A phenomenon of Open v/s high low

When you are into the work of stock trading, you often hear the terms “bull” and “bear”. These terms are used to define market conditions. It is important to know and understand what the terms indicate, in order to understand the functioning of the market. Let’s understand what are bear and bull markets and which one is better Bear or Bull market? And then let’s dig deeper into it.

What Are Bear and Bull Markets?

The words Bull and Bear are used to describe whether the market is appreciating or depreciating in value. Sometimes, these terms are also used to determine how investors think about the market and the subsequent trends.

In simple words, when the stock market rises high, it is said to be bullish or bull market. It is characterized by a continual increase in market share prices. When the market is bullish, most investors often believe that the uptrend will remain for a longer period of time.

On the other hand, the market is said to be bearish, when it is facing a downfall. A bear market is the indication of decline. In Bear Market, the share prices start dropping, and the economy of the country slows down.

Which one is better Bear or Bull market?

Both bear and bull markets have different impact on your investments. When the market is bullish, short term or intra-day trading takes a peek. On the other hand, the bear market brings long-term investment opportunities to investors. So it’s a good idea to spend some time to govern the market and make investment decisions accordingly.

Open vs High

Opening price is significant especially at the beginning of the market, to determine day trading strategies. The price at which stock first trade on trading day is known as opening price. Open vs high-low generally gives you the first impression of how a stock will perform throughout that trading day. Hence, the effect of news, events reflects on opening price, at times leading to the opening of stock in gap up or gap down.

When this opening price is compared with High or low, it helps the trader to take an effective position in the market. Therefore, a specific feature where High price can be compared with low prices, would be beneficent for the trader.

Open vs High low can be understood into two sections, in order to generate Buy & Sell signal:-

  • Open  equals to high

This indicates Bearish trend as prices will probably move below high price. In other words, a trader can go Short.  Whereas Previous high will help a trader to identify breakout by comparing it with current day’s high price.

  • Open equals to low
open equals low

This indicates Bullish trend, thus a trader can go long. Here prices will possibly move upward beyond low price. However, previous low can help in determining the breakouts.

We have thus developed open v/s high-low feature for traders to identify intra-day trading strategies and even the ‘%chg’ option plays an important role for intra-day traders. This feature in Truedata Cheetah is shaped in such a way where a trader can certainly take position by just observing the results.

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