newskate
29 posts
msg #27380
- Ignore newskate |
7/15/2003 6:40:38 PM
Okay, before we start with the picks and shovels - being new I have a question or two about volume. I've asked this a few places and I'm still not quite clear just yet:
What does volume mean? If a stock has volume listed here of say 50000, does that mean 50,000 shares, or more? If it sells for $1, and I have 500 to to spend, I've bought 500 shares. If Noah's system works and soon I have $10,000, I've bought 20% of the shares??? No wonder the stock goes up! Then how do I sell those?
So please help me here - on this site, on Yahoo, etc, what do the volume numbers mean? And when I see on Yahoo, for example, bid / ask size of 200 - does that mean 20,000? Do I add 2 zereos in all cases?
I guess I'm just worried about some point having enough cash to make moving in and out difficult on these low priced stock.
Thanks for you patience,
Stephen
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xplorer
257 posts
msg #27383
- Ignore xplorer |
7/15/2003 9:03:29 PM
Newskate
You got it right .... volume of 50000 is 50000 shares.
And "bid" and "ask" is exactly what it says ... 100 is 100 shares (or 1 block).. no need to add the "zero's" to the "100"...
If the daily volume is 50000 , and you bought 10000 of the 50000 traded on that day ... then you did by 20% of that days volume ... but not 20% of the available stock in that equity. I wouldn't want to invest so much that it would take all day for your trade to be executed ... it can be very nerve wracking when your trade takes hours to be executed with a low volume stock ...
One more slant on the volume ... the days that have the high volume, are the days that help to create the "support" and "resistance" levels on the charts ... this helps to select your entry and exit points...
trade on my friend
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newskate
29 posts
msg #27386
- Ignore newskate |
7/15/2003 9:57:17 PM
Mr. Xplorer, thanks for the response, may I continue...... Let's say I continue to mine then and my hundreds, turn into thousands with Noah's search (and it might not take long!). Then if I have say $50 to spend, and I want to "diversify" by buying 8-10 stocks, it's not impossible that me, and 4 of my closest SF buddies could create all the volume for that day on some of these $1 stocks (in relative terms). So instead of my $500 trade executing in seconds, my $5000 trade could execute at an average price 10% above my starting point? [ as an example ]???
If this is the case, then this is a bit scary I guess. How does one start here with say $25,000 (which I will be doing shortly), and build it into $100M, or $200 following this type of strategy. It doesn't look like there are enough shares to go around if you catch my story here....
Stephen
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xplorer
257 posts
msg #27391
- Ignore xplorer |
7/15/2003 10:46:26 PM
... you are correct ... theoretically you could make the well go dry ... by buying all the shares that are available to be purchased... it would be like going to the bread store to buy a loaf of bread, and buying all the loaves ... now you have to sell them ... ugh. ... and the last few you try to buy may have a few "buyers" ...bidding the price up.
... if the average daily volume is 50000 ... and you buy 50000 shares, then the volume would 100000 shares (50000 of the normal buying ...and your additional 50000 shares). Market makers can play that game ... cause they have millions to play with ...but it would be tough adding that much selling pressure to a stock, ... the result ? .... you wouldn't have a prayer of it going up.
Supply and demand is key. When you don't have enough shares to satisfy the buyer's needs, the price goes up ... and when there is an abundance, then the price will fall. This simple rule is the only reason the price varies throughout the day ... supply and demand.
One more thing ... that ole saying "don't put all your eggs in one basket" is a good rule to follow.
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newskate
29 posts
msg #27394
- Ignore newskate |
7/15/2003 11:12:58 PM
Mr. X - again, thank you for your time and thoughts.
Stephen
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murknd
62 posts
msg #27396
- Ignore murknd |
7/15/2003 11:28:00 PM
... and I would be very careful with your $25K if you're new to trading - it could evaporate before your eyes - start slow and be VERY patient ...
D
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Noahedwinbeach2
135 posts
msg #27408
- Ignore Noahedwinbeach2 |
7/16/2003 7:11:35 PM
This is Noah.
The more money you have the harder it is to get the same return because of the number of shares to be purchased. You will have to diversify your funds in order to keep making the same returns. There will be a point where you will have to purchase stocks where the average volume is over 1 million and such. My filter provides many stocks like that. You can do that or you can just purchase more expensive stocks in my filter. Just adjust the price range in my filter to return other stocks. There are still great stocks at higher prices with more volume. I do not think you will ever get to the problem your suggesting unless you have billions your trying to play with. At that point you might as well retire becuase you wont be able to spend all that money anyways.
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newskate
29 posts
msg #27409
- Ignore newskate |
7/16/2003 7:19:19 PM
Noah, when I do get the billions, I'll ask for your address and the first pint is on me!
Stephen
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Noahedwinbeach2
135 posts
msg #27410
- Ignore Noahedwinbeach2 |
7/16/2003 9:20:16 PM
lmao there you go dude. When you hit a million we can celebrate
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