Invest Systemically & Earn Smartly

Sanjay Lad

Introduction• A simple course design for common Trader. • This course is related to moving averages and

oscillators. • This TECHNICAL ANALYSIS COURSE will make a vast

difference in your approach & attitude towards STOCK MARKET.

• The course is designed in such a way that TECHNICAL ANALYSIS subject becomes very easy to understand even for a new person knowing nothing about it.

Technical analysis for investor & trader

• Short or medium or long term investor• Trader• Day trader • Trading in Derivatives

Summary of course

• STUDY OF Minimum Indicator.• How to change the parameter with respect to

individual trading?• How to make better use of readymade software

available in market? (i.e. Falcon, Trend, Iris etc)

• How to find Support , Resistance and Panic in the market by simple methods?

• Different Methods or Strategies of Speculation.

Concepts

PriceOpen Price :Low Price :High Price :CLOSE Price :

Charts

Types of Chart

Bar Chart Candlestick Chart

Bar Chart• A style of chart used by some

technical analysts, on which, as illustrated below, the top of the vertical line indicates the highest price a security traded at during the day, and the bottom represents the lowest price. The closing price is displayed on the right side of the bar, and the opening price is shown on the left side of the bar. A single bar like the one below represents one day of trading

Candlestick

• A price chart that displays the high, low, open, and close for a security each day over a specified period of time

Line Chart• A style of chart that

is created by connecting a series of data points together with a line. This is the most basic type of chart used in finance and it is generally created by connecting a series of past prices together with a line

Trend

Uptrend Down Trend

TRENDLINE

* A Straight line drawn to connect the highest or lowest prices of a share over a period in the immediate past.

Support• The price

level which, historically, a stock has had difficulty falling below. It is thought of as the level at which a lot of buyers tend to enter the stock.

Often referred to as the "support level".

Resistance

• The price at which a stock or market can trade, but which it cannot exceed, for a certain period of time.

Often referred to as "resistance level

Mathematics

Average

• If ‘x’ and ‘y’ are two numbers then,Average = (x + y)

2

Percentage

• ExampleLet,Last close of nifty is 4250 and today close is 4380, what is its percentage rise?

Moving Average – MA• An indicator frequently used in

technical analysis showing the average value of a security's price over a set period. Moving averages are generally used to measure momentum and define areas of possible support and resistance.

• Moving averages are used to emphasize the direction of a trend and to smooth out price and volume fluctuations, or "noise", that can confuse interpretation. Typically, upward momentum is confirmed when a short-term average (e.g.15-day) crosses above a longer-term average (e.g. 50-day). Downward momentum is confirmed when a short-term average crosses below a long-term average.

Simple Moving Average – SMA

• A simple, or arithmetic, moving average that is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods. Short-term averages respond quickly to changes in the price of the underlying, while long-term averages are slow to react

Exponential Moving Average – EMA

• A type of moving average that is similar to a simple moving average, except that more weight is given to the latest data. Also known as "exponentially weighted moving average

EMA to be use in charts

EMA 6 Short Term Average

EMA 30 MID Term Average

EMA 52 LONG Term Average

Uses of Moving Averages

• BUY & SELL SIGNAL• SUPPORT• RESISTANCE• TO TAKE POSITION• IT INDICATES TREND

Moving Average Convergence Divergence – MACD

• A trend-following momentum indicator that shows the relationship between two moving averages of prices. The MACD is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. A nine-day EMA of the MACD, called the "signal line", is then plotted on top of the MACD, functioning as a trigger for buy and sell signals

MACD ( In chart)MACD (6,30,E,6) IN DAILY, WEEKLY, MONTHLY

AND QUARTERLY CHARTS

MACD ( 25,52,E,6)

IN DAILY CHART

MACD (5,15,E,5)

QUARTERLY CHART

MACD (24,30,E,6)

INTRADAY CHART

Uses of MACD

• BUY AND SELL SIGNAL• TREND• POSITIVE DIVERGENCE• NEGATIVE DIVERGENCE