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Transcript of Blue
by Dipak Shodhan
What to expect?
Probably just the 'T' of Technical Analysis!
Relative Strength Index (RSI)
What is Technical Analysis?
Forecasting the future direction of price through study of past market data.
Introduction to what is Technical Analysis
Various Technical Indicators
There's too much out there...
Price and Volume
What do you do now?
Price of an instrument over a particular time frame and divide by the time frame.
Smooth Price Moves
SMA = AVERAGE OF ALL CLOSING PRICES ACROSS NUMBER OF PERIODS
Shorter SMA - 21 crosses over longer SMA - 55 (Bullish)
Shorter SMA - 21 crosses over longer SMA - 55 (Bearish)
EMA = AVERAGE OF ALL CLOSING PRICES ACROSS SET NUMBER OF PERIODS*
*EMA IS WEIGHTED BY MOST RECENT PRICES
EMA - 55 is closer to current market price
SMA - 55 away from current market price
MACD is a trend following EMA indicator.
Also used to determine the underlying momentum behind a trend.
MACD is calculated by subtracting the value of a fast 12-day EMA from the value of a slow, 26-day EMA.
This value is compared to a 9-day EMA of the MACD and the signal lines.
Instrument looses momentum when EMA-12 crosses bellow EMA-26
Bearish trend starts when EMA-12 crosses bellow zero
Instrument looses momentum when EMA-12 crosses above EMA-26
Moving Averages (MA)
Simple Moving Averages (SMA)
Exponential Moving Average
A MOVING AVERAGE (MA) COMBINES THE PRICE OF AN INSTRUMENT
OVER A PARTICULAR TIME FRAME AND DIVIDES BY THE TIME FRAME
TO SMOOTH PRICE MOVES INTO A SINGLE TREND LINE.
Shows when an instrument is
. Traders use this to determine when to enter or exit positions.
As the RSI enters Oversold area, investors start closing short positions.
As the RSI emerges back from Oversold area, investors start accumulating long positions.
As the RSI enters Overbought area, investors start closing long positions.
As the RSI falls back from Overbought area, investors start accumulating short positions.
100 - (100 / (1 + (U/D)))
U -> Upward Price Change
D -> Downward Price Change
Investment Brokerage Firm
Charges fees, known as commission
Adopt different types of financial strategies
Advisory services, market analysis and research
Platform for online buying and selling of securities
Meeting financial goals and managing or minimizing risk
An investment brokerage firm acts as an intermediary between the buyer and the seller.
Commit to investing over long term
It is possible to make "a killing in the market" in short term trading, but can be wiped out by an equally sudden loss.
Understanding the different kinds of stocks
Stocks represent an ownership stake, or share in the company that issues them. The money generated from the sale of stock is used by the company for its capital projects, and the profits generated by the company's operation may be returned to investors in the form of dividends.
Develop an investment strategy that meets your goals
Decide what type of stock portfolio is most important to meet your overall financial goals.
Diversify your holdings
Ideally, poor performance by 1 or 2 stocks will be offset by significant gains in the other stocks.
Growth Stocks : TSLA, GPRO, INVN ...etc
Income or Value Stocks : AIRI, NRF SGU ...etc
Blue-chip Stocks : IBM, XOM, CVX, MCD, KO, CAT ...etc
Defensive Stocks : PEP, KO, WMT, PG ...etc
Cyclical Stocks : Rise and fall with economy
Speculative stocks : Young companies with new technologies and older companies with new executive talent.
Look at price-to-earnings ratio
Stocks book value
Return on equity