[januson]

Hello

Back to basics
Just sitting here wondering what actually makes a stock price move up or down. Offcause news etc., fundamental stuff could affect it somehow, but if we disregard that in this technical thread.

I know there's a lot of discretionary traders out there, but what makes them enter a trade? A system? A gut feeling?
Also there's alot of algoritmics going on, is that only reserved the pros?

What is a price move then? Is it a 0.4% move or 1.2% move or even more? For a discretionary trader it must be more than an algo? Is the algos driven by discretionary traders or is it the other way around?

This is a purely academic and hyphotetical discussion!

[johnjohn1hew]

Price moves are caused by an imbalance between supply and demand. Volume is the quantity of contracts that have been traded and volume is what supply and demand are made up of. Every trader bases their opinion on something. There are a lot of methods out there. You cannot just say that a move is the result of professionals because you most likely have no way of knowing that. A lot of people just want to put a name or a face to action that they cannot make any sense of.

When you strip the market down to nothing and you start to examine it for what it really is, then you will start to see truth. You know, there is a lot of bullshit on top of everything, but if you just keep digging you will eventually find what was buried there long ago.

[sevensa]

Did you see the question was asked almost a year ago? How did you find a post like that?

[johnjohn1hew]

Yes, i did see that it was asked a year ago... Does that have any reflection on the validity of the question? I found this question when searching the TL forum. It popped up, no one had answered it, so anyone who can use this information is free to do so. What is your view on market action (since this is that type of thread)? Thanks.

[Kiwi]

I'd be interested to know what the op figured out in the mean time and, thus, their response to the one genuinely helpful post in this thread

(Not claiming that I'm always genuinely helpful, especially when faced with an ego-bloated guru type)

[sevensa]

Originally Posted by johnjohn1hew »

Yes, i did see that it was asked a year ago... Does that have any reflection on the validity of the question? I found this question when searching the TL forum. It popped up, no one had answered it, so anyone who can use this information is free to do so. What is your view on market action (since this is that type of thread)? Thanks.

What is your definition of market action?

[johnjohn1hew]

The action of the market. The character of price movements revealed through price spread and volume. Price and volume are the result of: supply and demand, effort and result, cause and effect. Effort is to result is as volume is to price. Effort is supply and demand and price reflects the imbalance/balance. The cause drives volume (effort) to produce an effect on price. The cause is what causes trades to be submitted, which causes the supply and demand to imbalance (effect). People base their trading on a lot of different methods, and their action makes up the cause. You weigh and measure these through price and volume to form a judgement.

A few quotes from Wyckoff:

“Tape reading and chart reading enable one to judge the future course of stocks, by weighing the relation of supply and demand. This can sometimes be done from price movement alone, but if you consider also the volume of the transactions you gain an additional and vitally important helpful factor.”

“When you study charts, look for the motive behind the action which the chart portrays. Aim to interpret the behaviour of the market and of stocks – not the fanciful patterns (“gaps,” horns,” “flags,” “pennants,” etc.) which the charts may accidentally form.”

“From the volume and price movement we find the greatest aid: (a) in determining the direction of the coming moves; (b) deciding wen to buy or sell, when to go long or short; (c) when a stock is on the springboard, and (d) when a move is culminating.”

[sevensa]

Originally Posted by johnjohn1hew »

The action of the market. The character of price movements revealed through price spread and volume. Price and volume are the result of: supply and demand, effort and result, cause and effect. Effort is to result is as volume is to price. Effort is supply and demand and price reflects the imbalance/balance. The cause drives volume (effort) to produce an effect on price. The cause is what causes trades to be submitted, which causes the supply and demand to imbalance (effect). People base their trading on a lot of different methods, and their action makes up the cause. You weigh and measure these through price and volume to form a judgement.

A few quotes from Wyckoff:

“Tape reading and chart reading enable one to judge the future course of stocks, by weighing the relation of supply and demand. This can sometimes be done from price movement alone, but if you consider also the volume of the transactions you gain an additional and vitally important helpful factor.”

“When you study charts, look for the motive behind the action which the chart portrays. Aim to interpret the behaviour of the market and of stocks – not the fanciful patterns (“gaps,” horns,” “flags,” “pennants,” etc.) which the charts may accidentally form.”

“From the volume and price movement we find the greatest aid: (a) in determining the direction of the coming moves; (b) deciding wen to buy or sell, when to go long or short; (c) when a stock is on the springboard, and (d) when a move is culminating.”

So you are really talking about Wycoff then when you say price action? DB is running a good Wyckoff section on here and you are probably better of posting there. Other people will define price action differently. As so far as what my opinion about "price action" is, this is like asking me what my opinion is about blue sky. It is what it is. If there was no "price action", no one would be making or losing money. I am not really sure what you are looking for as far as a response.