DEFINITION of 'Time and Sales'

A real-time data feed of trade orders for a security. Time and sales, or T&S, shows volume, price, direction, and date/time for each trade.

BREAKING DOWN 'Time and Sales'

Investors follow a number of different strategies and tools when deciding which stocks to buy and sell. Those using fundamental analysis attempt to determine the intrinsic value of a share by examining a company’s financials, while investors using technical analysis attempt to forecast prices by plugging price movements and trading volume into statistical models. One technical analysis technique used by investors is analyzing time and sales data.

Time and sales is a detailed account of trading activity for a particular security. For a historical perspective, time and sales is akin to reading ticker tape for an individual stock. It is a real-time display of the share volume, price, direction, and date/time for each trade, and is used in technical analysis. For example, time and sales data would indicate that a buy order for 76 shares of XYZ stock was made on the NASDAQ at 12:31:54 for $65.84.

Using time and sales data is a different technique, but often complementary, to using charts and graphs to estimate share price movement. For example, bar charts and candlestick charts show trading ranges for a given period of time in aggregate, and are used to see handle, double bottom, and Hikkake patterns. This provides a broad view of price and volume trends. When coupled with the more granular trade information from time and sales, the investor is able to create a more detailed picture of what is happening.

Time and sales data is most frequently accessed via a trading platform, and is displayed in the time and sales window. The window displays a running tally of trades for shares of a particular stock in a table format. Each of the primary components of time and sales – date/time, price, volume, direction – are arrayed in columns. The rows of data are often color-coded in order to indicate whether the trade occurred on, in, or outside the bid or ask. Many trading platforms allow investors to customize the way time and sales data is displayed, for example, adding volume or price filters.

Investors can use time and sales data to determine whether to execute a trade of their own. Because data is in real-time, the number of data updates can catch novice investors off guard. One initial strategy is to watch the direction, volume, and price for a short period of time in order to get a feel for things. At this point the investor can look for several different cues, including spikes in volume or a significant change in the number of trades. Using a time and sales data approach is likely to be the most successful with stocks that have strong volume.

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