Abstract of the article
- When a stock is lined up, we know it will soon become valuable.
- The range of volatility is one of the factors that make some stocks stay in the buying or selling queue for several days.
- By adjusting the supply and demand pressure in numbers close to one hundred, you can know the possibility of forming a shopping queue in the near future.
- To filter shares that have a lot of demand, but are traded on the zero board, use the “% change with last price” filter.
- The RV indicator helps to notice the suspicious volume in the trading day.
The concept of shopping queue
Queuing to buy means a lot of buyers and unwillingness of sellers to sell. When a stock is lined up, we know it will soon become valuable. In order to understand what a buying queue is, we must first understand the concept of swing range limitation. In fact, it should be said that one of the factors of creating a queue for a share is the existence of a range of fluctuations in the Iranian capital market.
Of course, this does not mean that if there is no limitation of the fluctuation range, there will be no news of creating a buying queue. In any case, the shopping queue is created in the absence of supply and the abundance of demand. We would probably all like to own an asset that is in high demand.
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What is the range of price fluctuation?
Fluctuation range is one of the tools of the capital market supervisory institutions, which help to prevent the excessive volatility of the capital market. The range of volatility is the price ceiling and floor that each share can have in a trading day. Currently, the range of stock price fluctuations for companies admitted to the Tehran Stock Exchange is defined as negative 5% to positive 5%.
◊ Be sure to read this article: Free stock market training from zero to one hundred
This means that if the previous day’s closing price for a share is 100 Tomans, on this day trading less than 95 Tomans and more than 105 Tomans cannot be traded. Therefore, if you have this share and the applicants want to purchase it, they can only increase their offer price by 5% every day. If the sellers do not agree to sell the shares, a queue of buyers will form, while there is no seller for the shares.
But how can we find out about it a little earlier than forming a shopping queue?
Supply and demand pressure filter
First, you should familiarize yourself with the concept of “supply and demand pressure”. The supply and demand pressure at any moment is calculated by dividing the sum of buy orders of a symbol by the sum of its sell orders and shows the depth of the orders of a symbol.
The supply and demand pressure for each symbol on the Rahvard site is always a number between zero and one hundred. Zero means forming a sell queue for a symbol and hundred means forming a buy queue for it. Our goal is to identify stocks that are moving towards the formation of a buying queue.
To detect it, go to the filter page of the 365 website and use the following method to set the filter so that it shows you shares with supply and demand pressure between 80 and 95. In this way, you can monitor the shares that are close to forming the purchase queue at any moment.
Filter percent change with last price
However, some shares may not grow in price despite having high supply and demand pressure and still be traded at zero. It can be assumed that in this case, major buyers intend to keep the share price low in order to complete their purchase.
To identify such shares, you can also filter the shares whose last price change percentage is between 2 and 5. In this way, you will remove shares whose price does not grow due to demand pressure from the filter output.
RV indicator filter
To be sure, in the last step you can add the RV indicator filter to your parameters. This filter helps to firstly notice the suspicious volume in the trading day and secondly to decide based on the upward or downward trend of the price in a period of time. To do this, set two filters for the RV indicator according to the image below.
◊ Also read this article: Investing with little money
With these settings, you can very accurately find out which shares are going to form a buying queue, so that you can take advantage of the profit obtained in such a situation.
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