Support and resistance represent key junctures where the forces of supply and demand meet. These lines appear as thresholds to price patterns. They are the respective lines which stops the prices from decreasing or increasing. A support line refers to that level beyond which a stock’s price will not fall. It denotes that price level
Money doesn’t change people, it shows who they really are. Never spend money before you earn it. Don’t chase money, instead be a money magnet. Invest time before you invest money. The more you learn, the more you earn. Never be a slave to money, become the master. You have to seduce money, don’t let
Analyst bias Technical analysis is not hard core science. It is subjective in nature and your personal biases can be reflected in the analysis. It is important to be aware of these biases when analyzing a chart. If the analyst is a perpetual bull, then a bullish bias will overshadow the analysis. On the other
Technical analysis has universal applicability. It can be applied to any fi nancial instrument – stocks, futures and commodities, fi xed-income securities, forex, etc Focus on price Fundamental developments are followed by price movements. By focusing only on price action, technicians focus on the future. The price pattern is considered as a leading indicator and
The field of technical analysis is based on three assumptions: The market discounts everything. Price moves in trends. History tends to repeat itself. The market discounts everything Technical analysis is criticized for considering only prices and ignoring the fundamental analysis of the company, economy etc. Technical analysis assumes that, at any given time, a stock’s
Price movements are not totally random Technical analysis is a trend following system. Most technicians acknowledge that hundreds of years of price charts have shown us one basic truth – prices move in trends. If prices were always random, it would be extremely difficult to make money using technical analysis. A technician believes that it
Keys to become successful and wealthy trader Wealthy traders are patient with winning trades and enormously impatient with losing trades. Yes, I often fell prone to that. I tend to hope too much when things are going bad. I have time stops, but tend to close positions/strategies too early when having a nice gain. Too
Nothing new ever occurs in the business of speculating or investing in securities and commodities. Money cannot consistently be made trading every day or every week during the year. Don’t trust your own opinion and back your judgment until the action of the market itself confirms your opinion. Markets are never wrong – opinions often
Day trading is not just about finding a strategy, practicing it, and then making oodles of money. Day traders develop certain traits, which in turn allow them to implement a strategy effectively, in all market conditions. When someone starts trading, it’s unlikely they will possess all these traits. They may be strong in one, two,
Longs on Options Buyer of an option Unlimited profit Limited Loss Profit would depend a price of underlying asset. Short on Option ( Writing ) Seller of Option. Profit Depend on premium. Unlimited loss. You can be assigned an exercise option anytime during the life of option contract. Break Even Point Calculation Call Option=Strike Price