How to Read Board Information, How to Read It, and How to Use It ~ Learn Board Reading to Aim for a Higher Level Investor! | Episode 3: How to Read and Use "Trade Price" [Naohira Onishi]
Profile of Yohei Oonishi
Financial journalist. After working at a publishing company, he became independent in 1995 and has contributed articles on financial and economic topics to money magazines, business magazines, and weekly publications. He covers a wide range, from interviews with analysts and strategists active on the market’s front line to top executives of listed companies. He is well-versed in FX and financial trading in general.
*This article is a republished and edited version of an article from FX攻略.com March 2019 issue. Please note that the market information stated in the text may differ from the current market conditions.
Focus on the progression of the stream that reflects real demand
This time, I would like to spotlight the progression of the “streamed prices” that you should observe alongside the order book information. This is a chronological record of trading activity. It consists of three items: ① time, ② volume, ③ execution price — showing exactly which number of shares traded at what time (hour, minute, second).
What is displayed in the order book information is only the buyers’ and sellers’ desired transaction prices and their order quantities, and it is not a confirmed fact. Investors may change their limit orders by watching the order book situation.
Among large investors, there are also moves to place a large number of orders at a specific price range to lure other market participants. If you fall for the lure, you cancel those orders, take the opposite side of the trade from the investors who got trapped, and make a profit—this is the so-called “showing the board.”
In that sense, what appears in the stream data is all outcomes and an immutable fact. By relying on the order book information, buyers and sellers engage in the aforementioned trading tactics, and in the end you can understand to what price a trade was concluded and how the price moved.
