Does anyone actually understand why stock price moves?

[schizo]

This is pretty much Econ 101.

More buyers (with limited sellers) equate to higher prices and more sellers (with limited buyers) drive down the prices.

 

[Overnight]

Simple...

I want to buy 5 cows at $70.

You have 6 cows to sell at $80.

One of us will be forced to pay the other's price.

Say I bite the bullet and buy 5 cows at $80.

Now you have 1 cow to sell at $80.

Someone comes in and really needs cows. They buy the 1 you have at $80.

Now there are no more cows to be sold at $80. The next person willing to part with cows is only willing to do it at $90.

repeat.

But then I come in and undercut you, by selling 10 cows at $75. So you bought the bullet and bought my 6 cows at 75.

Others see the feeding frenzy that is occurring and start selling their cows at 74. So now I am forced to try to sell my remaining 4 cows at 74, they see my offer, and undercut me by dropping ask to 73.

Buyers of cows see the ask dropping, so they cut their bids to 70, and sellers follow suit, adding more and more cows at lower and lower asks. So I sell my 4 remaining cows at 70.

Now nooby is going "fuck!" and decides to buy double the amount of cows he bought at 75 at 70.

Now he has a DCA cost of 72.50 per cow, hoping to sell the cows later above that. Then I decide I want to buy back my 4 cows I sold at a discount 70, and sell them back at 72.5, and you get the idea.

The more activity you have in an instrument, the lower the bid/ask spread becomes, because more and more competition means more volume, and lower spreads.

It is the same with stocks, except instead of trading a physical thing, yer trading shares.

 

[nooby_mcnoob]

But then I come in and undercut you, by selling 10 cows at $75. So you bought the bullet and bought my 6 cows at 75.

Others see the feeding frenzy that is occurring and start selling their cows at 74. So now I am forced to try to sell my remaining 4 cows at 74, they see my offer, and undercut me by dropping ask to 73.

Buyers of cows see the ask dropping, so they cut their bids to 70, and sellers follow suit, adding more and more cows at lower and lower asks. So I sell my 4 remaining cows at 70.

Now nooby is going "fuck!" and decides to buy double the amount of cows he bought at 75 at 70.

Now he has a DCA cost of 72.50 per cow, hoping to sell the cows later above that. Then I decide I want to buy back my 4 cows I sold at a discount 70, and sell them back at 72.5, and you get the idea.

The more activity you have in an instrument, the lower the bid/ask spread becomes, because more and more competition means more volume, and lower spreads.

It is the same with stocks, except instead of trading a physical thing, yer trading shares.

Genius.

Then comes the big farmer who wants to sell 100 cows when volume is usually 20 per day.

 

[Overnight]

Genius.

Then comes the big farmer who wants to sell 100 cows when volume is usually 20 per day.

And that is the last bastion of cornering the market there can ever be. Because the big-ass farmer who can come in and lock a market price at X when the the buyers sellers want to go past X on 20 volume? Well, they must hit his price first with their own volume.

Of course, that would have to be far in the future because cows are funny in that there are daily auctions which drive the future prices.

 

[Pekelo]

So far i havent found a solid explanation of why price moves.

99% of people couldn't correctly describe why or how a car moves, yet there are hundreds of millions of drivers. The same way, you don't really need to know why something happens, as long as you correctly REACT to that happenings. By reacting I mean you make a profitable trade.

See? Life is way too complex, you don't need to question or understand everything. Just react, multiply and be merry...

 

[Overnight]

99% of people couldn't correctly describe why or how a car moves, yet there are hundreds of millions of drivers....

Cars, stocks, airplanes, floors, there is only one reason they move...

 

[guest_trader_1]

Look at the order book of that symbol, the more liquid it is the harder it is to move from one price to another. A move happens when one side of the book can get rid of the other. Buyers win, price goes up, sellers win price goes down.

Penny stocks normally have small liquidity, so those prices jumps and spikes should be normal.

 

[smallfil]

If you are trading the stockmarket, why should you care where the stock price of any stock is going? You would just trade the stock, long or short does not matter.

 

[easymon1]

So far i havent found a solid explanation of why price moves.

It's not for the lack of beating this question into the ground, lol.
This is the spine of each and every of your posteroos.

Relax, you will be able to profit by your particular trading skill, when the next bubble emerges...give it twenty years or so, lol.
Or learn how to trade.
phhhhtfkhggf, blew some bubblewatter out my nose, ouch!

 

[FreeGoldRush]

Why does price move more with less volume?

Because there are fewer bids/offers on the order books at the exchanges priced near NBBO (either lit or dark).