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Stock Quote – is the current price of the financial asset – stock, which the seller or the buyer announces and at which they are ready to buy or sell.
In the financial market, a quotation is represented as a constantly changing value set by the quotation committee, which publishes prices at the opening and closing of the exchange, indicating the highs and lows of each day.
The following types of quotations are distinguished:
Direct – represents the price per unit of securities assets Reverse quotes reflect their volume, which can be purchased for a certain unit of money (RVL).
It is very important for an investor or trader to know which stocks to buy and which to sell. Such knowledge can be achieved by looking at the history of stock returns.
However, knowing when to buy and when to sell is just as important, and it is even more obvious to all those investors who have the misfortune of opening a buy position only to see the stock price soon collapse, or opening a sell position before the stock price begins to rise.
Technical analysis can help make good and timely decisions. Not only can it help you pinpoint the right time to maximize your purchases or sales, but it can also alert you to when to expect a change in the trend.
There are three types of stock charts most commonly found on trading platforms:
Line charts Bar charts Japanese candles charts.
A line chart is a very simple type of chart that displays information in the form of a series of points connected by straight line segments. This type of chart is most often used to visualize a trend on fairly long timeframes.
Line chart on IQ Option Platform.
The efficiency of a line chart is in its simplicity: it allows you to easily view the closing prices of a currency pair at a specific time. These are the easiest charts to understand: a line chart displays prices on the side and dates on the bottom.
However, line charts will not tell you about the rise or fall of prices and prices in the open market. Displaying less detail than a Japanese candlestick, the line chart is very little used by traders today. It mainly provides information on market trends.
Bars chart provides instant information about price movements over a specific period. It offers more information than a line chart.
Bars chart shows in addition to the closing price, the maximum and minimum price for the selected period. It can be a day, an hour, a week, etc.
Bars chart on IQ Option Platform.
Bars chart consists of four elements:
Open – the opening price of the market. It is displayed as a horizontal line to the left of the vertical line High – highest point of the vertical line Low – bottom point of the vertical line Close – market closing price. It is shown as a horizontal line to the right of the vertical line.
On bar charts the length of each vertical bar or line indicates the spread of prices for a certain period or trading range for a given currency pair.
That is why bars charts are most often used to monitor market volatility: the longer the bars, the greater the volatility in the market. However, while offering all the information a trader needs, they are also sometimes used for trading.
The “Japanese Candlestick” chart is a type of financial chart that displays the price movements of an asset over a certain period of time.
As the name implies, it consists of candlesticks, each of which represents the same period of time. It can be almost any period – from a few seconds to several years.
Candlesticks can be used for the analysis of different types of data, but mainly they are designed to simplify the perception of price fluctuations in the financial markets.
When used correctly, this tool helps traders correctly assess the likelihood of price changes. It also allows traders and investors to form their own ideas based on their market analysis.
Candles chart on IQ Option Platform.
Each candlestick consists of the following elements, displaying the change in the value of the asset during a certain period of time:
Open – the first registered trading price of the asset for the given period. Maximum – the highest registered price for the given period. Minimum – the lowest registered price for this period. Close – the last registered price for the given period.
The combination of these designations is often called OHLC (Open-high-low-close chart). The ratio between the open, high, low and close defines the type of candlestick.
The distance between the open and close is called the body, and the distance between the body and the high/low is called the wick or shadow. The distance between the high and low of a candlestick is called the range of the candlestick.
Candlesticks project resistance between bulls and bears on a particular time frame. Generally, the longer the body, the stronger the buying or selling pressure was. If the candlestick’s wicks are short, it means that the high (or low) of that timeframe was near the closing price.
The color and settings may vary depending on the charting tools, but basically, if the body is green, then the closing price of the asset was higher than the opening price. Red means that the price moved down during the timeframe and the candle closed below the opening price.
Some analysts prefer a black and white demonstration. In this case, instead of using green and red charts, they present upward moves as hollow candles and downward moves as all-black candles.
Participants in exchange trading can use a variety of strategies: long-term investments, arbitrage, scalping and trading using trends. Each of these cases assumes a special approach to risk management and requires a special psychology, as well as the use of specialized analysis tools – indicators.
Technical analysis indicators for stock trading are algorithms that allow receiving data on future prices with the help of quotes data for a certain period of time.
The Moving Average Convergence/Divergence (MACD) belongs to the oscillator category, although it is sometimes considered a trend indicator. The MACD is plotted in a separate window below the chart and determines the degree of convergence and divergence of two moving averages with different periods. This divergence is displayed as a chart, and the higher the columns, the greater the distance between the MA and the stronger the trend. The Relative Strength Index oscillator (RSI) is similar to the Stochastic in many ways, but its fluctuations within the range are calmer, and the signals are rarer. In addition, this indicator consists of one line, and does not have its own MA. Moving Average (MA) или скользящая средняя – A trend indicator, which is a curved line that is calculated on the basis of price changes. Accordingly, the moving average is the trader’s assistant, which confirms the trend. On a chart it looks like a curved line, repeating the price movement, but smoother. Average Directional Movement Index (ADX) is an indicator formed by three lines: The first line is a positive directional indicator +DI (most often colored blue). Each point of this indicator is constructed as a ratio of the maximum of the last candle to the maximum of the previous one. The formula of the indicator is quite complex, and the calculation requires several steps. In practice, if the maximum of the last candle is higher than the previous candle’s maximum, the +DI line will go up, if lower – it will go down. The second line is a negative directional indicator -DI (usually colored red). The principle of calculation of this indicator is similar to the algorithm +DI, but instead of comparing the maximums, the minimums of candles are compared. If the minimum of the current candle is lower than the previous one, the indicator goes up, if it is higher – it goes down. In this case both lines are smoothed with a certain period. After the ratio is calculated, an exponential moving average is drawn using the obtained data. vThe third line is the ADX indicator. It is also exponential moving average, but it is constructed not by the price values, but by -DI and +DI. The more divergent the positive and negative indicators, the higher the ADX rises.
How to start stock trading in India.
There are a number of brokerage companies, which offer stock trading on their platforms. One of the best choices is IQ Option stock trading platform.
To register on this platform you may follow this link https://iqoption.com/ or type the website address into the address bar.
After entering the Main page of the platform click Sign In button and fulfill the requested information:
Registration table on IQ Option Platform.
After you register on the platform, the two types of accounts are available for choosing. You can open a demo or a real account. The difference between them is that on a demo account you train to stock trading and invest, using virtual money.
Successful registration on IQ Option Platform.
To be able to trade with a real account, you need to top up your account with real money. Below is the example or account replenishment with Visa/Mastercard card.
Account replenishment on IQ Option Platform.
How to make money trading stocks in India.
A strategy is a set of investment parameters that determine your style of behavior on the exchange: what assets you trade, how often you sell, what guides your decisions (e.g., whether you watch the news that affects the market).
First of all you need to determine the following:
What stock to invest; The period for which you want to invest; The maximum amount of losses.
Below are the most popular and useful active trading stock strategies.
Intraday stock trading –
is a trading strategy that involves entering and exiting positions within a single day. Since trading takes place over the course of a single day, this strategy can also be referred to as intraday trading. The goal of day traders is to use intraday trading strategies to profit from changes in the price of a financial instrument.
Position stock trading –
is long-term trend trading on charts with large time scales. In position trading, fundamental analysis (its macroeconomic part) and technical forecasting method are very often used. This style of trading is used literally in all markets.
Scalping stock trading –
is one of the fastest styles of trading. Scalpers do not try to exploit large movements or prolonged trends. This strategy focuses on high-frequency trades with small changes in the price of an asset. Such trading involves forming trades on spreads between supply and demand, liquidity gaps or other market imperfections.
Swing stock trading –
is a type of long-term trading strategy that involves holding positions for several weeks or months. In a sense, swing trading is in the middle between day trading and trend trading.
When it comes to investing, the decision of when to buy a stock can sometimes be easier than knowing when the appropriate time to sell a stock is.
In common, you should follow the model of buy stocks at the bottom – sell at the top.
Generally, there are three primary reasons for a long-term investor to sell: the buy was a mistake and the stocks are falling, the price has grown dramatically, or the current price is no longer supported by fundamentals.
What are dividends on stock?
A stock dividend is a portion of the profits received by a company and distributed to all shareholders. (GB)
Before building a dividend portfolio, it is necessary to research and analyze the market of companies that are issuers of stocks, studying the history of how these players have paid dividends on stocks. At the first stage, it is worth immediately cutting out companies that have never paid dividends.
They are unlikely to change their strategy in the future and start handing out profits to shareholders. There are exceptions to the rules here, too, but they are quite rare. More often than not, a company announces all aspects of its dividend policy in advance.
To ensure that you are not fooled by your expectations, on the second step of the research, thoroughly study the dividend policies of the companies you have chosen for your investment portfolio.
All this data is public and can be found on the official websites of the issuing companies. Usually the size of dividend payments and their frequency are indicated there. First of all select for yourself companies with guaranteed dividend payments, which are usually either fixed payments or percentage of net profit. At the same time it is necessary to take into account possible differences in dividend policy, which relate to preferred and common shares, as well as various exceptions, because of which the shareholder may not receive a virtually guaranteed profit.
In order to receive dividends it is enough to buy a share on the stock exchange, becoming in fact a co-owner of the company that issued this security. As a consequence, any shareholder can hope to make a profit.
What is “buy and hold”?
A buy-and-hold is a passive investment strategy in which an investor buys stocks and holds them for an extended period of time regardless of fluctuations in the market. An investor who uses a buy-and-hold strategy actively chooses to invest, but does not care about short-term price movements and technical indicators. Many legendary investors, such as Warren Buffett and Jack Bogle, praise the buy-and-hold approach as ideal for people seeking stable long-term returns.