What is market depth and how do you use it to buy and sell shares?
Market depth lists all buy and sell orders in the market for a particular security. If you wish to see if there is sufficient liquidity to sell a particular security, you can quickly check how many orders exist, and at which prices. This is particularly important for certain interest rate securities and warrants, where liquidity…
What is a stop loss?
A Stop Loss is an instruction for a particular share in your portfolio to be placed for sale on the market when it trades at a pre-determined price. You decide which share you wish to sell, and set an acceptable exit price below the share’s current trading price. Imagine you own shares trading at $10.00…
Can you predict the price a stock will open by examining the market depth?
Market depth provides a snapshot of the demand and supply or the liquidity of a particular stock. It lists buy and sell orders in the market at any given time and allows you to gauge whether or not you are able to transact at a particular price. Using a market depth screen you can quickly…
Why don’t stocks begin trading at the previous day’s closing price?
Like many things in the world, the stock market relies on the power of supply and demand. The stronger the demand for a share in a company, the higher its price will be. Alternatively if less people are interested in buying a share of a particular company, its price will drop. Before the market opens…
What is the smallest and largest number of shares that you can buy?
The Australian Share Registries, which manage the registers of companies, will allow an initial minimum parcel of $500 worth of shares to be purchased. Once that original number is purchased, the investor can buy smaller parcels to add to their holding. But as every trade incurs a brokerage fee, it may make more sense to…
How do you become a successful share trader?
In today’s crowded financial market place, there is no shortage of advice to be found to help you become a successful share trader. In my experience, however, there are just a few basic and important principles which, if adhered to, will maximize your ability to succeed, especially in the type of volatile trading environment we’ve…
Why you should understand support and resistance levels
Why do traders always talk about support and resistance levels? What do they mean and how can traders use these levels to better understand where the market is heading next? Understanding support and resistance levels can greatly assist both traders and investors. It’s all about understanding how prices tend to move. There are usually psychological…
