Agreed - it only kicks the can down the road at best anyway. Let's see if the bubble bursts - my personal feeling is that we never really recovered from '08 because you can't build solid growth on debt (as they should've learnt in '08, and really should've known beforehand) so it could get very ugly.
Trading the stockmarket (NO Referrals)
- Thread starter mcast123
- Start date
Agreed - it only kicks the can down the road at best anyway. Let's see if the bubble bursts - my personal feeling is that we never really recovered from '08 because you can't build solid growth on debt (as they should've learnt in '08, and really should've known beforehand) so it could get very ugly.
Associate
- Joined
- 10 Jan 2005
- Posts
- 534
Quick question but what actually affects price apart from the buy sell levels? Who actually sets the level (who are the market makers)
Reason I ask this is have seen massive falls when I haven't really seen massive sells (only looking on yahoo finance app) so don't know if there are trades which are not showing.
There also seems to be stocks which I cant really see being massively affected by coronavirus but still taking massive hits across the board.
The graph someone posted for amount of time took to drop 10% from highs was pretty telling, I havent seen it drop this quick.
And another thing what was that run/drop Tesla put together I honestly thought I was watching Crypto.
Reason I ask this is have seen massive falls when I haven't really seen massive sells (only looking on yahoo finance app) so don't know if there are trades which are not showing.
There also seems to be stocks which I cant really see being massively affected by coronavirus but still taking massive hits across the board.
The graph someone posted for amount of time took to drop 10% from highs was pretty telling, I havent seen it drop this quick.
And another thing what was that run/drop Tesla put together I honestly thought I was watching Crypto.
It's driven by sentiment. You have major market participants, usually mutual funds, who will drive the majority of trading volume.
Also bear in mind we're at the tail end of a 11-year bull market so there is a persistent level of uncertainty in the market as to whether or not this is the market correction people have been predicting for the last few years. Imo, investors have been complacent about the economic impact of COVID 19 up until the beginning of this week and what we're now seeing is something of a panicked over-correction for that complacency.
This is a one off event that you can read, it is going to only get worse in the short term.
Anyone and everyone!
Anyone sticking in limit orders into the order book/providing the liquidity is setting the price essentially. Lots of the day to day liquidity will come from HFT/market making firms - they're actually quite small, generally using proprietary capital as this is a highly lucrative business with ridiculous % returns for the people who are the smartest/fastest.
For example if you take a snapshot of the order book at any time there are a bunch of bids(order which was sent to the exchange to buy at that price or lower) and a bunch of offers (order which was sent to the exchange to sell at that price or higher) at different price levels.
So say at a snap shot in time you have dowie corp - we'll take a look at say 3 levels of bids and offers - say dowei corp is trading around 550 OCUK dollars and, for the sake of simplicity the price increments are in whole OCUK dollars - this is crude and we'll keep it simple by saying there is only one venue at which dowie corp shares are traded and we'll just have a simple order book which operates on a "FIFO" - "first in first out" basis - this is basically like how a lot of futures markets work and keeps things simple:
dowie corp (DWIE)
..........503...3460...
..........502...800....
..........501...430....
...325....500..........
...1246...499..........
...2080...498..........
So in the above we can see if we want to buy shares in dowie corp right now then there are 430 available at 501 and more available at higher prices... likewise if we want to sell then the offer is 500... the difference between these is the "spread".
Lets say someone wants to buy 500 dowie corp shares at 501 - lets say they throw in a limit order at 501 - in that split second they do that, we'll assume there are no other orders, no one pulling orders etc.. - what does that look like immediately after:
dowie corp (DWIE)
..........503...3460...
..........502...800....
...70.....501..........
...325....500..........
...1246...499..........
...2080...498..........
So now the bid is 501 and the offer is 502... because that person buying has eaten up all the 430 shares on the offer though they still have 70 shares they want to buy...
What might happen here is immediately after that some other participants human or otherwise react*... maybe some of the guys who also wanted a taste of dowie corp at 500 will pull their orders and stick them in at 501, maybe some more people stick in buy orders maybe some of the people will sell orders at 502 and 503 are backing off a bit now... perhaps it looks like this after people have added or pulled orders:
..........503...1460...
..........502...400....
...500....501..........
...600....500..........
...800....499..........
...1500...498..........
That order for 500 shares on the bid is a combination of the 70 left over shares and any other orders that joined at that price...
now say someone sells 100 shares at market:
..........503...1460...
..........502...400....
...400....501..........
...600....500..........
...800....499..........
...1500...498..........
What's happened here then? Well our guy who had 70 shares still left to fill was at the front of the queue (cos he was the first there with bids at 501 and made the new price) so his whole order is now filled, he's the proud owner of 500 dowie corp shares... 30 other shares went to the next quickest ones to follow him.
Now lets say there is some positive news released about dowie corp, cos dowie corp is just awesome... well that could lead to both a combination of people trying to buy shares but also... those guys with the sell limit orders sitting in the book might start to pull them as the price jumps up slightly - lets look at more than 3 levels this time:
Maybe in the first tiny fraction of a second some lucky punter manages to grab 1000 dowie corp shares
..........515...2000...
..........514...700....
..........513...800....
..........512...800....
..........511...2500...
..........510...4500...
..........509...900....
..........508...800....
..........507...1000...
..........506...1500...
..........505...3500...
..........504...2050...
..........503...860....
..........502..........
...400....501..........
...600....500..........
...800....499..........
...1500...498..........
Maybe some others throw in orders but the people previously looking to sell start pulling their orders... the price can shoot up... not because there are necessarily people getting filled at all those levels but because in a split second perhaps the order book for dowie corp looked like - perhaps a combination of orders being pulled at like 503, 504 etc.., maybe someone threw in an order for 1000 shares at 510 and 1000 at 509 and got filled/partially filled - in a split second of pulling orders, thrown in orders it might look like this:
..........515...2000...
..........514...700....
..........513...800....
..........512...800....
..........511...2500...
..........510...3500...
...100....509..........
..........508..........
..........507..........
...800....506..........
..........505..........
...700....504..........
..........503..........
..........502..........
...400....501..........
...600....500..........
...800....499..........
...1500...498..........
Though in another spit second the price levels fill up again and we'd maybe have something like (looking at three levels again)
..........512...800....
..........511...2500...
..........510...2500...
...600....509..........
...2550...508..........
...1500...507..........
Say there was some really really bad news about dowie corp, maccy corp has used the ban hammer and prospects are looking very bad indeed... well save for perhaps a few unlucky people too slow to pull their buy orders... maybe the next willing buyers for dowie corp are much further down the order book... perhaps like down at 400-ish... that doesn't require loads of buying and selling per se for the price to move... but rather lots of orders being pulled and the market just dropping down to where some buy orders/sell orders can be matched...
*what actually happens in reality is multiple orders will be added/pulled in each tiny fraction of a second/"heartbeat" of the exchange and market participants react to that (or really various algos react to that, humans kind of react on a bit of a slower time frame, and those interested in longer time frames don't even look at the actual order book itself at all) .
Last edited:
Huh? I was referring to your comments about cashing in and out is better than holding. You posted with the confidence of it being a tried and tested/studied method/strategy. I might do some research into it.
Taking profits after a good run is sensible- but who’s to say when the stock will peak?
I sold my EasyJet shares prior to this downturn, and was happy with the profit. I could have made more by selling later. A bird in the hand and all that.
I sold my EasyJet shares prior to this downturn, and was happy with the profit. I could have made more by selling later. A bird in the hand and all that.
Soldato
- Joined
- 13 Jul 2004
- Posts
- 20,341
- Location
- Stanley Hotel, Colorado
The company hasnt changed, the price is cheaper. Thats the message I got. Uk wasnt expensive to begin with, some of the USA stock prices are a bit silly though its hard to say with tech or a commodity that can change rapidly.
So FTSE is cheaper then a year ago and it looks to be reset to near 2016 levels. We are lucky here because these companies do payout, they arent hypothetical in their cashflow so I'm gaining so long as the company is profitable and the price tag matters when I sell out.
Doesnt seem like it'll be a V shape recovery but I dont see these prices being cheaper in five years so if you arent a trader its a buy especially anyone who is averaging their buys, be happy and look at units gained each month rising and thats a positive.
Yea I want Shell anyway and BP is fine to own. I imagine a lot of the FT100 is fine though I'm interested to hear which will fail if any, but its the balance of the 100 that matters anyway and just the top 10 shares are fine to own over cash.
You know I'm worried it'll rise before I can buy, I dont mind the price dropping further as I will get more units and its out of my hands now either way.
Take profits but dont rush for the exits when everyone else is, I think that idea can easily be worse then the thing people are running from.
I hope the upset makes SXX acceptance more likely, take the cash and buy AAL shares with it at £4 cheaper this week and get some yield back for the trouble at least. Thats my intention and I hope they do a good job with the mine because UK will benefit as an exporter, we need that.
Miners profit from average price over five years vs costs, I think they are good then.
What Dowie said about spread, IGG gains from the spreads its just a great cash cow imo, only the biggest extremes are a threat.
Its a great buy I reckon, they are gaining from volatility because margin trading is really hard on people to get right and they even have to warn the majority will not profit. Inversely IGG is quite a safe UK stock, time proven probably grows so long as volatile markets continue.
So FTSE is cheaper then a year ago and it looks to be reset to near 2016 levels. We are lucky here because these companies do payout, they arent hypothetical in their cashflow so I'm gaining so long as the company is profitable and the price tag matters when I sell out.
Doesnt seem like it'll be a V shape recovery but I dont see these prices being cheaper in five years so if you arent a trader its a buy especially anyone who is averaging their buys, be happy and look at units gained each month rising and thats a positive.
It looks like a lot of big hitters are down a nice chunk today
Shell
BP
Glaxo
SSE
Yea I want Shell anyway and BP is fine to own. I imagine a lot of the FT100 is fine though I'm interested to hear which will fail if any, but its the balance of the 100 that matters anyway and just the top 10 shares are fine to own over cash.
I dont know about any contest but because the ISA allowance closes in like a month I setup a buy and I doubt it cleared today because I was a bit slow on registering so I'll get Mondays price.% percentages said:Royal Dutch Shell PLC 8.7
HSBC Holdings PLC 6.1
AstraZeneca PLC 5.3
BP PLC 5.0
GlaxoSmithKline PLC 4.8
British American Tobacco PLC 4.2
Diageo PLC 3.8
Unilever PLC 2.7
Rio Tinto PLC 2.5
Vodafone Group PLC 2.2
squiggles = close below 7000 this tax years suggests uptrend lost. Close above 6500 roughly is some support kept if previous peaks and lows can be indicative. Guesses but I'll add it to reason to consider buys
You know I'm worried it'll rise before I can buy, I dont mind the price dropping further as I will get more units and its out of my hands now either way.
Take profits but dont rush for the exits when everyone else is, I think that idea can easily be worse then the thing people are running from.
Bonds > shares and bonds are stupidly over priced. Price being the inverse of rates.
I hope the upset makes SXX acceptance more likely, take the cash and buy AAL shares with it at £4 cheaper this week and get some yield back for the trouble at least. Thats my intention and I hope they do a good job with the mine because UK will benefit as an exporter, we need that.
I sold some FTSE fund to buy gold fund earlier this week but I should have continued and repeated apparently. Long Gold is problematic because the right buy was a year ago, more so then FTSE was. I do think Gold is ok in its overall phase of a decade or so but it can also fall for 18 months, it already rose to get this price and its a fight to get higher.
Miners profit from average price over five years vs costs, I think they are good then.
Buy the house, the house always wins is my take on all that. I took IGG at a price lower then I sold it because they suffered worry from EU regs and red tape and brexit but they make a lot of money from market upset.Just getting into trading CFD's currently. I've seen so many contradictions about signal services. Has anyone had experience with trading CFD's through signals from say a £100 account? Would appreciate any suggestions for signal services if positive outcomes.
What Dowie said about spread, IGG gains from the spreads its just a great cash cow imo, only the biggest extremes are a threat.
Its a great buy I reckon, they are gaining from volatility because margin trading is really hard on people to get right and they even have to warn the majority will not profit. Inversely IGG is quite a safe UK stock, time proven probably grows so long as volatile markets continue.
Last edited:
Associate
- Joined
- 7 Sep 2014
- Posts
- 1,167
So when there's a gloabl issue like coronavirus that has the potential to massively upset the economy, if you're into funds that are cost free to exit, I just don't see the point in not withdrawing initially, seeing how it plays out then reinvesting. Different with equities where you have a significant exit cost though OFC.
Yeah, UK companies are decent buys for income based investments, decent div yields and they are not expensive either due to Brexit, potential growth and div yield. Best of both worlds really.
I'd be going down the BP route instead of Shell, i haven't looked into Shell much though, i'm generally not too bothered about traditional dirty stocks, especially considering the main talking points at Davos this year with ESG.
But I do know BP are heavily investing in Brazil and using sugarcane to create biofuels, biofuels cut emissions by 90%. Everyone thinks electric is the future, which it will be, but maybe not in the near future. I think if some of these biofuels become a solid option in the short term without having to pull out the current infrastructure, it could be a massive winner.
Gold is gonna have massive decade i think, its still a right buy in my view, Goldman and JP Morgan just released forecasts for gold, both have it at over 2k within 18 months. Worth looking at some gold stocks as well (Yamana Gold/Newmont Goldcorp Corp/Barrick Gold Corp)
This recent dip in gold/gold stocks which is following the broader market is just flushing out weak hands in my opinion, hopefully people aren't fooled by it.
Last edited:
Yea, returning to previous levels will take a long time, and it could drop a lot further. It's the right move considering risk/reward. There isn't much upside to holding on, but there's huge risk. If you are long long term investor and only worried about the price in 10 years time, then it doesn't matter i suppose.
Last edited:
Associate
- Joined
- 7 Sep 2014
- Posts
- 1,167
Agreed.
Soldato
- Joined
- 5 Dec 2010
- Posts
- 3,283
- Location
- deep space nine
The answer on when to invest is now. If long term hodl is your plan.
Once events show signs of returning to normality, prices will rise. Trouble is, they can rise so quickly that the best buying opportunities can disappear. Still think it’s best to invest when most other people are running away, classic Buffett.
We haven’t been seeing the large over valuations here that have been present in the states. Anyway, each to their own.
We haven’t been seeing the large over valuations here that have been present in the states. Anyway, each to their own.
Now... or... next week? Or next month? The trick is finding the bottom, right?