The Relative Strength Index (RSI) is a technical analysis instrument that is used to assess if an asset or commodity is wildly overvalued or oversold by comparing the extent of rapid price momentum.
The following formula is used to measure the RSI:
RSI = 100 – {(100 / 1 + RS)}
RS = Average of Upward Price Change/ Average of Downward Price Change.
Here is the formula of above terms to understand the formula even better:
Average of Upward Price Change= {(Past Average Gain) x 13 + Current Gain} ÷ 14
**Average of Downward Price Change= **{(Past Average Loss) x 13 + Current Loss} ÷ 14
Index funds are mutual funds in which investment are made in the stocks of Index they track such as Nifty, Sensex according to its composition and weightage of the index.
Investing in abroad markets has become quite easy these days. One can get direct and indirect exposure into the U.S. market through various methods. Investing in foreign markets like the U.S provides many benefits like Diversification into the top companies of the world, Benefit of Currency Depreciation, etc. Apart from directly purchasing the stocks listed on the U.S. stock exchanges, there are some different methods as well. Know the best methods of getting exposure to the U.S. stock markets.
Quantsapp is an online Analytics platform that provides various tools for Options and Derivatives traders. Quantsapp proprietarily provides various solutions to option traders in order to increase their profitability. One of its unique indictors is the "Trap Indicator" which helps traders identify opportunities based on the trap situations created in the markets. Discover how it can be utilized.
Buy the Dip represent an investing strategy wherein you add on to your existing investments in the case of any small or major market correction. This strategy is beneficial for long-term investments as it helps to reduce the overall cost and also increases the overall profitability.
Mutual funds for 80c benefits also called ELSS or tax saving funds are one of the most prominent and lucrative investment options to save taxes as well as grow money. Primarily because the have lowest lock-in period amongst the 80c investment options and have historically delivered best returns.
An economic calendar shows the important news or data that are extremely vital for the investors, traders, speculators and so on. See how risk can be minimized through an economic calendar.
Every Equity Investor should maintain some part of their portfolio diversified into foreign companies. This can be achieved through Foreign brokers or Mutual Funds and ETFs that invest in abroad markets. Investing abroad has many benefits such as exposure to the top global companies like Facebook, Amazon, Ford, etc. The tax implications on investments made outside India are different as foreign Equity is taxed as Debt Mutual Funds
Option Selling requires large capital. Due to this many small retail traders resort to option buying where the margin money required is very less. Although with various strategies you can reduce your overall risk and margin required in Options selling. Know more about how much money is required to start option selling. The difference in the margin money required for selling a naked Option vs Selling a Hedged Option here.
Options trading offers many options to traders, investors as well as hedgers. There are some common mistakes that option traders commit. Five of the most common mistakes are, taking too much leverage, not having a pre-defined stop loss and target, acting on tips on social media, adhering to buying options, and taking unhedged trades.
If you forget to square off your option contract at the end of the day, the contract will automatically be settled if it's an in-the-money option. The contract would be settled on the expiry date and will be sold at the market price.
Harshil Patel
RSI is widely used in swing trading and in intraday trading. Mostly, beginners can use this indicator in the prediction of a good opportunity to buy or short sell a stock. Majorly, the average length at which is kept at 14. But varies exponentially based on the trade and preference.