Stock market traders and investors have asked me tons of questions. Of all those questions, the two most important ones for me are the following.
- Should I hold my position, buy more or enter a new position, or sell?
- At what price should I buy or sell if data shows that I should buy more or sell?
Get your pen and paper and take notes of what I’m about to say.
Psychology and data science are important, related, and relevant when it comes to stock trading and investing. Do not separate the two. I’ll give you analogies so you’ll understand it better and faster.
Which place is top-of-mind when it comes to new gadgets and repair shops for gadgets? GREENHILLS.
Which place is top-of-mind if you want to buy anchovies (bagoong) or salted and dried fish (daing)? PANGASINAN.
Which place is top-of-mind for Christmas lanterns? PAMPANGA.
Which place is top-of-mind for fireworks and firecrackers? BULACAN.
What’s the common characteristic of the vendors of these various products in their respective areas?
They put up their stores in a cluster – almost always close to each other. Hence, that spot of the top-of-mind place may attract more customers than similar stores standing on their own located a few miles away.
In marketing, this is Nash Equilibrium.
I am not here to teach you marketing but to emphasize the importance of buyer’s psychology.
In the same way, traders have favorite price points or ranges. Often, you see those favorite ranges in clusters. In most cases, those clusters got the biggest volume and the highest number of trades.
In real life, where do we often go when we want to buy something? We go to the cluster of stores that sells the same products or offers the same services.
Aside from Equilyst Analytics, Inc., I am also the founder and CEO of iPresence Digital Marketing, Inc. I have spent nearly 18 years understanding the buyers’ psychology.
I know how buyers’ think. I know how to find the price points or ranges that traders trade the most. For that, I created the Price-Volume Distribution chart generator.
- It helps us identify reversals, divergences, or false breakouts.
- It shows at a glance the prices that got the biggest volume with the highest number of trades.
- It helps us see if the majority of the volume is registered near the intraday high, intraday low, or median. The price bar at the top of the chart represents the intraday high. The price bar at the bottom represents the intraday low.
- It gives us a clue if cross trades happened at a certain price.
- This chart helps us decide where we should place our buying or selling price because we can see the prices that got the biggest volume with the highest number of trades at a glance.
I know many of you are now having an aha moment and saying, “Now I know a portion of traders’ and investors’ psychology.”
But I also know that many of you don’t know how to find the price points or ranges that got the biggest volume and the highest number of trades.
That’s where you need my help. That’s where Equilyst Analytics comes to the rescue.
It’s only P4,740.00 to subscribe for 1 year. That’s only P13.00 per day for 365 days.
Not only will you get an access to my Short-term Trading and Long-term Investing watchlists, you’ll also have an exclusive access to my Private Clients Forum where you can ask as many intelligent, sensible, and reasonable questions as you can.
Promo runs from November 12, 2018 to December 14, 2018 only. Click here to read the details of the promo.