Reason 6 for Using Stock Metadata

Reason 6 for using stock metadata when day trading is to analyze the statistics for more clues and then figure out the closing price of the stock at the end of the day.

Now for reason 6, let’s examine another indicator to help anticipate where the closing price of the stock will be headed at the end of day. We’ll be looking at the High Close Gap data.

Much like with reason #5, this information for Ford shares can be found within 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.

Let’s start with the summary information.

In figure 6a, a modified extract from the summary file, we can see that out of the 291 total occurrences in this category, there were

• 14 times when the stock closed at the high of the day
• 172 times when the stock closed as much as $0.19 within the high of the day

We also can see that out of the 172 occurrences, there were as many as 86 times when the closing price anywhere between $0.10 and $0.19 which can be confirmed by accessing the data in the detail file and then applying filters as shown by figure 6b below.

After entering the filtering criteria in the Custom AutoFilter message box and clicking the OK button, the line items that meet these selection criteria will be presented.

As we can see from the figure 6c that follows, the count of valid matches is 86 which is exactly the same as was indicated in the summary file.

And so as a result of the analysis we have gone through here, we can perform some simple calculations for day trading to predict the closing price at the end of the day. The sequence of steps followed would be:

• Take the current price of the stock
• Compare where it stands in relationship to the highest and lowest price points of the day
• Identify the most popular High Close Gap range values in order to establish the highest and lowest potential price points possible
• Take into account whether the market is up or down,
• Compile all these details to predict the closing price

Of course when day trading, the nearer the time to the closing bell signal, the more accurate the final price prediction can be.

Reason 6 also promotes the option of expanding the scope of metadata being analyzed by turning on, adjusting or turning off selection filters for this group as well as any other stock metadata group that is in the process of being analyzed.

To improve the accuracy of a prediction, this information should be reviewed at different points during the day. It always helps to perfect a prediction by using results reached by other analysis activities described in the other different reasons for using stock metadata.

When going through the entire process, for day trading it always helps to ask yourself questions like:

• Are certain values more prevalent than others?
• Is there a tendency for these High Low Gap values to be at the higher or lower end of the range?
• Do the numbers repeat any type of patterns or sequence?

Over time, the more experience you have using this process, the simpler it becomes to make a closing price prediction. And with this day trading experience also comes an improving rate of prediction accuracy.

Will your accuracy levels using this process ever reach 100%? Probably not, but by going through this process a number of times, you will get better and improve over time. And when combined with other sources like stock charts and market news, it will help you develop day trading strategies to improve your stock market buy and sell decisions.

One last point to make – Before actually buying and selling stocks using this type of strategy, always practice using an online virtual stock market account or only execute your trades on paper.

Although taking this course of action won’t make you any money, it becomes a risk-free day trading approach that you can use. And of course, you won’t lose any money.

Having completed this section on using of reason 6, we are now ready to progress to some of the more controversial reasons for using stock metadata starting with reason 7:
Using metadata statistics with more clues on how to time the market by using the twenty-six 15-minute time periods of the day.

Return from Reason 6 to the Top 10 Reasons for Using Stock Metadata page for this site