Charting and Technical analysis Rules

Rule 1 – If you cannot see trends and patterns almost instantly when you look at a chart then they are not there. The longer you stare, the more your brain will try to apply order where there is none. If you have to justify exceptions, stray data points and conflicting evidence then it is safe … Read more Charting and Technical analysis Rules

Nifty Options-What happens on Expiration day?

Many traders will indulge in Option trading especially on Expiry Day to make some quick buck as sometimes Rs 1 Options can jump to Rs 20-30 in matter of time. During my trading Seminar , general question which most of participants have is Why do options trade at lesser than theoretical value on the expiry … Read more Nifty Options-What happens on Expiration day?

How to build a trading plan?

How do you go about building a trading plan?  What do you need to consider, and what type of trader should you be? The last question is a logical place to start – deciding the type of trader you want to be, and understanding why. Type of Trader When creating a trading plan, a trader must decide the style of trading … Read more How to build a trading plan?

Basic of Volume and Open Interest

Definition of ‘Open Interest’ The total number of options and/or futures contracts that are not closed or delivered on a particular day. Few Scenarios to Understand OI If a new buyer (a long) and new seller (a short) enter a trade, their orders are matched and open interest increases by one If a trader who … Read more Basic of Volume and Open Interest

How to trade using Stochastic

Developed by George C. Lane in the late 1950s, the Stochastic Oscillator is a momentum indicator that shows the location of the close relative to the high-low range over a set number of periods. According to an interview with Lane, The Stochastic Oscillator “doesn’t follow price, it doesn’t follow volume or anything like that. It … Read more How to trade using Stochastic

Cost of Carry formula and interpretation

A future Contract is an agreement between two parties to BUY or SELL an underlying asset, including stocks, indices,commoditities or currency, at a certain time in the future at a certain price. Futures contracts are standardized and are traded on the exchange. To facilitate liquidity in futures contracts, the exchange defines certain standard specifications for  … Read more Cost of Carry formula and interpretation

Technical Indicators: Force Index Introduction

Last Week we discussed  Trading using Stochastic  This week we will focus on learning new Indicator Force Index. Introduction The Force Index is developed by Trading for a Living fame author Alexander Elder , is an oscillator that measures the force of bulls behind particular market rallies and of bears behind every market correction.According to Elder, there … Read more Technical Indicators: Force Index Introduction

Trading using Stochastic

Last Week we discussed  Technical Indicator – Stochastics An Introduction Lets discuss today how to Trade using Stochastic   The Stochastic Oscillator can be used to generate Buy and Sell Signals as follows 1. Extreme Values (Overbought Oversold) 2. Stochastic Crossovers 3. Stochastic Divergences Extreme Values (Overbought Oversold) The stochastic oscillator is plotted within a … Read more Trading using Stochastic