If you’re interested to join the stock market, there are a lot of things you need to know before you take the plunge and invest in stocks. After the shares are listed, an investor can trade by opening a broking account with a registered stock broker and he can follow the usual procedure of placing an order for sale of the number of shares he wants to sell and also fix the price at which he wants them sold.
Similarly stock quote presentation of different sources may also vary from single ‘last price’ value to full details including the price change of the day, the trading range of the day, 52 week (one year) range, the volume traded, the average volume of trade, market capitalization, earnings per share (EPS), dividend yield, P/E ratio, closing price, highest price of the day, and lowest price of the day.
The agreement enforces certain rules and regulations on the company following the listing procedure and in case of violations of these, the stock exchanges have the right to impose monetary penalty against the concerned company and if needed may also decide to de-list the shares.
You collect data (stock prices) and then that data is plotted so you can see the overall big picture of what is going on. There are also several tools (technical indicators) that you can use to help you read stock charts, however they are beyond the scope of this lesson.
In order to prevent these kind of misleading signals from appearing on our charts, whenever a 2-for-1 split occurs, we divide all of the historical prices for the stock by 2 and multiply all of the historical volume by 2 so that the bars prior to the split match up smoothly with the bars that appear after the split.