Buy and sell volume?

Well I took the plunge and bought my first shares on Wednesday. $5,000 worth of BHP and my position statement is showing a grand total of -2.6% profit.
I am hoping that by next week BHP will be up to $50.
Anyway the thing is when I bought I applied none of what I have read and just pushed the button.
(My only logic was that BHP currently down a bit with what looks like a continually rising trend from a solid company)

So my question is - is there anywhere one can get the latest buy and sell volume before you push that button?

( I could have at least applied the run with the herd approach - which if valid would have shown the buy volume relatively low that day I figure)

Any help appreciated
Jack

Sir Jack,

I use Etrade to make my trades but i am pretty certain most electronic trading platforms work the same.

The volume for the day can be found along with the market depth in your trading platform.

It shows you the amount of shares traded for the day, the daily traded high and low and also the current bids.

Market depth shows the price the sellers want to sell for and the price the buyers are willing to pay. So for example, lets say the last trade was at 20cents, it will show you that there are buyers bidding at 19, 18.5, 18, 17.5.17 and so on, the ten closest prices to the last sale price will be displayed.

It also shows how many different buyers at are each price and the volume they want to buy. For example, there could 4 buyers at 19cents trying to buy a total of 500,000 shares, could be 1 buyer at 18 cents trying to buy 1,000 shares.

The same principle applies to the sellers but obviously prices are incrementally above the last trade price of 20cents. So there might be sellers at 21, 22, 23, 23.5 and so on.

You should easily be able to find the shares traded for the day in your trading platform software.

Alternatively, type in Google ASX+(your share code) for example ASX+cue
http://www.asx.com.au/asx/research/...s.jsp?searchBy=asxCode&allinfo=on&asxCode=CUE

That takes you to the ASX web site and will show you shares traded but i think there is a delay of 20mins or so?

20mins can make a big difference, so thats why using live feeds from your electronic trading platform is the way to do it.

Hope that helps JW

Thanks JW

But what I was after in particular was current volume separated into buy and sell as opposed to market depth - im only very new - but I think there is a difference?
So for instance at 1:30 pm there may be a volume of 130,000 for a particular share - I have found a few sites that show the 130,000 - but none that show the makeup of volume - e.g. bought 80,000 - sold 50,000.
I hope I am not saying something ridiculous here

Jack

A volume of 130,000 means 130,000 were brought and 130,000 were sold. For a transaction to occur, someone must buy some shares that someone else is selling. Hope that answers your question

JackJackJack said:

Thanks JW

But what I was after in particular was current volume separated into buy and sell as opposed to market depth - im only very new - but I think there is a difference?
So for instance at 1:30 pm there may be a volume of 130,000 for a particular share - I have found a few sites that show the 130,000 - but none that show the makeup of volume - e.g. bought 80,000 - sold 50,000.
I hope I am not saying something ridiculous here

Jack

Click to expand...

Hi Jack,

how it works it works is the volume represents both bought and sold as a share can only be bought by someone if another person is selling it, and the buyer is willing to pay the asking price of the seller.

There aren't unlimited shares in a company to be bought and sold, there is a finite amount that are held by people (shareholders) and the demand for this limited amount of shares is what pushes the share price up or down.

Hope that made sense

EDIT: What he said ^

JackJackJack said:

Thanks JW

But what I was after in particular was current volume separated into buy and sell as opposed to market depth - im only very new - but I think there is a difference?
So for instance at 1:30 pm there may be a volume of 130,000 for a particular share - I have found a few sites that show the 130,000 - but none that show the makeup of volume - e.g. bought 80,000 - sold 50,000.
I hope I am not saying something ridiculous here

Jack

Click to expand...

Jack, re “buy” volume and “sell” volume – you are not saying anything ridiculous at all.

What JimBob and miller are saying is true, basically for every share bought there is a share sold … BUT, there is a way of seeing whether the buyer or the seller initiated the transaction. That is, did the person who bought initiate the trade by crossing the spread to buy at the seller’s offer price, or did the seller initiate the transaction by crossing the spread to sell at the buyer’s bid price. This, in an important sense, can represent if the volume was/is “buy” volume or “sell” volume.

This information is referred to under different names, but the most common is “volume at bid” and “volume at ask”. I have written an introduction to the concept at this thread, specifically this post and then the following discussion.

Hope this helps.

JackJackJack said:

Well I took the plunge and bought my first shares on Wednesday. $5,000 worth of BHP and my position statement is showing a grand total of -2.6% profit.
I am hoping that by next week BHP will be up to $50.
Anyway the thing is when I bought I applied none of what I have read and just pushed the button.
(My only logic was that BHP currently down a bit with what looks like a continually rising trend from a solid company)

So my question is - is there anywhere one can get the latest buy and sell volume before you push that button?

( I could have at least applied the run with the herd approach - which if valid would have shown the buy volume relatively low that day I figure)

Any help appreciated
Jack

Click to expand...

Jack,

You've done pretty much everything wrong. The good news, is that most of us here who have been trading for a while, have also made many of those mistakes so you aren't alone.

I hope you had some stops in place, otherwise after the recent drop you'll currently be carrying quite a large loss.

Can I make a few basic suggestions that might help with your next trade. These are things I've done in the past and it seems we only tend to learn them after lossing our own money. Trading on paper is never the same as loosing your own hard earned cash.

My suggestions are:

1. Use the 2% Rule. This rule states that you sell, at a loss, if your losses go below more than 2% of your total capital. This helps protect your capital
2. Set your stops. You can set auto stops but these need to be monitored as prices can open below your stop in which case your autostop is useless and a manual sell will need to be implemented.
3. Don't assume that because a share has been going up it will continue to do so. Often some of the best shares are ones that are out of favour but there needs to be a fundamental or technical reason for the share to either turn around or continue to climb. What was your reason for BHP to go to $50?? We all know it's quality company but you've got to remember the share has almost doubled since the August lows so it was due to level out. The market was also due a correction

If "hoping" worked, we'd all be rolling in it.

In regards to your question on Volume, Most online trading sites (Etrade, Commsec etc) will show volume. Volume by it's self is not enough reason to trade. Often, once you see the high volume the share price has already gone up so you've effectively missed the boat. I've done this on numerous occassions and lost everytime.

Good luck with your next trade.

Timmy - thanks for that - "volume at bid" and "volume at ask" is the information I am after. I checked out your thread - and your concepts are very interesting - as my knowledge and experience increases I am sure to incorporate them.

Tronic - thanks also - As a newbie I did learn a lesson. An uneducated hunch means zip!
This was my thought process:
1. I got $5,000 in my CDIA account - better buy some shares.
2. Hmmmmm Martin Roth says BHP looks good for 2008.
3. Ohh the chart show BHP was at $48 not long ago and trending up - good time to buy at this temporary dip.
4. Ohhhh again - Commsec analysts say strong buy.
5. Next week they will be $50 - because because the Jack moving average says so

Currently - my strategy is to buy blue chip shares and reap the superior benefits they offer in terms of growth and yield over the medium to long term as compared to term deposits. This last little crash and some pessimistic forecast s I have been reading are swaying that view somewhat.

But either way I am enjoying what I have learnt so far and hoping to start trading more in the short term as soon as I can get up to speed.

Thanks

Jack