Learn What a VOID is and how it Impacts Your Trading

A void is a trading condition that occurs when small lot buyers and Odd Lot investors run out of capital to invest. These two retail groups tend to have very little savings to invest so they buy Odd Lots (under 100 shares for one transaction) or Fractional Shares, which is a fraction of ONE single share of stock of a company.
These groups are the LAST buyers in during a Velocity or Speculative Trading Condition which happens often during highly emotional trading activity in a Moderately Up Trending Market Condition.
When the Odd lot and low capital base NEW retail day traders run out of money they stop buying and a VOID of BUYERS occurs.
The Sell Side Institutions, Giant Hedge Funds, Professional Independent Traders all recognize the volume and price patterns that form due to a VOID of BUYERS on the retail side.
Volume bars are the number of ORDERS that are rapidly moving through the huge and very complex stock market systems. Volume, therefore is a primary indicator that warns of an impending VOID of BUYERS. When that occurs, the professionals mentioned above start to prepare to sell short and determined how low they can place a buy-to-cover order to maximize their profits when selling short. Thus, with a surge of HFT sell short orders, the market would gap down at open. HFTS use very small lot orders to fill the queues ahead of the market open and thus force the computers that run the market to lower the price of the stock to where the buy to covers are waiting. So that is WHY there is a sudden collapse of price after a speculative run up as we have had recently and will have again.