Implication Of Volume In Day Trading

Hello friends,

I have absolutely no experience with ICICI Direct trading screen. But I feel it is similar to ODIN trading screen (which my broker has) as far as TBQ and TSQ and best five buyers and best five sellers are concerned. Upon that presumption I am making this post. Anyway, you can read it as my experience with ODIN trading screen.

1. You will go wrong if you go by total buy quantity (TBQ) and total sell quantity (TSQ) found at the bottom. It is highly misleading. Why? Because, you do not know AT WHAT PRICE many of those orders are pending and WHAT IS THE QUANTITY available at each price level. All that price and quantity you can see is only best five (both buyer and seller). Even here too, it can be misleading as one need not disclose full quantity. For example, if I am buying 100 shares, ON A MINIMUM I need to disclose 10 shares (i.e. 10% of the total quantity). That means I can disclose anywhere between 10 shares and 100 shares (but not more than 100 shares). So eventhough you are seeing best five buyer and seller, you are not aware of the exact quantity.

2. If this is the situation in best five, then what would be the situation in TBQ and TSQ? You know nothing about them. Many many orders will be resting at circuit levels (as stop loss orders), which will never be triggered. In particular many orders are being placed just to mislead the newbies to think that "Oh! there is demand for ten lakh shares (on the buy side) and seller is only one lakh share (on TSQ side). So price must rise today. Let me buy it" Actually majority of this buy order is placed at down circuit level for the day and the operator knows that it will not be triggered for the day. Further, there is NO INTENTION to buy these huge chunk of shares also. IT IS A FAKE ORDER. If at all the price begins to drop down steeply, just observe, how quickly all these buy orders get cancelled. Think of the reverse for the sell side.

3. Want more proof? Just observe how quickly the last two (sometimes even three) best five (buyer or seller - depending upon the market condition) quatity and price changes. You can detect these FAKE ORDERS even there also.

So what I want to caution is that you will be in for a huge disappointment, if you blindly go by these TBQ and TSQ, best five etc.

So where is the true quantity disclosed? Only in the trading screen where the actual trading market rates are displayed. That is the best buyer and best seller. There true quantity of buying and selling is disclosed.

I hope this helps
Thanks and regards
R. S. Iyer

hi deb, just look at the attached chart. as per your round figure trading method (discussed in kolkata meet) today i took position in TCS @900.xx & sold the same @909.xx. we must have to discuss more about this trading style. logically this method is quite impressive.

Attached Images

DAY TRADING BREAKOUTS.gif (20.2 KB, 70 views)

Ah ! missed this point to discuss.

Refer Scene 1 and Scene 2 along with the attached pics 1,2 & 3. [reply no 27 of this thread]

Regards.

Theoretical discussion may take longer time. The points may be discussed during the trading time keeping the computer broker terminal screen open before us. U can start practical trading in the terminal with the help of only Rs.100/- .... watch the situation, apply ur brain, all doubts will be cleared.

The discussion started with small range of price for long time ... what will be the position ... long or short ... we have discussed some tools in our hand e.g. TBQ, TSQ and Volume. If brain signals wrong stop loss will be the risk management. If brain signals right vertical price movement may give u huge profit. So let us practice from today onwards ... for some days.

Again a reminder not TBQ<TSQ or TSQ>TBQ ... try to observe rate of change of individual TBQ or TSQ, try to observe the behavior at support or resistance ... not combined. From the small range of price or from the triangle formation, when breakout happens, what is the rate of change of TBQ, TSQ and volume.

Change of choice of buyer / seller mood is also a criteria. If a buyer has sufficiant money he may opt for "meat" instead of "fish". If he has less, he can go for "egg". It is one of the many reasons for why TBQ or TSQ changes.

Now I am asking u a question. In pic 1 of reply 27, u see there is a unusual big volume at the highest price. As we know in any trade there are equal number of sellers and buyers. Then why the buyers baught at the highest price ? Do u know the answer ? So there is no requirement to find all answers. We can find only the answers, where we can bag some money.

Regarding the target : I usually apply the trend line drawn at the lows (during long position) and highs (during short position) of one hour bar for entry. When entered I use shorter time frame bar trend line 15 mins bar. I exit my profit trade when trend line breaks. Pahle Lakshmi Lao .... uske bad technical funda. When u will exit then watch the Volume, TSQ and TBQ individually. U will watch that, u exited at the right time. The trend may go reverse or sideways ... both are dubious first for money and second for time.

My earnest request is that: apply with a small margin (in the range of Rs. 100/-) of investment in practical trade, make losses / profits. Do not bother the profit or loss ... it is for only preparing ur brain. Afterwards the sub concise will guide u the rest. U have not to trade, ur brain / sub concise will trade for u.



Happy trading.

Regards.

Biyas

Your attached chart(5 min TCS) also displays two strong reversal signals ,prior 1st & the 3rd candle when u took entry ,two Hammer formed ,which is a short body without uppershadow & long lower shadow.This signals a strong upmove coming and it happened.

Regards

Sunando

thanks for the information/s sunondo da.

u r right sunanda da
i think one buy signal comes from different avenues/
but the meeting point is same
isnt it?
waiting for ur valuable reply
regards
deb

ah
at last we attracted asis da
isnt this an achievment?
what ur opinion biyasc?