Time And Sales

What Are Time And Sales In Trading?

Time And Sales refer to the real-time data related to the trading of a particular stock, which traders use to track stock activity as well as make decisions regarding the buying and selling of the same. Almost every trading platform will have a section allotted for it.

Such a digital display of time is handy in technical analysis and contains information like date, time, direction, price, and volume. This running data, combined with fundamental analysis, is ideal for trading decisions. But unlike experts, first-time investors should study the process thoroughly before using it.

• Time and sales are the digital display of the stock-related information, which are important parts of any trading platform.
• It shows a real-time display of information related to the price, time, volume, date, and direction of movement of each stock that is being traded in the stock exchange.
• This forms an important part of technical analysis, which traders combine with fundamental study to make stock trading-related decisions.
• Novice traders should study the process in detail and learn to interpret each indicator so as to successfully use it to their advantage.

Time And Sales Explained

Time and sales display real-time data related to transactions taking place and is an important component of any buy and sell decision. It aids in technical analysis, which is combined with fundamental detail to analyze any stock performance. Apart from graphical charts, which include candlesticks or bar charts, the data related to time and sales trading view give a detailed display of stock movement and other various important relevant information.  It is a beneficial method for understanding and tracking the direction of trades.

Its main use lies with traders who trade for the short term, which is for a few hours or days. For them, detailed real-time knowledge about stock movements is essential because the time limit available for making buy and sell decisions is less, so continuous and updated details are essential.

Mastering the art of interpreting the data displayed in this section is crucial because it helps them remain updated every second and analyze how the market participants are reacting to a particular company stock. It becomes all the more essential in case of any news related to the company that affects the investment decisions of these participants.

New traders often take some time to understand the price movements from such trading time and sales data due to the action from both buying and selling points of view taking place simultaneously. Therefore, it is advisable to study it thoroughly for a few days before taking the plunge into stock trading and using it.

How To Read?

The data of time and sales from TradingView below shows a detailed view of the stock activity on a particular day, through the trading platform. The display also allows the customization of data through the use of filters. The stock symbol is shown, along with the volume, execution price per share, along with a small triangle facing up or down, indicating whether the traded price is more or less than the previous close.

It is important to understand the below-mentioned terms before we study how to use it.

1. Direction – This refers to whether the trade is a buy trade or a sell trade.
2. Price – This is the exact price at which the trade took place. If a trader has placed the order at 10 am and sold the shares at 11:30 am, the closing time would be visible.
3. Date and time – This suggests at which time and date the trade has been executed.
4. Volume – This is the total number of shares that changed hands.

In the screenshot below, the real-time Time and Sales data of the Invesco QQQ Trust listed on NASDAQ has been shared. This is a chart showing the data as of Oct 5, 2023. In the display, there are three columns: price, size, and time. Users can go to settings and make changes as per their preferences from the options available.

Source

Here, it is important to understand what the different colors within the data mean. The rows in green indicate that the trades are being done on the ask price. The rows in red show that the orders are getting executed on the bid price. However, if the color is white, it will indicate that the trade is done between the bid and ask price.

But it is to be noted that the candlestick patterns are equally important. Trade decision should be taken after studying the time and sales data along with candlesticks and other indicators like Relative Strength Index (RSI), Moving Average Convergence/Divergence (MACD), pivot points, Bollinger bands, etc.

Examples

Let us understand the concept of trading time and sales with the help of some suitable examples as mentioned below:

Example #1

Let us assume that Mike is a short-term trader in the stock exchange and trades daily. One day, he decided to trade on the stock of XYZ Ltd because there was a solid chance of the stock going up due to the news of its upcoming merger with another MNC, which would give a boost to its global operation within the next couple of years.

He is an expert in using Nasdaq time and sales in TradingView and detected from the time and sales data that at 11:25 EST, the stock was trading at $72.68, which is its all-time low.  But other indicators like the MACD and the RSI are giving a strong uptrend signal, signifying that the stock will go up very soon. Mike decided to buy 300 stocks at this price. Within the next couple of hours, the price shoots to $150 steady. Exactly at 2:00 pm, the stock reached $150.20, and Mike sold all his stocks, thus making a profit of $23,256 .

Example #2

Let us take an example of any company listed on the NASDAQ or NYSE, like Tesla Inc., and look at their data related to real-time trades from 3:00 pm to 3:30 pm as of 29^th Feb 2024. The data looks like the details given below:

However, the Nasdaq time and sales data of the pre-market (4:00 to 9:30 am ET) and also the aftermarket (4:00 TO 8:00 pm ET). There, before and after market sessions offer less liquidity, more volatility, and lower prices. Investors trading during these times take a lot of risk. Overall, Nasdaq gives such data related to volume, today’s and 52-week high and low, previous close, real-time quotes of the last five transactions, and the intraday chart.

Importance

Now let us analyze the importance of the concept of time and sales data in detail:

1. The trader can evaluate the demand and the supply of a particular stock in the exchange using real-time data. The market trends are easily detected, and it becomes possible to take action based on the rise and fall of demand.
2. To determine the demand levels, the bid and ask price is advantageous. A higher ask price indicates selling pressure and a higher bid price indicates a buying pressure, pushing the stock prices upwards.
3. From the above points is clear that any buying and selling opportunity can be easily identified. If the prices show a sudden selling pressure, it is better to come out of the market, and buying pressure is probably a good time to enter, provided other indicators give a positive signal to do so.
4. The other indicators, like MACD, RSI, Bollinger Bands, etc., should be used in conjunction with this time and sales data so as to get a more confident signal to go ahead with the decision.
5. Short-term traders find it very useful because it gives them real-time data for making decisions related to a few minutes, hours, or days and, thus, identifying a potential opportunity to trade.

Thus, the above are some points highlighting the importance of the data to any trader or investor.

Time And Sales vs Level 2

Both the above terms refer to real-time numerical information related to stock trading in exchanges. But there are some differences between them, which are as follows:

1. The data reported in different for each. The former deals with already executed trades related to a stock, but the latter deals with the bid and the ask prices of a stock.
2. In case of the former, color coding is used to make it more visually effective, whereas the latter does not have any such indicators.
3. For the former, the colors indicate whether the trade took place at the bid price or ask price. But for the latter, the data shows what is the current bid price or ask price.
4. The former provides data related to the past, which is rice already executed, but the latter provides information about the current price that is being offered.
5. While the former is related to trades already done, the latter is related to open orders.

Frequently Asked Questions (FAQs)

Recommended Articles

This article has been a guide to what are Time And Sales. Here, we explain the concept with how to read it, its differences with Level 2, examples, and importance. You may also find some useful articles here –

• Basic Technical Analysis
• Advanced Technical Analysis Course
• Technical Analysis Books