Day Trading Guide – Chapter 6: Day Trading & Investment Basics

This is chapter number 6 out of 13. Read the rest:

Read Day Trading Guide – Chapter 1: Introduction
Read Day Trading Guide – Chapter 2: An overview of day trading
Read Day Trading Guide – Chapter 3: Taking Up Day Trading As a Living
Read Day Trading Guide – Chapter 4: Day trading Facts
Read Day Trading Guide – Chapter 5: What You’ll Need to Get Started

In the financial markets, there are specific terminologies developed to enable traders to execute their transactions without any ambiguity. Therefore, in order for a trader to be able to trade effectively, he must be aware of the language used in the specific market.

Google  (Ticker  GOOG)

With reference to the table above, the information included in the table is known as “Level I” information. Level I information furnishes you with the best available price for a stock at a specific time together with volume traded among others. The above table refers to a Google stock which is denoted by the letter GOOG” on the ticker counter. The meaning of the other information is listed below:

Last:

This refers to the last price of the last transaction that took place. In the above example, the price is $44.25

Change:

This refers to the differences between the previous day closing price (at about 4:00 PM EST) and the “Last” price of the day trading. Thus, with reference to the above example, the previous day closing price was $44.25 – $1.25 = $43.00

Bid:

This refers to the best price offered to buy the stock (Best Bid). Thus, in this case, someone tried to purchase the stock at $42.24 or lower

Ask:

This refers to the best price offered to sell the stock. Thus, in the above case, someone tried to sell the stock at $44.26

Bid Size:

This refers to the quantity of shares that people are trying to buy at the Bid price

Ask Size:

This refers to the quantity of shares that people are trying to sell at the Ask price

Hi:

This shows the peak of the price achieved for the day trading. Thus, GOOG price peaked at $44.45

Lo:

This shows the lowest price that the share had declined to for the day trading. In this case, the lowest was $43.10

Volume:

This refers to the volume of shares that had been traded for the day. in the example, it show a volume of 24,014,000 shares

Last Trade:

The “Last Trade” shows the size of the last transaction for the share

For you to be able to trade properly, you really need to understand all this information without having to even think about them. In short, they have to be a second nature to you.

The picture below shows the same figures in a slightly different format; see if you can work out what the numbers represent: 

Read Day Trading Guide – Chapter 7: The different kinds of order for buying and selling stocks
Read Day Trading Guide – Chapter 8: Market makers
Read Day Trading Guide – Chapter 9: Technical Analysis
Read Day Trading Guide – Chapter 10: Choosing a broker
Read Day Trading Guide – Chapter 11: Costs of a direct access broker
Read Day Trading Guide – Chapter 12: Paper Trading Stocks
Read Day Trading Guide – Chapter 13: Conclusion