Hi Simon, could you explain how one determines the value of a share price please. I recently attended a Candle Charting course and would like know where I could download the course material. Thanks in advance.
Bev there are many ways to determine a share price, investors use calculations like sum of the parts or discount cash flow models (DCF). Traders use charts as they feel the markets show the true value of a price. Both methods have their problems, like a DCF uses a lot of assumptions that dont necessarily pan out. With trading you work with probabilities (ie not guarantees - hence stop losses). But the other guys have answered it the best - its worth what other people are prepared to buy it for.
there is no exact science and sometimes a major move is just short term market forces that can over react.These forces are not normally like this forever and over time the true value of the company will be shown and the fundamentals and could argue technical will reflect this(over the long term most likely)
I guess Bev's question is a question that we all what an answer for. This applies to the long term gurus too. The question could be, when is the right time to buy a share and when is the right time to sell a share. I agree with you that the price at that moment is the price, how the market values the share at that moment. What if there is a fund manager with major holding in the share and he/she is upset or excited about that share and he/she is emotionally driving the share all the way beyond the realistic levels. I am thinking that we all buy with a hope of a gain but ones needs some sort of a green light to say yes, I might be 60% right
Something like a P/E ratio. A share bottoming out, MA. It's more of a question that was posed about the OST TA course and the method of presentation whereby someone proposed that the course/seminar be more interactive
Take SOL for example. I have seen posts whereby someone said that it is time to go long with SOL and when I looked at the chart, to me SOL was hoovering in the overbought medium term levels. The trend was at 3 year resistance level. How will I say as a trader, there is a potential for this thing to go up say 10%? Not much to ask for but think a quick screening method.