SMM Concepts Part 1: Understanding Market Dynamics and Strategies
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Questions and Answers

According to the text, what is the role of a 'Bull' in the stock market?

  • Investing to satisfy greed
  • Profiting from a decline in prices
  • Betting on a rally and profiting from a rise in prices (correct)
  • Getting destroyed by a small adverse move

What does the term 'Pigs' refer to in the context of stock market trading?

  • Buyers who bet on a rally
  • Sellers who bet on price decline
  • Investors who satisfy their greed by trading (correct)
  • People who get destroyed by large adverse moves

What is the function of a 'Bear' in the stock market?

  • Sells and profits from a fall in prices (correct)
  • Bets on a rally and profits from rising prices
  • Buys positions that are too large and gets destroyed
  • Gets slaughtered when investing to satisfy greed

According to the text, what does the term 'Share Price' represent?

<p>The last person's transaction price (A)</p> Signup and view all the answers

What is the primary characteristic of 'Pigs' in the context of stock trading?

<p>Satisfy greed by trading excessively (D)</p> Signup and view all the answers

What is the role of 'Bulls' and 'Bears' in the stock market?

<p>Bulls bet on rally, Bears bet on decline (A)</p> Signup and view all the answers

According to the text, what is the primary determinant of share price?

<p>Market forces - demand and supply (A)</p> Signup and view all the answers

What does the DOW Theory suggest about market trends?

<p>Trends stay intact until they give a signal (D)</p> Signup and view all the answers

In simple technical analysis, what does 'Ghoda' symbolize?

<p>Outperformer (B)</p> Signup and view all the answers

What is the primary purpose of candlestick charts according to the text?

<p>To reflect the market demand and supply forces (C)</p> Signup and view all the answers

Which type of analysis allows studying multiple companies without detailed knowledge of their performance?

<p>Technical analysis (D)</p> Signup and view all the answers

What is the main focus of technical analysis as mentioned in the text?

<p>Demand and supply forces (B)</p> Signup and view all the answers

'DOW Theory' was developed by which prominent figure in technical analysis?

<p>Charles Dow (A)</p> Signup and view all the answers

'Gadha' is associated with which market role in simple technical analysis?

<p>Underperformer (B)</p> Signup and view all the answers

'Candlestick charts' are also known as which type of charts according to the text?

<p>'Japanese candlestick charts' (A)</p> Signup and view all the answers

'Technical analysis' primarily focuses on predicting which aspect of stocks according to the text?

<p>'Historical price movements' (A)</p> Signup and view all the answers

'Volume' plays a significant role in confirming which aspect of stock market trends according to the DOW Theory?

<p>'Trend confirmation' (C)</p> Signup and view all the answers

What does 'Ghoda' represent in simple TA?

<p>Outperformer (B)</p> Signup and view all the answers

Flashcards

Bull's role in stock market

Betting on price increases and profiting from rallies in stock prices.

Pigs in Stock Market

Investors driven by greed and excessive trading.

Bear's role in stock market

Betting on price drops and profiting from falling stock prices.

Share Price

The price of a stock, specifically the most recent transaction price.

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DOW Theory

Suggests market trends continue until a signal indicates otherwise.

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Technical Analysis

Studying historical price movements to predict future stock prices.

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Market Forces

The forces determining share prices.

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Candlestick charts

Charts used to visually depict market forces.

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Ghoda (Simplistic TA)

Represents the underperformer compared to market.

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Technical Analysis

Studying market trends via historical price data.

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Volume (Trading)

The amount of shares bought and sold in a period.

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Charles Dow

Prominent figure in technical analysis, creator of the Dow Theory.

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Gadha (Simplistic TA)

Represents a stock that is underperforming.

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Japanese Candlestick Charts

Charts showing opening, closing, high, and low prices of a stock during an interval.

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Trend Confirmation

Volume confirms trends in the market.

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Demand and Supply Forces

Factors of the market that determines pricing.

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Study Notes

Bulls

  • Investors who believe that the price of a stock is going to rise
  • They buy stocks with the expectation of selling them at a higher price in the future

Bears

  • Investors who believe that the price of a stock is going to fall
  • They sell stocks with the expectation of buying them back at a lower price in the future

Pigs

  • Investors who are not as confident as Bulls or Bears.
  • They are speculative and are looking for quick profits
  • Their primary characteristic is their lack of conviction in the market trends

Share Price

  • Represents the current market value of a stock

The DOW Theory

  • Suggests that the market trends can be identified by looking at the direction of the Dow Jones Industrial Average (DJIA)

Simple Technical Analysis

  • 'Ghoda' represents the breakout of a stock price from a consolidation pattern

Candlestick Charts

  • Are used to track the price movements of a stock over time.
  • They are known as Japanese Candlestick charts
  • The primary purpose is to make visual representations of the price movements of a stock, which can be used to generate buy or sell signals

Technical Analysis

  • The primary focus is on predicting price movements
  • Allows studying multiple companies without detailed knowledge of their performance

The DOW Theory

  • Was developed by Charles Dow

Simple Technical Analysis

  • 'Gadha' symbolises the breakout of a stock price from a consolidation pattern

Volume

  • Plays a significant role in confirming the trend of the market
  • According to the DOW Theory, volume should be heavy on price advances and light on downward movements

Simple Technical Analysis

  • 'Ghoda' represents the breakout of a stock price from a consolidation pattern

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Description

This quiz covers various concepts related to social media marketing (SMM) such as DOW theory, identifying outperformer & underperformer, charts & candlesticks, time frames, trend lines, candlestick types, and volume. It also delves into understanding market dynamics including bulls, bears, and pigs.

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