If you are about to open a zero brokerage demat account, you must learn how to use stock market indicators. A zero brokerage demat account helps investors buy/sell securities and hold them without paying any brokerage fee. And, stock market indicators help them gauge the direction of a price trend.
After opening a zero brokerage demat account, you may get tempted to trade a lot because you do not have to pay brokerage. Hence, you need to ensure that you are disciplined with your trading. For this, you should use indicators, which will help you analyse market trends.
In general, trading can be difficult for anyone. However, share market trading for beginners can be even more challenging. Hence, it is important for them to get a grip on indicators.
Here Are the Key Stock Market Indicators That Every Trader Must Know:
- Moving Average (MA): This is a popular technical indicator, which can help you gauge the direction of a price trend. Let us take an example to understand it. To calculate the 100-day MA of a stock’s price, you need to add all the stock prices over a 100-day period and divide it by 100. It helps in easing out short-term price spikes.
- Exponential Moving Average (EMA): This indicator is like Moving Average, with one crucial difference. MA gives equal weight to all data points. However, EMA gives more weight to recent data points. Hence, recency is an important factor in determining EMA. Like MA, EMA can help you determine whether a price trend is bullish or bearish.
- Moving Average Convergence Divergence (MACD): You can use this indicator by comparing two moving averages to ascertain whether the prices are diverging (moving away from each other) or converging (moving closer to each other). When two averages converge, it shows that momentum is decreasing. On the other hand, when two averages move away from each other, it could show that momentum is building.
- Stochastic Oscillator: This indicator helps you determine whether the stock market is currently overbought or oversold by comparing the current levels of the market with a range of its levels over a period of time. If the market is overbought, its current levels are above its fair value. Conversely, if the market is oversold, its current levels should be under its fair value.
- Relative Strength Index (RSI): This momentum indicator analyses the magnitude and speed of the recent price changes of a security to find out whether it is undervalued or overvalued. In addition, RSI can tell you whether a trend reversal is expected to happen in a security’s price.
As we said, share market trading for beginners can be tough. Hence, you need a broker who provides you with educational resources. On Bajaj Broking’s website, you can find a lot of content that explains how to use various kinds of indicators for all kinds of trading.
Bajaj Broking’s website has dedicated blogs for specific indicators, which can help you learn from scratch. Many brokers provide such resources, which can come in handy for all kinds of traders, particularly those who have just begun trading.
Conclusion
It is important to learn how to use stock market indicators whether you have a brokerage free demat account or a regular demat account. Such indicators are especially helpful for traders, as they try to understand the trend in prices and volumes.
While selecting a broker, you should check what kind of built-in indicators you can use on his website and trading app. You can also check with fellow traders to know how their experience has been with a particular broker. Based on that, you can decide which broker to sign up with.
Read Also: How to Set Financial Goals Using Your Demat Account App?
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