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Lesson Posted 19 hrs ago Financial Planning/Taxation Exam Coaching/CA Coaching Exam Coaching/CMA Coaching +1 Exam Coaching/Company Secratary (CS) Coaching less

Basis Of Charge Of GST

Expert Coaching Classes

Expert Coaching Classes is the foremost establishment for students pursuing the Chartered Accountancy...

The basis of ‘charge of tax’ as per any law is the ‘taxable event’. In case of GST, the ‘taxable event’ is the supply of goods or services. Supply of goods or services may be divided into 2 categories: Intra-State Supplies Inter-State Supplies. Intra-State Supplies:... read more

The basis of ‘charge of tax’ as per any law is the ‘taxable event’. In case of GST, the ‘taxable event’ is the supply of goods or services.

Supply of goods or services may be divided into 2 categories:

  1. Intra-State Supplies
  2. Inter-State Supplies.

Intra-State Supplies: Intra-State Supplies cover the supply of goods and services where the location of the supplier and the place of supply are in the same State or Union Territory. The GST levied on Intra-State Supplies comprises of: CGST (Central GST) and SGST (State GST) / UTGST (Union Territory GST).

It is to be noted that there is single legislation, CGST Act, 2017, for levying CGST.  Whereas Union Territories without State legislatures (Andaman and Nicobar Islands, Lakshadweep, Dadra and Nagar Haveli, Daman and Diu and Chandigarh) are governed by UTGST Act, 2017 for levying UTGST. States and Union territories with their own legislatures (Delhi and Puducherry) have their own GST legislation for levying SGST.

Inter-State Supplies: Inter-State Supplies cover the supply of goods and services where services where the location of the supplier and the place of supply are in: (a). Two different States (b). Two different Union Territories (c). A State and a Union Territory. The GST levied on Intra-State Supplies comprises of IGST (Integrated Goods and Service Tax).  It is to be noted that IGST is approximately the sum total of CGST and SGST/UTGST.

In case of goods Imported into India, IGST is levied as per section 3 of the Customs Tariff Act, 1975 on the value as determined under the said Act.

Rates: In case of CGST the rates of tax are the rates as notified by the Government. (Maximum rate of CGST is 20%). In case of IGST the rate are approximately CGST rate + SGST/UTGST rate. (Maximum rate of IGST is 40%).

Supplies outside the purview of GST: The supply of alcoholic liquor for human consumption is outside the purview of CGST/UTGST/SGST/IGST. Whereas CGST/UTGST/SGST/IGST on supply of the following items is to be levied w.e.f. a notified date:

  • Petroleum crude.
  • High speed diesel.
  • Motor spirit (commonly known as petrol).
  • Natural gas and.
  • Aviation turbine fuel.

Note: GST is to be collected and paid by a Taxable Person (as defined as per the act). The Value for the levy of the tax will be the transaction value under Section 15 of the act.

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Lesson Posted 18 hrs ago Financial Planning/Stock Market Trading

Benefits Of Trading

Kunal Kishore

Intelligence7 will help in every step to make you a professional trader in every suitable way to Grow...

There are many benefits of stock trading and what you should take to stock trading. With no constraints of time, educational qualifications or investments, one cannot find any another business quite like this. Work full time or part time, you can be a professional or a housewife, advantages of stock... read more

There are many benefits of stock trading and what you should take to stock trading. With no constraints of time, educational qualifications or investments, one cannot find any another business quite like this. Work full time or part time, you can be a professional or a housewife, advantages of stock trading are too good that you cannot ignore. Regardless of whether you’re an experienced stock trader or new to stock trading, there are many benefits of stock trading.

1. Work from Anywhere:

Computer and internet has promoted stock trading and taken the markets to a new level. Now you can trade in stocks from the comfort of your home/office. Stock trading is just a click of your mouse on System. Make money even at home along with your family life. This is one of the best stock trading benefit.

2. No Brokerage:

Those days are went when you were at the mercy of few stock brokers who would charge hefty large commissions on your trade. With the advent of computers and internet, myriads of stock brokerage firms have mushroomed all over the world. Competing with each other to get the maximum clients, they offer low commissions, latest trading technologies and other facilities to attract clients. No brokerage is one of the main benefits of stock trading.

3. Complete freedom:

With hundreds of stocks to choose from, you have the complete freedom to invest in any stock you like. You can be your own master. Do your own research and make your own decisions.

4. No time bar:

Another advantage of stock trading is that it has removed all time constraints and restrictions. You can trade stocks any time of the day and night at your convenience.

5. Make money in minutes:

You can make a lot of money within a matter of minutes, if you are well educated about the trends in stock market. The time it takes to execute the trade online is the same as just clicking your mouse.

6. No investment limit:

Another main benefit of stock trading is that you are not bound to any investment thresholds. You can start trade in a stock with as low or as high of an amount that your pocket allows.

7. Quick returns:

Unlike any other business, in stock trading you do not have to wait for a long time to get your returns. Plus there are no hassles of advertising your goods or alluring the customers by offering attractive schemes.

8. No experience required:

One of the other stock trading benefit is that you do not require any formal education or experience. One just needs to collect as much information to become a little stock trade savvy. With time and experience, anyone can initiating their way to stock trading. Start making money from day one.

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Lesson Posted 6 days ago Financial Planning/Taxation

An Introduction To GST

Expert Coaching Classes

Expert Coaching Classes is the foremost establishment for students pursuing the Chartered Accountancy...

Gst or Goods And Services Tax is a form of Indirect Tax. Before we understand what GST is, we must understand the differences between direct and indirect taxes. Direct Taxes Vs Indirect Taxes: Tax can be defined as an obligatory contribution paid to the Government, which, in turn, provides public services... read more

Gst or Goods And Services Tax is a form of Indirect Tax. Before we understand what GST is, we must understand the differences between direct and indirect taxes. 

Direct Taxes Vs Indirect Taxes: Tax can be defined as an obligatory contribution paid to the Government, which, in turn, provides public services to the people. In India, taxes can be broadly classified as Direct Taxes and Indirect Taxes.

Direct Taxes:

  • The burden of tax is on the taxpayer and cannot be passed on.
  • Tax is paid directly to the Government.
  • Direct Taxes are Progressive in nature: Poor do not feel the burden of tax.
  • Tax is levied on Income not Consumption;
  • Income Tax comes under the purview of Direct Taxes.

Indirect Taxes:

  • The burden or the incidence of tax is passed on in stages, and is finally borne by the consumer.
  • At each stage, tax is paid to the Government, wherein, the taxpayer collects his tax debt from the next party.
  • The final customer pays the actual tax.
  • Indirect taxes are regressive in nature poor may feel the burden of tax.
  • These are taxes on Consumption and not on Income.
  • GST comes under the purview of Indirect Taxes.

GST is applicable on the “supply” of services or goods as opposed to the earlier concept of taxation on the manufacture of goods (Excise duty); sale of goods (Sales tax); or providing of service (Service Tax).

GST is a destination-based tax structure unlike the origin-based structure that existed previously. In order to implement GST, a dual GST system has been adopted which is imposed concurrently by the Centre and States.

As per the dual GST system, Goods and services are simultaneously taxed under GST by the Centre and States. GST extends to whole of India including the State of Jammu and Kashmir.

GST comprises of:

  • Central Goods and Service Tax (CGST): Levied and collected by Central Government.
  • State Goods and Service Tax (SGST): Levied and collected by State Governments/Union Territories with State Legislatures, on intra-State supplies of taxable goods and/or services.
  • Union Territory Goods and Service Tax (UTGST): Levied and collected by Union Territories without State Legislatures, on intra-State supplies of taxable goods and/or services. 
  • Integrated Goods and Service Tax (IGST): Levied by Central Government on all Inter-State supplies.
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Lesson Posted on 16 Feb Financial Planning/Stock Market Investment

Meaning Of Derivative

BHAVANI PRASAD MADDALA

I have been giving training's and advisory services in the stock markets since 15 years and I am Certified...

What is a 'Derivative'? A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most... read more

What is a 'Derivative'?

A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. 

Derivatives can either be traded over-the-counter (OTC) or on an exchange. OTC derivatives constitute the greater proportion of derivatives in existence and are unregulated, whereas derivatives traded on exchanges are standardized. OTC derivatives generally have greater risk for the counterparty than do standardized derivatives.

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Lesson Posted on 16 Feb Financial Planning/Stock Market Investment

Equity Market

BHAVANI PRASAD MADDALA

I have been giving training's and advisory services in the stock markets since 15 years and I am Certified...

The market in which shares are issued and traded, either through exchanges or over-the-counter markets. Also known as the stock market, it is one of the most vital areas of a market economy because it gives companies access to capital and investors a slice of ownership in a company with the potential... read more

The market in which shares are issued and traded, either through exchanges or over-the-counter markets. Also known as the stock market, it is one of the most vital areas of a market economy because it gives companies access to capital and investors a slice of ownership in a company with the potential to realize gains based on its future performance. 

Breaking Down 'Equity Market':

Equity markets are the meeting point for buyers and sellers of stocks. The securities traded in the equity market can be either public stocks, which are those listed on the stock exchange, or privately traded stocks. Often, private stocks are traded through dealers, which is the definition of an over-the-counter market.

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Lesson Posted on 16 Feb Financial Planning/Stock Market Investment

Commodity

BHAVANI PRASAD MADDALA

I have been giving training's and advisory services in the stock markets since 15 years and I am Certified...

What is a 'Commodity'? A commodity is a basic good used in commerce that is interchangeable with other commodities of the same type; commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform... read more

What is a 'Commodity'?

A commodity is a basic good used in commerce that is interchangeable with other commodities of the same type; commodities are most often used as inputs in the production of other goods or services. The quality of a given commodity may differ slightly, but it is essentially uniform across producers. When they are traded on an exchange, commodities must also meet specified minimum standards, also known as a basis grade.

Breaking Down 'Commodity':

The basic idea is that there is little differentiation between a commodity coming from one producer and the same commodity from another producer. A barrel of oil is basically the same product, regardless of the producer. By contrast, for electronics merchandise, the quality and features of a given product may be completely different depending on the producer. Some traditional examples of commodities include grains, gold, beef, oil and natural gas. More recently, the definition has expanded to include financial products, such as foreign currencies and indexes. Technological advances have also led to new types of commodities being exchanged in the marketplace. For example, cell phone minutes and bandwidth.

Commodities Buyers and Producers:

The sale and purchase of commodities is usually carried out through futures contracts on exchanges that standardize the quantity and minimum quality of the commodity being traded. For example, the Chicago Board of Trade stipulates that one wheat contract is for 5,000 bushels and also states what grades of wheat can be used to satisfy the contract.

There are two types of traders that trade commodity futures. The first are buyers and producers of commodities that use commodity futures contracts for the hedging purposes for which they were originally intended. Theses traders actually make or take delivery of the actual commodity when the futures contract expires. For example, the wheat farmer that plants a crop can hedge against the risk of losing money if the price of wheat falls before the crop is harvested. The farmer can sell wheat futures contracts when the crop is planted and guarantee a predetermined price for the wheat at the time it is harvested.

Commodities Speculators:

The second type of commodities trader is the speculator. These are traders who trade in the commodities markets for the sole purpose of profiting from the volatile price movements. Theses traders never intend to make or take delivery of the actual commodity when the futures contract expires. Many of the futures markets are very liquid and have a high degree of daily range and volatility, making them very tempting markets for intraday traders. Many of the index futures are used by brokerages and portfolio managers to offset risk. Also, since commodities do not typically trade in tandem with equity and bond markets, some commodities can also be used effectively to diversify an investment portfolio.

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Lesson Posted on 16 Feb Financial Planning/Stock Market Investment

Supply And Demand Theory

BHAVANI PRASAD MADDALA

I have been giving training's and advisory services in the stock markets since 15 years and I am Certified...

Supply schedule: A supply schedule is a table that shows the relationship between the price of a good and the quantity supplied. Under the assumption of perfect competition, supply is determined by marginal cost. That is, firms will produce additional output while the cost of producing an extra unit... read more

Supply schedule:

A supply schedule is a table that shows the relationship between the price of a good and the quantity supplied. Under the assumption of perfect competition, supply is determined by marginal cost. That is, firms will produce additional output while the cost of producing an extra unit of output is less than the price they would receive.

A hike in the cost of raw goods would decrease supply, shifting costs up, while a discount would increase supply, shifting costs down and hurting producers as producer surplus decreases.

By its very nature, conceptualizing a supply curve requires the firm to be a perfect competitor (i.e. to have no influence over the market price). This is true because each point on the supply curve is the answer to the question "If this firm is faced with this potential price, how much output will it be able to and willing to sell?" If a firm has market power, its decision of how much output to provide to the market influences the market price, therefore the firm is not "faced with" any price, and the question becomes less relevant.

Economists distinguish between the supply curve of an individual firm and between the market supply curve. The market supply curve is obtained by summing the quantities supplied by all suppliers at each potential price. Thus, in the graph of the supply curve, individual firms' supply curves are added horizontally to obtain the market supply curve.

Economists also distinguish the short-run market supply curve from the long-run market supply curve. In this context, two things are assumed constant by definition of the short run: the availability of one or more fixed inputs (typically physical capital), and the number of firms in the industry. In the long run, firms have a chance to adjust their holdings of physical capital, enabling them to better adjust their quantity supplied at any given price. Furthermore, in the long run potential competitors can enter or exit the industry in response to market conditions. For both of these reasons, long-run market supply curves are generally flatter than their short-run counterparts.

The determinants of supply are:

  • Production costs: how much a goods costs to be produced. Production costs are the cost of the inputs; primarily labor, capital, energy and materials. They depend on the technology used in production, and/or technological advances.

  • Firms' expectations about future prices.

  • Number of suppliers.

Demand schedule:

A demand schedule, depicted graphically as the demand curve, represents the amount of some goods that buyers are willing and able to purchase at various prices, assuming all determinants of demand other than the price of the good in question, such as income, tastes and preferences, the price of substitute goods, and the price of complementary goods, remain the same. Following the law of demand, the demand curve is almost always represented as downward-sloping, meaning that as price decreases, consumers will buy more of the good.

Just like the supply curves reflect marginal cost curves, demand curves are determined by marginal utility curves. Consumers will be willing to buy a given quantity of a good, at a given price, if the marginal utility of additional consumption is equal to the opportunity cost  determined by the price, that is, the marginal utility of alternative consumption choices. The demand schedule is defined as the willingness and ability of a consumer to purchase a given product in a given frame of time.

It is aforementioned that the demand curve is generally downward-sloping, and there may exist rare examples of goods that have upward-sloping demand curves. Two different hypothetical types of goods with upward-sloping demand curves are Giffen goods (an inferior but staple good) and Veblen goods (goods made more fashionable by a higher price).

By its very nature, conceptualizing a demand curve requires that the purchaser be a perfect competitor—that is, that the purchaser has no influence over the market price. This is true because each point on the demand curve is the answer to the question "If this buyer is faced with this potential price, how much of the product will it purchase?" If a buyer has market power, so its decision of how much to buy influences the market price, then the buyer is not "faced with" any price, and the question is meaningless.

Like with supply curves, economists distinguish between the demand curve of an individual and the market demand curve. The market demand curve is obtained by summing the quantities demanded by all consumers at each potential price. Thus, in the graph of the demand curve, individuals' demand curves are added horizontally to obtain the market demand curve.

The determinants of demand are:

  1. Income.

  2. Tastes and preferences.

  3. Prices of related goods and services.

  4. Consumers' expectations about future prices and incomes that can be checked.

  5. Number of potential consumers.

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Lesson Posted on 16 Feb Financial Planning/Stock Market Investment

Volumes

BHAVANI PRASAD MADDALA

I have been giving training's and advisory services in the stock markets since 15 years and I am Certified...

In capital markets, volume, or trading volume, is the amount (total number) of a security (or a given set of securities, or an entire market) that were traded during a given period of time. In the context of a single stock trading on a stock exchange, the volume is commonly reported as the number of... read more

In capital markets, volume, or trading volume, is the amount (total number) of a security (or a given set of securities, or an entire market) that were traded during a given period of time. In the context of a single stock trading on a stock exchange, the volume is commonly reported as the number of shares that changed hands during a given day. The transactions are measured on stocks, bonds, options contracts, futures contracts and commodities.

The average volume of a security over a longer period of time is the total amount traded in that period, divided by the length of the period. Therefore, the unit of measurement for average volume is shares per unit of time, typically per trading day

Significance:

Trading volume is usually higher when the price of a security is changing. News about a company's financial status, products, or plans, whether positive or negative, will usually result in a temporary increase in the trade volume of its stock.

Shifts in trade volume can make observed price movements more significant. Higher volume for a stock is an indicator of higher liquidity in the market. For institutional investors who wish to sell a large number of shares of a certain stock, lower liquidity will force them to sell the stock slowly over a longer period of time, to avoid losses due to slippage.

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Lesson Posted on 16 Feb Financial Planning/Stock Market Investment

Most Important Of Trading Psychology And Discipline

BHAVANI PRASAD MADDALA

I have been giving training's and advisory services in the stock markets since 15 years and I am Certified...

There are many characteristics and skills required by traders in order for them to be successful in the financial markets. The ability to understand the inner workings of a company, its fundamentals and the ability to determine the direction of the trend are a few of the key traits needed, but not one... read more
There are many characteristics and skills required by traders in order for them to be successful in the financial markets. The ability to understand the inner workings of a company, its fundamentals and the ability to determine the direction of the trend are a few of the key traits needed, but not one of these is as important as the ability to contain emotions and maintain discipline.

i. Trading Psychology: The psychological aspect of trading is extremely important, and the reason for that is fairly simple: A trader is often darting in and out of stocks on short notice, and is forced to make quick decisions. To accomplish this, they need a certain presence of mind. They also, by extension, need discipline, so that they stick with previously established trading plans and know when to book profits and losses. Emotions simply can't get in the way.

ii. Understanding Fear: When a trader's screen is pulsating red (a sign that stocks are down) and bad news comes about a certain stock or the general market, it's not uncommon for the trader to get scared. When this happens, they may overreact and feel compelled to liquidate their holdings and go to cash or to refrain from taking any risks. Now, if they do that they may avoid certain losses - but they also will miss out on the gains.

Traders need to understand what fear is simply a natural reaction to what they perceive as a threat (in this case perhaps to their profit or money-making potential). Quantifying the fear might help. Or that they may be able to better deal with fear by pondering what they are afraid of, and why they are afraid of it.

Also, by pondering this issue ahead of time and knowing how they may instinctively react to or perceive certain things, a trader can hope to isolate and identify those feelings during a trading session, and then try to focus on moving past the emotion. Of course this may not be easy, and may take practice, but it's necessary to the health of an investor's portfolio.

iii. Greed Is Your Worst Enemy: There's an old saying on Wall Street that "pigs get slaughtered." This greed in investors causes them to hang on to winning positions too long, trying to get every last tick. This trait can be devastating to returns because the trader is always running the risk of getting whipsawed or blown out of a position.

iv. Greed is not easy to overcome: That's because within many of us there seems to be an instinct to always try to do better, to try to get just a little more. A trader should recognize this instinct if it is present, and develop trade plans based upon rational business decisions, not on what amounts to an emotional whim or potentially harmful instinct.

v. The Importance of Trading Rules: To get their heads in the right place before they feel the emotional or psychological crunch, investors can look at creating trading rules ahead of time. Traders can establish limits where they lay out guidelines based on their risk-reward relationship for when they will exit a trade - regardless of emotions. For example, if a stock is trading at $10/share, the trader might choose to get out at $10.25, or at $9.75 to put a stop loss or stop limit in and bail.

Of course, establishing price targets might not be the only rule. For example, the trader might say if certain news, such as specific positive or negative earnings or macroeconomic news, comes out, then he or she will buy (or sell) a security. Also, if it becomes apparent that a large buyer or seller enters the market, the trader might want to get out.

Traders might also consider setting limits on the amount they win or lose in a day. In other words, if they reap an $X profit, they're done for the day, or if they lose $Y they fold up their tent and go home. This works for investors because sometimes it is better to just "go on take the money and run," like the old Steve Miller song suggests even when those two birds in the tree look better than the one in your hand.

vi. Creating a Trading Plan: Traders should try to learn about their area of interest as much as possible. For example, if the trader deals heavily and is interested in telecommunications stocks, it makes sense for him or her to become knowledgeable about that business. Similarly, if he or she trades heavily in energy stocks, it's fairly logical to want to become well versed in that arena.

To do this, start by formulating a plan to educate yourself. If possible, go to trading seminars and attend sell-side conferences. Also, it makes sense to plan out and devote as much time as possible to the research process. That means studying charts, speaking with management (if applicable), reading trade journals or doing other background work (such as macroeconomic analysis or industry analysis) so that when the trading session starts the trader is up to speed. A wealth of knowledge could help the trader overcome fear issues in itself, so it's a handy tool.

In addition, it's important that the trader consider experimenting with new things from time to time. For example, consider using options to mitigate risk, or set stop losses at a different place. One of the best ways a trader can learn is by experimenting - within reason. This experience may also help reduce emotional influences.

Finally, traders should periodically review and assess their performance. This means not only should they review their returns and their individual positions, but also how they prepared for a trading session, how up-to-date they are on the markets and how they're progressing in terms of ongoing education, among other things. This periodic assessment can help the trader correct mistakes, which may help enhance their overall returns. It may also help them to maintain the right mindset and help them to be psychologically prepared to do business. 

Bottom Line, it's often important for a trader to be able to read a chart and have the right technology so that their trades get executed, but there is often a psychological component to trading that shouldn't be overlooked. Setting trading rules, building a trading plan, doing research and getting experience are all simple steps that can help a trader overcome these little mind matters.

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Lesson Posted on 16 Feb Financial Planning/Stock Market Investment

Open Interest And Volume Theory

BHAVANI PRASAD MADDALA

I have been giving training's and advisory services in the stock markets since 15 years and I am Certified...

Open interest is an indicator often used by traders to confirm trends and trend reversals for both the futures and options markets. Open interest represents the total number of open contracts on a security. Here we'll take a look at the importance of the relationship between volume and open interest... read more
Open interest is an indicator often used by traders to confirm trends and trend reversals for both the futures and options markets. Open interest represents the total number of open contracts on a security. Here we'll take a look at the importance of the relationship between volume and open interest in confirming trends and their impending changes. (Check out an introduction to the concept of open interest in Intro To Open Interest In The Futures Market.)

Volume and Open Interest:
Used in conjunction with open interest, volume represents the total number of shares or contracts that have changed hands in a one-day trading session in the commodities or options market. The greater the amount of trading during a market session, the higher the trading volume. A new student to technical analysis can easily see that the volume represents a measure of intensity or pressure behind a price trend. The greater the volume, the more we can expect the existing trend to continue rather than reverse.

Technicians believe that volume precedes price, which means that the loss of either upside price pressure in an uptrend or downside pressure in a downtrend will show up in the volume figures before presenting itself as a reversal in trend on the bar chart. The rules that have been set in stone for both volume and open interest are combined because of their similarity; however, having said that, there are always exceptions to the rule.

General Rules for Volume and Open Interest:
The chart below summarize the rules for volume and open interest.

                                         112002_1.gif
Figure 1: General rules for volume and open interest

So, price action increasing in an uptrend and open interest on the rise is interpreted as new money coming into the market (reflecting new buyers); this is considered bullish. Now, if the price action is rising and the open interest is on the decline, short sellerscovering their positions are causing the rally. Money is therefore leaving the marketplace; this is a bearish sign.

 

If prices are in a downtrend and open interest is on the rise, chartists know that new money is coming into the market, showing aggressive new short selling. This scenario will prove out a continuation of a downtrend and a bearish condition. Lastly, if the total open interest is falling off and prices are declining, the price decline is likely being caused by disgruntled long position holders being forced to liquidate their positions. Technicians view this scenario as a strong position technically because the downtrend will end once all the sellers have sold their positions. The following chart therefore emerges:

                                          112002_2.gif
Figure 2: Bullish and bearish signs according to open interest

When open interest is high at a market top and the price falls off dramatically, this scenario should be considered bearish. In other terms, this means that all of the long position holders that bought near the top of the market are now in a loss position, and their panic to sell keeps the price action under pressure.

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