StockFetcher Forums · Filter Exchange · Volume Question<< >>Post Follow-up
sprdime
1 posts
msg #32134
Ignore sprdime
5/19/2004 10:43:29 PM

Hi
I am trying to better understand the Volume a share is experiencing. and few things are unclear about the supply and demand and also the accumulation distribution concept. Would appreciate anyone assistance with my questions.


Sprdime

When looking at a daily chart at the end of the trading day, letís say of a share that opened at 9.10 and close at 9.20 with total volume of 230,000k. Volume will be displayed as long bars depend on the volume, now my question is; what will be the meaning of a 70,000k volume at 12.30 at 9.14?
Is that means their was a large order to sell at that price or a large order to buy at that price or their was a stand off with accumulation of orders and they met?

My second question is how can I know or follow the average price cost with correlation to volume?
For example a share is trending up from 9.00 to 11.00 in 2 weeks, how can I figure what is the average price traders paid on the way to 11.00 with volume factored in.



robdavis
69 posts
msg #32868
Ignore robdavis
8/17/2004 1:31:23 AM

Sprdime,

> When looking at a daily chart at the end of the trading day, letís say of a share that opened at 9.10 and close at 9.20 with total volume of 230,000k. Volume will be displayed as long bars depend on the volume, now my question is; what will be the meaning of a 70,000k volume at 12.30 at 9.14?

It means of the 230,000 shares 70,000 shares traded hands (i.e. bought or sold) between 12:30 and 12:31 p.m. And this also means at 12:31 p.m. of that day the per share price was $9.14.

> Is that means their was a large order to sell at that price or a large order to buy at that price or their was a stand off with accumulation of orders and they met?

From the direction the price was moving at around 12:30 p.m. frequently you can guess what might have happened in that minute, i.e. if the majority of traders were buyers or sellers. But, generally speaking, those are the details charts are not meant to reveal. To get that kind of in-depth info, you need to get and look at "time and sales" info, also known as "prints".

> My second question is how can I know or follow the average price cost with correlation to volume? For example a share is trending up from 9.00 to 11.00 in 2 weeks, how can I figure what is the average price traders paid on the way to 11.00 with volume factored in.

If you want to do the math real precisely, you need to get in-depth info; you need to obtain and use "time and sales" info, also known as "prints". The prints will have all the details you need to figure out what prices traders paid on the way to $11.00, and how many shares they traded, and when, and if the traders were buyers or sellers.

If you just want a rough estimate of what the average price was that traders paid in that 2-week period, 1) you want to get 1-minute charts for that 2-week period, 2) for every minute of that chart in that 2-week period you want to multiply the per-minute volume by the per-minute average price, then 3) you want to add up all those (6.5 hrs * 60 min * 10 days =) 3,900 subtotals for that 2-week period, and then 4) you want to divide that total by the total volume of the same 2-week period.

I hope this helps.

Rob




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