Market Statistics
These market statistics help us while day trading
Market Statistics help us in making decisions and more importantly, being decisive when trading.
Therefore, we are constantly looking for topics to analyse in order to find numbers that can support us while trading.
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Feel free to propose an interesting thesis that we should analyze. We'll be happy to do so!
When reach stocks their daily high?
About this analysis
The video above is all about the timing of daily highs. More specifically for stocks with a very high relative volume, which often become so called "runners".
We searched for US stocks that traded in 2021 on high relative volume. That's a pool of about 8000 stocks over a period of more or less 220 trading days. For all those stocks we took their price evolution during pre-market hours, regular market hours and during the after-market. We had a detailed view of the time frame of half an hour in which most stocks reached their high of day. Our goal was to find information to back us up while day trading.
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Analysis results
If you want to see all results, you'd better check the video that gives a clear comprehensive overview. Below you can find an extract of the most essential findings.
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In the first half hour during pre-market, between 4AM and 4.30AM, already 12,5 % of the stocks reached their high of day.
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Looking at the cumulative numbers, in 53% of the cases, the high of day was already reached during pre-market hours, so before the market opens.
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During the first half hour of the regular market hours, between 9.30 and 10AM, 18% of the stocks reach their daily high.
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Looking at the cumulative numbers, after 11AM almost 80% of the stocks have already reached their daily high.
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No differences were identified between gapping and non-gapping stocks.
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Conclusion
These numbers are statistically significant so if you would just trade randomly, then you could use these numbers to see your chances that the stock you’re buying may reach a higher high on the day. Since our goal is to day trade this is however not how we will use these results.
These numbers are crucial to us in case we feel that we're about to step into a FOMO trade. If we see a stock making a new high and we want to join not based on a pattern or technical input, we only have 46% chance after the market-open in making new highs. After 11AM, these chances even decreased to 20%!
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