i am still very new to trading and currently in the state of understanding the fundamentals of it. So i got stuck with the following questions :
How exactly does the price move? I learned that the price makes an uptick when a transaction is made on the "ask" (aggresive buyer) and a downtick when a transaction is made on the "bid" (aggresive seller). But when I watch the Level 2 and the Time and Sales within DAS I sometimes see that there are transactions made wheather at/above the ask/bid or inside and the price doesnt move. Happens very often in the premarket and a shares traded <100 (Lot-size 0)
How can a transaction be performed inside of a spread when there are only the possibilities to wheather set a price and wait that someone accepts it (limit order) or to accept a price yourself (market order) wheather on the bid or ask side?
Sometimes I see on the top of Level 2 a bid and an ask and they are just 0.01 apart from each other but the spread on Level 1 shows a wider spread. How does this come?
I am really looking forward to your answers and would be more than happy if you could help me with these questions.
We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.
Fundamentals of price movement
in Day Trading Basics
Posted