The secret of stock quotes reading: 11+ Secret techniques will make you a pro trader
Stocks Quotes is the only screener which will tell you that exact scenario of any trading instruments. It will always disclose the best possible opportunity for us depending on Buyers Demand and Sellers Supply and their activities correctly.
But some times due to lack of knowledge or negligence we ignore it otherwise this tape reading, tick reading techniques will make us a successful trader in Intraday trading no doubt in it.
Many Successful traders know these secrets which are kept in it and use wisely while trading in Intraday in Indian Stock market.
There are many possible ways to read and interpret live stock quotes. We will Discuss all those secrets and learn the various methods of way How to read a stock quote table. Today we will disclose “Secret of Stock quotes reading,“ which will make you like a pro trader.
Before proceeding further, we need to know first:-
What are stock quotes?
While live session stocks exchanges show real-time stocks price, which is quoted on the Exchange as the stocks are brought and sold throughout sessions. A stocks quote is the price of shares which
is quoted on the exchange by which Buyers and sellers make their decisions based on these stocks quotes. Stocks quotes also equipped with many other statistics.
In India, two major stock exchanges Like BSE and NSE Provide only Best five quotes BID & ASK/Offer Price along with Order number and quantity.
just Look at Bellow Image
It is Zerodha Kite quote dashboard. Many terminal many Broker provides a different way to display the Best five quotes.
Like Fyers have DOM feature enabled mood. Which is mostly called Market ladder?
Just look at it…
DOM – represent Depth of the Market have a special kind of easy to access order placement facility along with stocks quotes details, which will help you if you are an Intraday Trader.
It’s said that… The basic pattern is always the same.
In here it ‘s also no significant differences…
let us discuss how to read stocks quote like a pro trader.
Reading stocks quotes is called tick reading. Reading tick by ticks data on its best quotes dialog box will help you to make decisions taking a trade.
Here are a few observations which will help you a lot.
The left side of it called Bid, and right side of quote is called Ask or Offers . or You may take it as BUY – BID || ASK or SELL or Offer, it is denoted or displayed in many brokers platform in different nominations. But the meaning is the same.
Here we will take it as BID|| OFFERS.
Now in Intraday trading tick reading in the live quote is very important; it will help you place your order, and trend directions can find out from it.
Few observations of Reading quotes that We found during Intraday trading.
1. If offers quantity is enormous in volume but easily traded or executed in few moments and market price of any stocks goes up up and Up creating new highs means, the trend is up, and Some Big hand is started buying at market price.
2. If offers volume shows in Kite have big and easily traded then it can be seen price will jump within a few moments in upsides. As because Demand is too high than Supply and those who are participating in markets thinks that rate will be higher and higher due to many reasons they assume, or so they don’t give any chance to place the order to anyone, before that they accumulate that particular stocks are the market price.
3. If Bid price lower and lower and huge quantity is traded on market price, then it might be the signal of Huge supply has come, and the market price will be further down.
In that case, some Big hand started selling their holding, and demand decreases and Supply suddenly increases as Balance between Buyers and sellers and Demand -Supply has been affected, and it will further go down.
4. If Offer quantity suddenly decreases in best five quote box and few times it traded in lower volume or just slowed down execution rate in offers sections means Now the time has come to change its directions and it will start falling off that particular instruments.
This is happening because Sellers are selling their quantity at market price and placed bid order are getting executed in market price that was queued in systems, but offer set at a limit price still remained unchanged or slowed down executions its denote or sign of falling os stocks price.
5. Similar things happen while a buyer is buying at market price; therefore, in this scenario, the situation will be reversed, here executions of Buyers placed bid quantity will be slowed down.
6. Another important thing is that, if the set number of order with high volume is more than BID or offers either side will price move means if offers columns have lots more quantity with higher numbers of orders are executed then price will be move-in higher, but if its slowed down in executions or strangle then price will befall as many sellers are waiting with their massive volume of quantity wanting to sell it off.
And opposite things will happen if it happens in BID columns,
means price will make higher high if Bid quantity is waiting with a huge number of orders, but the cost will befall if bid quantity is executed with a huge volume of Bid orders as soon as it placed then the price will be fallen again.
Another few things to be noted or we should be kept in mind…
7. If the price is crossing Average price and instruments making a higher high, then it will go further ups.
8. If the price is trading bellow Avg price and making lower low, then it will create another fresh low or estimate will be down soon…
9. Last but not the lest If total Buyers(BID) are more than Total sellers(OFFERS) and the price is moving up, then it is an uptrend in directions, and might register another fresh new high means price of that particular instruments will be higher from the current market price.
And it will be reverse if total number os Buyers (BID) less than Sellers (offers) and price decreasing then it will make lower market price from current price.
10. O=H=L METHODS:-
FOR BUY or TAKING LONG POSITION
When to Buy Stocks? Open= Low methods or O=L
This O=H=L or OHL methods are ancient and traditional methods of trading.
In exchange, Millions of orders are passes through from it in microseconds, in various instruments are being traded within fractions of seconds.
But the Data or Stocks quotes When OPEN= LOW is seen, then one can go for Long or Buy those stocks. As demand increases than Supply imbalance between Demand and supply get Hampered due to this Price of that particular stocks goes ups.
This type of scenarios occurs when stocks get OVERSOLD, or Stocks price stand at Demand Zone or any positive news that drive market sentiments positive, and markets participants are
goes long or buy for this particular counter.
SELL OR FOR SHORT SELLINGS
IF price quotes displayed OPEN=HIGH OR O=H, then one can go with that particular stocks or instruments in Short Sell or Sell.
When Open Price is equal to the High price of that particular stocks
or instruments means Supply and Demand get this balance due to hefty supply means sellers are leaving this counter with selling off at huge volumes.
They assume that the price will fall more.
This type of scenario happens when the market faces tremendous resistance or Over Brought conditions or any bad news which drive the market on lower sides.
11. Average Price techniques:-
Some times When LTP traded Bellow from Average price One can Go Short or Sell mode and if LTP traded Above Avg price then Once can Go Long or Buy for this particular Stocks.
Stop loss will be Any Support for Long or Buy or From 0.75% from Avg price or whichever fit for the chart.
For short Stop, the loss will be any nearest resistance level or 0.75% from Avg price or whichever is suitable on charts.
12. Previous Close techniques:-
This also works wells. If Open price above the last close price then one should wait and watch for it at least 10-15 minutes If 10 minutes or 15 minutes candle Close above previous close price once should go for long with Stop loss of Previous bellow close.
In this scenario, once can observe rejections of the price of that particular candle in the lower frame like 3 minutes – 5 minutes, etc. If Price rejected from Bellow, the candle pattern in this scenario would be Hammers and spike of that candle patterns will be from bellow to above rejecting from lower price to push up into higher rate.
Before placing a trade, one should calculate risk and should have to maintain strict stop loss.
One should maintain a few points buffers in stop loss while placing orders. Some times operators of that particular stocks get hit the previous close and made low few points bellow from the last close, and then again they started accumulations of stocks buy which price go ups.
This is nothing but the just a game operators trapping games, and This is called bull trap, an integral part of the fight between Buyers and sellers, between Retails traders and Big boys
For short sells once can go for it if LTP price trade bellows previous day’s close price quite some times opening of the market at least 10-15 minutes. Ensuring that the amount not crossing high of prior day close can short from there. Once can take confirmations of candle spike which will be rejected from above and will from like a shooting star-like candle pattern.
For trade with levels, you can read this article which will help you a lot…..
I hope this will help read stocks quotes in corrects manners.
Best of luck, Happy and safe trading.