question on what affects a share price in a day

jon1981

hi,

just curious about day trading. i was watching stock prices for the last day and im trying to find out what impacts a price. e.g. bank stocks were pretty much level this morning then in the last hour they starting dipping by 8-10% for AIB e.g. how do you best place yourself to see this coming? is it possible or pure luck? what information should you be looking at to see a trend?


e.g. would this be news you could value and act upon?

Fears that the US Federal Reserve will soon consider raising interest rates put world markets under fresh strain today.

Read more: http://www.breakingnews.ie/business/ftse-under-pressure-on-us-interest-rate-fears-443683.html#ixzz0dpEwMQFI

http://www.breakingnews.ie/business/ftse-under-pressure-on-us-interest-rate-fears-443683.html

Idu

No correct answer to this as everything can have an affect. Broad things to look at would be:

How big companies in the same sector are performing
Earnings releases from the company or similar companies
How markets across the world are trending
Any news that relates to that sector, however seemingly irrelevant
Social situations such as war, natural disasters in developed countries, military coo's
Comments from political figures
Interest rates
Currency fluctuations (particularly for importing/exporting companies)

Even then you're still at the mercy of much bigger institutions who can influence a market through sheer size of orders

Idu

jon1981 wrote: »

e.g. would this be news you could value and act upon?




http://www.breakingnews.ie/business/ftse-under-pressure-on-us-interest-rate-fears-443683.html

You could depending on what you were trading. That announcement will be made at 7.15 today so European markets will be closed. Seeing as its just a rumour then you are leaving yourself open to the possibility that they don't and you are left exposed to a bad position that you can do nothing about.

Usually with rate cuts the FED or ECB will have made it clear in advance what their plan is so most markets will have priced that in. Rate cuts that are unexpected are released at an unscheduled time more often than not without much warning, only a few rumours

woodseb

Idu wrote: »

No correct answer to this as everything can have an affect. Broad things to look at would be:

How big companies in the same sector are performing
Earnings releases from the company or similar companies
How markets across the world are trending
Any news that relates to that sector, however seemingly irrelevant
Social situations such as war, natural disasters in developed countries, military coo's
Comments from political figures
Interest rates
Currency fluctuations (particularly for importing/exporting companies)

Even then you're still at the mercy of much bigger institutions who can influence a market through sheer size of orders

The other great unknown is sentiment - the sell-off in the irish banks was along with big moves in greek debt and general weakness in the general euro periphery

....predicting which news will impact prices and when the news will come out is key to trading intra-day

jon1981

its seems very technical for a novice. I was trying to jump straight into it and learn as i go, not sure this is possible without doing a few months research into the variables and factors you should be using to base your trading decisions on.

Idu

Nothing in life comes easy

woodseb

jon1981 wrote: »

its seems very technical for a novice. I was trying to jump straight into it and learn as i go, not sure this is possible without doing a few months research into the variables and factors you should be using to base your trading decisions on.

nothing wrong with learning as you go but maybe only mock trade until you think you have a good feel for it.....you'll never truely figure it out though, the market too dynamic for that and as Idu says, nothing comes easy

jon1981

as the cliche says...we would all be doing it if that were the case. do you guys day trade? what information soruces do you use?

Idu

http://ransquawk.com/ - My company provides that along with bloomberg terminals and we have TV's with Sky News constantly running or CNBC or Bloomberg news. I dont find any of them better than the other, just what you can pick up from each that's relevant. The Bloomberg terminal is good because you can programme it to only release news that you choose.

The best tool for day trading though is the order book but you need a trading tool showing market depth to get a good read from that

jon1981

seeing as though i work during the day in a non financial industry and can't watch terminals all day long, maybe i should reconsider giving this ago, seems like you have to pretty much keep your eye on the news

Squiggle

Don't day trade a market with 1% stamp duty on purchases. Period.

jon1981

Squiggle wrote: »

Don't day trade a market with 1% stamp duty on purchases. Period.

can you elaborate alittle?

Squiggle

jon1981 wrote: »

can you elaborate alittle?

The costs of short term trading the Irish market are too high. Irish share purchases attract stamp duty of 1% so a €100k purchase costs €1k in stamp duty alone ! There is No stamp duty on US stocks and 0.5% on UK stocks but of course there is a currency risk.

rubensni

The website investopedia.com has a virtual trading facility. If you're really interested in playing the markets, then try that. You'll learn about diversification and the like by playing around with values and get a feel as to what moves markets. Then you can move on to shorting and the more exciting stuff where the big money is made. You start with (a virtual) $100,000 so see how you get on over six months or so.

The thing to remember is that any fool can make money when the markets are good, but when things go bad you can lose very quickly. So unless you want to end up throwing eggs at an AGM, spread your investments around and when you see rapid growth keep asking yourself whether something is too good to be true, because it probably isn't.

jon1981

i didnt know that, thanks. I was just using the Irish stocks as an example. im still deciding what stocks to concentrate on... if at all.

Squiggle

rubensni wrote: »

The website investopedia.com has a virtual trading facility. If you're really interested in playing the markets, then try that. You'll learn about diversification and the like by playing around with values and get a feel as to what moves markets. Then you can move on to shorting and the more exciting stuff where the big money is made. You start with (a virtual) $100,000 so see how you get on over six months or so.

The thing to remember is that any fool can make money when the markets are good, but when things go bad you can lose very quickly. So unless you want to end up throwing eggs at an AGM, spread your investments around and when you see rapid growth keep asking yourself whether something is too good to be true, because it probably isn't.

Investing and trading are completely different things.

Squiggle

jon1981 wrote: »

i didnt know that, thanks. I was just using the Irish stocks as an example. im still deciding what stocks to concentrate on... if at all.

Unless you have insider information, which is illegal, forget about day trading stocks imo.

woodseb

Squiggle wrote: »

Unless you have insider information, which is illegal, forget about day trading stocks imo.

there's plenty of money to be made day trading by interpreting news quickly and reacting better than other traders but you need to have the right tools available to you in terms of real time info and market access to really capitalise on it - not something which the ordinary retail investor is likely to have

Speculator

Market sentiment and issues:

http://www.ft.com/cms/s/0/fb28f072-0b0f-11df-9109-00144feabdc0.html?nclick_check=1

Squiggle

woodseb wrote: »

there's plenty of money to be made day trading by interpreting news quickly and reacting better than other traders but you need to have the right tools available to you in terms of real time info and market access to really capitalise on it - not something which the ordinary retail investor is likely to have

Day trading stocks is inherently more risky than trading the likes of index futures for a number of reasons. One's success at day trading will be determined more by money management and perseverance than any other criteria though the product being traded and the amount of capital are also crucial.