How the War Affects the Stock Market in a Negative Way?

You might astonish how war can affect the stock market, but we can explain with recent events. Well, they both are entirely two different things, but war is one the crucial issue when it comes to making money in the economy. The stock market reacts differently to different variables, but war can entirely make it shut down. For instance, in the time of World War 1, the stock market closed for four months throughout the world after the war started.

Cyber War Monitoring

No matter which part of the world whether it is US-Korea, US-Iraq, India-Pakistan, or any other country have conflicts or have a war-like situation, it does affect the stock market negatively. In the time of the war, people start selling their bonds and shares and make fewer investments as there is a state of instability, and they start investing in companies like weapons and gun powder, etc.

To determine the influence of the war, let’s look into how the wars that have happened recently and have shaken up the stock market. Many people have the impression that the recession of the 2000s started with terror attacks on 11 September 2001, because after that incident the events have dropped down sharply.

North Korea Testing Missiles

Geopolitical tensions occur due to North Korea, which may trigger a war-like situation that eventually impacts other stock markets across the globe. According to the report, if North Korea tests its ballistic missile, then there will be a sharp decline in its stock market.

India-Pakistan Air Conflict

There is no doubt that the stock market has affected by war jitters. In the time of peace, we both neighbors have a strong rally, but the market immediately moves to worse because of Indo-Pak Air Strike, and there had been a decline of 200 points in Sensex and 10800 falls in Nifty. While on the other side, Karachi gets the shock of a 4% loss in its stock Exchange tank. Even after the Kargil war, there was a decline in the stock market of both countries.

Overall Trend

Well, wars are of different categories and make sure which one you want to highlight. A war in some cases can be beneficial for the economy take, for instance, the US markets, when the United States decided to go back to Iraq in 2003 we’d currently been in a 2-year bear market, and once the invasion of Iraq started, the markets began to bullish again. And we went on to have a 4-year bull market, the World War, which is a whole different ball game, and it was generally bad for economies particularly for those involved in the actual war. For instance, look at Germany, it was only between 1933 and mid-1939 that the country prospered, but once the war declared in early fall of 1939, their economic prosperity was no more. Now on the other hand, once a war is over this generally generates a new bull market as hope comes back to investors.

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Technical Indicators of Retail Traders

A professional approach and rich quick mentality, the delicate blend of both is required to make the outstanding trading setup for retail traders. Every successful trader has a different style and mind setup. But in the end, the art is ultimately left up to you, and we can only help you with science.

Trading Indicators and Tools

The most successful trading setup includes price action & a mix of 5 different tools which are listed as follows:

  • Trend indicator

The best trading setup for retail traders is using trend indicator that means not going against the trend, and it makes the job more difficult. It’s preferable to pick moving average to get an overall idea of the Trend.

      1. Try to use multiple moving averages to get a good understanding of small, mid and long term trend.
      2. Using Gann recommended moving averages will help you further.
  • Momentum indicator

In retail setup, you might have heard that trend is your friend, but not all the time, because it’s only your pal till it lasts. Trend’s trading is quite easy, but knowing whether it would stay consistent or not is the essential aspect of the trading setup. We may have seen some beginners complaining about reversing back of trends after entering the business. Therefore, checking the trend’s strength is more crucial momentum indicator that works best for the job.

  • Multi-time frame charts

The use of multiple times frames makes your trading setup much more efficient.

  • Time cycle tool

While considering the price factor, most traders neglect the essential element, which is equally responsible for stock movement is a time cycle. Stock market charts consist of two axes: Price is plotted on the x-axis, while time plotted on the y-axis. Professional traders also take into account time axis which gets them more than 50% edge on retail traders. Time-action is as much crucial as price action.

  • Support/ Resistance levels

To plot this, one should use Fibonacci levels and look for its confluence with Gann levels or pivot points. Higher the confluence of multiple levels, support or resistance level will be stronger.

Moving Average Example

Please, practice these concepts by selecting only 3 to 5 stocks, and keep paper trading in them daily. You will feel amazed at how these tools work like wonder.

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Top 10 Best Stock Brokers India

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Top 10 Best Stock Brokers India

Vote For Your Favourite Broker

Know India's best stock broker according to public votes. Stockbroking is being very popular n India because of the country's GDP growth. Its not easy to pick the best stock broker by considering the facts safety, security, platforms, support and other features. Choose your favourite two broker houses and see the result.

1. ICICI Direct

Being a leader with a large customer base in India, even though their brokerage is high, trust is more important in investing. That’s why ICICI still a leader in broker services.

2. HDFC Securities

By considering the investments and revenue, HDFC is among top broker in India

3. Zerodha

It’s growing fastly because of its simplicity and discount brokerages. Open Account Now

4. Sharekhan

Sharekhan struggled after the 2009 recession, then now again active with their business

5. Axis Securities

Axis is getting best reviews recently and their platform is the best in the industry to trade

6. Kotak Securities

With 3 in 1 facilities and improvements in banking made it to a competitor for the above brokers

7. Angel Broking

Active in their business, having lots of franchisees in India

8. Motilal Oswal

Best in research and advisory provides best recommendations for investments

9. India Infoline

IIFL is popular from old days, it is huge no of customers

10. Karvy Stock Broker

Headquartered in Hyderabad, India. Karvy Group is one of the leading financial services conglomerates.

This list is temporary, please vote for your favourite stockbroker and know top 10 best broking firms

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