Top 10 Countdown Of Reasons For Using Stock Metadata – #1 Of 10
February 9, 2010 by JR
Filed under Day Trading
Reason 1 for using stock metadata is having the capability of getting accurate statistics about each 15-minute time period that shares trade at the highest and lowest price points of the day.
Metadata is data about data. For example, say you gather information about cars parked at a shopping center. Data would be the colors of the cars there. After gathering this information for a period of time, you decide to report your findings.
The metadata could be something like the average count per day of the different colors for the cars parked there.
Metadata gives meaning to all those bars and lines appearing in stock charts. This is information that has been processed to illustrate accurate depictions of both detailed-level or summary-level statistical data over a defined period of time.
Historically and statistically speaking, one of the facets of information that stock metadata identifies is the different time periods of day when shares traded on the major North American stock exchanges. This is information is typically found in the 15-minute Hi-Low Counts report, a section of which is illustrated in figure 1 below.
This information on the Ford Motor Company for the period 10/1/2008 to 11/24/2009 will be used in the example presented in this article. Information on the Ford Motor Company will also be used in the other “Top 10 Countdown Of Reasons For Using Stock Metadata” series of articles to support the explanations being given. The dates covered by the reports span a total of 291 market trading days.
By compiling, summarizing and transforming the applicable historical stock data on a company into metadata, it’s simple to see both the most and least popular times of day that shares of a company have been traded at their highest or lowest price points. Figure 1 below presents those details in a report showing the different time periods sorted in descending sequence by number of occurrences.
Having this information available to you helps you make money by better managing the times of day you select to execute your trades. “Why is this?” is the question you may be asking yourself. The answer is simple.
If you’re prepared to buy shares of Ford during the 11:15:00 to 11:29:59 time frame (see bottom-right portion of figure 1) and you check the reports for the Ford Motor Company, you’ll discover that only 4 of the 425 total lowest price points were reached during that time period.
So after scrolling up towards the top section of that portion of the report, you can see that statistically speaking, there are other times later during the day when low prices were reached more often. And with that information in hand, you might want to reconsider this decision to buy those shares and wait for a more suitable time period of the day. Reason 1 is further explained below.
The source for this class of information is one section (figure 1) of the stock metadata report entitled 15-minute Hi-Low Counts. Click Here for a detailed description of this report.
As illustrated in figure 1 above, the information is divided into twenty-six 15-minute segments of time sorted in descending sequence by number of occurrences for each segment within the following time category:
Highest Price Reached
2nd Highest Price Reached
2nd Lowest Price Reached
Lowest Price Reached
So for the 291 trading days covered by this report for the Ford Motor Company, we can see, statistically speaking, that from 9:30:00 to 9:44:59, Ford shares traded at their highest (128) price points during that time period, and coincidentally, also at their lowest (92) price points of the day.
All of this information can be verified and confirmed by comparing the line entries within each day of the 15-minute Metadata Detail report. You’ll be seeing more on this latter report discussed when some of the other reasons for using stock metadata are reviewed on this site.
Although it may be possible for it to happen, usually these highest and lowest price points for the stock won’t occur on the same day.
When looking at figure 1, we can see that the next 15-minute period, from 9:45:00 to 9:59:59, was when the Ford shares traded at their second highest (77) price points and second lowest (66) price points of the day, again but usually not on the same day.
One thing to bear in mind when using stock metadata by looking at this report is the fact that Ford shares may have attained the highest or lowest price of the day more than once during the day. That’s why you see column totals of 374, 426, 419 and 425.
This is an important fact because it’s an indication of something that can affect the approach you may use for trading stocks.
Here’s why. Whether you’re either buying or selling your shares and you think you missed an opportunity to either open a position near the lowest price or clear your position near the highest of the day, you may be wrong.
Reason 1 tells you other opportunities may be presented to you to do so.
Furthermore, based upon the metadata values displayed in this report for the Ford Motor Company, compared to total of 374 occurrences for reaching the highest price point of the day, there are many more times of the day when the 2nd highest (426) price points as well as the lowest (425) and second lowest (419) price points of the day have been reached.
This implies that there are many more opportune times offered during the span of a day when these shares can be bought or sold at a price that can prove advantageous to you.
That about wraps it up for reason 1. Now let’s continue by going to the 2nd reason for using stock metadata:
Getting statistics by 15-minute time period during the day indicating the highest and lowest count of shares traded.
The link to this next reason is included in the author’s biography that follows.
Click Here to go to Reason #2
Click Here to access all Report Definitions and Layouts
Stan Pokutylowicz is a Senior Information Technology Specialist and is currently the System Architect and site-design specialist for Stock-Market-Keywords.com, a site containing popular search keywords on the stock market.
This site also features a different publicly-traded company each day of the week, Monday through Friday. As part of that offer is a series of 5 metadata reports containing statistical and historical information about the stock’s price over a period of approximately 12 months.
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Tags: forex, stocks, options, day trading, day traders
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