Volume (trading volume) is the number of shares (or other securities) that have been traded during a specific period of time – for example, in one day. Volume tells you how many shares were exchanged between buyers and sellers. It doesn’t indicate whether the price went up or down, but it reflects the overall market activity.
Why Volume?
From the perspective of our strategy, we prefer stocks with high trading volume. High volume ensures high liquidity, meaning it’s easy to buy or sell a large number of shares without significantly impacting the price. Additionally, the more market participants trading a stock, the more reliable the price movements become—giving greater confidence to our technical or fundamental analysis.
On the other hand, low volume can lead to distorted price movements and increases the risk of price manipulation. Trading in low-liquidity stocks can also make it harder to exit a position quickly when needed.
Answers and Score
| ANSWER | SCORE | PRIORITY |
| Yes, a high number of trades (over 10M) | 10 | 0,8 |
| Sufficient number of trades (1 – 10M) | 8 | 0,8 |
| No, insufficient number of trades (under 1M) | 3 | 0,8 |
Where to find volatility values?
You can find the value, for example, on finviz.com.
This question is part of this analyzer.
| Decameron Stock Analyzer – Swing trading, v.1.0 | open analyzer |
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What Impact Does Volume Have on Stock Movement and Why Include It in Your Analysis?
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