This article provides you with the information about the prices
, when you are dealing with investment in stocks. I know that most of the people can get confused by this concept of prices so I am discussing here as to how best you can use them when trading in stock market.
Now, first of all you must know about opening price. The fist price of a day is known as opening price and if you are adept at looking at bar chart which tells about the stock price movements, it is located at the left.
The opening price basically reflects the input and the incoming orders which came all through the preceding night. The people who do trading in stocks at night place these orders and these traders can be from any of the countries of the world and may be situated in different time zones. These prices reflect on the amount of activity which was there the preceding night. Many of the people who place these orders are actually not fully aware of exact market situation and just base their orders on the hunch.
This opening price is responsible for establishing the balance of the day and usually draws a line between the people who are aware of their actions as to what they are indulging in and the ones who do not.
The best way to enter stock market is when the market gaps at the start of the day. At this point you need to place your order which is just few ticks above the high of the range which opened and then from there you can place a stop below. You should keep yourself aware of the high in prices and the reason whey they went up
at the first instance.
These prices usually go up because large number of people are making stock purchases and buyers are also raking in money. You must however be aware that frenzied buying sometimes fuels the stock prices and when buying reaches a certain limit the bubble bursts bringing down everything with it.
The low prices are important too because bearish stock players would make money when stock is at low price and this is so because the bulls tend to turn more skittish when stock prices move downward. This makes it easier for the bears to pull the stock prices down to lowest levels and this helps them to make more money because money is required to short sell the stock and this is how money starts flowing for the skill full stock traders. This is a small piece on the stock investment and what is the relevant meaning of prices.