Stock Trading and Other Things

How can I develop my own stock trading price from stock price data?

I want to develop own stock trading price levels, From stock traded open high, low and close price previous records. Can any one tell me about calculating system? pl, guide.

Public Comments

1. first of all try to understand popular indicators that others use.. i mean try to learn basics.

2. Short answer:
Just take the avg. 52 week high and low and add the two prices together. Then divide by two. This is probably the fastest way to calculate the avg. trading price.

However, other things to consider:

1. Company management: Also look at trading information of the top executives within the company. Understand that some high executives must act on the stock options. But, if you see everyone selling that isn't usually a good sign.

2. Type of Sector the company is based: Within poor economies alcohol, tobacco and discount retailers are normally the best places to invest. People tend to become more stressed so they drink and smoke more. In addition, they are concerned about saving money so the discount retailers are a good place. Keep in mind the timing of the purchase. You can never time the "best" price to purchase a stock. But you can time the date in which you purchase them.

3. Your current portfolio: If you are holding several bank and retail stocks. It doesn't make sense to purchase more. Yes, some people consider this diversification "not have all your eggs riding on one company", but this is over dilution of your investment dollar. Stay the course with both diversification and allocation.

4. Long-term/Short-term Goals: You can fall in love with pets and people, but never fall in love with an investment. Just as you are looking at a purchase price, you must also consider a selling price as well. Once you've exhausted your stay with that investment, then sell. Pay yourself first, and look for the next opportunity.

5. Trade volume: This is usually overlooked many of the time. Why trade volume??? Well, if you are looking to purchase a company and they meet all your criteria. You must understand how many other people or financial institutions are invested in it as well. Roughly 85% of all "price" movement of a stock is determined by financial institutions.

6. Beta: This will measure the volatility of the stock price. A higher beta score means that this company is considered more volatile than a lower score.

Just my two cents.

3. you can not get that by a single day's opening / closing / high /low . you need at least 3/4 years data to analysis where r the support levels. where is upper level and where is lower. and it must compair with sensex/nifty. and most importantly stock moves with latest news on that company.. may be small news nor short term and big to long term moves... tracking which is difficult task for individual....
better to follow sites like moneycontrol.com or buzzingstocks.com

4. Rough price valuation model:

Find the P/E ratio of your target company and the P/E ratios of around 7-15 "comparable" companies. Take the mean PE ratio and multiply it by your company's earning. I am NOT suggesting you invest on this, as Public Comps don't tell the whole story of a company's worth. It is a model, however, and is informative, especially if you're just looking to play around with numbers and learn.

5. pivot point theory will help you but remember it works in intraday only. u can take high low & close of previous day and then make the following calculations

pivot point = (high + low + close)/3

resistance 3 = high + {2 x (pivot - low)}
resistance 2 = Pivot + (high - low)
resistance 1 = (pivot x 2) - low

support 1 = (pivot x 2) -high
support 2 = pivot - (high - low)
support 3 = low - {2 x (high - pivot)}