When using YardCharts, selecting an interval is fundamental. This choice dictates the temporal granularity of your market analysis, influencing how data points are captured and displayed on charts.
Daily Intervals: Each bar encapsulates a full trading day's worth of data, including Open, High, Low, Close (OHLC), and Volume metrics. These daily snapshots build the chart sequentially, day by day.
Liquidity is the lifeblood of trading, determining the ease and cost-effectiveness of transactions. YardCharts evaluates:
Bid-Ask Dynamics: The breadth of the spread between what buyers are willing to pay and sellers are willing to accept.
Market Depth: The volume of shares available at various price levels, which impacts the execution of larger trades.
Lower Risk: Facilitates trading in substantial volumes without significantly affecting the market price, ensuring there's always a market to interact with.
Increased Volatility: Small trades can cause disproportionate price movements, and exiting positions might face significant slippage, especially with stop orders.
YardCharts employs a sophisticated formula to calculate liquidity, measuring how much capital movement is required to shift a stock's price by a set percentage. This results in:
Liquidity Ratio: A scale from high figures for the most liquid stocks, like those in the Dow30, down to minimal values for thinly traded penny stocks.
| Liquidity Ratio | Liquidity Category | Liquidity Classification |
|---|---|---|
| > 50,000 | A + | Extremely liquid stock |
| > 20,000 < 50,000 | A | Very liquid stock |
| > 10,000 < 20,000 | B | Liquid stock |
| > 5,000 < 10,000 | C | Fairly liquid stock |
| > 1,000 < 5,000 | D | Sufficient to moderately liquid stock |
| > 500 < 1,000 | E | Little to sufficiently liquid stock |
| > 0 < 500 | I | Not liquid to little liquid stock |