Published on February 16, 2014
P1 PICKING STOCKS IN THE MARKET 24 The analysis of securities Made by: Imran Almaleh
INTRODUCTION About the course WHY INVEST? Why the stock market? The stock market & The economy HOW CAN WE USE IT?
PART 1 agenda: 24 The 2 types of TRADERS The fundamental analysis The technical analysis The trading cycle The Market moves Trading psychology Basics of Analysis: The Time-frame The 3 green lights Volume Support & Resistance Trend-lines
THE TYPES OF TRADERS The sleeping man Not a risk taker Stocks are not his primary concern The active trader Always alerted Deep analyzer Risk taker
THE SLEEPING MAN SELL 80 SP profit BUY
175sp overall profit THE ACTIVE TRADER SELL SELL 110 sp PROFIT 65 sp PROFIT BUY BUY
THE IMPORTANCE OF FUNDAMENTALS Get to know YOUR company Filtering stocks using fundamentals ROA ROE E/P – D/P ratios Market value : Book value Review report Why not to use it in DSE? Market efficiency Market depth
ARBS UG AHT NAMA UIC AROP SPS E/P D/P ROA ROE P/E ratio
TECHNICAL ANALYSIS Supply & Demand The main concepts: The Trend Bull market Side-way market Bear market The trading cycle
PRICE MOVES IN TRENDS!
THE TRADING CYCLE Strong, Smart, and Dumb MONEY The marketing Model
THE MARKET MOVES All Actions have Reactions 3 types of movements: Main move 1. Correction 2. 3. Uptrend Downtrend 33% of last move 66% of last move Small moves
THE PSYCHOLOGY OF TRADING Selling the Win fast Holding the Lose GREAD AND FEAR Fear is stronger than Greed THE EMOTIONAL CYCLE OF THE MARKET
THE EMOTIONS CYCLE FEER GREED PANIC HOPE HOPE
THE BASICS OF ANALYSIS The time frame The 3 Green lights to start The importance of VOLUME The support & resistance Trend lines
TIME FRAME Short-term Trading (Daily Trading) Between 5 minutes – 1 day Mid-term Trading Between 1 Week – 2 Months Long-term Trading (Investment) Between 6 Months – 2 Years or more
3 GREEN LIGHTS The stock market index The industry index The stock index
TRADING VOLUME Why observe it? Selling pressure Divergence
SUPPORT & RESISTANCE Concept Drawing the lines Converting the Support to Resistance & v.v. The strength of a Line
THE TREND LINE Upward trend Downward trend Time frame & the trend lines How to draw a trend-line? Trend break-out
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