The stock market can be a complex and intimidating place, especially for beginners. There are many terms and concepts that can be confusing, making it difficult to understand how things work. This blog post aims to demystify some of the most basic stock market terms, so you can feel more confident navigating the investment world. 1. P/E Ratio (Price-to-Earnings Ratio) The P/E ratio is a metric used to compare a company's stock price to its earnings per share (EPS). It essentially tells you how much you are paying for each rupee of a company's earnings. A higher P/E ratio can indicate that a stock is more expensive relative to its earnings, while a lower P/E ratio can indicate that a stock is cheaper. However, it is important to remember that the P/E ratio is just one factor to consider when evaluating a stock, and it should be compared to similar companies within the same industry. 2. Dividends Dividends are a portion of a company's profits that are paid out to its sharehol
The Relative Strength Index (RSI) is a popular technical analysis indicator used by traders to identify potential entry and exit points in the market. It was developed by J. Welles Wilder Jr. in 1978 and is widely used in financial markets worldwide. The RSI is a momentum oscillator that measures the magnitude of recent price changes to evaluate whether an asset is overbought or oversold. The RSI ranges from 0 to 100 and is calculated based on the average gain and average loss of the asset's price over a specific period. The default time period for the RSI is 14, but traders can adjust this based on their trading style and preference. The RSI is typically calculated using closing prices, but traders can also use other price data such as high and low prices. The RSI indicator is plotted as a line graph with values ranging from 0 to 100. When the RSI is above 70, it is considered overbought, indicating that the asset may be due for a price correction or reversal. Conversely, when th