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A Really Newbie Questions

patski · 52 · 7377

patski

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on: Oct 21, 2013, 12:36 AM
Hello.

OK. For starter, I have been reading and reading anything about stock market. I have even open some topic here asking some very elementary stock question (which by the way been answered - thanks).

I have been monitoring PSEi on a daily basis watching some stocks which I have set my eyes for hoping that when I get the general feel and applied what I have learned so far (by making a virtual trades which I have learned reading this forum - thanks again).

Observing price changes (on a 15 minutes, hourly and daily) on stocks on a daily basis (for morethan 2 months now), I have noticed something peculiar. How the market set/compute/determine a certain stock closing price? Is the closing price is based in the last trade of the day (regardless of the amount of share is traded)?

So mga sirs, there it is. It may be a stupid question but non the less I think its an important info to have.

Hypothetical example lang po.
A certain stock is being traded for the whole day at a range of 100pps with accumulated volume 1M shares, then 5 mins before closing, the last trade is consist of 10 share at 70pps. If the stock price is based on the last trade of the day, then boom, we know have a stock having a closing price well below the average price range (being traded for the day).

Salamat po in advance.


ferrariEverest

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Reply #1 on: Oct 21, 2013, 01:04 AM
Good question.

Tingin ko ang sagot jan ay market forces ng supply and demand.

Review nyo Sir yung trading hours para mas magka-idea kayo. maganda yung ginagawa nyo (observe + practice), tuloy nyo lang yan for at least 6-12 months.


patski

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Reply #2 on: Oct 21, 2013, 01:35 AM
Exactly Sir...

I was trying to look for any clue on how the price movement on the market explaisn "supply and demand" (or rather how it drives stock price).

Real intent of my question is how can I determine if the current closing price (or recent price movements) is real or not. I mean, western T.A (like EMA, SMA, Oscillators etc..) is based on different mathematical interpretation of price movements.

By now, I'am well aware that some traders (with deep pocket) can atleast manipulate to a certain degree prices.


ferrariEverest

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Reply #3 on: Oct 21, 2013, 01:53 AM
I'll intentionally leave the question hanging and leave it up to you to discover. I'm pretty sure you'll get a better idea in a few months or years to come.

You are spot on by saying prices can be manipulated. They almost always are. You need to follow the moves to find out the intentions and to determine the answers to questions such as whether the closing price is real or not.

Stay inquisitive and observant, and you'll find nearly all the answers you're looking for! By far, you're 1 of the most inquisitive I've seen in this forum. Edge mo yan, Sir. Good luck!


mikoangelo

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Reply #4 on: Oct 21, 2013, 07:54 AM
3:17 pm,meron tayong tinatawag na pre-close....yung unang transaction na nangyari at exactly 3:17,yun ang magsisilbing closing price....

yap pwede pong mamanipulate yung price lalo na ng mga big boys...tinatwag natin yang forced close...they will determine what price it will close..kahit na buong araw e nasa 100-102 range sya,pero sa run off bigla silang mag cross sale at  90,un na ang magiging closing price natin..

yap that happens, 100 + biglang bagsak ng 90+..usually dahil may biglang bad news or merong private placement nangyayari....

during window dressing,kabaligtaran naman nang yayari..they forced close it higher...kung minsan biglang spike ang price........


newbie_buboy

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Reply #5 on: Oct 21, 2013, 09:49 AM
ay day trading. need mo po magbasa ng maraming books at dapat mahaba pisi mo para ipatalo. hehe


patski

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Reply #6 on: Oct 21, 2013, 10:20 AM
@ miko:
Thanks for this vital info.. Atleast now I got a clearer picture. Another question. The closing price is solely base on the last price traded irrelevant of how big the volume is (assuming the minimum allowed shares to trade that stock)?

@buboy:
I'm not sure if I can be a day trader. I have only a small available time to check the days current price movement due to the nature of my work. I just want to make sure that my trading decision is based on actual facts (i.e. what the market sentiment really is). ^_^

@ferrari:
Salamat sir. Hope hindi kayo mag sasawang sumagot nang mga questions coming from newbies like my self.


INDO

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Reply #7 on: Oct 21, 2013, 11:39 AM
Another question. The closing price is solely base on the last price traded irrelevant of how big the volume is (assuming the minimum allowed shares to trade that stock)?


correct bro, whatever the last traded price, yun na ang magiging closing price nya


mikoangelo

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Reply #8 on: Oct 21, 2013, 02:49 PM
yap yap...kahit 1 lot lang yan basta yan ang unang transaction at the run off....un na mismo ang closing price...


TSO

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Reply #9 on: Oct 21, 2013, 10:39 PM
Observing price changes (on a 15 minutes, hourly and daily) on stocks on a daily basis (for morethan 2 months now), I have noticed something peculiar. How the market set/compute/determine a certain stock closing price? Is the closing price is based in the last trade of the day (regardless of the amount of share is traded)?

So mga sirs, there it is. It may be a stupid question but non the less I think its an important info to have.

Ultimately it's supply and demand, as some people above me wrote.

"Supply and demand" is in turn defined by what people find attractive. To a trader, these will be technical indicators. To an investor, these will be the underlying fundamentals. To an idiot, it will be the latest market news of the day or their broker's "endorsement".

You cannot predict the closing price consistently, especially if you're going to do this on a daily basis. Generations have tried to do so and failed, while long-term investors have grown wealthy at their expense.


Wills

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Reply #10 on: Oct 22, 2013, 12:04 AM

To an idiot, it will be the latest market news of the day or their broker's "endorsement".


LOL


TSO

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Reply #11 on: Oct 22, 2013, 04:19 AM
^ Totoo naman eh.

The Greater Fool theory applies whether you're a long-term value investor, a momentum trader, or a day trader. I personally find the whole investing game highly corrosive to either one's moral code or sense of idealism, solely because we either give in to our greed or fears or we enjoy exploiting the irrationality that is market sentiment.

After all, in the final analysis, none of us want to be Goldman Sachs' proverbial "muppet", i.e. the one left holding the empty bags.

(Edited for accentuation and grammatical correction)
« Last Edit: Oct 22, 2013, 04:22 AM by TSO »


bauer

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Reply #12 on: Oct 22, 2013, 04:32 AM
  we enjoy exploiting the irrationality that is market sentiment.


^Is it moral and ethical?  or "exploitation" is too harsh to be use as reference (perhaps "opportunity" is a good replacement)?


Wills

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Reply #13 on: Oct 22, 2013, 05:10 AM
We have the same observation haha I like the way you said it..

I find columnist very funny because they always give meanings to markets everyday movement as if they know the sentiments of every people in the market, maybe it's human nature to feel the need of giving meanings on things we don't understand, or it's just one of human ways to put an end to a confused mind.....




After all, in the final analysis, none of us want to be Goldman Sachs' proverbial "muppet", i.e. the one left holding the empty bags.


^That's the bottom-line!
« Last Edit: Oct 22, 2013, 05:12 AM by Wills »


Wills

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Reply #14 on: Oct 22, 2013, 05:17 AM

I personally find the whole investing game highly corrosive to either one's moral code or sense of idealism, solely because we either give in to our greed or fears or we enjoy exploiting the irrationality that is market sentiment.


For me I'd say very engaging, if you're not mentally tough you'll be pulled away in to a lot of different direction.


 


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