An item that records the highest trading volume on that day is one of the information that must be reviewed. In the stock market, a lot of stocks are traded every day, and most of the stocks are trading at a constant trading volume. However, among them, stocks that are traded heavily are called top trading stocks.
Generally, you can check 10 or 20 high-trading stocks based on the total number of shares traded on that day, or place an average of 5 trading days.
Stocks with a high transaction volume may have a high trading volume because of the large number of stocks in circulation, and the transaction itself may be actively occurring because the stock price is low. In any case, a large amount of stock trading means that transactions are frequent and that there are many stocks traded.
Especially, if the trading volume on the day is higher than the average trading volume, it is a particularly important indicator. And the return on investment can vary greatly depending on how we use stocks that have higher than average trading volume.
You can also see what kinds of industries are active by analyzing the top trading volume. It can also be used as an indicator of how much weight investors have recently placed on which points.
How to use top stocks trading volume
By analyzing the stocks of the stocks that are in the top of the stock trading volume and creating a group based on the stocks, you can understand the distribution and concentration of the stocks.
Based on this information, you identify the top stocks for each industry. If the stocks of the sector in question have recorded the higher trading volume, you should take a macro look at the stock price information of those sectors. In other words, you have to consider whether the buyings in the relevant sector have occurred in general or in part.
If there is a partial buyout, you should look for the reasons why the characteristics of the stocks and the trading volume have exploded. And comparing the reason with the state of the stock price helps to establish a trading strategy.
So why do you need to classify and identify your industry? The reason for classifying the industry is to check whether the number of purchases in the sector is generally active. If the buying activity in the sector is active in general, it can be used as a trading signal.
Stocks with the highest stock trading volume do not just show that a lot of transactions have occurred. A high volume of trading is an indicator of whether the hot interest of the market is reflected in the stock market or industry.
Of course, it is very dangerous to think that stocks with high trading volume are good stocks. But there is a need to be interested. This is because the stocks that recorded active trading volumes are evidence that they received such attention.