Bid ask volume analysis


#1

How to understand & factor in the bid ask volume in our day trading?
For example: in the attached chart there are five times more ask volume but stock price not going up. Why is this?


#2

As per my understanding, most of the algo traders, proprietary traders buy/sell at a specific price (i,e limit price ) .they will wait to reach the expecting price, usually they won’t enter at MKT price because they are dealing with high volume.

so you can’t take a decision based on the bid & ask volume.


#4

In my experience , bid/ask volume is not much useful , taking your chart snap, as an example , in colored box of bid/sell volume , it clearly shows sellers are more than buyers , and if you look at volume & MACD selling is going on ( it seems big buyers are already bought in ) and is being reflecting on charts , probably most of the remaining sellers are day traders / short term traders . so may be this reason stock price is not going up. 579eee59


#5

Hi high volume proprietary traders means more than how many lots in nifty


#6

Bid ask is useful in OFT.
who said its not useful ?

start cumulating bids and asks in your mind for a price range
eg . 618-620 .
[if you cant do this in mind then bidask not useful for you. … or use some software like ninja]
decide then which side is dominant
Then Trade

this is 1 of the uses . many more advanced uses too.


#7

Please could you explain what does OFT stand for?


#8

OFT = Order Flow Trading


#9

market depth doesn’t show you the actual data, because it hides the disclosed quantity.
while placing an order of 1000 qty if choose 500 as disclosed qty , in bids & ask u will see only the 500 qty at that defined price.
many big traders will do this…


#10

Yes, absolutely , i use market depth to only to see the price near my decided entry price & also for exit price . so i look at chart while entering & exiting particular stocks


#11

Not that many people can get analysis like this, some even avoid it. But you need to analyze almost everything in this market, especially your actions during and after trading.