Tag Archives: Learn Option Trading course

Money Making Candlestick

Money Making Candlestick Formations Candlestick Line   Candlestick Line Candlestick lines and charts — traditional Japanese charts whose individual lines look like candles, hence their name.  The candle- stick line is comprised of a real body and shadows.   See “Real body” and “shadow.”   Candlestick Formations Belt-hold line — there are bullish and bear- ish belt holds.  A bullish belt hold is a tall white

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RSI – Relative Strength Indicator

  RSI – Relative Strength Indicator Developed by J. Welles Wilder and introduced in his book, New Concepts in Technical Trading Systems, the Relative Strength Index (RSI) is an extremely popular momentum oscillator. The RSI compares the magnitude of a stock’s recent gains to the magnitude of its recent losses and turns that information into a number that ranges from 0 to 100. It

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Standard Deviations

In this example Microsoft is charted using 20 day Bollinger bands at 2 standard deviations. Contracting bands warn that the market is about to trend: the bands first converge into a narrow neck, followed by a sharp price movement. The first breakout is often a false move, preceding a strong trend in the opposite direction. A contracting range [C] is evident in June 1998:

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Primary Functions

Again, although Bollinger Bands can help generate buy and sell signals, they are not designed to determine the future direction of a security. The bands were designed to augment other analysis techniques and indicators. By themselves, Bollinger Bands serve two primary functions:   To identify periods of high and low volatility To identify periods when prices are at extreme, and possibly unsustainable, levels.  

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Three Bands Encompassing

Again, this indicator consists of three bands encompassing a security’s price action. Defaults are:   1. A simple moving average in the middle, usually 20 days for intermediate investing. 2. An upper band ( 20 day SMA plus 2 standard deviations) 3. A lower band (20 day SMA minus 2 standard deviations)   Standard deviation is a statistical term that provides a good indication of

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Bollinger Bands Rules

following are a few rules that serve as a good Beginning point.   1. Bollinger bands provide a relative definition of high and low. 2. That relative definition can be used to compare price action and indicator action to arrive at Rigorous buy and sell decisions. 3. Appropriate indicators can be derived from momentum, volume, sentiment, open interest, Inter-market data, etc. 4. Volatility and trend

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Bollinger Bands

Developed by John Bollinger, Bollinger Bands allows users to compare volatility and relative Price levels over a period time. Bollinger Bands are envelopes which surround the price bars on a Chart. They are plotted two standard deviations away from a simple moving average. Because Standard deviation is a measure of volatility, the bands adjust themselves to ongoing market Conditions. They widen during volatile market

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Futures Stock Options Glossary

QUICK REFERENCE GLOSSARY ON FUTURES AND OPTIONS FUTURES TERMINOLOGY SPOT PRICE: The price at which an asset trades in the spot market. FUTURES PRICE: The price at which the futures contract trades in the futures market. CONTRACT CYCLE: The period over which a contract trades. The index futures contracts on the NSE have one month, two months and three months expiry cycles which expire on the last Thursday of the month. Thus a January expiration

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Stock Market Trading

ADVANTAGES AND BENEFITS OF COVERED CALL STRATEGY ‘The biggest advantage of covered call strategy is it increases and improves the odds of successful trading. Another biggest share tips benefit is that it can be implemented in two of the three possible stock movement scenarios. If the stock goes up, it’s profitable. Ifthe stock goes sideways, it’s profitable. The only case when it is not profitable is

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Traders And Investors

SOME STRATEGIES FOR WRITING COVERED CALLS STRATEGY 1       This is the strategy that works best in India since options of fundamentally strong stocks continue to have some time premium left till the last day. You should write at-the-money calls since these give the maximum premium inflow. It is critical, however, that once covered call writing is accepted as a strategy, nse india,  traders should write calls

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