day trading. However, markets are volatile and predicting the trends is not easy even for seasoned professionals. In such situations, beginners can easily lose all their investments. This is why an important intraday tip is to invest smaller sums that a user can afford to lose. This will ensure individuals do not face financial difficulties in case the markets do not favour them.&lt;br /&gt;
  1828. &amp;nbsp;&lt;u&gt;&amp;nbsp;&lt;i&gt; Research and Choose Liquid Stocks:&lt;/i&gt;&lt;/u&gt;&lt;i&gt;&amp;nbsp;&lt;/i&gt;&lt;br /&gt;
  1829. Before commencing intraday trading, it is recommended to understand the basics of the stock market, and the fundamental and technical analyses. There is plenty of research available on the Internet and taking the time to read it will be advantageous. Moreover, there are hundreds of stocks that are traded on the equity markets and traders must trade only two or three liquid stocks. Liquid stocks are those shares that have high volumes in the intraday market. This allows traders to exit open positions before the end of the trading sessions.&lt;br /&gt;
  1830. &amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;i&gt;&lt;u&gt;Always Close All Open Positions:&lt;/u&gt;&amp;nbsp;&lt;/i&gt;&lt;br /&gt;
  1831. Some traders may get tempted to take delivery of their positions in case their targets are not achieved. This is one of the biggest errors and it is crucial to close all open positions even if traders have to book a loss.&lt;br /&gt;
  1832. &amp;nbsp;&amp;nbsp;&amp;nbsp; &lt;i&gt;&lt;u&gt;Spend Time:&lt;/u&gt;&lt;/i&gt;&lt;br /&gt;
  1833. Day trading is not for professionals who are employed in a full-time job. Traders must be able to monitor the market movements throughout the market session (from opening bell until its closing) to enable them to make the right calls as required.&lt;br /&gt;
  1834. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1835. &lt;li&gt;&lt;b&gt;Intraday Trading indicators&lt;/b&gt;&lt;/li&gt;
  1836. &lt;/ul&gt;
  1837. When it comes to booking profits in intraday trading, you will require to do a lot of research. For the same purpose, you need to follow certain indicators. Often intraday tips are believed to be the Holy Grail; this, however, is not entirely accurate. Intraday Trading indicators are beneficial tools when used with a comprehensive strategy to maximize returns.&lt;br /&gt;
  1838. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1839. &lt;li&gt;&lt;b&gt;How to make profit in intraday trading&lt;/b&gt;&lt;/li&gt;
  1840. &lt;/ul&gt;
  1841. &lt;div style=&quot;text-align: left;&quot;&gt;
  1842. Intraday traders always face inherent risks that exist in the stock markets. Price volatility and daily volume are a couple of factors that play an important role in the stocks picked for daily trading. Traders must not risk over two per cent of their total trading capital on a single trade to ensure the right risk management. So here are a few tips shared to make profit in intraday trading.&lt;br /&gt;
  1843. Intraday Time Analysis&lt;/div&gt;
  1844. &lt;div style=&quot;text-align: left;&quot;&gt;
  1845. When it comes to intraday trading, daily charts are the most commonly used charts that represent the price movements on a one-day interval. These charts are a popular intraday trading technique and help illustrate the movement of the prices between the opening bell and closing of the daily trading session. There are several methods in which intraday charts can be used. Below are some of the most commonly used charts while intraday trading on the Indian stock market. Know more about intraday trading time analysis.&lt;/div&gt;
  1846. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1847. &lt;li&gt;&lt;b&gt;How to Choose Stocks for Intraday Trading&lt;/b&gt;&lt;/li&gt;
  1848. &lt;/ul&gt;
  1849. To succeed as a day trader, it is important to know how to pick stocks for intraday trading. Often people are unable to make profits because they fail to select appropriate stocks to trade&lt;br /&gt;
  1850. &lt;br /&gt;
  1851. Day trading, if not managed properly, can have drastic results on the financial well-being of users. The temptation of earning huge profits in a short period of time can entice traders. However, with incomplete understanding and knowledge, intraday trading can be harmful.&lt;/div&gt;
  1852. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/3515350221637471280'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/3515350221637471280'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/intraday-trading-knowledge-tips.html' title='Intraday Trading Knowledge 2, Tips, Strategies, Basics'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgDhAuLXCRlzUyWtY0bcQYe5INRUMpHiCj7OVpALdm_Q2sj_LZ-kQ5ZdvObztM4l9Ik_YxcbMvUiFYjboe5juFd4rBl_a8gBq1UzSCzZk07sHBf9Y4v-VUJAcUpN6YW5wy-N0lHxjSBmsAW/s72-c/nsebsegrowth.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-6947876382086250967</id><published>2017-02-01T16:02:00.005+05:30</published><updated>2017-02-01T17:09:40.232+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Intraday Trading Knowledge"/><category scheme="http://www.blogger.com/atom/ns#" term="What is Intraday Trading"/><title type='text'>Intraday Trading Knowledge 1, What is Intraday Trading</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1853. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  1854. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjke3xt4odSr74YIR_xokn8ypk3uUrK9fehFQt9tAlV4m62dOwuJfEAj-X9F57cxl7ardqZ7TthtHNHv7ied27lQ3ew_lwd3a_xD05OyL8ZYKyKAf25gad0ymEsm2wPzJD7LtHQV7BioLNj/s1600/nsebsegrowth.png&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;56&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjke3xt4odSr74YIR_xokn8ypk3uUrK9fehFQt9tAlV4m62dOwuJfEAj-X9F57cxl7ardqZ7TthtHNHv7ied27lQ3ew_lwd3a_xD05OyL8ZYKyKAf25gad0ymEsm2wPzJD7LtHQV7BioLNj/s200/nsebsegrowth.png&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  1855. What is Intraday Trading&lt;br /&gt;
  1856. Intraday trading involves buying and selling of stocks within the same trading day. Here stocks are purchased, not with an intention to invest, but for the purpose of earning profits by harnessing the movement of stock indices. Thus, the fluctuations in the prices of the stocks are harnessed to earn profits from the trading of stocks.&lt;br /&gt;
  1857. &lt;br /&gt;
  1858. An online trading account is used for the purpose of intraday trading. While doing intraday trading, you need to specify that the orders are specific to intraday trading. As the orders are squared off before the end of the trading day, it is also called as Intraday Trading.&lt;br /&gt;
  1859. &lt;br /&gt;
  1860. Intraday Trading Tips&lt;br /&gt;
  1861. &lt;br /&gt;
  1862. Intraday trading is riskier than investing in the regular stock market. It is important, especially for beginners, to understand the basics of such trading to avoid losses. Individuals are advised to invest only the amount they can afford to lose without facing financial difficulties. A few intraday trading tips will help you learn the art of trading. Know now more about intraday trading tips.&lt;br /&gt;
  1863. Intraday Trading indicators&lt;br /&gt;
  1864. &lt;br /&gt;
  1865. When it comes to booking profits in intraday trading, you will require doing a lot of research. For the same purpose, you need to follow certain indicators. Often intraday tips are believed to be the Holy Grail; this, however, is not entirely accurate. Intraday trading indicators are beneficial tools when used with a comprehensive strategy to maximize returns. To get a detailed understanding of intraday trading indicators, and its effect on trading strategy, visit…&lt;br /&gt;
  1866. &lt;br /&gt;
  1867. &lt;br /&gt;
  1868. How to make profit in intraday trading&lt;br /&gt;
  1869. &lt;br /&gt;
  1870. Intraday traders always face inherent risks that exist in the stock markets. Price volatility and daily volume are a couple of factors that play an important role in the stocks picked for daily trading. Traders must not risk over two per cent of their total trading capital on a single trade to ensure the right risk management. So here are a few tips shared to make the profit in intraday trading.&lt;br /&gt;
  1871. Intraday Time Analysis&lt;br /&gt;
  1872. &lt;br /&gt;
  1873. When it comes to intraday trading, daily charts are the most commonly used charts that represent the price movements on a one-day interval. These charts are a popular intraday trading technique and help illustrate the movement of the prices between the opening bell and closing of the daily trading session. There are several methods in which intraday charts can be used. Know about some of the most commonly used charts.&lt;br /&gt;
  1874. How to Choose Stocks for Intraday Trading&lt;br /&gt;
  1875. &lt;br /&gt;
  1876. To succeed as a day trader, it is important to know how to pick stocks for intraday trading. Often people are unable to make profits because they fail to select appropriate stocks to trade during the day. Choosing the right stocks to book profits is an art that you will learn with experience. For beginners, here get some tips to choose stocks for intraday trading.&lt;/div&gt;
  1877. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/6947876382086250967'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/6947876382086250967'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/02/intraday-trading-knowledge-what-is.html' title='Intraday Trading Knowledge 1, What is Intraday Trading'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjke3xt4odSr74YIR_xokn8ypk3uUrK9fehFQt9tAlV4m62dOwuJfEAj-X9F57cxl7ardqZ7TthtHNHv7ied27lQ3ew_lwd3a_xD05OyL8ZYKyKAf25gad0ymEsm2wPzJD7LtHQV7BioLNj/s72-c/nsebsegrowth.png" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-787676073862748770</id><published>2017-01-29T21:47:00.000+05:30</published><updated>2017-01-29T21:47:09.075+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Dow Theory"/><title type='text'>Dow Theory Expended  </title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1878. &lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1879. &lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1880. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1u0njruku8c0JDaEZ1QXRbpGCDYd2wenKCkBKn4Oh_CYsgMMy9mEySmDk1H0nYTmVdbbUwYGFmgDP-0qshJcsparboGyRqtrmkvHwv-rDjT-WZevAKf-iNuQQuRazjwo_LA6MKWmzFzRL/s1600/dowtheoryforthe21stcenturytechnicalindicatorsforimprovingyourinvestmentresults-130404083155-phpapp02-thumbnail-4.jpg&quot; imageanchor=&quot;1&quot; style=&quot;clear: right; float: right; margin-bottom: 1em; margin-left: 1em;&quot;&gt;&lt;img border=&quot;0&quot; height=&quot;155&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1u0njruku8c0JDaEZ1QXRbpGCDYd2wenKCkBKn4Oh_CYsgMMy9mEySmDk1H0nYTmVdbbUwYGFmgDP-0qshJcsparboGyRqtrmkvHwv-rDjT-WZevAKf-iNuQQuRazjwo_LA6MKWmzFzRL/s1600/dowtheoryforthe21stcenturytechnicalindicatorsforimprovingyourinvestmentresults-130404083155-phpapp02-thumbnail-4.jpg&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;span style=&quot;font-size: large;&quot;&gt;&lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt; Dow Theory Expended&amp;nbsp;&amp;nbsp;&lt;/span&gt;&lt;/b&gt;&lt;/span&gt;&lt;br /&gt;
  1881. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;b&gt;&amp;nbsp;&amp;nbsp;&amp;nbsp;&amp;nbsp;&lt;/b&gt;&lt;/span&gt;&lt;/div&gt;
  1882. &lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1883. &lt;span style=&quot;font-size: large;&quot;&gt;&lt;i&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;b&gt;1. Introduction&lt;/b&gt;&lt;/span&gt;&lt;/i&gt;&lt;/span&gt;&lt;br /&gt;
  1884. &lt;ul style=&quot;text-align: left;&quot;&gt;&lt;/ul&gt;
  1885. &lt;span style=&quot;font-size: large;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Any attempt to trace the origins of technical analysis would inevitably lead to Dow theory. While more than 100 years old, Dow theory remains the foundation of much of what we know today as technical analysis.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  1886. &lt;br /&gt;
  1887. &lt;span style=&quot;font-size: large;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Dow theory was formulated from a series of Wall Street Journal editorials authored by Charles H. Dow from 1900 until the time of his death in 1902. These editorials reflected Dow&#39;s beliefs on how the stock market behaved and how the market could be used to measure the health of the business environment.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  1888. &lt;br /&gt;
  1889. &lt;span style=&quot;font-size: large;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Due to his death, Dow never published his complete theory on the markets, but several followers and associates have published works that have expanded on the editorials. Some of the most important contributions to Dow theory were William P. Hamilton&#39;s &quot;The Stock Market Barometer&quot; (1922), Robert Rhea&#39;s &quot;The Dow Theory&quot; (1932), E. George Schaefer&#39;s &quot;How I Helped More Than 10,000 Investors To Profit In Stocks&quot; (1960) and Richard Russell&#39;s &quot;The Dow Theory Today&quot; (1961).&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  1890. &lt;br /&gt;
  1891. &lt;span style=&quot;font-size: large;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Dow believed that the stock market as a whole was a reliable measure of overall business conditions within the economy and that by analyzing the overall market, one could accurately gauge those conditions and identify the direction of major market trends and the likely direction of individual stocks.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  1892. &lt;br /&gt;
  1893. &lt;span style=&quot;font-size: large;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Dow first used his theory to create the Dow Jones Industrial Index and the Dow Jones Rail Index (now Transportation Index), which were originally compiled by Dow for The Wall Street Journal. Dow created these indexes because he felt they were an accurate reflection of the business conditions within the economy because they covered two major economic segments: industrial and rail (transportation). While these indexes have changed over the last 100 years, the theory still applies to current market indexes.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  1894. &lt;span style=&quot;font-size: large;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt; &lt;br /&gt;
  1895. Much of what we know today as technical analysis has its roots in Dow&#39;s work. For this reason, all traders using technical analysis should get to know the six basic tenets of Dow theory. Let&#39;s explore them.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  1896. &lt;h1 style=&quot;text-align: left;&quot;&gt;
  1897. &lt;i&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif; font-size: large;&quot;&gt;2. The Market Discounts Everything&lt;/span&gt;&lt;/i&gt;&lt;/h1&gt;
  1898. &lt;ul style=&quot;text-align: left;&quot;&gt;&lt;/ul&gt;
  1899. &lt;h1 style=&quot;text-align: justify;&quot;&gt;
  1900. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;The first basic premise of Dow theory suggests that all information - past, current and even future - is discounted into the markets and reflected in the prices of stocks and indexes.&lt;br /&gt;
  1901. &lt;br /&gt;
  1902. That information includes everything from the emotions of investors to inflation and interest-rate data, along with pending earnings announcements to be made by companies after the close. Based on this tenet, the only information excluded is that which is unknowable, such as a massive earthquake. But even then the risks of such an event are priced into the market.&lt;br /&gt;
  1903. &lt;br /&gt;
  1904. It&#39;s important to note that this is not to suggest that market participants, or even the market itself, are all knowing, with the ability to predict future events. Rather, it means that over any period of time, all factors - those that have happened, are expected to happen and could happen - are priced into the market. As things change, such as market risks, the market adjusts along with the prices, reflecting that new information.&lt;br /&gt;
  1905. &lt;br /&gt;
  1906. The idea that the market discounts everything is not new to technical traders, as this is a major premise of many of the tools used in this field of study. Accordingly, in technical analysis one need only look at price movements, and not at other factors such as the balance sheet.&lt;br /&gt;
  1907. &lt;br /&gt;
  1908. Like mainstream technical analysis, Dow theory is mainly focused on price. However, the two differ in that Dow theory is concerned with the movements of the broad markets, rather than specific securities.&lt;br /&gt;
  1909. &lt;br /&gt;
  1910. For example, a follower of Dow theory will look at the price movement of the major market indexes. Once they have an idea of the prevailing trend in the market, they will make an investment decision. If the prevailing trend is upward, it follows that an investor would buy individual stocks trading at a fair valuation. This is where a broad understanding of the fundamental factors that affect a company can be helpful.&lt;br /&gt;
  1911. &lt;br /&gt;
  1912. It&#39;s important to note that while Dow theory itself is focused on price movements and index trends, implementation can also incorporate elements of fundamental analysis, including value- and fundamental-oriented strategies.&lt;br /&gt;
  1913. &lt;br /&gt;
  1914. Having said that, Dow theory is much more suited to technical analysis.&amp;nbsp;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/h1&gt;
  1915. &lt;h1 style=&quot;font-size: 30px; text-align: left;&quot;&gt;
  1916. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif; font-size: large;&quot;&gt;3. The Three-Trend Market&lt;/span&gt;&lt;/h1&gt;
  1917. &lt;h1 style=&quot;font-size: 30px; text-align: justify;&quot;&gt;
  1918. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif; font-size: large;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;An important part of Dow theory is distinguishing the overall direction of the market. To do this, the theory uses trend analysis.&lt;br /&gt;
  1919. &lt;br /&gt;
  1920. Before we can get into the specifics of Dow theory trend analysis, we need to understand trends. First, it&#39;s important to note that while the market tends to move in a general direction, or trend, it doesn&#39;t do so in a straight line. The market will rally up to a high (peak) and then sell off to a low (trough), but will generally move in one direction.&lt;/span&gt;&lt;/span&gt; &lt;/span&gt;&lt;/h1&gt;
  1921. &lt;ul style=&quot;text-align: left;&quot;&gt;&lt;/ul&gt;
  1922. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  1923. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4jDG38P5OCJvnQNQ1H9gemVj6uWpFd6BqzgA7ZlC9svOjf1dO5qIT5LrcYBpnWqQ3lp4Nz1OeNUYbLfWRQJR91kYt7CXO2ITPMnvVV-OcT6Ww_iSj8QqnsFi5jfIwRBqHGvGb1TJjbPLm/s1600/Dow1.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4jDG38P5OCJvnQNQ1H9gemVj6uWpFd6BqzgA7ZlC9svOjf1dO5qIT5LrcYBpnWqQ3lp4Nz1OeNUYbLfWRQJR91kYt7CXO2ITPMnvVV-OcT6Ww_iSj8QqnsFi5jfIwRBqHGvGb1TJjbPLm/s1600/Dow1.gif&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  1924. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;Figure 1: an uptrend&lt;/td&gt;&lt;/tr&gt;
  1925. &lt;/tbody&gt;&lt;/table&gt;
  1926. &lt;h1 style=&quot;text-align: justify;&quot;&gt;
  1927. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;An upward trend is broken up into several rallies, where each rally has a high and a low. For a market to be considered in an uptrend, each peak in the rally must reach a higher level than the previous rally&#39;s peak, and each low in the rally must be higher than the previous rally&#39;s low.&lt;br /&gt;
  1928. &lt;br /&gt;
  1929. A downward trend is broken up into several sell-offs, in which each sell-off also has a high and a low. To be considered a downtrend in Dow terms, each new low in the sell-off must be lower than the previous sell-off&#39;s low and the peak in the sell-off must be lower then the peak in the previous sell-off.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/h1&gt;
  1930. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  1931. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0kc3ovLzmDarVFWkNPtT4fg8bq4G5ZIuaRoHzquGNpgZDgHiIumgjRWK_wC7wTelGZjSWMmPDmvTQ79YSnMa0dEH1OeIMC-y39d1hWGPo2Z-4BuzLGad6E3GLd6EA_QG_WXGKKSVY__CV/s1600/Dow2.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi0kc3ovLzmDarVFWkNPtT4fg8bq4G5ZIuaRoHzquGNpgZDgHiIumgjRWK_wC7wTelGZjSWMmPDmvTQ79YSnMa0dEH1OeIMC-y39d1hWGPo2Z-4BuzLGad6E3GLd6EA_QG_WXGKKSVY__CV/s1600/Dow2.gif&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  1932. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;Figure 2: a downtrend&lt;/td&gt;&lt;/tr&gt;
  1933. &lt;/tbody&gt;&lt;/table&gt;
  1934. &lt;h1 style=&quot;text-align: justify;&quot;&gt;
  1935. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;Now that we understand how Dow theory defines a trend, we can look at the finer points of trend analysis.&lt;br /&gt;
  1936. &lt;br /&gt;
  1937. Dow theory identifies three trends within the market: primary, secondary and minor. A primary trend is the largest trend lasting for more then a year, while a secondary trend is an intermediate trend that lasts three weeks to three months and is often associated with a movement against the primary trend. Finally, the minor trend often lasts less than three weeks and is associated with the movements in the intermediate trend.&lt;br /&gt;
  1938. &lt;br /&gt;
  1939. Let us now take a look at each trend.&lt;br /&gt;
  1940. &lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/h1&gt;
  1941. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1942. &lt;li&gt;&lt;u&gt;&lt;i&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;&lt;b&gt;Primary Trend&lt;/b&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/i&gt;&lt;/u&gt;&lt;/li&gt;
  1943. &lt;/ul&gt;
  1944. &lt;h1 style=&quot;text-align: justify;&quot;&gt;
  1945. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;In Dow theory, the primary trend is the major trend of the market, which makes it the most important one to determine. This is because the overriding trend is the one that affects the movements in stock prices. The primary trend will also impact the secondary and minor trends within the market.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  1946. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;Dow determined that a primary trend will generally last between one and three years but could vary in some instances.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/h1&gt;
  1947. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  1948. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibbUCKO4jt66iTdXz18gOSVXxEHxeUWMiHyZgoK8I4pivc2zYct9BjX1MK4IzgHqk5ynVBq5tWS842WRtPhU9jEqfitQCmFKLqcf_9mSGXPN9a9aBOougINzcqlpgCcc7122IuaeKJcK3t/s1600/Dow3.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEibbUCKO4jt66iTdXz18gOSVXxEHxeUWMiHyZgoK8I4pivc2zYct9BjX1MK4IzgHqk5ynVBq5tWS842WRtPhU9jEqfitQCmFKLqcf_9mSGXPN9a9aBOougINzcqlpgCcc7122IuaeKJcK3t/s1600/Dow3.gif&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  1949. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;Figure 3: an uptrend with corrections&lt;/td&gt;&lt;/tr&gt;
  1950. &lt;/tbody&gt;&lt;/table&gt;
  1951. &lt;h1 style=&quot;text-align: justify;&quot;&gt;
  1952. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;&amp;nbsp;Regardless of trend length, the primary trend remains in effect until there is a confirmed reversal.&lt;br /&gt;
  1953. For example, if in an uptrend the price closes below the low of a previously established trough, it could be a sign that the market is headed lower, and not higher.&lt;br /&gt;
  1954. &lt;br /&gt;
  1955. When reviewing trends, one of the most difficult things to determine is how long the price movement within a primary trend will last before it reverses. The most important aspect is to identify the direction of this trend and to trade with it, and not against it, until the weight of evidence suggests that the primary trend has reversed.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/h1&gt;
  1956. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1957. &lt;li&gt;&lt;h1 style=&quot;text-align: justify;&quot;&gt;
  1958. &lt;u&gt;&lt;i&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;&amp;nbsp;Secondary,&amp;nbsp; or Intermediate, Trend&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/i&gt;&lt;/u&gt;&lt;/h1&gt;
  1959. &lt;/li&gt;
  1960. &lt;/ul&gt;
  1961. &lt;/div&gt;
  1962. &lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  1963. &lt;ul style=&quot;text-align: left;&quot;&gt;&lt;/ul&gt;
  1964. &lt;h1 style=&quot;text-align: justify;&quot;&gt;
  1965. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;In Dow theory, a primary trend is the main direction in which the market is moving. Conversely, a secondary trend moves in the opposite direction of the primary trend, or as a correction to the primary trend.&lt;br /&gt;
  1966. &lt;br /&gt;
  1967. For example, an upward primary trend will be composed of secondary downward trends. This is the movement from a consecutively higher high to a consecutively lower high. In a primary downward trend the secondary trend will be an upward move, or a rally. This is the movement from a consecutively lower low to a consecutively higher low.&lt;br /&gt;
  1968. &lt;br /&gt;
  1969. Below is an illustration of a secondary trend within a primary uptrend. Notice how the short-term highs (shown by the horizontal lines) fail to create successively higher peaks, suggesting that a short-term downtrend is present. Since the retracement does not fall below the October low, traders would use this to confirm the validity of the correction within a primary uptrend.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/h1&gt;
  1970. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  1971. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiA7vyhdi2DVctzw3ly-pJ6CUikJXyp5w1j5mMQ9h-vUWx5oJJDJ229JcN59mHIA_hhyphenhyphenC7qeR6STUXjAbyI8naQ9a6qA7dK2DX7uAjZyK-P_hkZZAEvX_wd76J_Y16c8xqccXMgLvmfpm8X/s1600/Dow4.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiA7vyhdi2DVctzw3ly-pJ6CUikJXyp5w1j5mMQ9h-vUWx5oJJDJ229JcN59mHIA_hhyphenhyphenC7qeR6STUXjAbyI8naQ9a6qA7dK2DX7uAjZyK-P_hkZZAEvX_wd76J_Y16c8xqccXMgLvmfpm8X/s1600/Dow4.gif&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  1972. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;Figure 4: a secondary trend w/ a primary uptrend&lt;/td&gt;&lt;/tr&gt;
  1973. &lt;/tbody&gt;&lt;/table&gt;
  1974. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1975. &lt;span style=&quot;font-size: large;&quot;&gt;&lt;b&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;/span&gt;&lt;/b&gt;&lt;/span&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;In general, a secondary, or intermediate, trend typically lasts between three weeks and three months, while the retracement of the secondary trend generally ranges between one-third to two-thirds of the primary trend&#39;s movement. For example, if the primary upward trend moved the DJIA from 10,000 to 12,500 (2,500 points), the secondary trend would be expected to send the DJIA down at least 833 points (one-third of 2,500).&lt;br /&gt;
  1976. &lt;br /&gt;
  1977. Another important characteristic of a secondary trend is that its moves are often more volatile than those of the primary move.&lt;br /&gt;
  1978. &lt;/span&gt;&lt;/div&gt;
  1979. &lt;ul style=&quot;text-align: left;&quot;&gt;
  1980. &lt;li&gt;&lt;u&gt;&lt;i&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;b&gt;Minor Trend&lt;/b&gt;&lt;/span&gt;&lt;/i&gt;&lt;/u&gt;&lt;/li&gt;
  1981. &lt;/ul&gt;
  1982. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1983. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;The last of the three trend types in Dow theory is the minor trend, which is defined as a market movement lasting less than three weeks. The minor trend is generally the corrective moves within a secondary move, or those moves that go against the direction of the secondary trend. &lt;/span&gt;&lt;/div&gt;
  1984. &lt;/div&gt;
  1985. &lt;/div&gt;
  1986. &lt;br /&gt;
  1987. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  1988. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjBnnCAOiyjmK1xTOblC5Gl2BymnAevsFU2pcbJsY_9xZlFwhnGCr5J9dYQ8sOP4-Pp4S-sTZHQp6l-t1HGb8nXhMGEOpbUU5Ix3udIamOWMXSvqcUJLufgvUpO6cCy_aEr6qgqwXOmipI/s1600/Dow5.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjjBnnCAOiyjmK1xTOblC5Gl2BymnAevsFU2pcbJsY_9xZlFwhnGCr5J9dYQ8sOP4-Pp4S-sTZHQp6l-t1HGb8nXhMGEOpbUU5Ix3udIamOWMXSvqcUJLufgvUpO6cCy_aEr6qgqwXOmipI/s1600/Dow5.gif&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  1989. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;Figure 5&lt;/td&gt;&lt;/tr&gt;
  1990. &lt;/tbody&gt;&lt;/table&gt;
  1991. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1992. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;Due to its short-term nature and the longer-term focus of Dow theory, the minor trend is not of major concern to Dow theory followers. But this doesn&#39;t mean it is completely irrelevant; the minor trend is watched with the large picture in mind, as these short-term price movements are a part of both the primary and secondary trends.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  1993. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1994. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;br /&gt;
  1995. Most proponents of Dow theory focus their attention on the primary and secondary trends, as minor trends tend to include a considerable amount of noise. If too much focus is placed on minor trends, it can to lead to irrational trading, as traders get distracted by short-term volatility and lose sight of the bigger picture.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  1996. &lt;div style=&quot;text-align: justify;&quot;&gt;
  1997. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;br /&gt;
  1998. Stated simply, the greater the time period a trend comprises, the more important the trend.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  1999. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2000. &lt;br /&gt;&lt;/div&gt;
  2001. &lt;h1&gt;
  2002. &lt;span style=&quot;font-size: large;&quot;&gt;&lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;4. The Three Phases Of Primary Trends&lt;/span&gt;&lt;/span&gt;&lt;/h1&gt;
  2003. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2004. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Since the most vital trend to understand is the primary trend, this leads into the third tenet of Dow theory, which states that there are three phases to every primary trend – the accumulation phase (distribution phase), the public participation phase and a panic phase (excess phase).&lt;br /&gt;
  2005. &lt;br /&gt;
  2006. Let us now take a look at each of the three phases as they apply to both bull and bear markets.&lt;br /&gt;
  2007. &lt;br /&gt;
  2008. &lt;i&gt;&lt;u&gt;&lt;b&gt;Primary Upward Trend (Bull Market)&lt;/b&gt;&lt;/u&gt;&lt;/i&gt;&lt;br /&gt;
  2009. &lt;br /&gt;
  2010. The Accumulation Phase&lt;br /&gt;
  2011. The first stage of a bull market is referred to as the accumulation phase, which is the start of the upward trend. This is also considered the point at which informed investors start to enter the market.&lt;br /&gt;
  2012. &lt;br /&gt;
  2013. The accumulation phase typically comes at the end of a downtrend, when everything is seemingly at its worst. But this is also the time when the price of the market is at its most attractive level because by this point most of the bad news is priced into the market, thereby limiting downside risk and offering attractive valuations.&lt;br /&gt;
  2014. &lt;br /&gt;
  2015. However, the accumulation phase can be the most difficult one to spot because it comes at the end of a downward move, which could be nothing more than a secondary move in a primary downward trend - instead of being the start of a new uptrend. This phase will also be characterized by persistent market pessimism, with many investors thinking things will only get worse.&lt;br /&gt;
  2016. &lt;br /&gt;
  2017. From a more technical standpoint, the start of the accumulation phase will be marked by a period of price consolidation in the market. This occurs when the downtrend starts to flatten out, as selling pressure starts to dissipate. The mid-to-latter stages of the accumulation phase will see the price of the market start to move higher. &lt;/span&gt;&lt;/span&gt;&lt;span id=&quot;goog_1294039554&quot;&gt;&lt;/span&gt;&lt;span id=&quot;goog_1294039555&quot;&gt;&lt;/span&gt;&lt;/div&gt;
  2018. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2019. &lt;br /&gt;&lt;/div&gt;
  2020. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  2021. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivr-7fCDAjcCmwWWFDDbrhsxbj0W4XZgMnNpsm7Ufs5SfWAOoMXJMFUhSzYse1ePVagXZkWjQsR5i7GmWiHnrk0sF6_xXAI2yR80rtrK526mCeIqQgRWdYCqOb_hcSvmFgnuNl9ScNnWrR/s1600/Dow6.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEivr-7fCDAjcCmwWWFDDbrhsxbj0W4XZgMnNpsm7Ufs5SfWAOoMXJMFUhSzYse1ePVagXZkWjQsR5i7GmWiHnrk0sF6_xXAI2yR80rtrK526mCeIqQgRWdYCqOb_hcSvmFgnuNl9ScNnWrR/s1600/Dow6.gif&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  2022. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;Figure 1: the accumulation phase&lt;/td&gt;&lt;/tr&gt;
  2023. &lt;/tbody&gt;&lt;/table&gt;
  2024. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2025. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;A new upward trend will be confirmed when the market doesn&#39;t move to a consecutively lower low and high.&lt;br /&gt;
  2026. &lt;br /&gt;
  2027. Public Participation Phase&lt;br /&gt;
  2028. When informed investors entered the market during the accumulation phase, they did so with the assumption that the worst was over and a recovery lay ahead. As this starts to materialize, the new primary trend moves into what is known as the public participation phase.&lt;br /&gt;
  2029. &lt;br /&gt;
  2030. During this phase, negative sentiment starts to dissipate as business conditions - marked by earnings growth and strong economic data - improve. As the good news starts to permeate the market, more and more investors move back in, sending prices higher.&lt;br /&gt;
  2031. &lt;br /&gt;
  2032. This phase tends not only to be the longest lasting, but also the one with the largest price movement. It&#39;s also the phase in which most technical and trend traders start to take long positions, as the new upward primary trend has confirmed itself - a sign these participants have waited for.&lt;/span&gt;&lt;/div&gt;
  2033. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2034. &lt;br /&gt;&lt;/div&gt;
  2035. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  2036. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhO6567aoJVwiRzDvW4ImkMvs4roeV36e-Y-3qCBn5Dw7szJejNXqw7B3YWVdSIdsK7TwPCLY-r3sjTpPZwXPHYNGz2I0CWaoRl_nYdwJWu-t_oVN5P3OpS6Lu-DBnOZUdxp8s6tuM31Iab/s1600/Dow7.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhO6567aoJVwiRzDvW4ImkMvs4roeV36e-Y-3qCBn5Dw7szJejNXqw7B3YWVdSIdsK7TwPCLY-r3sjTpPZwXPHYNGz2I0CWaoRl_nYdwJWu-t_oVN5P3OpS6Lu-DBnOZUdxp8s6tuM31Iab/s1600/Dow7.gif&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  2037. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;Figure 2: the public participation phase&lt;/td&gt;&lt;/tr&gt;
  2038. &lt;/tbody&gt;&lt;/table&gt;
  2039. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2040. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;i&gt;The Excess Phase&lt;/i&gt;&lt;br /&gt;
  2041. As the market has made a strong move higher on the improved business conditions and buying by market participants to move starts to age, we begin to move into the excess phase. At this point, the market is hot again for all investors.&lt;br /&gt;
  2042. &lt;br /&gt;
  2043. The last stage in the upward trend, the excess phase, is the one in which the smart money starts to scale back its positions, selling them off to those now entering the market. At this point, the market is marked by, as Alan Greenspan might say, &quot;irrational exuberance&quot;. The perception is that everything is running great and that only good things lie ahead. &lt;/span&gt;&lt;/div&gt;
  2044. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2045. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;This is also usually the time when the  last of the buyers start to enter the market - after large gains have  been achieved. Like lambs to the slaughter, the late entrants hope that  recent returns will continue. Unfortunately for them, they are buying  near the top. &lt;br /&gt;
  2046. &lt;br /&gt;
  2047. During this phase, a lot of attention  should be placed on signs of weakness in the trend, such as  strengthening downward moves. Also, if the upward moves start to show  weakness, it could be another sign that the trend may be near the start  of a primary downtrend.&lt;/span&gt;&lt;/div&gt;
  2048. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2049. &lt;/div&gt;
  2050. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  2051. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhaKDYKtetmpORHWopArorxEwkyEBV0UJzgLlUPFzXAzm4nNoTzHJc6SUJp-Sl-Xh5gFPRztc_-IursSCxwjvazNk0mRakb9mboi5NkSVU8RMlWy7xrvXlhy6IIsRcDgQXgk88MsbPdub6x/s1600/Dow8.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhaKDYKtetmpORHWopArorxEwkyEBV0UJzgLlUPFzXAzm4nNoTzHJc6SUJp-Sl-Xh5gFPRztc_-IursSCxwjvazNk0mRakb9mboi5NkSVU8RMlWy7xrvXlhy6IIsRcDgQXgk88MsbPdub6x/s1600/Dow8.gif&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  2052. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;&lt;table align=&quot;center&quot; border=&quot;0&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;&quot; style=&quot;border-collapse: collapse; width: 320px;&quot; summary=&quot;&quot; title=&quot;&quot;&gt;&lt;tbody&gt;
  2053. &lt;tr&gt;&lt;td&gt;Figure 3: the excess phase&lt;/td&gt;&lt;/tr&gt;
  2054. &lt;/tbody&gt;&lt;/table&gt;
  2055. &lt;/td&gt;&lt;/tr&gt;
  2056. &lt;/tbody&gt;&lt;/table&gt;
  2057. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2058. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&amp;nbsp;&lt;b&gt;Primary Downward Trend (Bear Market)&lt;/b&gt;&lt;br /&gt;
  2059. &lt;br /&gt;
  2060. &lt;i&gt;The Distribution Phase&lt;/i&gt;&lt;/span&gt;&lt;/div&gt;
  2061. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2062. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;i&gt;&lt;br /&gt;
  2063. &lt;/i&gt;The  first phase in a bear market is known as the distribution phase, the  period in which informed buyers sell (distribute) their positions. This  is the opposite of the accumulation phase during a bull market in that  the informed buyers are now selling into an overbought market instead of  buying in an oversold market.&lt;br /&gt;
  2064. &lt;br /&gt;
  2065. In  this phase, overall sentiment continues to be optimistic, with  expectations of higher market levels. It is also the phase in which  there is continued buying by the last of the investors in the market,  especially those who missed the big move but are hoping for a similar  one in the near future.&lt;br /&gt;
  2066. &lt;br /&gt;
  2067. As was the case in the  accumulation phase, the distribution phase can be difficult to spot in  its early stages. The reason for this is that it may be disguised as a  secondary downward trend within the primary upward trend.&lt;br /&gt;
  2068. &lt;br /&gt;
  2069. From  a technical standpoint, the distribution phase is represented by a  topping of the market where the price movement starts to flatten as  selling pressure increases . The mid to latter stages of  the distribution phase will see prices start to fall as more and more  investors, anticipating weakness, exit their positions.&lt;br /&gt;
  2070. &lt;br /&gt;
  2071. A new downward trend will be confirmed when the previous trend fails to make another consecutive higher high and low.&lt;/span&gt;&lt;/div&gt;
  2072. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2073. &lt;/div&gt;
  2074. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2075. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&amp;nbsp;&lt;i&gt;Public Participation Phase&lt;/i&gt;&lt;/span&gt;&lt;/div&gt;
  2076. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2077. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;i&gt;&lt;br /&gt;
  2078. &lt;/i&gt;This  phase is similar to the public participation phase found in a primary  upward trend in that it lasts the longest and will represent the largest  part of the move - in this case downward. &lt;br /&gt;
  2079. &lt;br /&gt;
  2080. During  this phase it is clear that the business conditions in the market are  getting worse and the sentiment is becoming more negative as time goes  on. The market continues to discount the worsening conditions as selling  increases and buying dries up.&lt;br /&gt;
  2081. &lt;br /&gt;
  2082. This is also the  point at which most trend followers and technical traders start to dump  their positions and take short positions as the new downward trend has  confirmed itself.&lt;br /&gt;
  2083. &lt;br /&gt;
  2084. &lt;i&gt;The Panic Phase&lt;/i&gt;&lt;/span&gt;&lt;/div&gt;
  2085. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2086. &lt;span style=&quot;font-family: &amp;quot;arial&amp;quot; , &amp;quot;helvetica&amp;quot; , sans-serif;&quot;&gt;&lt;i&gt;&lt;br /&gt;
  2087. &lt;/i&gt;The  last phase of the primary downward market tends to be filled with  market panic and can lead to very large sell-offs in a very short period  of time. In the panic phase, the market is wrought up with negative  sentiment, including weak outlooks on companies, the economy and the  overall market. &lt;br /&gt;
  2088. &lt;br /&gt;
  2089. During this phase you will see many investors selling off their stakes in panic.  Usually these participants are the ones that just entered the market  during the excess phase of the previous run-up in share price.&lt;br /&gt;
  2090. &lt;br /&gt;
  2091. But  just when things start to look their worst is when the accumulation  phase of a primary upward trend will begin and the cycle repeats itself.&lt;/span&gt;&lt;/div&gt;
  2092. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2093. &lt;/div&gt;
  2094. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2095. &lt;/div&gt;
  2096. &lt;/div&gt;
  2097. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/787676073862748770'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/787676073862748770'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2017/01/dow-theory-expended.html' title='Dow Theory Expended  '/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg1u0njruku8c0JDaEZ1QXRbpGCDYd2wenKCkBKn4Oh_CYsgMMy9mEySmDk1H0nYTmVdbbUwYGFmgDP-0qshJcsparboGyRqtrmkvHwv-rDjT-WZevAKf-iNuQQuRazjwo_LA6MKWmzFzRL/s72-c/dowtheoryforthe21stcenturytechnicalindicatorsforimprovingyourinvestmentresults-130404083155-phpapp02-thumbnail-4.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-123126125469877428</id><published>2014-04-06T18:47:00.000+05:30</published><updated>2014-04-06T18:49:23.706+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Candlestick Chart"/><category scheme="http://www.blogger.com/atom/ns#" term="Candlestick Patterns"/><category scheme="http://www.blogger.com/atom/ns#" term="Candlestick Tutorial"/><category scheme="http://www.blogger.com/atom/ns#" term="Trading Setup"/><category scheme="http://www.blogger.com/atom/ns#" term="Trading Strategy"/><title type='text'>Candlestick Outside Vertical Bars and How to Trade Them</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  2098. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  2099. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXpJvy0UkAQ5V6QmH2fi_-Ch9Ou_J_frgYOTsMFydQ5Yot7PBL2pT6nMzigCU5qjw0G0FNuKWFiy8znxQlxi3urTPZpCE4BYCjkAGU11uuGt0VaArKMpZFz6VyLRwlNrHEnkMEB3qpWRni/s1600/weekly-candlestick-chart.jpg&quot; imageanchor=&quot;1&quot; style=&quot;clear: left; float: left; margin-bottom: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXpJvy0UkAQ5V6QmH2fi_-Ch9Ou_J_frgYOTsMFydQ5Yot7PBL2pT6nMzigCU5qjw0G0FNuKWFiy8znxQlxi3urTPZpCE4BYCjkAGU11uuGt0VaArKMpZFz6VyLRwlNrHEnkMEB3qpWRni/s1600/weekly-candlestick-chart.jpg&quot; height=&quot;150&quot; width=&quot;200&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  2100. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2101. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;Few Candlestick patterns can excite traders as much as the Engulfing pattern, or also known as the ‘Outside Vertical Bar.’  &lt;/span&gt;
  2102. &lt;/span&gt;&lt;/div&gt;
  2103. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2104. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;This is a one-bar formation that can pop up on any
  2105. time-frame chart; with the longer time-frames often increasing the
  2106. potential reliability of the signal.  &lt;/span&gt;&lt;/span&gt;
  2107. &lt;/div&gt;
  2108. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2109. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;With the Outside Vertical Bar, what we are looking
  2110. for is fairly simple: We want the candle in question to completely cover
  2111. the range of the previously printed candle; taking out the previous
  2112. high and low. &lt;/span&gt;&lt;/span&gt;
  2113. &lt;/div&gt;
  2114. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2115. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2116. &lt;span class=&quot;gsstx&quot;&gt;The chart below illustrates a Bearish Outside Vertical Bar, also known as the Bearish Engulfing Pattern.&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2117. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2118. &lt;br /&gt;&lt;/div&gt;
  2119. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  2120. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhORgvQyg4nrFrIe0uwN6QIutwmUaB88bXMDwujSumDLxjWuojLFzJaFspOvfbNRazlFkRNBXgftJsjIWaJQpj6OY-b-VYeHlriuTLVhUDf5l1X0UP25UW9jDLMMvYoSOTVYToaICzmdk33/s1600/Outside_Vertical_Bars_body_Picture_2.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhORgvQyg4nrFrIe0uwN6QIutwmUaB88bXMDwujSumDLxjWuojLFzJaFspOvfbNRazlFkRNBXgftJsjIWaJQpj6OY-b-VYeHlriuTLVhUDf5l1X0UP25UW9jDLMMvYoSOTVYToaICzmdk33/s1600/Outside_Vertical_Bars_body_Picture_2.png&quot; height=&quot;378&quot; width=&quot;400&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  2121. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2122. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;As you can see, the Outside Vertical bar takes out
  2123. the high, and then the low of the previous bar. Many traders will look
  2124. at Outside Vertical Bars as continuation patterns – trading in the
  2125. direction of the Outside candle. So in the above chart, traders could be
  2126. looking to go short upon the close of the Outside Vertical Bar; in an
  2127. effort to reap the extension of momentum that was very visible in the
  2128. previous candle. &lt;/span&gt;
  2129. &lt;/span&gt;&lt;/div&gt;
  2130. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2131. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2132. &lt;span class=&quot;gsstx&quot;&gt;The Bullish Outside Vertical Bar is similar to the
  2133. Bearish version, with the exception that the Bullish Candle closes at a
  2134. level higher than it opened. The chart below illustrates a Bullish
  2135. Outside Vertical Bar (Bullish Engulfing Pattern). &lt;/span&gt;&lt;/span&gt;
  2136. &lt;/div&gt;
  2137. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2138. &lt;br /&gt;&lt;/div&gt;
  2139. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  2140. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiuiB0rLjiVWydHNlqHOZfQzIWFl6uknxrqOqgnqGYCgNELoDtofqraa7o0JvqlN5XP1t1EfVXF-5mhJu9ijHDnJNCkbVW1aBl8xxyULNPuZK3bmTmSQXnefZrtMDdaU02XBNdIYPkoZ7d_/s1600/Outside_Vertical_Bars_body_Picture_1.png&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiuiB0rLjiVWydHNlqHOZfQzIWFl6uknxrqOqgnqGYCgNELoDtofqraa7o0JvqlN5XP1t1EfVXF-5mhJu9ijHDnJNCkbVW1aBl8xxyULNPuZK3bmTmSQXnefZrtMDdaU02XBNdIYPkoZ7d_/s1600/Outside_Vertical_Bars_body_Picture_1.png&quot; height=&quot;295&quot; width=&quot;320&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  2141. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2142. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;In the above chart, traders noticing that the
  2143. Outside bar had encompassed the high and low of the previous candle –
  2144. looking to go long. As we can see, momentum continued thereafter and
  2145. this is the goal of the trader trading with Outside Vertical Bars: To
  2146. capitalize on the momentum that created the engulfing candle. &lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2147. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2148. &lt;br /&gt;&lt;/div&gt;
  2149. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2150. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot; style=&quot;font-weight: bold; text-decoration: underline;&quot;&gt;How to Trade Outside Vertical Bars&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2151. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2152. &lt;br /&gt;&lt;/div&gt;
  2153. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2154. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;Many traders looking for extreme volatility may look
  2155. to trade outside bars in whichever direction they present themselves.
  2156. As in, if they receive a Bearish Outside Vertical Bar – they go short.
  2157. If they receive a Bullish Outside Vertical Bar, they go long.&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2158. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2159. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;
  2160. &lt;/div&gt;
  2161. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2162. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;Try to be more judicio&lt;/span&gt;&lt;span class=&quot;gsstx&quot;&gt;us
  2163. in the manner in which play outside bars, and attempt to focus
  2164. solely on outside bars that agree with assessment of the trend. Identified the mannerism in which grade trend via price action&amp;nbsp;&lt;/span&gt;&lt;span class=&quot;gsstx&quot;&gt; in which&amp;nbsp; grade the trend with successive higher high’s and higher low’s, or lower low’s and lower high’s.&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2165. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2166. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;
  2167. &lt;/div&gt;
  2168. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2169. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;After identifying the cleanest, strongest trends via
  2170. price action – wait for an outside bar that agrees with the
  2171. direction in which&amp;nbsp; want to trade that pair, and that is when will
  2172. enter.  &lt;/span&gt;&lt;/span&gt;
  2173. &lt;/div&gt;
  2174. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2175. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span class=&quot;gsstx&quot;&gt;Outside vertical bars function as ‘triggers,’&amp;nbsp;
  2176. to initiate trades in the direction of the longer-term, extended trends
  2177. that can find in markets.  &lt;/span&gt;&lt;/span&gt;
  2178. &lt;/div&gt;
  2179. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2180. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2181. &lt;span class=&quot;gsstx&quot;&gt;&lt;br /&gt;&lt;/span&gt;&lt;/span&gt;
  2182. &lt;/div&gt;
  2183. &lt;div class=&quot;gsstx&quot; style=&quot;text-align: justify;&quot;&gt;
  2184. &lt;/div&gt;
  2185. &lt;/div&gt;
  2186. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/123126125469877428'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/123126125469877428'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2014/04/candlestick-outside-vertical-bars-and.html' title='Candlestick Outside Vertical Bars and How to Trade Them'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXpJvy0UkAQ5V6QmH2fi_-Ch9Ou_J_frgYOTsMFydQ5Yot7PBL2pT6nMzigCU5qjw0G0FNuKWFiy8znxQlxi3urTPZpCE4BYCjkAGU11uuGt0VaArKMpZFz6VyLRwlNrHEnkMEB3qpWRni/s72-c/weekly-candlestick-chart.jpg" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-4730565835230752989</id><published>2014-03-25T10:52:00.000+05:30</published><updated>2014-03-25T10:52:54.468+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Financial Learning"/><category scheme="http://www.blogger.com/atom/ns#" term="Risk Management"/><title type='text'>Basic knowledge of risk management</title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  2187. &lt;h2 class=&quot;ck subtitle&quot;&gt;
  2188. Basic knowledge of risk management&lt;/h2&gt;
  2189. &lt;div class=&quot;ck subtitle&quot; style=&quot;text-align: justify;&quot;&gt;
  2190. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh0E3dz_19UEuGFdAV4piMlOCUJpCcaCCe4JwBM5pG-_fhUl_oMJEFDBf9LmFHNRKApVkbuqb5ZMk1BPvEmJFE4cGvucBnB05afXpzNrUTAPaWeUGNT_wNpYPfO-oaTCRW-It_Xf9uTH5Q/s1600/_risk_management_240.gif&quot; style=&quot;clear: left; float: left; margin-bottom: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh0E3dz_19UEuGFdAV4piMlOCUJpCcaCCe4JwBM5pG-_fhUl_oMJEFDBf9LmFHNRKApVkbuqb5ZMk1BPvEmJFE4cGvucBnB05afXpzNrUTAPaWeUGNT_wNpYPfO-oaTCRW-It_Xf9uTH5Q/s1600/_risk_management_240.gif&quot; height=&quot;200&quot; width=&quot;175&quot; /&gt;&lt;/a&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Every investment is subject to risk due to potential unfavorable price
  2191. changes. As the financial markets constitute a complex system with many
  2192. factors influencing the&amp;nbsp;demand and supply at the same time, it is
  2193. important to know that the result of practically any given transaction
  2194. is uncertain.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2195. &lt;div class=&quot;ck subtitle&quot; style=&quot;text-align: left;&quot;&gt;
  2196. &lt;br /&gt;&lt;/div&gt;
  2197. &lt;div class=&quot;ck subtitle&quot; style=&quot;text-align: left;&quot;&gt;
  2198. &lt;br /&gt;&lt;/div&gt;
  2199. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2200. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Risk management depends very much on the types of assets the trader is
  2201. interested in. In this text we would like to discuss the tools that can
  2202. be used in order to &lt;span style=&quot;color: #0000ee;&quot;&gt;minimize&lt;/span&gt; potential losses&amp;nbsp;resulting from adverse
  2203. price changes:&lt;/span&gt;&lt;/div&gt;
  2204. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2205. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2206. &lt;/span&gt;&lt;/div&gt;
  2207. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  2208. &lt;li&gt;
  2209.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;study the different types of assets&lt;/span&gt;&lt;/li&gt;
  2210. &lt;li&gt;
  2211.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;plan your strategy&lt;/span&gt;&lt;/li&gt;
  2212. &lt;li&gt;
  2213.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;establish the maximum acceptable risk&lt;/span&gt;&lt;/li&gt;
  2214. &lt;li&gt;
  2215.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;use the different order types.&lt;/span&gt;&lt;/li&gt;
  2216. &lt;/ul&gt;
  2217. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;div style=&quot;text-align: justify;&quot;&gt;
  2218. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Study the different types of assets&lt;/strong&gt;&lt;/span&gt;&lt;/div&gt;
  2219. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2220. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2221. &lt;/span&gt;&lt;/div&gt;
  2222. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2223. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;em&gt;It is crucial to first understand the liquidity. &lt;/em&gt;&lt;/span&gt;&lt;/div&gt;
  2224. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2225. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2226. &lt;/span&gt;&lt;/div&gt;
  2227. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2228. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2229. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2230. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2231. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2232. &lt;/span&gt;&lt;/div&gt;
  2233. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2234. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2235. Depending on the type of asset you are interested in, there may be more
  2236. or less volatility related. The higher&amp;nbsp; the volatility, the higher the
  2237. financial risk associated with the given market. This means that
  2238. operating on a such market involves potentially higher profits and
  2239. losses than in the case of markets with lower volatility. There are
  2240. markets where there is not much movement, while others change very often
  2241. and the price changes may be quite significant.&lt;/span&gt;&lt;/div&gt;
  2242. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2243. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2244. &lt;/span&gt;&lt;/div&gt;
  2245. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2246. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2247. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2248. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2249. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2250. &lt;/span&gt;&lt;/div&gt;
  2251. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2252. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2253. Another important issue is the spread - i.e. the difference between the
  2254. ask price and bid price. Different assets have different spreads, as
  2255. the spread size depends on such factors as liquidity of the market, its
  2256. volatility or time of the day. As the spread represents an&amp;nbsp;indirect cost
  2257. of the transaction for&amp;nbsp; a trader, it can be related to the volatility
  2258. in order to compare the cost of transaction between the given markets.
  2259. For example, the cost of&amp;nbsp;operating on&amp;nbsp; a market where the spread is 4
  2260. points and the difference between daily maximum and minimum is equal to
  2261. 60 points, can be considered to be more attractive than in the case of a
  2262. market where the spread is 2 points, but the daily price range is just
  2263. 20 points.&lt;/span&gt;&lt;/div&gt;
  2264. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2265. &lt;br /&gt;&lt;/div&gt;
  2266. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2267. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Plan your strategy&lt;/strong&gt;&lt;/span&gt;&lt;/div&gt;
  2268. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2269. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2270. &lt;/span&gt;&lt;/div&gt;
  2271. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2272. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;em&gt;It is imperative to decide what type of investment strategy is to be implemented&lt;/em&gt;&lt;/span&gt;&lt;/div&gt;
  2273. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2274. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2275. &lt;/span&gt;&lt;/div&gt;
  2276. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2277. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2278. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2279. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2280. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2281. &lt;/span&gt;&lt;/div&gt;
  2282. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2283. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2284. The strategy shall define the key aspects of the trades, including
  2285. their time horizon. There are assets where it is difficult to trade in
  2286. the short term, as the cost of transaction is relatively high in
  2287. relation to the size of&amp;nbsp; typical price movements. However, it is still
  2288. possible to consider such markets for the purposes of investment in the
  2289. longer term, cost carry transactions or possible arbitrage. On the other
  2290. hand, assets that change very often could provide a good possibility
  2291. for transactions in the short and ultra short term.&lt;/span&gt;&lt;/div&gt;
  2292. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2293. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2294. &lt;/span&gt;&lt;/div&gt;
  2295. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2296. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;3&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2297. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2298. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2299. &lt;/span&gt;&lt;/div&gt;
  2300. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2301. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2302. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2303. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2304. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2305. &lt;/span&gt;&lt;/div&gt;
  2306. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2307. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2308. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2309. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2310. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2311. &lt;/span&gt;&lt;/div&gt;
  2312. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2313. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Establish the maximum acceptable risk for an investment or trade&lt;/strong&gt;&lt;/span&gt;&lt;/div&gt;
  2314. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2315. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2316. &lt;/span&gt;&lt;/div&gt;
  2317. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2318. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2319. &amp;nbsp;&lt;em&gt;Important step that many investors seem to ignore&lt;/em&gt;&lt;/span&gt;&lt;/div&gt;
  2320. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2321. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2322. &lt;/span&gt;&lt;/div&gt;
  2323. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2324. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2325. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2326. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2327. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2328. &lt;/span&gt;&lt;/div&gt;
  2329. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2330. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2331. It may be a good idea to establish a maximum amount of money that
  2332. he/she is willing to risk in any&amp;nbsp;given transaction. Such an amount can
  2333. be defined as a percentage of the available capital. Considering an
  2334. example where the trader is willing to risk no more than 3% of
  2335. the&amp;nbsp;portfolio, 3% of that amount would mean that the investor is willing
  2336. to “risk” no more than $300 USD in a trade.&lt;/span&gt;&lt;/div&gt;
  2337. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2338. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2339. &lt;/span&gt;&lt;/div&gt;
  2340. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2341. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2342. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2343. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2344. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2345. &lt;/span&gt;&lt;/div&gt;
  2346. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2347. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2348. The limit calculated as shown above, or using any other method, can be
  2349. taken into&amp;nbsp;account when considering where to set the stop loss or close
  2350. the transaction by any other means. In order to do that, one should also
  2351. consider a value of&amp;nbsp; pips. Assuming that for a specific asset the pips
  2352. value is equal to $10 USD, and the acceptable risk is $300 USD, then a
  2353. trader may consider placing a stop-loss with a value of 300/10 = 30 pips
  2354. from the level where the transaction&amp;nbsp; was opened.&lt;/span&gt;&lt;/div&gt;
  2355. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2356. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2357. &lt;/span&gt;&lt;/div&gt;
  2358. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2359. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;4&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2360. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2361. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2362. &lt;/span&gt;&lt;/div&gt;
  2363. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2364. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2365. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2366. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2367. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2368. &lt;/span&gt;&lt;/div&gt;
  2369. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2370. &lt;/div&gt;
  2371. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2372. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2373. &lt;/span&gt;&lt;/div&gt;
  2374. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2375. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Use the different orders.&lt;/strong&gt;&lt;/span&gt;&lt;/div&gt;
  2376. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2377. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2378. &lt;/span&gt;&lt;/div&gt;
  2379. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2380. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;em&gt;Understanding the possibilities behind the pending orders of the trading platform may contribute to more efficient trading plan&lt;/em&gt;&lt;/span&gt;&lt;/div&gt;
  2381. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2382. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2383. &lt;/span&gt;&lt;/div&gt;
  2384. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2385. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2386. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2387. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2388. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2389. &lt;/span&gt;&lt;/div&gt;
  2390. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2391. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2392. There are many different orders available at the MT5, which can
  2393. potentially help to realise profits or limit the losses during the
  2394. investment process:&lt;/span&gt;&lt;/div&gt;
  2395. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2396. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2397. &lt;/span&gt;&lt;/div&gt;
  2398. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  2399. &lt;li&gt;
  2400.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Market orders&amp;nbsp;- buy/sell&lt;/span&gt;&lt;/li&gt;
  2401. &lt;li&gt;
  2402.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Stop loss&lt;/span&gt;&lt;/li&gt;
  2403. &lt;li&gt;
  2404.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Take profit&lt;/span&gt;&lt;/li&gt;
  2405. &lt;/ul&gt;
  2406. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2407. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2408. &lt;/span&gt;&lt;/div&gt;
  2409. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2410. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;5&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2411. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2412. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2413. &lt;/span&gt;&lt;/div&gt;
  2414. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2415. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2416. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2417. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2418. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2419. &lt;/span&gt;&lt;/div&gt;
  2420. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2421. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Market orders (or instant execution orders)&lt;/strong&gt;: these are simply orders (buy or sell) that are executed instantly&amp;nbsp; at the&amp;nbsp; time they are placed.&lt;/span&gt;&lt;/div&gt;
  2422. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2423. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2424. &lt;/span&gt;&lt;/div&gt;
  2425. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2426. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;6&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2427. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2428. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2429. &lt;/span&gt;&lt;/div&gt;
  2430. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2431. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2432. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2433. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2434. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2435. &lt;/span&gt;&lt;/div&gt;
  2436. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2437. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Stop-loss&lt;/strong&gt;: stop-loss orders are additional orders
  2438. available for both pending orders and market orders. They can also be
  2439. attached to already opened positions on&amp;nbsp; a given market. These types of
  2440. orders are the most basic orders designated for limiting the potential
  2441. losses, for&amp;nbsp; example when an investor is not able to follow prices all
  2442. the time. A trader establishes stop-loss levels by either specifying the
  2443. level in points from the current price or by specifying an exact price
  2444. level. For long positions, the stop-loss value must be lower than the
  2445. current price. For short positions, the stop-loss value must be higher
  2446. than the current price.&lt;/span&gt;&lt;/div&gt;
  2447. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2448. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2449. &lt;/span&gt;&lt;/div&gt;
  2450. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2451. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;7&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2452. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2453. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2454. &lt;/span&gt;&lt;/div&gt;
  2455. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2456. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2457. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2458. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2459. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2460. &lt;/span&gt;&lt;/div&gt;
  2461. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2462. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Take-profit&lt;/strong&gt;: Take profit is an additional order
  2463. available for both pending orders and&amp;nbsp;market orders. They can also be
  2464. attached to already opened positions on&amp;nbsp; a given market. The difference
  2465. between this order and the stop-loss order is that in the take-profit
  2466. order, a trader will fix the exact profit he wants to realise.
  2467. Sometimes, investors are not actually sure how much a price will
  2468. continue its direction, so they fix a value for which a profit is
  2469. guaranteed if the price reaches that level. For long positions, the
  2470. take-profit level must be above the current price. For short positions,
  2471. the take-profit level must be lower than the current price.&amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2472. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2473. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2474. &lt;/span&gt;&lt;/div&gt;
  2475. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2476. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2477. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2478. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2479. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2480. &lt;/span&gt;&lt;/div&gt;
  2481. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2482. &lt;/div&gt;
  2483. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2484. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2485. &lt;/span&gt;&lt;/div&gt;
  2486. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2487. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Pending orders&lt;/strong&gt;: Pending orders will be placed
  2488. immediately but executed only when the price has reached a previously
  2489. determined price. There are six types of&lt;br /&gt;
  2490. orders available as pending orders:&lt;/span&gt;&lt;/div&gt;
  2491. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2492. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2493. &lt;/span&gt;&lt;/div&gt;
  2494. &lt;ul style=&quot;text-align: justify;&quot;&gt;
  2495. &lt;li&gt;
  2496.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Buy limit&lt;/span&gt;&lt;/li&gt;
  2497. &lt;li&gt;
  2498.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Sell limit&lt;/span&gt;&lt;/li&gt;
  2499. &lt;li&gt;
  2500.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Buy stop&lt;/span&gt;&lt;/li&gt;
  2501. &lt;li&gt;
  2502.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Sell stop&lt;/span&gt;&lt;/li&gt;
  2503. &lt;li&gt;
  2504.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Buy stop limit&lt;/span&gt;&lt;/li&gt;
  2505. &lt;li&gt;
  2506.  &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Sell stop limit&lt;/span&gt;&lt;/li&gt;
  2507. &lt;/ul&gt;
  2508. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2509. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2510. &lt;/span&gt;&lt;/div&gt;
  2511. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2512. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;8&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2513. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2514. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2515. &lt;/span&gt;&lt;/div&gt;
  2516. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2517. &lt;/div&gt;
  2518. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2519. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2520. &lt;/span&gt;&lt;/div&gt;
  2521. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2522. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Buy limit&lt;/strong&gt;: an investor is willing to buy an asset when
  2523. the price has reached a&amp;nbsp;certain level.&amp;nbsp; At the&amp;nbsp; time of placing of&amp;nbsp; an
  2524. order the market price must be higher than the one specified as the buy
  2525. limit price. In this situation, investors&amp;nbsp;believe that prices will fall
  2526. to a certain level and will later rise.&lt;/span&gt;&lt;/div&gt;
  2527. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2528. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2529. &lt;/span&gt;&lt;/div&gt;
  2530. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2531. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;9&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2532. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2533. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2534. &lt;/span&gt;&lt;/div&gt;
  2535. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2536. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2537. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2538. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2539. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2540. &lt;/span&gt;&lt;/div&gt;
  2541. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2542. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Sell limit&lt;/strong&gt;: an investor in this case is willing to
  2543. sell an asset when the price has reached a specified level. At the&amp;nbsp; time
  2544. of placing&amp;nbsp; an order, the market price must be lower than the one
  2545. specified by the investor (sell limit price). This approach reflects the
  2546. belief of the trader that prices will reach a certain level (the sell
  2547. limit price level) and then start falling.&lt;/span&gt;&lt;/div&gt;
  2548. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2549. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2550. &lt;/span&gt;&lt;/div&gt;
  2551. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2552. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;10&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2553. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2554. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2555. &lt;/span&gt;&lt;/div&gt;
  2556. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2557. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2558. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2559. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2560. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2561. &lt;/span&gt;&lt;/div&gt;
  2562. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2563. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Buy stop&lt;/strong&gt;: by placing a buy stop order an investor
  2564. expects that if prices reach a certain level (buy stop price), they will
  2565. keep on rising. The price at which the transaction&amp;nbsp; is concluded will
  2566. be less favourable than the current market price. However , the fact of
  2567. reaching that level could be interpreted as a confirmation signal. Once
  2568. executed, this order will buy an asset after reaching a level defined by
  2569. the investor. The market price at the time of placing the order must be
  2570. lower than the defined buy stop level.&lt;/span&gt;&lt;/div&gt;
  2571. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2572. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2573. &lt;/span&gt;&lt;/div&gt;
  2574. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2575. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;11&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2576. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2577. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2578. &lt;/span&gt;&lt;/div&gt;
  2579. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2580. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2581. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2582. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2583. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2584. &lt;/span&gt;&lt;/div&gt;
  2585. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2586. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Sell stop&lt;/strong&gt;: by placing a sell stop order a trader
  2587. expects the prices to keep on&amp;nbsp;falling, once a certain level (sell stop
  2588. price) below the current market price&amp;nbsp; is reached. Reaching this level
  2589. can also be interpreted as a confirmation&amp;nbsp;order of the investor’s
  2590. prediction. Once executed, this order will sell an asset after reaching a
  2591. level previously established by the trader. The market price at the
  2592. time of placing the order must be higher than the defined sell stop
  2593. level.&lt;/span&gt;&lt;/div&gt;
  2594. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2595. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2596. &lt;/span&gt;&lt;/div&gt;
  2597. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2598. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;12&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2599. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2600. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2601. &lt;/span&gt;&lt;/div&gt;
  2602. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2603. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2604. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2605. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2606. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2607. &lt;/span&gt;&lt;/div&gt;
  2608. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2609. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Buy stop limit&lt;/strong&gt;: It is combines both buy stop
  2610. and buy limit features. This order will place a pending order (buy limit
  2611. order) only if the price previously reaches a defined price by the
  2612. investor. One may say that this is a conditional pending order, that
  2613. will only be executed when the price reaches a certain level. To place
  2614. this&amp;nbsp;order the current price must be lower than the conditional price
  2615. level - i.e. the price which activates the pending order.&lt;/span&gt;&lt;/div&gt;
  2616. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2617. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2618. &lt;/span&gt;&lt;/div&gt;
  2619. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2620. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;a href=&quot;https://www.blogger.com/null&quot; name=&quot;13&quot;&gt;&lt;/a&gt;&lt;/span&gt;&lt;/div&gt;
  2621. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2622. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2623. &lt;/span&gt;&lt;/div&gt;
  2624. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2625. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2626. &amp;nbsp;&lt;/span&gt;&lt;/div&gt;
  2627. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2628. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;
  2629. &lt;/span&gt;&lt;/div&gt;
  2630. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2631. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;strong&gt;Sell stop limit&lt;/strong&gt;: This is a conditional pending&amp;nbsp;order. An order will
  2632. be placed if and only if a price reaches a price level previously
  2633. defined by the investor. To place this conditional order, the current
  2634. market price level must be higher than the conditional price. Once&amp;nbsp;
  2635. prices start falling and reach the conditional price level a new sell
  2636. limit order will be placed.&lt;/span&gt;&lt;/div&gt;
  2637. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2638. &lt;br /&gt;&lt;/div&gt;
  2639. &lt;/div&gt;
  2640. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4730565835230752989'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/4730565835230752989'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2014/03/basic-knowledge-of-risk-management.html' title='Basic knowledge of risk management'/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEh0E3dz_19UEuGFdAV4piMlOCUJpCcaCCe4JwBM5pG-_fhUl_oMJEFDBf9LmFHNRKApVkbuqb5ZMk1BPvEmJFE4cGvucBnB05afXpzNrUTAPaWeUGNT_wNpYPfO-oaTCRW-It_Xf9uTH5Q/s72-c/_risk_management_240.gif" height="72" width="72"/></entry><entry><id>tag:blogger.com,1999:blog-5098111511822610032.post-1187213960956984007</id><published>2014-03-19T23:00:00.000+05:30</published><updated>2014-03-19T23:00:17.055+05:30</updated><category scheme="http://www.blogger.com/atom/ns#" term="Chart Analysis-Chart Patterns"/><category scheme="http://www.blogger.com/atom/ns#" term="Stock Market Calculator"/><category scheme="http://www.blogger.com/atom/ns#" term="Stock Market Theory"/><title type='text'>Harmonic Pattern </title><content type='html'>&lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  2641. &lt;div dir=&quot;ltr&quot; style=&quot;text-align: left;&quot; trbidi=&quot;on&quot;&gt;
  2642. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2643. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: large;&quot;&gt;&lt;b&gt;HARMONIC PATTERNS&lt;/b&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  2644. &lt;br /&gt;
  2645. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Harmonic price patterns take geometric price patterns to the next level by using Fibonacci numbers   to define precise turning points. Unlike other trading methods,   Harmonic trading attempts to predict future movements. This is in vast   contrast to common methods that are reactionary and not predictive.   Let&#39;s look at some examples of how harmonic price patterns are used to   trade on the market. (Extensions, clusters, channels   and more! Discover new ways to put the &quot;golden ratio&quot; to work. &lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  2646. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;Combine Geometry and Fibonacci Numbers&lt;/b&gt;&lt;br /&gt;
  2647. Harmonic  trading  combines patterns and math into a trading method that is  precise and  based on the premise that patterns repeat themselves. At  the root of the  methodology is the primary ratio, or some derivative of  it (0.618 or  1.618). Complementing ratios include: 0.382, 0.50, 1.41,  2.0, 2.24,  2.618, 3.14 and 3.618. The primary ratio is found in almost  all natural  and environmental structures and events; it is also found  in man-made  structures. Since the pattern repeats throughout nature and  within  society, the ratio is also seen in the financial markets, which  are  affected by the environments and societies in which they trade.  (Don&#39;t  make these common errors when working with Fibonacci numbers&amp;nbsp;-  check out&lt;/span&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;a href=&quot;http://beyondstockmarket.blogspot.com/2014/03/top-fibonacci-retracement-mistakes-to.html&quot;&gt; Top Fibonacci Retracement Mistakes To Avoid&lt;/a&gt;&lt;/span&gt;&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;)  By finding patterns of varying lengths and magnitudes, the trader can   then apply Fibonacci ratios to the patterns and try to predict future   movements. The trading method is largely attributed to Scott Carney,   although others have contributed or found patterns and levels that   enhance performance.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2648. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2649. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;Issues with Harmonics&lt;/b&gt;&lt;br /&gt;
  2650. Harmonic  price patterns are  extremely precise, requiring the pattern to show  movements of a  particular magnitude in order for the unfolding of the  pattern to  provide an accurate reversal point. A trader may often see a  pattern  that looks like a harmonic pattern, but the Fibonacci levels  will not  align in the pattern, thus rendering the pattern unreliable in  terms of  the Harmonic approach. This can be an advantage, as it  requires the  trader to be patient and wait for ideal set-ups.&lt;br /&gt;
  2651. &lt;br /&gt;
  2652. Harmonic patterns can gauge how long current moves will last, but  they  can also be used to isolate reversal points. The danger occurs when  a  trader takes a position in the reversal area and the pattern fails.   When this happens, the trader can be caught in a trade where the trend   rapidly extends against them. Therefore, as with all trading strategies,   risk must be controlled.&lt;br /&gt;
  2653. &lt;br /&gt;
  2654. It is important to note that patterns may exist within other  patterns,  and it is also possible that non-harmonic patterns may (and  likely  will) exist within the context of harmonic patterns. These can be  used  to aid in the effectiveness of the harmonic pattern and enhance  entry  and exit performance. Several price waves may also exist within a   single harmonic wave (for instance a CD wave or AB wave). Prices are   constantly gyrating; therefore, it is important to focus on the bigger   picture of the time frame being traded. The fractal nature of the   markets allows the theory to be applied from the smallest to largest   time frames.&lt;br /&gt;
  2655. To use the method, a trader will benefit from a chart platform that allows the trader to plot multiple Fibonacci retracements to measure each wave.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  2656. &lt;/div&gt;
  2657. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2658. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;The Visual Patterns and How to Trade Them&lt;/b&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  2659. &lt;br /&gt;
  2660. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;There   is quite an assortment of harmonic patterns, although there are four   that seem most popular. These are the Gartley, butterfly, bat and crab   patterns.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2661. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2662. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  2663. &lt;span style=&quot;font-size: large;&quot;&gt;&lt;b&gt;GARTLEY PATTERN&lt;/b&gt;&lt;/span&gt;&lt;/span&gt;&lt;br /&gt;
  2664. &lt;span style=&quot;font-size: small;&quot;&gt;The  Gartley was originally published by H.M. Gartley in his  book&amp;nbsp;Profits  in the Stock Market and the Fibonacci levels were later  added by Scott  Carney in his book The Harmonic Trader.&lt;/span&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2665. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2666. &lt;/div&gt;
  2667. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  2668. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcIl8t5MFOMbLi57cfnGdkp3YWCN9UYlQV9eBndm6t33jfcKFZjLFAXZJWa2XfSAIznAwZSGMvc48haV5z4Gu71sAaMQXlnkSLymheNJMVzDlvhJsyMgsfxvGYbsYhsvPi-uf69GUj-s-H/s1600/__9159968.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcIl8t5MFOMbLi57cfnGdkp3YWCN9UYlQV9eBndm6t33jfcKFZjLFAXZJWa2XfSAIznAwZSGMvc48haV5z4Gu71sAaMQXlnkSLymheNJMVzDlvhJsyMgsfxvGYbsYhsvPi-uf69GUj-s-H/s1600/__9159968.gif&quot; height=&quot;228&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  2669. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Figure 1: The Gartley Pattern.&lt;/span&gt;&lt;/td&gt;&lt;/tr&gt;
  2670. &lt;/tbody&gt;&lt;/table&gt;
  2671. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2672. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;The bullish pattern is often seen early in a trend, and  it is a sign  the corrective waves are ending and an upward move will  ensue at point  D. All patterns may be within the context of a broader  trend or range  and traders must be aware of that (see Elliott Wave Theory).   Point D is a 0.786 correction of the XA wave, and it is a 1.27 or  1.618  extension of the BC wave. The area at D is known as the potential   reversal zone (PRZ). This is where long positions could be entered,   as&amp;nbsp;some price confirmation of reversal is encouraged. A stop is placed   just below the PRZ.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2673. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2674. &lt;/div&gt;
  2675. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2676. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: large;&quot;&gt;More About&amp;nbsp; Bullish / Bearish Gartley Pattern.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2677. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2678. &lt;/div&gt;
  2679. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2680. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: large;&quot;&gt;Bearish Gartley&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2681. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2682. &lt;/div&gt;
  2683. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2684. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;The bearish gartley pattern formation is similar to head and shoulders pattern, but as you can see the point C is below the point A, hence it is not head and shoulder pattern.&amp;nbsp;&lt;/span&gt; &lt;/span&gt;&lt;/div&gt;
  2685. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2686. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt; &lt;/span&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt; &lt;/span&gt;&lt;br /&gt;
  2687. &lt;h4&gt;
  2688. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Formation and trading strategy of Bearish Gartley pattern:&lt;/span&gt;&lt;/h4&gt;
  2689. &lt;br /&gt;
  2690. &lt;ol&gt;
  2691. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Point B must retrace 61.8% of AX movement.&lt;/span&gt;&lt;/li&gt;
  2692. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt; &lt;/span&gt;
  2693. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Point C must retrace anywhere from 38.2% to 88.6% of BA movement.&lt;/span&gt;&lt;/li&gt;
  2694. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt; &lt;/span&gt;
  2695. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Point D must be 138.2% or 161.8% extension of the BC movement.&lt;/span&gt;&lt;/li&gt;
  2696. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt; &lt;/span&gt;
  2697. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Point D must retrace 76.8% of AX movement. This is our selling area.&lt;/span&gt;&lt;/li&gt;
  2698. &lt;/ol&gt;
  2699. &lt;span style=&quot;font-size: small;&quot;&gt;&lt;/span&gt;&lt;br /&gt;
  2700. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  2701. &lt;/div&gt;
  2702. &lt;/div&gt;
  2703. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  2704. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXciyE2P-qYGsHj9_p8JLLrPivQDf4JCaWEehyNYc3FKnJKXluhZZ7JrfNBZiB2UONCkDFJ9tpDEENMZq9mUAQC_nyvGQl0Ik6nIQ2VKCCsH2oJMY32pqQYbaZGARj6jsQ28mchGKAUv_w/s1600/bearish-gartley-pattern-300x257.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjXciyE2P-qYGsHj9_p8JLLrPivQDf4JCaWEehyNYc3FKnJKXluhZZ7JrfNBZiB2UONCkDFJ9tpDEENMZq9mUAQC_nyvGQl0Ik6nIQ2VKCCsH2oJMY32pqQYbaZGARj6jsQ28mchGKAUv_w/s1600/bearish-gartley-pattern-300x257.jpg&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  2705. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2706. &lt;br /&gt;
  2707. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: large;&quot;&gt;Bullish Gartley&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2708. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2709. &lt;/div&gt;
  2710. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2711. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;The bullish pattern is as seen below, its formation is quite similar  to inverse head and shoulders pattern, but as you can see below point C  is not on the same level as point A.&lt;/span&gt; &lt;br /&gt;
  2712. &lt;h4&gt;
  2713. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Formation of Bullish Gartley pattern and trading strategy:&lt;/span&gt;&lt;/h4&gt;
  2714. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  2715. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiV32-1Xjbk3P5_IfcKOlfupTZfTYh7tJoh0w6DtU2Xv0e1GNTI0lj1M1OgSmT2hCYecEmFFVQQEeQwsXizypGi3p7tkvrLEa88Fn-Y6Rcv78KfKrTWQ4Cg2bA2hHXn_-i9-VmAbiRAGBD_/s1600/bullish-gartley-pattern-300x257.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiV32-1Xjbk3P5_IfcKOlfupTZfTYh7tJoh0w6DtU2Xv0e1GNTI0lj1M1OgSmT2hCYecEmFFVQQEeQwsXizypGi3p7tkvrLEa88Fn-Y6Rcv78KfKrTWQ4Cg2bA2hHXn_-i9-VmAbiRAGBD_/s1600/bullish-gartley-pattern-300x257.jpg&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  2716. &lt;ol&gt;
  2717. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Point B can retrace 61.8% of XA movement.&lt;/span&gt;&lt;/li&gt;
  2718. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Point C can retrace anywhere from 38.2% to 88.6% of AB movement.&lt;/span&gt;&lt;/li&gt;
  2719. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Point D can be 138.2% or 161.8% extension of the CD move.&lt;/span&gt;&lt;/li&gt;
  2720. &lt;li&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Point D can retrace 76.8% of XA movement. Point D is our buying area.&lt;/span&gt;&lt;/li&gt;
  2721. &lt;/ol&gt;
  2722. &lt;/div&gt;
  2723. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2724. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;Stop loss in this is always very strict and hence we get very cool risk  reward ratio, many times around 1:5 or more. The very important reason  for trading this pattern is that it is based on uncertain places where  traders are most afraid to take positions, hence giving better meaning for risk.&lt;/span&gt;&lt;br /&gt;
  2725. &lt;h2 class=&quot;wsite-content-title&quot; style=&quot;text-align: left;&quot;&gt;
  2726. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: x-large;&quot;&gt;Butterfly Pattern&lt;/span&gt;&lt;/span&gt;&lt;/h2&gt;
  2727. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  2728. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZ2XJTMAUM33ICc8j28pMZC94yEImJDtBCMT2AQZlKCZrSnckpxGQl4qUAQNNhbhY0wyk8gGsmw5s4xeb-zEhn3nsvVAvxY8KCsuy46gKVRtmKsMwUDzWeVoRvXXeCbpXuTXxxraoBWx8a/s1600/__7360925.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhZ2XJTMAUM33ICc8j28pMZC94yEImJDtBCMT2AQZlKCZrSnckpxGQl4qUAQNNhbhY0wyk8gGsmw5s4xeb-zEhn3nsvVAvxY8KCsuy46gKVRtmKsMwUDzWeVoRvXXeCbpXuTXxxraoBWx8a/s1600/__7360925.gif&quot; height=&quot;236&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  2729. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Figure 2: The Butterfly Pattern&lt;/span&gt;&lt;/td&gt;&lt;/tr&gt;
  2730. &lt;/tbody&gt;&lt;/table&gt;
  2731. &lt;h2 class=&quot;wsite-content-title&quot; style=&quot;text-align: justify;&quot;&gt;
  2732. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;&lt;/span&gt;&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-weight: normal;&quot;&gt;The butterfly pattern is different than the Gartley in  that it  focuses on finding reversals at new lows (bullish) or new highs   (bearish). D is a new low and a potential reversal point if the   Fibonacci figures align with the structure. D would need to be an   extension of BC in the magnitude of 1.618 or 2.618. This should align   with an extension of XA in the magnitude of a 1.27 or 1.618. Entry is   taken near D with price confirmation of the reversal encouraged. Stops   are placed slightly below the potential reversal area (bullish).&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/h2&gt;
  2733. &lt;h2 class=&quot;wsite-content-title&quot; style=&quot;text-align: left;&quot;&gt;
  2734. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: x-large;&quot;&gt;Bat Pattern&lt;/span&gt;&lt;/span&gt;&lt;/h2&gt;
  2735. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  2736. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTQlqtEsh6W4_BhhwRK6vLaASqHNej0mh1HapNerfeLZFKYswjSlJksanBOZTdAX2gFoaLlmkVU8QDvnwl_0gBm1ljHZnzekwjsvmOTscWzDNyu3MQSGQrFr4pzfmVKE_rMFhdiAN3smnJ/s1600/__5588009.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiTQlqtEsh6W4_BhhwRK6vLaASqHNej0mh1HapNerfeLZFKYswjSlJksanBOZTdAX2gFoaLlmkVU8QDvnwl_0gBm1ljHZnzekwjsvmOTscWzDNyu3MQSGQrFr4pzfmVKE_rMFhdiAN3smnJ/s1600/__5588009.gif&quot; height=&quot;220&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  2737. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Figure 3: The Bat Pattern&lt;/span&gt;&lt;/td&gt;&lt;/tr&gt;
  2738. &lt;/tbody&gt;&lt;/table&gt;
  2739. &lt;div class=&quot;wsite-content-title&quot; style=&quot;text-align: justify;&quot;&gt;
  2740. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;The bat pattern is similar to Gartley in appearance, but  not in  measurement. Point B has a smaller retracement of XA of 0.382 or  0.50  (less than 0.618), but the extension of the BC wave into D is at  minimum  1.618 and potentially 2.618. Therefore, D will be a 0.886  retracement  of the original XA wave. This is the PRZ: when selling has  stopped and  buying enters the market, enter a long position and take  advantage of  the bullish pattern. Place a stop just below the PRZ.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2741. &lt;h2 class=&quot;wsite-content-title&quot; style=&quot;text-align: left;&quot;&gt;
  2742. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;color: #cc0000; font-size: x-large;&quot;&gt;Crab Pattern&lt;/span&gt;&lt;/span&gt;&lt;/h2&gt;
  2743. &lt;div class=&quot;wsite-content-title&quot; style=&quot;text-align: justify;&quot;&gt;
  2744. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  2745. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgkpPzWDxxtNCvypbpnVijU0qxmp2nEY5nqk-TGpK47gq75djw-elbcQH0aRJPvG_S1lXKCMchjGusS69j9cUn0rRBiKZt3gB6Q3nGj4PHU3LrD2nNXwyqh8g4s6m9dJbThn9ISa6T2G-M/s1600/__4724798.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjgkpPzWDxxtNCvypbpnVijU0qxmp2nEY5nqk-TGpK47gq75djw-elbcQH0aRJPvG_S1lXKCMchjGusS69j9cUn0rRBiKZt3gB6Q3nGj4PHU3LrD2nNXwyqh8g4s6m9dJbThn9ISa6T2G-M/s1600/__4724798.gif&quot; height=&quot;234&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  2746. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Figure 4: The Crab Pattern&lt;/span&gt;&lt;/td&gt;&lt;/tr&gt;
  2747. &lt;/tbody&gt;&lt;/table&gt;
  2748. &lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2749. &lt;/div&gt;
  2750. &lt;/div&gt;
  2751. &lt;br /&gt;
  2752. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2753. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;The crab is considered by Carney to be one  of the most  precise of the  patterns, providing reversals in extremely  close  proximity to what the  Fibonacci numbers indicate. This pattern,   similar to the butterfly,  looks to capture a high probability reversal   at a new (recent) low or  high (bullish or bearish respectively). In a   bullish pattern, point B  will &lt;/span&gt;                                                         &lt;span style=&quot;font-size: small;&quot;&gt;pullback    0.618 or less of XA. The extension of BC into D is quite large, from    2.24 to 3.618. D (the PRZ) is a 1.618 extension of XA. Entries are  made   near D with a stop-loss order just outside the PRZ.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2754. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2755. &lt;br /&gt;&lt;/div&gt;
  2756. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  2757. &lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6BY5qBm3juvVqNQKdA-vc9yr69aOiEntaqcEwdcXwWViF_MocZl8QEMdqxfhDWq3Qjwg2jJI0Wy4L1YrEFHYYLCmfrT4wUo_X3iJp5e6jopGOhx1a83BgyocEDLKaHWV0YiP8pNAlcx03/s1600/1291444_orig.jpg&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: 1em; margin-right: 1em;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj6BY5qBm3juvVqNQKdA-vc9yr69aOiEntaqcEwdcXwWViF_MocZl8QEMdqxfhDWq3Qjwg2jJI0Wy4L1YrEFHYYLCmfrT4wUo_X3iJp5e6jopGOhx1a83BgyocEDLKaHWV0YiP8pNAlcx03/s1600/1291444_orig.jpg&quot; height=&quot;418&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/div&gt;
  2758. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2759. &lt;br /&gt;&lt;/div&gt;
  2760. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2761. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;Fine-Tuning Entries and Stops&lt;/b&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2762. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2763. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;&amp;nbsp;&lt;/b&gt;&lt;/span&gt; &lt;span style=&quot;font-size: small;&quot;&gt;&lt;br /&gt;
  2764. Each  pattern  provides a PRZ. This is not an exact level, as two  measurements&amp;nbsp;-  extension or retracement of XA -&amp;nbsp;creates one level at D  and the  extension of BC creates another level at D. This actually makes  D a zone  where reversals are likely. Traders will also notice that BC  can have  differing extension lengths. Therefore, traders must be aware  of how far  a BC extension may go. If all projected levels are within  close  proximity, the trader can enter a position at any area. If the  zone is  spread out, such as on longer-term charts where the levels may  be 50 pips or more apart, it is important to wait to see if the price reaches further extension levels of BC before entering a trade. &lt;br /&gt;
  2765. &lt;br /&gt;
  2766. Stops can be placed outside the largest potential extension of BC. In   the crab pattern, for example, this would be 3.618. If the rate   reversed before 3.618 was hit, the stop would be moved to just outside   the closed Fibonacci level&amp;nbsp;to the rate low (bullish pattern) or rate   high (bearish pattern) in the PRZ. &lt;br /&gt;
  2767. &lt;br /&gt;
  2768. Figure 5 is an intra-day example of a butterfly pattern from May 3, 2011.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2769. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2770. &lt;br /&gt;&lt;/div&gt;
  2771. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  2772. &lt;/div&gt;
  2773. &lt;table align=&quot;center&quot; cellpadding=&quot;0&quot; cellspacing=&quot;0&quot; class=&quot;tr-caption-container&quot; style=&quot;margin-left: auto; margin-right: auto; text-align: center;&quot;&gt;&lt;tbody&gt;
  2774. &lt;tr&gt;&lt;td style=&quot;text-align: center;&quot;&gt;&lt;a href=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoYO9xSZdlrySErDz4LlhrJvKbGO_1NYyDceih5aGN9cGz4uNexTCaUIWaXy_yN1MGfl_4RiQLeYFmMlChoCXwGE3Bz2JJlY_IpxeBZCjBQGD61EqvKKHlc2Y-vk8JvgKherqkFWChKho8/s1600/__8495474.gif&quot; imageanchor=&quot;1&quot; style=&quot;margin-left: auto; margin-right: auto;&quot;&gt;&lt;img border=&quot;0&quot; src=&quot;https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgoYO9xSZdlrySErDz4LlhrJvKbGO_1NYyDceih5aGN9cGz4uNexTCaUIWaXy_yN1MGfl_4RiQLeYFmMlChoCXwGE3Bz2JJlY_IpxeBZCjBQGD61EqvKKHlc2Y-vk8JvgKherqkFWChKho8/s1600/__8495474.gif&quot; height=&quot;500&quot; width=&quot;640&quot; /&gt;&lt;/a&gt;&lt;/td&gt;&lt;/tr&gt;
  2775. &lt;tr&gt;&lt;td class=&quot;tr-caption&quot; style=&quot;text-align: center;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;Figure 5. Bearish Butterfly Pattern&amp;nbsp;- EUR/USD, 15 Minute&lt;/span&gt;&lt;/td&gt;&lt;/tr&gt;
  2776. &lt;/tbody&gt;&lt;/table&gt;
  2777. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2778. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;The price touches almost exactly the 1.618 extension  level of XA at  1.4892 and the extension of BC to 2.618 is very close at  1.4887 (there  are two Fibonacci tools used, one for each wave). This  creates a very  small PRZ, but it may not always be the case. Entry is  taken after the  rate enters the zone and then begins to retreat. The  stop is placed just  outside the most significant level that was not  reached by the rate, in  this case a few pips above the 1.618 XA  extension. Targets can be based  on support levels  within the pattern; therefore, an initial profit target would be just  above point B.&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2779. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2780. &lt;br /&gt;&lt;/div&gt;
  2781. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2782. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&amp;nbsp;&lt;/span&gt;&lt;/span&gt;&lt;/span&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;The Bottom Line&lt;/b&gt;&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2783. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2784. &lt;span style=&quot;font-family: Arial,Helvetica,sans-serif;&quot;&gt;&lt;span style=&quot;font-size: small;&quot;&gt;&lt;b&gt;&amp;nbsp;&lt;/b&gt;&lt;br /&gt;
  2785. Harmonic  trading is a precise and  mathematical way to trade, but it requires  patience, practice and a lot  of study to master the patterns. Movements  that do not align with  proper pattern measurements invalidate a  pattern and can lead traders  astray. The Gartley, butterfly, bat and  crab are the better-known  patterns that traders can watch for. Entries  are made in the potential  reversal zone when price confirmation  indicates a reversal, and stops  are placed outside the nearest  significant (for the pattern) Fibonacci  level that was not hit by the  BC or XA extensions/retracements into the D  (PRZ) area.&lt;/span&gt;&lt;/span&gt;&lt;/div&gt;
  2786. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2787. &lt;br /&gt;&lt;/div&gt;
  2788. &lt;div class=&quot;separator&quot; style=&quot;clear: both; text-align: center;&quot;&gt;
  2789. &lt;iframe allowfullscreen=&#39;allowfullscreen&#39; webkitallowfullscreen=&#39;webkitallowfullscreen&#39; mozallowfullscreen=&#39;mozallowfullscreen&#39; width=&#39;320&#39; height=&#39;266&#39; src=&#39;https://www.youtube.com/embed/mVgKzpjDvd0?feature=player_embedded&#39; frameborder=&#39;0&#39;&gt;&lt;/iframe&gt;&lt;/div&gt;
  2790. &lt;div style=&quot;text-align: justify;&quot;&gt;
  2791. &lt;/div&gt;
  2792. &lt;/div&gt;
  2793. </content><link rel='edit' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/1187213960956984007'/><link rel='self' type='application/atom+xml' href='http://www.blogger.com/feeds/5098111511822610032/posts/default/1187213960956984007'/><link rel='alternate' type='text/html' href='http://nse-bse-mcx-technicalanalysis.blogspot.com/2014/03/harmonic-pattern.html' title='Harmonic Pattern '/><author><name>NBIG</name><uri>http://www.blogger.com/profile/00207150427792255704</uri><email>noreply@blogger.com</email><gd:image rel='http://schemas.google.com/g/2005#thumbnail' width='32' height='32' src='//blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhD8VtoB9dkkRRGsF80KNBgIdABAH5M8WgT4pplJHHVgQyUg5L1p3aWjLPUiARxPjzlDtiNWWkPpdCuQ17INYBXpHV4waF3L367huQnULBAtWXLXSfbdAF1M6X4BhOjdJ4/s113/31143744_10156380224723556_107450525669015743_n.png'/></author><media:thumbnail xmlns:media="http://search.yahoo.com/mrss/" url="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjcIl8t5MFOMbLi57cfnGdkp3YWCN9UYlQV9eBndm6t33jfcKFZjLFAXZJWa2XfSAIznAwZSGMvc48haV5z4Gu71sAaMQXlnkSLymheNJMVzDlvhJsyMgsfxvGYbsYhsvPi-uf69GUj-s-H/s72-c/__9159968.gif" height="72" width="72"/></entry></feed>

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