Charts consistency

[Aman03]

Hi Team,

At times I find the candles in the charts are not consistent and are very scattered. Please help me understand the reason for such a formation.

I checked, volume doesn't seem to be the factor as many have good volume but the form inconsistent candles.

Please help.

 

[bpr]

Hi Team,

At times I find the candles in the charts are not consistent and are very scattered. Please help me understand the reason for such a formation.

I checked, volume doesn't seem to be the factor as many have good volume but the form inconsistent candles.

Please help.

no liquidity. When you see such a chart then you close it and forget about that instrument as they are not be tradeable.

 

[Aman03]

no liquidity. When you see such a chart then you close it and forget about that instrument as they are not be tradeable.

****************

Thanks bpr,

Can you please elaborate it. Is it associated with total traded volume, or total traded value or total number of trades?

Is it possible so scan such stocks and keep them away in advance for the next trading day.

Many Thanks/

 

[bpr]

****************

Thanks bpr,

Can you please elaborate it. Is it associated with total traded volume, or total traded value or total number of trades?

Is it possible so scan such stocks and keep them away in advance for the next trading day.

Many Thanks/

Both total volume and total number of trades can be used to get a indication of liquidity.
Never use total traded value that is of no use as far as liquidity is considered.

Also one easy way to spot them is by looking at the chart like what you posted.
When you see charts like that they are bound to be illiquid.

Liquidity of a instrument does not change on a day to day basis so no need to filter and track these things.
However some of the stocks during results and news the liquidity increases and after the news the liquidity dries up.