52-week high/low
- Thread starter Amahrix
- Start date
Do you need to know the 52 week high low to trade an asset - no. However, sometimes it is nice to know.
The spread between the high and low gives you a crude proxy of how volatile the stock is.
Example - 52 week high - low 8 -10 Unless there is some pending news the probability of the asset moving 5 in a day is low.
Also there can be some significance as the price of an asset tends toward the 52 week high or low. You'll hear support and resistance levels. If asset is tending toward 52 week high or low you would want to combine your analysis with additional data. The asset has the probability to be more trade worthy than an asset in the middle of its high - low.
If you happen to know the high low good. If not, not the end of the world.
The spread between the high and low gives you a crude proxy of how volatile the stock is.
Example - 52 week high - low 8 -10 Unless there is some pending news the probability of the asset moving 5 in a day is low.
Also there can be some significance as the price of an asset tends toward the 52 week high or low. You'll hear support and resistance levels. If asset is tending toward 52 week high or low you would want to combine your analysis with additional data. The asset has the probability to be more trade worthy than an asset in the middle of its high - low.
If you happen to know the high low good. If not, not the end of the world.
It is one of the most useless foolish 'simple' concept to use for trading.
We need to enter position early. don't wait and wait and wait for confirmation, double confirmation, triple confirmation for price to hit 52 week high / low and for all the planets to be aligned.
By the time you enter based on 52 week high/ low, it might be too late.
And market might start to reverse direction.
Market is merciless to those who are too slow to react, or who hestitated too much.
We need to enter position early. don't wait and wait and wait for confirmation, double confirmation, triple confirmation for price to hit 52 week high / low and for all the planets to be aligned.
By the time you enter based on 52 week high/ low, it might be too late.
And market might start to reverse direction.
Market is merciless to those who are too slow to react, or who hestitated too much.
Rather “How volatile the stock was.”
I mean to say it is worth going out of your way to not know the numbers versus knowing as knowing leads to too much information which leads to a more stressful position to make decisions under uncertainty. Part of it leads to voodoo magic with TA (I won’t argue TA because it’ll go on like arguing religion).
Anyways, thanks for your response
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Just like everything else ...
Yeah pretty much. Focus should be price for traders and long term value for investors.
Many good companies when oversold or overbought may revert to the mean. Read it again before commenting. For example, analyze BMY or ADM, they are both trading close to 52 week low. Both are fairly good dividend stocks. A high probability trade is to sell OTM puts with strike price below or close to 52 week low, expiry date before ex-dividend date. Heavy institutional support exist.
Much more data on these 2 , you'll need to dig it up...
Much more data on these 2 , you'll need to dig it up...
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Fellow EliteTrader, your response epitomizes my argument.