Reason 5 for Using Stock Metadata

Reason 5 for using stock metadata is to get accurate statistics to use to help anticipate the price range of the stock during the day.

The stock metadata reviewed in reason 5 takes into consideration the fact that active day traders do well and make money when they know the boundaries for a stock’s price. With that information in hand, and by also knowing at what price the stock opened at, it becomes much easier to plan both when to execute buy and sell orders.

There are two report sources for using stock metadata that help come up with useful strategies to address reason 5, more specifically the metadata information found in the

• Daily Historical Metadata Detail report
  Click Here to see a detailed description of this report
  Click Here to see this report for the Ford Motor Company


• Daily Historical Metadata Summary report
  Click Here to see a detailed description of this report
  Click Here to see this report for the Ford Motor Company

You might find it easier to follow the explanations given by having your own copy of these files populated with the exact same stock price data.
Click here to get them. You can also save yourself a lot of effort by using these files later on as templates for creating your own metadata reports.

Here’s the process that’s used to figure out how to identify a potential price range for the stock during the day. Start off by looking at the High Low Gap section (figure 5a) of the Daily Historical Metadata Summary report. You’ll find three columns of data with these green-shaded headings:

• Range Start of High Low Gap
• Count from >$0.00 to end
• # Times High Low Gap

When you examine the information in each column, you’ll notice that the

• First column shows groups of incrementing starting-price ranges beginning with =$0.00 and ending with =>$3.00
• Next column shows the count of entries remaining, starting from that specific range category and continuing until the end
• Last column provides the count of entries strictly within the specific range

From this information it’s easy to spot that the $0.20 to $0.29 range is statistically one of the more popular High-Low Gap ranges for shares of Ford during the time period covered by this report.

This table shows you that there were 204 occasions when the gap was $0.29 or less with 83 of them being between $0.20 and $0.29 inclusively.

After the data has been imported into a spreadsheet file from the Daily Historical Metadata Detail report PDF file, the best way to select the data you want to examine is to use worksheet filters. As illustrated below, you’ll be looking for all the High-Low Gap entries falling within $0.20 and $0.29 inclusively.

The first thing that needs to be done to the worksheet after it has been populated with the metadata values is to activate filters for selected columns of data.

If the columns being looked at for reason 5 are not adjacent to each other, simply select a range of columns that also includes the required columns.

As shown in figure 5b above, we will be activating filters against columns that also include those with the headings Date and High Low Gap.

You can confirm that the filter feature has been activated (figure 5c) when the drop-down arrow appears below the column heading.

Figure 5d is a partial extract of the filtered results. The count of 83 matches the count shown in figure 5a and therefore confirms that all occurrences were selected where the High-Low Gap was between $0.20 and $0.29 inclusively.

There’s additional value in being able to use variations of this filtering feature. Take for example if you only want to check the last few weeks of the report to see how often the High-Low Gap has been $0.29 or less.

First adjust the filter for the High Low Gap column to select occurrences where the value is less than or equal to $0.29, and then as illustrated above, activate the filter against the Date column to select all entries whose value is greater than 11/2/2009.

Figure 5f illustrates the results produced after the filters have been applied to the worksheet. Only those events where the dates occur after 11/2/2009 and where the High-Low Gap is $0.29 or less are displayed.

So now you may be asking yourself, “Why is this important?”

The answer is simple. For one thing, by going through the results presented, day traders can see if any trading patterns are forming. This could be anything from contiguous days where the High Low Gap is within this range or even an absence of this range for a period of time.

And with that, the dates of interest could be noted down and the data further examined by activating one or more different column filters and further analyzing the information there by using stock metadata.

And probably the most important answer is that you’re leveraging the statistical information found using stock metadata to help you make informed decisions based on historical data.

With the review of reason 5 behind us now, let’s move on and learn more about using stock metadata. Here’s what reason 6 will be looking at:
Using metadata statistics to help anticipate the closing price of the stock at the end of the day

Return from Reason 5 to the Top 10 Reasons for Using Stock Metadata page for this site