Statistics in stock day trading

Price volatility in stock market brings potential profile positions to the traders. How to predict the direction of the stock market or stock price becomes the primary job for traders’ trading model.

We are looking for the direction of the market in a given timeframe. High-frequency traders will consider the potential profile-out position in millisecond level.

Long-term holder will look into month time scale.

For most of average traders, the ideal timeframe will be on daily base. In this paper, for a non-news trading day, author will introduce statistics method to predict the stock prices and bid-ask spread for day trading.

Keywords: Stock Trading; algorithm trading stock; Statistics in stock trading; stock trading strategies