Why Use Stock Metadata for Day Trading - Top 10 Reasons – #4 of 10

Reason 4 for using stock metadata is having accurate statistics to help anticipate a higher or lower price based on the previous day’s closing price when the market closes for trading.

The stock metadata reviewed in reason 4 can help answer the question:
“What are the odds today’s closing price for this stock will be higher or lower than the previous day’s closing price?”

Here’s how to obtain that statistical type of information for day trading.

Along with market news and company announcements, using stock metadata reviewed in reason 4 as another source of information can help make money by answering this question:
Will today’s closing price be higher or lower than yesterday’s closing price?”

To find out why, we’ll look at using stock metadata from two sources, the

- Daily Historical Metadata Detail report: Click Here to see a detailed description
- Daily Historical Metadata Summary report: Click Here to see a detailed description

You might find it easier to follow the explanations given by having your own copy of these files populated with the exact same stock price data. Click here to get them. You can also save yourself a lot of effort by using these files later on as starting templates for creating your own metadata reports.

When using one portion of the summary information (figure 4a) for day trading, we only see the total numbers for occasions when the price closed up, closed down, and closed with no change.

And when looking at the detailed information (figure 4b), each of the line items used to reach these totals is displayed. This also helps to visualize the range in values within that column.



To better illustrate the explanation for this example in reason 4, formulas were added to the bottom of the columns showing the count of entries in each column along with the equivalent percentage values.

Using stock metadata about Ford Motor company shares from the Close vs Prev Close data shown in figure 4b, an extract from the Daily Historical Metadata Detail report, we see the percentages are almost the same - 50.9% closing higher compared to 47.1% closing lower.

So the odds seem to very slightly favor Ford shares closing higher.

A method used for validating this Ford Motor company information for day trading is to look at the Daily Historical Metadata Summary report and to do a comparison to the section showing the Close vs Prev Close Gap metadata (figure 4c).



For reason 4, the number of occurrences that saw no change between the Close price and previous Close price is 5. If this value is subtracted from the total count of occurrences (153) that closed higher compared to the previous close, the result is 148, exactly the same as the value appearing in figure 4a and figure 4b.

The total count of 137occurrences illustrates that the value for the price closing lower is the same as shown in both figure 4b and figure 4c.

In addition to using stock metadata for day trading, there’s another tool that can be used, a pre-market trading indicator that can help anticipate a higher or lower closing price for the day.

A popular link to a pre-market trading indicator is CNNmoney.com , a site offering pre-market information. Go there before the market opens in the morning to get an idea where the market will open at the start of the day.

Combine that information with any market news or company news and it becomes easier to anticipate where the stock will be heading that day.

Now please pay attention and you’ll notice a very important fact about the price of shares of the Ford Motor Company for the dates under review. As illustrated in figure 4b above, on the 2nd day after they close, for the majority of times on these days the stock will close even higher.

For example when the original Close vs Prev Close value closed higher, on the 2nd day there were 109 occurrences closed even higher compared to 34 occurrences when it closed lower, and 4 occurrences when the price remained the same. This reflects a ratio of almost 3 to 1 in favor of closing higher on the 2nd day.

And when the original Close vs Prev Close value closed lower, on the 2nd day there were 95 occurrences closed even higher compared to 40 occurrences when it closed lower, and 2 occurrences when the price remained the same. This reflects a ratio of almost 2.5 to 1 in favor of closing higher on the 2nd day.

So statistically speaking, for day trading the 2nd day favors a higher closing price for stocks of the Ford Motor company. Having been able to identify this type of trend is another good reason for using stockmetadata as part of your strategic research.

Now let’s continue by examining the #5 reason for using stock metadata:
Getting metadata statistics to help anticipate the price range of the stock during the day

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