Dear Folks,
Could you justify/reasoned it, while few stocks order book in NSE, Buy qty was more and sell qty was less, naturally stock has to indeed go up, but it wasn't the case.Hence, it remained in RED till the market closed. Below is the screenshot for 1 stock.
you cannot treat that when there is more buy quantity than sell quantity , stock price will always go up . look at reliance futures , sell quantity is very high than buy quantity , still stock is 20 rs up , because there is short covering in stock and some people are still shorting it in hope that it will go down due to brent crude prices going downward
Hi Sunny,
its not the number of buy or sell limit orders that move the market. The urgency to get into or get out of a position moves the market. As John carter in his book Mastering the trade says, "Market doesn’t move because it want to. It moves because it have to… : " Hope this provides some insight to ur query…
The buy quantity what you see there is in fact all sell quantities (or most of it, i should say).
What people generally do is if the trend is downtrend or they expect stock to fall (overall market to fall), then they short the stock in the morning itself (for intraday).
Once they short a stock in intraday, they set a target buy order and leave it in the electronic order book. So slowly the Buy side qty increases and shows a higher number. These are in fact people waiting to buy back the stock in intraday when stock price goes furtherdown.
Note:
Total Buy Qty and Total Sell Qty are in fact the orders which are pending in the ELOB.
Example: CMP is 320, a person may have shorted 1 lakh quantity in the start and set a target to buy back at 305 for 1 lakh quantity.
In this case Total Volumes traded today will be 1 lakh+, since he has already shorted 1lakh and someone has already purchased that 1 lakh qty for trade to execute on both sides.
And Total Buy Qty in ELOB will show 1 lakh and Total Sell Qty could be very less. Unless the price comes to 305, this 1 lakh buy order will still wait in the ELOB. So the market has to go down in order to execute this buy order. So this is bearish market but with very high Total Buy Qty.
So you cannot judge anything by seeing Total Buy Qty and Total Sell Qty, these are just orders waiting in the ELOB (Electronic Limit Order Book).
In fact you should get an alarm, when Total Buy Qty is very high and the price is moving down, it means so many people have shorted in intraday.
Hope you understand.
Thank you all for all your answers, however my high regards to Astroguru, which has fully satisfied my query with good illustration.
