Page 215 - DCOM507_STOCK_MARKET_OPERATIONS

Stock Market Operations

Notes Neutral Network: A neutral network is a trading system in which a forecasting model is trained
to find desired output from past trading data.
Primary Trends: The primary trends are the long range cycle that carries the entire market up or
down (bull or bear markets).
Secondary Trend: The secondary trend acts as a restraining force on the primary trend. It ends to
correct deviations from its general boundaries.
Technical Analysis: Technical analysis is a method of evaluating securities by analyzing the
statistics generated by market activity, such as past prices and volume.

Trend/Line: A trendline is a simple charting technique that adds a line to a chart to represent the
trend in the market or a stock.

10.10 Review Questions

1. Write a brief note on technical analysis and assumptions.

2. What is the difference between technical and fundamental analysis?
3. Write a note on the origin and development of technical analysis.
4. What are the techniques of technical analysis?

5. What do you mean by market indicators?
6. Write a short note on old puzzles and new developments: Fibonacci Numbers, The Dow
Theory, Elliott Wave Principles; Kondratev Wave Theory, Chaos Theory, Neutral
Networks.
7. What are the tools of technical analysis? Explain in detail.
8. Write a note on charting as a technical tool: types of charts and important chart patterns.

9. What do you mean by exponential moving average (EMA)?
10. Explain briefly linear weighted average.
11. Define and explain moving average convergence divergence (MACD).
12. Write a note on major uses of moving averages.
13. What are the technical analysis indicators and oscillators?

14. Define Aroon oscillator.
15. Write a note on relative strength index.
16. What are the limitations of charts and criticisms of technical analysis?

Answers: Self Assessment

1. Technical 2. Market Movements

3. Investors 4. Fundamental
5. Breakout 6. Fibonacci
7. Russian 8. Neutral
9. Technicians 10. Dow

11. Charts 12. Simple

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