aca_trader said:
Hi Murthy!
In my humble opinion, this is the very reason why LTP should be given more importance and should be taken as real close because this is the price ultimately to which the buyers and sellers have agreed to. In case, the last 30 minutes are very volatile, the gap between LTP & Close may be very significant and may not make the analysis that helpful.
However, there is another & practical side to it and that is if most of the traders take the 30-minute average close as close, they would most probably take their decision based upon this close and hence a person treating LTP as close may not be moving in sync with the market thereby increasing the risk.
Best Regards,
--Ashish
hi ashish,
yes i agree, the LTP is not given the importance as, probably it deserves, at least, as far as next day morning's trading is concerned. most of the TA software do not take the LTP into consideration at all. further, the LTP is more often inflenced by end of day sentiments, and is more often less than the close and is easily manipulatable, particularly in low volume stocks.
for example, on today's data, following are the observations on the stocks traded on NSE.
the two stocks with the highest & lowast ratios are given below.
total stocks (EQ series) traded today= 801
REVL qty=1094 Last=380.00 CL=404.30 Last/CL 94% (Lowest)
VIPIND qty=22102 Last=130.00 CL=118.25 Last/CL= 110% (Highest)
of course, such large variations are more likely in low volume stocks.
changes in Close prices stand more to logic than changes in LTP.
30 mins correspond to about 9 % of the total traded time.
if Close price is determined by the weighed average price of the last say, 1 or 2 % of the day's traded volume, it may be more meaningful. this may bring the best of both methods but it is never done anywhere like that.
anyway thanks for opening the highly stimulating topic, though hypothetical.
murthymsr