When we study charts, we are usually concerned with 4 main prices for each candle: open, close, low, high. Even if you’re just passively watching your stock performance over many weeks, you are still tracking its price, and each day you see that the price changed by some $ amount, which is also expressed in %. But which price is being talked about here?
Frequently, much confusion arises when people say that the market or a stock are sold off or bought up, since, ultimately, there is a buyer and a seller on the ends of all transactions. So, what does “sold off” even mean? The important thing here is to understand that there are essentially 2 categories of orders you can make on the market: a limit order and a market order. A limit order is made when you specify the precise price at which you want to buy or sell a stock. The buyer’s price is the bid price (think of a bidder at an auction, who sets the price he wants to buy the item at), while the seller’s price is called the ask price (how much money he is asking to receive for his asset). These are the very bid/ask prices that you see...