The price is right

The price is right

It is all about price

Price is the product of collect effect of market crowd. Buyers and sellers tussle discover prices. Prices always include all underlying information, news and people’s assumptions. This is also called as stock market discount mechanism. As assumptions changes or news flow continues or fundamental changes we see rapid rise or fall in prices. All underlying information consist of hundreds of factors like market or stock facts, market opinions, wild guesses and trading emotions. All these factors changes supply demand equations every second that why new prices are discovered literally every second. Dow Theory

Dow Theory and price

Charles Dow one of the founder of  “the wall street journal”  stated that in market only one thing is true and that is “price”, because prices always effortlessly concluded their journey, regardless of underlying facts, rumors and market noises. In my view, Price is the only information a traders can trust. Some of the Dow observations also called as “dow theory” are 1. Prices most of the time moves in trends. 2. Trend can recognized and they appear regularly and repetitively. 3. Primary trend and major trend while secondary trend are called retracement and not easy to trade with. 4. Trend likely to continue until something major fundamental change occurs. Price and value

Price and value

Price and value are to different things. Technical analysis shows and discovers prices while fundamental analysis can judge value. Stock trading above it value called as overvalued this might be due to companies prosper future, market rumors or due to news based emotions. Difference between real value and price called as “premium”. Vice versa is true for stock is trading below value. Here the difference is called as “discount”. These premium and discount always matter to long term investors. While some smart traders use both technical analysis and fundamental analysis to trade better and also to control risk. For example, in bear market, blue chips (fundamentally strong stock) didn’t fall that much as compared to midcaps and small cap companies stocks. Trading in major index stocks is comparatively less risky than other. Major index stocks are always included or excluded on their major fundamentals and company management quality by market regulators. Using fundamental analysis along with technical analysis is like catalyst. It only increases your chances of winning. Professional traders always choose fundamentally sound or highest quality stocks to trade. And use technical analysis to make their buy or sell decisions. Price and technical analysis

Price and technical analysis

Technical ideas are not new to the world, you can fetch them as back as 1800 century to rice traders in japan. Technical analysis used and developed by many brainy peoples around the world, because you know mathematics is not a game for fools. Technical analysis was there way before computer, trading systems and charting software’s. It is not a cult because it is survived almost 200 years and will continue to help traders in future. New ideas, indicators, charting style adds every years and make traders knowledge better and better.

The Author

Pramod Baviskar

Professional Market Trader And Owner Of Dalal Street Winners Advisory And Coaching Services. Working Since 2007 And Online Presence Since 2010. We Provide Highly Accurate And Professional 1 Entry And 1 Exit Future, Option, Commodity, Currency And Intraday Stock Tips On Whatsapp With Live Support And Follow Up.
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