Guide to Day trading

» Day Trading Rules and Facts

» Day Trading Terms/Definitions

Investing and Day Trading Basics

» Bid and Ask

» Types of Orders

» Level II

» ECNs (Electronic Communication
Networks)

» Market Makers

» Order Routing

» Technical Analysis

» Fundamental vs. Technical
Analysis

» Direct Access Broker

» Selling Short

» Paper Trading Stocks

Day Trading Strategies

» Different Day Trading Styles

» Entry and Exit Signals

» Stop Loss Placement

» Money / Risk Management

» Day Trading FAQ

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http://www.camarillaequation.com/
index.html

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http://www.delta.st

»
http://www.geocities.com/
daytradingtutor/

»
http://www.tradingsimulator
software.com/

»● Day Trading – Bid and Ask

If you have ever typed the ticker symbol in any financial website on the Internet to get the price quote for a stock, you would have obtained something like this:

Yahoo! Inc. (YHOO)
Last	32.48	Change	0.09
Bid	32.47	Ask	32.48
Bid Size	6300	Ask Size	1600
Hi	32.56	Lo	32.14
Volume	6,825,334	Last Trade	2000

This is what is called "Level I" information. Level I gives you the best available prices for a stock at a given time along with volume information and some other details. In this example we are looking at the stock of Yahoo Inc., which has a four-letter ticker symbol "YHOO" What does the rest of the information mean?

Last - the last transaction for the stock took place at $32.48 a share.

Change - how much has the stock gone up or down from the closing price (price at about 4:00 PM EST) of the previous trading day.

Bid - the best open order to buy the stock (also known as the "best bid"). Someone is trying to buy YHOO at $32.47 a share or lower.

Ask - the best open order to sell the stock (also know as the "best ask"). Someone is trying to sell YHOO at $32.48 a share or higher.

Bid Size - the amount of shares that investors are trying to buy at the Bid price.

Ask Size - the amount of shares that investors are trying to sell at the Ask price.

Hi - the transaction with the highest price of the day. YHOO has been as high as $32.56 per share.

Lo - the transaction with the lowest price of the day. YHOO has been as low as $32.14 per share. So the stock, currently at $32.48, is closer to the upper part of its trading range than to the lower part.

Volume - the total number of shares that have been bought and sold (for every buyer there has to be a seller) during the current trading day.

Last Trade - the size of the last transaction in the stock (somebody bought 500 shares of INTC stock from someone else who sold 500 shares of INTC stock).

This might seem trivial to some of you, but every trader should know this inside out without even having to think about it. You have to recall this information automatically without taking time to think. Furthermore, you have to know how your order will interact with the current Bid or Ask if you place an order to buy or sell a stock, and this brings us to the topic of "orders." How many different types of orders exist and what are they good for? This is information that you must know as a day trader (and as an investor). Even though most of the information on this page also applies to day trading currencies, for a better understanding of currencies, you can go to the currency section of this website.