What is Indicator? & Importance in Share Market

Hello everyone,

This is Omkar from eMS Stock Market Institute.

In previous Blog you have learnt various Order Types. Basically, there were shar market total 4 types of order.

  • Market Order.
  • Limit Order.
  • SL Limit.
  • SL Market.

EMS STOCK MARKET CLASSES will discuss about Indicators. There are too many indicators. But today we will focus only on 1 Indicators, which we primarily use here in our eMS Stock Market Institute whileteaching and trading. We will see remaining indicators in our further meeting.

But before that lets understand, what is Indicators?

what is Indicator? & Importance in Share Market

We will understand it by an example. Assume that, you are driving a car. And there is another car in front of you. Car driver in that car wants to turn right side. Hence, he will give indication to the cars which are behind to him. How? By switching on the right indicator. This is to notify you that, car in front of you is turning right side. Stay cautious.

Now, you know that, next car is getting turned to Right side. So, you will slow down your car and let that next car turn to right side.

In this example, we can say that, indicator has worked like a signal. Front car has given a signal to the cars which were behind to him.

i.e., Indicator = Signal.

Indicator which we are going to learn today is: –

WHAT IS MOVING AVARAGE & IMPORTANCE IN SHAR MARKET

Moving Average: –

While trading in stocks, whether it is Intraday Trading or Delivery Trading, you need to be perfect. Then only you will get good amount of money as a profit. Otherwise, you will end up your trading by making huge losses. To avoid such losses, you need a confirmation signal about the Trend. And here, Moving Average comes into the picture. Moving average will tell you that, whether stock is in Uptrend or in the Downtrend.

Basically, Moving Average is an average of previous few candles. (Depends on what period you have mentioned) For ease of our understanding, let’s take the period of last 10 Days.

In above example, I have mentioned Stock XYZ, Its closing Price of last 10 days, and its average of 10 days.

DateClosing Price10 Days Average
01/01/2022510
02/01/2022515
03/01/2022499
04/01/2022527
05/01/2022534
06/01/2022540
07/01/2022535
08/01/2022542
09/01/2022550
10/01/2022558531

Here, CMP of XYZ company is 558. But the 10 Days Average Price of XYZ company is 531 as on 10/01/2022.

In this example, we can say that CMP (558) is more than Its 10 Days Average Price (531). Hence, this is an Uptrend. The stock will keep moving up its price, until and unless CMP comes below the 10 Days Average Price. Unfortunately, if it comes below the average price, then we can say – it is a Down Trend.

i.e., CMP > Simple Moving Average = Uptrend

        CMP < Simple Moving Average = Down Trend

This is how we identify the trend.

Important Tip: – Moving Average Line also works as a Support and Resistance.

This is sufficient for today.

If you want to learn it Practically, you can enroll for our EMS SHARE MARKET CLASSES IN PUNE CITY ( Basics to Advance Single Super Course.)

In this, you will learn Intraday Trading, Delivery Trading, Equity Trading, Futures and Options Trading , Currency market , Commodity market  etc.

For more information visit our website http://sharemarketclasses.in/ Or you can contact us ems share market courses in pune  on 7796881234.

From next article, we will see another Indicators in share market for maximizing our profit.

Thank you.

Regards,

eMS Stock Market Institute in pune .

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