RE: Back in25 Feb 2021 13:55
The city traders will have a comprehensive calculation on the actual value of the company. There will be a whole set of indicators regaridng debt, cashflow, market share and the like. Based on all of that there will be a number which is in effect a technical sp. It will be roughly the same across the traders as these computations have evolved over the years, some are external equations and measurement techniques, some are in-house and some are a little wild form the new kids. The computers are constantly re-evaluating the variables and using a wide variety of sources to estimate what the variables will be in the future and what different permutations will do to the technical sp. A very big game of chess where the peices can be made to move differently.
In amonst this comes joe with his pension pot. Those city boys have joe factored into their number crunching routines. Those computers do not do ethics. Those computers are set to maximum gain. Second guessing large swings in any share that has automatic trading is a basic casino game. There are some patterns to follow, but mostly if they want joe's pension pot in their bank accounts, they will eventualy drain it dry if joe doesn't hedge and avoid get rich quick trading.