What does it mean when a stock is down in after hours trading?
The market is open between 9:30 am and 4:30 pm est. Beyond that trading takes place in extended hours. Pre-market trading occurs in the morning (7:30 to 9:30am). Aftermarket trading occurs between 4:30pm and 8:00pm est. The trading occurs on electronic communication networks (ECN). Pre-market and after hours trading doesn't usually affect stock price for open market trades. If news comes out (after the market closes) the news can have an effect which would carry into normal trading. If a stock sell lower (in after hours trading)than its price when the market closed at 4:30pm it is said to be down in after hours trading. Stocks can be thinly traded in after hours so any selling can bring a stock's price down.
What are the indicators to gap up opening of a stock on next day?
A gap is defined as a price level on a chart where no trading occurred. These can occur in all time frames but, for swing trading, we are mostly concerned with the daily chart.A gap on a daily chart happens when the stock closes at one price but opens the following day at a different price. Why would this happen? This happens because buy or sell orders are placed before the open that cause the price to open higher or lower than the previous day's close.Here is an example:Let's say that on Tuesday, Sunpharma closes at Rs840. After the close they come out with their earnings report. They report higher than expect earnings that causes excitement among investors. Buy orders come flooding in. The next day Sunpharma opens at Rs860. Since there were no trades between Rs 840 and Rs860 this will create a gap on the chart.
How do I predict whether the share will be going up or down in the stock market?
There are lot of techniques using which one can make a prediction about the future movement of the stock.One of the techniques is by using RSI ( Relative strength Index )divergenceHere, we are looking at the divergence between between the price and the RSI.There are two types of divergencePositive DivergenceNegative DivergenceLet us see how we can use positive RSI to our advantage.When RSI gives you a positive signal, you can expect the stock to go up and when RSI gives you a negative signal, you can expect the stock to go down. Here, you can only expect the stock to go up or down based on the signal but you need extra confirmation for to identify reversals.Extra confirmation can be in the form of Gap up or Gap down opening. There are a lot of ways to identify the reversal points, one of them being Gap up/ Gap down opening.Coming to positive divergence, the price should be making lower lows and the RSI should be making higher lows.Always remember, when you are looking out for positive Divergence, connect the lows of price and lows of RSI.You can't connect lows of price and highs of RSI or highs of price and lows of RSIIt has to be lows of price and lows of RSI always!Let us understand with the help of a chart( Image source : NetDania App )Above is the chart of Asian Paints ( Hourly chart )As you can see the trend of the stock was down.Price made lower lows. The recent low was lower than the immediate previous low.Correspondingly, RSI was making higher lows. The recent low was higher than the immediate previous low.The price was pointing down but the RSI is clearly signalling now that the downtrend will stop and chances are that the stock is going to reverse from here. This is a case of positive divergence.RSI is also called as a leading indicator because of its ability to predict future stock movement in advance.Let us see how the stock has performed after giving positive divergence( Image source : NetDania App )As you can clearly see, the stock reversed and started it's journey upwards from 1280 to 1332.Also the Gap up opening 4 candles later after reversal was the confirmation that the stock movement has indeed reversed.Negative Divergence works exactly the opposite!!If you can combine other techniques along with the RSI, you can get some really good entries.Hope RSI Divergence was simple and easy to understand :)
I want to start investing money in the stock market. What should I do?
I'm 19 years old, and I want to start investing in the stock market. How much money can I make over the next years if I'm good with buying and selling stocks..? I am ready to invest $100 as soon as I can and then build off the next weeks when I get paid up to $1000. What should I do first, and where do I go first??? I am confused on how to start investing.
Have any stock market advice?
Congratulations on your interest in the stock market. Most financial gurus started investing at your age, so maybe you'll be the next Peter Lynch! You didn't mention your time frame or what your initial investment will be. These are critical issues when investing money. You've clearly established your goal (earning $2,000), but how quickly you'll need the money is a huge issue. To earn $2,000 quickly in the stock market, you're going to have to take some huge risks. That's not investing-that's gambling. If you really want to play it safe, open a money market fund with Vanguard. The Prime Money Market is paying around 5% with virtually no risk to your money. Good luck and happy investing!
How do I make a monthly income using the stock market?
Ok, the art of making money on the stock market is usually called Trading. this involves opening a stock position (buying) and then closing the position if it rises in value. The first thing i would do is place that 1000 in a high interest savings account and start adding to it. If you want to be successful trading stock, you will probably need more like 20,000 to start. Especially to make enough more then a couple of bucks a month. Second you must start reading and learning about stock trading. like any profession it takes lots of education and practice to be successful. (dont believe the hype that you can make money easily, Remember that when one person makes money, someone else has lost Money.) Also practice with a demo account if too. (demo accounts use fake money to trade positions, you dont make anything with these accounts, but you also dont lose. Finally come up with a system, Trading rules. and Learn to trade mechanically. that limits the emotional decisions you can make, emotion is a traders worst enemy, it loses money like no other issue.